Exhibit 10.1

 

EXECUTION COPY

 

 

 

MUELLER HOLDINGS (N.A.), INC.

 

 

Warrants to Purchase
24,487,383 Shares of Class A Common Stock

 

 

WARRANT AGREEMENT

 

 

Dated as of April 29, 2004

 

 

LAW DEBENTURE TRUST COMPANY OF NEW YORK

 

Warrant Agent

 

 

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WARRANT AGREEMENT, dated as of April 29, 2004, between Mueller Holdings (N.A.),
Inc., a Delaware corporation (the “Company”), and Law Debenture Trust Company of
New York, as warrant agent (the “Warrant Agent”).

 

WHEREAS, the Company proposes to issue warrants (the “Warrants”) to initially
purchase up to an aggregate of 24,487,383 shares of Class A Common Stock, par
value $.01 per share (the “Common Stock”), of the Company (the Common Stock
issuable on exercise of the Warrants being referred to herein as the “Warrant
Shares”), in connection with the offering (the “Offering”) by the Company of
223,000 Units (the “Units”), each consisting of $1,000 principal amount at
maturity of the Company’s 14 3/4% Senior Discount Notes due 2014 (the “Notes”)
and one Warrant, each Warrant initially representing the right to purchase
109.80889 Warrant Shares.

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing so to act in connection with the issuance of
Warrant Certificates (as defined) and other matters as provided herein.

 

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

 

SECTION 1.                            CERTAIN DEFINITIONS.

 

(a)  As used in this Agreement, the following terms shall have the following
respective meanings:

 

“144A Global Warrant” means a global Warrant substantially in the form of
Exhibit A hereto bearing the Global Warrant Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee.

 

“Affiliate” of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person.  For 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 specified Person, whether through the ownership
of voting securities, by agreement or otherwise.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or
for beneficial interests in any Global Warrant, the rules and procedures of the
Depositary that apply to such transfer or exchange.

 

“Board of Directors” means the board of directors or corporate governing body of
the Company or any committee thereof authorized to act on its behalf.

 

“Business Day” means any day other than a Legal Holiday.

 

“Closing Date” means the date hereof.

 

“Commission” means the Securities and Exchange Commission.

 

“Definitive Warrant” means a certificated Warrant registered in the name of the
Holder thereof and issued in accordance with Section 3.1 or 3.5 hereof,
substantially in the form of Exhibit A

 

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hereto except that such Warrant shall not bear the Global Warrant Legend and
shall not have the “Schedule of Exchanges of Interests in the Global Warrants”
attached thereto.

 

“Depositary” means, with respect to the Warrants issuable or issued in whole or
in part in global form, the Person specified in Section 3.3 hereof as the
Depositary with respect to the Warrants, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of the Indenture.

 

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

 

“Global Warrants” means, individually and collectively, each of the Restricted
Global Warrants and the Unrestricted Global Warrants, substantially, in the form
of Exhibit A hereto issued in accordance with Section 3.1 and 3.5 hereof.

 

“Global Warrant Legend” means the legend set forth in Section 3.5(g)(ii), which
is required to be placed on all Global Warrants issued under this Warrant
Agreement.

 

“Holder” means a person who is listed as the record owner of any Warrant or
Warrant Share, as applicable.

 

“Indenture” means the indenture, dated the date hereof, between the Company and
Law Debenture Trust Company of New York, as trustee, relating to the Notes.

 

“Indirect Participant” means a Person who holds a beneficial interest in a
Global Warrant through a Participant.

 

“Initial Purchasers” means Credit Suisse First Boston LLC, Deutsche Bank
Securities Inc., and J.P. Morgan Securities Inc.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. 

 

“Non-U.S. Person” means a Person who is not a U.S. Person.

 

“Officer” means, with respect to any Person, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Warrant Agent in form and substance reasonably acceptable to
the Warrant Agent.  The counsel may be an employee of or counsel to the Company,
any subsidiary of the Company or the Warrant Agent.

 

“Participant” means, with respect to the Depositary, a Person who has an account
with the Depositary.

 

“Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof,
including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business.

 

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“Private Placement Legend” means the legend set forth in Section 3.5(g)(i) to be
placed on all Warrants issued under this Warrant Agreement and Warrant Shares
issued in respect thereof except where otherwise permitted by the provisions of
this Warrant Agreement.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Regulation S” means Regulation S promulgated under the Securities Act.

 

“Regulation S Definitive Warrant” means a Definitive Warrant in the form of
Exhibit A hereto bearing the Private Placement Legend and the Regulation S
Legend.

 

“Regulation S Legend” means the legend set forth in Section 3.5(g)(iv) to be
placed on all Warrants issued pursuant to Regulation S and Warrant Shares issued
in respect thereof.

 

“Restricted Definitive Warrant” means a Definitive Warrant bearing the Private
Placement Legend.

 

“Restricted Global Warrant” means a Global Warrant bearing the Private Placement
Legend.

 

“Restricted Period” means the one-year distribution compliance period as defined
in Regulation S.

 

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

 

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

 

“Rule 903” means Rule 903 promulgated under the Securities Act.

 

“Rule 904” means Rule 904 promulgated under the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Separation Date” means the earliest of (i) October 26, 2004, (ii) the date on
which a registration statement with respect to a registered exchange offer for
the Notes is declared effective under the Securities Act, (iii) the date a shelf
registration statement with respect to the Notes is declared effective under the
Securities Act, (iv) such date as the Initial Purchasers in their sole
discretion shall determine and (v) the occurrence of a Change of Control (as
defined in the Indenture).  Notwithstanding the foregoing, Units issued pursuant
to Rule 903 shall separate immediately upon issuance.

 

“Trustee” means the trustee under the Indenture.

 

“Unrestricted Global Warrant” means a global Warrant substantially in the form
of Exhibit A attached hereto that bears the Global Warrant Legend and that has
the “Schedule of Exchanges of Interests in the Global Warrant” attached thereto,
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing Warrants that do not bear the Private Placement Legend.

 

“Unrestricted Definitive Warrant” means one or more Definitive Warrants that do
not bear and are not required to bear the Private Placement Legend.

 

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“U.S. Person” means a U.S. person as defined in Rule 902(k) under the Securities
Act.

 

“Warrant Registration Rights Agreement” means the registration rights agreement,
dated as of April 29, 2004, by and among the Company and the Initial Purchasers
relating to the Warrants and the Warrant Shares.

 

(b)  Other Definitions.

 

Term

 

Defined in
Section

 

 

 

“Disinterested Director”

 

8(h)

“DTC”

 

3.3

“Exercise Period”

 

4(a)

“Exercise Price”

 

4(a)

“Expiration Date”

 

4(a)

“Fair Value”

 

8(h)

“Non—Affiliate Sale”

 

8(h)

“Transfer Agent” 

 

6(b)

“Warrant Certificates”

 

3.1

“Warrant Countersignature Order”

 

3.2

“Warrant Register”

 

3.3

 

(c)  Rules of Construction.  Unless the context otherwise requires or except as
otherwise expressly provided,

 

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

 

(ii) “herein,” “hereof” and other words of similar import refer to this
Agreement as a whole and not to any particular Section, Article or other
subdivision;

 

(iii) all references to Sections or Articles or Exhibits refer to Sections or
Articles or Exhibits of or to this Agreement unless otherwise indicated; and

 

(iv) references to agreements or instruments, or to statutes or regulations, are
to such agreements or instruments, or statutes or regulations, as amended from
time to time (or to successor statutes or regulations).

 

SECTION 2.                            APPOINTMENT OF WARRANT AGENT.

 

The Company hereby appoints the Warrant Agent to act as agent for the Company in
accordance with the instructions set forth hereinafter in this Agreement and the
Warrant Agent hereby accepts such appointment.

 

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SECTION 3.                            ISSUANCE OF WARRANTS; WARRANT
CERTIFICATES.

 

3.1.         FORM AND DATING.

 

(A)          GENERAL.

 

The Warrants shall be substantially in the form of Exhibit A hereto (the
“Warrant Certificates”).  The Warrants may have notations, legends or
endorsements required by law, stock exchange rule or usage.  Each Warrant shall
be dated the date of the countersignature.

 

The terms and provisions contained in the Warrants shall constitute, and are
hereby expressly made, a part of this Warrant Agreement.  The Company and the
Warrant Agent, by their execution and delivery of this Warrant Agreement,
expressly agree to such terms and provisions and to be bound thereby.  However,
to the extent any provision of any Warrant conflicts with the express provisions
of this Warrant Agreement, the provisions of this Warrant Agreement shall govern
and be controlling.

 

(B)          GLOBAL WARRANTS.

 

Warrants issued in global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Warrant Legend thereon and the “Schedule
of Exchanges of Interests in the Global Warrant” attached thereto).  Warrants
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Warrant Legend thereon and without the
“Schedule of Exchanges of Interests in the Global Warrant” attached thereto). 
Each Global Warrant shall represent such of the outstanding Warrants as shall be
specified therein and each shall provide that it shall represent the number of
outstanding Warrants from time to time endorsed thereon and that the number of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions.  Any
endorsement of a Global Warrant to reflect the amount of any increase or
decrease in the number of outstanding Warrants represented thereby shall be made
by the Warrant Agent in accordance with instructions given by the Holder thereof
as required by Section 3.5 hereof.

 

(C)           DEFINITIVE WARRANTS.

 

Warrants issued pursuant to Regulation S shall be issued in definitive form,
substantially in the form of Exhibit A hereto (but without the Global Warrant
Legend thereon and without the “Schedule of Exchanges of Interests in the Global
Warrants” attached thereto). 

 

3.2.         EXECUTION.

 

At least one Officer shall sign the Warrants for the Company by manual or
facsimile signature.

 

If the Officer whose signature is on a Warrant no longer holds that office at
the time a Warrant is countersigned, the Warrant shall nevertheless be valid.

 

A Warrant shall not be valid until countersigned by the manual signature of an
authorized signatory on behalf of the Warrant Agent.  The signature shall be
conclusive evidence that the Warrant has been properly issued under this Warrant
Agreement.

 

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The Warrant Agent shall, upon a written order of the Company signed by an
Officer (a “Warrant Countersignature Order”), countersign Warrants for original
issue up to the number stated in the preamble hereto.

 

The Warrant Agent may appoint an agent acceptable to the Company to countersign
Warrants.  Such an agent may countersign Warrants whenever the Warrant Agent may
do so.  Each reference in this Warrant Agreement to a countersignature by the
Warrant Agent includes a countersignature by such agent.  Such an agent has the
same rights as the Warrant Agent to deal with the Company or an Affiliate of the
Company.

 

3.3.         WARRANT REGISTRAR.

 

The Company shall maintain an office or agency where Warrants may be presented
for registration of transfer or for exchange (“Warrant Registrar”).  The Warrant
Registrar shall keep a register of the Warrants and of their transfer and
exchange.  The Company may appoint one or more co-Warrant Registrars.  The term
“Warrant Registrar” includes any co-Warrant Registrar.  The Company may change
any Warrant Registrar without notice to any holder.  The Company shall notify
the Warrant Agent in writing of the name and address of any agent not a party to
this Warrant Agreement.  If the Company fails to appoint or maintain another
entity as Warrant Registrar, the Warrant Agent shall act as such.  The Company
or any of its subsidiaries may act as Warrant Registrar.

 

The Company initially appoints The Depository Trust Company (“DTC”) to act as
Depositary with respect to the Global Warrants.

 

The Company initially appoints the Warrant Agent to act as the Warrant Registrar
with respect to the Global Warrants.

 

3.4.         HOLDER LISTS.

 

The Warrant Agent shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders.  If the Warrant Agent is not the Warrant Registrar, the Company
shall promptly furnish to the Warrant Agent at such times as the Warrant Agent
may request in writing, a list in such form and as of such date as the Warrant
Agent may reasonably require of the names and addresses of the Holders.

 

3.5.         TRANSFER AND EXCHANGE.

 

(A)          TRANSFER AND EXCHANGE OF GLOBAL WARRANTS.

 

A Global Warrant may not be transferred as a whole except by the Depositary to a
nominee of the Depositary, by a nominee of the Depositary to the Depositary or
to another nominee of the Depositary, or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.  All Global
Warrants will be exchanged by the Company for Definitive Warrants if (i) the
Company delivers to the Warrant Agent notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Warrants (in whole but not in part) should
be exchanged for Definitive Warrants and delivers a written notice to such
effect to the Warrant Agent.  Upon the occurrence of either of the preceding
events in (i) or (ii) above, Definitive Warrants shall be issued in such names
as the Depositary shall instruct the Warrant

 

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Agent.  Global Warrants also may be exchanged or replaced, in whole or in part,
as provided in Sections 3.6 and 3.7 hereof.  A Global Warrant may not be
exchanged for another Warrant other than as provided in this Section 3.5(a),
however, beneficial interests in a Global Warrant may be transferred and
exchanged as provided in Section 3.5(b), (c), (d) or (f) hereof upon delivery of
written request to the Warrant Agent by or on behalf of the Depositary.

 

(B)          TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
WARRANTS.

 

The transfer and exchange of beneficial interests in the Global Warrants shall
be effected through the Depositary, in accordance with the provisions of this
Warrant Agreement and the Applicable Procedures.  Beneficial interests in the
Restricted Global Warrants shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act.  Transfers of beneficial interests in the Global Warrants also shall
require compliance with either subparagraph (i) or (ii) below, as applicable, as
well as one or more of the other following subparagraphs, as applicable:

 

(i)           Transfer of Beneficial Interests in the Same Global Warrant. 
Beneficial interests in any Restricted Global Warrant may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Warrant in accordance with the transfer restrictions set
forth in the Private Placement Legend.  Beneficial interests in any Unrestricted
Global Warrant may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Warrant.  No written
orders or instructions shall be required to be delivered to the Warrant
Registrar to effect the transfers described in this Section 3.5(b)(i).

 

(ii)          All Other Transfers and Exchanges of Beneficial Interests in
Global Warrants.  In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 3.5(b)(i) above, the transferor of
such beneficial interest must deliver to the Warrant Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to credit or cause to be credited a beneficial interest in another Global
Warrant in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive Warrant
in an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depositary to the Warrant Registrar containing
information regarding the Person in whose name such Definitive Warrant shall be
registered.  Upon effectiveness of the Registration Statement (as defined in the
Warrant Registration Rights Agreement) by the Company in accordance with Section
3.5(f) hereof, the requirements of this Section 3.5(b)(ii) shall be deemed to
have been satisfied upon receipt by the Warrant Registrar of a certification
required by the Company in connection with such Registration Statement delivered
by the Holder of such beneficial interests in the Restricted Global Warrants. 
Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Warrants contained in this Agreement and the
Warrants or otherwise applicable under the Securities Act, the Warrant Agent
shall adjust the principal amount of the relevant Global Warrant(s) pursuant to
Section 3.5(h) hereof.

