Document:

Exhibit
10.12

 

Execution Version

 

AMENDMENT NO. 6 TO CREDIT AGREEMENT

 

This Amendment No. 6 to
Credit Agreement (this “Amendment”)
dated as of September 3, 2009, is made by and among WALTER ENERGY,
INC., a Delaware corporation formerly known as Walter Industries, Inc.
(the “Borrower”),
BANK OF AMERICA, N.A., a national
banking association organized and existing under the laws of the United States
(“Bank of America”),
in its capacity as administrative agent for the Lenders (as defined in the
Credit Agreement (as defined below)) (in such capacity, the “Administrative Agent”),
each of the Lenders signatory hereto, each of the lenders signatory hereto
becoming a party to the Credit Agreement as a “Revolving Lender” thereunder
(each such joining lender, a “Joining Revolving Lender”)
and each of the Guarantors (as defined in the Credit Agreement) signatory
hereto.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower,
the Administrative Agent and the Lenders have entered into that certain Credit
Agreement dated as of October 3, 2005 (as amended by Amendment No. 1
to Credit Agreement and Waiver dated as of January 24, 2006, as further amended
by Amendment No. 2 to Credit Agreement and Waiver dated as of February 14,
2006, as further amended by Amendment No. 3 to Credit Agreement dated as
of September 14, 2006, as further amended by Amendment No. 4 to
Credit Agreement dated as of October 9, 2007, as further amended by
Amendment No. 5 to Credit Agreement dated as of April 30, 2008, as
hereby amended and as from time to time hereafter further amended, modified,
supplemented, restated, or amended and restated, the “Credit Agreement”;
the capitalized terms used in this Amendment not otherwise defined herein shall
have the respective meanings given thereto in the Credit Agreement), pursuant
to which the Lenders have made available to the Borrower a term loan facility
and a revolving credit facility, including a letter of credit facility and a
swing line facility; and

 

WHEREAS, each of the
undersigned Joining Revolving Lenders desire to become a party to the Credit
Agreement as “Lenders” and to have all of the rights and be obligated to
perform all of the obligations of a “Lender” thereunder; and

 

WHEREAS, each of the
Guarantors has entered into a Guaranty pursuant to which it has guaranteed
certain or all of the obligations of the Borrower under the Credit Agreement
and the other Loan Documents; and

 

WHEREAS, the Borrower
has requested that the Administrative Agent and the existing Lenders agree to
amend certain terms of the Credit Agreement, which the Administrative Agent and
the existing Lenders party hereto are willing to do on the terms and conditions
contained in this Amendment;

 

NOW,
THEREFORE, in consideration of the premises and further
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

 

1.             Amendments to Credit
Agreement.  Subject to
the terms and conditions set forth herein, the Credit Agreement, including all
schedules and exhibits thereto, is hereby amended such that, after giving
effect to all such amendments, it shall read in its entirety as attached hereto
as Exhibit A.

 

For the avoidance of doubt,
it is acknowledged and agreed that after giving effect to this Amendment and
the amendments to the Credit Agreement provided herein, the Aggregate Revolving
Credit Commitments shall be $300,000,000 (subject to an increase pursuant to Section 2.15
of the Credit Agreement, as amended hereby).

 

2.             Joining Revolving Lenders.  Each of the undersigned Joining Revolving
Lenders, by its execution of this Amendment (as hereby consented to by the
Administrative Agent, the Borrower, the L/C Issuer and the Swing Line Lender), hereby
confirms and agrees that, upon the effectiveness of this Amendment, it shall be
and become a party to the Credit Agreement as a Lender (and, in all cases, a “Revolving
Lender”) thereunder and under the other Loan Documents as if it had executed
the Credit Agreement, and shall have all of the rights and be obligated to
perform all of the obligations of a Lender thereunder, and shall have a Revolving
Credit Commitment as set forth in Paragraph 3 hereof.  Each Joining Revolving Lender hereby (a) acknowledges
that it has received a copy of the Credit Agreement and the schedules and
exhibits thereto and such other documents and information as it has deemed
appropriate to make its own credit and legal analysis and decision to become a
party to the Credit Agreement as a Lender thereunder; and (b) agrees that
it will, independently and without reliance upon the Administrative Agent or
any other Lender or any of their Related Parties and based on such documents
and information as it shall from time to time deem appropriate, continue to
make its own credit and legal decisions in taking or not taking action under or
based upon the Credit Agreement, any other Loan Document or any related
agreement or any document furnished thereunder.

