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                                                                   EXHIBIT 4.11

                       SMITH & WESSON HOLDING CORPORATION

                                    AS ISSUER

                                       AND

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

                                   AS TRUSTEE

                                   ----------

                                    INDENTURE

                          DATED AS OF DECEMBER 15, 2006

                                   ----------

                      4% SENIOR CONVERTIBLE NOTES DUE 2026



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
RECITALS OF THE COMPANY..................................................     1

ARTICLE I Definitions and Other Provisions of General Application........     1
   Section 1.01.  Definitions............................................     1
   Section 1.02.  Compliance Certificates and Opinions...................    12
   Section 1.03.  Form of Documents Delivered to Trustee.................    13
   Section 1.04.  Acts of Holders; Record Dates..........................    13
   Section 1.05.  Notices, Etc. to Trustee and Company...................    14
   Section 1.06.  Notice to Holders; Waiver..............................    15
   Section 1.07.  Conflict with Trust Indenture Act......................    15
   Section 1.08.  Effect of Headings and Table of Contents...............    15
   Section 1.09.  Successors and Assigns.................................    15
   Section 1.10.  Severability Clause....................................    15
   Section 1.11.  Benefits of Indenture..................................    16
   Section 1.12.  Governing Law..........................................    16
   Section 1.13.  Legal Holiday..........................................    16

ARTICLE II Security Forms................................................    16
   Section 2.01.  Forms Generally........................................    16
   Section 2.02.  Form of Face of Security...............................    16
   Section 2.03.  Form of Reverse of Security............................    16
   Section 2.04.  Form of Trustee's Certificate of Authentication........    16
   Section 2.05.  Legend on Restricted Securities........................    17

ARTICLE III The Securities...............................................    17
   Section 3.01.  Title and Terms........................................    17
   Section 3.02.  Denominations..........................................    17
   Section 3.03.  Execution, Authentication, Delivery and Dating.........    17
   Section 3.04.  Temporary Securities...................................    18
   Section 3.05.  Registration; Registration of Transfer and Exchange;
                     Restrictions on Transfer............................    18
   Section 3.06.  Mutilated, Destroyed, Lost and Stolen Securities.......    20
   Section 3.07.  Persons Deemed Owners..................................    21
   Section 3.08.  Book-Entry Provisions for Global Securities............    21
   Section 3.09.  Cancellation and Transfer Provisions...................    23
   Section 3.10.  CUSIP Numbers..........................................    24

ARTICLE IV Satisfaction And Discharge....................................    25
   Section 4.01.  Satisfaction and Discharge of Indenture................    25
   Section 4.02.  Application of Trust Money.............................    25



                                       -i-





                                                                            Page
                                                                            ----
                                                                         
ARTICLE V Remedies.......................................................    26
   Section 5.01.  Events of Default......................................    26
   Section 5.02.  Acceleration of Maturity; Rescission and Annulment.....    27
   Section 5.03.  Collection of Indebtedness and Suits for Enforcement by
                     Trustee.............................................    28
   Section 5.04.  Trustee May File Proofs of Claim.......................    29
   Section 5.05.  Application of Money Collected.........................    29
   Section 5.06.  Limitation on Suits....................................    29
   Section 5.07.  Unconditional Right of Holders to Receive Payment......    30
   Section 5.08.  Restoration of Rights and Remedies.....................    30
   Section 5.09.  Rights and Remedies Cumulative.........................    30
   Section 5.10.  Delay or Omission Not Waiver...........................    31
   Section 5.11.  Control by Holders.....................................    31
   Section 5.12.  Waiver of Past Defaults................................    31
   Section 5.13.  Undertaking for Costs..................................    31
   Section 5.14.  Waiver of Stay or Extension Laws.......................    32

ARTICLE VI The Trustee...................................................    32
   Section 6.01.  Certain Duties and Responsibilities....................    32
   Section 6.02.  Notice of Defaults.....................................    33
   Section 6.03.  Certain Rights of Trustee..............................    33
   Section 6.04.  Not Responsible for Recitals...........................    35
   Section 6.05.  May Hold Securities....................................    35
   Section 6.06.  Money Held in Trust....................................    35
   Section 6.07.  Compensation and Reimbursement.........................    35
   Section 6.08.  Disqualification; Conflicting Interests................    36
   Section 6.09.  Corporate Trustee Required; Eligibility................    36
   Section 6.10.  Resignation and Removal; Appointment of Successor......    36
   Section 6.11.  Acceptance of Appointment by Successor.................    37
   Section 6.12.  Merger, Conversion, Consolidation or Succession to
                     Business............................................    38
   Section 6.13.  Preferential Collection of Claims Against..............    38

ARTICLE VII Holders' Lists And Reports By Trustee........................    38
   Section 7.01.  Company to Furnish Trustee Names and Addresses of
                     Holders.............................................    38
   Section 7.02.  Preservation of Information; Communications to
                     Holders.............................................    38
   Section 7.03.  Reports By Trustee.....................................    39

ARTICLE VIII Consolidation, Merger, Conveyance, Transfer Or Lease........    39
   Section 8.01.  Company May Consolidate, etc. Only on Certain Terms....    39
   Section 8.02.  Successor Substituted..................................    40

ARTICLE IX Supplemental Indentures.......................................    40
   Section 9.01.  Supplemental Indentures Without Consent of Holders.....    40
   Section 9.02.  Supplemental Indentures With Consent of Holders........    41
   Section 9.03.  Execution of Supplemental Indentures...................    42
   Section 9.04.  Effect of Supplemental Indentures......................    43



                                      -ii-





                                                                            Page
                                                                            ----
                                                                         
   Section 9.05.  Conformity with Trust Indenture Act....................    43
   Section 9.06.  Reference in Securities to Supplemental Indentures.....    43

ARTICLE X Covenants......................................................    43
   Section 10.01. Payments...............................................    43
   Section 10.02. Maintenance of Office or Agency........................    43
   Section 10.03. Money for Security Payments to be Held in Trust........    44
   Section 10.04. Statement by Officers as to Default....................    45
   Section 10.05. Existence..............................................    45
   Section 10.06. Further Instruments and Acts...........................    45
   Section 10.07. Reports and Delivery of Information....................    45
   Section 10.08. Resale of Certain Securities...........................    46
   Section 10.09. Book-Entry System......................................    46
   Section 10.10. Additional Interest Under the Registration Rights
                     Agreement...........................................    47
   Section 10.11. Information for IRS Filings............................    47
   Section 10.12. Limit on Incurring Additional Indebtedness and Liens...    47
   Section 10.13. Requirement to Seek Stockholder Approval...............    48

ARTICLE XI Redemption Prior to Maturity; Repurchase Upon A Fundamental
   Change................................................................    48
   Section 11.01. Company's Right to Redeem; Notices to Trustee..........    48
   Section 11.02. Selection of Securities to be Redeemed.................    48
   Section 11.03. Notice of Redemption...................................    49
   Section 11.04. Effect of Notice of Redemption.........................    50
   Section 11.05. Holder's Right to Require Redemption...................    50
   Section 11.06. Notice of Right to Require Redemption..................    50
   Section 11.07. Redemption by Holder...................................    51
   Section 11.08. Deposit of Redemption Price............................    51
   Section 11.09. Securities Redeemed in Part............................    51
   Section 11.10. Repurchase of Securities at Option of the Holder Upon
                     Fundamental Change..................................    52
   Section 11.11. Effect of Fundamental Change Repurchase Notice.........    54
   Section 11.12. Securities Repurchased in Whole or in Part.............    55
   Section 11.13. Covenant to Comply With Securities Laws Upon Repurchase
                     of Securities.......................................    56
   Section 11.14. Deposit of Fundamental Change Repurchase Price.........    56
   Section 11.15. Repayment to the Company...............................    56

ARTICLE XII Interest Payments on the Securities..........................    56
   Section 12.01. Interest Rate..........................................    56

ARTICLE XIII Conversion..................................................    57
   Section 13.01. Conversion Privilege...................................    57
   Section 13.02. Conversion Procedure...................................    58
   Section 13.03. No Fractional Shares...................................    60
   Section 13.04. Taxes on Conversion....................................    60
   Section 13.05. Company to Provide Stock...............................    60
   Section 13.06. Adjustment of Conversion Price.........................    61



                                      -iii-





                                                                            Page
                                                                            ----
                                                                         
   Section 13.07. Conversion After a Public Acquirer Change of Control...    65
   Section 13.08. No Adjustment..........................................    66
   Section 13.09. Notice of Conversion Price Adjustment..................    67
   Section 13.10. Notice of Certain Transactions.........................    67
   Section 13.11. Effect of Reclassification, Consolidation, Merger or
                     Sale on Conversion Privilege........................    68
   Section 13.12. Trustee's Disclaimer...................................    68
   Section 13.13. Voluntary Decrease.....................................    69
   Section 13.14. Company Determination Final............................    69

ARTICLE XIV Make-Whole Premium...........................................    69
   Section 14.01. Make-Whole Premium.....................................    69
   Section 14.02. Adjustment to the Make-Whole Premium...................    72


EXHIBITS:

Exhibit A Form of Face of Security

Exhibit B Form of Reverse of Security

Exhibit C Form of Trustee's Certificate of Authentication

Exhibit D Fundamental Change Repurchase Notice


                                      -iv-


          INDENTURE, dated as of December 15, 2006, between Smith & Wesson
Holding Corporation, a corporation duly organized and existing under the laws of
the State of Nevada, as Issuer (the "COMPANY"), having its principal office at
2100 Roosevelt Avenue, Springfield, Massachusetts 01104, and The Bank of New
York Trust Company, N.A., as Trustee (the "TRUSTEE").

                             RECITALS OF THE COMPANY

          The Company has duly authorized the creation of an issue of its 4%
Senior Convertible Notes Due 2026 (each a "SECURITY" and collectively, the
"SECURITIES") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.

          All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid and legally binding obligations of the Company, and to make
this Indenture a valid and legally binding agreement of the Company, in
accordance with the terms of the Securities and the Indenture, have been done.
Further, all things necessary to duly authorize the issuance of the Common Stock
of the Company issuable upon the conversion of the Securities, and to duly
reserve for issuance the number of shares of Common Stock issuable upon such
conversion, have been done.

                                   AGREEMENT:

          For and in consideration of the premises and the purchases of the
Securities by the Holders thereof, it is mutually agreed, for the benefit of the
Company and the equal and proportionate benefit of all Holders of the
Securities, as follows:

                                   ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

          Section 1.01. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:

               (a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;

               (b) all other terms used herein and not otherwise defined that
are defined in the Trust Indenture Act, either directly or by reference therein,
have the meanings assigned to them therein;

               (c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and

               (d) the words "herein," "hereof' and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.


                                       1



          "ACT," when used in respect of any Holder, has the meaning specified
in Section 1.04.

          "ADDITIONAL INTEREST" has the meaning specified in 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 in respect of any specified Person means the power to direct
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.

          "AGENT MEMBERS" has the meaning specified in Section 3.08.

          "APPROVED STOCK PLAN" means any (a) presently existing employee,
director or consultant benefit plan or program or employee stock purchase plan
of the Company or any of its Subsidiaries or (b) agreement or employee benefit
plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer or
director for services provided to the Company.

          "BOARD OF DIRECTORS" means, in respect of any Person, either the board
of directors of such Person or any duly authorized committee of that board.

          "BOARD RESOLUTION" means, in respect of any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the Trustee.

          "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions in The City of New York or the city in which the
Corporate Trust Office is located are authorized or obligated by law, or
executive order or governmental decree to be closed.

          "BUY-IN" has the meaning specified in Section 13.02(c).

          "BUY-IN PRICE" has the meaning specified in Section 13.02(c).

          "CAPITAL STOCK" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, in respect of partnerships, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership.

          "CHANGE OF CONTROL" shall be deemed to have occurred if any of the
following occurs after the date hereof:


                                       2



               (1) any sale, lease, exchange or other transfer (in one
     transaction or a series of related transactions) of all or substantially
     all of the Company's assets to any person or group of related persons
     (other than to any of the Company's wholly owned Subsidiaries);

               (2) the approval by the holders of the Company's Capital Stock of
     any plan or proposal for the liquidation or dissolution of the Company;

               (3) if any person or group shall become the beneficial owner,
     directly or indirectly, of shares representing more than 50% of the
     aggregate ordinary voting power represented by issued and outstanding
     voting stock of the Company;

               (4) at any time the following persons cease for any reason to
     constitute a majority of the Company's Board of Directors: (i) individuals
     who on the date hereof constituted the Company's Board of Directors and
     (ii) any other new directors whose appointment to the Company's Board of
     Directors or whose nomination for election by the Company's stockholders
     was approved by at least a majority of the directors of the Company then
     still in office either (A) who were directors of the Company on the date
     hereof, or (B) whose appointment or nomination for election was previously
     so approved; or

               (5) any consolidation or merger by the Company where persons who
     are beneficial owners, directly or indirectly, of the Company's shares of
     voting stock immediately prior to such transaction no longer beneficially
     own, directly or indirectly, at least a majority of the aggregate ordinary
     voting power represented by issued and outstanding voting stock of the
     continuing or surviving corporation or entity.

For purposes of the definition of Change of Control: (i) "PERSON" or "GROUP"
have the meanings given to them for purposes of Sections 13(d) and 14(d) of the
Exchange Act or any successor provisions, and the term "group" includes any
group acting for the purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor
provision); (ii) a "BENEFICIAL OWNER" will be determined in accordance with Rule
13d-3 under the Exchange Act, as in effect on the date of this Indenture; (iii)
"BENEFICIALLY OWNED" and "BENEFICIALLY OWN" have meanings correlative to that of
beneficial owner; and (iv) "VOTING STOCK" means any class or classes of Capital
Stock pursuant to which the holders of Capital Stock under ordinary
circumstances have the power to vote in the election of the board of directors,
managers or trustees of any Person or other Persons performing similar functions
irrespective of whether or not, at the time, Capital Stock of any other class or
classes shall have, or might have, voting power by reason of the happening of
any contingency.

Notwithstanding anything in this Indenture to the contrary, a merger or
consolidation shall not be deemed to constitute a "Change of Control" if at
least 90% of the consideration (excluding cash payments for fractional shares
and cash payments pursuant to dissenters' appraisal rights) in the merger or
consolidation consists of shares of Capital Stock that are listed on, or
immediately after the transaction will be listed on, any Eligible Market and as
a result of such transaction the obligations of the Company under the Securities
and this Indenture are expressly assumed by the Person issuing such
consideration in such merger or consolidation and any Securities surrendered for
conversion would become convertible into such publicly traded securities.


                                       3



          "CLOSING PRICE" means, for any security as of any date, the last
closing trade price for such security on the principal United States securities
market on which such security is traded (which is currently The NASDAQ Global
Select Market in respect of the Common Stock) as reported by Bloomberg Financial
Markets (or any successor thereto, "BLOOMBERG"), or, if such exchange begins to
operate on an extended hours basis and does not designate the closing bid price
or the closing trade price, as the case may be, then the last bid price or last
trade price, respectively, of such exchange prior to 4:00:00 p.m. (New York City
time) as reported by Bloomberg, or, if such exchange is not the principal
securities exchange or trading market for such security, the last trade price of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or,
if no last trade price is reported for such security by Bloomberg, the average
of the highest bid prices and the lowest ask prices of any market makers for
such security in the "pink sheets" by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Price
of such security on such date shall be the fair market value as mutually
determined by the Company and the Majority Holders.

          "COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument 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 EQUITY" of any Person means Capital Stock of such Person that
is generally entitled to (a) vote in the election of directors of such Person or
(b) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management or policies of such Person.

          "COMMON STOCK" means the shares of Common Stock, par value $0.001 per
share, of the Company as it exists on the date of this Indenture or any other
shares of Capital Stock of the Company into which the Common Stock shall be
reclassified or changed or, in the event of a merger, consolidation or other
similar transaction involving the Company that is otherwise permitted hereunder
in which the Company is not the surviving corporation, the common stock, common
equity interests, ordinary shares or depositary shares or other certificates
representing common equity interests of such surviving corporation or its direct
or indirect parent corporation.

          "COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

          "COMPANY REDEMPTION DATE" means each date when, pursuant to the
provisions of Section 11.01, the Company elects to redeem the Securities in
whole or in part.

          "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the


                                       4



Board, its President or any Vice President, and by its Chief Financial Officer,
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.

          "CONVERSION AGENT" means the Trustee or such other office or agency
designated by the Company with notice provided to the Holders where Securities
may be presented for conversion.

          "CONVERSION AMOUNT" has the meaning specified in Section 13.01(c).

          "CONVERSION DATE" has the meaning specified in Section 13.02(a).

          "CONVERSION FAILURE" has the meaning specified in Section 13.02(c).

          "CONVERSION LIMITATION" has the meaning specified in Section 13.02(i).

          "CONVERSION PRICE" has the meaning specified in Section 13.01(c).

          "CONVERSION RATE" has the meaning specified in Section 13.01(c).

          "CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 222 Berkeley Street, 2nd Floor, Boston, MA 02116, Attn: Corporate
Trust Services.

          "CORPORATION" means a corporation, association, company, joint-stock
company or business trust.

          "CREDIT FACILITY" means that Amended and Restated Loan and Security
Agreement, dated November 8, 2006 among the Company, as guarantor, Smith &
Wesson Corp., as borrower, and TD Banknorth, N.A., as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time; provided, however, that the aggregate outstanding amount of such
Indebtedness (taking into account the maximum amounts which may be advanced
under the Credit Facility) does not at any time exceed $62,000,000.

          "CURRENT MARKET PRICE PER SHARE OF COMMON STOCK" has the meaning
specified in Section 13.06(f).

          "DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would become an Event of Default.

          "DEPOSITARY" means The Depository Trust Company until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean such successor Depositary.

          "EFFECTIVE DATE" has the meaning specified in Section 14.01(c).

          "ELIGIBLE MARKET" means The New York Stock Exchange, the American
Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market.


                                       5



          "EVENT OF DEFAULT" has the meaning specified in Section 5.01.

          "EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as
amended.

          "EXCLUDED SECURITIES" means issuances of any shares of Common Stock
(i) 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)
pursuant to any Approved Stock Plan; (iii) pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security not described in
clause (ii) above and outstanding as of the Issue Date (provided that the terms
of such option, warrant, right or security are not amended or modified with
respect to exercise price or number of shares after the Issue Date); (iv) for a
change in the par value of the Common Stock; and (v) for any Make-Whole Premium
described in Article XIV.

          "EXPIRATION DATE" has the meaning specified in Section 13.06(e).

          "EXPIRATION TIME" has the meaning specified in Section 13.06(e).

          "FUNDAMENTAL CHANGE" means the occurrence of a Change in Control or a
Termination of Trading.

          "FUNDAMENTAL CHANGE COMPANY NOTICE" has the meaning specified in
Section 11.10(b).

          "FUNDAMENTAL CHANGE CONVERSION" has the meaning specified in Section
13.02(e).

          "FUNDAMENTAL CHANGE CONVERSION/REPURCHASE PERIOD" has the meaning
specified in Section 11.10(c).

          "FUNDAMENTAL CHANGE REPURCHASE" has the meaning specified in Section
11.10(a).

          "FUNDAMENTAL CHANGE REPURCHASE NOTICE" has the meaning specified in
Section 11.10(c).

          "FUNDAMENTAL CHANGE REPURCHASE PRICE" has the meaning specified in
Section 11.10(a).

          "FUNDAMENTAL CHANGE SETTLEMENT DATE" means the Effective Date for a
Fundamental Change. In respect of any Fundamental Change Conversion or
Fundamental Change Repurchase for which a Notice of Conversion or Fundamental
Change Repurchase Notice, as applicable, has been delivered after the Effective
Date (and during the Fundamental Change Conversion/Repurchase Period), the
Fundamental Change Settlement Date shall mean the date that is two Business Days
following the end of the Fundamental Change Conversion/Repurchase Period.


                                       6



          "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, in each case, as in effect in the United States on the date hereof.

          "GLOBAL SECURITY" means a Security in global form registered in the
Security Register in the name of a Depositary or a nominee thereof.

          "HOLDER" or "SECURITYHOLDER" means a Person in whose name a Security
is registered in the Security Register.

          "HOLDER REDEMPTION DATE" has the meaning specified in Section 11.05.

          "INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.

          "INITIAL PURCHASERS" means Highbridge International LLC, [add names of
other buyers].

          "INTEREST" means, when used with reference to the Securities, any
interest payable under the terms of the Securities, including Additional
Interest, if any, payable under the terms of the Registration Rights Agreement.

          "INTEREST EXPENSE" means, in respect of the Company for any applicable
period, gross interest expense of the Company for such period determined in
accordance with GAAP, plus, to the extent not included in such interest expense,
any amount of interest capitalized in accordance with GAAP during the same
period.

          "INTEREST PAYMENT DATE" means June 15 and December 15, commencing June
15, 2007.

          "INVESTMENT COMPANY ACT" means the Investment Company Act of 1940 and
any successor statute thereto, in each case as amended from time to time.

          "ISSUE DATE" means the date the Securities are originally issued as
set forth on the face of the Security under this Indenture.

          "LTM EBITDA" means, in respect of the Company as of any date, the Net
Income of the Company for the immediately preceding twelve month period (the
"LTM PERIOD") for which financials are publicly available, plus without
duplication, the sum of the following amounts to the extent deducted in
determining Net Income of the Company for such period: (1) Interest Expense, (2)
income tax expense, and (3) depreciation and amortization expense (excluding
amortization expense attributable to a prepaid item that was paid in cash in a


                                       7



prior period), and minus, one-time or non-cash gains, including but not limited
to (1) gains generated from disposition of assets, (2) gains resulted from
reversal of charges, (3) gains resulted from change of estimates, (4) gains
resulted from change of actuarial assumptions, or (5) extraordinary
non-recurring gains. In connection with acquisitions consummated subsequent to
the commencement of an LTM Period, LTM EBITDA shall be calculated for any such
acquisition on a pro forma basis for such LTM Period.

          "MAJORITY OWNER" of a Person means the Person having "beneficial
ownership" (as defined in Rule 13(d)(3) under the Exchange Act) of more than 50%
of the total voting power of all shares of the respective Person's Common
Equity.

          "MAKE-WHOLE PREMIUM" has the meaning specified in Section 14.01(c).

          "MAKE-WHOLE PREMIUM TABLE" has the meaning specified in Section
14.01(c)

          "MATURITY," when used in respect of any Security, means the date on
which the principal, the Redemption Price or the Fundamental Change Repurchase
Price of such Security becomes due and payable as therein or herein provided,
whether at the Stated Maturity, on a Redemption Date or a Fundamental Change
Repurchase Date, or by declaration of acceleration or otherwise.

          "NET INCOME" means, in respect of the Company for any applicable
period, the net income (loss) of the Company for such period, determined on a
consolidated basis and in accordance with GAAP.

          "NOTICE OF CONVERSION" has the meaning specified in Section 13.02(a).

          "NOTICE OF DEFAULT" has the meaning specified in Section 5.01(d).

          "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, the President or any Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 10.04 shall be the principal executive,
financial or accounting officer of the Company.

          "OPINION OF COUNSEL" means a written opinion of counsel, who may be
external or in-house counsel for the Company.

          "OUTSTANDING" when used in respect of Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except: (i) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation; (ii) Securities, or
portions thereof, for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company (if
the Company shall act as its own Paying Agent) for the Holders of such
Securities; provided that if such Securities are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given to the Holders
as herein provided, or provision satisfactory to a Responsible Officer of the
Trustee shall have been made for giving such notice; and (iii) Securities that
have been paid or in exchange for


                                       8



or in lieu of which other Securities have been authenticated and delivered
pursuant to this Indenture; provided, however, that, in determining whether the
Holders of the requisite Principal Amount of the Outstanding Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act in respect of such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.

          "PAYING AGENT" means any Person (including the Company) authorized by
the Company to pay the principal of and interest to the Holders, including the
Redemption Price or the Fundamental Change Repurchase Price on behalf of the
Company. The Trustee shall initially be the Paying Agent.

          "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.

          "PHYSICAL SECURITIES" means permanent certificated Securities in
registered form issued in denominations of $1,000 Principal Amount and integral
multiples thereof.

          "PRINCIPAL AMOUNT" of a Security means the Principal Amount as set
forth on the face of the Security.

          "PUBLIC ACQUIRER CHANGE OF CONTROL" means a Fundamental Change of the
type set forth in clauses (1) or (5) in the definition of Change of Control
(after giving effect to the last paragraph of the definition) in which the
acquirer (the "PUBLIC ACQUIRER") has a class of common stock traded on an
Eligible Market which will be so traded when issued or exchanged in connection
with such Fundamental Change (the "PUBLIC ACQUIRER COMMON STOCK"). If an
acquirer does not itself have a class of common stock satisfying the foregoing
requirement, it shall be deemed to have Public Acquirer Common Stock if a
corporation that directly or indirectly is the Majority Owner of the acquirer
has a class of common stock satisfying the foregoing requirement; in such case,
all references to Public Acquirer Common Stock shall refer to such class of
common stock.

          "PURCHASED SHARES" has the meaning specified in Section 13.06(e).

          "QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning
specified in Rule 144A.

          "RECORD DATE" for the interest payable on any Interest Payment Date
means each June 1 and December 1 (whether or not a Business Day) next preceding
such Interest Payment Date.


                                       9



          "REDEMPTION DATE" means any Company Redemption Date or Holder
Redemption Date.

          "REDEMPTION PRICE" means the Principal Amount of the Securities to be
redeemed together with accrued and unpaid interest to, but excluding, the
applicable Redemption Date.

          "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of December 15, 2006, by and among the Company and the
Initial Purchasers, for the benefit of themselves and the Holders, as the same
may be amended or modified from time to time in accordance with the terms
thereof.

          "RESPONSIBLE OFFICER" means any officer of the Trustee with direct
responsibility for the administration of this Indenture and also, in respect of
a particular matter, any other officer of the Trustee to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.

          "RESTRICTED GLOBAL SECURITY" means a Global Security representing
Restricted Securities.

          "RESTRICTED SECURITY" or "RESTRICTED SECURITIES" has the meaning
specified in Section 2.05.

          "RIGHTS PLAN" has the meaning specified in Section 13.06(c).

          "RULE 144" means Rule 144 under the Securities Act (including any
successor rule thereto), as the same may be amended from time to time.

          "RULE 144A" means Rule 144A under the Securities Act (including any
successor rule thereto), as the same may be amended from time to time.

          "RULE 144A INFORMATION" has the meaning specified in Section 10.07(b).

          "SECURITIES ACT" means the U.S. Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.

          "SECURITY" or "SECURITIES" has the meaning specified in the first
paragraph of the Recitals of the Company.

          "SECURITIES PURCHASE AGREEMENT" means the Securities Purchase
Agreement, dated as of December 15, 2006, entered into by and among the Company
and the Initial Purchasers in connection with the sale of the Securities.

          "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 3.05(a).

          "SHARE DELIVERY DATE" has the meaning specified in Section 13.02(b).


                                       10



          "SHELF REGISTRATION STATEMENT" means a registration statement under
the Securities Act registering the Securities and the Common Stock issuable on
conversion thereof for resale pursuant to the terms of the Registration Rights
Agreement.

          "STATED MATURITY," when used in respect of any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the principal amount of such Security together with accrued and unpaid interest
and Additional Interest, if any, is due and payable.

          "STOCK PRICE" has the meaning specified in Section 14.01(c).

          "STOCK PRICE CAP" has the meaning specified in Section 14.01(c).

          "STOCK PRICE THRESHOLD" has the meaning specified in Section 14.01(c).

          "STOCKHOLDER APPROVAL" has the meaning specified in Section 10.13.

          "SUBSCRIPTION DATE" means December 15, 2006.

          "SUBSIDIARY" means, in respect of any Person, (a) any corporation,
association or other business entity of which 50% or more of the total voting
power of shares of capital stock or other equity interest 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) and (b) any partnership (i) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (ii) the only general partners of which are (a)
such Person or (b) one or more subsidiaries of such Person (or any combination
thereof).

          "SURVIVING ENTITY" has the meaning specified in Section 8.01(a).

          "TERMINATION OF TRADING" means that the Common Stock or other
securities into which the Securities are convertible are not listed for trading
on an Eligible Market.

          "TRADING DAY" means (a) if the applicable security is listed or
admitted for trading on an Eligible Market, a day on which such Eligible Market
is open for business or (b) if the applicable security is not so listed,
admitted for trading or quoted, any Business Day.

          "TRANSFER" for purposes of Section 3.05, has the meaning specified in
Section 3.05.

          "TRANSFER RESTRICTED SECURITY" means a Security required to bear the
restricted legend set forth in the form of Security set forth as Exhibit A
attached hereto.

          "TRIGGER EVENT" has the meaning specified in Section 13.06(c).

          "TRIGGERING DISTRIBUTION" has the meaning specified in Section
13.06(d).


                                       11



          "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as in
effect on the date as of which this Indenture was executed, provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

          "TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.

          "UNITED STATES" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction (its "possessions" including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).

          "VICE PRESIDENT" when used in respect of the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."

          "WEIGHTED AVERAGE PRICE" means, as determined by the Company, for any
security as of any date, the dollar volume-weighted average price for such
security on the principal market or exchange on which such security is traded
during the period beginning at 9:30:01 a.m., New York City time (or such other
time as such principal market or exchange publicly announces is the official
open of trading), and ending at 4:00:00 p.m., New York City time (or such other
time as such principal market or exchange publicly announces is the official
close of trading) as reported by Bloomberg through its "Volume at Price"
functions, or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m.,
New York City time (or such other time as such market publicly announces is the
official open of trading), and ending at 4:00:00 p.m., New York City time (or
such other time as such market publicly announces is the official close of
trading) as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the
market makers for such security as reported in the "pink sheets" by Pink Sheets
LLC (formerly the National Quotation Bureau, Inc.). If the Weighted Average
Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Weighted Average Price of such security on such date shall
be the fair market value as mutually determined by the Company and the Majority
Holders. All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during the
applicable calculation period.

          Section 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate to the effect that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and an Opinion of Counsel
to the effect that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.


                                       12



          Every certificate or opinion in respect of compliance with a condition
or covenant provided for in this Indenture shall include:

               (a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;

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

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

               (d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

          Section 1.03. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion in respect of some matters and one or more other such Persons as
to other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

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

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

          Section 1.04. Acts of Holders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee in accordance with
Section 1.05 and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as an


                                       13



"ACT" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

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

               (c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 7.01)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.

               (d) The ownership of Securities shall be proved by the Security
Register.

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

          Section 1.05. Notices, Etc. to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:

               (a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing and mailed, first-class postage prepaid, to or with the Trustee at its
Corporate Trust Office; or

               (b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office


                                       14



specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company, Attention:
Secretary.

          Notwithstanding anything to the contrary contained herein, notice to
the Trustee shall be effective only upon actual receipt by the Trustee.

          Section 1.06. Notice to Holders; Waiver. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at such
Holder's address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice in respect of other Holders. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.

          In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

          Whenever under this Indenture the Trustee is required to provide any
notice by mail, in all cases the Trustee may alternatively provide notice by
overnight courier or by telefacsimile, with confirmation of transmission.

          Section 1.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act that is required hereunder to be a part of and govern this Indenture, the
provision of the Trust Indenture Act shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the provision of the Trust Indenture Act shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.

          Section 1.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof, and all Article and Section
references are to Articles and Sections, respectively, of this Indenture unless
otherwise expressly stated.

          Section 1.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.

          Section 1.10. Severability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.


                                       15



          Section 1.11. Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their respective successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.

          Section 1.12. Governing Law. This Indenture and the Securities shall
be governed by and construed in accordance with the laws of the State of New
York.

          Section 1.13. Legal Holiday. In any case where any Interest Payment
Date, Stated Maturity or Redemption Date of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date, at the Stated Maturity or on the
Redemption Date; provided, that no interest shall accrue in respect of such
payment for the period from and after such Interest Payment Date, Stated
Maturity or Redemption Date, as the case may be.

                                   ARTICLE II

                                 SECURITY FORMS

          Section 2.01. Forms Generally. The Securities and the Trustee's
certificates of authentication shall be in substantially the forms set forth in
this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor, the Internal Revenue Code of 1986,
as amended, and regulations thereunder, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof.

          The Securities shall initially be issued in the form of permanent
Global Securities in registered form in substantially the form set forth in this
Article. The aggregate Principal Amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary, as hereinafter provided.

          Section 2.02. Form of Face of Security. The face of each Security
shall be substantially in the form of Exhibit A attached hereto.

          Section 2.03. Form of Reverse of Security. The reverse of each
Security shall be substantially in the form of Exhibit B attached hereto.

          Section 2.04. Form of Trustee's Certificate of Authentication. No
Security shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security a certificate
of authentication substantially in the form of Exhibit C attached hereto.


                                       16



          Section 2.05. Legend on Restricted Securities. During the period
beginning on the Issue Date and ending on the date two years from such date, any
Security, including any Security issued in exchange therefor or in lieu thereof,
shall be deemed a "RESTRICTED SECURITY" and shall be subject to the restrictions
on transfer provided in the legends set forth on the face of the form of
Security attached hereto as Exhibit A; provided, however, that the term
"Restricted Security" shall not include any Securities as to which restrictions
have been terminated in accordance with Section 3.05. All Securities shall bear
the applicable legends set forth on the face of the form of Security attached
hereto as Exhibit A. Except as provided in Section 3.05 and Section 3.09, the
Trustee shall not issue any unlegended Security until it has received an
Officers' Certificate from the Company directing it to do so.

                                   ARTICLE III

                                 THE SECURITIES

          Section 3.01. Title and Terms. The aggregate Principal Amount of
Securities that may be authenticated and delivered under this Indenture is
initially limited to $80,000,000, except for Securities authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 3.04, 3.05, 3.06, or 9.06. Other than as
set forth in the preceding sentence, the Company shall not issue any Securities
under this Indenture.

          The Securities shall be known and designated as the "4% SENIOR
CONVERTIBLE NOTES DUE 2026" of the Company. The Principal Amount shall be
payable at the Stated Maturity or, at the election of the Holder or the Company,
at a Redemption Date as provided for under this Indenture.

          The Principal Amount, accrued interest and Additional Interest, if
any, on the Securities shall be payable at the office or agency of the Company
in The City of New York maintained for such purpose and at any other office or
agency maintained by the Company for such purpose; provided, however, that at
the option of the Company payments may be made by wire transfer or by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.

          The Securities shall not have the benefit of a sinking fund.

          The Securities shall be superior in right of payment to all
subordinated indebtedness of the Company, and shall rank pari passu with all
other unsecured and unsubordinated indebtedness of the Company.

          Section 3.02. Denominations. The Securities shall be issuable only in
registered form without coupons and in denominations of $1,000 and any integral
multiple of $1,000 above that amount.