 

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(iii)         [RESERVED]

 

(iv)         Transfer and Exchange of Beneficial Interests in a Restricted
Global Warrant for Beneficial Interests in the Unrestricted Global Warrant.  A
beneficial interest in any Restricted Global Warrant may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Warrant or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Warrant if the exchange or transfer complies
with the requirements of Section 3.5(b)(ii) above and:

 

(A)          such transfer is effected pursuant to the Registration Statement in
accordance with the Warrant Registration Rights Agreement; or

 

(B)           the Warrant Registrar receives the following:

 

(1)           if the holder of such beneficial interest in a Restricted Global
Warrant proposes to exchange such beneficial interest for a beneficial interest
in an Unrestricted Global Warrant, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(a) thereof; or

 

(2)           if the holder of such beneficial interest in a Restricted Global
Warrant proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Warrant, a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Company or the
Warrant Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Company or the Warrant
Registrar, as applicable, to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to subparagraph (B) above at a time
when an Unrestricted Global Warrant has not yet been issued, the Company shall
issue and, upon receipt of an Warrant Countersignature Order in accordance with
Section 3.2 hereof, the Warrant Agent shall countersign one or more Unrestricted
Global Warrants in the number equal to the number of beneficial interests
transferred pursuant to subparagraph (B) above.

 

(C)           TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
WARRANTS. 

 

(i)           Beneficial Interests in Restricted Global Warrants to Restricted
Definitive Warrants.  If any holder of a beneficial interest in a Restricted
Global Warrant proposes to exchange such beneficial interest for a Restricted
Definitive Warrant or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Restricted Definitive Warrant, then, upon
receipt by the Warrant Registrar of the following documentation:

 

(A)          if the holder of such beneficial interest in a Restricted Global
Warrant proposes to exchange such beneficial interest for a Restricted
Definitive Warrant, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a) thereof;

 

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(B)           if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;

 

(C)           if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;

 

(D)          if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a) thereof;

 

(E)           if such beneficial interest is being transferred in reliance on an
exemption from the registration requirements of the Securities Act other than
those listed in subparagraphs (B) through (D) above, a certificate to the effect
set forth in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;

 

(F)           if such beneficial interest is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or

 

(G)           if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(c) thereof,

 

the Warrant Agent shall cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant to be reduced by the number of
Warrants to be represented by the Definitive Warrant pursuant to Section 3.5(h)
hereof, and the Company shall execute and the Warrant Agent shall countersign
and deliver to the Person designated in the instructions a Definitive Warrant in
the appropriate amount.  Any Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c) shall be registered in such name or names as the holder of such
beneficial interest shall instruct the Warrant Registrar through instructions
from the Depositary and the Participant or Indirect Participant.  The Warrant
Agent shall deliver such Definitive Warrants to the Persons in whose names such
Warrants are so registered.  Any Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c)(i) shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.

 

(ii)          Beneficial Interests in Restricted Global Warrants to Unrestricted
Definitive Warrants.  A holder of a beneficial interest in a Restricted Global
Warrant may exchange such beneficial interest for an Unrestricted Definitive
Warrant or may transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Warrant only if:

 

(A)          such transfer is effected pursuant to the Registration Statement in
accordance with the Warrant Registration Rights Agreement; or

 

(B)           the Warrant Registrar receives the following:

 

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(1)           if the holder of such beneficial interest in a Restricted Global
Warrant proposes to exchange such beneficial interest for a Definitive Warrant
that does not bear the Private Placement Legend, a certificate from such holder
in the form of Exhibit C hereto, including the certifications in item (1)(b)
thereof; or

 

(2)           if the holder of such beneficial interest in a Restricted Global
Warrant proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a Definitive Warrant that does not bear the
Private Placement Legend, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Company or the
Warrant Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Company or the Warrant
Registrar, as applicable, to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.

 

(iii)         Beneficial Interests in Unrestricted Global Warrants to
Unrestricted Definitive Warrants.  If any holder of a beneficial interest in an
Unrestricted Global Warrant proposes to exchange such beneficial interest for a
Definitive Warrant or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Warrant, then, upon satisfaction of
the conditions set forth in Section 3.5(b)(ii) hereof, the Warrant Agent shall
cause the amount of the applicable Global Warrant to be reduced accordingly
pursuant to Section 3.5(h) hereof, and the Company shall execute and the Warrant
Agent shall countersign and deliver to the Person designated in the instructions
a Definitive Warrant in the appropriate principal amount.  Any Definitive
Warrant issued in exchange for a beneficial interest pursuant to this Section
3.5(c)(iii) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall
instruct the Warrant Registrar through instructions from the Depositary and the
Participant or Indirect Participant.  The Warrant Agent shall deliver such
Definitive Warrants to the Persons in whose names such Warrants are so
registered.  Any Definitive Warrant issued in exchange for a beneficial interest
pursuant to this Section 3.5(c)(iii) shall not bear the Private Placement
Legend.

 

(D)          TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS FOR BENEFICIAL
INTERESTS.

 

(i)           Restricted Definitive Warrants to Beneficial Interests in
Restricted Global Warrants.  If any Holder of a Restricted Definitive Warrant
proposes to exchange such Warrant for a beneficial interest in a Restricted
Global Warrant or to transfer such Restricted Definitive Warrants to a Person
who takes delivery thereof in the form of a beneficial interest in a Restricted
Global Warrant, then, upon receipt by the Warrant Registrar of the following
documentation:

 

(A)          if the Holder of such Restricted Definitive Warrant proposes to
exchange such Warrant for a beneficial interest in a Restricted Global Warrant,
a certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;

 

(B)           if such Restricted Definitive Warrant is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;

 

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(C)           [RESERVED];

 

(D)          if such Restricted Definitive Warrant is being transferred pursuant
to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (3)(a)
thereof;

 

(E)           if such Restricted Definitive Warrant is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable; or

 

(F)           [RESERVED];

 

(G)           if such Restricted Definitive Warrant is being transferred
pursuant to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,

 

the Warrant Agent shall cancel the Restricted Definitive Warrant, increase or
cause to be increased the amount of, in the case of clause (A) above, the
appropriate Restricted Global Warrant.

 

(ii)          Restricted Definitive Warrants to Beneficial Interests in
Unrestricted Global Warrants.  A Holder of a Restricted Definitive Warrant may
exchange such Warrant for a beneficial interest in an Unrestricted Global
Warrant or transfer such Restricted Definitive Warrant to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Warrant only if:

 

(A)          such transfer is effected pursuant to the Registration Statement in
accordance with the Registration Rights Agreement; or

 

(B)           the Warrant Registrar receives the following:

 

(1)           if the Holder of such Definitive Warrants proposes to exchange
such Warrants for a beneficial interest in the Unrestricted Global Warrant, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or

 

(2)           if the Holder of such Definitive Warrants proposes to transfer
such Warrants to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Warrant, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications in item (4)
thereof;

 

and, in each such case set forth in this subparagraph (B), if the Company or the
Warrant Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Company or the Warrant
Registrar, as applicable, to the effect that such exchange or transfer is in
compliance with the Securities Act and that

 

12

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the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this Section
3.5(d)(ii), the Warrant Agent shall cancel the Definitive Warrants and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Warrant.

 

(iii)         Unrestricted Definitive Warrants to Beneficial Interests in
Unrestricted Global Warrants.  A Holder of an Unrestricted Definitive Warrant
may exchange such Warrant for a beneficial interest in an Unrestricted Global
Warrant or transfer such Definitive Warrants to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Warrant
at any time.  Upon receipt of a request for such an exchange or transfer, the
Warrant Agent shall cancel the applicable Unrestricted Definitive Warrant and
increase or cause to be increased the amount of one of the Unrestricted Global
Warrants.

 

If any such exchange or transfer from a Definitive Warrant to a beneficial
interest is effected pursuant to subparagraph (ii) above at a time when an
Unrestricted Global Warrant has not yet been issued, the Company shall issue
and, upon receipt of an Warrant Countersignature Order in accordance with
Section 3.2 hereof, the Warrant Agent shall countersign one or more Unrestricted
Global Warrants in the number equal to the number of beneficial interests of
Definitive Warrants so transferred.

 

(E)           TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS FOR DEFINITIVE
WARRANTS.

 

Upon request by a Holder of Definitive Warrants and such Holder’s compliance
with the provisions of this Section 3.5(e), the Warrant Registrar shall register
the transfer or exchange of Definitive Warrants.  Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Warrant Registrar the Definitive Warrants duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Warrant Registrar
duly executed by such Holder or by its attorney, duly authorized in writing.  In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 3.5(e).

 

(i)           Restricted Definitive Warrants to Restricted Definitive Warrants. 
Any Restricted Definitive Warrant may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted Definitive
Warrant if the Warrant Registrar receives the following:

 

(A)          if the transfer will be made pursuant to Rule 144A, then the
transferor must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (1) thereof;

 

(B)           if the transfer will be made pursuant to Rule 903 or Rule 904,
then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; or

 

(C)           if the transfer will be made pursuant to any other exemption from
the registration requirements of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable.

 

13

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(ii)          Restricted Definitive Warrants to Unrestricted Definitive
Warrants.  Any Restricted Definitive Warrant may be exchanged by the Holder
thereof for an Unrestricted Definitive Warrant or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted Definitive
Warrant if:

 

(A)          any such transfer is effected pursuant to the Registration
Statement in accordance with the Warrant Registration Rights Agreement; or

 

(B)           the Warrant Registrar receives the following:

 

(1)           if the Holder of such Restricted Definitive Warrants proposes to
exchange such Warrants for an Unrestricted Definitive Warrant, a certificate
from such Holder in the form of Exhibit C hereto, including the certifications
in item (1)(d) thereof; or

 

(2)           if the Holder of such Restricted Definitive Warrants proposes to
transfer such Warrants to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Warrant, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Company or the
Warrant Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company or the Warrant Registrar, as applicable, to the effect
that such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.

 

(iii)         Unrestricted Definitive Warrants to Unrestricted Definitive
Warrants.  A Holder of Unrestricted Definitive Warrants may transfer such
Warrants to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Warrant.  Upon receipt of a request to register such a transfer, the
Warrant Registrar shall register the Unrestricted Definitive Warrants pursuant
to the instructions from the Holder thereof.

 

(F)            REGISTRATION STATEMENT.

 

Upon the effectiveness of the Registration Statement and sales of Warrants in
connection therewith in accordance with the Warrant Registration Rights
Agreement, the Company shall issue and, upon receipt of a Warrant
Countersignature Order in accordance with Section 3.2, the Warrant Agent shall
countersign (i) one or more Unrestricted Global Warrants in an amount equal to
the amount of the beneficial interests in the Restricted Global Warrants sold
under such Registration Statement and (ii) Definitive Warrants in an amount
equal to the amount of the beneficial interests of the Restricted Definitive
Warrants sold under such Registration Statement.  Concurrently with the issuance
of such Warrants, the Warrant Agent shall cause the amount of the applicable
Restricted Global Warrants to be reduced accordingly, and the Company shall
execute and the Warrant Agent shall countersign and deliver to the Persons
designated by the Holders of Definitive Warrants so accepted Definitive Warrants
in the appropriate amount.

 

14

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(G)          LEGENDS.

 

The following legends shall appear on the face of all Global Warrants and
Definitive Warrants issued under this Warrant Agreement unless specifically
stated otherwise in the applicable provisions of this Warrant Agreement.

 

(i)           Private Placement Legend.

 

(A)          Except as permitted by subparagraph (B) below, each Global Warrant
and each Definitive Warrant (and all Warrants issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following form:

 

“THIS SECURITY (OR ITS PREDECESSOR) AND THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, NEITHER
THIS SECURITY NOR THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED
UPON ITS EXERCISE 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 AND THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE REPRESENTS THAT (1) IT IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT, (2) IT IS NOT A U.S. PERSON, IS NOT
ACQUIRING THE WARRANT FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S OR (3) THE
HOLDER ACQUIRED THIS SECURITY PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE WARRANT
SHARES TO BE ISSUED UPON ITS EXERCISE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, PROVIDED THAT PRIOR TO ANY SUCH TRANSFER, THE PURCHASER
FURNISHES TO THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION AND TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE WARRANT AGENT), AND,
IF REQUIRED BY THE COMPANY, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (V) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY

 

15

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APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY AND PURCHASER OF THIS
SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN THIS LEGEND.

 

EACH HOLDER AGREES NOT TO ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THE
WARRANTS OR WARRANT SHARES UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

THE COMPANY AND THE WARRANT AGENT ARE REQUIRED UNDER THE WARRANT AGREEMENT TO
REFUSE TO REGISTER ANY TRANSFER OF THE WARRANTS OR WARRANT SHARES NOT MADE IN
ACCORDANCE WITH REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.

 

THE WARRANT MAY NOT BE EXERCISED UNLESS REGISTERED UNDER THE ACT OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.”

 

(B)           Notwithstanding the foregoing, any Global Warrant or Definitive
Warrant issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 3.5 (and all Warrants issued
in exchange therefor or substitution thereof) shall not bear the Private
Placement Legend.

 

(ii)          Global Warrant Legend.  Each Global Warrant shall bear a legend in
substantially the following form:

 

“THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE WARRANT
AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 3.5 OF THE WARRANT AGREEMENT, (II) THIS
GLOBAL WARRANT MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
3.5(a) OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO
THE WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT
AGREEMENT AND (IV) THIS GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.”

 

(iii)         Unit Legend.  Each Warrant issued prior to the Separation Date
shall bear a legend in substantially the following form:

 

“THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS (THE “UNITS”), EACH OF WHICH CONSIST OF $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THE 14 3/4% SENIOR DISCOUNT NOTES DUE 2014 OF MUELLER
HOLDINGS (N.A.), INC. (THE “NOTES”) AND ONE WARRANT (THE “WARRANTS”) INITIALLY
ENTITLING THE HOLDER THEREOF TO PURCHASE 109.80889 SHARES, PAR VALUE $0.01 PER
SHARE, OF MUELLER HOLDINGS (N.A.), INC.

 

16

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PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING
OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO A
REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT,  (III) THE DATE A SHELF REGISTRATION STATEMENT WITH RESPECT TO
THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV) SUCH DATE AS THE
INITIAL PURCHASERS IN THEIR SOLE DISCRETION SHALL DETERMINE AND (V) THE
OCCURRENCE OF A CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE GOVERNING THE
NOTES), THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER
WITH, THE NOTES.”