 

3.             Revolving Credit Commitments.  The parties hereby agree that, upon the
effectiveness of this Amendment, the Aggregate Revolving Credit Commitments, as
reduced hereby, shall be as set forth on Annex I hereof and the
outstanding principal amount of any Revolving Loans under the Credit Agreement
shall be reallocated in accordance with such Aggregate Revolving Credit
Commitments and the requisite assignments shall be deemed to be made in such
amounts by and between the Revolving Lenders and from each Revolving Lender to
each other Revolving Lender at par (and, if necessary, to Joining Revolving
Lenders from existing Revolving Lenders who elect not to continue as Lenders
under the Credit Agreement or who reduce their commitments in connection with
this Amendment),  with the same force and effect as
if such assignments were evidenced by applicable Assignments and Assumptions
under the Credit Agreement, but without the payment of any related assignment
fee.  Notwithstanding anything to the
contrary in Section 11.06 of the Credit Agreement, no other
documents or instruments, including any Assignment and Assumption, shall be
executed in connection with these assignments (all of which requirements are
hereby waived), and such assignments shall be deemed to be made with all
applicable representations, warranties and covenants as if evidenced by an
Assignment and Assumption.  Upon the
effectiveness of this Amendment, the Revolving Lenders shall make all necessary
cash settlements in full with each other Revolving Lender (and with the Lenders
under the Credit Agreement whose Revolving Credit Commitments thereunder are
being terminated), either directly or through the Administrative Agent, as the
Administrative 

 

2

 

Agent
may direct or approve, with respect to all assignments, reallocations and other
changes in the Revolving Credit Commitments of the Revolving Lenders such that
after giving effect to such settlements each Revolving Lender’s Pro Rata
Revolving Share shall be as set forth on Annex I.

 

4.             Effectiveness; Conditions
Precedent.  The
effectiveness of this Amendment and the amendments to the Credit Agreement
provided in Paragraph 1 hereof, the joinder of the Joining Revolving
Lenders provided in Paragraph 2 hereof and the reallocation of the
Revolving Lenders’ Pro Rata Revolving Shares provided in Paragraph 3
hereof are subject to the satisfaction of each the following conditions
precedent:

 

(a)           The Administrative Agent shall have received each of
the following fees, documents or instruments in form and substance reasonably
acceptable to the Administrative Agent:

 

(i)            counterparts of this Amendment, duly executed by the
Borrower, the Administrative Agent, each Guarantor, the Required Lenders and
each Revolving Lender whose Revolving Credit Commitment will be extended or
increased pursuant to this Amendment, which counterparts may be delivered by
telefacsimile or other electronic means (including .pdf), but such delivery
will be promptly followed by the delivery of four (4) original signature pages by
each Person party hereto unless waived by the Administrative Agent;

 

(ii)           an amendment fee payable to each Lender (excluding
any Joining Revolving Lender) that executes this Amendment by 5:00 p.m.
EST on August 31, 2009, such amendment fee for each Lender’s own
account, in an amount equal to (a) for each such Revolving Lender, five
basis points (5.0 “bps”) multiplied  by such Revolving Lender’s
Revolving Credit Commitment immediately prior to the effective date of this Amendment
and (b) for each Term Loan Lender, five basis points (5.0 “bps”) multiplied
by such Term Loan Lender’s Outstanding Amount with respect to the Term
Loan immediately prior to the effective date of this Amendment;

 

(iii)          a  Commitment Fee
payable to each applicable Revolving Lender (including each Joining Revolving
Lender) as set forth in that certain Engagement Letter dated as of August 5,
2009 (the “Engagement
Letter”) among the Borrower, the Administrative Agent, Banc of
America Securities LLC (“BAS”),
SunTrust Bank, SunTrust Robinson Humphrey, Inc. (“STRH”),
Calyon New York Branch and Regions Bank;

 

(iv)          counterparts of a Revolving Loan Note, duly executed
by the Borrower in favor of each Joining Revolving Lender that requests a
Revolving Loan Note, which counterparts may be delivered by telefacsimile or
other electronic means (including .pdf), but such delivery will be promptly followed
by the delivery of one (1) original signature page unless waived by
the Administrative Agent; and

 

3

 

(v)           such other assurances, certificates, documents,
consents or opinions as the Administrative Agent reasonably may require.

 

(b)           In addition to the
Commitment Fees pursuant to the Engagement Letter, all other fees and expenses
payable to the Administrative Agent, BAS, STRH and the Lenders (including the
reasonable fees and expenses of counsel to the Administrative Agent) shall have
been paid in full (without prejudice to final settling of accounts for such
fees and expenses).

 

5.             Consent of the Guarantors;
Confirmation of Security Interest.

 

(a)           Each Guarantor hereby consents, acknowledges and
agrees to the amendment and other matters set forth herein and hereby confirms
and ratifies in all respects the Guaranty to which such Guarantor is a party
(including without limitation the continuation of such Guarantor’s payment and
performance obligations thereunder upon and after the effectiveness of this Amendment
and the amendments described in Paragraph 1 hereof)
and the enforceability of such Guaranty against such Guarantor in accordance
with its terms.