          Section 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents.


                                       17



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

          At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities. The Company Order shall specify
the amount of Securities to be authenticated, and shall further specify the
amount of such Securities to be issued as a Global Security or as Physical
Securities. The Trustee in accordance with such Company Order shall authenticate
and deliver such Securities as in this Indenture provided and not otherwise.

          Each Security shall be dated the date of its authentication.

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

          Section 3.04. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.

          If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like Principal Amount of definitive Securities of
authorized denominations. Until so exchanged, the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.

          Section 3.05. Registration; Registration of Transfer and Exchange;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the register maintained in
such office and in any other office or agency designated pursuant to Section
10.02 being herein sometimes collectively referred to as the "SECURITY
REGISTER") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed security registrar (the "SECURITY
REGISTRAR") for the purpose of registering Securities and transfers of
Securities as herein provided.


                                       18



          Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.02 for such
purpose, the Company shall execute, and, upon receipt of a Company Order, the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of any authorized denominations and
of a like aggregate Principal Amount and tenor, each such Security bearing such
restrictive legends as may be required by this Indenture (including Sections
2.02, 2.05 and 3.09).

          At the option of the Holder and subject to the other provisions of
this Section 3.05 and to Section 3.09, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate Principal
Amount and tenor, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and, upon receipt of a Company Order, the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.

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

          Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing. As a condition to the
registration of transfer of any Restricted Securities, the Company or the
Trustee may require evidence satisfactory to them as to the compliance with the
restrictions set forth in the legend on such securities.

          Except as provided in the following sentence and in Section 3.09, all
Securities originally issued hereunder and all Securities issued upon
registration of transfer or exchange or replacement thereof shall be Restricted
Securities and shall bear the legend required by Sections 2.02 and 2.05, unless
the Company shall have delivered to the Trustee (and the Security Registrar, if
other than the Trustee) a Company Order stating that the Security is not a
Restricted Security and may be issued without such legend thereon. Securities
which are issued upon registration of transfer of, or in exchange for,
Securities which are not Restricted Securities shall not be Restricted
Securities and shall not bear such legend.

          No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04 not involving any transfer.

          The Company shall not be required to exchange or register a transfer
of any Security (i) during the 15-day period immediately preceding the mailing
of any Notice of Redemption Right of any Security, (ii) after any Notice of
Redemption Right has been given by


                                       19



any Holders, except, where such notice provides that such Security is to be
redeemed only in part, the Company shall be required to exchange or register a
transfer of the portion thereof not to be redeemed, (iii) that has been
surrendered for conversion or (iv) as to which a Fundamental Change Repurchase
Notice has been delivered and not withdrawn, except, where such Fundamental
Change Repurchase Notice provides that such Security is to be purchased only in
part, the Company shall be required to exchange or register a transfer of the
portion thereof not to be purchased.

               (b) Beneficial ownership of every Restricted Security shall be
subject to the restrictions on transfer provided in the legends required to be
set forth on the face of each Restricted Security pursuant to Sections 2.02 and
2.05, unless such restrictions on transfer shall be terminated in accordance
with this Section 3.05(b) or Section 3.09. The Holder of each Restricted
Security, by such Holder's acceptance thereof, agrees to be bound by such
restrictions on transfer.

               The restrictions imposed by this Section 3.05 and by Sections
2.02, 2.05 and 3.09 upon the transferability of any particular Restricted
Security shall cease and terminate upon delivery by the Company to the Trustee
of an Officers' Certificate stating that such Restricted Security has been sold
pursuant to an effective Shelf Registration Statement under the Securities Act
or transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto). Any Restricted Security as to which the Company
has delivered to the Trustee an Officers' Certificate that such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon surrender of such Restricted Security for exchange to the
Security Registrar in accordance with the provisions of this Section 3.05, be
exchanged for a new Security, of like tenor and aggregate Principal Amount,
which shall not bear the restrictive legends required by Sections 2.02 and 2.05.
The Company shall inform the Trustee in writing of the effective date of any
Shelf Registration Statement registering the Securities under the Securities
Act. The Trustee shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the aforementioned Shelf Registration
Statement.

               As used in the preceding two paragraphs, the term "TRANSFER"
encompasses any sale, pledge, transfer or other disposition of any Restricted
Security.

               (c) Neither the Trustee nor any of its agents shall (i) have any
duty to monitor compliance with or in respect of any federal or state or other
securities or tax laws or (ii) have any duty to obtain documentation relating to
any transfers or exchanges other than as specifically required hereunder.

          Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and,
upon receipt of a Company Order, the Trustee shall authenticate and deliver in
exchange therefor a new Security of like tenor and Principal Amount and bearing
a number not contemporaneously outstanding.

          If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in


                                       20



the absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and, upon receipt
of a Company Order, the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of like tenor and
Principal Amount and bearing a number not contemporaneously outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable or has been called for redemption
in full, the Company in its discretion may, instead of issuing a new Security,
pay such Security.

          Upon the issuance of any new Security under this Section 3.06, the
Company may require payment by the Holder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.

          Every new Security issued pursuant to this Section 3.06 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

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

          Section 3.07. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
the principal of and interest and Additional Interest, if any, on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and none of the Company, the Trustee, or any agent of the Company or the Trustee
shall be affected by notice to the contrary.

          Section 3.08. Book-Entry Provisions for Global Securities. (a) The
Global Securities initially shall (i) be registered in the name of the
Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee
as custodian for the Depositary and (iii) bear legends as set forth on the face
of the form of Security in Section 2.02.

               (b) Members of, or participants in, the Depositary ("AGENT
MEMBERS") shall have no rights under this Indenture in respect of any Global
Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under the Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of any Holder.


                                       21


               (c) Transfers of the Global Securities shall be limited to
transfers in whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in a Global Security may be
transferred or exchanged, in whole or in part, for Physical Securities in
accordance with the rules and procedures of the Depositary and the provisions of
Section 3.09. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the Global
Securities if (A) such Depositary has notified the Company (or the Company
becomes aware) that the Depositary (i) is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing agency
registered under the Exchange Act when the Depositary is required to be so
registered to act as such Depositary and, in either such case, no successor
Depositary shall have been appointed within 90 days of such notification or of
the Company becoming aware of such event; or (B) there shall have occurred and
be continuing an Event of Default in respect of such Global Security and the
Outstanding Securities shall have become due and payable pursuant to Section
5.02 and the Trustee requests that Physical Securities be issued; provided that
Holders of Physical Securities offered and sold in reliance on Rule 144A shall
have the right, subject to applicable law, to request that such Securities be
exchanged for interests in the applicable Global Security.

               (d) In connection with any transfer or exchange of a portion of
the beneficial interest in the Global Security to beneficial owners pursuant to
clause (c) of this Section 3.08, the Security Registrar shall (if one or more
Physical Securities are to be issued) reflect on its books and records the date
and a decrease in the Principal Amount of the Global Security in an amount equal
to the Principal Amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and, upon receipt of a Company
Order, the Trustee shall authenticate and deliver, one or more Physical
Securities of like tenor and amount.

               (e) In connection with the transfer of the entire Global Security
to beneficial owners pursuant to clause (c) of this Section 3.08, the Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and, upon receipt of a Company Order, the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in the Global Security, an
equal aggregate Principal Amount of Physical Securities of authorized
denominations and the same tenor.

               (f) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in the Global Security pursuant to clause
(c) or (d) of this Section 3.08 shall, except as otherwise provided by clause
(c) of Section 3.09, bear the legend regarding transfer restrictions applicable
to the Physical Securities set forth on the face of the form of Security in
Section 2.02.

               (g) The Holder of the Global Securities may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.


                                       22



               (h) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in, the
Depositary, or other Person in respect of the accuracy of the books or records,
or the acts or omissions, of the Depositary or its nominee or of any participant
or member thereof, in respect of any ownership interest in the Securities or in
respect of the delivery to any participant, member, beneficial owner or other
Person (other than the Depositary) of any notice (including any notice of
redemption) or the payment of any amount, under or in respect of such
Securities. All notices and communications to be given to the Holders and all
payment to be made to Holders under the Securities shall be given or made only
to or upon the order of the registered Holders (which shall be the Depositary or
its nominee in the case of a Global Security). The rights of beneficial owners
in any Global Security shall be exercised only through the Depositary subject to
the applicable procedures of the Depositary. The Trustee may rely on information
furnished by the Depositary in respect of its members, participants and any
beneficial owners.

          Section 3.09. Cancellation and Transfer Provisions. The Company at any
time may deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold. The Trustee shall cancel and dispose of all Securities surrendered for
registration of transfer, exchange, payment, purchase, repurchase, redemption,
conversion (pursuant to Article XIII hereof) or cancellation in accordance with
its customary practices. If the Company shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation. The Company may not issue new
Securities to replace Securities it has paid in full or delivered to the Trustee
for cancellation.

               (a) Transfers to QIBs. The following provisions shall apply in
respect of the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB:

                    (i) the Security Registrar shall register the transfer if
such transfer is being made by a proposed transferor who has checked the box
provided for on the form of Security stating, or has otherwise advised the
Company and the Security Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has otherwise
advised the Company and the Security Registrar in writing, that it is purchasing
the Security for its own account or an account in respect of which it exercises
sole investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in reliance
on Rule 144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon its foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and

                    (ii) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Physical Securities which after transfer
are to be evidenced by an interest in the Global Security, upon receipt by the
Security Registrar of instructions given in accordance with the Depositary's and
the Security Registrar's procedures, the Security


                                       23



Registrar shall reflect on its books and records the date and an increase in the
Principal Amount of the Global Security in an amount equal to the Principal
Amount of the Physical Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred.

               (b) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the legends required by
Sections 2.02 and 2.05, the Security Registrar shall deliver Securities that do
not bear such legends. Upon the registration of transfer, exchange or
replacement of Securities bearing the legends required by Sections 2.02 and
2.05, the Security Registrar shall deliver only Securities that bear such
legends unless the Company has notified the Trustee in writing that the Shelf
Registration Statement has been declared effective or there is delivered to the
Security Registrar an Opinion of Counsel reasonably satisfactory to the Company
and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.

               (c) General. By its acceptance of any Security bearing the
legends required by Sections 2.02 and 2.05, each Holder of such a Security
acknowledges the restrictions on transfer of such Security set forth in this
Indenture and in such legends and agrees that it will transfer such Security
only as provided in this Indenture.

               The Security Registrar shall retain, in accordance with its
customary procedures, copies of all letters, notices and other written
communications received pursuant to this Section 3.09. The Company shall have
the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Security Registrar.

               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 in respect of any transfer of any
interest in any Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
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 3.10. CUSIP Numbers. In issuing the Securities, the Company
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices delivered, and as a convenience, to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee in writing of any change in the
"CUSIP" numbers.


                                       24



                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

          Section 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided for
and other surviving rights discussed below), and the Trustee, on demand of and
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

               (a) either

                    (i) all Securities theretofore authenticated and delivered
(other than (A) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.06 and (B) Securities for
whose payment money has theretofore been deposited with the Trustee in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust as provided in Section 10.03) have been delivered
to the Trustee for cancellation; or

                    (ii) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company has
deposited or caused to be deposited funds with the Trustee in trust and for the
purpose and in an amount sufficient to pay and discharge the entire indebtedness
evidenced by such Securities not theretofore delivered to the Trustee for
cancellation;

               (b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and

               (c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.

               Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.07 and, if money
shall have been deposited with the Trustee pursuant to clause (a)(ii) of Section
4.01, the obligations of the Trustee under Section 4.02 and the last paragraph
of Section 10.03 shall survive such satisfaction and discharge.

          Section 4.02. Application of Trust Money. Subject to the provisions of
the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Section 4.01 shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with
the Trustee.


                                       25



                                   ARTICLE V

                                    REMEDIES

          Section 5.01. Events of Default. "EVENT OF DEFAULT" wherever used
herein, means any one of the following events (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):

               (a) the Company's (i) failure to cure a Conversion Failure by
delivery of the required number of shares of Common Stock within ten Business
Days after the applicable Conversion Date or (ii) notice, written or oral, to
any Holder, including by way of public announcement or through any of its
agents, at any time, of its intention not to comply with a request for
conversion of any Securities into shares of Common Stock that is tendered in
accordance with the provisions of this Indenture; or

               (b) default in the payment of interest (including Additional
Interest, if any) on any Securities when due and payable and such default
continues for a period of 30 days; or

               (c) default in the payment of the Principal Amount, the
Redemption Price or the Fundamental Change Repurchase Price on any Security when
it becomes due and payable; or

               (d) default in the performance of any covenant, agreement or
condition of the Company in this Indenture or the Securities (other than a
default specified in clauses (a) through (c) above), and such default continues
for a period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate Principal Amount of the Outstanding
Securities a written notice specifying such default and requiring it to be
remedied and stating that such notice is a "NOTICE OF DEFAULT" hereunder; or

               (e) default by the Company or any Subsidiary in the payment of
the principal or interest on any loan agreement or other instrument under which
there may be outstanding, or by which there may be evidenced, any indebtedness
for money borrowed in excess of $10 million in the aggregate of the Company and
any Subsidiary (other than indebtedness for borrowed money secured only by the
real property to which the indebtedness relates and which is non-recourse to the
Company or to such Subsidiary), whether such indebtedness now exists or shall
hereafter be created, resulting in such indebtedness becoming or being declared
due and payable prior to its stated maturity, and such acceleration shall not
have been rescinded or annulled within 30 days after written notice has been
received by the Company or such Subsidiary from the Trustee or by the Trustee,
the Company and such Subsidiary by the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities; or

               (f) the entry against the Company or any of its Subsidiaries of a
final judgment or judgments (not subject to appeal and not covered by insurance)
aggregating in


                                       26



excess of $10 million which judgments remain unpaid, unstayed, undischarged or
unbonded for a period of 60 days; or

               (g) failure by the Company to give the Fundamental Change Company
Notice pursuant to Section 11.10 or the Public Acquirer Change of Control Notice
pursuant to Section 13.07; or

               (h) failure on the part of the Company to duly observe and comply
with the limitations on Indebtedness and liens set out in Section 10.12 and such
failure continues for a period of 30 days following the occurrence thereof or,
if later, the date the Company knows or should have known of such failure; or

               (i) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company or any Subsidiary of
a voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (ii) a decree or order
adjudging the Company or any Subsidiary as bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Subsidiary under any
applicable Federal or State law or (iii) appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or any Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or

               (j) the commencement by the Company or any Subsidiary of a
voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Company or any
Subsidiary in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company or any
Subsidiary in furtherance of any such action.

          Section 5.02. Acceleration of Maturity; Rescission and Annulment. (a)
If an Event of Default (other than those specified in clauses (i) and (j) of
Section 5.01) occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in aggregate Principal Amount of the
Outstanding Securities may declare the Principal Amount plus accrued and unpaid
interest and Additional Interest, if any, on all the Outstanding Securities to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such Principal
Amount plus accrued and unpaid interest and Additional Interest, if any, shall
become immediately due and payable.


                                       27



Notwithstanding the foregoing, in the case of an Event of Default specified in
clause (i) or (j) of Section 5.01, the Principal Amount plus accrued and unpaid
interest and Additional Interest, if any, on all Outstanding Securities will
ipso facto become due and payable without any declaration or other Act on the
part of the Trustee or any Holder.

               (b) At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter provided in this Article V, the Holders
of a majority in aggregate Principal Amount of the Outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if such rescission and annulment will not
conflict with any judgment or decree of a court of competent jurisdiction and:

                    (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay

                         (A) all overdue interest on the Securities,

                         (B) the Principal Amount plus accrued and unpaid
interest and Additional Interest, if any, the Redemption Price or the
Fundamental Change Repurchase Price, as applicable, on any Securities which have
become due otherwise than by such declaration of acceleration, and

                         (C) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 6.07; and

                    (ii) all Events of Default, other than the non-payment of
the Principal Amount plus accrued and unpaid interest and Additional Interest,
if any, on Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.12.

                    No such rescission shall affect any subsequent default or
impair any right consequent thereon.

          Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if a default is made in the payment of the
Principal Amount plus accrued and unpaid interest and Additional Interest, if
any, at the Maturity thereof or in the payment of the Redemption Price or the
Fundamental Change Repurchase Price in respect of any Security, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities, and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel. If
an Event of Default occurs and is continuing, the Trustee may, but shall not be
obligated to, pursue any available remedy to collect the payment of the
Principal Amount plus accrued but unpaid interest and Additional Interest, if
any, on the Outstanding Securities or to enforce the performance of any
provision of the Securities or this Indenture. The Trustee may maintain a
proceeding even if the Trustee does not possess any of the Securities or does
not produce any of the Securities in the proceeding. A delay or omission by the
Trustee or any


                                       28



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.

          Section 5.04. Trustee May File Proofs of Claim. In case of any
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 6.07.

          No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

          The Trustee shall be entitled to participate as a member of any
official committee of creditors of the Company as it deems necessary or
advisable.

          Section 5.05. Application of Money Collected. Any money collected by
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money to Holders, upon presentation of the Securities and the notation thereon
of 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
6.07;

          SECOND: To the payment of the amounts then due and unpaid on the
Securities for the Principal Amount, the Redemption Price, the Fundamental
Change Repurchase Price or interest and Additional Interest, if any, as the case
may be, in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities; and

          THIRD: To the Company.

          Section 5.06. Limitation on Suits. No Holder shall have any right to
institute any proceeding, judicial or otherwise, in respect of this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder (other than in the case of an Event of Default specified in clause (i)
or (j) of Section 5.01), unless:


                                       29



               (a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;

               (b) the Holders of not less than 25% in aggregate Principal
Amount of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder and have offered the Trustee indemnity or security
reasonably satisfactory to the Trustee;

               (c) the Trustee for 60 days after its receipt of such notice,
request and offer of security or indemnity has failed to institute any such
proceeding; and

               (d) no direction, in the opinion of the Trustee, inconsistent
with such written request has been given to the Trustee during such 60-day
period by the Holders of a majority in aggregate Principal Amount of the
Outstanding Securities.

          No one or more Holders shall have any right in any manner whatever by
virtue of, or by availing itself of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders, or to obtain or to seek to
obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all the Holders.

          Section 5.07. Unconditional Right of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of the Principal Amount, the Redemption Price, the
Fundamental Change Repurchase Price or interest and Additional Interest, if any,
in respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any Redemption Date or Fundamental Change
Settlement Date, as applicable, and to convert the Securities in accordance with
Article XIII, or to bring suit for the enforcement of any such payment on or
after such respective dates or the right to convert, shall not be impaired or
affected adversely without the consent of such Holder.

          Section 5.08. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

          Section 5.09. Rights and Remedies Cumulative. Except as otherwise
provided in respect of the replacement or payment of mutilated, destroyed, lost
or stolen Securities in the last paragraph of Section 3.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The


                                       30



assertion or employment of any right or remedy hereunder shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

          Section 5.10. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.

          Section 5.11. Control by Holders. The Holders of a majority in
Principal Amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that:

               (a) such direction shall not be in conflict with any rule of law
or with this Indenture;

               (b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and

               (c) the Trustee may refuse to follow any direction that the
Trustee determines may involve the Trustee in personal liability or may be
prejudicial to the rights of the Holders of Securities.

          Section 5.12. Waiver of Past Defaults. The Holders of not less than a
majority in aggregate Principal Amount of the Outstanding Securities may on
behalf of the Holders of all the Securities waive any past Default hereunder and
its consequences, except a Default:

               (a) Described in clause (i) or (j) of Section 5.01; or

               (b) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.

               Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

          Section 5.13. Undertaking for Costs. 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, in either case in respect of
the Securities, a court may require any party litigant in such suit to file an
undertaking to pay the costs of the suit, and the court may assess reasonable
costs, including reasonable attorney's fees, and expenses, against any party
litigant in the suit having due regard to the merits and good faith of the
claims or defenses made by the party litigant; but the provisions of this
Section 5.13 shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of


                                       31



Holders, holding in the aggregate more than 10% in aggregate Principal Amount of
the Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the Principal Amount or interest and Additional
Interest, if any, on any Security on or after Maturity of such Security, the
Redemption Price or the Fundamental Change Repurchase Price. This Section 5.13
shall be in lieu of Section 315(e) of the Trust Indenture Act and such Section
315(e) is hereby expressly excluded from this Indenture, as permitted by the
Trust Indenture Act.

          Section 5.14. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

                                   ARTICLE VI

                                   The Trustee

          Section 6.01. Certain Duties and Responsibilities. (a) If an Event of
Default has occurred and is continuing, the Trustee shall exercise such rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in its exercise thereof, 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 duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the TIA and the Trustee need
perform only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into this
Indenture or the TIA against the Trustee; and

                    (ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, without investigation, as to the truth of the statements
and the correctness of the opinions expressed therein, upon the statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture but need not verify the contents thereof.

However, in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other facts
stated therein).

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


                                       32



                    (i) this paragraph does not limit the effect of paragraph
(b) of this Section 6.01;

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

                    (iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.02 or Section 5.11.

               (d) Whether or not therein expressly so provided, 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 6.01.

          Section 6.02. Notice of Defaults. If an Event of Default occurs and is
continuing, the Trustee shall mail to Holders of Securities a notice of the
Default or Event of Default within 90 days after it occurs or, if later, within
15 days after it is known to the Trustee. Except in the case of a default (x) in
the payment of the principal of or interest on any Security, (y) in the payment
of the Fundamental Change Repurchase Price on the Fundamental Change Settlement
Date, or (z) in the payment or delivery, as the case may be, of cash, Common
Stock or a combination thereof upon conversion of such Security on the date
provided for herein therefor, the Trustee may withhold the notice if and so long
as the board of directors, the executive committee or a trust committee of
directors of the Trustee in good faith determines that withholding the notice is
in the interest of the Holders.

          Section 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:

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

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

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

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


                                       33



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

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

               (g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and shall not be responsible for the negligence or misconduct of such
agents or attorneys appointed with due care;

               (h) the Trustee shall not be charged with knowledge of any
Default or Event of Default in respect of the Securities unless either (i) a
Responsible Officer shall have actual knowledge of such Default or Event of
Default or (ii) written notice of such Default or Event of Default shall have
been received by the Trustee from the Company or any other obligor on such
Securities or by any Holder of such Securities;

               (i) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;

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

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

               (l) the permissive rights of the Trustee to take certain actions
under this Indenture shall not be construed as a duty unless so specified
herein; and

               (m) in no event shall the Trustee be responsible or liable for
any failure or delay in the performance of its obligations hereunder arising out
of or caused by, directly or indirectly, forces beyond its control, including,
without limitation, strikes, work stoppages,


                                       34



accidents, acts of war or terrorism, civil or military disturbances, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; it being
understood that the Trustee shall use reasonable efforts which are consistent
with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

          Section 6.04. Not Responsible for Recitals. The recitals contained
herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity, sufficiency or priority of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.

          Section 6.05. May Hold Securities. The Trustee, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Section 6.08 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.

          Section 6.06. Money Held in Trust. 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 otherwise agreed in writing with the Company.

          Section 6.07. Compensation and Reimbursement. The Company agrees:

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

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

               (c) to indemnify the Trustee and any predecessor Trustee for, and
to hold it harmless against, any loss, liability or expense (including
reasonable attorney's fees and expenses, and taxes (other than taxes based upon,
measured by or determined by the income of the Trustee)) incurred without
negligence or willful misconduct on its part, arising out of or in connection
with the acceptance or administration of this trust, including the reasonable
costs and expenses of defending itself against any claim (whether assessed by
the Company, by any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder.

               The obligations of the Company under this Section 6.07 shall
survive the resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture. To


                                       35



secure the Company's payment obligations in this Section 6.07, the Trustee shall
have a lien prior to the Securities on all money or property held or collected
by the Trustee, and the money or property held in trust to pay principal,
interest and Additional Interest, if any, on the Securities. Such lien shall
survive the resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture. When the Trustee incurs expenses or renders
services after a Default or an Event of Default specified in clause (i) or (j)
of Section 5.01 occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under Title 11 of the U.S. Code or any
other similar foreign, federal or state law for the relief of debtors.

          Section 6.08. Disqualification; Conflicting Interests. 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.

          Section 6.09. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has, or whose parent
banking company has, a combined capital and surplus of at least $50,000,000;
provided, however, that with respect to American Stock Transfer & Trust Company,
the combined capital and surplus must be at least $10,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 6.09, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.09, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

          Section 6.10. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article VI shall become effective until the acceptance
of appointment by the successor Trustee under Section 6.11.

               (b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

               (c) The Trustee may be removed at any time by Act of the Holders
of a majority in aggregate Principal Amount of the Outstanding Securities,
delivered to the Trustee and to the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30 days
after the notice of removal, the Trustee being removed may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee in respect of the Securities.

               (d) If at any time:


                                       36



                    (i) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or

                    (ii) the Trustee shall cease to be eligible under Section
6.09 and shall fail to resign after written request therefor by the Company or
by any such Holder, or

                    (iii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent, or

                    (iv) a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

                    then, in any such case, (A) the Company by a Company Order
may remove the Trustee, or (B) subject to Section 5.13, any Holder who has been
a bona fide Holder of a Security for at least six months may, on behalf of such
Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

               (e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Company Order, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in Principal Amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.

               (f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.

          Section 6.11. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring


                                       37



Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.

          No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article VI.

          Notwithstanding the resignation or removal of the Trustee, the
Company's obligations under Section 6.07 shall continue for the benefit of the
retiring Trustee in respect of expenses and liabilities incurred by it prior to
such resignation or removal.

          Section 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee by sale or otherwise, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.

          Section 6.13. Preferential Collection of Claims Against. If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Securities), the Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Company (or
any such other obligor).

                                  ARTICLE VII

                      HOLDERS' LISTS AND REPORTS BY TRUSTEE

          Section 7.01. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee:

               (a) semi-annually, not more than 15 days after each Record Date,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Record Date; and

               (b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; excluding from any such list names and addresses
received by the Trustee in its capacity as Security Registrar; provided,
however, that no such list need be furnished so long as the Trustee is acting as
Security Registrar.

          Section 7.02. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses


                                       38



of Holders contained in the most recent list furnished to the Trustee as
provided in Section 7.01 and the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 7.01 upon receipt of a new list so
furnished.

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

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

          Section 7.03. Reports By Trustee. (a) The Trustee shall transmit to
Holders such reports 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. Reports so required to be transmitted at
stated intervals of not more than 12 months shall be transmitted no later than
June 30 in each calendar year, commencing in June 30, 2007. Each such report
shall be dated as of a date not more than 60 days prior to the date of
transmission.

               (b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, upon which the Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Securities are listed on
any stock exchange or of any delisting thereof.

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

          Section 8.01. Company May Consolidate, etc. Only on Certain Terms. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Company shall not permit any Person to consolidate with or merge
into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

               (a) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety (the "SURVIVING ENTITY"), (i) shall be either (1) organized and validly
existing under the laws of the United States of America, any State thereof or
the District of Columbia, or (2) organized under the laws of a jurisdiction
outside the United States and has common stock traded on an Eligible Market and
a worldwide total market capitalization of its equity securities before giving
effect to the consolidation or merger of at least $2 billion, and (ii) the
Surviving Entity shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, all of the obligations of the Company
under the Securities and this Indenture;


                                       39


               (b) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and

               (c) the Company or the Surviving Entity has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with this Article VIII and Article IX, respectively.

          Section 8.02. Successor Substituted. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety in accordance with Section 8.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

          Section 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

               (a) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or

               (b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or

               (c) to provide for a successor Trustee in respect of the
Securities; or

               (d) to cure any ambiguity or defect, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions in respect of matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of this
Indenture; provided that such action pursuant to this clause (d) shall not
adversely affect the interests of the Holders in any material respect; or

               (e) to add any additional Events of Default for the benefit of
the Holders; or


                                       40



               (f) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities any property or assets; or

               (g) to decrease the Conversion Price of the Securities; provided,
however, that such decrease shall be in accordance with the terms of this
Indenture or shall not adversely affect the interests of the Holders; or

               (h) to supplement any provision of this Indenture to such extent
as shall be necessary to permit or facilitate the discharge of the Securities;
provided that such change or modification does not adversely affect the
interests of the Holders; or

               (i) to make any change or modification necessary in connection
with the registration of the Securities under the Securities Act as contemplated
in the Registration Rights Agreement; provided that such change or modification
does not adversely affect the interests of the Holders; or

               (j) to add or modify any other provision herein in respect of
matters or questions arising hereunder which the Company and the Trustee may
deem necessary or desirable and which would not reasonably be expected to
adversely affect the interests of the Holders in any material respect.

          Section 9.02. Supplemental Indentures With Consent of Holders. With
the consent of the Holders of not less than a majority in aggregate Principal
Amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may 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 of modifying in any manner the rights
of the Holders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:

               (a) reduce the rate of or extend the time for payment of
interest, if any, on the Security; or

               (b) reduce the Principal Amount of, or extend the Stated Maturity
of, any Security; or

               (c) make any change that impairs or adversely affects the
conversion rights of any Securities; or

               (d) reduce the Redemption Price, the Fundamental Change
Repurchase Price of any Security, the Make-Whole Premium or amend or modify in
any manner adverse to the Holders the Company's obligation to make such
payments, whether through an amendment or waiver of provisions in the covenants,
definitions or otherwise; or

               (e) modify the provisions in respect of the right of Holders to
cause the Company to redeem Securities on the Redemption Date or to repurchase
Securities upon a Fundamental Change in a manner adverse to Holders; or


                                       41



               (f) make any interest or principal on a Security payable in money
other than that stated in the Security or other than in accordance with the
provisions of this Indenture; or

               (g) impair the right of any Holder to receive payment of the
Principal Amount of or interest (including Additional Interest, if any), on a
Holder's Securities on or after the due dates therefor or to institute suit for
the enforcement of any payment on or in respect of such Holder's Securities; or

               (h) reduce the quorum or voting requirements under this
Indenture; or

               (i) change the ranking of the Securities in a manner adverse to
the Holders; or

               (j) make any change in the amendment provisions which require
each Holder's consent or in the waiver provisions; or

               (k) reduce the percentage in Principal Amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture; or

               (l) modify any of the provisions of this Section 9.02 or Section
5.12, 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 Outstanding Security affected thereby.

               It shall not be necessary for any Act of Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

               No consideration shall be offered or paid to any Holder to amend
or consent to a waiver or modification of any provision of any of this Indenture
or the Securities unless the same consideration also is offered to all
Securityholders.

          Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be provided with, and (subject to Section 6.01)
shall be fully protected in relying upon, in addition to the documents required
by Section 1.02, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. Subject to
the preceding sentence, the Trustee shall sign such supplemental indenture if
the same does not adversely affect the Trustee's own rights, duties or
immunities under this Indenture or otherwise. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that adversely affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.


                                       42



          Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

          Section 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.

          Section 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX shall bear a notation in form approved by
the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.

                                    ARTICLE X

                                    COVENANTS

          Section 10.01. Payments. The Company shall duly and punctually make
all payments in respect of the Securities in accordance with the terms of the
Securities and this Indenture.

          Any payments made or due pursuant to this Indenture shall be
considered paid on the applicable date due if by 10:00 a.m., New York City time,
on such date the Paying Agent holds, in accordance with this Indenture, cash
sufficient to pay all such amounts then due. Payment of the Principal Amount and
interest (and Additional Interest, if any), including Redemption Price and
Fundamental Change Repurchase Price, on the Securities shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

          Section 10.02. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served, which shall initially be at an office of an affiliate
of the Trustee, namely c/o The Bank of New York at 101 Barclay Street, New York,
New York 10286. The Company shall give prompt written notice to the Trustee of
any change in the location, of such office or agency. 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 of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.


                                       43



          The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. Another office and addressee
for purposes hereof shall initially be 222 Berkeley Street, 2nd Floor, Boston,
MA 02116, Attn: Corporate Trust Services.

          Section 10.03. Money for Security Payments to be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it shall, on or before
each due date of any payment in respect of any of the Securities, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to make the payment so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of its action or failure so to act.

          Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of any payment in respect of any Securities, deposit with
a Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

          The Company shall cause each Paying Agent other than the Trustee 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 10.03,
that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.

          The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability in respect of
such money.

          Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the making of payments in respect of any Security
and remaining unclaimed for two years after such payment has become due shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent in respect of such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper


                                       44



published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining shall be repaid to the Company. In the absence of a
written request from the Company to return funds remaining unclaimed for two
years after such payment has become due to the Company, the Trustee shall from
time to time deliver all unclaimed payments to or as directed by applicable
escheat authorities, as determined by the Trustee in its sole discretion, in
accordance with the customary practices and procedures of the Trustee. Any such
unclaimed funds held by the Trustee pursuant to this Section 10.03 shall be held
uninvested and without any liability for interest.

          Section 10.04. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, stating whether
or not to the knowledge of the signers thereof the Company is in Default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in Default, specifying all such
Defaults and the nature and status thereof of which they may have knowledge.

          The Company shall deliver to the Trustee, as soon as possible and in
any event within 30 days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officers' Certificate setting
forth the details of such Event of Default or event and the action which the
Company is taking or proposes to take in respect thereof.

          Section 10.05. Existence. Subject to Article VIII, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors of 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 Holders.

          Section 10.06. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

          Section 10.07. Reports and Delivery of Information. (a) The Company
shall file with the Trustee such annual and quarterly reports, information,
documents other reports (or copies of such portions of any of the foregoing as
the Commission may by rules and regulations prescribe) which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act, within 15 days after the applicable required filing date as set
forth in the Exchange Act, whether or not Company makes the filing with the
Commission. The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, if required by the Trust Indenture Act at the times and in
the manner required by the Trust Indenture Act. The Company also shall comply
with Trust Indenture Act Section 314(a), whether or not the Securities are
governed by the Trust Indenture Act. At any time when the Company is not subject
to Section


                                       45



13 of 15(d) of the Exchange Act, the Company shall furnish to the Trustee (i)
quarterly financial statements within 45 days after the end of each fiscal
quarter that are substantially equivalent to those the Company would be required
to file with the Commission in a Quarterly Report on Form 10-Q, (ii) annual
financial statements within 90 days after the end of each fiscal year that are
substantially equivalent to those the Company would be required to file with the
Commission in an Annual Report on Form 10-K, including a report thereon by the
Company's certified independent accountants, and (iii) accompanying each of the
financial statements required by (i) and (ii) above, information substantially
equivalent to that required by Regulation S-K Item 303, "Management's Discussion
and Analysis of Financial Condition and Results of Operations;" provided, that
the Company shall be deemed to have satisfied its obligations under this
paragraph if it files such information with the Commission (if the Commission
will accept such filing) and such filing is available on the Commission's
Electronic Data Gathering, Analysis and Retrieval system or otherwise makes such
financial statements and other information available on or through its web site.