 

Notwithstanding the foregoing, Units issued pursuant to Rule 903 of Regulation S
shall separate immediately upon issuance.

 

(iv)         Regulation S. Legend.  Each Warrant that is issued pursuant to
Regulation S shall bear the following legend on the fact thereof:

 

“THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND THE WARRANT MAY NOT BE EXERCISED BY OR
ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) OR AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.  IN ORDER TO EXERCISE THIS WARRANT, THE HOLDER MUST FURNISH TO THE
COMPANY AND THE WARRANT AGENT EITHER (A) A WRITTEN CERTIFICATION THAT IT IS NOT
A U.S. PERSON AND THE WARRANT IS NOT BEING EXERCISED ON BEHALF OF A U.S. PERSON
OR (B) A WRITTEN OPINION OF COUNSEL TO THE EFFECT THAT THE SECURITIES DELIVERED
UPON EXERCISE OF THE WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OR
THAT THE DELIVERY OF SUCH SECURITIES IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.  TERMS IN THIS LEGEND HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”

 

(H)          CANCELLATION AND/OR ADJUSTMENT OF GLOBAL WARRANTS.

 

At such time as all beneficial interests in a particular Global Warrant have
been exercised or exchanged for Definitive Warrants or a particular Global
Warrant has been exercised, redeemed, repurchased or canceled in whole and not
in part, each such Global Warrant shall be returned to or retained and canceled
by the Warrant Agent in accordance with Section 3.8 hereof.  At any time prior
to such cancellation, if any beneficial interest in a Global Warrant is
exercised or exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Warrant or for
Definitive Warrants, the amount of Warrants represented by such Global Warrant
shall be reduced accordingly and an endorsement shall be made on such Global
Warrant by the Warrant Agent or by the Depositary at the direction of the
Warrant Agent to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Warrant, such other Global
Warrant shall be increased accordingly and an endorsement shall be made on such
Global Warrant by the Warrant Agent or by the Depositary at the direction of the
Warrant Agent to reflect such increase.

 

17

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(I)           GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

 

(i)            To permit registrations of transfers and exchanges, the Company
shall execute and the Warrant Agent shall countersign Global Warrants and
Definitive Warrants upon the Company’s order or at the Warrant Registrar’s
request.

 

(ii)           No service charge shall be made to a holder of a beneficial
interest in a Global Warrant or to a holder of a Definitive Warrant for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith .

 

(iii)          All Global Warrants and Definitive Warrants issued upon any
registration of transfer or exchange of Global Warrants or Definitive Warrants
shall be the duly authorized, executed and issued warrants for Common Stock of
the Company and entitled to the same benefits under this Warrant Agreement, as
the Global Warrants or Definitive Warrants surrendered upon such registration of
transfer or exchange.

 

(iv)          Prior to due presentment for the registration of a transfer of any
Warrant, the Warrant Agent, and the Company may deem and treat the Person in
whose name any Warrant is registered as the absolute owner of such Warrant for
all purposes and none of the Warrant Agent, or the Company shall be affected by
notice to the contrary.

 

(v)           The Warrant Agent shall countersign Global Warrants and Definitive
Warrants in accordance with the provisions of Section 3.2 hereof.

 

(vi)          The Company and the Warrant Agent shall refuse to register any
transfer or exchange not in compliance with this Section 3.5.

 

(J)            FACSIMILE SUBMISSIONS TO WARRANT AGENT.

 

All certifications, certificates and Opinions of Counsel required to be
submitted to the Warrant Registrar pursuant to this Section 3.5 to effect a
registration of transfer or exchange may be submitted by facsimile.

 

Notwithstanding anything herein to the contrary, as to any certificates and/or
certifications delivered to the Warrant Registrar pursuant to this Section 3.5,
the Warrant Registrar’s duties shall be limited to confirming that any such
certifications and certificates delivered to it are in the form of Exhibits B
and C attached hereto.  The Warrant Registrar shall not be responsible for
confirming the truth or accuracy of representations made in any such
certifications or certificates.  As to any Opinions of Counsel delivered
pursuant to this Section 3.5, the Warrant Registrar may rely upon, and be fully
protected in relying upon, such opinions.

 

3.6.         REPLACEMENT WARRANTS.

 

If any mutilated Warrant is surrendered to the Warrant Agent or the Company and
the Warrant Agent receives evidence to its satisfaction of the destruction, loss
or theft of any Warrant, the Company shall issue and the Warrant Agent, upon
receipt of a Warrant Countersignature Order, shall countersign a replacement
Warrant if the Warrant Agent’s requirements are met.  If required by the Warrant
Agent or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Warrant Agent and the Company to protect the
Company, the Warrant Agent, any

 

18

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Agent and any agent for purposes of the countersignature from any loss that any
of them may suffer if a Warrant is replaced.  The Company may charge for its
expenses in replacing a Warrant.

 

Every replacement Warrant is an additional warrant of the Company and shall be
entitled to all of the benefits of this Warrant Agreement equally and
proportionately with all other Warrants duly issued hereunder.

 

3.7.         TEMPORARY WARRANTS.

 

Until certificates representing Warrants are ready for delivery, the Company may
prepare and the Warrant Agent, upon receipt of a Warrant Countersignature Order,
shall issue temporary Warrants.  Temporary Warrants shall be substantially in
the form of certificated Warrants but may have variations that the Company
considers appropriate for temporary Warrants and as shall be reasonably
acceptable to the Warrant Agent.  Without unreasonable delay, the Company shall
prepare and the Warrant Agent shall countersign definitive Warrants in exchange
for temporary Warrants.

 

Holders of temporary Warrants shall be entitled to all of the benefits of this
Warrant Agreement.

 

3.8.         CANCELLATION.

 

Subject to Section 3.5(h) hereof, the Company at any time may deliver Warrants
to the Warrant Agent for cancellation.  The Warrant Registrar and Warrant Paying
Agent shall forward to the Warrant Agent any Warrants surrendered to them for
registration of transfer, exchange or exercise.  The Warrant Agent and no one
else shall cancel all Warrants surrendered for registration of transfer,
exchange, exercise, replacement or cancellation and shall destroy canceled
Warrants (subject to the record retention requirement of the Exchange Act). 
Certification of the destruction of all canceled Warrants shall be delivered to
the Company.  The Company may not issue new Warrants to replace Warrants that
have been exercised or that have been delivered to the Warrant Agent for
cancellation.

 

3.9.         CUSIP AND CINS NUMBERS.

 

The Company in issuing the Warrants and Warrant Shares may use “CUSIP” and
“CINS” numbers, and the Warrant Agent will use CUSIP numbers or CINS numbers in
notices as a convenience to holders of Warrants and Warrant Shares, the notice
to state that no representation is made as to the correctness of such numbers
either as printed on the Warrants and Warrant Shares or as contained in any
notice.  The Company will promptly notify the Warrant Agent and Transfer Agent,
as applicable, of any change in the CUSIP or CINS numbers.

 

SECTION 4.                            SEPARATION OF WARRANTS; TERMS OF WARRANTS;
EXERCISE OF WARRANTS.

 

(A)           THE NOTES AND WARRANTS WILL NOT BE SEPARATELY TRANSFERABLE UNTIL
THE SEPARATION DATE, EXCEPT AS SET FORTH IN SECTION 3.5(G)(III).  SUBJECT TO THE
TERMS OF THIS AGREEMENT, EACH WARRANT HOLDER SHALL HAVE THE RIGHT, WHICH MAY BE
EXERCISED DURING THE PERIOD COMMENCING AT THE OPENING OF BUSINESS ON THE
SEPARATION DATE AND UNTIL 5:00 P.M., NEW YORK CITY TIME ON APRIL 15, 2014 (THE
“EXERCISE PERIOD”), TO RECEIVE FROM THE COMPANY THE NUMBER OF FULLY PAID AND
NON-ASSESSABLE WARRANT SHARES WHICH THE HOLDER MAY AT THE TIME BE ENTITLED TO
RECEIVE ON EXERCISE OF SUCH WARRANTS AND PAYMENT OF THE EXERCISE PRICE SPECIFIED
IN THE FORM OF WARRANT CERTIFICATE ATTACHED AS EXHIBIT A (THE “EXERCISE PRICE”)
(I) IN CASH, BY WIRE TRANSFER OR BY CERTIFIED OR OFFICIAL BANK CHECK TO THE
ORDER OF THE COMPANY, IN

 

19

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EACH CASE, EQUAL TO THE EXERCISE PRICE THEN IN EFFECT FOR SUCH WARRANT SHARES OR
(II) THROUGH CASHLESS EXERCISE WITHOUT A CASH PAYMENT BEING REQUIRED, FOR SUCH
NUMBER OF WARRANT SHARES EQUAL TO THE PRODUCT OF (A) THE NUMBER OF WARRANT
SHARES FOR WHICH SUCH WARRANT IS EXERCISABLE AS OF THE DATE OF EXERCISE (IF THE
EXERCISE PRICE WERE BEING PAID IN CASH) AND (B) A FRACTION, THE NUMERATOR OF
WHICH IS (X) THE FAIR VALUE PER SHARE OF COMMON STOCK ON THE DATE OF EXERCISE
MINUS (Y) THE EXERCISE PRICE PER SHARE AS OF THE DATE OF EXERCISE AND THE
DENOMINATOR OF WHICH IS THE FAIR VALUE PER SHARE ON THE DATE OF EXERCISE;
PROVIDED THAT (I) HOLDERS SHALL BE ABLE TO EXERCISE THEIR WARRANTS ONLY IF A
REGISTRATION STATEMENT RELATING TO THE EXERCISE OF SUCH WARRANT SHARES IS THEN
IN EFFECT, OR THE EXERCISE OF SUCH WARRANTS IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AND SUCH SECURITIES ARE QUALIFIED FOR SALE
OR EXEMPT FROM QUALIFICATION UNDER THE APPLICABLE SECURITIES LAWS OF THE STATES
IN WHICH THE VARIOUS HOLDERS OF THE WARRANTS OR OTHER PERSONS TO WHOM IT IS
PROPOSED THAT THE WARRANT SHARES BE ISSUED ON EXERCISE OF THE WARRANTS RESIDE
AND (II) HOLDERS OF REGULATION S WARRANTS SHALL BE ABLE TO EXERCISE THEIR
WARRANTS ONLY AFTER PROVIDING THE REQUIRED CERTIFICATION REFERRED TO IN THE
REGULATION S LEGEND. EACH WARRANT NOT EXERCISED PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON APRIL 15, 2014 (THE “EXPIRATION DATE”) SHALL BECOME VOID AND ALL
RIGHTS THEREUNDER AND ALL RIGHTS IN RESPECT THEREOF UNDER THIS AGREEMENT SHALL
CEASE AS OF SUCH TIME.  NO ADJUSTMENTS AS TO DIVIDENDS WILL BE MADE UPON
EXERCISE OF THE WARRANTS.

 

(B)           IN ORDER TO EXERCISE ALL OR ANY OF THE WARRANTS REPRESENTED BY A
WARRANT CERTIFICATE, THE HOLDER THEREOF MUST DELIVER TO THE WARRANT AGENT AT ITS
OFFICE SET FORTH IN SECTION 15 HEREOF THE WARRANT CERTIFICATE AND THE FORM OF
ELECTION TO PURCHASE ON THE REVERSE THEREOF DULY FILLED IN AND SIGNED, WHICH
SIGNATURE SHALL BE MEDALLION GUARANTEED BY AN INSTITUTION WHICH IS A MEMBER OF A
SECURITIES TRANSFER ASSOCIATION RECOGNIZED SIGNATURE GUARANTEE PROGRAM, AND UPON
PAYMENT TO THE WARRANT AGENT FOR THE ACCOUNT OF THE COMPANY OF THE EXERCISE
PRICE, AS ADJUSTED AS HEREIN PROVIDED, FOR THE NUMBER OF WARRANT SHARES IN
RESPECT OF WHICH SUCH WARRANTS ARE THEN EXERCISED.  PAYMENT OF THE AGGREGATE
EXERCISE PRICE SHALL BE MADE (I) IN CASH, BY WIRE TRANSFER OR BY CERTIFIED OR
OFFICIAL BANK CHECK PAYABLE TO THE ORDER OF THE COMPANY OR (II) THROUGH A
CASHLESS EXERCISE IN THE MANNER PROVIDED IN SECTION 4(A) HEREOF.

 

(C)           SUBJECT TO THE PROVISIONS OF SECTION 5 HEREOF, UPON COMPLIANCE
WITH CLAUSES (A) AND (B) ABOVE, THE WARRANT AGENT SHALL DELIVER OR CAUSE TO BE
DELIVERED WITH ALL REASONABLE DISPATCH, TO OR UPON THE WRITTEN ORDER OF THE
HOLDER AND IN SUCH NAME OR NAMES AS THE WARRANT HOLDER MAY DESIGNATE, A
CERTIFICATE OR CERTIFICATES FOR THE NUMBER OF WHOLE WARRANT SHARES ISSUABLE UPON
THE EXERCISE OF SUCH WARRANTS OR OTHER SECURITIES OR PROPERTY TO WHICH SUCH
HOLDER IS ENTITLED HEREUNDER, TOGETHER WITH CASH AS PROVIDED IN SECTION 9
HEREOF; PROVIDED THAT IF ANY CONSOLIDATION, MERGER OR LEASE OR SALE OF ASSETS IS
PROPOSED TO BE EFFECTED BY THE COMPANY AS DESCRIBED IN SECTION 8(M) HEREOF, OR A
TENDER OFFER OR AN EXCHANGE OFFER FOR SHARES OF COMMON STOCK SHALL BE MADE, UPON
SUCH SURRENDER OF WARRANTS AND PAYMENT OF THE EXERCISE PRICE AS AFORESAID, THE
WARRANT AGENT SHALL, AS SOON AS POSSIBLE, BUT IN ANY EVENT NOT LATER THAN TWO
BUSINESS DAYS THEREAFTER, DELIVER OR CAUSE TO BE DELIVERED THE FULL NUMBER OF
WARRANT SHARES ISSUABLE UPON THE EXERCISE OF SUCH WARRANTS IN THE MANNER
DESCRIBED IN THIS SENTENCE OR OTHER SECURITIES OR PROPERTY TO WHICH SUCH HOLDER
IS ENTITLED HEREUNDER, TOGETHER WITH CASH AS PROVIDED IN SECTION 9 HEREOF.  SUCH
CERTIFICATE OR CERTIFICATES SHALL BE DEEMED TO HAVE BEEN ISSUED AND ANY PERSON
SO DESIGNATED TO BE NAMED THEREIN SHALL BE DEEMED TO HAVE BECOME A HOLDER OF
RECORD OF SUCH WARRANT SHARES AS OF THE DATE OF THE SURRENDER OF SUCH WARRANTS
AND PAYMENT OF THE EXERCISE PRICE.