 

(b)           Each of the Borrower and each Guarantor hereby confirms
its grant as collateral security for the payment, performance and satisfaction
of all of the Borrower’s Obligations and such Guarantor’s Obligations (as
defined in the Guaranty), as applicable, and the payment and performance of its
obligations and liabilities (whether now existing or hereafter arising) under
the Security Agreement or under any of the other Loan Documents to which it is
now or hereafter becomes a party, to the Administrative Agent for the benefit
of the Secured Parties a continuing first priority security interest in and to,
and collaterally assigns to the Administrative Agent for the benefit of the
Secured Parties, the Collateral (as defined in the Security Agreement).

 

(c)           Each of the
Borrower and each Guarantor that is a party to the Pledge Agreement hereby
confirms its grant as collateral security for the payment, performance and
satisfaction of all of its Secured Obligations (as defined in the Pledge
Agreement), and the payment and performance of its obligations and liabilities
(whether now existing or hereafter arising) under the Pledge Agreement or under
any of the other Loan Documents to which it is now or hereafter becomes a
party, to the Administrative Agent for the benefit of the Secured Parties a
continuing first priority security interest in and to, and collaterally assigns
to the Administrative Agent for the benefit of the Secured Parties, the
Collateral (as defined in the Pledge Agreement).

 

(d)           Each of the Borrower and each Guarantor that is a
party to a Mortgage hereby (i) confirms its grant and conveyance, as
collateral security for the payment, performance and satisfaction of all of the
Obligations (as defined in the applicable Mortgage to which it is a party), to
the Administrative Agent for the benefit of the Secured Parties, of a
continuing first priority lien and security interest in and to, the Mortgaged
Property (as defined in the applicable Mortgage to which it is a party), and (ii) ratifies
and affirms the Mortgage to which it is a party and its obligations thereunder.

 

4

 

6.             Representations and
Warranties.  In order to
induce the Administrative Agent and the Lenders to enter into this Amendment,
the Borrower represents and warrants to the Administrative Agent and the
Lenders as follows:

 

(a)           The representations and
warranties made by the Borrower  in
Article VI of the Credit Agreement and in each of the other Loan
Documents to which it is a party are true and correct in all material respects
on and as of the date hereof, except to the extent that such representations
and warranties expressly relate to an earlier date;

 

(b)           Except as set forth in Paragraph
7 below, the Persons appearing as Guarantors on the signature pages to
this Amendment constitute all Persons who are required to be Guarantors
pursuant to the terms of the Credit Agreement and the other Loan Documents,
including without limitation all Persons who became Subsidiaries or were
otherwise required to become Guarantors after the Closing Date, and each of such
Persons has become and remains a party to a Guaranty as a Guarantor;

 

(c)           This Amendment has been duly
authorized, executed and delivered by the Borrower and Guarantors party hereto
and constitutes a legal, valid and binding obligation of such parties; and

 

(d)           After giving effect to this Amendment,
no Default or Event of Default has occurred and is continuing.

 

7.             Post-Effectiveness Obligations.  The Borrower, on behalf of Taft Coal Sales &
Associates, Inc., an Alabama corporation (“Taft”),
and Tuscaloosa Resources, Inc., an Alabama corporation (“TRI”, and together with Taft,
collectively the “Joining Guarantors”), hereby
agrees to deliver, or cause to be delivered, to the Administrative Agent on or
before October 4, 2009, each of the following:

 

(a)           a Guaranty Joinder Agreement
duly executed by each Joining Guarantor;

 

(b)           a Security Joinder Agreement duly executed by each
Joining Guarantor (with all schedules thereto appropriately completed);

 

(c)           a Pledge Agreement Supplement duly executed by
Walter Minerals, Inc. with respect to the Pledged Interests in each
Joining Guarantor in the form required by the Pledge Agreement;

 

(d)           (i) the certificates representing 100% of such
Pledged Interests and (ii) duly executed, undated stock powers or other
appropriate powers of assignment in blank affixed thereto;

 

(e)           Uniform Commercial Code financing statements naming
each Joining Guarantor as “Debtor” and naming the Administrative Agent for the
benefit of the Secured Parties as “Secured Party,” in form, substance and
number sufficient in the reasonable opinion of the Administrative Agent and its
special counsel to be filed in all Uniform Commercial Code filing offices and
in all jurisdictions in which filing is 

 

5

 

necessary to perfect in
favor of the Administrative Agent for the benefit of the Secured Parties the
Lien on the Collateral conferred under such Security Instrument to the extent
such Lien may be perfected by Uniform Commercial Code filing;

 

(f)            an opinion of counsel to each Joining Guarantor, and
Walter Minerals, Inc. with respect to the Pledge Agreement Supplement,
addressed to the Administrative Agent and the Lenders, in form and substance
reasonably acceptable to the Administrative Agent, each of which opinions may
be in form and substance, including assumptions and qualifications contained
therein, substantially similar to those opinions of counsel delivered pursuant
to Section 5.01(a) of the Credit Agreement;

 

(g)           current copies of the Organization Documents and
incumbency certificates of each such Joining Guarantor and Walter Minerals, Inc.,
minutes of duly called and conducted meetings (or duly effected consent
actions) of the Board of Directors, partners, or appropriate committees thereof
(and, if required by such Organization Documents or applicable law, of the
shareholders, members or partners) of such Person authorizing the actions and
the execution and delivery of documents described in this Paragraph 7,
all certified by the applicable Governmental Authority or appropriate officer
as the Administrative Agent may elect; and

 

(h)           such other assurances, certificates, documents,
consents or opinions as the Administrative Agent or the Required Lenders may
reasonably require.