               (b) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder or any beneficial owner
of Securities or holder or beneficial owner of shares of Common Stock issued
upon conversion thereof, the Company will promptly furnish or cause to be
furnished Rule 144A Information (as defined below) to such Holder or any
beneficial owner of Securities or holder or beneficial owner of shares of Common
Stock, or to a prospective purchaser of any such security designated by any such
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act in connection with the
resale of any such security. "RULE 144A INFORMATION" shall be such information
as is specified pursuant to Rule 144A(d)(4) under the Securities Act.

               (c) It is expressly understood that materials transmitted
electronically by the Company to the Commission shall be deemed filed with the
Trustee for purposes of this Section 10.07. The Trustee shall not be under a
duty to review or evaluate any report or information delivered to the Trustee
pursuant to the provisions of this Section 10.07 for the purposes of making such
reports available to it and to the Holders of Securities who may request such
information. 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 conclusively on Officers' Certificates).

          Section 10.08. Resale of Certain Securities. During the period
beginning on the Issue Date and ending on the date that is two years from the
Issue Date, the Company shall not, and shall not permit any of its "affiliates"
(as defined under Rule 144 under the Securities Act or any successor provision
thereto) to, resell any Securities which constitute "restricted securities"
under Rule 144 that have been reacquired by any of them. The Trustee shall have
no responsibility in respect of the Company's performance of its agreement in
the preceding sentence.

          Section 10.09. Book-Entry System. If the Securities cease to trade in
the Depositary's book-entry settlement system, the Company covenants and agrees
that it shall use


                                       46



reasonable efforts to make such other book entry arrangements that it determines
are reasonable for the Securities.

          Section 10.10. Additional Interest Under the Registration Rights
Agreement. If at any time Additional Interest becomes payable by the Company
pursuant to the Registration Rights Agreement, the Company shall promptly
deliver to the Trustee a certificate to that effect and stating (i) the amount
of such Additional Interest that is payable and (ii) the date on which such
Additional Interest is payable pursuant to the terms of the Registration Rights
Agreement. Unless and until a Responsible Officer of the Trustee receives such a
certificate, the Trustee may assume without inquiry that no Additional Interest
is payable. If the Company has paid Additional Interest directly to the Persons
entitled to such Additional Interest, the Company shall deliver to the Trustee a
certificate setting forth the particulars of such payment.

          Section 10.11. Information for IRS Filings. The Company shall provide
to the Trustee on a timely basis such information as the Trustee requires to
enable the Trustee to prepare and file any form required to be submitted by the
Trustee with the Internal Revenue Service and the Holders.

          Section 10.12. Limit on Incurring Additional Indebtedness and Liens.
Prior to such time as the Closing Price of the Common Stock has exceeded 200% of
the Conversion Price for at least 30 Trading Days during any period of 40
consecutive Trading Days following the effectiveness of the Shelf Registration
Statement, the Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:

          (a) incur, create, issue, assume, guarantee or otherwise become liable
for any outstanding Indebtedness that ranks senior to, or pari passu with, the
Securities in an aggregate principal amount in excess of the greater of (i)
Indebtedness incurred under the Credit Facility, or (ii) three times LTM EBITDA,
measured at any time the Company incurs, creates, issues, assumes, guarantees or
otherwise becomes directly or indirectly liable for such Indebtedness, including
any amounts owing under the Credit Facility; provided that, to the extent any
Indebtedness is permitted pursuant to the immediately preceding clause of this
Section 10.12, such Indebtedness shall not under any circumstances be
convertible into, or exchangeable or exercisable for, Common Stock, or

          (b) allow or suffer to exist any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its
Subsidiaries, other than to secure Indebtedness permitted by clause (a) above.

          At any such time that the Company seeks to incur, create, issue,
assume, guarantee or otherwise become directly or indirectly liable for
Indebtedness other than Indebtedness incurred under the Credit Facility, the
Company shall deliver, prior to the incurrence of such Indebtedness, an
Officers' Certificate to the Trustee (w) certifying the amount of LTM EBITDA,
(x) setting forth the calculation of such figure, (y) specifying the publicly
available financial information upon which such calculation was based and (z)
directing the Trustee to deliver a copy of such Officers' Certificate to the
Holders in accordance with the last sentence of this Section 10.12; provided
that, to the extent that any Officers' Certificate delivered


                                       47



hereunder contains any material, nonpublic information, the Company shall, prior
to or contemporaneously with the delivery of such certificate to the Holders,
publicly disclose such information. The Trustee shall deliver a copy of any
Officers' Certificate delivered to it pursuant to this Section 10.12 to the
Holders within five Business Days of its receipt thereof.

          Section 10.13. Requirement to Seek Stockholder Approval. At the next
special or annual meeting of stockholders of the Company, the Company shall take
all action necessary to seek to obtain the approval of its stockholders
providing for the Company's issuance of all of the shares of Common Stock issued
and issuable pursuant hereto upon conversion of the Securities or payment of the
Make-Whole Premium, as applicable, without reference to the limit thereon set
forth in Section 13.06(i), pursuant to the rules or regulations of The NASDAQ
Global Select Market, including, without limitation, NASDAQ Marketplace Rule
4350(i) (the "STOCKHOLDER APPROVAL"). In connection with such action, the
Company shall provide each stockholder with a proxy statement and shall use its
reasonable best efforts to solicit and obtain the Stockholder Approval and to
cause its Board of Directors to recommend, to the extent possible consistent
with its fiduciary duties under applicable law, to the stockholders that they
approve such proposals. If, despite the Company's reasonable best efforts, such
Stockholder Approval is not obtained at the first meeting at which it is
presented for a vote, the Company shall seek to obtain such Stockholder Approval
at each subsequent general meeting of stockholders until such Stockholder
Approval is obtained.

                                   ARTICLE XI

       REDEMPTION PRIOR TO MATURITY; REPURCHASE UPON A FUNDAMENTAL CHANGE

          Section 11.01. Company's Right to Redeem; Notices to Trustee. Prior to
December 15, 2009, the Securities are not redeemable. At any time commencing on
December 15, 2009 and ending December 15, 2011, subject to the terms and
conditions of this Article XI, if the Closing Price of the Common Stock on no
fewer than 20 Trading Days of the 30 consecutive Trading Days immediately
preceding the applicable Redemption Notice Date exceeds 150% of the Conversion
Price, the Company may, at its option, redeem the Securities for cash in whole
or in part at the Redemption Price. From and after December 15, 2011, subject to
the terms and conditions of this Article XI, the Company may, at its option,
redeem the Securities for cash in whole or in part at the Redemption Price.

          Section 11.02. Selection of Securities to be Redeemed. If less than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot (so long as such method is not prohibited by
the rules of any stock exchange on which the Securities are then listed). The
Trustee shall make the selection within seven days from its receipt of the
notice from the Company delivered pursuant to Section 11.01 from Outstanding
Securities not previously called for redemption and shall notify the Company of
its selection.

          Securities and portions of them the Trustee selects shall be in
Principal Amounts of $1,000 or integral multiples of $1,000. Provisions of this
Indenture that apply to Securities called for redemption in whole also apply to
Securities called for redemption in part.


                                       48



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

          Section 11.03. Notice of Redemption. At least 30 days but not more
than 60 days before a Redemption Date, the Company shall mail a notice of
required redemption ("COMPANY'S REDEMPTION ELECTION NOTICE" and the date such
notice is given, the "REDEMPTION ELECTION NOTICE DATE") by first-class mail,
postage prepaid, to each Holder of Securities to be redeemed.

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

               (a) the Redemption Date;

               (b) the Redemption Price;

               (c) the Conversion Price;

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

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

               (f) that Holders who want to convert Securities must satisfy the
requirements set forth therein and in this Indenture;

               (g) that Securities called for redemption must be surrendered to
the Paying Agent for cancellation to collect the Redemption Price;

               (h) if fewer than all the outstanding Securities are to be
redeemed, the certificate number (if such Securities are held other than in
global form) and Principal Amounts of the particular Securities to be redeemed;

               (i) that, unless the Company defaults in making payment of such
Redemption Price, Securities covered by any redemption will cease to be
outstanding and interest will cease to accrue on and after the Redemption Date
with respect to the Securities to be redeemed; and

               (j) the CUSIP number of the Securities.

          At the Company's written request delivered at least 10 days prior to
the date such notice is to be given (unless a shorter time period shall be
acceptable to the Trustee), the Trustee shall give the Company's Redemption
Election Notice in the Company's name and at the Company's expense.


                                       49



          Section 11.04. Effect of Notice of Redemption. Once the Company's
Redemption Election Notice is given, Securities called for redemption become due
and payable on the applicable Redemption Date and at the Redemption Price stated
in the notice except for Securities which are converted in accordance with the
terms of this Indenture. Upon surrender to the Paying Agent, such Securities
shall be paid at the Redemption Price stated in the notice.

          Section 11.05. Holder's Right to Require Redemption. Each Holder
making an election in accordance with this Article XI shall, by notice given in
accordance with Section 11.06, have the right to require the Company to redeem
any of its outstanding Securities in cash on each of December 15, 2011, December
15, 2016 and December 15, 2021 (each, a "HOLDER REDEMPTION DATE") at the
Redemption Price. The Company shall redeem in cash at the Redemption Price on
the applicable Holder Redemption Date any Securities which Holders elect for
redemption in accordance with this Section 11.05.

          Section 11.06. Notice of Right to Require Redemption. At least 30 days
but not more than 60 days before each applicable Holder Redemption Date, the
Company shall mail a notice (the "NOTICE OF REDEMPTION RIGHT") of a Holder's
right to require redemption by first-class mail, postage prepaid, to each Holder
of Securities.

          The Notice of Redemption Right shall state:

               (a) the applicable Holder Redemption Date;

               (b) the Redemption Price;

               (c) the Conversion Price;

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

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

               (f) that Holders who want to convert Securities must satisfy the
requirements set forth therein and in this Indenture;

               (g) that Securities presented for redemption must be surrendered
to the Paying Agent for cancellation to collect the Redemption Price;

               (h) that, unless the Company defaults in making payment of such
Redemption Price, Securities covered by any Notice of Redemption will cease to
be outstanding and interest will cease to accrue on and after the applicable
Holder Redemption Date with respect to the Securities to be redeemed;

               (i) that if the Holder does not comply with the procedures
specified and present Securities to be redeemed to the Paying Agent not later
than the applicable Holder Redemption Date, the right to require redemption on
such Holder Redemption Date will terminate; and


                                       50



               (j) the CUSIP number of the Securities.

          At the Company's written request delivered at least 10 days prior to
the date such notice is to be given (unless a shorter time period shall be
acceptable to the Trustee), the Trustee shall give the Notice of Redemption
Right in the Company's name and at the Company's expense.

          Section 11.07. Redemption by Holder. At any time after a Holder's
timely receipt of a Notice of Redemption Right, but in no event later than five
days prior to the applicable Holder Redemption Date, such Holder may require the
Company to redeem, in whole or in part, the Securities held by such Holder by
delivering a notice (the "NOTICE OF REDEMPTION") to the Paying Agent. The Notice
of Redemption shall state:

               (a) if certificated, the certificate numbers of the Securities
which such Holder will deliver to be redeemed, or, if not certificated, the
Notice of Redemption must comply with appropriate procedures of the Depositary;

               (b) the portion of the Principal Amount of the Securities which
the Holder will deliver to be redeemed, which portion must be in a Principal
Amount of $1,000 or integral multiples thereof; and

               (c) that such Securities shall be redeemed as of the applicable
Holder Redemption Date pursuant to the terms and conditions specified in the
Securities and in this Indenture.

          Section 11.08. Deposit of Redemption Price. Prior to 10:00 a.m., New
York City time, on any Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of
them is the Paying Agent, shall segregate and hold in trust) money sufficient to
pay the Redemption Price of all Securities to be redeemed on that date other
than Securities or portions of Securities presented for redemption which on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money not required for that purpose because of conversion of
Securities pursuant to Article XIII. If such money is then held by the Company
in trust and is not required for such purpose it shall be discharged from such
trust.

          Section 11.09. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and, upon receipt
of a Company Order, the Trustee shall authenticate and deliver to the Holder a
new Security in an authorized denomination equal in principal amount to the
unredeemed portion of the Security surrendered. The Company shall not be
required to (i) issue, register the transfer of, or exchange any Securities
during a period of 10 days before a Redemption Date or (ii) register the
transfer of, or exchange any, Securities so presented for redemption, in whole
or in part, except the unredeemed portion of any Security being redeemed in
part.


                                       51



          Section 11.10. Repurchase of Securities at Option of the Holder Upon
Fundamental Change.

               (a) General. If prior to the Stated Maturity there shall have
occurred a Fundamental Change, each Holder shall have the option to require all
or a portion of its Securities to be repurchased (the "FUNDAMENTAL CHANGE
REPURCHASE") in cash by the Company at the Fundamental Change Repurchase Price
on the Fundamental Change Settlement Date in accordance with the following
procedures. The "FUNDAMENTAL CHANGE REPURCHASE PRICE" means the Principal Amount
of the Securities to be repurchased, together with accrued and unpaid interest
and Additional Interest, if any, to, but excluding, the Fundamental Change
Settlement Date.

               (b) Company Notice of Fundamental Change. Within 15 days after
the Company knows or reasonably should know of the occurrence of a Fundamental
Change, the Company shall deliver a written notice of Fundamental Change (the
"FUNDAMENTAL CHANGE COMPANY NOTICE") by first-class mail or by overnight courier
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Fundamental Change
Repurchase Notice to be completed by the Securityholder and shall state:

                    (i) the events causing a Fundamental Change and the date of
such Fundamental Change;

                    (ii) the last date of the Fundamental Change
Conversion/Repurchase Period by which a Holder must deliver a Fundamental Change
Repurchase Notice to elect the repurchase option pursuant to this Section 11.10
or deliver a Notice of Conversion requesting conversion upon a Fundamental
Change in accordance with Section 13.02;

                    (iii) the Fundamental Change Settlement Date;

                    (iv) the Fundamental Change Repurchase Price;

                    (v) the Conversion Price applicable on the date of the
Fundamental Change Company Notice;

                    (vi) that Securities as to which a Fundamental Change
Repurchase Notice has been given may be converted pursuant to Article XIII
hereof only if the Fundamental Change Repurchase Notice has been withdrawn in
accordance with the terms of this Indenture;

                    (vii) that Securities must be surrendered to the Paying
Agent for cancellation to collect payment;

                    (viii) that the Fundamental Change Repurchase Price for any
Security as to which a Fundamental Change Repurchase Notice has been duly given
and not withdrawn will be paid promptly following the later of the Fundamental
Change Settlement Date and the time of surrender of such Security as described
in clause (vii) above;


                                       52



                    (ix) the procedures the Holder must follow to exercise
rights under this Section 11.10;

                    (x) the conversion rights of the Securities;

                    (xi) the procedures for withdrawing a Fundamental Change
Repurchase Notice;

                    (xii) that, unless the Company defaults in making payment of
such Fundamental Change Repurchase Price, Securities covered by any Fundamental
Change Repurchase Notice will cease to be outstanding and interest will cease to
accrue on and after the Fundamental Change Settlement Date;

                    (xiii) the CUSIP number of the Securities; and

                    (xiv) whether a Make-Whole Premium is required to be paid by
the Company upon any conversion in connection such a Fundamental Change.

          The Company shall, at least three Business Days prior to delivering
the Fundamental Change Company Notice, deliver an Officers' Certificate to the
Trustee specifying:

                         (A) the information required by the Fundamental Change
Company Notice pursuant to Section 11.10(b), and

                         (B) whether the Company desires the Trustee to give the
Fundamental Change Company Notice required by Section 11.10(b).

          If the Company requests that the Trustee shall give (at the Company's
expense) such Fundamental Change Company Notice in the Company's name, the
Company shall, in all cases, prepare the text of such Fundamental Change Company
Notice. In connection with delivery of the Fundamental Change Company Notice to
the Holders, the Company shall publish a notice containing substantially the
same information that is required in the Fundamental Change Company Notice in a
newspaper published in the English language, customarily published each Business
Day and of general circulation in The City of New York, or publish such
information on the Company's website or through such other public medium as the
Company may use at such time.

               (c) Fundamental Change Repurchase Notice. In order to exercise
its rights under Section 11.10 hereof, a Holder must deliver to the Paying
Agent:

                    (i) a written notice of repurchase (a "FUNDAMENTAL CHANGE
REPURCHASE NOTICE"), substantially in the form of Exhibit D hereto, at any time
during the period beginning upon receipt of the Fundamental Change Company
Notice and ending on the twenty (20) Trading Days after the Effective Date (the
"FUNDAMENTAL CHANGE CONVERSION/REPURCHASE PERIOD"):


                                       53



                         (A) if certificated, the certificate numbers of the
Securities which such Holder will deliver to be repurchased, or, if not
certificated, the Fundamental Change Repurchase Notice must comply with
appropriate procedures of the Depositary;

                         (B) the portion of the Principal Amount of the
Securities which the Holder will deliver to be repurchased, which portion must
be in a Principal Amount of $1,000 or integral multiples thereof; and

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

                    (ii) the Security (if such Security is held other than in
global form) for cancellation prior to, on or after the Fundamental Change
Settlement Date (together with all necessary endorsements) at the offices of the
Paying Agent, such delivery being a condition to receipt by the Holder of the
Fundamental Change Repurchase Price therefor; provided that such Fundamental
Change Repurchase Price shall be so paid pursuant to this Section 11.10 only if
the Security so delivered to the Paying Agent shall conform in all respects to
the description thereof in the related Fundamental Change Repurchase Notice.

          Provisions of this Indenture that apply to the repurchase of all of a
Security also apply to the repurchase of any portion of such Security.

          Any repurchase by the Company contemplated pursuant to the provisions
of this Section 11.10 shall be consummated by the delivery to the Paying Agent
of the consideration to be received by the Holder promptly following the later
of the Fundamental Change Settlement Date and the time of delivery of the
Security.

          Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Fundamental Change Repurchase Notice contemplated by
this Section 11.10(c) shall have the right to withdraw such Fundamental Change
Repurchase Notice at any time prior to the close of business on the Business Day
prior to the Fundamental Change Settlement Date by delivery of a written notice
of withdrawal to the Paying Agent in accordance with Section 11.11.

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

               (d) Procedure Upon Repurchase. The Company shall deposit cash at
the time and in the manner as provided in Section 11.14, sufficient to pay the
aggregate Fundamental Change Repurchase Price of all Securities to be purchased
pursuant to this Section 11.10.

          Section 11.11. Effect of Fundamental Change Repurchase Notice. Upon
receipt by the Paying Agent of the Fundamental Change Repurchase Notice
specified in Section 11.10(c), the Holder of the Security in respect of which
such Fundamental Change Repurchase Notice was given shall (unless such
Fundamental Change Repurchase Notice is withdrawn as specified in the following
two paragraphs) thereafter be entitled to receive solely the Fundamental Change
Repurchase Price in respect of such Security. Such Fundamental Change


                                       54



Repurchase Price shall be paid to such Holder, subject to receipt of funds by
the Paying Agent, promptly following the later of (x) the Fundamental Change
Settlement Date in respect of such Security (provided the conditions in Section
11.10(c) have been satisfied) and (y) the time of delivery of such Security to
the Paying Agent by the Holder thereof in the manner required by Section
11.10(c). Securities in respect of which a Fundamental Change Repurchase Notice
has been given by the Holder thereof may not be converted pursuant to Article
XIII on or after the date of the delivery of such Fundamental Change Repurchase
Notice unless such Fundamental Change Repurchase Notice has first been validly
withdrawn as specified in the following two paragraphs.

          A Fundamental Change Repurchase Notice may be withdrawn only by means
of a written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the procedures set forth in the Fundamental Change Company
Notice at any time prior to the close of business on the Business Day prior to
the Fundamental Change Settlement Date specifying:

               (a) the Principal Amount of the Securities in respect of which
such notice of withdrawal is being submitted;

               (b) if certificated, the certificate numbers of the Securities in
respect of which such notice of withdrawal is being submitted, or, if not
certificated, such notice of withdrawal must comply with appropriate procedures
of the Depositary; and

               (c) the Principal Amount, if any, of such Securities which
remains subject to the original Fundamental Change Repurchase Notice and which
has been or will be delivered for repurchase by the Company.

          There shall be no repurchase of any Securities pursuant to Section
11.10 if there has occurred (prior to, on or after, as the case may be, the
giving, by the Holders of such Securities, of the required Fundamental Change
Repurchase Notice) and is continuing an Event of Default (other than a default
in the payment of the Fundamental Change Repurchase Price in respect of such
Securities). The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) in respect of which a Fundamental Change Repurchase
Notice 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 in respect of such
Securities) in which case, upon such return, the Fundamental Change Repurchase
Notice in respect thereof shall be deemed to have been withdrawn.

          Section 11.12. Securities Repurchased in Whole or in Part. Any
Security which is to be repurchased, whether in whole or in part, shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount of the
Security so surrendered which is not repurchased.


                                       55



          Section 11.13. Covenant to Comply With Securities Laws Upon Repurchase
of Securities. In connection with any offer to repurchase Securities under
Section 11.10 (provided that such offer or repurchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or repurchase), the Company shall (a) comply with Rule 13e-4 and Rule
14e-1 under the Exchange Act, (b) file the related Schedule TO (or any successor
schedule, form or report) under the Exchange Act, and (c) otherwise comply with
all Federal and state securities laws so as to permit the rights and obligations
under Section 11.10 to be exercised in the time and in the manner specified in
Section 11.10, as applicable.

          Section 11.14. Deposit of Fundamental Change Repurchase Price. Prior
to 10:00 a.m., New York City time, on the Business Day preceding the Fundamental
Change Settlement Date, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the Paying Agent, shall segregate and hold in trust as
provided herein) an amount of money (in immediately available funds if deposited
on such Business Day), sufficient to pay the Fundamental Change Repurchase Price
of all the Securities or portions thereof which are to be repurchased as of the
Fundamental Change Settlement Date. The Company shall promptly notify the
Trustee in writing of the amount of any deposits of cash made pursuant to this
Section 11.14.

          Section 11.15. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company any cash that remains unclaimed, 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 11.14 exceeds the aggregate
Fundamental Change Repurchase Price of the Securities or portions thereof which
the Company is obligated to repurchase as of the Fundamental Change Settlement
Date, then as soon as practicable following the Fundamental Change Settlement
Date, the Trustee or the Paying Agent, as the case may be, shall return any such
excess to the Company.

                                  ARTICLE XII

                       INTEREST PAYMENTS ON THE SECURITIES

          Section 12.01. Interest Rate. (a) Interest on the Securities shall be
payable semi-annually in arrears on each Interest Payment Date to Holders of
record on the Record Date immediately preceding such Interest Payment Date.
Interest on the Securities shall accrue at a rate of 4% per annum. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
Interest on the Securities shall accrue from the most recent date to which
interest has been paid, or if no interest has been paid, from December 15, 2006,
until the Principal Amount is paid or duly made available for payment.

               (b) If prior to any Interest Payment Date, Additional Interest
has accrued under the Registration Rights Agreement and not theretofore been
paid in full, any such Additional Interest shall be due and payable on such
Interest Payment Date, and shall be included in interest payable on such
Interest Payment Date and shall be paid in the manner provided for herein for
the payment of interest.


                                       56



               (c) Interest on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security is registered at the close of business on the
Record Date for such interest at the office or agency of the Company maintained
for such purpose. Each installment of interest on any Security shall be made by
check mailed to the address of the Holder specified in the register of
Securities; provided, however, that, in respect of any Holder of Securities with
an aggregate principal amount in excess of $5,000,000, at the request of such
Holder in writing to the Company, interest on such Holder's Securities shall be
paid by wire transfer in immediately available funds in accordance with the
written wire transfer instruction supplied by such Holder from time to time to
the Trustee and Paying Agent (if different from the Trustee) at least ten days
prior to the applicable Interest Payment Date. In the case of a permanent Global
Security, interest payable on any Interest Payment Date will be paid to the
Depositary, in respect of that portion of such permanent Global Security held
for its account by Cede & Co. for the purpose of permitting such party to credit
the interest received by it in respect of such permanent Global Security to the
accounts of the beneficial owners thereof.

                                  ARTICLE XIII

                                   CONVERSION

          Section 13.01. Conversion Privilege. (a) Subject to the further
provisions of this Article XIII, at any time or times after the Issue Date, a
Holder of a Security may convert the Principal Amount of such Security (or any
portion thereof equal to $1,000 or any integral multiple of $1,000 in excess
thereof) into shares of Common Stock at any time prior to the close of business
on the Business Day prior to the Stated Maturity.

               (b) Conversion Period. Notwithstanding the foregoing, if such
Security is presented for repurchase or redemption pursuant to Article XI, such
conversion right shall terminate at the close of business on the Business Date
immediately preceding a Redemption Date or the last day of the Fundamental
Change Conversion/Repurchase Period for such Security (unless the Company shall
default on payment when due, in which case the conversion right shall extend to
the close of business on the date such default is cured and such Security is
redeemed or repurchased).

               (c) Conversion Rate. The number of shares of Common Stock
issuable upon conversion of any Conversion Amount pursuant to Section 13.01
shall be determined by dividing (x) such Conversion Amount by (y) the Conversion
Price (the "CONVERSION RATE").

                    (i) "CONVERSION AMOUNT" means the portion of the Principal
Amount to be converted, redeemed or otherwise in respect of which this
determination is being made.

                    (ii) "CONVERSION PRICE" means, as of any Conversion Date (as
defined below) or other date of determination, and subject to adjustment as
provided herein, $12.336, subject to adjustment as provided herein.


                                       57


               (d) Securities Converted in Whole or in Part. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of a portion of a Security.

               (e) Rights of Holders. Unless otherwise provided herein, a Holder
of Securities is not entitled to any rights of a holder of Common Stock until
such Holder has converted its Securities to Common Stock, and only to the extent
such Securities are deemed to have been converted into Common Stock pursuant to
this Article XIII.

          Section 13.02. Conversion Procedure. (a) To convert a Security (or any
portion thereof) into shares of Common Stock on any date (the "CONVERSION
DATE"), a Holder must (i) complete and manually sign the conversion notice on
the back of the Security (or a facsimile of the conversion notice) specifying
the Principal Amount of such Security such Holder seeks to convert and deliver
such notice (the "NOTICE OF CONVERSION") to a Conversion Agent, (ii) surrender
the Security to a Conversion Agent, (iii) furnish appropriate endorsements and
transfer documents if required by a Registrar or a Conversion Agent and (iv) pay
any transfer or similar tax, if required. Anything herein to the contrary
notwithstanding, in the case of Global Securities, a Notice of Conversion shall
be delivered and such Securities shall be surrendered for conversion in
accordance with the rules and procedures of the Depositary as in effect from
time to time.

               (b) The Company will, as soon as practicable after the Conversion
Date, but in no event later than two Trading Days following the delivery of a
Notice of Conversion (the "SHARE DELIVERY DATE") issue, or cause to be issued,
and deliver to the Conversion Agent or to such Holder, or such Holder's nominee
or nominees, certificates for the number of full shares of Common Stock, if any,
to which such Holder shall be entitled. The Person or Persons entitled to
receive such Common Stock upon such conversion shall be treated for all purposes
as the record holder or holders of such Common Stock, as of the close of
business on the applicable Conversion Date; provided, however, that no surrender
of a Security on any date when the stock transfer books of the Company shall be
closed shall be effective to constitute the Person or Persons entitled to
receive the shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such shares of
Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided further that such conversion shall be at the Conversion Price
in effect on the Conversion Date as if the stock transfer books of the Company
had not been closed. Upon conversion in full of a Security, such Person shall no
longer be a Holder of such Security. Except as otherwise provided in Section
13.06, no payment or adjustment will be made for dividends or distributions on
shares of Common Stock issued upon conversion of a Security.

               All Securities or portions thereof surrendered for conversion
during the period from the close of business on the Record Date to the opening
of business on the day immediately following the Interest Payment Date shall be
accompanied by payment, in 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, however, that no such payment need be made if
(i) the Company has specified a Company Redemption Date that is


                                       58



after a Record Date and on or prior to the corresponding Interest Payment Date,
or (ii) there shall exist at the time of conversion a default in the payment of
interest on the Securities.

               (c) Company's Failure to Timely Convert. If the Company shall
fail to issue, or cause to be issued, and deliver to the Conversion Agent or to
a Holder, or such Holder's nominee or nominees, certificates for the number of
full shares of Common Stock, if any, to which such Holder shall be entitled upon
conversion of any Securities on or prior to the date which is three Trading Days
after the Conversion Date (a "CONVERSION FAILURE"), and if on or after such
Trading Day such Holder purchases (in an open market transaction or otherwise)
Common Stock to deliver in satisfaction of a sale by such Holder of Common Stock
issuable upon such conversion that such Holder anticipated receiving from the
Company (a "BUY-IN"), then the Company shall, within three Business Days after
such Holder's request and in such Holder's discretion, either (i) pay cash to
such Holder in an amount equal to such Holder's total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased (the
"BUY-IN PRICE"), at which point the Company's obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or (ii) promptly
honor its obligation to deliver to such Holder a certificate or certificates
representing such Common Stock and pay cash to such Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) the Closing Price on the Conversion Date.

               (d) If a Holder converts more than one Security at the same time,
the number of shares of Common Stock issuable upon the conversion shall be based
on the aggregate Principal Amount of Securities converted.

               (e) The conversion by the Holder following its receipt of the
Fundamental Change Company Notice during the Fundamental Change
Conversion/Repurchase Period shall be a "FUNDAMENTAL CHANGE CONVERSION". Except
as otherwise provided in Section 13.07, in connection with a Fundamental Change
Conversion, the Holder shall be entitled to receive a Make-Whole Premium in
accordance with Article XIV.

               (f) Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, as soon as practicable, a new Security equal in Principal Amount to the
unconverted portion of the Security surrendered.

               (g) If the last day on which a Security may be converted is not a
Business Day in a place where a Conversion Agent is located, the Securities may
be surrendered to that Conversion Agent on the next succeeding Business Day.

               (h) Holders that have already delivered a Fundamental Change
Repurchase Notice in respect of a Security may not surrender such Security for
conversion until the Fundamental Change Repurchase Notice has been withdrawn in
accordance with the procedures set forth in Section 11.11.

               (i) The Company shall not effect any conversion of a Security,
and no Holder shall have the right to convert any portion of such Security, to
the extent that after giving


                                       59



effect to such conversion (including any Make-Whole Premium), the Holder
(together with the Holder's affiliates) would beneficially own in excess of
4.99% of the number of shares of Common Stock outstanding immediately after
giving effect to such conversion (the "CONVERSION LIMITATION"). For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its affiliates shall include the number of shares of Common
Stock issuable upon conversion of a Security in respect of which the
determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) conversion of the
remaining, nonconverted portion of any Security beneficially owned by the Holder
or any of its affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its affiliates. Except as set
forth in the preceding sentence, for purposes of this Section, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act. For purposes of this Section 13.02(i), in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form 10-K, 10-Q or Form 8-K, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company setting forth
the number of shares of Common Stock outstanding. For any reason at any time,
upon the written or oral request of the Holder, the Company shall within one
Business Day confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including any Security, by the Holder or
its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. Notwithstanding the foregoing, the Conversion
Limitation shall not be applicable (i) on any of the ten Trading Days up to and
including the Stated Maturity, or (ii) on any of the ten Trading Days up to and
including the Effective Date or (iii) during the Fundamental Change
Conversion/Repurchase Period.

          Section 13.03. No Fractional Shares. The Company shall not issue any
fraction of a share of Common Stock upon any conversion. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock to the nearest whole share.
The Company shall pay any and all taxes that may be payable in respect of the
issuance and delivery of Common Stock upon conversion of any Conversion Amount.

          Section 13.04. Taxes on Conversion. If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issuance of shares of Common Stock upon such conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificate representing the Common Stock being issued
in a name other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulation.

          Section 13.05. Company to Provide Stock. (a) The Company shall, prior
to issuance of any Securities hereunder, and from time to time as may be
necessary, reserve, out of


                                       60



its authorized but unissued Common Stock, a sufficient number of shares of
Common Stock to permit the conversion of all outstanding Securities into shares
of Common Stock (including after taking into account any adjustments to the
Conversion Price pursuant to Section 13.06).

               (b) All shares of Common Stock delivered upon conversion of the
Securities, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim other than those created by a Holder.

               (c) The Company will endeavor promptly to comply with all federal
and state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on any Eligible Market. Any Common Stock
issued upon conversion of a Security hereunder which at the time of conversion
was a Transfer Restricted Security will remain a restricted security.

          Section 13.06. Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time by the Company as follows:

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

               (b) In case the Company shall issue rights, options or warrants
(other than pursuant to a Rights Plan) to all or substantially all holders of
its Common Stock entitling them (for a period commencing no earlier than the
record date described below and expiring not more than 60 days after such record
date) to subscribe for or purchase shares of Common Stock (or securities
convertible into or exercisable or exchangeable for Common Stock) at a price per
share (or having a conversion, exercise or exchange price per share) less than
the Closing Price per share of Common Stock on the Business Day immediately
prior to the date of announcement of such issuance (treating the conversion,
exercise or exchange price per share of the securities convertible into or
exercisable or exchangeable for Common Stock as equal to (x) the sum of (i) the
price for a unit of the security convertible into or exercisable or exchangeable
for Common Stock and (ii) any additional consideration initially payable upon
the conversion of such security into or exercise or exchange of such security
for Common Stock divided by (y) the number of shares of Common Stock initially
underlying such security), the Conversion Price in effect shall be adjusted so
that the same shall equal the price determined by multiplying the Conversion
Price by a fraction:


                                       61



                    (1) the numerator of which shall be the number of shares of
Common Stock outstanding on the close of business on the date of announcement,
plus the number of shares which the aggregate offering price of the total number
of shares so offered for subscription or purchase (or the aggregate conversion,
exercise or exchange price of the securities so offered) would purchase at such
Current Market Price per share of Common Stock; and

                    (2) the denominator of which shall be the number of shares
of Common Stock outstanding at the close of business on the date of
announcement, plus the total number of additional shares of Common Stock so
offered for subscription or purchase (or into which the securities so offered
are convertible, exercisable or exchangeable).

                    Such adjustment shall be made successively whenever any such
rights, options or warrants are issued, and shall become effective on the day
following the date of announcement of such issuance.