 

(D)           THE WARRANTS SHALL BE EXERCISABLE, AT THE ELECTION OF THE HOLDERS
THEREOF, EITHER IN FULL OR FROM TIME TO TIME IN PART.  IF LESS THAN ALL THE
WARRANTS REPRESENTED BY A WARRANT CERTIFICATE ARE EXERCISED, SUCH WARRANT
CERTIFICATE SHALL BE SURRENDERED AND A NEW WARRANT CERTIFICATE OF THE SAME TENOR
AND FOR THE NUMBER OF WARRANTS WHICH WERE NOT EXERCISED SHALL BE EXECUTED BY THE
COMPANY AND DELIVERED TO THE WARRANT AGENT AND THE WARRANT AGENT SHALL
COUNTERSIGN THE NEW WARRANT CERTIFICATE,

 

20

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REGISTERED IN SUCH NAME OR NAMES AS MAY BE DIRECTED IN WRITING BY THE HOLDER,
AND SHALL DELIVER THE NEW WARRANT CERTIFICATE TO THE PERSON OR PERSONS ENTITLED
TO RECEIVE THE SAME. 

 

(E)           ALL WARRANT CERTIFICATES SURRENDERED UPON EXERCISE OF WARRANTS
SHALL BE CANCELLED BY THE WARRANT AGENT.  SUCH CANCELLED WARRANT CERTIFICATES
SHALL THEN BE DISPOSED OF BY THE WARRANT AGENT IN A MANNER SATISFACTORY TO THE
COMPANY.  THE WARRANT AGENT SHALL ACCOUNT PROMPTLY TO THE COMPANY WITH RESPECT
TO WARRANTS EXERCISED AND CONCURRENTLY PAY TO THE COMPANY ALL MONIES RECEIVED BY
THE WARRANT AGENT FOR THE PURCHASE OF THE WARRANT SHARES THROUGH THE EXERCISE OF
SUCH WARRANTS.

 

(F)            THE WARRANT AGENT SHALL KEEP COPIES OF THIS AGREEMENT AND ANY
NOTICES GIVEN OR RECEIVED HEREUNDER AVAILABLE FOR INSPECTION BY THE HOLDERS
DURING NORMAL BUSINESS HOURS AT ITS OFFICE.  THE COMPANY SHALL SUPPLY THE
WARRANT AGENT FROM TIME TO TIME WITH SUCH NUMBERS OF COPIES OF THIS AGREEMENT AS
THE WARRANT AGENT MAY REQUEST.

 

(G)           CERTIFICATES REPRESENTING WARRANT SHARES SHALL BEAR A PRIVATE
PLACEMENT LEGEND (WITH ALL REFERENCES TO WARRANTS THEREIN REPLACED BY REFERENCES
TO COMMON STOCK, AND WITH SUCH CHANGES THERETO AS THE COMPANY MAY DEEM
APPROPRIATE) IF (I) THE WARRANTS FOR WHICH THEY WERE ISSUED CARRIED A PRIVATE
PLACEMENT LEGEND OR (II) THE WARRANTS DID NOT CARRY A PRIVATE PLACEMENT LEGEND
BUT THE WARRANT SHARES ARE ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT (OTHER THAN THE EXEMPTION PROVIDED BY SECTION 3(A)(9)
OF THE SECURITIES ACT).  TRANSFERS OR EXCHANGES OF ANY SUCH WARRANT SHARES SHALL
BE SUBJECT TO THE RESTRICTIONS CONTAINED IN SUCH LEGEND AND, AS APPLICABLE, THE
PROVISIONS OF SECTION 3.5 HERETO.

 

SECTION 5.                            PAYMENT OF TAXES.

 

The Company will pay all documentary stamp taxes attributable to the initial
issuance of Warrant Shares upon the exercise of Warrants; provided that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant Certificates or any
certificates for Warrant Shares in a name other than that of the registered
holder of a Warrant Certificate surrendered upon the exercise of a Warrant, and
the Company shall not be required to issue or deliver such Warrant Certificates
unless or until the person or persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

 

SECTION 6.                            RESERVATION OF WARRANT SHARES.

 

(A)           THE COMPANY WILL AT ALL TIMES RESERVE AND KEEP AVAILABLE, FREE
FROM PREEMPTIVE RIGHTS, OUT OF THE AGGREGATE OF ITS AUTHORIZED BUT UNISSUED
COMMON STOCK OR ITS AUTHORIZED AND ISSUED COMMON STOCK HELD IN ITS TREASURY, FOR
THE PURPOSE OF ENABLING IT TO SATISFY ANY OBLIGATION TO ISSUE WARRANT SHARES
UPON EXERCISE OF WARRANTS, THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK WHICH
MAY THEN BE DELIVERABLE UPON THE EXERCISE OF ALL OUTSTANDING WARRANTS.

 

(B)           THE COMPANY OR, IF APPOINTED, THE TRANSFER AGENT FOR THE COMMON
STOCK (THE “TRANSFER AGENT”) AND EVERY SUBSEQUENT TRANSFER AGENT FOR ANY SHARES
OF THE COMPANY’S CAPITAL STOCK ISSUABLE UPON THE EXERCISE OF ANY OF THE RIGHTS
OF PURCHASE AFORESAID WILL BE IRREVOCABLY AUTHORIZED AND DIRECTED AT ALL TIMES
TO RESERVE SUCH NUMBER OF AUTHORIZED SHARES AS SHALL BE REQUIRED FOR SUCH
PURPOSE.  THE COMPANY WILL KEEP A COPY OF THIS AGREEMENT ON FILE WITH THE
TRANSFER AGENT AND WITH EVERY SUBSEQUENT TRANSFER AGENT FOR ANY SHARES OF THE
COMPANY’S CAPITAL STOCK ISSUABLE UPON THE EXERCISE OF THE RIGHTS OF PURCHASE
REPRESENTED BY THE WARRANTS.  THE WARRANT AGENT IS HEREBY IRREVOCABLY AUTHORIZED
TO

 

21

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

 

REQUISITION FROM TIME TO TIME FROM SUCH TRANSFER AGENT THE STOCK CERTIFICATES
REQUIRED TO HONOR OUTSTANDING WARRANTS UPON EXERCISE THEREOF IN ACCORDANCE WITH
THE TERMS OF THIS AGREEMENT.  THE COMPANY WILL SUPPLY SUCH TRANSFER AGENT WITH
DULY EXECUTED CERTIFICATES FOR SUCH PURPOSES AND WILL PROVIDE OR OTHERWISE MAKE
AVAILABLE ANY CASH WHICH MAY BE PAYABLE AS PROVIDED IN SECTION 9 HEREOF.  THE
COMPANY WILL FURNISH SUCH TRANSFER AGENT A COPY OF ALL NOTICES OF ADJUSTMENTS,
AND CERTIFICATES RELATED THERETO, TRANSMITTED TO EACH HOLDER PURSUANT TO
SECTION 10 HEREOF.

 

(C)           BEFORE TAKING ANY ACTION WHICH WOULD CAUSE AN ADJUSTMENT PURSUANT
TO SECTION 8 HEREOF TO REDUCE THE EXERCISE PRICE BELOW THE THEN PAR VALUE (IF
ANY) OF THE WARRANT SHARES, THE COMPANY WILL TAKE ANY CORPORATE ACTION LEGALLY
PERMITTED WHICH MAY, IN THE OPINION OF ITS COUNSEL (WHICH MAY BE COUNSEL
EMPLOYED BY THE COMPANY), BE NECESSARY IN ORDER THAT THE COMPANY MAY VALIDLY AND
LEGALLY ISSUE FULLY PAID AND NONASSESSABLE WARRANT SHARES AT THE EXERCISE PRICE
AS SO ADJUSTED.

 

(D)           THE COMPANY COVENANTS THAT ALL WARRANT SHARES WHICH MAY BE ISSUED
UPON EXERCISE OF WARRANTS WILL, UPON ISSUE, BE FULLY PAID, NONASSESSABLE, FREE
OF PREEMPTIVE RIGHTS AND FREE FROM ALL TAXES, LIENS, CHARGES AND SECURITY
INTERESTS WITH RESPECT TO THE ISSUANCE THEREOF.

 

SECTION 7.                            OBTAINING STOCK EXCHANGE LISTINGS.

 

The Company will from time to time take all action which may be necessary so
that the Warrant Shares, immediately upon their issuance upon the exercise of
Warrants, will be listed on the principal securities exchanges, automated
quotation systems or other markets within the United States of America, if any,
on which other shares of Common Stock are then listed, if any.

 

SECTION 8.                            ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT SHARES ISSUABLE.

 

The Exercise Price and the number of Warrant Shares issuable upon the exercise
of each Warrant are subject to adjustment from time to time upon the occurrence
of the events enumerated in this Section 8.  For purposes of this Section 8,
“Common Stock” means shares now or hereafter authorized of the Company’s Class A
Common Stock, par value $0.01 per share and Class B Common Stock, par value
$0.01 per share. 

 

(A)           ADJUSTMENT FOR DISTRIBUTION ON COMMON STOCK IN SHARES OF COMMON
STOCK.

 

If the Company pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock, the Exercise Price shall be adjusted in accordance
with the formula:

 

E’            = E  x  O / (O + D)

 

where:

 

E’            =              the adjusted Exercise Price

 

E              =              the current Exercise Price

 

O             =              the number of shares of Common Stock outstanding on
the record date

 

D             =              the number of shares of Common Stock issued as part
of the distribution

 

22

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

 

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

 

(B)          ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.

 

If the Company (i) subdivides its outstanding shares of Common Stock into a
greater number of shares or (ii) combines its outstanding shares of Common Stock
into a smaller number of shares, then the Exercise Price and number of Warrant
Shares issuable in respect thereof in effect immediately prior to such action
shall be proportionately adjusted so that the holder of any Warrant thereafter
exercised may receive, for the same aggregate exercise price, the aggregate
number and kind of shares of capital stock of the Company which he would have
owned immediately following such action if such Warrant had been exercised
immediately prior to such action.

 

The adjustment shall become effective immediately after the record date in the
case of a dividend or distribution and immediately after the effective date in
the case of a subdivision, combination or reclassification. 

 

(C)           ADJUSTMENT FOR RIGHTS ISSUE.

 

If the Company distributes any rights, options or warrants to all holders of its
Common Stock entitling them for a period expiring within 45 days after the
record date mentioned below to purchase shares of Common Stock at a price per
share less than the Fair Value per share on that record date, the Exercise Price
shall be adjusted in accordance with the formula:

 

OPERATOR:  WHEN YOU VIEW THIS WITH YOUR SHOW/HIDE OFF OR WHEN YOU PRINT IT, THE
EQUATION LOOKS FINE.

 

 

O    +   

N x P

 

 

E’   =    E     x

 

M

 

 

O + N

 

where:

 

E’

=

the adjusted Exercise Price.

 

 

 

E

=

the current Exercise Price.

 

 

 

O

=

the number of shares of Common Stock outstanding on the record date.

 

 

 

N

=

the number of additional shares of Common Stock issuable pursuant to such
rights, options or warrants.

 

 

 

P

=

the aggregate price per share of the additional shares.

 

 

 

M

=

the Fair Value per share of Common Stock on the record date.

 

The adjustment shall be made successively whenever any such rights, options or
warrants are issued and shall become effective immediately after the record date
for the determination of stockholders entitled to receive the rights, options or
warrants.  If at the end of the period during which such rights, options or
warrants are exercisable, not all rights, options or warrants shall have been

 

23

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

 

exercised, the Exercise Price shall be immediately readjusted to what it would
have been if “N” in the above formula had been the number of shares actually
issued.

 

(D)          ADJUSTMENT FOR OTHER DISTRIBUTIONS.

 

If the Company distributes to all holders of its Common Stock any of its assets,
shares of capital stock other than Common Stock, or debt securities or any
rights or warrants to purchase debt securities of the Company, the Exercise
Price shall be adjusted in accordance with the formula:

 

 

E’   =    E     x

M    -    F

 

M

 

 

 

where:

 

E’

=

the adjusted Exercise Price.

 

 

 

E

=

the current Exercise Price.

 

 

 

M

=

the Fair Value per share of Common Stock on the record date mentioned below.

 

 

 

F

=

the fair market value on the record date of the assets, securities, rights or
warrants to be distributed in respect of one share of Common Stock as determined
in good faith by the Board of Directors of the Company.

 

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

 

This Section 8(d) does not apply to cash dividends or cash distributions paid
(i) out of consolidated current or retained earnings as shown on the books of
the Company prepared in accordance with generally accepted accounting principles
or (ii) on or about the date hereof as described in the Offering Circular dated
April 22, 2004 related to the Units.  Also, this Section 8(d) does not apply to
rights, options or warrants referred to in Section 8(c) hereof.

 

(E)           ADJUSTMENT FOR COMMON STOCK ISSUE.

 

If the Company issues shares of Common Stock for a consideration per share less
than the Fair Value per share on the date the Company fixes the offering price
of such additional shares, the Exercise Price shall be adjusted in accordance
with the formula:

 

 

 

P

 

 

E’   =    E     x

O     + 

M

 

 

 

A

 

 

where:

 

E’

=

the adjusted Exercise Price.

 

 

24

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

 

E

=

the then current Exercise Price.

 

 

 

O

=

the number of shares outstanding immediately prior to the issuance of such
additional shares.

 

 

 

P

=

the aggregate consideration received for the issuance of such additional shares.

 

 

 

M

=

the Fair Value per share on the date of issuance of such additional shares.

 

 

 

A

=

the number of shares outstanding immediately after the issuance of such
additional shares.

 

 

The adjustment shall be made successively whenever any such issuance is made,
and shall become effective immediately after such issuance.