 

The Administrative Agent may,
but shall not be obligated to, extend the time (if applicable) for the
satisfaction of any of the requirements set forth herein by up to thirty (30)
days in its sole discretion.

 

The Borrower hereby
acknowledges and agrees that the failure to satisfy any of the requirements set
forth in this Paragraph 7 within the time provided therefor (including
any extension granted by the Administrative Agent) shall constitute a default
hereunder and an additional Event of Default under the Credit Agreement for all
purposes, and, without limiting the foregoing, all rights, powers, remedies and
restrictions, including restrictions on extensions of credit, under the Loan
Documents resulting from an Event of Default shall be applicable.

 

8.             Entire Agreement.  This Amendment, together with all the Loan
Documents (collectively, the “Relevant Documents”), sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relating to such subject matter. 
No promise, condition, representation or warranty, express or implied,
not set forth in the Relevant Documents shall bind any party hereto, and no
such party has relied on any such promise, condition, representation or
warranty.  Each of the parties hereto
acknowledges that, except as otherwise expressly stated in the Relevant
Documents, no representations, warranties or commitments, express or implied,
have been made by any party to the other in relation to the subject matter
hereof or thereof.  None of the terms or
conditions of this Amendment may be changed, modified, waived or canceled
orally or otherwise, except in writing and in accordance with Section 11.01
of the Credit Agreement.

 

6

 

9.             Full Force and Effect of
Agreement.  Except as
hereby specifically amended, modified or supplemented, the Credit Agreement and
all other Loan Documents are hereby confirmed and ratified in all respects and
shall be and remain in full force and effect according to their respective
terms.

 

10.           Counterparts.  This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.  Delivery of an
executed counterpart of a signature page of this Amendment by telecopy or
other electronic means (including .pdf) shall be effective as delivery of a
manually executed counterpart of this Amendment.

 

11.           Governing Law.  This Amendment shall in all respects be
governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts executed and to be performed entirely within such
State, and shall be further subject to the provisions of Sections 11.14
and 11.15 of the Credit Agreement.

 

12.           Enforceability.  Should any one or more of the provisions of
this Amendment be determined to be illegal or unenforceable as to one or more
of the parties hereto, all other provisions nevertheless shall remain effective
and binding on the parties hereto.

 

13.           References.  All references in any of the Loan Documents
to the “Credit Agreement” shall mean the Credit Agreement, as amended hereby.

 

14.           Successors and Assigns.  This Amendment shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each of the
Guarantors and Lenders, and their respective successors, legal representatives,
and assignees to the extent such assignees are permitted assignees as provided
in Section 11.06 of the Credit Agreement.

 

[Signature pages omitted.]

 

7

 

EXHIBIT A

 

Conformed Credit Agreement
Incorporating Amendment No. 6

 

[see attached]

 

 

	
   

  	
  EXHIBIT A

  
	
   

  	
  Amendment No. 6 to Credit Agreement

  

 

	
   

  	
  Published Deal
  CUSIP Number:

  	
  93317LAD8

  
	
   

  	
  Published
  Revolver CUSIP Number:

  	
  93317LAE6

  
	
   

  	
  Published Term
  CUSIP Number:

  	
  93317LAF3

  

 

CREDIT
AGREEMENT

 

Dated as of October 3, 2005

 

among

 

 

WALTER
ENERGY, INC.,

as the Borrower,

 

BANK OF
AMERICA, N.A.,

as Administrative Agent, Swing Line Lender,

L/C Issuer and a Lender,

 

SUNTRUST
BANK,

as Co-Syndication Agent and as a Lender,

 

CALYON NEW
YORK BRANCH,

as Co-Syndication Agent and as Documentation
Agent,

 

REGIONS BANK,

as Co-Syndication Agent and as a Lender,

 

and

 

The Other Lenders Party Hereto

 

BANC OF
AMERICA SECURITIES LLC,

and

SUNTRUST
ROBINSON HUMPHREY, INC.,

as

Joint Lead Arrangers

 

BANC OF
AMERICA SECURITIES LLC,

SUNTRUST
ROBINSON HUMPHREY, INC.,

CALYON NEW YORK BRANCH,

and

REGIONS
CAPITAL MARKETS,

as Joint Bookrunners

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
  Page

  

 

ARTICLE
I.