               (c) (i) In case the Company shall distribute to all or
substantially all holders of its Common Stock any shares of Capital Stock of the
Company (other than Common Stock), evidences of indebtedness or other non-cash
assets (including securities of any person other than the Company but excluding
(1) dividends or distributions paid exclusively in cash, (2) dividends or
distributions referred to in subsection (a) of this Section 13.06 or (3)
distributions made in connection with the liquidation, dissolution or winding up
of the Company), or shall distribute to all or substantially all holders of its
Common Stock rights, options or warrants to subscribe for or purchase any of its
securities (excluding those rights, options and warrants referred to in
subsection (b) of this Section 13.06 and also excluding the distribution of
rights to all holders of Common Stock pursuant to a Rights Plan or the
detachment of such rights to the extent set forth in the second following
paragraph), then in each such case the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the current
Conversion Price by a fraction:

                    (1) the numerator of which shall be the Current Market Price
per share of Common Stock on such record date, less the fair market value on
such record date (as determined by the Board of Directors, whose determination
shall be conclusive evidence of such fair market value and which shall be
evidenced by an Officer's Certificate delivered to Trustee) of the portion of
the distributed assets so distributed applicable to one share of Common Stock
(determined on the basis of the number of shares of Common Stock outstanding on
the record date); and

                    (2) the denominator of which shall be such Current Market
Price per share of Common Stock on such record date mentioned below.

               Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive such
distribution.

                    (ii) In the event that the Company has in effect a preferred
shares rights plan ("RIGHTS PLAN"), upon conversion of the Securities into
Common Stock, to the


                                       62



extent that the Rights Plan is still in effect upon such conversion, the Holders
will receive, in addition to the Common Stock, the rights described therein
(whether or not the rights have separated from the Common Stock at the time of
conversion), subject to the limitations set forth in the Rights Plan. If the
Rights Plan provides that upon separation of rights under such plan from the
Common Stock that the Holders would not be entitled to receive any such rights
in respect of the Common Stock issuable upon conversion of the Securities, the
Conversion Price will be adjusted as provided in this Section 13.06(c) (with
such separation deemed to be the distribution of such rights), subject to
readjustment in the event of the expiration, termination or redemption of the
rights. Any distribution of rights or warrants pursuant to a Rights Plan that
would allow a Holder to receive upon conversion, in addition to the Common
Stock, the rights described therein (whether or not the rights have separated
from the Common Stock at the time of conversion), shall not constitute a
distribution of rights, options or warrants pursuant to this Article XIII.

                    (iii) Rights, options or warrants distributed by the Company
to all holders of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company's Capital Stock (either initially or under
certain circumstances), which rights, options or warrants, until the occurrence
of a specified event or events ("TRIGGER EVENT"): (A) are deemed to be
transferred with such shares of Common Stock; (B) are not exercisable; and (C)
are also issued in respect of future issuances of Common Stock, shall be deemed
not to have been distributed for purposes of this Section 13.06 (and no
adjustment to the Conversion Price under this Section 13.06 will be required)
until the occurrence of the earliest Trigger Event, whereupon such rights,
options and warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Price shall be made under this
clause (c) of Section 13.06. If any such right or warrant, including any such
existing rights, options or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights,
options or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
record date in respect of new rights, options or warrants with such rights (and
a termination or expiration of the existing rights, options or warrants without
exercise by any of the holders thereof). In addition, in the event of any
distribution (or deemed distribution) of rights, options or warrants, or any
Trigger Event or other event (of the type described in the preceding sentence)
in respect thereof that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 13.06
was made, in the case of any such rights, options or warrants which shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of Common Stock in respect of such rights,
options or warrants (assuming such holder had retained such rights, options or
warrants), made to all holders of Common Stock as of the date of such redemption
or repurchase.

               (d) In case the Company shall, by dividend or otherwise, at any
time distribute (a "TRIGGERING DISTRIBUTION") to all or substantially all
holders of its Common Stock cash, the Conversion Price shall be decreased so
that the same shall equal the rate determined by multiplying such Conversion
Price in effect on the Business Day immediately prior to the record


                                       63



date (the "DETERMINATION DATE") declared by the Company for such Triggering
Distribution by a fraction of which the numerator shall be the Current Market
Price per share of Common Stock on the Determination Date less the aggregate
amount of cash so distributable applicable to one share of Common Stock
(determined on the basis of the number of shares of Common Stock outstanding on
the date such distribution is made), and the denominator shall be the Current
Market Price per share of Common Stock on the Determination Date, such increase
to become effective immediately prior to the opening of business on the day
following the date on which the Triggering Distribution is paid. It is expressly
understood that a stock buyback, repurchase or similar transaction or program
shall in no event be considered a Triggering Distribution for purposes of this
clause (d) of Section 13.06.

               (e) In case the Company or any of its Subsidiaries shall purchase
any shares of the Common Stock by means of a tender offer, then, effective
immediately prior to the opening of business on the day after the last date (the
"EXPIRATION DATE") tenders could have been made pursuant to such tender offer
(as it may be amended) (the last time at which such tenders could have been made
on the Expiration Date is hereinafter sometimes called the "EXPIRATION TIME"),
the Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Expiration Date by a fraction of which:

                    (1) the numerator shall be the product of the number of
shares of Common Stock outstanding (including Purchased Shares but excluding any
shares held in the treasury of the Company) immediately prior to the Expiration
Time multiplied by the Current Market Price per share of Common Stock (as
determined in accordance with clause (f) of Section 13.06); and

                    (2) the denominator shall be the sum of (x) the aggregate
consideration (determined as set forth below) payable to stockholders of the
Company based on the acceptance (up to any maximum specified in the terms of the
tender offer) of all shares validly tendered 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 and excluding any
shares held in the treasury of the Company) immediately prior to the Expiration
Time and the Current Market Price per share of Common Stock (as determined in
accordance with clause (f) of Section 13.06).

               For purposes of this clause (e) of Section 13.06, the aggregate
consideration in any such tender offer shall equal the sum of the aggregate
amount of cash consideration and the aggregate fair market value (as determined
by the Board of Directors, whose determination shall be conclusive evidence
thereof and which shall be evidenced by an Officers' Certificate delivered to
the Trustee) of any other consideration payable in such tender offer. In the
event that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law from
effecting any or all such purchases or any or all such purchases are rescinded,
the Conversion Price shall again be adjusted to be the Conversion Price which
would have been in effect based upon the number of shares actually purchased. If
the application of this clause (e) of Section 13.06 to any tender offer would
result in an increase in the Conversion Price, no adjustment shall be made for
such


                                       64



tender offer under this Section 13.06(e). For purposes of this clause (e) of
Section 13.06, the term "TENDER OFFER" shall mean and include both tender offers
and exchange offers, all references to "PURCHASES" of shares in tender offers
(and all similar references) shall mean and include both the purchase of shares
in tender offers and the acquisition of shares pursuant to exchange offers, and
all references to "TENDERED SHARES" (and all similar references) shall mean and
include shares tendered in both tender offers and exchange offers.

               (f) "CURRENT MARKET PRICE PER SHARE OF COMMON STOCK" on any date
means (i) for the purpose of any computation under clauses (b), (c) or (d) of
this Section 13.06, the average of the daily Closing Prices for the ten
consecutive Trading Days commencing 11 Trading Days before the record date in
respect of distributions, issuances or other events requiring such computation
under Section 13.06 and (ii) for purposes of any computation under subsection
(e) of this Section 13.06, the arithmetic average of the daily Closing Prices
for the ten consecutive Trading Days commencing on the Trading Day next
succeeding the Expiration Date.

               (g) In any case in which this Section 13.06 shall require that an
adjustment be made to the Conversion Price, in lieu of the foregoing adjustment,
the Company may, at its option, distribute, concurrently with the distribution
to the holders of the outstanding Common Stock, shares of Common Stock, rights,
options, warrants, any shares of Capital Stock of the Company (other than Common
Stock), evidences of indebtedness or other non-cash assets that such Holder of a
Security would have been entitled to receive, as applicable, had such Security
been converted immediately prior to the happening of the record date relating to
the event that would have caused such adjustment (without regard to the
Conversion Limitation).

               (h) In any case in which this Section 13.06 shall require that an
adjustment be made following a record date, an announcement date or a
Determination Date or Expiration Date, as the case may be, established for
purposes of this Section 13.06, the Company may elect to defer (but only until
five Business Days following the filing by the Company with the Trustee of the
certificate described in Section 13.09) issuing to the Holder of any Security
converted after such record date or announcement date or Determination Date or
Expiration Date the shares of Common Stock and other capital stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other capital stock of the Company issuable upon such conversion only on the
basis of the Conversion Rate prior to adjustment; and, in lieu of the shares the
issuance of which is so deferred, the Company shall issue or cause its transfer
agents to issue due bills or other appropriate evidence prepared by the Company
of the right to receive such shares.

               (i) Notwithstanding the foregoing provisions of this Section
13.06, until the Company shall have received Stockholder Approval, the
Conversion Price shall not be adjusted below $10.091 (as adjusted for stock
splits, reverse stock splits, stock combinations, reclassifications,
reorganizations and similar events), nor shall the Make-Whole Premium be paid to
the extent (but only to the extent) the effective Conversion Price would be less
than $10. 091 (as adjusted for stock splits, reverse stock splits, stock
combinations, reclassifications, reorganizations and similar events).

          Section 13.07. Conversion After a Public Acquirer Change of Control.
(a) In the event of a Public Acquirer Change of Control that occurs prior to
December 15, 2011, the


                                       65



Company, in lieu of paying the Make-Whole Premium pursuant to Article XIV, may
elect to adjust the Conversion Price such that from and after the Effective Date
of such Public Acquirer Change of Control, Holders shall be entitled to convert
their Securities into a number of shares of Public Acquirer Common Stock in
accordance with Section 13.02. The adjusted Conversion Price shall be the
Conversion Price in effect immediately before the Public Acquirer Change of
Control multiplied by a fraction:

                    (i) the numerator of which will be the arithmetic average of
Weighted Average Price of the Common Stock for the five (5) 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 arithmetic average
of the Weighted Average Price of the Public Acquirer Common Stock for the five
(5) consecutive Trading Days commencing on the Trading Day next succeeding the
Effective Date of such Public Acquirer Change of Control.

               (b) In order to make the election pursuant to this Section 13.07,
the Company and the issuer of the Public Acquirer Common Stock shall execute (i)
with the Trustee a supplemental indenture providing that (x) the Public Acquirer
shall expressly assume all of the Company's obligations under the Securities and
the Indenture and (y) each Security shall be convertible into Public Acquirer
Common Stock and (ii) an amendment to the Registration Rights Agreement (to the
extent any Registrable Securities (as defined therein) remain outstanding) to
make the provisions thereof apply to the Public Acquirer Common Stock. Such
supplemental indenture shall provide for provisions and adjustments which shall
be as nearly equivalent as it may be practicable to the provisions and
adjustments provided for in this Article XIII as determined in good faith by the
Board of Directors of the Company or such Public Acquirer.

               (c) At least twenty (20) Trading Days prior to the expected
Effective Date of a Fundamental Change that is also a Public Acquirer Change of
Control and not later than concurrently with the applicable Fundamental Change
Company Notice, the Company shall provide a notice (a "PUBLIC ACQUIRER CHANGE OF
CONTROL NOTICE") to all the Holders, the Trustee and the Paying Agent stating
whether the Company elects (i) to adjust the Conversion Price as set forth in
this Section 13.07 or (ii) does not elect to so adjust the Conversion Price, in
which case the Holders will have the right to convert Securities and, if
applicable, receive any Make-Whole Premium as set forth in Article XIV. In
addition, upon a Public Acquirer Change of Control, in lieu of converting
securities, the Holders can, subject to certain conditions, require the Company
to repurchase all or a portion of the Securities pursuant to Section 11.10.

          Section 13.08. No Adjustment. (a) No adjustment need be made for
issuances of Excluded Securities.

               (b) Without limiting the provisions of Section 13.06, no
adjustment shall be made thereunder, nor shall an adjustment be made to the
ability of the Holder to convert, for any distribution described therein if the
Holder will otherwise participate in the distribution without conversion of such
Holder's Securities as if such Holder held a number of shares of Common Stock
equal to the applicable Conversion Rate, multiplied by the Principal Amount


                                       66



(expressed in thousands) of Securities held by such Holder, without having to
convert its Securities. Further, if the application of the foregoing formulas in
Section 13.06 would result in either an increase in the Conversion Price or a
decrease in the Conversion Price below the par value of the Common Stock, no
adjustment to the Conversion Price will be made (except on account of share
combinations). No adjustment in the Conversion Price shall be required unless
the adjustment would require a decrease of at least 1% in the Conversion Price
as last adjusted; provided, however, that any adjustments which by reason of
this Section 13.08 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment and, in any event, shall be
carried forward and taken into account regardless of whether the aggregate
adjustment is less than 1% upon the announcement by the Company of a Fundamental
Change, upon any Holder Redemption Date, upon any notice of redemption of the
Securities and at the Stated Maturity.

          Section 13.09. Notice of Conversion Price Adjustment. (a) Whenever the
Conversion Price is adjusted, the Company shall promptly mail to Securityholders
a notice of the adjustment and file with the Trustee an Officers' Certificate
briefly stating the facts requiring the adjustment and the manner of computing
it. Unless and until the Trustee shall receive an Officers' Certificate setting
forth an adjustment of the Conversion Price, the Trustee may assume without
inquiry that the Conversion Price has not been adjusted and that the last
Conversion Price of which it has knowledge remains in effect.

               (b) Whenever, rather than adjusting the Conversion Price, the
Company elects to distribute, concurrently with the distribution to the holders
of the outstanding Common Stock, shares of Common Stock, rights, options,
warrants, any shares of Capital Stock of the Company (other than Common Stock),
evidences of indebtedness or other non-cash assets that such Holder of a
Security would have been entitled to receive, as applicable, had such Security
been converted immediately prior to the happening of the record date relating to
the event that would have caused such adjustment (without regard to the
Conversion Limitation) as provided in Section 13.07(g), the Company shall,
contemporaneously with announcing such distribution, or giving notice thereof to
the holders of the Common Stock, provide notice to the Holders that they will
participate in such distribution on an as converted basis.

          Section 13.10. Notice of Certain Transactions. In the event that:

               (a) the Company takes any action which would require an
adjustment in the Conversion Price;

               (b) the Company consolidates or merges with, or transfers all or
substantially all of its property and assets to, another corporation and
stockholders of the Company must approve the transaction; or

               (c) there is a dissolution or liquidation of the Company,

          the Company shall mail to Holders and file with the Trustee a notice
stating the proposed record or effective date, as the case may be. The Company
shall mail the notice with respect to clause (a) at least five days before such
date and the notice with respect to clauses (b) and (c) at least twenty days
before such date. Failure to mail such notice or any defect therein


                                       67



shall not affect the validity of any transaction referred to in clause (a), (b)
or (c) of this Section 13.10.

          Section 13.11. Effect of Reclassification, Consolidation, Merger or
Sale on Conversion Privilege. If any of the following shall occur, namely: (a)
any reclassification or change of shares of Common Stock issuable upon
conversion of the Securities (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination, or any other change for which an adjustment is
provided in Sections 13.06 and 13.07); (b) any consolidation or merger or
combination to which the Company is a party other than a merger in which the
Company is the continuing corporation and which does not result in any
reclassification of, or change (other than in par value, or from par value to no
par value, or from no par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock; or (c) any sale or
conveyance as an entirety or substantially as an entirety of the property and
assets of the Company, directly or indirectly, to any Person, then the Company,
or such successor, purchasing or transferee corporation, as the case may be,
shall, as a condition precedent to such reclassification, change, combination,
consolidation, merger, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
outstanding shall have the right to convert such Security into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, combination, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
deliverable upon conversion of such Security immediately prior to such
reclassification, change, combination, consolidation, merger, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article XIII. If,
in the case of any such consolidation, merger, combination, sale or conveyance,
the stock or other securities and property (including cash) receivable thereupon
by a holder of Common Stock include shares of stock or other securities and
property of a Person other than the successor, purchasing or transferee
corporation, as the case may be, in such consolidation, merger, combination,
sale or conveyance, then such supplemental indenture shall also be executed by
such other Person and shall contain such additional provisions to protect the
interests of the Holders as the Board of Directors shall reasonably consider
necessary by reason of the foregoing. The provisions of this Section 13.11 shall
similarly apply to successive reclassifications, changes, combinations,
consolidations, mergers, sales or conveyances.

          In the event the Company shall execute a supplemental indenture
pursuant to this Section 13.11, the Company shall promptly file with the Trustee
(x) an Officers' Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or other securities or property (including cash)
receivable by Holders upon the conversion of their Securities after any such
reclassification, change, combination, consolidation, merger, sale or
conveyance, any adjustment to be made in respect thereof and that all conditions
precedent have been complied with and (y) an Opinion of Counsel that all
conditions precedent have been complied with, and shall promptly mail notice
thereof to all Holders.

          Section 13.12. Trustee's Disclaimer. The Trustee shall have no duty to
determine when an adjustment under this Article XIII should be made, how it
should be made or what such


                                       68



adjustment should be, but may accept as conclusive evidence of that fact or the
correctness of any such adjustment, and shall be protected in relying upon, an
Officers' Certificate including the Officers' Certificate in respect thereof
which the Company is obligated to file with the Trustee pursuant to Section
13.09. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities and the Trustee shall
not be responsible for the Company's failure to comply with any provisions of
this Article XIII. The Trustee shall not be responsible for monitoring the price
of the Common Stock, for determining the Conversion Price or for effecting any
calculations under this Article XIII.

          The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 13.11, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the Officers'
Certificate in respect thereof which the Company is obligated to file with the
Trustee pursuant to Section 13.11.

          Section 13.13. Voluntary Decrease. The Company from time to time may
decrease the Conversion Price by any amount for any period of time if the period
is at least 20 days and if the decrease is irrevocable during the period if the
Board of Directors determines that such decrease would be in the best interest
of the Company or the Board of Directors deems it advisable to avoid or diminish
income tax to holders of shares of Common Stock in connection with any stock or
rights dividend or distribution or similar event, and the Company provides 10
days prior notice of any decrease in the Conversion Price.

          Section 13.14. Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to this Article XIII shall
be conclusive if made in good faith and in accordance with the provisions of
this Article XIII, absent manifest error, and set forth in a resolution of the
Board of Directors.

                                   ARTICLE XIV

                               MAKE-WHOLE PREMIUM

          Section 14.01. Make-Whole Premium. (a) If a Fundamental Change occurs
prior to December 15, 2011, the Company shall pay the Make-Whole Premium to
Holders of the Securities who effect a Fundamental Change Conversion at any time
during the Fundamental Change Conversion/Repurchase Period.

                    (b) Subject to the provisions of Section 13.07(i), the
Make-Whole Premium shall be equal to an additional number of shares of Common
Stock calculated in accordance with Section 14.01(c) hereof. The Make-Whole
Premium will be in addition to, and not in substitution for, any cash,
securities or other assets otherwise due to Holders of Securities upon
conversion as described in this Indenture.

                    (c) The "MAKE-WHOLE PREMIUM" shall be equal to the principal
amount of the Securities to be converted divided by $1,000 and multiplied by the
applicable number of shares of Common Stock determined by reference to the table
below (the "MAKE-WHOLE PREMIUM TABLE") and is based on the Effective Date and
the Stock Price.


                                       69



ADDITIONAL SHARES REQUIRED TO BE ISSUED (PER $1,000 PRINCIPAL AMOUNT OF
SECURITIES)



                                                                 STOCK PRICE
EFFECTIVE  ----------------------------------------------------------------------------------------------------------------------
   DATE     $9.00    $10.00  $11.00    $12.00   $13.00   $14.00   $15.00   $16.00  $17.00  $18.00  $19.00  $20.00  $25.00  $30.00
- ---------  -------  -------  -------  -------  -------  -------  -------  -------  ------  ------  ------  ------  ------  ------
                                                                                 
12/15/06   30.0476  25.9766  21.5656  18.2151  15.5069  13.3358  11.5992  10.1553  8.9524  7.9586  7.0979  6.3905  4.0229  2.7577
12/15/07   30.0476  25.1923  20.6340  16.9251  14.2204  11.9834  10.1125   8.7450  7.5840  6.5601  5.7466  5.1133  3.0121  1.9834
12/15/08   30.0476  24.1087  19.1232  15.2898  12.3521   9.9941   8.2045   6.7308  5.5550  4.6443  3.9310  3.2931  1.6256  1.0066
12/15/09   30.0476  23.1686  17.8142  13.8198  10.5826   8.0601   6.0677   4.3545  2.9377  1.8271  1.2131  0.7442      --      --
12/15/10   30.0476  21.3395  15.5762  11.4371   8.2729   6.0645   4.3253   2.9765  1.9922  1.1998  0.7436  0.4559      --      --
12/15/11   30.0476  18.9364   9.8481   4.9672   2.5804   1.1086   0.0405       --      --      --      --      --      --      --



                                       70



          The exact Stock Price and Effective Date may not be set forth on the
Make-Whole Premium Table, in which case, if the Stock Price is between two Stock
Prices on the Make-Whole Premium Table or the Effective Date is between two
Effective Dates on the Make-Whole Premium Table, the Make-Whole Premium shall be
determined by straight-line interpolation between Make-Whole Premium amounts set
forth for the higher and lower Stock Prices and the two Effective Dates, as
applicable, based on a 365-day year (or a 366-day year if the Effective Date
occurs in a leap year). The Stock Prices set forth in the column headers are
subject to adjustment pursuant to Section 14.02.

                    (i) If the Stock Price is less than or equal to $9.00
(subject to adjustment pursuant to Section 14.02, the "STOCK PRICE THRESHOLD"),
the Make-Whole Premium shall be equal to zero shares of Common Stock.

                    (ii) If the Stock Price is equal to or greater than $30.00
(subject to adjustment pursuant to Section 14.02, the "STOCK PRICE CAP"), the
Make-Whole Premium shall be equal to zero shares of Common Stock.

                    (iii) "STOCK PRICE" means the price paid per share of Common
Stock in the transaction constituting the Fundamental Change, determined as
follows: (i) if holders of Common Stock receive only cash in the transaction
constituting the Fundamental Change, the Stock Price shall equal the cash amount
paid per share of Common Stock; and (ii) in all other cases, the Stock Price
shall equal the arithmetic average of the Closing Prices of a share of Common
Stock over the five Trading Day period ending on the Trading Day immediately
preceding the Effective Date; and "EFFECTIVE DATE" means the date that a
Fundamental Change becomes effective.

               (d) The Company shall pay the Make-Whole Premium solely in shares
of Common Stock (other than cash paid in lieu of fractional shares) or in the
same form of consideration into which all or substantially all of the shares of
Common Stock have been converted or exchanged in connection with the Fundamental
Change. If holders of the Common Stock receive or have the right to receive more
than one form of consideration in connection with such Fundamental Change, then,
for purposes of the foregoing, the forms of consideration in which the
Make-Whole Premium shall be paid shall be in proportion to the different forms
of consideration paid to holders of Common Stock in connection with such
Fundamental Change.

               (e) Excepts as otherwise provided herein or in the Securities,
the Company or its agents shall be responsible for making all calculations
required under the terms of this Article XIV. Any determination that the Company
or its Board of Directors must make pursuant to this Article XIV shall be set
forth in a Board Resolution, shall be made in good faith and, absent manifest
error, shall be final and binding on Holders of the Securities. The Company or
its agents shall be required to deliver to the Trustee a schedule of its
calculations and the Trustee shall be entitled to conclusively rely upon the
accuracy of such calculation without independent verification.

               (f) Promptly after determination of the actual number of shares
of Common Stock to be issued in respect of the Make-Whole Premium, the Company
shall publish a notice containing this information in a newspaper published in
the English language,


                                       71



customarily published each Business Day and of general circulation in the City
of New York or publish such information on the Company's website or through such
other public medium as the Company may use at that time.

          Section 14.02. Adjustment to the Make-Whole Premium. Whenever the
Conversion Price shall be adjusted from time to time by the Company pursuant to
Section 13.06, the Stock Price Threshold and the Stock Price Cap shall be
adjusted and each of the Stock Prices set forth in the Make-Whole Premium Table
shall be adjusted. The adjusted Stock Price Threshold, Stock Price Cap and Stock
Prices set forth in the Make-Whole Premium Table shall equal the Stock Price
Threshold, the Stock Price Cap and such Stock Prices, as the case may be,
immediately prior to such adjustment multiplied by a fraction, the numerator of
which is the Conversion Price as so adjusted and the denominator of which is the
Conversion Price immediately prior to the adjustment giving rise to such
adjustment. Each of the share amounts set forth in the body of the Make-Whole
Premium Table shall also be adjusted in the same manner and at the same time.


                                       72



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

                                    SMITH & WESSON HOLDING CORPORATION


                                    By: /s/ Michael F. Golden
                                        ----------------------------------------
                                    Name:  Michael F. Golden
                                    Title: President and Chief Executive Officer
                                           -------------------------------------


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


                                    By: /s/ Peter M. Murphy
                                        ----------------------------------------
                                    Name:  Peter M. Murphy
                                    Title: Vice President


                                       73



                                    EXHIBIT A

                            FORM OF FACE OF SECURITY

          [INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- THIS SECURITY (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.

          THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF SMITH & WESSON
HOLDING CORPORATION THAT (A) 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), THIS SECURITY AND THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY TO (I) SMITH & WESSON HOLDING CORPORATION OR ANY SUBSIDIARY
THEREOF, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY
PURSUANT TO CLAUSE (A)(IV) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER THE TRANSFER OF
THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTION.]

          [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.


                                       A-1



          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]


                                       A-2



                       Smith & Wesson Holding Corporation

                      4% Senior Convertible Notes Due 2026

No. [_____] CUSIP NO. [831756 AA 9][831756 AB 7]                  U.S. $[______]


          Smith & Wesson Holding Corporation, a corporation duly organized and
validly existing under the laws of the State of Nevada (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 registered assigns, the principal sum of [__________] United
States Dollars ($ ) [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- (which amount
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary, in accordance with the
rules and procedures of the Depositary)] on December 15, 2026 and to pay
interest on said principal sum semiannually on June 15 and December 15 of each
year commencing June 15, 2007 at the rate of 4% per annum (to Holders of record
on the immediately preceding June 1 and December 1 which interest has been paid,
or if no interest has been paid, from December 15, 2006 until the Principal
Amount is paid or duly made available for payment. Except as otherwise provided
in the Indenture, the interest payable on this Security pursuant to the
Indenture on any June 15 and December 15 will be paid to the Person in whose
name this Security (or one or more predecessor Securities) is registered at the
close of business on the Record Date, which shall be June1 and December 1
(whether or not a Business Day) next preceding such June 1 and December 1,
respectively. Subject to the procedures of DTC, payment of the principal of and
interest accrued on this Security shall be made by wire transfer or by check
mailed to the address of the Holder of this Security specified in the register
of Securities, or, upon written application by a Holder of an aggregate
Principal Amount of greater than U.S. $5 million to the Security Registrar
setting forth wire instructions not later than ten days prior to the relevant
payment date, such Holder may receive payment by wire transfer in immediately
available funds, in such lawful money of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts.

          The Issue Date of this Security is December 15, 2006.

          Reference is made to the further provisions of this Security set forth
on the reverse hereof, including, without limitation, provisions giving the
Holder of the Security the right to require redemption of this Security on each
of December 15, 2011, December 15, 2016 and December 15, 2021, the right to
convert this Security into Common Stock of the Company the right of the Holder
of this Security to require the Company to repurchase this Security and upon
certain events, in each case, 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 shall for all purposes have the same effect as though
fully set forth at this place. Capitalized terms used but not defined herein
shall have such meanings as are ascribed to such terms in the Indenture.

          This Security 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 said State.


                                       A-3



          This Security 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.

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

                                        SMITH & WESSON HOLDING CORPORATION


                                        By:
                                            ------------------------------------
                                            Authorized Signatory


                                            ------------------------------------


                                       A-4


                                    EXHIBIT B

                           FORM OF REVERSE OF SECURITY

          This Security is one of a duly authorized issue of Securities of the
Company, designated as its 4% Senior Convertible Notes Due 2026 (the
"Securities"), all issued or to be issued under and pursuant to an Indenture,
dated as of December 15, 2006 (the "Indenture"), between the Company and The
Bank of New York Trust Company, N.A. (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 and the Holders of the Securities.

          The indebtedness evidenced by the Securities is unsecured and
unsubordinated senior indebtedness of the Company and ranks equally with the
Company's other unsecured and unsubordinated senior indebtedness.

          1.   Interest Rate. Interest on the Securities shall be payable
               semi-annually in arrears on each Interest Payment Date to Holders
               of record on the Record Date immediately preceding such Interest
               Payment Date. Interest on the Securities shall accrue at a rate
               of 4% per annum. Interest will be computed on the basis of a
               360-day year comprised of twelve 30-day months. Interest on the
               Securities shall accrue from the most recent date to which
               interest has been paid, or if no interest has been paid, from
               December 15, 2006, until the Principal Amount is paid or duly
               made available for payment.

          2.   Redemption. No sinking fund is provided for the Securities. The
               Securities are redeemable at the option of the Company at any
               time after December 15, 2009 and prior to December 15, 2011 if
               the Common Stock of the Company Closing Price of the Common Stock
               on no fewer than 20 Trading Days of the 30 consecutive Trading
               Days immediately preceding the applicable Redemption Notice Date
               exceeded 150% of the Conversion Price. From and after December
               15, 2011, the Company may, at its option, redeem the Securities
               in whole or in part at the Redemption Price. Subject to the terms
               and conditions of the Indenture, the Holder shall have the right
               by giving a redemption notice to require the Company to redeem
               the Holder's Securities in whole or in part on any of December
               15, 2011, December 15, 2016 and/or December 15, 2021 at the
               election of the Holder at the Redemption Price.

          3.   Repurchase by the Company at the Option of the Holder Upon a
               Fundamental Change. Subject to the terms and conditions of the
               Indenture, the Company shall become obligated, at the option of
               the Holder, to repurchase the Securities if a Fundamental Change
               occurs at any time prior to the Stated Maturity at the
               Fundamental Change Repurchase Price.


                                       B-1



          4.   Withdrawal of Fundamental Change Repurchase Notice. Holders have
               the right to withdraw, in whole or in part, any Fundamental
               Change Repurchase Notice, by delivering to the Paying Agent a
               written notice of withdrawal in accordance with the provisions of
               the Indenture.

          5.   Payment of Redemption Price and Fundamental Change Repurchase
               Price. If cash sufficient to pay the Redemption Price or
               Fundamental Change Repurchase Price, as the case may be, of all
               Securities or portions thereof to be redeemed or repurchased on a
               Redemption Date or on a Fundamental Change, as the case may be,
               is deposited with the Paying Agent on the Business Day following
               the Redemption Date or the Fundamental Change Settlement Date, as
               the case may be, the Securities to be redeemed or repurchased
               will cease to be outstanding and interest will cease to accrue on
               such Securities (or portions thereof) immediately after such
               Redemption Date or Fundamental Change Settlement Date, as the
               case may be, and the Holder thereof shall have no other rights as
               such (other than the right to receive the Redemption Price or
               Fundamental Change Repurchase Price, as the case may be) upon
               surrender of such Security.

          6.   Conversion. Subject to the terms and conditions of the Indenture,
               a Holder may convert at any time each of its Securities into
               shares of the Company's common stock at the Conversion Price. The
               Conversion Price in effect at any given time is subject to
               adjustment. A Holder may convert fewer than all of such Holder's
               Securities so long as the Securities converted are an integral
               multiple of $1,000 principal amount. If this Security shall be
               surrendered for conversion during the period from the close of
               business on the Record Date to the opening of business on the day
               immediately following the Interest Payment Date, it shall be
               accompanied by payment, in 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,
               however, that no such payment need be made if there shall exist
               at the time of conversion a default in the payment of interest on
               the Securities. If this Security shall be surrendered for
               conversion during the period subsequent to the close of business
               on the Interest Payment Date to the opening of business on the
               Record Date preceding the next Interest Payment Date, it shall be
               accompanied by payment, in funds acceptable to the Company, of an
               amount equal to the accrued interest on such Interest Payment
               Date on the Principal Amount being converted; provided, however,
               that no such payment need be made if there shall exist at the
               time of conversion a default in the payment of interest on the
               Securities.

          [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- In the event of a deposit
or withdrawal of an interest in this Security, including an exchange, transfer,
repurchase or conversion of this Security in part only, the Trustee, as
custodian of the Depositary, shall make an adjustment on its records to reflect
such deposit or withdrawal in accordance with the rules and procedures of the
Depositary.]


                                       B-2



          [INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- Subject to certain
limitations in the Indenture, at any time when the Company is not subject to
Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as
amended, upon the request of a Holder of a Restricted Security, the Company will
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder of Restricted Securities, or to a prospective purchaser of
any such security designated by any such Holder, to the extent required to
permit compliance by any such Holder with Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"). "Rule 144A Information" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto).]

          If an Event of Default shall occur and be continuing, the Principal
Amount plus accrued and unpaid interest through such date on all the Securities
may be declared due and payable in the manner and with the effect provided in
the Indenture.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate Principal Amount of the Outstanding
Securities. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate Principal Amount of the Outstanding
Securities, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of any provision of or applicable to this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.

          As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding in
respect of the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default in respect of the
Securities, the Holders of not less than 25% in aggregate Principal Amount of
the Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity satisfactory to it, the Trustee shall not have
received from the Holders of a majority in Principal Amount of Outstanding
Securities a direction inconsistent with such request, and the Trustee shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of said principal hereof or interest hereon on or after the respective
due dates expressed herein or for the enforcement of any conversion right.

          No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Principal Amount or Fundamental Change
Repurchase Price of, or interest on, this Security at the times, place and rate,
and in the coin or currency, herein prescribed.


                                       B-3



          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate Principal Amount, will be
issued to the designated transferee or transferees.

          The Securities are issuable only in registered form in denominations
of $1,000 and any integral multiple of $1,000 above that amount, as provided in
the Indenture and subject to certain limitations therein set forth. Securities
are exchangeable for a like aggregate Principal Amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

          Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and none of
the Company, the Trustee or any such agent shall be affected by notice to the
contrary.

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

          All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.


                                       B-4



                                 ASSIGNMENT FORM

If you want to assign this Security, fill in the form below and have your
signature guaranteed:

I or we assign and transfer this Security to:

_____________________________________________

_____________________________________________

_____________________________________________

_______________________________________________________________________________
(Print or type name, address and zip code and social security or tax ID number
of assignee)

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


Date:                                   Signed:
      -------------------------------           --------------------------------

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


Signature Guarantee:
                     -----------------------------------------------------------

Note: Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security 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 Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.


                                       B-5



          In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act, as amended (the "Securities Act"), covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the second anniversary of the Issue Date set forth on the
face of this Security, the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer and
that this Security is being transferred:

[Check One]

(1) _____ to the Company or a subsidiary thereof; or

(2) _____ to a "Qualified Institutional Buyer" pursuant to and in compliance
with Rule 144A under the Securities Act; or

(3) _____ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act.

Unless one of the above boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any Person
other than the registered Holder thereof, provided that if box (3) is checked,
the Company may require, prior to registering any such transfer of the
Securities, in its sole discretion, such legal opinions, certifications and
other information as the Company may reasonably request to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.