 

This subsection (e) does not apply to:

 

(1)           ANY OF THE TRANSACTIONS DESCRIBED IN SUBSECTIONS (A), (B), (C) AND
(D) OF THIS SECTION 8,

 

(2)           THE EXERCISE OF WARRANTS, OR THE CONVERSION OR EXCHANGE OF OTHER
SECURITIES CONVERTIBLE OR EXCHANGEABLE FOR COMMON STOCK THE ISSUANCE OF WHICH
CAUSED AN ADJUSTMENT TO BE MADE UNDER SECTION 8(F),

 

(3)           COMMON STOCK ISSUED TO THE COMPANY’S EMPLOYEES (OR EMPLOYEES OF
ITS SUBSIDIARIES) UNDER BONA FIDE EMPLOYEE BENEFIT PLANS OR OTHER ARRANGEMENTS
ADOPTED BY THE BOARD OF DIRECTORS AND APPROVED BY THE HOLDERS OF COMMON STOCK
WHEN REQUIRED BY LAW, IF SUCH COMMON STOCK WOULD OTHERWISE BE COVERED BY THIS
SUBSECTION (E) (BUT ONLY TO THE EXTENT THAT THE AGGREGATE NUMBER OF SHARES
EXCLUDED HEREBY AND ISSUED AFTER THE DATE OF THIS WARRANT AGREEMENT SHALL NOT
EXCEED 10% OF THE COMMON STOCK OUTSTANDING AT THE TIME OF THE ADOPTION OF EACH
SUCH PLAN, EXCLUSIVE OF ANTI-DILUTION ADJUSTMENTS THEREUNDER;

 

(4)           COMMON STOCK ISSUED TO SHAREHOLDERS OF ANY PERSON WHICH MERGES
INTO THE COMPANY, OR WITH A SUBSIDIARY OF THE COMPANY, IN PROPORTION TO THEIR
STOCK HOLDINGS OF SUCH PERSON IMMEDIATELY PRIOR TO SUCH MERGER, UPON SUCH
MERGER, PROVIDED THAT IF SUCH PERSON IS AN AFFILIATE OF THE COMPANY, THE BOARD
OF DIRECTORS SHALL HAVE OBTAINED A FAIRNESS OPINION FROM A NATIONALLY RECOGNIZED
INVESTMENT BANKING, APPRAISAL OR VALUATION FIRM, WHICH IS NOT AN AFFILIATE OF
THE COMPANY, STATING THAT THE CONSIDERATION RECEIVED IN SUCH MERGER IS FAIR TO
THE COMPANY FROM A FINANCIAL POINT OF VIEW, OR

 

(5)           THE ISSUANCE OF SHARES OF COMMON STOCK PURSUANT TO RIGHTS, OPTIONS
OR WARRANTS WHICH WERE ORIGINALLY ISSUED IN A NON-AFFILIATE SALE TOGETHER WITH
ONE OR MORE OTHER SECURITIES AS PART OF A UNIT AT A PRICE PER UNIT.

 

(F)            ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE.

 

If the Company issues any securities convertible into or exchangeable for Common
Stock (other than securities issued in transactions described in subsections (c)
and (d) of this Section 8) for a consideration per share of Common Stock
initially deliverable upon conversion or exchange of such

 

25

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

 

securities less than the Fair Value per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:

 

 

 

P

 

 

E’   =    E     x

O     +

M

 

 

O     +     D

 

 

where:

 

E’

=

the adjusted Exercise Price.

 

 

 

E

=

the then current Exercise Price.

 

 

 

O

=

the number of shares outstanding immediately prior to the issuance of such
securities.

 

 

 

P

=

the aggregate consideration received for the issuance of such securities.

 

 

 

M

=

the Fair Value per share on the date of issuance of such securities.

 

 

 

D

=

the maximum number of shares deliverable upon conversion or in exchange for such
securities at the initial conversion or exchange rate.

 

The adjustment shall be made successively whenever any such issuance is made,
and shall become effective immediately after such issuance.

 

If all of the Common Stock deliverable upon conversion or exchange of such
securities have not been issued when such securities are no longer outstanding,
then the Exercise Price shall promptly be readjusted to the Exercise Price which
would then be in effect had the adjustment upon the issuance of such securities
been made on the basis of the actual number of shares of Common Stock issued
upon conversion or exchange of such securities.

 

This subsection (f) does not apply to:

 

(1) SECURITIES ISSUED IN TRANSACTIONS DESCRIBED IN SUBSECTIONS (A), (B) OR (C)
OF THIS SECTION 8,

 

(2) THE ISSUANCE OF COMMON STOCK WHICH CAUSED AN ADJUSTMENT TO BE MADE UNDER
SECTION 8(E),

 

(3)           COMMON STOCK ISSUED TO THE COMPANY’S EMPLOYEES (OR EMPLOYEES OF
ITS SUBSIDIARIES) UNDER BONA FIDE EMPLOYEE BENEFIT PLANS OR OTHER ARRANGEMENTS
ADOPTED BY THE BOARD OF DIRECTORS AND APPROVED BY THE HOLDERS OF COMMON STOCK
WHEN REQUIRED BY LAW, IF SUCH COMMON STOCK WOULD OTHERWISE BE COVERED BY THIS
SECTION 8(E) (BUT ONLY TO THE EXTENT THAT THE AGGREGATE NUMBER OF SHARES
EXCLUDED HEREBY AND ISSUED AFTER THE DATE OF THIS WARRANT AGREEMENT SHALL NOT
EXCEED 10% OF THE COMMON STOCK OUTSTANDING AT THE TIME OF THE ADOPTION OF EACH
SUCH PLAN, EXCLUSIVE OF ANTI-DILUTION ADJUSTMENTS THEREUNDER;

 

(4) CONVERTIBLE SECURITIES ISSUED TO SHAREHOLDERS OF ANY PERSON WHICH MERGES
INTO

 

26

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

 

THE COMPANY, OR WITH A SUBSIDIARY OF THE COMPANY, IN PROPORTION TO THEIR STOCK
HOLDINGS OF SUCH PERSON IMMEDIATELY PRIOR TO SUCH MERGER, UPON SUCH MERGER,
PROVIDED THAT IF SUCH PERSON IS AN AFFILIATE OF THE COMPANY, THE BOARD OF
DIRECTORS SHALL HAVE OBTAINED A FAIRNESS OPINION FROM A NATIONALLY RECOGNIZED
INVESTMENT BANKING, APPRAISAL OR VALUATION FIRM, WHICH IS NOT AN AFFILIATE OF
THE COMPANY, STATING THAT THE CONSIDERATION RECEIVED IN SUCH MERGER IS FAIR TO
THE COMPANY FROM A FINANCIAL POINT OF VIEW, OR

 

(5) THE ISSUANCE OF SHARES OF COMMON STOCK PURSUANT TO RIGHTS, OPTIONS OR
WARRANTS WHICH WERE ORIGINALLY ISSUED IN A NON-AFFILIATE SALE TOGETHER WITH ONE
OR MORE OTHER SECURITIES AS PART OF A UNIT AT A PRICE PER UNIT. 

 

(G)          CONSIDERATION RECEIVED.

 

For purposes of any computation involving consideration received pursuant to
subsections (e), and (f) of this Section 8, the following shall apply:

 

(1)           IN THE CASE OF THE ISSUANCE OF SHARES OF COMMON STOCK FOR CASH,
THE CONSIDERATION SHALL BE THE AMOUNT OF SUCH CASH, PROVIDED THAT IN NO CASE
SHALL ANY DEDUCTION BE MADE FOR ANY COMMISSIONS, DISCOUNTS OR OTHER EXPENSES
INCURRED BY THE COMPANY FOR ANY UNDERWRITING OF THE ISSUE OR OTHERWISE IN
CONNECTION THEREWITH;

 

(2)           IN THE CASE OF THE ISSUANCE OF SHARES OF COMMON STOCK FOR A
CONSIDERATION IN WHOLE OR IN PART OTHER THAN CASH, THE CONSIDERATION OTHER THAN
CASH SHALL BE DEEMED TO BE THE FAIR MARKET VALUE THEREOF AS DETERMINED IN GOOD
FAITH BY THE BOARD OF DIRECTORS (IRRESPECTIVE OF THE ACCOUNTING TREATMENT
THEREOF), WHOSE DETERMINATION SHALL BE CONCLUSIVE, AND DESCRIBED IN A BOARD
RESOLUTION WHICH SHALL BE FILED WITH THE WARRANT AGENT;

 

(3)           IN THE CASE OF THE ISSUANCE OF SECURITIES CONVERTIBLE INTO OR
EXCHANGEABLE FOR SHARES, THE AGGREGATE CONSIDERATION RECEIVED THEREFOR SHALL BE
DEEMED TO BE THE CONSIDERATION RECEIVED BY THE COMPANY FOR THE ISSUANCE OF SUCH
SECURITIES PLUS THE ADDITIONAL MINIMUM CONSIDERATION, IF ANY, TO BE RECEIVED BY
THE COMPANY UPON THE CONVERSION OR EXCHANGE THEREOF (THE CONSIDERATION IN EACH
CASE TO BE DETERMINED IN THE SAME MANNER AS PROVIDED IN CLAUSES (1) AND (2) OF
THIS SUBSECTION); AND

 

(4)           IN THE CASE OF THE ISSUANCE OF SHARES OF COMMON STOCK PURSUANT TO
RIGHTS, OPTIONS OR WARRANTS WHICH RIGHTS, OPTIONS OR WARRANTS WERE ORIGINALLY
ISSUED TOGETHER WITH ONE OR MORE OTHER SECURITIES AS PART OF A UNIT AT A PRICE
PER UNIT, THE CONSIDERATION SHALL BE DEEMED TO BE THE FAIR VALUE OF SUCH RIGHTS,
OPTIONS OR WARRANTS AT THE TIME OF ISSUANCE THEREOF AS DETERMINED IN GOOD FAITH
BY THE BOARD OF DIRECTORS WHOSE DETERMINATION SHALL BE CONCLUSIVE AND DESCRIBED
IN A BOARD RESOLUTION WHICH SHALL BE FILED WITH THE WARRANT AGENT PLUS THE
ADDITIONAL MINIMUM CONSIDERATION, IF ANY, TO BE RECEIVED BY THE COMPANY UPON THE
EXERCISE, CONVERSION OR EXCHANGE THEREOF (AS DETERMINED IN THE SAME MANNER AS
PROVIDED IN CLAUSES (1) AND (2) OF THIS SUBSECTION).

 

(H)          FAIR VALUE.

 

In Sections 8(e) and (f) hereof, the “Fair Value” per security at any date of
determination shall be (1) in connection with a sale by the Company to a party
that is not an Affiliate of the Company in an arm’s-length transaction (a
“Non-Affiliate Sale”), the price per security at which such security is sold and
(2) in connection with any sale by the Company to an Affiliate of the Company,
(a) the last price per security at which such security was sold in a
Non-Affiliate Sale within the three-month period preceding

 

27

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

 

such date of determination or (b) if clause (a) is not applicable, the fair
market value of such security determined in good faith by (i) a majority of the
Board of Directors, including a majority of the Disinterested Directors, and
approved in a Board resolution delivered to the Warrant Agent or (ii) a
nationally recognized investment banking, appraisal or valuation firm, which is
not an Affiliate of the Company, in each case, taking into account, among all
other factors deemed relevant by the Board of Directors or such investment
banking, appraisal or valuation firm, the trading price and volume of such
security on any national securities exchange or automated quotation system on
which such security is traded.  Notwithstanding the foregoing, any sale to
Credit Suisse First Boston LLC (or any successor thereto) or any other
affiliated broker-dealer pursuant to an underwritten or Rule 144A offering shall
be deemed to be and treated as a Non-Affiliate Sale.

 

In Sections 8(c) and (d) hereof, the “Fair Value” per security at any date of
determination shall be (a) the last price per security at which such security
was sold by the Company in a Non-Affiliate Sale within the three-month period
preceding such date of determination or (b) if clause (a) is not applicable, the
fair market value of such security determined in good faith by (i) a majority of
the Board of Directors, including a majority of the Disinterested Directors, and
approved in a Board resolution delivered to the Warrant Agent or (ii) a
nationally recognized investment banking, appraisal or valuation firm, which is
not an Affiliate of the Company, in each case, taking into account, among all
other factors deemed relevant by the Board of Directors or such investment
banking, appraisal or valuation firm, the trading price and volume of such
security on any national securities exchange or automated quotation system on
which such security is traded.

 

For purposes of this Section 8(h), “Disinterested Director” means, in connection
with any issuance of securities that gives rise to a determination of the Fair
Value thereof, each member of the Board of Directors who is not an officer,
employee, director or other Affiliate of the party to whom the Company is
proposing to issue the securities giving rise to such determination.

 

For purposes of this Section 8(h), “Affiliate” of any specified Person means (A)
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person and (B) any
director or officer of such specified person.  For 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, by agreement or otherwise.

 

(I)           WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED.

 

No adjustment in the Exercise Price need be made unless the adjustment would
require an increase or decrease of at least 1% in the Exercise Price.  Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.  All calculations under this Section 8 shall be made
to the nearest cent or to the nearest 1/100th of a share, as the case may be, it
being understood that no such rounding shall be made under subsection (q).

 

(J)            WHEN NO ADJUSTMENT REQUIRED.

 

No adjustment need be made for a transaction referred to Section 8(a), (b), (c),
(d), (e), (f) or (g) hereof, if Warrant Holders are to participate (without
being required to exercise their Warrants) in the transaction on a basis and
with notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction.  No adjustment need be made for (i) rights to purchase Common
Stock pursuant to a Company plan for

 

28

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

 

reinvestment of dividends or interest or (ii) a change in the par value or no
par value of the Common Stock.  To the extent the Warrants become convertible
into cash, no adjustment need be made thereafter as to the cash.  Interest will
not accrue on the cash.

 

Notwithstanding anything to the contrary in this Warrant Agreement, no
adjustment to the Exercise Price will be made that would reduce the exercise
price below the par value of the Common Stock; provided that such adjustment
will be deemed to have been made for purposes of Section 8(q).

 

(K)          NOTICE OF ADJUSTMENT.

 

Whenever the Exercise Price or number of Warrant Shares issued upon exercise is
adjusted, the Company shall provide the notices required by Section 10 hereof.

 

(L)           NOTICE OF CERTAIN TRANSACTIONS.

 

If (i) the Company takes any action that would require an adjustment in the
Exercise Price pursuant to Section 8(a), (b), (c), (d), (e), (f) or (g) hereof
and if the Company does not arrange for Warrant Holders to participate pursuant
to Section 8(j) hereof, (ii) the Company takes any action that would require a
supplemental Warrant Agreement pursuant to Section 8(m) hereof or (iii) there is
a liquidation or dissolution of the Company, then the Company shall mail to
Warrant Holders a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, transfer, lease, liquidation or
dissolution.  The Company shall mail the notice at least 15 days before such
date.  Failure to mail the notice or any defect in it shall not affect the
validity of the transaction.

 

(M)          REORGANIZATION OF COMPANY.