DEFINITIONS
AND ACCOUNTING TERMS

 

	
  1.01

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.02

  	
  Other Interpretive Provisions

  	
   

  	
  39

  
	
  1.03

  	
  Accounting Terms

  	
   

  	
  39

  
	
  1.04

  	
  Rounding

  	
   

  	
  40

  
	
  1.05

  	
  Times of Day

  	
   

  	
  41

  
	
  1.06

  	
  Letter of Credit Amounts

  	
   

  	
  41

  

 

ARTICLE
II.

THE
COMMITMENTS AND CREDIT EXTENSIONS

 

	
  2.01

  	
  Term Loan

  	
   

  	
  41

  
	
  2.02

  	
  Revolving Loans

  	
   

  	
  42

  
	
  2.03

  	
  Borrowings, Conversions and Continuations of Committed Loans

  	
   

  	
  42

  
	
  2.04

  	
  Letters of Credit and Bankers’ Acceptances

  	
   

  	
  44

  
	
  2.05

  	
  Swing Line Loans

  	
   

  	
  54

  
	
  2.06

  	
  Prepayments

  	
   

  	
  56

  
	
  2.07

  	
  Termination or Reduction of Commitments

  	
   

  	
  60

  
	
  2.08

  	
  Repayment of Loans

  	
   

  	
  61

  
	
  2.09

  	
  Interest

  	
   

  	
  61

  
	
  2.10

  	
  Fees

  	
   

  	
  62

  
	
  2.11

  	
  Computation of Interest and Fees

  	
   

  	
  62

  
	
  2.12

  	
  Evidence of Debt

  	
   

  	
  63

  
	
  2.13

  	
  Payments Generally; Administrative Agent’s Clawback

  	
   

  	
  64

  
	
  2.14

  	
  Sharing of Payments by Lenders

  	
   

  	
  66

  
	
  2.15

  	
  Increase in Commitments

  	
   

  	
  66

  

 

ARTICLE
III.

SECURITY

 

	
  3.01

  	
  Security

  	
   

  	
  68

  
	
  3.02

  	
  Further Assurances

  	
   

  	
  68

  

 

i

 

	
  3.03

  	
  Information Regarding Collateral

  	
   

  	
  70

  

 

ARTICLE
IV.

TAXES,
YIELD PROTECTION AND ILLEGALITY

 

	
  4.01

  	
  Taxes

  	
   

  	
  71

  
	
  4.02

  	
  Illegality

  	
   

  	
  72

  
	
  4.03

  	
  Inability to Determine Rates

  	
   

  	
  73

  
	
  4.04

  	
  Increased Costs; Reserves on Eurodollar Rate Loans

  	
   

  	
  73

  
	
  4.05

  	
  Compensation for Losses

  	
   

  	
  75

  
	
  4.06

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  76

  
	
  4.07

  	
  Survival

  	
   

  	
  76

  

 

ARTICLE
V.

CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS

76

 

	
  5.01

  	
  Conditions of Initial Credit Extension

  	
   

  	
  76

  
	
  5.02

  	
  Conditions to all Credit Extensions

  	
   

  	
  80

  

 

ARTICLE
VI.

REPRESENTATIONS
AND WARRANTIES

 

	
  6.01

  	
  Existence, Qualification and Power; Compliance with Laws

  	
   

  	
  80

  
	
  6.02

  	
  Authorization; No Contravention

  	
   

  	
  81

  
	
  6.03

  	
  Governmental Authorization; Other Consents

  	
   

  	
  81

  
	
  6.04

  	
  Binding Effect

  	
   

  	
  81

  
	
  6.05

  	
  Financial Statements; No Material Adverse Effect

  	
   

  	
  81

  
	
  6.06

  	
  Litigation

  	
   

  	
  82

  
	
  6.07

  	
  No Default

  	
   

  	
  82

  
	
  6.08

  	
  Ownership of Property; Liens

  	
   

  	
  82

  
	
  6.09

  	
  Environmental Compliance

  	
   

  	
  82

  
	
  6.10

  	
  Insurance

  	
   

  	
  82

  
	
  6.11

  	
  Taxes

  	
   

  	
  83

  
	
  6.12

  	
  ERISA Compliance

  	
   

  	
  83

  
	
  6.13

  	
  Subsidiaries; Equity Interests

  	
   

  	
  84

  
	
  6.14

  	
  Margin Regulations; Investment Company Act

  	
   

  	
  84

  
	
  6.15

  	
  Disclosure

  	
   

  	
  84

  

 

ii

 

	
  6.16

  	
  Compliance with Laws

  	
   

  	
  84

  
	
  6.17

  	
  Intellectual Property; Licenses, Etc

  	
   

  	
  84

  

 

ARTICLE
VII.