If none of the foregoing boxes is checked, the Trustee or Security Registrar
shall not be obligated to register this Security in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 3.09 of the Indenture shall have
been satisfied.


Date:                                   Signed:
      -------------------------------           --------------------------------

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


Signature Guarantee:
                     -----------------------------------------------------------

Note: Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security 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 Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.


                                       B-6



              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

          The undersigned represents and warrants that it is purchasing this
Security for its own account or an account in respect of which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.

                                        Name of Holder:
                                                        ------------------------


Date:                                   Signed:
      -------------------------------           --------------------------------

NOTICE: To be executed by an executive officer.


                                       B-7



                                CONVERSION NOTICE

          If you want to convert this Security into Common Stock of the Company,
check the box: [ ]

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

          $_________________________________________

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

            ________________________________________________________
              (Insert other person's social security or tax ID no.)

           ___________________________________________________________

            ___________________________________________________________

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


Date:                                   Signed:
      -------------------------------           --------------------------------

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


Signature Guarantee:
                     -----------------------------------------------------------

Note: Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security 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 Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.


                                       B-8



                                    EXHIBIT C

                 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          The Bank of New York Trust Company, N.A., as Trustee, certifies that
this is one of the Securities referred to in the within-mentioned Indenture.

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


                                        By:
                                            ------------------------------------
                                            Authorized Signatory


                                       C-1



                                    EXHIBIT D

                  FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE

_________, 20__

_____________________________________

_____________________________________

_____________________________________

_____________________________________

Attention: __________________________

     Re: Smith & Wesson Holdings Corporation (the "Company")

5% Senior Convertible Notes Due 2011

This is a Fundamental Change Repurchase Notice as defined in Section 11.10 of
the Indenture dated as of December 15, 2006 (the "Indenture") between the
Company and The Bank of New York Trust Company, N.A., as Trustee. Terms used but
not defined herein shall have the meanings ascribed to them in the Indenture.

Certificate No(s). of Securities: ___________________

I intend to deliver the following aggregate Principal Amount of Securities for
purchase by the Company pursuant to Section 11.10 of the Indenture (in multiples
of $1,000):

$_____________________________

I hereby agree that the Securities will be purchased as of the Fundamental
Change Settlement Date pursuant to the terms and conditions of the Indenture.


Signed:
        -----------------------------------------------------------------------


                                       D-1

                                                                   EXHIBIT 10.38

                          SECURITIES PURCHASE AGREEMENT

     SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of December 15,
2006, by and among Smith & Wesson Holding Corporation, a Nevada corporation with
headquarters located at 2100 Roosevelt Avenue, Springfield, Massachusetts 01104
(the "COMPANY"), and the investors listed on the Schedule of Buyers attached
hereto (individually, a "BUYER" and collectively, the "BUYERS").

     WHEREAS:

     A. The Company and each Buyer are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded Section
4(2) of the Securities Act of 1933, as amended (the "1933 ACT"), and Rule 506 of
Regulation D ("REGULATION D") as promulgated by the United States Securities and
Exchange Commission (the "SEC") under the 1933 Act.

     B. The Company has authorized the issuance of 4% Convertible Senior Notes
due 2026 (as amended or modified from time to time, collectively, the "NOTES"),
which Notes shall be convertible into the Company's common stock, $.001 par
value per share (the "COMMON STOCK") (as converted, collectively, the
"CONVERSION SHARES"), and shall be issued pursuant to and by the provisions of
an Indenture dated as of the Closing Date (as defined below) between the Company
and The Bank of New York Trust Company, N.A., as trustee (the "TRUSTEE"), in
substantially the form attached hereto as Exhibit A (the "INDENTURE").

     C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, (i) that aggregate principal
amount of Notes, in substantially the form attached hereto as Exhibit B, set
forth opposite such Buyer's name in column (3) on the Schedule of Buyers (which
aggregate amount for all Buyers shall be $80,000,000).

     D. Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (as amended or modified
from time to time, the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the
Company has agreed to provide certain registration rights with respect to the
Notes and the Conversion Shares under the 1933 Act and the rules and regulations
promulgated thereunder, and applicable state securities laws.

     E. The Notes and the Conversion Shares collectively are referred to herein
as the "SECURITIES."

     NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

     1. PURCHASE AND SALE OF NOTES.

          (a) Purchase of Notes.



               (i) Subject to the satisfaction (or waiver) of the conditions set
     forth in Sections 5 and 6 below, the Company shall issue and sell to each
     Buyer, and each Buyer severally, but not jointly, agrees to purchase from
     the Company on the Closing Date (as defined below) a principal amount of
     Notes as is set forth opposite such Buyer's name in column (3) on the
     Schedule of Buyers (the "CLOSING").

               (ii) Closing. The date and time of the Closing (the "CLOSING
     DATE") shall be 10:00 a.m., New York City Time, on the date hereof (or such
     later date or time as is mutually agreed to by the Company and each Buyer)
     after notification of satisfaction (or waiver) of the conditions to the
     Closing set forth in Sections 5 and 6 below at the offices of Schulte Roth
     & Zabel LLP, 919 Third Avenue, New York, New York 10022.

               (iii) Purchase Price. The aggregate purchase price for the Notes
     to be purchased by each Buyer at the Closing (the "PURCHASE PRICE") shall
     be the amount set forth opposite such Buyer's name in column (4) of the
     Schedule of Buyers. Each Buyer shall pay $1.00 for each $1.00 of principal
     amount of Notes to be purchased by such Buyer at the Closing.

          (b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its
Purchase Price to the Company for the Notes to be issued and sold to such Buyer
at the Closing, by wire transfer of immediately available funds in accordance
with the Company's written wire instructions, and (ii) the Company shall deliver
or caused to be delivered to each Buyer the Notes (for the account of such Buyer
as such Buyer shall instruct) which such Buyer is then purchasing, duly executed
on behalf of the Company and registered in the name of such Buyer or its
designee.

     2. BUYER'S REPRESENTATIONS AND WARRANTIES.

          Each Buyer represents and warrants with respect to only itself as
follows:

          (a) No Public Sale or Distribution. Such Buyer is (i) acquiring the
Notes and (ii) upon conversion of the Notes, will acquire the Conversion Shares
issuable upon conversion of the Notes, in each case, for its own account and not
with a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the
1933 Act; provided, however, that by making the representations herein, such
Buyer does not agree to hold any of the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary
course of its business. Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities. As used in this Agreement, "PERSON" means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

          (b) Accredited Investor Status. Such Buyer is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D and a "qualified
institutional buyer" within the meaning of Rule 144A under the 1933 Act.


                                       -2-



          (c) Reliance on Exemptions. Such Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments, and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.

          (d) Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances, and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by such Buyer. Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend, or affect such
Buyer's right to rely on the Company's representations and warranties contained
herein. Such Buyer understands that its investment in the Securities involves a
high degree of risk. Such Buyer has sought such accounting, legal, and tax
advice that it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities.

          (e) No Governmental Review. Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

          (f) Validity; Enforcement. This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed, and delivered on
behalf of such Buyer and shall constitute the legal, valid, and binding
obligations of such Buyer enforceable against such Buyer in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and remedies.

          (g) No Conflicts. The execution, delivery, and performance by such
Buyer of this Agreement and the Registration Rights Agreement and the
consummation by such Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of such Buyer
or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, or instrument to which such Buyer is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment, or decree
(including federal and state securities laws) applicable to such Buyer, except
in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Buyer to perform its obligations hereunder.

          (h) Residency. Such Buyer is a resident of that jurisdiction specified
below its address on the Schedule of Buyers.


                                       -3-



          (i) Certain Trading Activities. Such Buyer has not directly or
indirectly engaged in any purchase, sale, or Short Sales involving the Company's
securities since the time that such Buyer was first contacted by one of the
Agents with respect to the transactions contemplated hereby. "Short Sales" means
all "short sales" as defined in Rule 200 promulgated under Regulation SHO under
the 1934 Act, and all types of direct and indirect stock pledges, forward sales
contracts, puts, options, calls, short sales, swaps and similar arrangements
(including on a total return basis) and sales and other transactions through
non-US broker dealers or foreign brokers. Notwithstanding the foregoing, (i) in
the case of LB I Group Inc., the representation set forth above shall only apply
with respect to the Global Trading Strategies group of Lehman Brothers Holdings
Inc. and (ii) in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such
Purchaser's assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of
such Purchaser's assets, the representation set forth above shall only apply
with respect to the portion of assets managed by the portfolio manager that had
or has knowledge of the transactions contemplated herein.

     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          Except as set forth on the schedules hereto delivered to the Buyers as
of the date hereof, the Company represents and warrants to each of the Buyers as
follows:

          (a) Organization and Qualification. Each of the Company and its
"SUBSIDIARIES" (which for purposes of this Agreement means any joint venture or
entity in which the Company, directly or indirectly, owns capital stock or holds
an equity or similar interest of 50% or more) are entities duly organized and
validly existing and in good standing under the laws of the jurisdiction in
which they are formed, and have the requisite power and authorization to own
their properties and to carry on their business as now being conducted. Each of
the Company and its Subsidiaries is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. As used in this
Agreement, "MATERIAL ADVERSE EFFECT" means any material adverse effect (i) on
the business, properties, assets, operations, results of operations, or
condition (financial or otherwise) of the Company and its Subsidiaries,
individually or taken as a whole, or (ii) on the transactions contemplated
hereby or in the other Transaction Documents or by the agreements and
instruments to be entered into in connection herewith or therewith, or (iii) on
the authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below). Except as set forth on Exhibit 21 to
the Company's Annual Report on Form 10-K for the fiscal year ended April 30,
2006, the Company has no "significant subsidiaries" as such term is defined in
Rule 1-02 of Regulation S-X of the 1933 Act.

          (b) Authorization; Enforcement; Validity. The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Indenture, the Notes, the Registration
Rights Agreement and each of the other agreements entered into by the parties
hereto in connection with the transactions contemplated by this Agreement
(collectively, the "TRANSACTION DOCUMENTS") and to issue the Securities in
accordance with the terms hereof and thereof. The execution and delivery of the
Transaction


                                       -4-



Documents by the Company and the consummation by the Company of the transactions
contemplated thereby, including, without limitation, the issuance of the Notes,
the reservation for issuance and the issuance of the Conversion Shares issuable
upon conversion of the Notes, have been duly authorized by the Company's Board
of Directors and (other than the filing with the SEC of a Form D and one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement) no further filing, consent, or authorization is required by
the Company, its Board of Directors or its stockholders. This Agreement and the
other Transaction Documents of even date herewith have been duly executed and
delivered by the Company, and constitute the legal, valid, and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.

          (c) Issuance of Securities. The issuance of the Notes are duly
authorized and are free from all taxes, liens, and charges with respect to the
issue thereof. As of the Closing, a number of shares of Common Stock shall have
been duly authorized and reserved for issuance, free of preemptive rights, a
number of shares of Common Stock sufficient for the purpose of enabling the
Company to satisfy all obligations to issue the Conversion Shares upon
conversion of all of the Notes. Upon conversion in accordance with the Notes and
the Indenture, the Conversion Shares will be validly issued, fully paid, and
nonassessable, and free from all preemptive or similar rights, taxes, liens, and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock. The offer and issuance by the
Company of the Securities is exempt from registration under the 1933 Act,
assuming the correctness of the representations and warranties of Buyer
contained herein.

          (d) No Conflicts. The execution, delivery, and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Notes and reservation for issuance and issuance of the
Conversion Shares) will not (i) result in a violation of the Articles of
Incorporation (as defined in Section 3(x)), any capital stock of the Company or
the Bylaws (as defined in Section 3(x)), or any of the organizational documents
of any of the Subsidiaries, or (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment, or decree (including federal and state
securities laws and regulations and the rules and regulations of The NASDAQ
Global Select Market (the "PRINCIPAL MARKET")) applicable to the Company or any
of its Subsidiaries or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected.

          (e) Consents. The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings,
and registrations which the Company is required to obtain pursuant to the
preceding sentence


                                       -5-



have been obtained or effected on or prior to the Closing Date, and the Company
and its Subsidiaries are unaware of any facts or circumstances which might
prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence.

          (f) Acknowledgment Regarding Buyer's Purchase of Securities. The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of arm's length purchaser with respect to this Agreement and the other
Transaction Documents and the transactions contemplated thereby and that no
Buyer is (i) an officer or director of the Company, (ii) an "affiliate" of the
Company or any of its Subsidiaries (as defined in Rule 144) or (iii) to the
knowledge of the Company, a "beneficial owner" of more than 10% of the shares of
Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the "1934 ACT")). The Company further acknowledges that
no Buyer is acting as a financial advisor or fiduciary of the Company or any of
its Subsidiaries (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Buyer's purchase of the Securities. The Company
further represents to each Buyer that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

          (g) No General Solicitation; Placement Agent's Fees. Neither the
Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its
or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities. The Company shall be responsible for the payment of any
placement agent's fees, financial advisory fees, or brokers' commissions (other
than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby. The Company acknowledges that it has engaged
Cowen & Company, LLC and Merriman Curhan Ford as placement agents (collectively
the "AGENTS") in connection with the sale of the Securities. Other than the
Agents, the Company has not engaged any placement agent or other agent in
connection with the sale of the Securities.

          (h) No Integrated Offering. None of the Company, its Subsidiaries, any
of their affiliates, and any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated. None of the
Company, its Subsidiaries, their affiliates, and any Person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of any of the Securities under the 1933 Act or cause
the offering of the Securities to be integrated with other offerings.

          (i) Form S-3 Eligibility. The Company is eligible to register the
Notes and the Conversion Shares for resale by the Buyers using Form S-3
promulgated under the 1933 Act.


                                       -6-



          (j) Rule 144A. The Notes satisfy the requirements set forth in Rule
l44A(d)(3) under the 1933 Act.

          (k) Trust Indenture Act. Assuming the accuracy of the representations
of the Buyers contained in Section 2 hereof and their compliance with the
agreements set forth therein, it is not necessary in connection with the offer,
sale and delivery of the Securities in the manner contemplated by this Agreement
to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the
"TIA").

          (l) Dilutive Effect. The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Notes will increase
in certain circumstances. The Company further acknowledges that its obligation
to issue Conversion Shares upon conversion of the Notes in accordance with this
Agreement, the Indenture and the Notes, is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership interests of
other stockholders of the Company.

          (m) Application of Takeover Protections; Rights Agreement. The Company
and its board of directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Articles of Incorporation or the laws of the
State of Nevada which is or could become applicable to any Buyer as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company's issuance of the Securities and any Buyer's ownership of the
Securities. Except as disclosed in the Company's Form 8-A filed with the SEC on
July 19, 2006, the Company has not adopted a stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of Common Stock or
a change in control of the Company.

          (n) SEC Documents; Financial Statements. During the two (2) years up
to and including the date hereof, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements, notes and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC DOCUMENTS"). The
Company has delivered to the Buyers or their respective representatives true,
correct, and complete copies of each of the SEC Documents not available on the
EDGAR system. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude


                                       -7-



footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Buyers which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(d) of this Agreement, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.

          (o) Absence of Certain Changes. Since April 30, 2006, there has been
no material adverse change and no Material Adverse Effect. Since April 30, 2006,
neither the Company nor any of its Subsidiaries has (i) declared or paid any
dividends, (ii) sold any assets, individually or in the aggregate, in excess of
$1,000,000 outside of the ordinary course of business or (iii) had capital
expenditures, individually or in the aggregate, in excess of $1,000,000 except
as disclosed in the Company's Quarterly Reports for the quarterly periods ended
July 31, 2006 and October 31, 2006. Neither the Company nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy
law nor does the Company have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact which would reasonably lead a creditor to do so. The
Company and its Subsidiaries, individually and on a consolidated basis, are not
as of the date hereof, and after giving effect to the transactions contemplated
hereby to occur at the Closing, will not be Insolvent (as defined below). For
purposes of this Section 3(o), "INSOLVENT" means, with respect to any Person (i)
the present fair saleable value of the such Person's assets is less than the
amount required to pay such Person's total Indebtedness (as defined in Section
3(y)), (ii) such Person is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) such Person intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature,
or (iv) such Person has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted.

          (p) No Undisclosed Events, Liabilities, Developments or Circumstances.
Except for the Acquisition (as defined below), no event, liability, development,
or circumstance has occurred or exists, or is contemplated to occur with respect
to the Company or its Subsidiaries or their respective business, properties,
prospects, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance and sale by the
Company of its Common Stock and which has not been publicly announced.

          (q) Conduct of Business; Regulatory Permits. Neither the Company nor
its Subsidiaries is in violation of any term of or in default under the Articles
of Incorporation or Bylaws or their organizational charter or articles of
incorporation or bylaws, respectively. Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree, or order or any statute,
ordinance, rule, or regulation applicable to the Company or its Subsidiaries,
and neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except for possible violations which would
not, individually or in the aggregate, have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of any
of the rules, regulations, or requirements of the Principal Market and


                                       -8-



has no knowledge of any facts or circumstances which would reasonably lead to
delisting or suspension of the Common Stock by the Principal Market in the
foreseeable future. Since April 30, 2006 (i) the Common Stock has been
designated for quotation on the Principal Market, (ii) trading in the Common
Stock has not been suspended by the SEC or the Principal Market and (iii) the
Company has received no communication, written or oral, from the SEC or the
Principal Market regarding the suspension or delisting of the Common Stock from
the Principal Market. The Company and its Subsidiaries possess all certificates,
authorizations, and permits issued by the appropriate regulatory authorities
necessary to conduct their respective businesses, except where the failure to
possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization, or
permit.

          (r) Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor to the knowledge of the Company, any director, officer, agent,
employee, or other Person acting on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the Company
or any of its Subsidiaries (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

          (s) Money Laundering. The operations of the Company and the
Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder
(collectively, the "MONEY LAUNDERING LAWS"), and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any or its subsidiaries with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.

          (t) OFAC. Neither the Company nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Company will not,
directly or indirectly, use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint venture partner
or other Person, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.

          (u) Sarbanes-Oxley Act. There is and has been no failure on the part
of the Company or, to the knowledge of the Company, any of the Company's
directors or officers, in their capacities as such, to comply in all material
respects with any provision of the Sarbanes-Oxley Act of 2002, as in effect at
the applicable time, and the rules and regulations promulgated in connection
therewith (the "SARBANES-OXLEY ACT"), including Section 402 related to loans and
Sections 302 and 906 related to certifications.


                                       -9-



          (v) Internal Accounting and Disclosure Controls. The Company and each
of its Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference. The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-14 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed in to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company's management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure. During the twelve months prior to the date hereof
neither the Company nor any of its Subsidiaries have received any notice or
correspondence from any accountant relating to any potential material weakness
in any part of the system of internal accounting controls of the Company or any
of its Subsidiaries.

          (w) Transactions With Affiliates. Except as set forth in the SEC
Documents filed at least ten (10) days prior to the date hereof and other than
the grant of stock options pursuant to the Company's 2004 Incentive Compensation
Plan, none of the officers, directors, or employees of the Company is presently
a party to any transaction with the Company or any of its Subsidiaries (other
than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee, or partner.

          (x) Equity Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 100,000,000 shares of Common Stock,
of which as of the date hereof, 39,642,256 are issued and outstanding,
17,620,852 shares are reserved for issuance pursuant to the Company's incentive
compensation plans and employee stock purchase plan and no shares are reserved
for issuance pursuant to securities (other than the Notes) exercisable or
exchangeable for, or convertible into, shares of Common Stock and (ii)
20,000,000 shares of preferred stock, $.001 par value per share, of which as of
the date hereof none of which is issued and outstanding or reserved for
issuance. All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 3(x): (i) none of the Company's capital stock is subject to preemptive
rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company; (ii) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries,
or contracts,


                                      -10-



commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
capital stock of the Company or any of its Subsidiaries; (iii) there are no
outstanding debt securities, notes, credit agreements, credit facilities or
other agreements, documents or instruments evidencing Indebtedness of the
Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries is or may become bound; (iv) there are no financing statements
securing obligations in any material amounts, either singly or in the aggregate,
filed in connection with the Company or any of its Subsidiaries; (v) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act
(except pursuant to the Registration Rights Agreement); (vi) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities; (viii) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or agreement; and
(ix) the Company and its Subsidiaries have no liabilities or obligations
required to be disclosed in the SEC Documents but not so disclosed in the SEC
Documents, other than those incurred in the ordinary course of the Company's or
its Subsidiaries' respective businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect. If not available
on EDGAR system, the Company has furnished to each Buyer true, correct and
complete copies of the Company's Amended and Restated Articles of Incorporation,
as in effect on the date hereof (the "ARTICLES OF INCORPORATION"), and the
Company's Amended and Restated Bylaws, as in effect on the date hereof (the
"BYLAWS"), and the terms of all securities convertible into, or exercisable or
exchangeable for, shares of Common Stock and the material rights of the holders
thereof in respect thereto.

          (y) Indebtedness and Other Contracts. Except as disclosed in Schedule
3(y), neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument would result in a Material
Adverse Effect, (iii) is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iv) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company's officers, has or is expected to have a Material
Adverse Effect. Schedule 3(y) provides a list of any such outstanding
Indebtedness. For purposes of this Agreement: (A) "INDEBTEDNESS" of any Person
means, without duplication (1) all indebtedness for borrowed money, (2) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (including, without limitation, "capital leases" in
accordance with generally accepted accounting principles) (other than trade
payables entered into in the ordinary course of business), (3) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (4) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection


                                      -11-



with the acquisition of property, assets or businesses, (5) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (6) all monetary
obligations under any leasing or similar arrangement which, in connection with
generally accepted accounting principles, consistently applied for the periods
covered thereby, is classified as a capital lease, (7) all indebtedness referred
to in clauses (1) through (6) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, lien, pledge, charge, security interest or other encumbrance upon
or in any property or assets (including accounts and contract rights) owned by
any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (8) all
Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (1) through (7) above; and (B) "CONTINGENT
OBLIGATION" means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto.

          (z) Absence of Litigation. Except as set forth in the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 2006 and the Company's
Quarterly Reports for the quarterly periods ended July 31, 2006 and October 31,
2006, there is no action, suit, proceeding, inquiry or investigation before or
by the Principal Market, any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, the Common Stock or any of
the Subsidiaries, or any of the Company's or the Subsidiaries' officers or
directors in their capacities as such, whether of a civil or criminal nature of
otherwise.

          (aa) Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

          (bb) Employee Relations. (i) Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company and its Subsidiaries believe that their relations
with their employees are good. No executive officer of the Company or any of its
Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the
Company or any such Subsidiary that such officer intends to leave the Company or
any such Subsidiary or otherwise terminate such officer's employment with the
Company or any such Subsidiary. No executive officer of the Company or any of
its


                                      -12-



Subsidiaries is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters.

          (ii) The Company and its Subsidiaries are in compliance with all
     federal, state, local and foreign laws and regulations respecting labor,
     employment and employment practices and benefits, terms and conditions of
     employment and wages and hours, except where failure to be in compliance
     would not, either individually or in the aggregate, reasonably be expected
     to result in a Material Adverse Effect.

          (cc) Title. Except as disclosed in the Company's Annual Report on Form
10-K for the fiscal year ended April 30, 2006 and the Company's Quarterly
Reports for the quarterly periods ended July 31, 2006 and October 31, 2006 and
Schedule 3(cc), the Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and any of its Subsidiaries. Any real property and facilities held under
lease by the Company and any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

          (dd) Intellectual Property Rights. The Company and its Subsidiaries
own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, original works of authorship, trade secrets and other
intellectual property rights and all applications related thereto ("INTELLECTUAL
PROPERTY RIGHTS") necessary to conduct their respective businesses as now
conducted. None of the Company's or its Subsidiaries' Intellectual Property
Rights have expired, terminated or been abandoned, or are expected to expire,
terminate or be abandoned, within three years from the date of this Agreement.
The Company does not have any knowledge of any infringement by the Company or
any of its Subsidiaries of Intellectual Property Rights of others. There is no
claim, action or proceeding being made or brought, or to the knowledge of the
Company, being threatened, against the Company or any of its Subsidiaries
regarding its Intellectual Property Rights. The Company is unaware of any facts
or circumstances which might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their Intellectual Property Rights.

          (ee) Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the


                                      -13-



failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. The term "ENVIRONMENTAL LAWS" means
all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

          (ff) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.

          (gg) Tax Status. The Company and each of its Subsidiaries (i) has made
or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim.

          (hh) Ranking of Notes. Except as set forth on Schedule (hh), no
Indebtedness of the Company is senior to or ranks pari passu with the Notes in
right of payment, whether with respect of payment of redemptions, interest,
damages or upon liquidation or dissolution or otherwise.

          (ii) Independent Accountants. BDO Seidman LLP, who has rendered an
opinion upon the consolidated financial statements of the Company as of and for
the year ended April 30, 2006, is an independent registered public accounting
firm within the meaning of the 1933 Act.

          (jj) Off Balance Sheet Arrangements. There is no transaction,
arrangement, or other relationship between the Company and an unconsolidated or
other off balance sheet entity that is required to be disclosed by the Company
in its 1934 Act filings and is not so disclosed or that otherwise would be
reasonably likely to have a Material Adverse Effect.

          (kk) U.S. Real Property Holding Corporation. The Company is not, nor
has ever been, a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and the Company
shall so certify upon Buyer's request.


                                      -14-



          (ll) Investment Company. Neither the Company nor its Subsidiaries is
and, after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof, will become an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.

          (mm) Manipulation of Price. The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.

          (nn) Disclosure. The Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Buyers or their agents or
counsel with any information that constitutes or could reasonably be expected to
constitute material, nonpublic information, other than the information to be
included in the 8-K Filings (as defined below). The Company understands and
confirms that each of the Buyers will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure provided to
the Buyers regarding the Company and its Subsidiaries, their business and the
transactions contemplated hereby, including the Schedules to this Agreement,
furnished by or on behalf of the Company is true and correct in all material
respects and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. No
event or circumstance has occurred with respect to the Company or any of its
Subsidiaries or either of their respective businesses, properties, prospects,
operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.

     4. COVENANTS.

          (a) Best Efforts. Each party shall use its best efforts to satisfy
each of the conditions to be satisfied by it as provided in Sections 5 and 6 of
this Agreement.

          (b) Form D and Blue Sky. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof to Highbridge International LLC and, upon request to each other Buyer
promptly after such filing. The Company shall, on or before the Closing Date,
take such action as the Company shall reasonably determine is necessary in order
to obtain an exemption for or to qualify the Securities for sale to the Buyers
at the Closing pursuant to this Agreement under applicable securities or "Blue
Sky" laws of the states of the United States (or to obtain an exemption from
such qualification), and shall provide evidence of any such action so taken upon
request and without charge to the Buyers on or prior to the Closing Date. The
Company shall make all filings and reports relating to the offer and sale of the
Securities required under applicable securities or "Blue Sky" laws of the states
of the United States following the Closing Date.


                                      -15-



          (c) Reporting Status. From the Closing Date until the earlier to occur
of (i) the date on which the Buyers shall have sold all the Conversion Shares,
and (ii) none of the Notes is outstanding (the "REPORTING PERIOD"), the Company
shall timely file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer required
to file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would no longer require or otherwise permit such
termination. The Company shall take all actions necessary to maintain its
eligibility to register the Conversion Shares for resale by the Buyers on Form
S-3.

          (d) Use of Proceeds. The Company will use the proceeds from the sale
of the Notes for the acquisition of Bear Lake Acquisition Corp. and its
subsidiaries, including, without limitation, Thompson/Center Arms Company, Inc.
(the "ACQUISITION") as set forth in the Agreement and Plan of Merger dated
December 15, 2006 between the Company, Bear Lake Acquisition Corp and its
principal stockholders (the "Merger Agreement"), and shall not use the proceeds
for the redemption or repurchase of any of its outstanding Indebtedness or any
equity securities.

          (e) Financial Information. For so long as any Securities remain
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
under the 1933 Act, the Company will, during any period in which it is not
subject to Section 13 or 15(d) under the 1934 Act, make available to the Buyer
and any holder of Securities in connection with any sale thereof and any
prospective purchaser of Securities and securities analysts, in each case upon
request, the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the 1933 Act (or any successor thereto).

          (f) Listing. The Company shall promptly secure the listing of all of
the Conversion Shares upon each national securities exchange and automated
quotation system, if any, upon which the Common Stock is then listed (subject to
official notice of issuance) and shall maintain such listing of all Conversion
Shares from time to time issuable under the terms of the Transaction Documents.
The Company shall maintain the Common Stocks' authorization for quotation on the
Principal Market. Neither the Company nor any of its Subsidiaries shall take any
action which would be reasonably expected to result in the delisting or
suspension of the Common Stock on the Principal Market.

          (g) Fees and Expenses.

               (i) The Company shall be responsible for the payment of any
     placement agent's fees or commissions, financial advisory fees, or broker's
     commissions (other than for Persons engaged by any Buyer) relating to or
     arising out of the transactions contemplated hereby, including, without
     limitation, any fees or commissions payable to the Agents. The Company
     shall pay, and hold each Buyer harmless against, any liability, loss or
     expense (including, without limitation, reasonable attorney's fees and
     out-of-pocket expenses) arising in connection with any claim relating to
     any such payment. In addition to the foregoing (and without duplication),
     the Company agrees to pay Highbridge International LLC (a Buyer)
     ("HIGHBRIDGE") or its designee(s) for all reasonable costs and expenses,
     not to exceed $100,000, incurred in connection with the transactions
     contemplated by the Transaction Documents (including all reasonable legal


                                      -16-



     fees and disbursements in connection therewith, documentation and
     implementation of the transactions contemplated by the Transaction
     Documents and due diligence in connection therewith), which amount shall be
     withheld by Highbridge from its Purchase Price at the Closing. Except as
     otherwise set forth in the Transaction Documents, each party to this
     Agreement shall bear its own expenses in connection with the sale of the
     Securities to the Buyers.

               (ii) Whether or not the transactions contemplated in this
     Agreement are consummated or this Agreement is terminated, the Company
     shall pay or cause to be paid all costs and expenses incident to the
     performance of its obligations hereunder, including without limitation, all
     fees, costs and expenses (i) incident to the preparation, issuance,
     execution, authentication and delivery of the Securities, including any
     expenses of the Trustee, (ii) incurred in connection with the registration
     or qualification and determination of eligibility for investment of the
     Securities under the laws of such jurisdictions, (iii) incurred in
     connection with the application for quotation of the Notes on the Private
     Offerings, Resales and Trading through Automatic Linkages ("PORTAL") system
     of the National Association of Securities Dealers, Inc. ("NASD"), (iv)
     related to any filing with the NASD, (v) incurred in connection with the
     application for listing for trading of the Conversion Shares on the
     Principal Market, and (vi) in connection with satisfying its obligations
     under Section 4(e).

          (h) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by a Holder (as defined in the Registration Rights
Agreement) in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document. The Company hereby agrees to execute and deliver such documentation as
a pledgee of the Securities may reasonably request in connection with a pledge
of the Securities to such pledgee by an Investor.

          (i) Disclosure of Transactions and Other Material Information. On or
before 8:30 a.m., New York Time, on the first Business Day following the date of
this Agreement, the Company shall file two Current Reports on Form 8-K, the
first describing the Acquisition and attaching the material documents related to
the Acquisition (including, without limitation, the Merger Agreement) and the
second describing the terms of the transactions contemplated by the Transaction
Documents and attaching the material Transaction Documents (including, without
limitation, this Agreement, the Indenture, the form of the Notes, and the
Registration Rights Agreement) as exhibits to such filing (including all
exhibits, the "8-K FILINGS"). From and after the filing of the 8-K Filings with
the SEC, no Buyer shall be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of its respective
officers, directors, employees or agents, that is not disclosed in the 8-K
Filings. The Company shall not, and shall cause each of its Subsidiaries and its
and each of their respective officers, directors, employees and agents, not to,
provide any Buyer with any material, nonpublic information regarding the Company
or any of its Subsidiaries from and after the filing of the 8-K Filings with the
SEC without the express written consent of such Buyer. In the event of a breach
of the foregoing covenant by the Company, any of its Subsidiaries, or any of its
or their


                                      -17-



respective officers, directors, employees and agents, in addition to any other
remedy provided herein or in the Transaction Documents, a Buyer shall have the
right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, nonpublic information without the
prior approval by the Company, its Subsidiaries, or any of its or their
respective officers, directors, employees, or agents. No Buyer shall have any
liability to the Company, its Subsidiaries, or any of its or their respective
officers, directors, employees, stockholders or agents for any such disclosure.
Subject to the foregoing, neither the Company nor any Buyer shall issue any
press releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of any Buyer, to make any press release or other
public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filings and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the
prior written consent of any applicable Buyer, neither the Company nor any of
its Subsidiaries or affiliates shall disclose the name of such Buyer in any
filing, announcement, release or otherwise, unless such disclosure is required
by law, regulation, or the Principal Market.

          (j) Additional Notes; Variable Securities; Dilutive Issuances. For so
long as any Notes remain outstanding, the Company will not issue any Notes other
than to the Buyers as contemplated hereby and the Company shall not issue any
other securities that would cause a breach or default under the Notes. For so
long as any Notes remain outstanding, the Company shall not, in any manner,
issue or sell any rights, warrants or options to subscribe for or purchase
Common Stock or directly or indirectly convertible into or exchangeable or
exercisable for Common Stock at a price which varies or may vary with the market
price of the Common Stock, including by way of one or more reset(s) to any fixed
price unless the conversion, exchange or exercise price of any such security
cannot be less than the then applicable Conversion Price (as defined in the
Notes) with respect to the Common Stock into which any Note is convertible. For
long as any Notes remain outstanding, the Company shall not, in any manner,
enter into or affect any dilutive issuance if the effect of such dilutive
issuance is to cause the Company to be required to issue upon conversion of any
Notes any shares of Common Stock in excess of that number of shares of Common
Stock which the Company may issue upon conversion of the Notes without breaching
the Company's obligations under the rules or regulations of the Principal
Market.

          (k) Reservation of Shares. From and after the Closing Date, the
Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, free of preemptive rights, a number of
shares of Common Stock sufficient for the purpose of enabling the Company to
satisfy all obligations to issue the Conversion Shares upon conversion of all of
the Notes.

          (l) Conduct of Business. The business of the Company and its
Subsidiaries shall not be conducted in violation of any law, ordinance, or
regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.

          (m) Lock-Up.


                                      -18-



               (i) For purposes of this Section 4(m), the following definitions
     shall apply.

                    (A) "CONVERTIBLE SECURITIES" means any stock or securities
          (other than Options) convertible into or exercisable or exchangeable
          for shares of Common Stock.

                    (B) "OPTIONS" means any rights, warrants or options to
          subscribe for or purchase shares of Common Stock or Convertible
          Securities.