 

If the Company (i) issues by reclassification of its Common Stock any shares of
its capital stock or (ii) consolidates or merges with or into, or transfers or
leases all or substantially all its assets to, any person, upon consummation of
such transaction the Warrants shall automatically become exercisable for the
kind and amount of securities, cash or other assets which the holder of a
Warrant would have owned immediately after the reclassification, consolidation,
merger, transfer or lease if the holder had exercised the Warrant immediately
before the effective date of the transaction and for the same aggregate exercise
price.  Concurrently with the consummation of such consolidation or merger, the
person formed by or surviving any such consolidation or merger if other than the
Company, or the person to which such sale or conveyance shall have been made,
shall enter into (i) a supplemental Warrant Agreement so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section 8(m) and (ii) a
supplement to the Warrant Registration Rights Agreement providing for the
assumption of the Company’s obligations thereunder.  The successor Company shall
mail to Warrant holders a notice describing the supplemental Warrant Agreement
and Warrant Registration Rights Agreement.  If the issuer of securities
deliverable upon exercise of Warrants under the supplemental Warrant Agreement
is an affiliate of the formed, surviving, transferee or lessee corporation, that
issuer shall join in the supplemental Warrant Agreement and Warrant Registration
Rights Agreement.  If this Section 8(m) applies, Sections 8(a), (b), (c), (d),
(e), (f) and (g) hereof do not apply.

 

(N)          COMPANY DETERMINATION FINAL.

 

Any determination that the Company or the Board of Directors must make pursuant
to Section 8(a), (b), (c), (d), (e), (f), (g), (h), (i) or (j) hereof is
conclusive.

 

29

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(O)          WARRANT AGENT’S DISCLAIMER.

 

The Warrant Agent has no duty to determine when an adjustment under this
Section 8 should be made, how it should be made or what it should be.  The
Warrant Agent has no duty to determine whether any provisions of a supplemental
Warrant Agreement under Section 8(m) hereof are correct.  The Warrant Agent
makes no representation as to the validity or value of any securities or assets
issued upon exercise of Warrants.  The Warrant Agent shall not be responsible
for the Company’s failure to comply with this Section 8.

 

(P)          WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED.

 

In any case in which this Section 8 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event (i) issuing to the
holder of any Warrant exercised after such record date the Warrant Shares and
other capital stock of the Company, if any, issuable upon such exercise over and
above the Warrant Shares and other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price and (ii) paying
to such holder any amount in cash in lieu of a fractional share pursuant to
Section 9 hereof; provided that the Company shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder’s right to receive
such additional Warrant Shares, other capital stock and cash upon the occurrence
of the event requiring such adjustment.

 

(Q)          ADJUSTMENT IN NUMBER OF WARRANT SHARES.

 

Upon each adjustment of the Exercise Price pursuant to this Section 8 (other
than Section 8(a) and 8(m), which include adjustments for the Warrant Shares),
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to receive upon payment of the
adjusted Exercise Price that number of shares of Common Stock (calculated to the
nearest hundredth) obtained from the following formula:

 

N’   =

Nx

E

 

 

 

E’

 

 

where:

 

N’

=

the adjusted number of Warrant Shares issuable upon exercise of a Warrant by
payment of the adjusted Exercise Price.

 

 

 

N

=

the number or Warrant Shares previously issuable upon exercise of a Warrant by
payment of the Exercise Price prior to adjustment.

 

 

 

E’

=

the adjusted Exercise Price.

 

 

 

E

=

the Exercise Price prior to adjustment.

 

(R)           FORM OF WARRANTS.

 

Irrespective of any adjustments in the Exercise Price or the number or kind of
shares purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrants initially issuable pursuant to this
Agreement.

 

30

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SECTION 9.                            FRACTIONAL INTERESTS.

 

The Company shall not be required to issue fractional Warrant Shares on the
exercise of Warrants.  If more than one Warrant shall be presented for exercise
in full at the same time by the same holder, the number of full Warrant Shares
which shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of Warrant Shares purchasable on exercise of the
Warrants so presented.  If any fraction of a Warrant Share would, except for the
provisions of this Section 9, be issuable on the exercise of any Warrants (or
specified portion thereof), the Company shall pay an amount in cash equal to the
Fair Value per Warrant Share, as determined on the day immediately preceding the
date the Warrant is presented for exercise, multiplied by such fraction,
computed to the nearest whole U.S. cent.

 

SECTION 10.                     NOTICES TO WARRANT HOLDERS.

 

(A)           UPON ANY ADJUSTMENT OF THE EXERCISE PRICE OR THE NUMBER OF WARRANT
SHARES ISSUABLE UPON EXERCISE OF WARRANTS PURSUANT TO SECTION 8 HEREOF, THE
COMPANY SHALL PROMPTLY THEREAFTER (I) CAUSE TO BE FILED WITH THE WARRANT AGENT A
CERTIFICATE OF A FIRM OF INDEPENDENT PUBLIC ACCOUNTANTS OF RECOGNIZED STANDING
SELECTED BY THE BOARD OF DIRECTORS OF THE COMPANY (WHO MAY BE THE REGULAR
AUDITORS OF THE COMPANY) SETTING FORTH THE EXERCISE PRICE AFTER SUCH ADJUSTMENT
AND SETTING FORTH IN REASONABLE DETAIL THE METHOD OF CALCULATION AND THE FACTS
UPON WHICH SUCH CALCULATIONS ARE BASED AND SETTING FORTH THE NUMBER OF WARRANT
SHARES (OR PORTION THEREOF) ISSUABLE AFTER SUCH ADJUSTMENT IN THE EXERCISE
PRICE, UPON EXERCISE OF A WARRANT AND PAYMENT OF THE ADJUSTED EXERCISE PRICE,
WHICH CERTIFICATE SHALL BE CONCLUSIVE EVIDENCE OF THE CORRECTNESS OF THE MATTERS
SET FORTH THEREIN, AND (II) CAUSE TO BE GIVEN TO EACH OF THE REGISTERED HOLDERS
OF WARRANTS AT THE ADDRESS APPEARING ON THE WARRANT REGISTER FOR EACH SUCH
REGISTERED HOLDER WRITTEN NOTICE OF SUCH ADJUSTMENTS BY FIRST-CLASS MAIL,
POSTAGE PREPAID.  WHERE APPROPRIATE, SUCH NOTICE MAY BE GIVEN IN ADVANCE AND
INCLUDED AS A PART OF THE NOTICE REQUIRED TO BE MAILED UNDER THE OTHER
PROVISIONS OF THIS SECTION 10.

 

(B)           IN CASE:

 

(i)            the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants;

 

(ii)           the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other than
dividends or cash distributions paid out of consolidated current or retained
earnings as shown on the books of the Company prepared in accordance with
generally accepted accounting principles, dividends payable on or about the date
hereof as described in the Offering Circular or dividends payable in shares of
Common Stock);

 

(iii)          of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of Common Stock issuable
upon exercise of the Warrants (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 a tender offer or exchange offer for shares of
Common Stock;

 

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

 

31

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(v)           the Company proposes to take any action (other than actions of the
character described in Section 8(a) or (b) hereof) which would require an
adjustment of the Exercise Price pursuant to Section 8 hereof;

 

then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of Warrants at his address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (x)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any related tender
offer or exchange offer for shares of Common Stock, or (z) the date on which any
such consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up.  The failure to give the
notice required by this Section 10 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any action.

 

(C)           NOTHING CONTAINED IN THIS AGREEMENT OR IN ANY OF THE WARRANT
CERTIFICATES SHALL BE CONSTRUED AS CONFERRING UPON THE HOLDERS OF WARRANTS THE
RIGHT TO VOTE OR TO CONSENT OR TO RECEIVE NOTICE AS STOCKHOLDERS IN RESPECT OF
THE MEETINGS OF STOCKHOLDERS OR THE ELECTION OF DIRECTORS OF THE COMPANY OR ANY
OTHER MATTER, OR ANY RIGHTS WHATSOEVER AS STOCKHOLDERS OF THE COMPANY.

 

SECTION 11.                     MERGER, CONSOLIDATION OR CHANGE OF NAME OF
WARRANT AGENT.

 

(A)           ANY CORPORATION INTO WHICH THE WARRANT AGENT MAY BE MERGED OR WITH
WHICH IT MAY BE CONSOLIDATED, OR ANY CORPORATION RESULTING FROM ANY MERGER OR
CONSOLIDATION TO WHICH THE WARRANT AGENT SHALL BE A PARTY, OR ANY CORPORATION
SUCCEEDING TO THE BUSINESS OF THE WARRANT AGENT, SHALL BE THE SUCCESSOR TO THE
WARRANT AGENT HEREUNDER WITHOUT THE EXECUTION OR FILING OF ANY PAPER OR ANY
FURTHER ACT ON THE PART OF ANY OF THE PARTIES HERETO, PROVIDED THAT SUCH
CORPORATION WOULD BE ELIGIBLE FOR APPOINTMENT AS A SUCCESSOR WARRANT AGENT UNDER
THE PROVISIONS OF SECTION 13 HEREOF.  IN CASE AT THE TIME SUCH SUCCESSOR TO THE
WARRANT AGENT SHALL SUCCEED TO THE AGENCY CREATED BY THIS AGREEMENT, AND IN CASE
AT THAT TIME ANY OF THE WARRANT CERTIFICATES SHALL HAVE BEEN COUNTERSIGNED BUT
NOT DELIVERED, ANY SUCH SUCCESSOR TO THE WARRANT AGENT MAY ADOPT THE
COUNTERSIGNATURE OF THE ORIGINAL WARRANT AGENT; AND IN CASE AT THAT TIME ANY OF
THE WARRANT CERTIFICATES SHALL NOT HAVE BEEN COUNTERSIGNED, ANY SUCCESSOR TO THE
WARRANT AGENT MAY COUNTERSIGN SUCH WARRANT CERTIFICATES EITHER IN THE NAME OF
THE PREDECESSOR WARRANT AGENT OR IN THE NAME OF THE SUCCESSOR TO THE WARRANT
AGENT; AND IN ALL SUCH CASES SUCH WARRANT CERTIFICATES SHALL HAVE THE FULL FORCE
AND EFFECT PROVIDED IN THE WARRANT CERTIFICATES AND IN THIS AGREEMENT.

 

(B)           IN CASE AT ANY TIME THE NAME OF THE WARRANT AGENT SHALL BE CHANGED
AND AT SUCH TIME ANY OF THE WARRANT CERTIFICATES SHALL HAVE BEEN COUNTERSIGNED
BUT NOT DELIVERED, THE WARRANT AGENT WHOSE NAME HAS BEEN CHANGED MAY ADOPT THE
COUNTERSIGNATURE UNDER ITS PRIOR NAME, AND IN CASE AT THAT TIME ANY OF THE
WARRANT CERTIFICATES SHALL NOT HAVE BEEN COUNTERSIGNED, THE WARRANT AGENT MAY
COUNTERSIGN SUCH WARRANT CERTIFICATES EITHER IN ITS PRIOR NAME OR IN ITS CHANGED
NAME, AND IN ALL SUCH CASES SUCH WARRANT CERTIFICATES SHALL HAVE THE FULL FORCE
AND EFFECT PROVIDED IN THE WARRANT CERTIFICATES AND IN THIS AGREEMENT.

 

32

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SECTION 12.                     WARRANT AGENT.

 

The Warrant Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Warrants, by their acceptance thereof, shall be bound:

 

(A)           THE STATEMENTS CONTAINED HEREIN AND IN THE WARRANT CERTIFICATES
SHALL BE TAKEN AS STATEMENTS OF THE COMPANY AND THE WARRANT AGENT ASSUMES NO
RESPONSIBILITY FOR THE CORRECTNESS OF ANY OF THE SAME EXCEPT SUCH AS DESCRIBE
THE WARRANT AGENT OR ACTION TAKEN OR TO BE TAKEN BY IT.  THE WARRANT AGENT
ASSUMES NO RESPONSIBILITY WITH RESPECT TO THE DISTRIBUTION OF THE WARRANT
CERTIFICATES EXCEPT AS HEREIN OTHERWISE EXPRESSLY PROVIDED.

 

(B)           THE WARRANT AGENT SHALL NOT BE RESPONSIBLE FOR ANY FAILURE OF THE
COMPANY TO COMPLY WITH ANY OF THE COVENANTS CONTAINED IN THIS AGREEMENT OR IN
THE WARRANT CERTIFICATES TO BE COMPLIED WITH BY THE COMPANY.

 

(C)           THE WARRANT AGENT MAY CONSULT AT ANY TIME WITH COUNSEL
SATISFACTORY TO IT (WHO MAY BE COUNSEL FOR THE COMPANY) AND THE WARRANT AGENT
SHALL INCUR NO LIABILITY OR RESPONSIBILITY TO THE COMPANY OR TO ANY HOLDER OF
ANY WARRANT CERTIFICATE IN RESPECT OF ANY ACTION TAKEN, SUFFERED OR OMITTED BY
IT HEREUNDER IN GOOD FAITH AND IN ACCORDANCE WITH THE OPINION OR THE ADVICE OF
SUCH COUNSEL.

 

(D)           THE WARRANT AGENT SHALL INCUR NO LIABILITY OR RESPONSIBILITY TO
THE COMPANY OR TO ANY HOLDER OF ANY WARRANT CERTIFICATE FOR ANY ACTION TAKEN IN
RELIANCE ON ANY WARRANT CERTIFICATE, CERTIFICATE OF SHARES, NOTICE, RESOLUTION,
WAIVER, CONSENT, ORDER, OPINION, CERTIFICATE, OR OTHER PAPER, DOCUMENT OR
INSTRUMENT BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN SIGNED, SENT OR
PRESENTED BY THE PROPER PARTY OR PARTIES.