AFFIRMATIVE
COVENANTS

 

	
  7.01

  	
  Financial Statements

  	
   

  	
  85

  
	
  7.02

  	
  Certificates; Other Information

  	
   

  	
  86

  
	
  7.03

  	
  Notices

  	
   

  	
  88

  
	
  7.04

  	
  Payment of Obligations

  	
   

  	
  88

  
	
  7.05

  	
  Preservation of Existence, Etc

  	
   

  	
  89

  
	
  7.06

  	
  Maintenance of Properties

  	
   

  	
  89

  
	
  7.07

  	
  Maintenance of Insurance

  	
   

  	
  89

  
	
  7.08

  	
  Compliance with Laws

  	
   

  	
  90

  
	
  7.09

  	
  Books and Records

  	
   

  	
  90

  
	
  7.10

  	
  Inspection Rights

  	
   

  	
  90

  
	
  7.11

  	
  Use of Proceeds

  	
   

  	
  90

  
	
  7.12

  	
  New Subsidiaries, Pledgors and Real Property

  	
   

  	
  90

  
	
  7.13

  	
  [Intentionally Omitted]

  	
   

  	
  92

  
	
  7.14

  	
  Compliance with ERISA

  	
   

  	
  92

  
	
  7.15

  	
  Further Assurances

  	
   

  	
  93

  

 

 

ARTICLE
VIII.

NEGATIVE
COVENANTS

 

	
  8.01

  	
  Liens

  	
   

  	
  93

  
	
  8.02

  	
  Investments

  	
   

  	
  94

  
	
  8.03

  	
  Indebtedness

  	
   

  	
  96

  
	
  8.04

  	
  Fundamental Changes

  	
   

  	
  98

  
	
  8.05

  	
  Dispositions

  	
   

  	
  99

  
	
  8.06

  	
  Restricted Payments

  	
   

  	
  100

  
	
  8.07

  	
  Change in Nature of Business

  	
   

  	
  101

  
	
  8.08

  	
  Transactions with Affiliates

  	
   

  	
  101

  
	
  8.09

  	
  Burdensome Agreements

  	
   

  	
  101

  
	
  8.10

  	
  Use of Proceeds

  	
   

  	
  102

  

 

iii

 

	
  8.11

  	
  Prepayment of Indebtedness; Amendment to Material Agreements

  	
   

  	
  102

  
	
  8.12

  	
  Financial Covenants

  	
   

  	
  103

  
	
  8.13

  	
  Acquisitions

  	
   

  	
  103

  
	
  8.14

  	
  Creation of New Subsidiaries

  	
   

  	
  104

  

 

ARTICLE
IX.

EVENTS
OF DEFAULT AND REMEDIES

 

	
  9.01

  	
  Events of Default

  	
   

  	
  104

  
	
  9.02

  	
  Remedies Upon Event of Default

  	
   

  	
  106

  
	
  9.03

  	
  Application of Funds

  	
   

  	
  107

  

 

ARTICLE
X.

ADMINISTRATIVE
AGENT

 

	
  10.01

  	
  Appointment and Authority

  	
   

  	
  108

  
	
  10.02

  	
  Rights as a Lender

  	
   

  	
  108

  
	
  10.03

  	
  Exculpatory Provisions

  	
   

  	
  108

  
	
  10.04

  	
  Reliance by Administrative Agent

  	
   

  	
  109

  
	
  10.05

  	
  Delegation of Duties

  	
   

  	
  110

  
	
  10.06

  	
  Resignation of Administrative Agent

  	
   

  	
  110

  
	
  10.07

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
   

  	
  111

  
	
  10.08

  	
  No Other Duties, Etc

  	
   

  	
  111

  
	
  10.09

  	
  Administrative Agent May File Proofs of Claim

  	
   

  	
  111

  
	
  10.10

  	
  Collateral and Guaranty Matters

  	
   

  	
  112

  

 

ARTICLE
XI.

MISCELLANEOUS

 

	
  11.01

  	
  Amendments, Etc

  	
   

  	
  112

  
	
  11.02

  	
  Notices; Effectiveness; Electronic Communication

  	
   

  	
  115

  
	
  11.03

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  117

  
	
  11.04

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  	
  117

  
	
  11.05

  	
  Payments Set Aside

  	
   

  	
  119

  
	
  11.06

  	
  Successors and Assigns

  	
   

  	
  119

  
	
  11.07

  	
  Treatment of Certain Information; Confidentiality

  	
   

  	
  123

  
	
  11.08

  	
  Right of Setoff

  	
   

  	
  124

  

 

iv

 

	
  11.09

  	
  Interest Rate Limitation

  	
   

  	
  125

  
	
  11.10

  	
  Counterparts; Integration; Effectiveness

  	
   

  	
  125

  
	
  11.11

  	
  Survival of Representations and Warranties

  	
   

  	
  125

  
	
  11.12

  	
  Severability

  	
   

  	
  125

  
	
  11.13

  	
  Replacement of Lenders

  	
   

  	
  125

  
	
  11.14

  	
  Governing Law; Jurisdiction; Etc

  	
   

  	
  126

  
	
  11.15

  	
  Waiver of Jury Trial

  	
   

  	
  127

  
	