                    (C) "COMMON STOCK EQUIVALENTS" means, collectively, Options
          and Convertible Securities.

               (ii) From the date hereof until the date that is 90 days
     following the Closing Date, the Company hereby agrees that it will not, (A)
     offer, pledge, sell, contract to sell, sell any option or contract to
     purchase, purchase any option or contract to sell, grant any option, right
     or warrant to purchase, lend, or otherwise transfer or dispose of, directly
     or indirectly, any shares of Common Stock or any Common Stock Equivalents,
     (B) enter into any swap or other arrangement that transfers to another, in
     whole or in part, any of the economic consequences of ownership of the
     Common Stock, and (C) file with the SEC a registration statement under the
     1933 Act relating to any additional shares of its Common Stock or Common
     Stock Equivalents, whether any such transaction described in clause (A) or
     (B) above is to be settled by delivery of Common Stock or such other
     securities, in cash or otherwise within such 90-day period. The foregoing
     provisions of this Section 4(m) shall not apply to (1) the sale of the
     Securities under this Agreement or the issuance of the Conversion Shares,
     (2) in connection with any employee benefit plan which has been approved by
     the Board of Directors of the Company, pursuant to which the Company's
     securities may be issued to any incentive compensation plan, officer, or
     director for services provided to the Company, (3) the issuance by the
     Company of any shares of Common Stock upon the exercise of an option or
     warrant or the conversion of a security outstanding on the date hereof
     (provided that the terms of such options or warrants are not amended or
     modified in any manner after the date hereof) or an option or warrant
     issued or granted in compliance with this paragraph, (4) the filing of any
     registration statement in respect of the Notes or the Conversion Shares or
     (5) the sale of Common Stock in a bona fide firm commitment underwritten
     offering with a nationally recognized underwriter if the price per share in
     such offering exceeds (i) if such offering is consummated at any time from
     the date hereof through the date 45 days following the Closing Date, 115%
     of the Conversion Price or (ii) if such offering is consummated at any time
     thereafter until the date 90 days following the Closing Date, 110% of the
     Conversion Price (other than an "at-the-market offering" as defined in Rule
     415(a)(4) under the 1933 Act and "equity lines"). In addition, the Company
     agrees to obtain lock-up agreements with each of its executive officers and
     directors in substantially the form attached hereto as Exhibit D.

          (n) Blue Sky. The Company shall endeavor to qualify the Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions as
the Buyers shall reasonably request and to continue such qualification in effect
so long as reasonably required for


                                      -19-



distribution of the Securities and to pay all related fees and expenses
reasonably incurred in connection with such qualification and in connection with
the determination of the eligibility of the Securities for investment under the
laws of such jurisdictions as the Buyers may designate; provided that the
Company shall not be required to file a general consent to service of process in
any jurisdiction or to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified or to subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.

          (o) Regulation M. The Company will not take any action prohibited by
Regulation M under the 1934 Act, in connection with the distribution of the
Securities contemplated hereby.

          (p) General Solicitation. None of the Company, any of its affiliates
(as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of
the Company or such affiliate will solicit any offer to buy or offer or sell the
Securities by means of any form of general solicitation or general advertising
within the meaning of Regulation D, including: (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
medium or broadcast over television or radio; and (ii) any seminar or meeting
whose attendees have been invited by any general solicitation or general
advertising.

          (q) Integration. None of the Company, any of its affiliates (as
defined in Rule 501(b) under the 1933 Act), or any person acting on behalf of
the Company or such affiliate will sell, offer for sale, or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the 1933
Act) which will be integrated with the sale of the Securities in a manner which
would require the registration of the Securities under the 1933 Act or require
stockholder approval under the rules and regulations of the Principal Market and
the Company will take all action that is appropriate or necessary to assure that
its offerings of other securities will not be integrated for purposes of the
1933 Act or the rules and regulations of the Principal Market, with the issuance
of Securities contemplated hereby;

          (r) Qualification Under Trust Indenture Act. Prior to any registration
of the Notes or the Conversion Shares pursuant to the Registration Rights
Agreement, or at such earlier time as may be so required, the Company shall
qualify the Indenture under TIA and to enter into any necessary supplemental
indentures in connection therewith.

     5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

          The obligation of the Company hereunder to issue and sell the Notes to
each Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing each Buyer with prior written
notice thereof:

          (a) Each Buyer shall have executed each of the Transaction Documents
to which it is a party and delivered the same to the Company.

          (b) Each Buyer shall have delivered to the Company the Purchase Price
(less any amounts withheld pursuant to Section 4(g)(i)) for the Notes being
purchased by such Buyer


                                      -20-



at the Closing by wire transfer of immediately available funds pursuant to the
wire instructions provided by the Company.

          (c) The representations and warranties of each Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and each Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.

     6. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.

          The obligation of each Buyer hereunder to purchase the Notes at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for each Buyer's
sole benefit and may be waived by such Buyer at any time in its sole discretion
by providing the Company with prior written notice thereof:

          (a) The Company shall have executed and delivered to such Buyer (i)
each of the Transaction Documents and (ii) the Notes (for the account of such
Buyer as such Buyer shall instruct) being purchased by such Buyer at the Closing
pursuant to this Agreement.

          (b) Such Buyer shall have received the opinions of Greenberg Traurig,
LLP, the Company's outside counsel, dated as of the Closing Date, in
substantially the form of Exhibit E attached hereto.

          (c) The Company shall have delivered to such Buyer lock-up agreements
with each of the Company's executive officers and directors in substantially the
form attached hereto as Exhibit D.

          (d) The Company shall have delivered to such Buyer a certificate
evidencing the formation and good standing of the Company and Smith & Wesson
Corp. in such entity's jurisdiction of formation issued by the Secretary of
State (or comparable office) of such jurisdiction, as of a date within ten (10)
days of the Closing Date.

          (e) The Company shall have delivered to such Buyer a certificate
evidencing the Company's qualification as a foreign corporation and good
standing issued by the Secretary of State (or comparable office) of each
jurisdiction in which the Company conducts business and is required to so
qualify, as of a date within ten (10) days of the Closing Date.

          (f) The Company shall have delivered to such Buyer a certified copy of
the Articles of Incorporation as certified by the Secretary of State of the
State of Nevada within ten (10) days of the Closing Date.

          (g) The Company shall have delivered to such Buyer a certificate,
executed by the Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions consistent with Section 3(b) as adopted by the Company's
Board of Directors in a form


                                      -21-



reasonably acceptable to such Buyer, (ii) the Articles of Incorporation and
(iii) the Bylaws, each as in effect at the Closing, in the form attached hereto
as Exhibit F.

          (h) The representations and warranties of the Company shall be true
and correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such specified date) and the Company shall have performed, satisfied and
complied in all respects with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to the Closing Date. Such Buyer shall have received a
certificate, executed by the Chief Executive Officer of the Company, dated as of
the Closing Date, to the foregoing effect and as to such other matters as may be
reasonably requested by such Buyer in the form attached hereto as Exhibit G.

          (i) The Company shall have delivered to such Buyer a letter from the
Company's transfer agent certifying the number of shares of Common Stock
outstanding as of a date within five days of the Closing Date.

          (j) The Common Stock (1) shall be designated for quotation or listed
on the Principal Market and (2) shall not have been suspended, as of the Closing
Date, by the SEC or the Principal Market from trading on the Principal Market
nor shall suspension by the SEC or the Principal Market have been threatened, as
of the Closing Date, either (A) in writing by the SEC or the Principal Market or
(B) by falling below the minimum listing maintenance requirements of the
Principal Market.

          (k) The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the sale of the
Securities.

          (l) The Securities shall have been approved for trading on PORTAL,
subject only to notice of issuance at or prior to the time of purchase.

          (m) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading, nor
shall any public notice have been given of (i) any intended downgrading or (ii)
any review or possible change that does not indicate an improvement in the
rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the 1933 Act.

          (n) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such
Buyer or its counsel may reasonably request.

     7. TERMINATION.

          In the event that the Closing shall not have occurred with respect to
a Buyer on or before five (5) Business Days from the date hereof due to the
Company's or such Buyer's failure to satisfy the conditions set forth in
Sections 5 and 6 above (and the nonbreaching party's failure


                                      -22-



to waive such unsatisfied condition(s)), the nonbreaching party shall have the
option to terminate this Agreement with respect to such breaching party at the
close of business on such date without liability of any party to any other
party; provided, however, this if this Agreement is terminated pursuant to this
Section 7, the Company shall remain obligated to reimburse the non-breaching
Buyers for the expenses described in Section 4(g)(i) above.

     8. MISCELLANEOUS.

          (a) Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement, and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action, or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action, or proceeding is brought in an inconvenient forum or that the
venue of such suit, action, or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action, or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

          (b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

          (c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

          (d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

          (e) Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyers, the Company, their
affiliates, and Persons


                                      -23-



acting on their behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant, or undertaking with respect
to such matters. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the holders of at least a
majority of the aggregate principal amount of the Notes issued and issuable
hereunder, and any amendment to this Agreement made in conformity with the
provisions of this Section 8(e) shall be binding on all Buyers and holders of
Notes, as applicable. No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the applicable Securities then outstanding. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents or holders of Notes, as the case may be. The Company has not, directly
or indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.

          (f) Notices. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

               If to the Company:

                    Smith & Wesson Holding Corporation
                    2100 Roosevelt Avenue
                    Springfield, Massachusetts 01104
                    Telephone: (413) 747-3305
                    Facsimile: (413) 739-8528
                    Attention: John A. Kelly

                    Copy to:

                    Greenberg Traurig, LLP
                    2375 East Camelback Rd., Ste 700
                    Phoenix, AZ  85016
                    Telephone: (602) 445-8302
                    Facsimile: (602) 445-8100
                    Attention: Robert S. Kant, Esq.


                                      -24-



               If to the Transfer Agent:

                    Interwest Transfer Co., Inc.
                    1981 East Murray Holladay Road
                    Suite 100
                    P.O. Box 17136
                    Salt Lake City, Utah  84117
                    Telephone: (801) 272-9294 x15
                    Facsimile: (801) 277-3147

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers,

     with a copy (for informational purposes only) to:

          Schulte Roth & Zabel LLP
          919 Third Avenue
          New York, New York 10022
          Telephone: (212) 756-2000
          Facsimile: (212) 593-5955
          Attention: Eleazer N. Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver, or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number, and an image of the first page of such transmission, or (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.

               (g) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Notes. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority of the aggregate principal amount
of the Notes issued and issuable hereunder. A Buyer may assign some or all of
its rights hereunder without the consent of the Company, in which event such
assignee shall be deemed to be a Buyer hereunder with respect to such assigned
rights.

               (h) No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

               (i) Survival. Unless this Agreement is terminated under Section
7, the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4 and 8
shall survive the Closing and delivery and exercise of the Securities, as
applicable. Each Buyer shall be responsible only for its own representations,
warranties, agreements, and covenants hereunder.


                                      -25-


          (j) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

          (k) Indemnification. (i) In consideration of each Buyer's execution
and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company's other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Buyer and each other holder of the Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing Persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"INDEMNITEES"), as incurred, from and against any and all actions, causes of
action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"INDEMNIFIED LIABILITIES"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Securities, (iii) any disclosure made by such Buyer pursuant to Section
4(i), or (iv) the status of such Buyer or holder of the Securities as an
investor in the Company pursuant to the transactions contemplated by the
Transaction Documents. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

               (ii) Promptly after receipt by an Indemnitee under this Section
     8(k) of notice of the commencement of any action or proceeding (including
     any governmental action or proceeding) involving an Indemnified Liability,
     such Indemnitee shall, if a claim for indemnification in respect thereof is
     to be made against any indemnifying party under this Section 8(k), deliver
     to the indemnifying party a written notice of the commencement thereof, and
     the indemnifying party shall have the right to participate in, and, to the
     extent the indemnifying party so desires, jointly with any other
     indemnifying party similarly noticed, to assume control of the defense
     thereof with counsel mutually satisfactory to the indemnifying party and
     the Indemnitee; provided, however, that an Indemnitee shall have the right
     to retain its own counsel with the fees and expenses of not more than one
     counsel for such Indemnitee to be paid by the indemnifying party, if, in
     the reasonable opinion of the Indemnitee, the representation by such
     counsel of the


                                      -26-



     Indemnitee and the indemnifying party would be inappropriate due to actual
     or potential differing interests between such Indemnitee and any other
     party represented by such counsel in such proceeding. Legal counsel
     referred to in the immediately preceding sentence shall be selected by the
     Investors holding at least a majority of the aggregate principal amount of
     the Notes issued and issuable hereunder. The Indemnitee shall cooperate
     fully with the indemnifying party in connection with any negotiation or
     defense of any such action or Indemnified Liabilities by the indemnifying
     party and shall furnish to the indemnifying party all information
     reasonably available to the Indemnitee that relates to such action or
     Indemnified Liabilities. The indemnifying party shall keep the Indemnitee
     fully apprised at all times as to the status of the defense or any
     settlement negotiations with respect thereto. No indemnifying party shall
     be liable for any settlement of any action, claim or proceeding effected
     without its prior written consent, provided, however, that the indemnifying
     party shall not unreasonably withhold, delay or condition its consent. No
     indemnifying party shall, without the prior written consent of the
     Indemnitee, which consent shall not be unreasonably withheld conditioned or
     delayed, consent to entry of any judgment or enter into any settlement or
     other compromise which does not include as an unconditional term thereof
     the giving by the claimant or plaintiff to such Indemnitee of a release
     from all liability in respect to such Indemnified Liabilities or
     litigation. Following indemnification as provided for hereunder, the
     indemnifying party shall be subrogated to all rights of the Indemnitee with
     respect to all third parties, firms or corporations relating to the matter
     for which indemnification has been made. The failure to deliver written
     notice to the indemnifying party within a reasonable time of the
     commencement of any such action shall not relieve such indemnifying party
     of any liability to the Indemnitee under this Section 8(k), except to the
     extent that the indemnifying party is prejudiced in its ability to defend
     such action.

               (iii) The indemnification required by this Section 8(k) shall be
     made by periodic payments of the amount thereof during the course of the
     investigation or defense, as and when bills are received or Indemnified
     Liabilities are incurred.

               (iv) The indemnity agreements contained herein shall be in
     addition to (x) any cause of action or similar right of the Indemnitee
     against the indemnifying party or others, and (y) any liabilities the
     indemnifying party may be subject to pursuant to the law.

          (l) No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

          (m) Remedies. Each Buyer and each holder of the Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its


                                      -27-



obligations under the Transaction Documents, any remedy at law may prove to be
inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond
or other security.

          (n) Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Buyer exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then such Buyer may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.

          (o) Payment Set Aside. To the extent that the Company makes a payment
or payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

          (p) Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents and the Company
acknowledges that the Buyers are not acting in concert or as a group, and the
Company will not assert any such claim, with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Buyer confirms that
it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer
shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose.

                            [SIGNATURE PAGE FOLLOWS]


                                      -28-



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        COMPANY:

                                        SMITH & WESSON HOLDING CORPORATION


                                        By: /s/ Michael F. Golden
                                            ------------------------------------
                                        Name: Michael F. Golden
                                        Title: President and Chief Executive
                                               Officer

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        BUYERS:

                                        HIGHBRIDGE INTERNATIONAL LLC

                                        By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC


                                        By: /s/ Adam J. Chill
                                            ------------------------------------
                                        Name: Adam J. Chill
                                        Title: Managing Director

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        CAPITAL VENTURES INTERNATIONAL

                                        BY: HEIGHTS CAPITAL MANAGEMENT, INC.
                                        ITS AUTHORIZED AGENT


                                        By: /s/ Martin Kobinger
                                            ------------------------------------
                                        Name: Martin Kobinger
                                        Title: Investment Manager

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        CORNELL CAPITAL PARTNERS, LP


                                        By: /s/ Mark Angelo
                                            ------------------------------------
                                        Name: Mark Angelo
                                        Title:
                                               ---------------------------------

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        CRANSHIRE CAPITAL, L.P.


                                        By: /s/ Mitchell P. Kopin
                                            ------------------------------------
                                        Name: Mitchell P. Kopin
                                        Title: President - Downsview Capital
                                               The General Partner

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        D.B. ZWIRN SPECIAL OPPORTUNITIES FUND,
                                        LTD


                                        By: /s/ Lawrence D. Cutler
                                            ------------------------------------
                                        Name: Lawrence D. Cutler
                                        Title: Chief Administrative &
                                               Compliance Officer

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        D.B. ZWIRN SPECIAL OPPORTUNITIES FUND,
                                        LP


                                        By: /s/ Lawrence D. Cutler
                                            ------------------------------------
                                        Name: Lawrence D. Cutler
                                        Title: Chief Administrative &
                                               Compliance Officer

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        ENABLE GROWTH PARTNERS LP


                                        By: /s/ Brendan O'Neil
                                            ------------------------------------
                                        Name: Brendan O'Neil
                                        Title: Principal and Portfolio Manager

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        EVOLUTION MASTER FUND LTD. SPC,
                                        SEGREGATED PORTFOLIO M


                                        By: /s/ Michael Lerch
                                            ------------------------------------
                                        Name: Michael Lerch
                                        Title: Director

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        GLG MARKET NEUTRAL FUND

                                        By: GLG Partners LP Acting as Investment
                                            Manager to GLG Market Neutral Fund


                                        By: /s/ Bob Price
                                            ------------------------------------
                                        Name: Bob Price
                                        Title: Head of Operations
                                               GLG Partners LP


                                        By: /s/ Tim Kuschill
                                            ------------------------------------
                                        Name: Tim Kuschill
                                        Title: Legal Counsel
                                               GLG Partners LP

                [Signature Page to Securities Purchase Agreement]


          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        HUDSON BAY FUND LP


                                        By: /s/ Yoav Roth
                                            ------------------------------------
                                        Name: Yoav Roth
                                        Title: Principal and Portfolio Manager

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        HUDSON BAY OVERSEAS FUND LTD


                                        By: /s/ Yoav Roth
                                            ------------------------------------
                                        Name: Yoav Roth
                                        Title: Principal and Portfolio Manager

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        IROQUOIS MASTER FUND LTD.


                                        By: /s/ Joshua Silverman
                                            ------------------------------------
                                        Name: Joshua Silverman
                                        Title: Authorized Signator

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        KAMUNTING STREET MASTER FUND, LTD


                                        By: /s/ Gregor Dannacher
                                            ------------------------------------
                                        Name: Gregor Dannacher
                                        Title: Director of Research
                                               Kamunting Street Capital
                                               Management, L.P. As Investment
                                               Manager For Kamunting Street
                                               Master Fund, LTD

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        KINGS ROAD INVESTMENTS LTD.


                                        By: /s/ Brandon L. Jones
                                            ------------------------------------
                                        Name: Brandon L. Jones
                                        Title: Co-head, Private Investments

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        LBI GROUP INC.


                                        By: /s/ Eric Salzman
                                            ------------------------------------
                                        Name: Eric Salzman
                                        Title: VP

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        PORTSIDE GROWTH AND OPPORTUNITY FUND


                                        By: /s/ Jeffrey Smith
                                            ------------------------------------
                                        Name: Jeffrey Smith
                                        Title: Authorized Signatory

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        BUYER:

                                        RADCLIFFE SPC, LTD. FOR AND ON BEHALF OF
                                        THE CLASS A SEGREGATED PORTFOLIO

                                        By: RG Capital Management, L.P.
                                        By: RGC Capital Management Company, LLC


                                        By: /s/ Gerald F. Stahlecker
                                            ------------------------------------
                                        Name: Gerald F. Stahlecker
                                        Title: Managing Director

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        ROCKMORE INVESTMENT MASTER FUND LIMITED


                                        By: /s/ Brian Daly
                                            ------------------------------------
                                        Name: Brian Daly
                                        Title: Managing Partner

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        SCOGGIN CAPITAL MANAGEMENT, LP II

                                        By: S&E Partners, LP
                                            Its: general partner

                                        By: Scoggin, Inc. Its: general partner


                                        By: Curtis Schener
                                            ------------------------------------
                                        Name: Curtis Schener
                                        Title: CEO

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        SILVER OAK CAPITAL, L.L.C.


                                        By: /s/ Fred Berger
                                            ------------------------------------
                                        Name: Fred Berger
                                        Title: Manager

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR PIPES
                                        CORPORATE STRATEGIES MASTER LIMITED


                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        BUYERS:

                                        UBS O'CONNOR LLC FBO O'CONNOR GLOBAL
                                        CONVERTIBLE ARBITRAGE II MASTER LIMITED


                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director

                [Signature Page to Securities Purchase Agreement]



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR GLOBAL
                                        CONVERTIBLE ARBITRAGE MASTER LIMITED


                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director

                [Signature Page to Securities Purchase Agreement]


                               SCHEDULE OF BUYERS



                                                                                    (3)
                                                                                 AGGREGATE                             (5)
                                                                                 PRINCIPAL        (4)        LEGAL REPRESENTATIVE'S
                 (1)                                     (2)                     AMOUNT OF      PURCHASE           ADDRESS AND
                BUYER                       ADDRESS AND FACSIMILE NUMBER           NOTES         PRICE          FACSIMILE NUMBER
                -----                  --------------------------------------   -----------   -----------   ------------------------
                                                                                                
Highbridge International LLC                                                    $20,000,000   $20,000,000   Schulte Roth & Zabel LLP
                                                                                                            919 Third Avenue
                                                                                                            New York, New York 10022
                                                                                                            Attn: Eleazer Klein,
                                                                                                            Esq.
                                                                                                            Facsimile: (212)593-5955
                                                                                                            Tel: (212)756-2376


Capital Ventures International
                                                                                $ 4,000,000   $ 4,000,000




Cornell Capital Partners, LP
                                                                                $ 1,000,000   $ 1,000,000





Cranshire Capital L.P.
                                                                                $ 2,500,000   $ 2,500,000







D.B. Zwirn Special Opportunities
Fund, LTD                                                                       $ 1,500,000   $ 1,500,000







D.B. Zwirn Special Opportunities
Fund, LP                                                                        $ 1,000,000   $ 1,000,000











                                                                                                   
Enable Growth Partners LP
                                                                                $ 2,000,000   $ 2,000,000





Evolution Master Fund Ltd. SPC
Segregated Portfolio M                                                          $ 5,000,000   $ 5,000,000














GLG Market Neutral Fund
                                                                                $ 2,000,000   $ 2,000,000





Hudson Bay Fund LP
                                                                                $ 2,400,000   $ 2,400,000





Hudson Bay Overseas Fund Ltd
                                                                                $ 2,600,000   $ 2,600,000





Iroquois Master Fund Ltd.
                                                                                $ 2,500,000   $ 2,500,000
















Kamunting Street Master Fund, Ltd
                                                                                $ 2,000,000   $ 2,000,000








                                                                                                   
Kings Road
Investments Ltd.                                                                $ 5,000,000   $ 5,000,000








LBI Group, Inc.
                                                                                $ 5,500,000   $ 5,500,000



Portside Growth and Opportunity Fund
                                                                                $ 4,000,000   $ 4,000,000





Radcliffe SPC, Ltd. for and on
behalf of the Class A Segregated                                                $ 5,000,000   $ 5,000,000
Portfolio






Rockmore Investment Master Fund, Ltd
                                                                                $ 2,500,000   $ 2,500,000






Scoggin Capital Management, LP II
                                                                                $ 2,000,000   $ 2,000,000   Katten Muchin Rosenman
                                                                                                            LLP 575 Madison Avenue
                                                                                                            New York, New York 10022
                                                                                                            Attention: Fred Santo
                                                                                                            Facsimile: (212)940-8563
                                                                                                            Tel\: (212)940-8720



Silver Oak Capital, LLC
                                                                                $ 2,000,000   $ 2,000,000



UBS O'Connor LLC fbo O'Connor PIPES
Corporate Strategies Master Limited                                             $ 2,000,000   $ 2,000,000






UBS O'Connor LLC fbo O'Connor
Global Convertible Arbitrage II                                                 $   308,000   $   308,000
Master Limited






                                                                                                   




UBS O'Connor LLC fbo O'Connor
Global Convertible Arbitrage Master                                             $ 3,192,000   $ 3,192,000
Limited

                                                                  EXHIBIT 10.39

                       SMITH & WESSON HOLDING CORPORATION

                                LOCK-UP AGREEMENT

                                December 15, 2006

Smith & Wesson Holding Corporation
2100 Roosevelt Avenue
Springfield, Massachusetts 01104

     Re: Smith & Wesson Holding Corporation - Lock-Up Agreement

Dear Sirs:

     In connection with (i) the issuance by Smith & Wesson Holding Corporation
(the "COMPANY") of up to $80,000,000 principal amount of its 4% Convertible
Senior Notes due 2026 (the "NOTES") pursuant to the Indenture to be dated
December 15, 2006 (the "INDENTURE") by and between the Company and The Bank of
New York, as trustee, which Notes will among other things be convertible into
shares of common stock, par value $.001 per share (the "COMMON STOCK"), of the
Company (as converted the "CONVERSION SHARES," and together with the Notes,
each, a "SECURITY" and collectively, the "SECURITIES"), and (ii) the sale of the
Notes pursuant to the Securities Purchase Agreement entered into by and among
the Company and the investors named on the Schedule of Buyers attached thereto
(the "BUYERS"), on the date hereof (the "SECURITIES PURCHASE AGREEMENT"), the
undersigned agrees that, commencing on the date hereof and ending on the earlier
to occur of (1) the date the Closing Sale Price (as defined in the Indenture) of
the Common Stock has exceeded 150% of the Conversion Price (as defined in the
Indenture) for five (5) consecutive Trading Days (as defined in the Indenture)
and (2) 90 days from the Closing Date (as defined in the Securities Purchase
Agreement) (the "LOCK-UP PERIOD"), the undersigned will not, without the written
consent of Buyers' that purchased a majority of the Notes on the Closing Date
(the "MAJORITY BUYERS"), (A) sell, offer to sell, contract or agree to sell,
hypothecate, hedge, pledge, grant any option to purchase, make any short sale or
otherwise dispose of or agree to dispose of, directly or indirectly, any shares
of Common Stock, owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership (as
determined pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules promulgated thereunder), or (B) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any shares of Common Stock, owned directly
by the undersigned (including holding as a custodian) or with respect to which
the undersigned has beneficial ownership within the rules and regulations of the
Securities and Exchange Commission, whether any such transaction is to be
settled by delivery of such securities, in cash or otherwise, (collectively, the
"UNDERSIGNED'S SHARES").

     This Lock-Up Agreement shall not apply to (i) any shares of Common Stock
acquired by the undersigned on the open market or otherwise after the Closing
Date, (ii) any shares of Common Stock traded pursuant to a Rule 10b5-1 trading
plan that are put into effect at least 30 days prior to the Closing Date, or
(iii) the pledge of shares of Common Stock in ordinary borrowing transactions
involving less than 10% of the net value of the borrowing, provided that the
pledgee agrees to be bound in writing by the restrictions set forth herein.



     The foregoing restriction is expressly agreed to preclude the undersigned
or any affiliate of the undersigned from engaging in, without the written
consent of the Majority Buyers, any hedging or other transaction which is
designed to or which reasonably could be expected to lead to or result in a sale
or disposition of the Undersigned's Shares even if the Undersigned's Shares
would be disposed of by someone other than the undersigned. Such prohibited
hedging or other transactions would include, without limitation, any short sale
or any purchase, sale or grant of any right (including, without limitation, any
put or call option) with respect to any of the Undersigned's Shares or with
respect to any security that includes, relates to, or derives any significant
part of its value from the Undersigned's Shares.

     Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein or (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that the
trustee of the trust agrees to be bound in writing by the restrictions set forth
herein, and provided further that any such transfer shall not involve a
disposition for value. For purposes of this Lock-Up Agreement, "immediate
family" shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin. The undersigned now has, and, except as contemplated
by clauses (i) and (ii) above, for the duration of this Lock-Up Agreement will
have, good and marketable title to the Undersigned's Shares, free and clear of
all liens, encumbrances, and claims whatsoever. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the Undersigned's Shares except in
compliance with the foregoing restrictions.

     The undersigned understands and agrees that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.

     This Lock-Up Agreement may be executed in two counterparts, each of which
shall be deemed an original but both of which shall be considered one and the
same instrument.

     This Lock-Up Agreement will be governed by and construed in accordance with
the laws of the State of New York, without giving effect to any choice of law or
conflicting provision or rule (whether of the State of New York, or any other
jurisdiction) that would cause the laws of any jurisdiction other than the State
of New York to be applied. In furtherance of the foregoing, the internal laws of
the State of New York will control the interpretation and construction of this
Lock-Up Agreement, even if under such jurisdiction's choice of law or conflict
of law analysis, the substantive law of some other jurisdiction would ordinarily
apply.

     The Buyers shall be intended third party beneficiaries of this Agreement to
the same extent as if they were parties hereto, and shall be entitled to enforce
the provisions hereof. No provision of this Agreement may be amended without the
written consent of the Majority Buyers.

                                        Very truly yours,

                                        ----------------------------------------
                                        Exact Name of Stockholder


                                        ----------------------------------------
                                        Authorized Signature

                                        ----------------------------------------
                                        Title


Agreed to and Acknowledged:

SMITH & WESSON HOLDING CORPORATION


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


                                        2

                                                                   EXHIBIT 10.40

                          REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of December
15, 2006, by and among Smith & Wesson Holding Corporation, a Nevada corporation
with headquarters located at 2100 Roosevelt Avenue, Springfield, Massachusetts
01104 (the "COMPANY"), and the undersigned buyers (each, a "BUYER", and
collectively, the "BUYERS").

          WHEREAS:

          A. The Company has authorized the issuance of up to $80,000,000
principal amount of its 4% Convertible Senior Notes (the "NOTES") pursuant to
the Indenture dated of even date herewith, between the Company and The Bank of
New York Trust Company, N.A., as Trustee (as the same may be amended from time
to time, the "INDENTURE"), which Notes will, among other things, be convertible
into shares of Common Stock (as defined below) (as converted, the "CONVERSION
SHARES"), in accordance with the terms of the Notes and the Indenture.

          B. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions set forth
in the Securities Purchase Agreement, to issue and sell to the Buyers an
aggregate of $80,000,000 principal amount of the Notes.

          C. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights to the
Buyers under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:

          1. Definitions.

          Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

          "1933 ACT" has the meaning set forth in the recitals of this
Agreement.

          "1934 ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

          "ADDITIONAL INTEREST" has the meaning set forth in Section 2(e)
hereof.

          "ADDITIONAL INTEREST PAYMENT DATE" means each June 15 and December 15.



          "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" (including, with correlative meanings, the terms "controlling,"
"controlled by", and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person
whether through the ownership of voting securities or by agreement or otherwise.

          "BUSINESS DAY" means any day other than Saturday, Sunday or any other
day on which commercial banks in The City of New York are authorized or required
by law to remain closed.

          "BUYERS" has the meaning set forth in the recitals of this Agreement.

          "CLOSING DATE" means the date of the closing of the sale of the Notes
as contemplated by the Securities Purchase Agreement.

          "COMMON STOCK" means the common stock, par value $0.001 per share, of
the Company, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Notes.

          "COMPANY" has the meaning set forth in the recitals of this Agreement.

          "CONVERSION SHARES" has the meaning set forth in the recitals of this
Agreement.

          "EFFECTIVE DATE" means the date the Shelf Registration Statement has
been declared effective by the SEC.

          "EFFECTIVENESS DEADLINE" means the date that is one hundred eighty
(180) calendar days after the Closing Date.

          "FILING DEADLINE" means ninety (90) calendar days after the Closing
Date.

          "HOLDER" means a Person who is a holder or beneficial owner of any
Notes or Conversion Shares.

          "HOLDER INFORMATION" with respect to any Holder means information with
respect to such Holder required to be included in any Shelf Registration
Statement or the related Prospectus pursuant to the 1933 Act and which
information is included therein in reliance upon and in conformity with
information furnished to the Company in writing by such Holder specifically for
inclusion therein.

          "INDENTURE" has the meaning set forth in the recitals of this
Agreement.


                                        2



          "LEGAL COUNSEL" means one firm or counsel designated by the Company
(and reasonably acceptable to the Buyers acting on behalf of the Holders) to act
as counsel for the Holders in connection therewith, which firm shall be Schulte
Roth & Zabel LLP.

          "LOSSES" has the meaning set forth in Section 5(d) hereof.

          "MAJORITY HOLDERS" means the Holders of a majority of the then
outstanding aggregate principal amount of Notes being registered under a Shelf
Registration Statement; provided that Holders of the shares of Common Stock
issued upon conversion of Notes shall be deemed to be Holders of the aggregate
principal amount of Notes from which such Common Stock was converted; and
provided further, that Notes or shares of Common Stock which have been sold or
otherwise transferred pursuant to the Shelf Registration Statement shall not be
included in the calculation of Majority Holders.

          "NASD" means the National Association of Securities Dealers, Inc.

          "NOTES" has the meaning set forth in the recitals hereto.

          "NOTICE AND QUESTIONNAIRE" means a Selling Securityholder Notice and
Questionnaire substantially in the form of Exhibit A attached hereto.

          "NOTICE HOLDER" means any Holder of Transfer Restricted Securities
that has delivered a properly completed and signed Notice and Questionnaire to
the Company in accordance with Section 2(b) hereof.

          "PERSON" has the meaning set forth in the Indenture.

          "PROSPECTUS" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the 1933 Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Notes or Conversion Shares covered by such
Shelf Registration Statement, and all amendments and supplements to such
prospectus, including all documents incorporated or deemed to be incorporated by
reference in such prospectus.

          "QUESTIONNAIRE DEADLINE" has the meaning set forth in Section 2(b)
hereof.

          "RECORD HOLDER" means each Person who is registered on the books of
the registrar as the holder of Notes at the close of business on June 1 and
December 1 immediately preceding such Additional Interest Payment Date.

          "REGISTRATION DEFAULT" has the meaning set forth in Section 2(e)
hereof.

          "RULE 144" means Rule 144 under the 1933 Act (or any similar provision
promulgated by the SEC).

          "RULE 144A" means Rule 144A under the 1933 Act (or any successor
provision promulgated by the SEC).


                                        3



          "RULE 144(K)" means Rule 144(k) under the 1933 Act (or any successor
provision promulgated by the SEC).

          "RULE 415" means Rule 415 under the 1933 Act (or any successor
provision promulgated by the SEC).

          "SEC" means the Securities and Exchange Commission.

          "SECURITIES PURCHASE AGREEMENT" has the meaning set forth in the
recitals of this Agreement.

          "SHELF REGISTRATION" means a registration effected pursuant to Section
2 hereof.

          "SHELF REGISTRATION PERIOD" has the meaning set forth in Section 2(c)
hereof.