 

(E)           THE COMPANY AGREES TO PAY TO THE WARRANT AGENT REASONABLE
COMPENSATION FOR ALL SERVICES RENDERED BY THE WARRANT AGENT IN THE EXECUTION OF
THIS AGREEMENT AS SEPARATELY AGREED BY THEM, TO REIMBURSE THE WARRANT AGENT FOR
ALL EXPENSES, TAXES AND GOVERNMENTAL CHARGES AND OTHER CHARGES OF ANY KIND AND
NATURE INCURRED BY THE WARRANT AGENT IN THE EXECUTION OF THIS AGREEMENT.  THE
COMPANY SHALL INDEMNIFY THE WARRANT AGENT AGAINST ANY AND ALL LOSSES,
LIABILITIES OR EXPENSES INCURRED BY IT ARISING OUT OF OR IN CONNECTION WITH THE
ACCEPTANCE OR ADMINISTRATION OF ITS DUTIES UNDER THIS WARRANT AGREEMENT,
INCLUDING REASONABLE ATTORNEY’S FEES AND EXPENSES AND THE COSTS AND EXPENSES OF
ENFORCING THIS WARRANT AGREEMENT AGAINST THE COMPANY AND DEFENDING ITSELF
AGAINST ANY CLAIM (WHETHER ASSERTED BY THE COMPANY OR ANY HOLDER OR ANY OTHER
PERSON) OR LIABILITY IN CONNECTION WITH THE EXERCISE OR PERFORMANCE OF ANY OF
ITS POWERS OR DUTIES HEREUNDER, EXCEPT TO THE EXTENT ANY SUCH LOSS, LIABILITY OR
EXPENSE MAY BE ATTRIBUTABLE TO ITS NEGLIGENCE OR BAD FAITH.  THE WARRANT AGENT
SHALL NOTIFY THE COMPANY PROMPTLY OF ANY CLAIM FOR WHICH IT MAY SEEK INDEMNITY. 
FAILURE BY THE WARRANT AGENT TO SO NOTIFY THE COMPANY SHALL NOT RELIEVE THE
COMPANY OF ITS OBLIGATIONS HEREUNDER.  THE COMPANY SHALL DEFEND THE CLAIM AND
THE WARRANT AGENT SHALL COOPERATE IN THE DEFENSE.  THE WARRANT AGENT MAY HAVE
SEPARATE COUNSEL AND THE COMPANY SHALL PAY THE REASONABLE FEES AND EXPENSES OF
SUCH COUNSEL.  THE COMPANY NEED NOT PAY FOR ANY SETTLEMENT MADE WITHOUT ITS
CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.

 

(F)            THE WARRANT AGENT SHALL BE UNDER NO OBLIGATION TO INSTITUTE ANY
ACTION, SUIT OR LEGAL PROCEEDING OR TO TAKE ANY OTHER ACTION LIKELY TO INVOLVE
EXPENSE UNLESS THE COMPANY OR ONE OR MORE REGISTERED HOLDERS OF WARRANTS SHALL
FURNISH THE WARRANT AGENT WITH REASONABLE SECURITY AND INDEMNITY FOR ANY COSTS
AND EXPENSES WHICH MAY BE INCURRED, BUT THIS PROVISION SHALL NOT AFFECT THE
POWER OF THE WARRANT AGENT TO TAKE SUCH ACTION AS IT MAY CONSIDER PROPER,
WHETHER WITH OR WITHOUT ANY SUCH SECURITY OR INDEMNITY.  ALL RIGHTS OF ACTION
UNDER THIS AGREEMENT OR UNDER ANY OF THE WARRANTS MAY BE ENFORCED BY

 

33

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THE WARRANT AGENT WITHOUT THE POSSESSION OF ANY OF THE WARRANT CERTIFICATES OR
THE PRODUCTION THEREOF AT ANY TRIAL OR OTHER PROCEEDING RELATIVE THERETO, AND
ANY SUCH ACTION, SUIT OR PROCEEDING INSTITUTED BY THE WARRANT AGENT SHALL BE
BROUGHT IN ITS NAME AS WARRANT AGENT AND ANY RECOVERY OF JUDGMENT SHALL BE FOR
THE RATABLE BENEFIT OF THE REGISTERED HOLDERS OF THE WARRANTS, AS THEIR
RESPECTIVE RIGHTS OR INTERESTS MAY APPEAR.

 

(G)           THE WARRANT AGENT, AND ANY STOCKHOLDER, DIRECTOR, OFFICER OR
EMPLOYEE OF IT, MAY BUY, SELL OR DEAL IN ANY OF THE WARRANTS OR OTHER SECURITIES
OF THE COMPANY OR BECOME PECUNIARILY INTERESTED IN ANY TRANSACTION IN WHICH THE
COMPANY MAY BE INTERESTED, OR CONTRACT WITH OR LEND MONEY TO THE COMPANY OR
OTHERWISE ACT AS FULLY AND FREELY AS THOUGH IT WERE NOT WARRANT AGENT UNDER THIS
AGREEMENT.  NOTHING HEREIN SHALL PRECLUDE THE WARRANT AGENT FROM ACTING IN ANY
OTHER CAPACITY FOR THE COMPANY OR FOR ANY OTHER LEGAL ENTITY.

 

(H)           THE WARRANT AGENT SHALL ACT HEREUNDER SOLELY AS AGENT FOR THE
COMPANY, AND ITS DUTIES SHALL BE DETERMINED SOLELY BY THE EXPRESS PROVISIONS
HEREOF.  NO IMPLIED DUTIES SHALL BE READ INTO THIS AGREEMENT AGAINST THE WARRANT
AGENT.  THE WARRANT AGENT SHALL NOT BE LIABLE FOR ANYTHING WHICH IT MAY DO OR
REFRAIN FROM DOING IN CONNECTION WITH THIS AGREEMENT EXCEPT FOR ITS OWN
NEGLIGENCE OR BAD FAITH.

 

(I)            THE WARRANT AGENT SHALL NOT AT ANY TIME BE UNDER ANY DUTY OR
RESPONSIBILITY TO ANY HOLDER OF ANY WARRANT CERTIFICATE TO MAKE OR CAUSE TO BE
MADE ANY ADJUSTMENT OF THE EXERCISE PRICE OR NUMBER OF THE WARRANT SHARES OR
OTHER SECURITIES OR PROPERTY DELIVERABLE AS PROVIDED IN THIS AGREEMENT, OR TO
DETERMINE WHETHER ANY FACTS EXIST WHICH MAY REQUIRE ANY OF SUCH ADJUSTMENTS, OR
WITH RESPECT TO THE NATURE OR EXTENT OF ANY SUCH ADJUSTMENTS, WHEN MADE, OR WITH
RESPECT TO THE METHOD EMPLOYED IN MAKING THE SAME.  THE WARRANT AGENT SHALL NOT
BE ACCOUNTABLE WITH RESPECT TO THE VALIDITY OR VALUE OR THE KIND OR AMOUNT OF
ANY WARRANT SHARES OR OF ANY SECURITIES OR PROPERTY WHICH MAY AT ANY TIME BE
ISSUED OR DELIVERED UPON THE EXERCISE OF ANY WARRANT OR WITH RESPECT TO WHETHER
ANY SUCH WARRANT SHARES OR OTHER SECURITIES WILL WHEN ISSUED BE VALIDLY ISSUED
AND FULLY PAID AND NONASSESSABLE, AND MAKES NO REPRESENTATION WITH RESPECT
THERETO.

 

SECTION 13.                     CHANGE OF WARRANT AGENT.

 

If the Warrant Agent shall become incapable of acting as Warrant Agent, the
Company shall appoint a successor to such Warrant Agent.  If the Company shall
fail to make such appointment within a period of 30 days after it has been
notified in writing of such incapacity by the Warrant Agent or by the registered
holder of a Warrant Certificate, then the registered holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of a successor
to the Warrant Agent.  Pending appointment of a successor to such Warrant Agent,
either by the Company or by such a court, the duties of the Warrant Agent shall
be carried out by the Company.  The holders of a majority of the unexercised
Warrants shall be entitled at any time to remove the Warrant Agent and appoint a
successor to such Warrant Agent.  Such successor to the Warrant Agent need not
be approved by the Company or the former Warrant Agent.  After appointment the
successor to the Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Warrant Agent
without further act or deed; provided that the former Warrant Agent shall
deliver and transfer to the successor to the Warrant Agent any property at the
time held by it hereunder and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose.  Failure to give any notice
provided for in this Section 13, however, or any defect therein, shall not
affect the legality or validity of the appointment of a successor to the Warrant
Agent.

 

34

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SECTION 14.                     REPORTS.

 

(A)           WHETHER OR NOT REQUIRED BY THE RULES AND REGULATIONS OF THE
COMMISSION, SO LONG AS ANY WARRANTS OR THE WARRANT SHARES ARE OUTSTANDING, THE
COMPANY SHALL FURNISH TO THE WARRANT AGENT AND THE HOLDERS OF WARRANTS OR
WARRANT SHARES (I) ALL QUARTERLY AND ANNUAL FINANCIAL INFORMATION THAT WOULD BE
REQUIRED TO BE CONTAINED IN A FILING WITH THE COMMISSION ON FORMS 10-Q AND 10-K
IF THE COMPANY WERE REQUIRED TO FILE SUCH FORMS, INCLUDING A “MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” AND,
WITH RESPECT TO THE ANNUAL INFORMATION ONLY, A REPORT THEREON BY THE COMPANY’S
CERTIFIED INDEPENDENT ACCOUNTANTS AND (II) ALL CURRENT REPORTS THAT WOULD BE
REQUIRED TO BE FILED WITH THE COMMISSION ON FORM 8-K IF THE COMPANY WERE
REQUIRED TO FILE SUCH REPORTS. 

 

(B)           THE COMPANY SHALL PROVIDE THE WARRANT AGENT WITH A SUFFICIENT
NUMBER OF COPIES OF ALL SUCH REPORTS THAT THE WARRANT AGENT MAY BE REQUIRED TO
DELIVER TO THE HOLDERS OF THE WARRANTS AND THE WARRANT SHARES UNDER THIS
SECTION 14. 

 

(C)           SO LONG AS ANY WARRANTS OR THE WARRANT SHARES ARE OUTSTANDING, THE
COMPANY SHALL FURNISH TO THE WARRANT AGENT, THE HOLDERS OF WARRANTS OR WARRANT
SHARES AND TO SECURITIES ANALYSTS AND PROSPECTIVE INVESTORS, UPON THEIR REQUEST,
THE INFORMATION REQUIRED TO BE DELIVERED PURSUANT TO RULE 144A(D)(4) UNDER THE
SECURITIES ACT.

 

SECTION 15.                     NOTICES TO COMPANY AND WARRANT AGENT.

 

Any notice or demand authorized by this Agreement to be given or made by the
Warrant Agent or by the registered holder of any Warrant to or on the Company
shall be sufficiently given or made when received if deposited in the mail,
first class or registered, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent) as follows:

 

Mueller Holdings (N.A.), Inc.
                110 Corporate Drive, Suite 10

Portsmouth, New Hampshire  03801

Facsimile No.: (603) 422-8035

Attention:  General Counsel

 

With a copy to:

 

Davis Polk & Wardwell

450 Lexington Avenue

New York, New York 10017

Facsimile No.: (212) 450-3800

Attention: Michael Kaplan, Esq.

 

In case the Company shall fail to maintain such office or agency or shall fail
to give such notice of the location or of any change in the location thereof,
presentations may be made and notices and demands may be served at the principal
office of the Warrant Agent.

 

Any notice pursuant to this Agreement to be given by the Company or by the
registered holder(s) of any Warrant to the Warrant Agent shall be sufficiently
given when and if deposited in the mail, first-class or registered, postage
prepaid, addressed (until another address is filed in writing by the Warrant
Agent with the Company) to the Warrant Agent as follows:

 

35

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Law Debenture Trust Company of New York

767 Third Avenue, 31st Floor
New York, New York  10017
Facsimile No.:  212-750-1361
Attention:  Patrick Healy

 

SECTION 16.                     SUPPLEMENTS AND AMENDMENTS.

 

The Company and the Warrant Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Warrants in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not in any way adversely affect the interests of the holders of Warrants.  Any
amendment or supplement to this Agreement that has an adverse effect on the
interests of the holders of Warrants shall require the written consent of the
holders of a majority of the then outstanding Warrants (excluding Warrants held
by the Company or any of its affiliates).  The consent of each holder of
Warrants affected shall be required for any amendment pursuant to which the
Exercise Price would be increased or the number of Warrant Shares purchasable
upon exercise of Warrants would be decreased (other than pursuant to adjustments
provided in this Agreement).

 

SECTION 17.                     SUCCESSORS.

 

All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

 

SECTION 18.                     TERMINATION.

 

This Agreement shall terminate at 5:00 p.m., New York City time on April 15,
2014.  Notwithstanding the foregoing, this Agreement will terminate on any
earlier date if all Warrants have been exercised.  The provisions of Section 12
shall survive such termination.

 

SECTION 19.                     GOVERNING LAW.

 

This Agreement and each Warrant Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of New York and for all purposes
shall be construed in accordance with the internal laws of said State.

 

SECTION 20.                     BENEFITS OF THIS AGREEMENT.

 

Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent and the registered holders
of Warrants any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Warrant Agent and the registered holders of Warrants.

 

36

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SECTION 21.                     COUNTERPARTS.

 

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

 

[Signature Page Follows]

 

37

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

 

 

MUELLER HOLDINGS (N.A.), INC.

 

 

 

 

 

By:

/s/

 

 

 

 Name: Darrell Jean

 

 

 

 Title: Vice President and Chief Financial Officer

 

 

 

 

 

 

 

 

LAW DEBENTURE TRUST COMPANY OF NEW YORK, as Warrant Agent

 

 

 

 

 

By:

/s/

 

 

 

 Name: Daniel R. Fisher

 

 

 

 Title: Senior Vice President

 

 

38

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EXHIBIT A

 

[Form of Warrant Certificate]

 

[Face]

 

[Insert applicable legends]

 

No.                                Warrants
CUSIP No.                 

 

Warrant Certificate

 

MUELLER HOLDINGS (N.A.), INC.

 

This Warrant Certificate certifies that [       ], or its registered assigns, is
the registered holder of [  ] Warrants expiring April 15, 2014 (the “Warrants”)
to purchase Class A Common Stock, par value $.01 (the “Common Stock”), of
Mueller Holdings (N.A.), Inc., a Delaware corporation (the “Company”).  Each
Warrant entitles the registered holder upon exercise at any time from 9:00 a.m.
on the Separation Date, as defined in the Warrant Agreement referred to below
(the “Exercise Date”) until 5:00 p.m. New York City Time on April 15, 2014, to
receive from the Company 109.80889 fully paid and nonassessable shares of Class
A Common Stock (the “Warrant Shares”) at the initial exercise price (the
“Exercise Price”) of $0.01 per share payable upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement referred to on the reverse hereof.  The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.

 

No Warrant may be exercised after 5:00 p.m., New York City Time on April 15,
2014, and to the extent not exercised by such time such Warrants shall become
void.

 

Reference is hereby made to the further provisions of this Warrant Certificate
set forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though fully set forth at this place.

 

This Warrant Certificate shall not be valid unless countersigned by the Warrant
Agent, as such term is used in the Warrant Agreement.

 

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

 

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IN WITNESS WHEREOF, Mueller Holdings (N.A.), Inc.. has caused this Warrant
Certificate to be signed below.