  11.16

  	
  USA PATRIOT Act Notice

  	
   

  	
  127

  
	
  11.17

  	
  No Advisory or Fiduciary Responsibility

  	
   

  	
  128

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  	
  S-1

  

 

v

 

	
  SCHEDULES

  
	
   

  
	
  1.01(a)

  	
  Unrestricted Subsidiaries

  
	
  2.01

  	
  Commitments and Pro Rata Shares

  
	
  3.01

  	
  Mortgaged Real Property

  
	
  3.03

  	
  Information Regarding Collateral

  
	
  5.01

  	
  Good Standing and Foreign Qualification Jurisdictions

  
	
  6.06

  	
  Litigation

  
	
  6.09

  	
  Environmental Matters

  
	
  6.11

  	
  Proposed Tax Assessments

  
	
  6.13(a)

  	
  Subsidiaries

  
	
  6.13(b)

  	
  Other Equity Investments

  
	
  8.01

  	
  Existing Liens

  
	
  8.03

  	
  Existing Indebtedness

  
	
  11.02

  	
  Administrative Agent’s Office; Certain Addresses for Notices

  
	
  11.06

  	
  Processing and Recordation Fees

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
   

  	
  Form of

  
	
   

  	
   

  
	
  A-1

  	
  Revolving Loan Notice

  
	
  A-2

  	
  Term Loan Interest Rate Selection Notice

  
	
  B

  	
  Swing Line Loan Notice

  
	
  C-1

  	
  Term Loan Note

  
	
  C-2

  	
  Revolving Loan Note

  
	
  D-1

  	
  Compliance Certificate

  
	
  D-2

  	
  Pro Forma Effect Compliance Certificate

  
	
  E

  	
  Assignment and Assumption

  
	
  F

  	
  Guaranty Agreement

  
	
  G

  	
  Opinion Matters

  
	
  H

  	
  [Intentionally Omitted]

  
	
  I

  	
  Security Agreement

  
	
  J

  	
  Mortgage

  

 

vi

 

CREDIT
AGREEMENT

 

This CREDIT
AGREEMENT (“Agreement”)
is entered into as of October 3, 2005  among
WALTER ENERGY, INC., a Delaware
corporation formerly known as Walter Industries, Inc. (the “Borrower”), each
lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”),
and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

 

The Borrower has requested that the Lenders provide a
revolving credit facility and a term loan facility, and the Lenders are willing
to do so on the terms and conditions set forth herein.

 

In consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Defined Terms. 
As used in this Agreement, the following terms shall have the meanings
set forth below:

 

“Acceptance
Credit” means a commercial Letter of Credit in which the L/C Issuer
engages with the beneficiary of such Letter of Credit to accept a time draft.

 

“Acceptance
Documents” means such general acceptance agreements,
applications, certificates and other documents as the L/C Issuer may require in
connection with the creation of Bankers’ Acceptances.

 

“Acquisition”
means the acquisition of (i) a controlling equity or other ownership
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity or other ownership interest or upon exercise of an option or
warrant for, or conversion of securities into, such equity or other ownership
interest, or (ii) assets of another Person which constitute all or
substantially all of the assets of such Person or of a line or lines of
business conducted by such Person.

 

“Additional
Secured Indebtedness” means Indebtedness issued by the Borrower
or any of its Restricted Subsidiaries and secured by any Lien on any asset or
property of the Borrower or any of its Restricted Subsidiaries (which such Lien
is either pari passu or subordinated to the Liens
pursuant to the Loan Documents), the terms of such secured Indebtedness of
which are acceptable to the Administrative Agent and having terms consistent
with, but not limited to, the following: (a) none of the maturity date,
any scheduled payment of principal or any obligation to repurchase or prepay
such Indebtedness (whether absolute or at the option of the holder (other than
as a result of the occurrence of a specified event as agreed to by the
Administrative Agent that would constitute an Event of Default)) occurs for at
least six months following the later of (i) October 3, 2012 and (ii) the
Term Loan Maturity Date; (b) the terms of such Indebtedness contain no
financial maintenance covenants or other covenants or any other terms or
conditions that, taken as a whole, are more restrictive than the covenants,
terms and restrictions contained in 

 

 

this Agreement and the
other applicable Loan Documents; and (c) on or prior to the date of
incurrence thereof, the Borrower has delivered to the Administrative Agent a
Compliance Certificate demonstrating compliance (calculated on a pro forma
basis in accordance with Article I, as applicable), giving effect
to the incurrence of such Indebtedness, with the financial covenants set forth
in Sections 8.12(a) and (b).

 

“Adjusted
Consolidated Leverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated Funded Indebtedness as of such date less the
Adjusted Cash Balance as of such date to (b) Consolidated EBITDA for the
Four-Quarter Period most recently ended for which the Borrower has delivered
financial statements pursuant to Section 7.01(a) or (b).