          "SHELF REGISTRATION STATEMENT" means any "shelf" registration
statement of the Company filed pursuant to the provisions of Section 2(a) hereof
which covers the Transfer Restricted Securities on Form S-3 or on another
appropriate form (as determined by the Company) for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all documents incorporated or deemed to be incorporated by reference
therein.

          "SUSPENSION PERIOD" has the meaning set forth in Section 2(d) hereof.

          "TRANSFER RESTRICTED SECURITIES" means (a) the Notes; and (b) the
Conversion Shares issued and issuable upon conversion of the Notes (and any
security issued with respect thereto upon any stock dividend, split, or similar
event) until the earliest to occur of the date on which such Notes, Conversion
Shares, or any security issued with respect thereto upon any stock dividend,
split or similar event, as the case may be: (i) has been transferred pursuant to
a Shelf Registration Statement or another registration statement covering such
Notes or Conversion Shares which has been filed with the SEC pursuant to the
1933 Act, in either case after such registration statement has become effective
and while such registration statement is effective under the 1933 Act; (ii) has
been transferred pursuant to Rule 144; (iii) may be sold or transferred pursuant
to Rule 144(k); or (iv) ceases to be outstanding.

          "TRUSTEE" means the trustee with respect to the Notes under the
Indenture.

          All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information incorporated or deemed
to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus, or Prospectus shall be deemed to mean and include
any document filed with the SEC under the 1934 Act, after the date of such Shelf
Registration Statement, preliminary Prospectus, or


                                        4



Prospectus, as the case may be, which is incorporated or deemed to be
incorporated by reference therein.

          2. Shelf Registration Statement.

               a. The Company shall, at its expense, prepare and, as soon as
practicable but in no event later than the Filing Deadline, file with the SEC a
Shelf Registration Statement with respect to resales of the Transfer Restricted
Securities by the Holders from time to time on a delayed or continuous basis
pursuant to Rule 415 and in accordance with the methods of distribution set
forth in such Shelf Registration Statement and thereafter shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the 1933 Act as soon as possible, but no later than the
Effectiveness Deadline. The Shelf Registration Statement shall contain the
"Selling Securityholders" and "Plan of Distribution" sections in substantially
the form attached hereto as Exhibit B. The Company shall supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for the
Shelf Registration Statement, or by the 1933 Act, the 1934 Act or the SEC. By
9:30 a.m., New York City time, on the second Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final Prospectus to be used in connection with sales
pursuant to such Shelf Registration Statement.

               b. (i) The Company shall name each Holder that delivers a
properly completed and signed Notice and Questionnaire to the Company as a
selling security holder in the Shelf Registration Statement. A Holder of
Transfer Restricted Securities may include such securities in the Shelf
Registration Statement only if the Holder sends by first-class registered mail
or by courier with delivery confirmation, a properly completed Notice and
Questionnaire to the Company. The Company shall deliver the Notice and
Questionnaire to the Buyers within ten (10) Business Days of the Closing Date.
In order for the Transfer Restricted Securities to be included in the Shelf
Registration Statement at the time of its effectiveness, a completed Notice and
Questionnaire must be sent to the Company on or prior to the 30th Business Day
after the date the Notice and Questionnaire is deemed to have been given in
accordance with Section 6(c) hereof (or, in the case of a Holder that is a
transferee of Transfer Restricted Securities, on or prior to the earlier of (x)
the 20th Business Day after the completion of the transfer of Transfer
Restricted Securities to the transferee and (y) 9:00 a.m., New York time, on the
fifth Business Day prior to effectiveness of the Shelf Registration Statement)
(in any case, the "QUESTIONNAIRE DEADLINE"). The Company agrees and undertakes
that it shall distribute a Notice and Questionnaire (A) no later than 30
Business Days prior to the expected effectiveness of the Shelf Registration
Statement to each Holder in accordance with Section 6(c) hereof, and (B) in the
case of a Holder that is a transferee of Transfer Restricted Securities upon the
request of such transferee Holder given in accordance with Section 6(c) hereof,
to such Holder at the address set forth in such request.

                    (ii) Following the effectiveness of the Shelf Registration
Statement, upon receipt of a completed Notice and Questionnaire from a Holder,
the Company will, as promptly as practicable, but in any event within ten (10)
Business Days after its receipt thereof, file any amendments to the Shelf
Registration Statement or supplements to the related Prospectus as are necessary
to permit the Holder to deliver the Prospectus to purchasers of


                                        5



Transfer Restricted Securities (subject to the right of the Company to suspend
the use of the Prospectus as described in Section 2(d) hereof); provided,
however, that (i) if a supplement to the related Prospectus is required to
permit the Holder (or other Holders not included in the Shelf Registration
Statement upon effectiveness) to deliver the Prospectus to purchasers of
Transfer Restricted Securities, the Company shall not be required to file more
than one (1) such supplement during any twenty (20) day period and (ii) if a
post-effective amendment to the Shelf Registration Statement is required to
permit the Holder (or other Holders not included in the Shelf Registration
Statement upon effectiveness) to deliver the Prospectus to purchasers of
Transfer Restricted Securities, the Company shall have twenty-one (21) Business
Days to file such post-effective amendment and shall not be required to file
more than one (1) post-effective amendment to the Shelf Registration Statement
in any ninety (90) day period. The Company shall use its reasonable best efforts
to cause any such post-effective amendment to become effective under the 1933
Act as promptly as is practicable; provided, that if a Notice and Questionnaire
is delivered to the Company during a Suspension Period, the Company shall not be
obligated to amend the Shelf Registration Statement or supplement the Prospectus
until the termination of such Suspension Period.

                    (iii) Each Holder as to which the Shelf Registration
Statement is being effected agrees to furnish promptly to the Company upon the
written reasonable request of the Company, which request shall only be made
within three days of the proposed effectiveness of the Registration Statement or
an amendment thereto, (x) such other information as the Company may reasonably
request for use in connection with the Shelf Registration Statement or
Prospectus or in any application to be filed with or under state securities laws
and (y) all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not misleading.

               c. The Company shall use its reasonable best efforts to keep the
applicable Shelf Registration Statement continuously effective, supplemented,
and amended under the 1933 Act in order to permit the Prospectus forming a part
thereof to be usable by the Notice Holders, subject to Section 2(e) hereof, by
all Notice Holders until the earliest to occur of: (i) the two year anniversary
of the Issue Date (as defined in the Notes); (ii) the last date on which in the
opinion of counsel to the Company the holding period applicable to sales of all
applicable Transfer Restricted Securities under Rule 144(k) has expired; (iii)
the date as of which all applicable Transfer Restricted Securities have been
transferred under Rule 144; and (iv) such date as of which all applicable
Transfer Restricted Securities have been sold pursuant to the applicable Shelf
Registration Statement (in any such case, such period being called the "SHELF
REGISTRATION PERIOD"). The Company will, in order to fulfill its obligations and
this Section 2(c): (x) subject to Section 2(d), prepare and file with the SEC
such amendments and post-effective amendments to the Shelf Registration
Statement as may be necessary to keep the Shelf Registration Statement
continuously effective for the Shelf Registration Period; (y) subject to Section
2(d), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the 1933 Act; and (z) comply in all
material respects with the provisions of the 1933 Act with respect to the
disposition of all Transfer Restricted Securities covered by the Shelf
Registration Statement during the Shelf Registration Period.


                                        6



               d. The Company may suspend the availability of any Shelf
Registration Statement and the use of any Prospectus (the period during which
the availability of any Shelf Registration Statement and any Prospectus may be
suspended herein referred to as the "SUSPENSION PERIOD"), without incurring any
obligation to pay Additional Interest pursuant to Section 2(e), for a period not
to exceed: (i) 30 days in the aggregate in any three-month period; or (iii) 90
days in the aggregate during any 12-month period, in each case for valid
business reasons determined in good faith by the Company in its reasonable
judgment (which shall not include the avoidance of the Company's obligations
hereunder), including, without limitation, the acquisition or divestiture of
assets, pending corporate developments, public filings with the SEC and similar
events; provided, that the Company promptly thereafter complies with the
requirements of Section 3(j) hereof, if applicable.

               e. The Company and the Buyers agree that the Holders of Transfer
Restricted Securities will suffer damages, and it would not be feasible to
ascertain the extent of such damages with precision, if the Company fails to
fulfill its obligations under Section 2 hereof. Accordingly, if: (i) the Shelf
Registration Statement covering all the Transfer Restricted Securities required
to be covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the Filing Deadline or (B)
not declared effective by the SEC on or before the Effectiveness Deadline or
(ii) the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by a
replacement Shelf Registration Statement filed and declared effective) or usable
(including as a result of a Suspension Period) for the offer and sale of
Transfer Restricted Securities for a period of time (including any Suspension
Period) which exceeds: (x) 30 days in the aggregate in any three-month period;
or (y) 90 days in the aggregate in any 12-month period (each such event referred
to in clauses (i) or (ii), a "REGISTRATION DEFAULT"); the Company shall pay to
each Notice Holder (who is also a Record Holder) during any period in which a
Registration Default has occurred or is continuing, as partial relief (which
remedy shall not be exclusive of any other remedies available at law or in
equity), in an amount (the "ADDITIONAL INTEREST") equal to seventy five one
hundredths of a percent (75 basis points) per 30 day period of such Registration
Default per $1,000 principal amount of Notes related to the Transfer Restricted
Securities subject to such Shelf Registration Statement for the period during
which such Registration Default has occurred and is continuing, it being
understood that all calculations pursuant to this and the preceding sentence
shall be carried out to five decimal places and shall be pro rated for periods
totaling less than thirty days. Following the cure of all Registration Defaults,
Additional Interest will cease to accrue with respect to such Registration
Defaults. All accrued Additional Interest shall be paid by the Company on each
Additional Interest Payment Date in cash to the date of such cure and Additional
Interest will be calculated on the basis of a 360-day year consisting of twelve
30-day months. Notwithstanding anything in the Agreement to the contrary,
Additional Interest shall only be payable to Notice Holders. Notwithstanding
anything herein or in the Securities Purchase Agreement to the contrary in no
event shall the aggregate amount of Additional Interest exceed, in the
aggregate, 8% of the aggregate Purchase Price.

               f. All of the Company's obligations (including, without
limitation, the obligation to pay Additional Interest) set forth in the
preceding paragraph which are outstanding or exist with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to


                                        7



such security shall have been satisfied in full. Notwithstanding the foregoing,
no Additional Interest shall accrue as to any Transfer Restricted Security from
and after the earlier of: (i) the date such security is no longer a Transfer
Restricted Security; and (ii) the expiration of the Shelf Registration Period.

               g. Immediately upon the occurrence or the termination of a
Registration Default, the Company shall give the Trustee, so long as the Notes
remain outstanding, notice of such commencement or termination of the obligation
to pay Additional Interest with regard to the Notes, and the amount thereof and
of the nature of the default giving rise to such commencement or the event
giving rise to such termination, as the case may be (such notice to be contained
in an Officer's Certificate (as such term is defined in the Indenture)), and
prior to receipt of such Officer's Certificate the Trustee and the transfer and
paying agent shall be entitled to assume that no such commencement or
termination has occurred, as the case may be.

          3. Registration Procedures.

          In connection with any Shelf Registration Statement, the following
provisions shall apply:

               a. The Company shall: (i) furnish to the Buyers, within a
reasonable period of time, but in any event within five (5) Business Days, prior
to the filing thereof with the SEC to afford the Buyers and their counsel a
reasonable opportunity for review, a copy of each Shelf Registration Statement,
and each amendment thereof, and a copy of each Prospectus, and each amendment or
supplement thereto (excluding amendments caused by the filing of a report under
the 1934 Act), and shall reflect in each such document, when so filed with the
SEC, such comments as the Buyers may reasonably propose therein; and (ii)
include information regarding the Notice Holders and the methods of distribution
they have elected for their Transfer Restricted Securities provided to the
Company in Notice and Questionnaires as necessary to permit such distribution by
the methods specified therein.

               b. Subject to Section 2(d), the Company shall ensure that: (i)
any Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in all
material respects with the 1933 Act and the rules and regulations thereunder;
(ii) any Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and (iii) any Prospectus forming a part of
any Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation with respect to any Holder Information.

               c. The Company, as promptly as reasonably practicable (but in any
event within two Business Days), shall notify each Notice Holder:


                                        8



                    (i) when any Prospectus or any supplement thereto has been
filed with the SEC and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;

                    (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Shelf Registration Statement or of any order preventing or suspending the
use of any Prospectus or the initiation or threat of any proceedings for that
purpose;

                    (iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of the Transfer Restricted Securities included in any Shelf Registration
Statement for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose;

                    (iv) of the occurrence of, but not the nature of or details
concerning, any event or the existence of any condition that requires the making
of any changes in the Shelf Registration Statement or the Prospectus so that, as
of such date, such Shelf Registration Statement or Prospectus do not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading;

                    (v) of the Company's determination that a post-effective
amendment to the Shelf Registration Statement is necessary (other than a
post-effective amendment pursuant to Section 2(b)(ii)); and

                    (vi) of the commencement (including as a result of any of
the events or circumstances described in Section 2(b)(ii)) and termination of
any Suspension Period.

               d. The Company shall use its reasonable best efforts to obtain:
(i) the withdrawal of any order suspending the effectiveness of any Shelf
Registration Statement and the use of any related Prospectus; and (ii) the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Transfer Restricted Securities for offer or sale in any
jurisdiction in which they have been qualified for sale, in each case at the
earliest possible time, and shall provide notice to each Notice Holder and the
Buyers of the withdrawal of any such orders or suspensions.

               e. The Company shall promptly furnish, upon written request and
without charge, to the Buyers and any Notice Holder, (i) at least one copy of
any Shelf Registration Statement and any post-effective amendment thereto,
excluding all documents incorporated or deemed to be incorporated therein by
reference and all exhibits thereto, (ii) promptly after the same is prepared and
filed with the SEC, one copy of any Shelf Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of any Shelf Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto, provided that the Company shall only
be obligated to furnish those documents which are not available on


                                        9



the EDGAR System. The Company shall promptly furnish, without charge, to Legal
Counsel copies of any correspondence from the SEC or the staff of the SEC to the
Company or its representatives relating to any Shelf Registration Statement.

               f. The Company shall, during the Shelf Registration Period,
promptly deliver, upon written request and without charge, to the Buyers and
each Notice Holder, as many copies of the Prospectus (including each preliminary
Prospectus) included in any Shelf Registration Statement, and any amendment or
supplement thereto, as such person may reasonably request and except as provided
in Sections 2(d) and 3(p) hereof; and the Company hereby consents (except during
a Suspension Period or during the continuance of an event described in Section
3(c)(ii) through (v)) to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto during the Shelf Registration
Period.

               g. The Company shall submit to the SEC, within five (5) Business
Days after the Company learns that no review of a particular Shelf Registration
Statement will be made by the staff of the SEC or that the staff has no further
comments on a particular Shelf Registration Statement, as the case may be, a
request for acceleration of effectiveness of such Shelf Registration Statement
to a time and date not later than 48 hours after the submission of such request.

               h. Prior to any offering of Transfer Restricted Securities
pursuant to any Shelf Registration Statement, the Company shall register or
qualify or cooperate with the Notice Holders and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Transfer Restricted Securities for offer
and sale, under the securities or blue sky laws of such jurisdictions within the
United States as any such Notice Holders reasonably request and shall maintain
such qualification in effect so long as required and do any and all other acts
or things necessary or advisable to enable the offer and sale in such
jurisdictions of the Transfer Restricted Securities covered by such Shelf
Registration Statement; provided, however, that the Company will not be required
to: (i) qualify generally to do business as a foreign corporation or as a dealer
in securities in any jurisdiction where it is not then so qualified or; (ii)
take any action which would subject it to service of process or taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not then
so subject.

               i. If the Transfer Restricted Securities are in certificated
form, the Company shall cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities sold pursuant to any Shelf Registration Statement free of any
restrictive legends and, with respect of any Notes, in such denominations
permitted by the Indenture and registered in such names as Holders may request
at least two (2) Business Days prior to settlement of sales of Transfer
Restricted Securities pursuant to such Shelf Registration Statement.

               j. Subject to the exceptions contained in (i) and (ii) of Section
3(h) above, the Company shall use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the applicable Shelf Registration
Statement to be registered with or


                                       10



approved by such other federal, state and local governmental agencies or
authorities, and self-regulatory organizations in the United States as may be
necessary to enable the Holders to consummate the disposition of such Transfer
Restricted Securities as contemplated by the Shelf Registration Statement;
without limitation to the foregoing, the Company shall provide all such
information as may be required by the NASD in connection with the offering under
the Shelf Registration Statement of the Transfer Restricted Securities
(including, without limitation, such as may be required by NASD Rule 2710 or
2720), and shall cooperate with each Holder in connection with any filings
required to be made with the NASD by such Holder in that regard.

               k. Upon the occurrence of any event described in Section 3(c)(iv)
or 3(c)(v) hereof, the Company shall promptly prepare and file with the SEC a
post-effective amendment to any Shelf Registration Statement, or an amendment or
supplement to the related Prospectus, or any document incorporated therein by
reference, or file a document which is incorporated or deemed to be incorporated
by reference in such Shelf Registration Statement or Prospectus, as the case may
be, so that, as thereafter delivered to purchasers of the Transfer Restricted
Securities included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which they
were made) not misleading and, in the case of a post-effective amendment, use
its reasonable best efforts to cause it to become effective as promptly as
practicable; provided that the Company's obligations under this paragraph (k)
shall be suspended if the Company has suspended the use of the Prospectus in
accordance with Section 2(d) hereof and given notice of such suspension to
Notice Holders, it being understood that the Company's obligations under this
Section 3(k) shall be automatically reinstated at the end of such Suspension
Period.

               l. The Company shall provide, prior to the effective date of any
Shelf Registration Statement hereunder, a CUSIP number for the Transfer
Restricted Securities registered under such Shelf Registration Statement.

               m. The Company shall use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and shall make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the 1933 Act and Rule 158 promulgated by the SEC
thereunder (or any similar rule promulgated under the 1933 Act) for a 12-month
period commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of any Shelf Registration Statement or each
post-effective amendment to any Shelf Registration Statement, which such
statements shall be made available no later than 45 days after the end of the
12-month period or 90 days after the end of the 12-month period, if the 12-month
period coincides with the fiscal year of the Company.

               n. The Company shall use its reasonable best efforts to cause all
shares of Common Stock issuable upon conversion of the Notes to be reserved for
listing on each securities exchange or quotation system on which the Common
Stock is then listed no later than the date the applicable Shelf Registration
Statement is declared effective and shall use its reasonable best efforts to
cause all Common Stock to be so listed when issued, and, in connection
therewith, to make such filings as may be required under the 1934 Act and use
its reasonable best efforts to have such filings declared effective as and when
required thereunder.


                                       11



               o. If any Notice Holder is required to be described in the
Registration Statement as an underwriter, then upon the reasonable written
request of such Notice Holder in connection with any disposition of Transfer
Restricted Securities pursuant to a Shelf Registration Statement, make
reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Transfer Restricted Securities and
any broker-dealers, attorneys and accountants retained by such Notice Holders,
all relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
executive officers, directors and designated employees of the Company and its
subsidiaries to make reasonably available for inspection during normal business
hours all relevant information reasonably requested by such representative for
the Notice Holders or any such broker-dealers, attorneys or accountants in
connection with such disposition, in each case as is customary for similar "due
diligence" examinations; provided, however, that any information that is
designated by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by such Persons, unless
disclosure thereof is made in connection with a court, administrative or
regulatory proceeding or required by law, or such information has become
available to the public generally through the Company or through a third party
without an accompanying obligation of confidentiality.

               p. Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in Sections 3(c)(ii) through and including
3(c)(vi), it shall forthwith discontinue (and shall cause its agents and
representatives to discontinue) disposition of Transfer Restricted Securities
and will not resume disposition of Transfer Restricted Securities until such
Holder has received copies of an amended or supplemented Prospectus contemplated
by Section 3(k) hereof, or until such Notice Holder is advised in writing by the
Company that the use of the Prospectus may be resumed or that the relevant
Suspension Period has been terminated, as the case may be, provided that the
foregoing shall not prevent the sale, transfer or other disposition of Transfer
Restricted Securities by a Holder in a transaction which is exempt from, or not
subject to, the registration requirements of the 1933 Act, so long as such
Holder does not and is not required to deliver the applicable Prospectus or
Shelf Registration Statement in connection with such sale, transfer or other
disposition, as the case may be; and provided, further, that the provisions of
this Section 3(q) shall not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Additional Interest.

               q. The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration of the Notes covered by the
Shelf Registration Statement contemplated hereby.

          4. Registration Expenses.

          The Company shall bear all fees and expenses incurred in connection
with the performance of its obligations under Sections 2 and 3 hereof and shall
reimburse the Holders for the reasonable fees and disbursements of the Legal
Counsel which amount shall be limited to $10,000. Such fees and expenses shall
include, without limitation: (i) all registration and filing fees and expenses
(including filings made with the NASD); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing of Prospectuses and certificates for
the Common Stock to be issued upon conversion of the Notes) and the Company's
expenses for messenger and delivery services


                                       12



and telephone; (iv) all fees and disbursements of counsel to the Company; (v)
all application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company. The
Company shall bear its internal expenses (including, without limitation, all
salaries and expenses of their officers and employees performing legal,
accounting or other duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 4, each Holder shall bear the
expense of any broker's commission, agency fee, or underwriter's discount or
commission, if any, relating to the sale or disposition of such Holder's
Transfer Restricted Securities pursuant to a Shelf Registration Statement.

          5. Indemnification and Contribution.

               a. The Company agrees to indemnify and hold harmless each Holder
of Transfer Restricted Securities covered by any Shelf Registration Statement,
its directors, officers, partners, members, and employees and each Person, if
any, who controls any such Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act (collectively referred to for purposes of
this Section 5 as a "HOLDER") against any losses, claims, damages, or
liabilities, joint or several, or actions in respect thereof, to which any of
them may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, liabilities, or actions arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
the Shelf Registration Statement, or in any Prospectus, or any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein (in the case of any Prospectus, in the light of the circumstances under
which they were made) not misleading, and will reimburse each such party for any
legal or other expenses reasonably incurred by such party in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that: (i) the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon Holder Information; and (ii) with respect to any untrue
statement or omission of material fact made in any Shelf Registration Statement,
or in any Prospectus, the indemnity agreement contained in this Section 5(a)
shall not inure to the benefit of a Holder from whom the Person asserting any
such loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Holder occurs
under the circumstance where it shall have been established that: (w) the
Company had previously furnished copies of the Prospectus, and any amendments
and supplements thereto, to such Holder; (x) delivery of the Prospectus, and any
amendment or supplements thereto, was required by the 1933 Act to be made to
such Holder; (y) the untrue statement or omission of a material fact contained
in the Prospectus was corrected in amendments or supplements thereto; and (z)
there was not sent or given to such Holder, at or prior to the written
confirmation of the sale of such securities to such Holder, a copy of such
amendments or supplements to the Prospectus. This indemnity agreement will be in
addition to any liability that the Company may otherwise have. This indemnity
agreement will not apply to any loss, damage, expense, liability or claim
arising from an offer or sale, occurring during a Suspension Period, of Transfer
Restricted Securities by a Notice Holder who has previously received notice from
the Company of the commencement of the Suspension Period pursuant to Section
3(c)(vi).


                                       13



               b. Each Holder, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its directors and officers and each
Person, if any, who controls the Company within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the
foregoing indemnity from the Company to the Holders and agrees to reimburse each
such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any loss, claim,
damage, liability or action, but only with reference to Holder Information
supplied by such Holder in writing to the Company for the express purpose of
being used in the Registration Statement. In no event shall any Holder, its
directors, officers, partners, members or employees or any Person, if any, who
controls such Holder be liable or responsible for any amount in excess of the
amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Shelf Registration
Statement exceeds: (i) the amount paid by such Holder for such Transfer
Restricted Securities; plus (ii) the amount of any damages that such Holder, its
directors, officers or any Person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. This indemnity agreement will be in addition to any
liability that such Holder may otherwise have.

               c. Promptly after receipt by an indemnified party under this
Section 5 of notice of any claim or the commencement of any action or proceeding
(including any governmental investigation), such indemnified party will, if a
claim for indemnification in respect thereof is to be made against the
indemnifying party under Section 5(a) or 5(b) hereof, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In case any such
action or proceeding is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein (jointly with any other indemnifying party
similarly notified), and to the extent that it may elect, by written notice,
delivered to such indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants (including any impleaded parties) in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to appoint counsel to defend such
action and approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless: (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expense of more than one separate counsel (in addition to any
local counsel), approved by the Holders in the case of paragraph (a) of this
Section 5, representing the indemnified parties under such paragraph (a) who are
parties to such action); (ii) the indemnifying party shall not


                                       14



have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice or
commencement of the action; (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; or (iv) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes (1) an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, and (2) does
not include a statement as to or an admission of fault, culpability, or failure
to act by or on behalf of any indemnified party. Subject to the provisions of
the immediately following sentence, no indemnifying party shall be liable for
any settlement, compromise or the consent to the entry of judgment in connection
with any such action effected without its written consent, but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action other than a judgment entered with the consent of such indemnified
party, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If at any time an indemnified party shall have requested
that an indemnifying party reimburse the indemnified party for reasonable fees
and expenses of counsel as contemplated by this Section 5(c) and to which it
would be entitled under Section 5(a) or 5(b) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if: (x) such settlement is entered into more than 45
days after receipt by such indemnifying party of such request for reimbursement,
(y) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (z)
such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

               d. In the event that the indemnity provided in paragraph (a) or
(b) of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, each indemnifying party agrees to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively, "LOSSES") to which the indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company from the sale of the Notes, on the one hand, and a Holder with
respect to the sale by such Holder of Notes or Common Stock, on the other hand;
provided, however, that in no case shall an indemnifying party that is a Holder
be responsible for any amount in excess of the total price at which the Transfer
Restricted Securities are sold by such Holder to a purchaser. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company and such Holder shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of such Holder on the other in
connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and such Holder on the other shall be
deemed to be in the same respective proportions as the total net proceeds from
the sale of the Notes (before deducting expenses) received by or on behalf of
the Company, on the one hand, and the total proceeds received by


                                       15



such Holder with respect to its sale of Transfer Restricted Securities under the
Shelf Registration Statement, on the other hand, bear to the total gross
proceeds from the sale of the Notes. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
relates to Holder Information supplied by such Holder, on the other, the intent
of the parties and their relative knowledge, information and opportunity to
correct or prevent such untrue statement or omission. The parties agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
were determined by pro rata allocation or any other method of allocation that
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 5(d), each
Person who controls such Holder within the meaning of either the 1933 Act or the
1934 Act shall have the same rights to contribution as such Holder, and each
Person who controls the Company within the meaning of either the 1933 Act or the
1934 Act shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).

               e. The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, any
underwriter or the Company or any of the officers, directors or controlling
Persons referred to in Section 5 hereof, and will survive the sale by a Holder
of Transfer Restricted Securities covered by a Shelf Registration Statement.

               f. Rules 144 and 144A. The Company covenants that it shall use
its reasonable best efforts to file the reports required to be filed by it under
the 1933 Act and the 1934 Act in a timely manner so long as the Transfer
Restricted Securities remain outstanding. If at any time the Company is not
required to file such reports, it will, upon request of any Holder or beneficial
owner of Transfer Restricted Securities, make available such information
necessary to permit sales pursuant to Rule 144A. The Company further covenants
that, for as long as any Transfer Restricted Securities remain outstanding, it
will take such further action as any Holder of Transfer Restricted Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Transfer Restricted Securities without registration under
the 1933 Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A. Upon the written request of any Holder of Transfer Restricted
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.

          6. Holder's Obligations. Each Buyer agrees, by acquisition of the
Notes, that no Buyer of Notes shall be entitled to sell any of the Notes or
Conversion Shares pursuant to a Shelf Registration Statements or to receive a
Prospectus relating thereto unless such Buyer has furnished the Company with a
completed Notice and Questionnaire as required pursuant to Section 2(b).

          7. Miscellaneous.

               a. No Inconsistent Agreements. Except as disclosed in the
Securities Purchase Agreement, the Company has not, as of the date hereof,
entered into nor shall it, on or


                                       16


after the date hereof, enter into, any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof. In addition, the Company shall not grant
to any of its Noteholders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in the
Shelf Registration Statement provided for in this Agreement other than the
Transfer Restricted Securities.

               b. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company consents in writing and
the Company has obtained the written consent of at least the Majority Holders;
provided that with respect to any matter that directly or indirectly affects the
rights of the Buyers hereunder, the Company shall obtain the written consent of
the Buyers against which such amendment, qualification, supplement, waiver or
consent is to be effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being sold pursuant to a Shelf Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders.

               c. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:

                    (i) if to the Buyers, initially at their address set forth
in the Securities Purchase Agreement;

                    (ii) if to any other Holder, at the most current address of
such Holder maintained by the Registrar under the Indenture or the registrar of
the Common Stock (provided that while the Notes or the Common Stock are in
book-entry form, notice to the Trustee shall serve as notice to the Holders),
or, in the case of the Notice Holder, the address set forth in its Notice and
Questionnaire;

                    (iii) if to the Company, to:

                    Smith & Wesson Holding Corporation
                    2100 Roosevelt Avenue
                    Springfield, Massachusetts 01104
                    Telephone: (413) 747-3305
                    Facsimile: (413) 739-8528
                    Attention: John A. Kelly

                    With a copy to:


                                       17



                    Greenberg Traurig, LLP
                    2375 East Camelback Rd., Ste 700
                    Phoenix, AZ  85016
                    Telephone: (602) 445-8302
                    Facsimile: (602) 445-8100
                    Attention: Robert S. Kant, Esq.

                    (iv) if to Legal Counsel, to:

                    Schulte Roth & Zabel LLP
                    919 Third Avenue
                    New York, NY 10022
                    Telephone: (212) 756-2000
                    Facsimile: (212) 593-5955
                    Attention: Eleazer Klein, Esq.

          All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if sent
by first-class mail or telecopier.

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

               d. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and underwriter and any such Holder and
underwriter may specifically enforce the provisions of this Agreement as if an
original party hereto. In the event that any other Person shall succeed to the
Company under the Indenture, then such successor shall enter into an agreement,
in form and substance reasonably satisfactory to the Buyers, whereby such
successor shall assume all of the Company's obligations under this Agreement.

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

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

               g. Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably


                                       18



submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

               h. Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.

               i. Notes Held by the Company, Etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Notes or
the shares of Common Stock issuable upon conversion thereof is required
hereunder, Notes or the shares of Common Stock issued upon conversion thereof
held by the Company or its Affiliates (other than subsequent Holders of Notes or
the Common Stock issued upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Notes) shall
not be counted in determining whether such consent or approval was given by the
Holders of such required percentage.

               j. Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Shelf Registration Period, except
for any liabilities or obligations under Section 2(e), 4 or 5.

               k. Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers


                                       19



are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Buyer
confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other
Buyer to be joined as an additional party in any proceeding for such purpose.


                                       20



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        COMPANY:

                                        SMITH & WESSON HOLDING CORPORATION


                                        By: /s/ Michael F. Golden
                                            ------------------------------------
                                        Name: Michael F. Golden
                                        Title: President and Chief Executive
                                               Officer



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        BUYERS:

                                        HIGHBRIDGE INTERNATIONAL LLC

                                        By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC


                                        By: /s/ Adam J. Chill
                                            ------------------------------------
                                        Name: Adam J. Chill
                                        Title: Managing Director



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        CAPITAL VENTURES INTERNATIONAL

                                        BY: HEIGHTS CAPITAL MANAGEMENT, INC.
                                        ITS AUTHORIZED AGENT


                                        By: /s/ Martin Kobinger
                                            ------------------------------------
                                        Name: Martin Kobinger
                                        Title: Investment Manager



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        CORNELL CAPITAL PARTNERS, LP


                                        By: /s/ Mark Angelo
                                            ------------------------------------
                                        Name: Mark Angelo
                                        Title:
                                               ---------------------------------



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        CRANSHIRE CAPITAL, L.P.


                                        By: /s/ Mitchell P. Kopin
                                            ------------------------------------
                                        Name: Mitchell P. Kopin
                                        Title: President - Downsview Capital
                                               The General Partner



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        D.B. ZWIRN SPECIAL OPPORTUNITIES FUND,
                                        LTD

                                        By: /s/ Lawrence D. Cutler
                                            ------------------------------------
                                        Name: Lawrence D. Cutler
                                        Title: Chief Administrative &
                                               Compliance Officer



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        D.B. ZWIRN SPECIAL OPPORTUNITIES FUND,
                                        LP


                                        By: /s/ Lawrence D. Cutler
                                            ------------------------------------
                                        Name: Lawrence D. Cutler
                                        Title: Chief Administrative &
                                               Compliance Officer



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        ENABLE GROWTH PARTNERS LP


                                        By: /s/ Brendan O'Neil
                                            ------------------------------------
                                        Name: Brendan O'Neil
                                        Title: Principal and Portfolio Manager



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        EVOLUTION MASTER FUND LTD. SPC,
                                        SEGREGATED PORTFOLIO M


                                        By: /s/ Michael Lerch
                                            ------------------------------------
                                        Name: Michael Lerch
                                        Title: Director



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        GLG MARKET NEUTRAL FUND

                                        BY: GLG PARTNERS LP ACTING AS INVESTMENT
                                            MANAGER TO GLG MARKET NEUTRAL FUND


                                        By: /s/ Bob Price
                                            ------------------------------------
                                        Name: Bob Price
                                        Title: Head of Operations
                                               GLG Partners LP


                                        By: /s/ Tim Kuschill
                                            ------------------------------------
                                        Name: Tim Kuschill
                                        Title: Legal Counsel
                                               GLG Partners LP



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        HUDSON BAY FUND LP


                                        By: /s/ Yoav Roth
                                            ------------------------------------
                                        Name: Yoav Roth
                                        Title: Principal and Portfolio Manager



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        HUDSON BAY OVERSEAS FUND LTD


                                        By: /s/ Yoav Roth
                                            ------------------------------------
                                        Name: Yoav Roth
                                        Title: Principal and Portfolio Manager



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        IROQUOIS MASTER FUND LTD.


                                        By: /s/ Joshua Silverman
                                            ------------------------------------
                                        Name: Joshua Silverman
                                        Title: Authorized Signator



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        KAMUNTING STREET MASTER FUND, LTD


                                        By: /s/ Gregor Dannacher
                                            ------------------------------------
                                        Name: Gregor Dannacher
                                        Title: Director of Research
                                               Kamunting Street Capital
                                               Management, L.P.
                                               As Investment Manager For
                                               Kamunting Street Master Fund, LTD



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        KINGS ROAD INVESTMENTS LTD.


                                        By: /s/ Brandon L. Jones
                                            ------------------------------------
                                        Name: Brandon L. Jones
                                        Title: Co-head, Private Investments



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        LBI GROUP INC.


