Document:

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

 

 

1

 

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

 

2

 

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.

 

3

 

“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.

 

4

 

“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.

 

5

 

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.

 

6

 

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

 

7

 

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.

 

8

 

(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;

 

9

 

(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:

 

10

 

(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;

 

11

 

(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

 

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

 

(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

 

(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

 

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

 

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

 

(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

 

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

 

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

 

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

 

(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

 

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

 

(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

 

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

 

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

 

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

 

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

 

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

 

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

 

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.

 

A-1

 

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

  

 

A-2

 

[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 

 

A-1

 

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.

 

A-2

 

[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.

 

A-3

 

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-4

 

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

 

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

 

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:

  	
   

  	
   

  	
   

  
						

 

B-3

 

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

 

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 

 

C-1

 

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 

 

C-2

 

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:

  	
   

  	
   

  	
   

  
						

 

C-3Exhibit 10.2

 

	
  CREDIT

  	
  First Boston

  	
  CSFB  PRIVATE  EQUITY, INC.

  
	
  SUISSE

  	
  Private Equity

  	
   

  
	
   

  	
   

  	
  Eleven Madison Avenue

  	
  Tel   1  212 325
  2000

  
	
   

  	
   

  	
  New York, NY 10110-3629

  	
  www.csfb.com

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  September 23, 2004

  	
   

  

 

Mueller Holdings (N.A.), Inc.

Mueller Group, Inc.

500 West Eldorado Street

Decatur, IL 62522-1808

Attention: Darrell Jean

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain letter agreement dated July
23, 1999 (as amended heretofore, the “Letter Agreement”)
between DLJ Merchant Banking II, Inc., as successor in interest to Donaldson,
Lufkin & Jenrette Securities Corporation, (“DLJMB”)
and each of you (collectively, the “Company”)
pursuant to which the Company pays certain fees to DLJMB for financial advisory
services.

 

Please acknowledge below our agreement that the Engagement Period (as
defined in the Letter Agreement) is hereby extended until the earlier of (i)
August 15, 2009 and (ii) the date that the DLJ Merchant Banking Funds no longer
own in aggregate more than 50% of the equity of the Company or any successor
thereto (whether by merger, consolidation, securities purchase or
otherwise).  Such extension shall apply
to each other provision of the Letter Agreement except for the Company’s
obligation to engage Credit Suisse First Boston, LLC, as the Company’s
exclusive financial advisor, placement agent, initial purchaser, managing
underwriter or dealer manager with respect to any Transaction (as defined in
the Letter Agreement), which provision shall expire in accordance with the
terms of the initial Letter Agreement in August 2004.  The Company shall therefore have the right to
select such institution as the Company deems appropriate to act in connection
with any Transaction.

 

	
   

  	
  DLJ Merchant Banking II, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Isikow

  
	
   

  	
   

  	
  Title:

  	
  Director

  
					

 

 

Acknowledged by:

 

Mueller Holdings (N.A.), Inc.

 

 

	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Name: Walter A. Smith

  	
   

  
	
   

  	
  Title:      Treasurer

  	
   

  

 

Mueller Group, Inc.

 

 

	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Name: Walter A. Smith

  	
   

  
	
   

  	
  Title:   Treasurer

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