 

 

Dated: April 29, 2004

 

 

 

 

MUELLER HOLDINGS (N.A.), INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

Countersigned:

 

LAW DEBENTURE TRUST COMPANY OF NEW YORK

 

 

as Warrant Agent

 

By:

 

 

Authorized Signature

 

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[Reverse of Warrant Certificate]

 

The Warrants evidenced by this Warrant Certificate are part of a duly authorized
issue of Warrants expiring at 5:00 p.m. New York City time on April 15, 2014
entitling the holder on exercise to receive shares of Class A Common Stock, and
are issued or to be issued pursuant to a Warrant Agreement dated as of April 29,
2004 (the “Warrant Agreement”), duly executed and delivered by the Company to
Law Debenture Trust Company of New York, as warrant agent (the “Warrant Agent”),
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words “holders” or “holder”
meaning the registered holders or registered holder) of the Warrants.  A copy of
the Warrant Agreement may be obtained by the holder hereof upon written request
to the Company.

 

Warrants may be exercised at any time on or after the Separation Date and on or
before  5:00 p.m. New York City time on April 15, 2014; provided that (I)
holders shall be able to exercise their Warrants only if a registration
statement relating to the Warrants Shares is then in effect, or the exercise of
such Warrants is exempt from the registration requirements of the Securities Act
of 1933, as amended (the “Securities Act”), and such securities are qualified
for sale or exempt from qualification under the applicable securities laws of
the states in which the various holders of the Warrants or other persons to whom
it is proposed that the Warrant Shares be issued on exercise of the Warrants
reside and (II) holders of Regulation S Warrants shall be able to exercise this
Warrant only in accordance with the terms of the legend contained hereon.  In
order to exercise all or any of the Warrants represented by this Warrant
Certificate, the holder must deliver to the Warrant Agent at its New York office
set forth in Section 15 of the Warrant Agreement this Warrant Certificate and
the form of election to purchase on the reverse hereof duly filled in and
signed, which signature shall be medallion guaranteed by an institution which is
a member of a Securities Transfer Association recognized signature guarantee
program, and upon payment to the Warrant Agent for the account of the Company of
the Exercise Price, as adjusted as provided in the Warrant Agreement, for the
number of Warrant Shares in respect of which such Warrants are then exercised. 
No adjustment shall be made for any dividends on any Common Stock issuable upon
exercise of this Warrant.

 

The Warrant Agreement provides that upon the occurrence of certain events the
Exercise Price set forth on the face hereof may, subject to certain conditions,
be adjusted.  If the Exercise Price is adjusted, the Warrant Agreement provides
that the number of shares of Common Stock issuable upon the exercise of each
Warrant shall be adjusted.  No fractions of a share of Common Stock will be
issued upon the exercise of any Warrant, but the Company will pay the cash value
thereof determined as provided in the Warrant Agreement.

 

The Company has agreed pursuant to a Warrant Registration Rights Agreement dated
as of April 29, 2004 (the “Warrant Registration Rights Agreement”) to file
within 90 days after the issuance of the Warrants and use its reasonable best
efforts to make effective on or before 180 days after such date a shelf
registration statement on the appropriate form under the Securities Act, and to
use its reasonable best efforts to keep such registration statement continuously
effective under the Securities Act in order to permit the resale of the Warrants
and Warrant Shares by the holders thereof for a period ending two years after
the date of the initial issuance of the Warrants.

 

Warrant Certificates, when surrendered at the office of the Warrant Agent by the
registered holder thereof in person or by legal representative or attorney duly
authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but

 

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without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.

 

Upon due presentation for registration of transfer of this Warrant Certificate
at the office of the Warrant Agent a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.

 

The Company and the Warrant Agent may deem and treat the registered holder(s)
thereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, of any distribution to the holder(s) hereof, and
for all other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.  Neither the Warrants nor this Warrant
Certificate entitles any holder hereof to any rights of a stockholder of the
Company.

 

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[Form of Election to Purchase]

 

(To Be Executed Upon Exercise Of Warrant)

 

The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to receive                            shares of Class
A Common Stock before giving effect to the cashless exercise provisions and
herewith:

 

(1) tenders payment for such shares to the order of MUELLER HOLDINGS (N.A.),
INC., in the amount of $                     in accordance with the terms hereof

 

OR

 

(2) agrees to make payment therefore pursuant to the cashless exercise
provisions of the Warrant Agreement, all on the terms and the conditions
specified in the Warrant Certificate and the Warrant Agreement.

 

[If this Warrant is a Regulation S Warrant, insert the following:

 

The undersigned hereby certifies that it is not a U.S. person (as defined in
Regulation S) and is not exercising the Warrant on behalf of a U.S. person or
the undersigned is delivering with this exercise notice a written opinion of
counsel to the effect that the Warrant and Warrant Shares delivered upon
exercise thereof have been registered under the Securities Act or are exempt
from registration thereunder.]

 

The undersigned requests that a certificate for such shares be registered in the
name of                               , whose address is
                                     and that such shares be delivered to
                      , whose address is
                                                        .  If said number of
shares is less than all of the shares of Common Stock purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares be registered in the name of
                                            , whose address is
                                        , and that such Warrant Certificate be
delivered to whose address is                                         .

 

 

 

 

 

Signature

 

 

Date:

 

 

 

 

 

 

 

Signature Guaranteed

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Warrant Agent, 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 Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

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SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANTS

 

The following exchanges of a part of this Global Warrant have been made:

 

Date of Exchange

 

Amount of
decrease in
Number of
warrants in this
Global Warrant

 

Amount of
increase in
Number of
Warrants in this
Global Warrant

 

Number of
Warrants in this
Global Warrant
following such
decrease or
increase

 

Signature of
authorized officer
of Warrant Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Mueller Holdings (N.A.), Inc.

110 Corporate Drive, Suite 10

Portsmouth, New Hampshire  03801

Attention:  General Counsel

 

Law Debenture Trust Company of New York

767 Third Avenue, 31st Floor

New York, New York  10017
Facsimile No.:  212-750-1361
Attention:  Patrick Healy

 

Re:  Warrants

 

Reference is hereby made to the Warrant Agreement, dated as of April 29, 2004
(the “Warrant Agreement”), between Mueller Holdings (N.A.), Inc., as issuer (the
“Company”), and Law Debenture Trust Company of New York, as warrant agent. 
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.

 

                                      , (the “Transferor”) owns and proposes to
transfer the                      Warrant[s] or interest in such Warrant[s]
representing                      Warrant[s] specified in Annex A hereto in such
Warrant[s] or interests (the “Transfer”), to 
                                                       (the “Transferee”), as
further specified in Annex A hereto.  In connection with the Transfer, the
Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.             o            Check if Transferee will take delivery of a
beneficial interest in the 144A Global Warrant or a Definitive Warrant Pursuant
to Rule 144A.  The Transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
“Securities Act”), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Warrant is being transferred to a
Person that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Warrant for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a “qualified institutional
buyer” within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States.  Upon consummation of the
proposed Transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Warrant and/or the Definitive Warrant and in the Warrant
Agreement and the Securities Act.

 

2.             o            Check if Transferee will take delivery of a
Regulation S Definitive Warrant.  The Transfer is being effected pursuant to and
in accordance with Rule 903 or Rule 904 under the Securities Act and,
accordingly, the Transferor hereby further certifies that (i) the Transfer is
not being made to a person in the United States and (x) at the time the buy
order was originated, the

 

B-1

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Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser).  If such transfer is being made pursuant to Rule 903, the purchaser
has executed a certification in the form of Exhibit 2 to the Purchase Agreement
with respect to the Units.  Upon consummation of the proposed transfer in
accordance with the terms of the Warrant Agreement, the transferred beneficial
interest or Definitive Warrant will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend and Regulation S Legend printed on
the Regulation S Definitive Warrant and in the Warrant Agreement and the
Securities Act.

 

3.             o            Check and complete if Transferee will take delivery
of a Definitive Warrant pursuant to any provision of the Securities Act other
than Rule 144A or Regulation S.  The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Warrants and Restricted Definitive Warrants and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):

 

(a)          o    such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;

 

or

 

(b)         o    such Transfer is being effected to the Company or a subsidiary
thereof;

 

or

 

(c)          o    such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;

 

or

 

(d)         o    such Transfer is being effected pursuant to another exemption
from the registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that the
Transfer complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Warrant or Restricted Definitive Warrants and
the requirements of the exemption claimed, which certification is supported by
(1) a certificate executed by the Transferee in a form reasonably satisfactory
to the Company and the Warrant Agent and (2) if the Company or the Warrant Agent
requests, an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act.  Upon consummation
of the proposed transfer in accordance with the terms of the Warrant Agreement,
the transferred beneficial interest or Definitive Warrant will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Definitive Warrants and in the Warrant Agreement and the Securities Act.

 

B-2

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4.             o            Check if Transferee will take delivery of a
beneficial interest in an Unrestricted Global Warrant or of an Unrestricted
Definitive Warrant.

 

(a)           o            Check if Transfer is pursuant to Rule 144.  (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Warrant Agreement and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act.  Upon consummation of the proposed Transfer
in accordance with the terms of the Warrant Agreement, the transferred
beneficial interest or Definitive Warrant will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Warrants, on Restricted Definitive Warrants and in the
Warrant Agreement.

 

(b)           o            Check if Transfer is Pursuant to Regulation S.  (i)
The Transfer is being effected pursuant to and in accordance with Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Warrant Agreement and any applicable blue sky securities laws of any state
of the United States and (ii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the transferred
beneficial interest or Definitive Warrant will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Warrants, on Restricted Definitive Warrants and in the
Warrant Agreement.

 

(c)           o            Check if Transfer is Pursuant to Other Exemption. 
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Warrant Agreement and any applicable blue sky securities laws
of any State of the United States and (ii) the restrictions on transfer
contained in the Warrant Agreement and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will not be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrants or Restricted
Definitive Warrants and in the Warrant Agreement.

 

This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.

 

 

 

 

[Insert Name of Transferor]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Dated:

 

 

 

 

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ANNEX A TO CERTIFICATE OF TRANSFER

 

1.  The Transferor owns and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)           o            a beneficial interest in the 144A Global Warrant

 

(b)           o            a Restricted Definitive Warrant.

 

2.  After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)           o            a beneficial interest in the:

 

(i)                o            144A Global Warrant, or

 

(ii)               o            Unrestricted Global Warrant; or

 

(b)       o                a Restricted Definitive Warrant; or

 

(c)        o                an Unrestricted Definitive Warrant,

 

in accordance with the terms of the Warrant Agreement.

 

B-4

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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE

 

Mueller Holdings (N.A.), Inc.

110 Corporate Drive, Suite 10

Portsmouth, New Hampshire  03801

Attention:  General Counsel

 

Law Debenture Trust Company of New York

767 Third Avenue, 31st Floor

New York, New York  10017
Facsimile No.:  212-750-1361
Attention:  Patrick Healy

 

Re:  Warrants

 

(CUSIP                         )

 

Reference is hereby made to the Warrant Agreement, dated as of April 29, 2004
(the “Warrant Agreement”), between Mueller Holdings (N.A.), Inc., as issuer (the
“Company”), and State Street Bank and Trust Company, as warrant agent. 
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.

 

                                                    , (the “Owner”) owns and
proposes to exchange the                        Warrant[s] or interest in such
Warrant[s] representing [                        ] Warrant[s] specified herein,
in such Warrant[s] or interests (the “Exchange”).  In connection with the
Exchange, the Owner hereby certifies that:

 

1.             Exchange of Restricted Definitive Warrants or Beneficial
Interests in a Restricted Global Warrant for Unrestricted Definitive Warrants or
Beneficial Interests in an Unrestricted Global Warrant

 

(a)               o            Check if Exchange is from beneficial interest in
a Restricted Global Warrant to beneficial interest in an Unrestricted Global
Warrant.  In connection with the Exchange of the Owner’s beneficial interest in
a Restricted Global Warrant for a beneficial interest in an Unrestricted Global
Warrant in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Global Warrants and pursuant to and in accordance
with the United States Securities Act of 1933, as amended (the “Securities
Act”), (iii) the restrictions on transfer contained in the Warrant Agreement and
the Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the beneficial interest in an Unrestricted
Global Warrant is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

 

(b)               o            Check if Exchange is from beneficial interest in
a Restricted Global Warrant to Unrestricted Definitive Warrant.  In connection
with the Exchange of the Owner’s beneficial interest in a Restricted Global
Warrant for an Unrestricted Definitive Warrant, the Owner hereby

 

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certifies (i) the Definitive Warrant is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Warrants and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Warrant Agreement and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act and (iv)
the Definitive Warrant is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.

 

(c)               o            Check if Exchange is from Restricted Definitive
Warrant to beneficial interest in an Unrestricted Global Warrant.  In connection
with the Owner’s Exchange of a Restricted Definitive Warrant for a beneficial
interest in an Unrestricted Global Warrant, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Warrants and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Warrant Agreement and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.

 

(d)               o            Check if Exchange is from Restricted Definitive
Warrant to Unrestricted Definitive Warrant.  In connection with the Owner’s
Exchange of a Restricted Definitive Warrant for an Unrestricted Definitive
Warrant, the Owner hereby certifies (i) the Unrestricted Definitive Warrant is
being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Warrants and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Warrant
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

 

2.             Exchange of Restricted Definitive Warrants or Beneficial
Interests in Restricted Global Warrants for Restricted Definitive Warrants or
Beneficial Interests in Restricted Global Warrants

 

(a)               o            Check if Exchange is from beneficial interest in
a Restricted Global Warrant to Restricted Definitive Warrant.  In connection
with the Exchange of the Owner’s beneficial interest in a Restricted Global
Warrant for a Restricted Definitive Warrant in a number equal to the number of
beneficial interests exchanged, the Owner hereby certifies that the Restricted
Definitive Warrant is being acquired for the Owner’s own account without
transfer.  Upon consummation of the proposed Exchange in accordance with the
terms of the Warrant Agreement, the Restricted Definitive Warrant issued will
continue to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Warrant and in the Warrant
Agreement and the Securities Act.

 

(b)               Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in a Restricted Global Warrant.  In connection with the
Exchange of the Owner’s Restricted Definitive Warrant for a beneficial interest
in the 144A Global Warrant in a number equal to the number of beneficial
interests exchanged, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner’s own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Warrants and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable

 

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blue sky securities laws of any state of the United States.  Upon consummation
of the proposed Exchange in accordance with the terms of the Warrant Agreement,
the beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Warrant and in the Warrant Agreement and the Securities Act.

 

This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.

 

 

 

 

[Insert Name of Transferor]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Dated:

 

 

 

 

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