                                        By: /s/ Eric Salzman
                                            ------------------------------------
                                        Name: Eric Salzman
                                        Title: SVP



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        PORTSIDE GROWTH AND OPPORTUNITY FUND


                                        By: /s/ Jeffrey Smith
                                            ------------------------------------
                                        Name: Jeffrey Smith
                                        Title: Authorized Signatory


          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        BUYER:

                                        RADCLIFFE SPC, LTD. FOR AND ON BEHALF OF
                                        THE CLASS A SEGREGATED PORTFOLIO

                                        By: RG Capital Management, L.P.

                                        By: RGC Management Company, LLC


                                        By: /s/ Gerald F. Stahlecker
                                            ------------------------------------
                                        Name: Gerald F. Stahlecker
                                        Title: Managing Director



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        ROCKMORE INVESTMENT MASTER FUND LIMITED


                                        By: /s/ Brian Daly
                                            ------------------------------------
                                        Name: Brian Daly
                                        Title: Managing Director



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        SCOGGIN CAPITAL MANAGEMENT, LP II

                                        By: S&E Partners, LP
                                            Its: general partner

                                        By: Scoggin, Inc.
                                            Its: general partner


                                        By: /s/ Curtis Schener
                                            ------------------------------------
                                        Name: Curtis Schener
                                        Title: CEO



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        SILVER OAK CAPITAL, LLC


                                        By: /s/ Fred Berger
                                            ------------------------------------
                                        Name: Fred Berger
                                        Title: Manager



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR PIPES
                                        CORPORATE STRATEGIES MASTER LIMITED


                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR GLOBAL
                                        CONVERTIBLE ARBITRAGE II MASTER LIMITED


                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director



          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR GLOBAL
                                        CONVERTIBLE ARBITRAGE MASTER LIMITED


                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director


                                                                       EXHIBIT A

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

1.   (a)  Full Legal Name of Selling Securityholder:

          ______________________________________________________________________

     (b)  Full Legal Name of Registered Holder (if not the same as (a) above)
          through which Transfer Restricted Securities Listed in Item 3 below
          are held:

          ______________________________________________________________________

     (c)  Full Legal Name of DTC participant (if applicable and if not the same
          as (b) above) through which Transfer Restricted Securities listed in
          Item 3 below are held:

          ______________________________________________________________________

2.   Address for Notices to Selling Securityholder:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Telephone: _____________________________________________________________________

Fax: ___________________________________________________________________________

Contact Person: ________________________________________________________________

3.   Beneficial Ownership of Transfer Restricted Securities:

     (a)  Type and Principal Amount of Transfer Restricted Securities
          beneficially owned:

          ______________________________________________________________________

          ______________________________________________________________________

     (b)  CUSIP No(s). of such Transfer Restricted Securities beneficially
          owned:

          ______________________________________________________________________

     (c)  Did you acquire the securities listed in Item 3(a) in the ordinary
          course of business?

          Yes [ ]   No [ ]



     (d)  At the time of your purchase of the securities listed in Item 3(a),
          did you have any agreements or understandings, directly or indirectly,
          with any person to distribute the securities?

          Yes [ ]   No [ ]

     (e)  If your response to Item 3(d) is yes, please describe such agreements
          or understandings.

          ______________________________________________________________________

          ______________________________________________________________________

4.   Beneficial Ownership of Other Securities of the Company Owned by the
     Selling Securityholder.

     Except as set forth below in this Item 4, the undersigned is not the
     beneficial or registered owner of any securities of the Company other than
     the Transfer Restricted Securities listed above in Item 3.

     (a)  Type and Amount of Other Securities beneficially owned by the Selling
          Securityholder:

          ______________________________________________________________________

          ______________________________________________________________________

     (b)  CUSIP No(s). of such Other Securities beneficially owned:

          ______________________________________________________________________

          ______________________________________________________________________

5.   Relationships with the Company:

     Except as set forth below, neither the undersigned nor any of its
     affiliates, officers, directors or principal equity holders (owners of 5%
     of more of the equity securities of the undersigned) has held any position
     or office or has had any other material relationship with the Company (or
     its predecessors or affiliates) during the past three years.

     State any exceptions here:

          ______________________________________________________________________

          ______________________________________________________________________

6.   Broker-Dealers and their Affiliates

     (a)  Is the Selling Securityholder a broker-dealer:



          Yes [ ]   No [ ]

          If so, please answer the remaining question in this section.

          (i) Please advise whether the notes were received by the Selling
          Securityholder as compensation for investment banking services or as
          investment shares, and if so please describe the circumstances.

          Note that in general we may be required to identify any registered
          broker-dealer as an underwriter in the prospectus.

          (ii) Except as set forth below, if the Selling Securityholder is a
          registered broker- dealer, the Selling Securityholder does not plan to
          make a market in the Transfer Restricted Securities. If the Selling
          Securityholder plans to make a market in the Transfer Restricted
          Securities, please indicate whether the Selling Securityholder plans
          to use the prospectus relating to the Transfer Restricted Securities
          as a market-making prospectus.

          (b)  Affiliation with Broker-Dealers

               Is the Selling Securityholder an affiliate(1) of a registered
               broker-dealer?

          Yes [ ]   No [ ]

          If so, please answer the remaining questions in this section.

          (i)  Please describe the affiliation between the Selling
               Securityholder and any registered broker-dealer.

          (ii) If the notes were purchased by the Selling Securityholder other
               than in the ordinary course of business, please describe the
               circumstances.

          (iii) Please advise whether the notes were received by the Selling
               Securityholder as compensation for investment banking services or
               as investment shares, and if so please describe the
               circumstances.

          (iv) If the Selling Securityholder, at the time of its purchase of
               Transfer Restricted Securities, had any agreements or
               understandings, directly or indirectly, with any person to
               distribute the Transfer Restricted Securities, please describe
               such agreements or undertakings.

- ----------
(1)  An "affiliate" of a specified person or entity means a person or entity
     that directly, or indirectly through one or more intermediaries, controls
     or is controlled by, or is under common control with, the person or entity
     specified.



     Note that if the Selling Securityholder is an affiliate of a broker-dealer
     and did not purchase its notes in the ordinary course of business or at the
     time of the purchase had any agreements or understandings, directly or
     indirectly, to distribute the securities, we may be required to identify
     the Selling Securityholder as an underwriter in the prospectus.

7.   Beneficial Ownership by Entities:

     If the Selling Securityholder is an entity, does any natural person have
     voting or dispositive power over the Transfer Restricted Securities held by
     the Selling Securityholder?(2)

     If so, please state the person's or persons' name(s):

8.   Beneficial Ownership by Natural Persons or by a Board or Committee

     Is the Selling Securityholder a reporting entity with the Securities and
     Exchange Commission?

     If the Selling Securityholder is a majority owned subsidiary of a reporting
     entity, identify the majority stockholder that is a reporting entity.

     Yes [ ]   No [ ]

     If No, please answer the remaining questions in this section.

     (i)  Please name the natural person or person(s) having voting and/or
          investment control over the Selling Securityholder.(3)

     (ii) If the voting and/or investment control over the Selling
          Securityholder is held by board or committee, please state the name of
          the natural person or person(s) on such board or committee.

- ----------
(2)  Please answer "Yes" if any natural person, directly or indirectly, through
     any contract, arrangement, understanding, relationship, or otherwise has or
     shares: (a) voting power which includes the power to vote, or to direct the
     voting of, such security; and/or, (b) investment power which includes the
     power to dispose, or to direct the disposition of, the Transfer Restricted
     Securities held by the Selling Securityholder.

(3)  Please include any natural person that, directly or indirectly, through any
     contract, arrangement, understanding, relationship, or otherwise has or
     shares: (a) voting power which includes the power to vote, or to direct the
     voting of, such security; and/or, (b) investment power which includes the
     power to dispose, or to direct the disposition of, the Transfer Restricted
     Securities held by the Selling Securityholder.



9.   Plan of Distribution:

     Except as set forth below, the undersigned (including its donees or
     pledgees) intends to distribute the Transfer Restricted Securities listed
     above in Item 3 pursuant to the Shelf Registration Statement only as
     follows (if at all): Such Transfer Restricted Securities may be sold from
     time to time directly by the undersigned or, alternatively, through
     underwriters, broker-dealers, or agents. If the Transfer Restricted
     Securities are sold through underwriters, broker-dealers, or agents, the
     Selling Securityholder will be responsible for underwriting discounts or
     commissions or agents' commissions. Such Transfer Restricted Securities may
     be sold in one or more transactions at fixed prices, at prevailing market
     prices at the time of sale, at varying prices determined at the time of
     sale or at negotiated prices. These sales may be effected in transactions,
     which may involve crosses or block transactions,

     -    on any national securities exchange or quotation service on which the
          securities may be listed or quoted at the time of sale;

     -    in the over-the-counter market;

     -    in transactions otherwise than on these exchanges or systems or in the
          over-the-counter market;

     -    through the writing of options, whether such options are listed on an
          options exchange or otherwise;

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

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

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

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

     -    in privately negotiated transactions;

     -    in short sales;

     -    in sales pursuant to Rule 144;

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



     -    in a combination of any such methods of sale; and

     -    in any other method permitted pursuant to applicable law.

     State any exceptions here:

     ___________________________________________________________________________

     ___________________________________________________________________________

Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
written agreement of the Company.

The undersigned acknowledges its obligation to comply with the provisions of the
1934 Act and the rules thereunder relating to stock manipulation, particularly
Regulation M thereunder (or any successor rules or regulations), in connection
with any offering of Transfer Restricted Securities pursuant to the Registration
Rights Agreement. The undersigned agrees that neither it nor any person acting
on its behalf will engage in any transaction in violation of such provisions.

The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.

Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.

In accordance with the undersigned's obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company, upon written request (which request shall be made within three days of
the proposed effeteness of the Registration Statement or an amendment thereto),
of any inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains effective.

All notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing by hand delivery, first class mail or air courier guaranteeing
overnight delivery to the address set forth below.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Shelf Registration
Statement and the related prospectus.

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the



respective successors, heirs, personal representatives and assigns of the
Company and the Selling Securityholder with respect to the Transfer Restricted
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.



IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:                                  Beneficial Owner:
       ------------------------------                     ----------------------


                                        By:
                                             -----------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

               PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
               QUESTIONNAIRE TO SMITH & WESSON HOLDING CORPORATION

                         Smith & Wesson Holding Corporation
                         2100 Roosevelt Avenue
                         Springfield, Massachusetts 01104
                         Attention: Chief Financial Officer



                                                                       EXHIBIT B

                             SELLING SECURITYHOLDERS

     The notes and shares of common stock issuable upon conversion of the notes
that may be offered pursuant to this prospectus will be offered by the selling
securityholders. For additional information regarding the issuance of those
notes and the shares of common stock issuable upon conversion of the notes, see
"Private Placement of Convertible Notes" above. We are registering the notes and
shares of common stock issuable upon conversion of the notes in order to permit
the selling stockholders to offer the notes and the shares of common stock
issuable upon conversion of the notes for resale from time to time. Except for
the ownership of the notes issued pursuant to the Securities Purchase Agreement,
the selling stockholders have not had any material relationship with us within
the past three years.

     The following table sets forth the selling securityholders and other
information regarding the beneficial ownership of the shares of common stock and
notes by each of the selling securityholders. The second column lists the
principal amount of notes benefically owned by each selling securityholder as of
________, 200_. The third column lists the number of shares of common stock
beneficially owned by each selling securityholder, based on its ownership of the
notes, as of ________, 200_, assuming conversion of all notes held by the
selling securityholders on that date, without regard to any limitations on
conversions.

     The fourth column lists the notes being offered by this prospectus by each
selling securityholder. The fifth column lists the shares of common stock being
offered by this prospectus by each selling securityholder.

     In accordance with the terms of a registration rights agreement among the
Company and the selling securityholders, this prospectus generally covers the
resale of the notes and the number of shares of common stock issued or issuable
upon conversion of the notes as of the trading day immediately preceding the
date the registration statement is initially filed with the SEC. Because the
conversion price of the notes may be adjusted, the number of shares that will
actually be issued may be more or less than the number of shares being offered
by this prospectus. The sixth column assumes the sale of all of the notes
offered by the selling securityholders pursuant to this prospectus. The seventh
column assumes the sale of all of the shares of common stock offered by the
selling securityholders pursuant to this prospectus.

     Under the terms of the notes, a selling securityholder may not convert the
notes to the extent such conversion would cause such selling securityholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% of our then outstanding shares of common stock
following such conversion, excluding for purposes of such determination shares
of common stock issuable upon conversion of the notes which have not been
converted. The number of shares in the fourth column does not reflect this
limitation. The selling securityholders may sell all, some or none of their
notes or shares of common stock issuable upon conversion of the notes in this
offering. See "Plan of Distribution."





                                      PRINCIPAL                  MAXIMUM      MAXIMUM
                                      AMOUNT AT                 NUMBER OF    NUMBER OF
                                      MATURITY     NUMBER OF    NOTES TO     SHARES TO   NUMBER OF
                                      OF NOTES      SHARES       BE SOLD      BE SOLD      NOTES       NUMBER OF
                                    BENEFICIALLY     OWNED      PURSUANT     PURSUANT      OWNED     SHARES OWNED
                                     OWNED PRIOR    PRIOR TO     TO THIS      TO THIS      AFTER         AFTER
NAME OF SELLING SECURITYHOLDER       TO OFFERING    OFFERING   PROSPECTUS   PROSPECTUS   OFFERING      OFFERING
- ------------------------------      ------------   ---------   ----------   ----------   ---------   ------------
                                                                                   
Highbridge International LLC (1)                                                                           0

Capital Ventures International

Cornell Capital Partners, LP

Cranshire Capital L.P.

D.B. Zwirn Special Opportunities
Fund, LTD

D.B. Zwirn Special Opportunities
Fund, LP

Enable Growth Partners LP

Evolution Master Fund Ltd. SPC,
Segregated Portfolio M

GLG Market Neutral Fund

Hudson Bay Fund LP

Hudson Bay Overseas Fund Ltd

Iroquois Master Fund Ltd.

Kamunting Street Master Fund, Ltd

Kings Road
Investments Ltd.

LBI Group, Inc.

Portside Growth and Opportunity
Fund

Radcliffe SPC, Ltd.
For and on behalf of the Class A
Segregated Portfolio





                                                                                   
Rockmore Investment Master Fund,
Ltd

Scoggin Capital Management, LP II

Silver Oak Capital, LLC

UBS O'Connor LLC fbo O'Connor
PIPES Corporate Strategies
Master Limited

UBS O'Connor LLC fbo O'Connor
Global Convertible Arbitrage II
Master Limited

UBS O'Connor LLC fbo O'Connor
Global Convertible Arbitrage
Master Limited


(1)  Highbridge Capital Management, LLC is the trading manager of Highbridge
     International LLC and has voting control and investment discretion over
     securities held by Highbridge International LLC. Glenn Dubin and Henry
     Swieca control Highbridge Capital Management, LLC. Each of Highbridge
     Capital Management, LLC, Glenn Dubin and Henry Swieca disclaim beneficial
     ownership of the securities held by Highbridge International LLC.



                              PLAN OF DISTRIBUTION

     We are registering the notes and the shares of common stock issuable upon
conversion of the notes to permit the resale of these notes and shares of common
stock by the holders of the notes from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
securityholders of the notes and shares of common stock issuable upon conversion
of the notes. We will bear all fees and expenses incident to our obligation to
register the notes and shares of common stock issuable upon conversion of the
notes.

     The selling securityholders may sell all or a portion of the notes or
shares of common stock issuable upon conversion of the notes beneficially owned
by them and offered hereby from time to time directly or through one or more
underwriters, broker-dealers or agents. If the notes or shares of common stock
issuable upon conversion of the notes are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions. The notes and shares of common
stock issuable upon conversion of the notes may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,

     -    on any national securities exchange or quotation service on which the
          securities may be listed or quoted at the time of sale;

     -    in the over-the-counter market;

     -    in transactions otherwise than on these exchanges or systems or in the
          over-the-counter market;

     -    through the writing of options, whether such options are listed on an
          options exchange or otherwise;

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

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

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

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

     -    privately negotiated transactions;

     -    short sales;



     -    sales pursuant to Rule 144;

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

     -    a combination of any such methods of sale; and

     -    any other method permitted pursuant to applicable law.

     If the selling securityholders effect such transactions by selling notes or
common stock issuable upon conversion of the notes to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling securityholders or commissions from purchasers of the notes or such
common stock, as applicable, for whom they may act as agent or to whom they may
sell as principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved). In connection with sales of the shares of
common stock issuable upon conversion of the notes or otherwise, the selling
securityholders may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the shares of common stock issuable upon
conversion of the notes in the course of hedging in positions they assume. The
selling securityholders may also sell shares of common stock issuable upon
conversion of the notes short and deliver shares of common stock covered by this
prospectus to close out short positions and to return borrowed shares in
connection with such short sales. The selling securityholders may also loan or
pledge the notes or shares of common stock issuable upon conversion of the notes
to broker-dealers that in turn may sell such shares.

     The selling securityholders may pledge or grant a security interest in some
or all of the notes or shares of common stock issuable upon conversion of the
notes owned by them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell the notes and
shares of common stock issuable upon conversion of the notes from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling securityholders to include
the pledgee, transferee or other successors in interest as selling
securityholders under this prospectus. The selling securityholders also may
transfer and donate the notes and shares of common stock issuable upon
conversion of the notes in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.

     The selling securityholders and any broker-dealer participating in the
distribution of the notes and shares of common stock issuable upon conversion of
the notes may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions allowed
to, any such broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act. At the time a particular offering of the
notes or shares of common stock issuable upon conversion of the notes is made, a
prospectus supplement, if required, will be distributed which will set forth the
aggregate amount of notes or shares of common stock issuable upon conversion of
the notes being offered and the terms of the offering, including the name or
names of any broker-dealers or agents, any discounts,



commissions and other terms constituting compensation from the selling
securityholders and any discounts, commissions or concessions allowed or
reallowed or paid to broker-dealers.

     Under the securities laws of some states, the notes and shares of common
stock issuable upon conversion of the notes may be sold in such states only
through registered or licensed brokers or dealers. In addition, in some states
the notes and shares of common stock issuable upon conversion of the notes may
not be sold unless such shares have been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.

     There can be no assurance that any selling securityholder will sell any or
all of the notes and shares of common stock issuable upon conversion of the
notes registered pursuant to the registration statement, of which this
prospectus forms a part.

     The selling securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the notes and shares of common stock issuable
upon conversion of the notes by the selling securityholders and any other
participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the notes and shares of common stock issuable
upon conversion of the notes to engage in market-making activities with respect
to the notes or shares of common stock issuable upon conversion of the notes.
All of the foregoing may affect the marketability of the notes or shares of
common stock issuable upon conversion of the notes and the ability of any person
or entity to engage in market-making activities with respect to the notes and
shares of common stock issuable upon conversion of the notes.

     We will pay all expenses of the registration of the notes and the
underlying shares of common stock pursuant to the registration rights agreement,
estimated to be $[________] in total, including, without limitation, Securities
and Exchange Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that a selling securityholder
will pay all underwriting discounts and selling commissions, if any. We will
indemnify the selling securityholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights
agreements, or the selling securityholders will be entitled to contribution. We
may be indemnified by the selling securityholders against civil liabilities,
including liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling securityholder specifically for use
in this prospectus, in accordance with the related registration rights
agreement, or we may be entitled to contribution.

     Once sold under the registration statement, of which this prospectus forms
a part, the notes and shares of common stock issuable upon conversion of the
notes will be freely tradable in the hands of persons other than our affiliates.

Exhibit 99.2

Michael Golden, President/CEO John Kelly, CFO November/December 2006 HIGHLY CONFIDENTIAL

 

Information Regarding Disclosures Although Smith & Wesson its Securities (or to the extent applicable, the Common (as such term is defined in Reg D) who are able to evaluate the own examination of the Company and the terms of the The acquisition of the Securities, if offered, should be considered only by related matters concerning its investment and is urged to The and other sources believed to be reliable, but the The Company is subject to the informational requirements of the Any representation to the contrary is a criminal offense.is expected to agree to file, within a certain period of time upon completion of the Offering, a Each prospective investor in the Offering should, prior to purchasing any Securities, consult its own Any representations and warranties will be contained only in a definitive Securities Exchange Act of 1934, as amended, and files reports, proxy statements and other information with the The Securities have not and will not be registered under the Securities Act of 1933, as amended (the “Act”), or under any state securities laws nor has the Securities and Exchange Commission (the “Commission”) or any state regulatory authority endorsed the Offering.Holding Corporationregistration statement with the Commission with respect to the Securities being offered (and/or to the extent applicable theunderlying Common Stock), there can be no assurance that such registration statement will be declared effective by the Commission or that any investor will have an opportunity to sellStock) pursuant thereto. In the Offering, Securities will be offered only to Qualified Institutional Buyers (as defined in Rule 144A under the Act) and a limited number of institutional “accredited investors”merits and risks, including illiquidity of the investment. In making an investment decision, investors must rely upon theirOffering, including the merits and risks involved.persons who can bear the economic risk of their investment for an indefinite period of time and can afford a total loss of their investment.attorney and business advisor as to the legal, business, tax andask questions of, and receive answers from, Smith & Wesson Holding Corporation and Cowen and Company concerning the terms and conditions of the Offering and request any additional information they may consider necessary in making aninformed investment decision. This presentation does not constitute an offer to sell or a solicitation of an offer to purchase any securities of any nature whatsoever, nor do the contents of the presentation constitute legal, tax or business advice. This presentation and the offering of Smith & Wesson Holding Corporation’s Securities shall be kept confidential.recipient agrees not to disclose to any third party any information contained herein, or any terms, conditions or other facts with respect to the Offering, including, without limitation, that the Company is or may be contemplating the Offering. Information included herewith has been obtained from the Companyaccuracy or completeness of such information is not guaranteed by, and should not be construed as a representation by, Cowen and Company or the Company.agreement signed by the investor and the Company. Commission.

2

Smith & Wesson Holding Corporation operating The detailed Such forward-looking statements include statements Such factors include the demand for the Certain statements contained in this presentation may be deemed to be forward-looking statements under federal securities laws, and the Company intends that such forward-looking statements be subject to the safe-harbor created thereby. regarding the Company’s strategies, the demand for the Company’s products, the opportunity for growth of the Company, anticipated sales and results, and the anticipated acquisition of Thomson/Center Arms. Company cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Company’s products, the Company’s growth opportunities, the ability of the Company to obtain operational enhancements, the ability of the company to complete the acquisition of Thompson/Center Arms and other risks from time to time in the Company’s reports filed with the SEC. 3

3

Offering Summary (a) Smith & Wesson Holding Corp. SWHC (NASDAQ) Convertible Notes $80MM December 15, 2006 To partially fund the acquisition of Thompson/Center Arms Cowen and Company Merriman Curhan Ford & Co. Issuer: Ticker (Exchange): Security: Amount: Closing: Use of Proceeds: Placement Agents: Balance of purchase price and acquisition costs will be funded through existing, $30MM acquisition line of credit. (a)

4

Company Profile FY2006 sales growth: 14% FY2006 sales growth: 69% #1 in revolvers — #3 in pistols — 60% larger than handgun market Springfield, MA; Houlton, ME — — 854 Employees Two non-union, U.S. factories — NASDAQ: SWHC Market Cap ~$550MM 154 year old American company Largest U.S. manufacturer of handguns & handcuffs 2005 market share: New growth fueled by expansion into $1.1B long gun market — · • • • • • • •

5

Investment Highlights Accretive in next fiscal year (Y/E 4/30/08) Provides hunting and long gun manufacturing expertise Highly valuable Smith & Wesson brand Large market opportunity in safety, security, protection and sport Leading market position in the handgun market Experienced management team with proven track record Strong financial performance Acquisition of Thompson/Center Arms — — · • • • • •

6

Acquisition Overview $65MM Sales $13MM EBITDA 39% Gross Margin 100% acquisition of Thompson/Center Arms for $102 million in cash Expected public announcement on December 18; expected closing in early January 2007 Thompson/Center Arms calendar year 2005 highlights — — — Expected earnings accretion of 15% for FY 2008 (Y/E 4/30/08) Experienced management team with long gun expertise · • • • •

7

Thompson/Center Arms 41-year old long gun company headquartered in Rochester, NH Leading player in black powder and interchangeable firearms systems markets Robust new product pipeline for 2007 including bolt action rifle Approximately 500 non-union employees 160,000 sq. ft. facility (owned) Provides S&W immediate entry into hunting rifles Long gun barrel manufacturing expertise accelerates S&W growth in rifles Expands and strengthens existing distribution channels No product overlap Company Overview — — — — — Acquisition Benefits — — — — · •

8

Interchangeable Firearm Systems Black Powder Accessories Firearms Powder Rimfire Rifles Thompson/Center Arms Black

9

Smith & Wesson Overview

 

154 Years of Innovation Elite/1000 Shotguns — M&P Tactical Rifle M&P Pistol Series 2007 460 XVR 2006 500 Magnum 2006 2005 AirLite-Scandium 2003 S&W 40 Caliber 44 Magnum 2001 1990 357 Magnum 1955 44 Special 38 Special 1935 1908 Model 3-Breaktop 1899 Model 1-22 Rimfire 1870 1857

11

Sport Safety...Security...Protection...Sport Safety Protection Our Vision The most recognizable company in the global business of Security

12

S&W: 87% Brand Awareness A company-sponsored, 2004 survey asked consumers about their future purchase intent: Current Status Served Served Served (March 2006) Will enter January 2007 Will enter with TCA Not served Not served S&W Rank #1 #1 #1 #3 #3 #3 #4 Product / Service Revolvers Pistols Tactical Rifles Shotguns Hunting Rifles Security Systems Ammunition Nov, 2004 Source: American Sports Data -

13

Growth Strategy platform Use “Safety-Security-Protection-Sport” to enter new markets while continuing to drive growth in our core businesses Drive Growth in Handgun Market Innovative Products Law Enforcement Military/Federal Gov’t International Sporting Goods · • • • • Diversify into New Markets Long Guns Homeland Security Criminal Investigation Law Enforcement Defense · • • • • Build and Leverage Brand Re-energize the legacy Key to new market entry Licensing opportunities Marketing initiatives · • • •

14

Our Current Markets Y/Y Growth Q2 FY07 +52% Q2 FY07 +40% Q2 FY07 +148% Targets Firearms Distributors 2800 Independent U.S. Military Federal Agencies and Homeland Security State & Municipal Law Enforcement Agencies Dealers Big Box Retailers Channel Direct Sales Force Washington D.C. presence & lobbying Direct Sales Force effort Market Sporting Goods Federal Government Law Enforcement

15

Strong Year Over Year Growth 52% Q2-07 37% Q1-07 32% Q4-06 24% Q3-06 Sporting Goods Sales Growth Y/Y Transition to Direct Sales Force in Q2 8% Q2-06 (Percent Growth) 60.0% 50.0 40.0 30.0 20.0 10.0 0.0 44% Q2-07 54% Q1-07 44% Q4-06 24% Q3-06 Firearms Sales Growth Y/Y Transition to Direct Sales Force in Q2 14% Q2-06 (Percent Growth) 60.0% 50.0 40.0 30.0 20.0 10.0 0.0

16

Federal Government/ Law Enforcement Market

Growth in FY 2006: $11MM vs. $0 in 2005 (1H FY 2007: 237%) US Gov’t to Afghanistan Military Regular Visits to Washington D.C. by CEO, COO, Lobby Firm Anticipate military changing from 9 mm to 45 caliber Won: 132 LE Departments committed to M&P Pistol since January Won: Four orders / 75K Units — Growth in 1H FY 2007: 226% 2006 Recapturing LE market share, currently with 10%, originally 98% Market Size: 17,000 Departments and 800,000 Officers Military/ Federal Government — — — — Law Enforcement — — — — · •

17

Addressing New Growth Opportunities Defense License Homeland Security Acquire Law Enforcement & Criminal Investigation Manufacture Safety...Security...Protection...Sport Long Guns Outsource Market Opportunities: Opportunities for Entry:

18

Entering New Markets: Long Guns 2005 U.S. DOMESTIC NON-MILITARY MARKET Shotguns $354MM (32%) The long gun market is 60% larger than the handgun market Rifles $506MM (46%) ·Tactical Rifles (14%) $152MM (7%) $1.1 Billion Black Powder $80MM BATF 2005 Excise Tax Study and Smith & Wesson Management Estimates Based on 2005 vs. 2006 data from top 3 distributors. SOURCE:

19

Why the Long Gun Market? Sales & orders exceeded 10% of market in first year Capacity constrained Law enforcement agencies committed to date: 44 M&P15 Tactical Rifle • • • S&W has announced entry into shotguns in 2007 $1.1 Billion Market: 60% larger than handguns Consumers already perceive S&W as a leader Highly fragmented and void of sophisticated marketing S&W entered long gun market March 2006 — — Thompson/Center Arms acquisition positions S&W to accelerate growth in the long gun market

· • • • •

20

Experienced Management Team Previous Experience 30 yrs business experience with Kohler, Stanley Works, Black and Decker, and Procter & Gamble 22 yrs accounting and finance experience with Smith & Wesson 22 yrs business experience with Kohler, Stanley Works and Black & Decker 24 yrs sales and marketing experience with Coca-Cola and Frito-Lay 25 yrs business experience with Union Carbide, GE Silicones, Newell and Stanley Works (Wal-Mart Sales Manager) 15 yrs operations management experience with Tier I & II automotive manufacturers Ingersoll Rand and Autoliv 10 yrs licensing experience with the Meredith Corporation, Stanley Works and Harley-Davidson Position President CEO CFO COO VP of Marketing VP of Sales VP of Operations VP of Licensing Name Leland Nichols Tom Taylor Tom Fimmen Ken Chandler Michael Golden John Kelly Bobbie Hunnicutt

21

Financial Overview

 

Quarterly Income Statement Summary 2006 $98.4 32.7 32.9% $11.2 6.2 $0.15 (a) Six Months Ended Oct. 31, 2005 $67.4 20.1 29.3% $6.1 3.4 $0.09 2006 $50.8 16.1 31.2% $5.3 2.9 $0.07 Three Months Ended Oct. 31, 2005 $35.5 10.5 29.3% $1.2 0.7 $0.02 (US$ in millions, except per share data) Sales Gross Profit Gross Margin Operating Income Net Income EPS +84% +46% Sales: Net Income: +43% +312% Sales: Net Income: Growth: 2005 Six Months Ended Oct. 31 Results include $3.1MM environmental reserve reduction ($1.9MM after tax, $0.05 per share) (a)

23

Annual Income Statement Summary 2007E 68.0 34.0% 25.6 12.8% 15.0 0.36 $ 200.0 $ $ $ 2006 49.6 31.0% 14.5 9.1% 8.7 0.22 $ 157.9 $ $ $ Year Ended April 30, 2005 40.9 32.5% 11.2 8.9% 5.2 0.14 $ 124.0 $ $ $ 2004 $ 117.9 39.1 32.7% 4.8 4.0% 0.8 0.02 $ $ $ (US$ in millions, except per share data) Sales Gross Profit Gross Margin Operating Income Operating Margin Net Income EPS +27% Sales: Net Income: +72% +27% Sales: Net Income: +67% +5% Sales: Net Income: +527% Growth: FY 2007 Pre-acquisition EPS guidance of $0.36

24

Pro Forma Balance Sheet Summary Pro Forma 0.7 45.8 231.5 129.7 181.7 49.8 231.5 50.6 for Acquisition and Offering $ $ $ $ $

As of Oct. 31, 2006 0.7 31.6 104.7 19.7 54.9 49.8 104.7 26.8 $ $ $ $ $

(US$ in millions) Cash & Cash Equivalents Accounts Receivable Total Assets Total Debt Total Liabilities Equity Liabilities and Equity Working Capital

25

Acquisition Accounting in accordance with the accounting pronouncements and amortized over to inventory and Under recent accounting pronouncements related to purchase accounting, certain intangible assets, sales backlog and inventory must be valued at “fair value” their estimated useful lives. As a result, the amounts allocated backlog are expected to significantly impact the results in the first quarter after the acquisition. Amounts allocated to amortizable intangible assets are amortized over 5 to 20 years. These are all non-cash adjustments. Estimated Acquisition Related Amortization · $ 1.9 0.6 0.0 0.0 $ 2.5 FY2008E 0.7 0.2 6.0 0.1 7.0 FY2007E $ $ (US$ in millions) Amortization of customer list Amortization of patents Amortization of inventory mark-up to FMV Amortization of valuation of beginning backlog Total transaction is These numbers are preliminary and are subject to change based upon the Thompson balance sheet and backlog at the time the Note: closed.

26

Updated FY07 Annual Guidance Pro Forma for Acquisition FY07 $218.6 11.5 36.6 $0.27 Non-cash Purchase Accounting Adjustments - $(4.4) — $(0.10) Thompson/ Center Arms January — April 2007 $18.6 0.9 2.7 $0.01 SWHC Standalone FY07 $200.0 15.0 33.9 $0.36 (US$ in millions, except per share data) Net Product Sales Net Income EBITDA Earnings per Diluted Share:

27

Updated FY08 Annual Guidance Pro Forma for Acquisition FY08 $320.0 27.0 62.2 $0.60 SWHC Standalone FY08 $250.0 22.0 47.5 $0.52 (US$ in millions, except per share data) Net Product Sales Net Income EBITDA Earnings per Diluted Share:

28

Investment Highlights Accretive in next fiscal year (Y/E 4/30/08) Provides hunting and long gun manufacturing expertise Highly valuable Smith & Wesson brand Large market opportunity in safety, security, protection and sport Leading market position in the handgun market Experienced management team with proven track record Strong financial performance Acquisition of Thompson/Center Arms — — · •• • • •

29

Appendix: EBITDA Reconciliation Smith & Wesson (US$ in millions) Net Income Income Taxes Interest Expense Depreciation FAS 123R Amortization of Acquisition Related Intangibles EBITDA Thompson/Center Arms (US$ in millions) Net Income Income Taxes Interest Expense Depreciation Management Fee to Thompson directors Consulting Fee to Previous Owners Amortization of Acquisition Related Intangibles EBITDA Post Acquisition 27.0 16.6 4.4 8.7 3.0 2.5 62.2 FY2008 $ $ SWHC 22.0 13.5 1.0 8.0 3.0 — 47.5 Standalone $ $ Post 11.5 7.1 2.5 6.1 2.4 7.0 36.6 Acquisition $ $ FY2007 SWHC 15.0 9.1 1.4 6.0 2.4 — 33.9 Standalone $ $ 2.9 2.2 4.0 0.3 0.3 0.8 2.4 12.9 For the Year Ended December 31, 2005 $ $

30