 

“Adjusted
Cash Balance” means, as of any date of measurement thereof, the
amount by which the cash on the balance sheet of the Borrower and its
Restricted Subsidiaries on such date day exceeds $50,000,000.

 

“Administrative
Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative
Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

 

“Agency
Fee Letter” means the letter agreement, dated as of June 17,
2005, executed by and between the Borrower and the Administrative Agent.

 

“Aggregate
Acquisition Amount” has the meaning specified in Section 8.13.

 

“Aggregate
Commitments” means, as at any date of determination thereof, the
sum of (a) the Aggregate Revolving Credit Commitments at such date, plus
(b) the Outstanding Amount with respect to the Term Loan Facility at such
date.

 

“Aggregate
Credit Exposures” means, as at any date of determination
thereof, the sum of (i) the unused portion of the Aggregate Revolving
Credit Commitments then in effect, plus (ii) the Total Outstandings
at such time.

 

“Aggregate
Revolving Credit Commitments” means, as at any date of
determination thereof, the sum of all Revolving Credit Commitments of all
Lenders at such date.

 

“Agreement”
means this Credit Agreement.

 

2

 

“Amendment
No. 5 Effective Date” means April 30, 2008, the
effective date for that certain Amendment No. 5 to this Agreement by and
among the Borrower, the Administrative Agent and the Lenders party thereto.

 

“Amendment
No. 6 Effective Date” means September 3, 2009.

 

“Amendment
No. 6 Engagement Letter” means the letter agreement, dated
as of August 5, 2009, among the Borrower, the Administrative Agent,
SunTrust Bank, Calyon New York Branch, Regions Bank and the Arrangers.

 

“Applicable
Rate” means, from time to time, with respect to the Term Loan,
Commitment Fee, Revolving Loans, Swing Line Loans and Letter of Credit - BA
Fees, the following percentages per annum, based upon the Adjusted Consolidated
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 7.02(b):

 

	
   

  	
   

  	
   

  	
   

  	
  Term Loans

  	
   

  	
  Revolving
  Loans, Swing Line Loans

  and Letter of Credit – BA Fees

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Adjusted

  Consolidated Leverage

  Ratio

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurodollar

  Rate Loans

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurodollar
  Rate

  Loans and Letter of

  Credit - BA Fees

  	
   

  
	
  1

  	
   

  	
  Greater than or
  equal to 2.00 to 1.00

  	
   

  	
  2.00

  	
  %

  	
  3.00

  	
  %

  	
  3.00

  	
  %

  	
  4.00

  	
  %

  
	
  2

  	
   

  	
  Less than 2.00
  to 1.00 but greater than or equal to 1.00 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  2.50

  	
  %

  	
  3.50

  	
  %

  
	
  3

  	
   

  	
  Less than 1.00
  to 1.00

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  2.00

  	
  %

  	
  3.00

  	
  %

  

 

Any increase or decrease in the Applicable Rate with
respect to Revolving Loans, Swing Line Loans, Term Loans (including Segments
thereof) and Letter of Credit - BA Fees resulting from a change in the Adjusted
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant
to Section 7.02(b); provided, however, that if a
Compliance Certificate is not delivered when due in accordance with Section 7.02(b),
then Pricing Level 1 shall apply thereto as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered
until the Business Day following the date the appropriate certificate is so
delivered.  Subject to the proviso in the
preceding sentence, from the Amendment No. 6 Effective Date to the
Business Day following the date the Compliance Certificate for the fiscal
period ending September 30, 2009 is delivered or is required to be
delivered (whichever shall first occur), the Applicable Rate with respect to
the Term Loan (including Segments thereof), Revolving Loans, Swing Line Loans
and Letter of Credit - BA Fees shall be Pricing Level 3.

 

Notwithstanding anything
to the contrary contained in this definition, the determination of the
Applicable Rate for any period shall be subject to the provisions of Section 2.11(b).

 

3

 

“Approved
Fund” means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.

 

“Arrangers”
means, as of the Amendment No. 6 Effective Date, BAS and STRH, each in its
capacity as a joint lead arranger.

 

“Assignee
Group” means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.

 

“Assignment
and Assumption” means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 11.06(b)), and accepted by the
Administrative Agent, in substantially the form of Exhibit E or any
other form approved by the Administrative Agent.

 

“Attributable
Indebtedness” means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease
that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.

 

“Audited
Financial Statements” means the audited consolidated balance
sheet of the Borrower and its Non-Mueller Subsidiaries (but including US Pipe)
for the fiscal year ended December 31, 2004, and the related consolidated
statements of income or operations, retained earnings and cash flows for such
fiscal year of the Borrower and its Non-Mueller Subsidiaries (but including US
Pipe), including the notes thereto.

 

“Auditor”
has the meaning specified in Section 7.01(a).

 

“Availability
Period” means the period from and including the Closing Date to
the earliest of (a) the Revolving Credit Maturity Date, (b) the date
of termination of the Aggregate Revolving Credit Commitments pursuant to Section 2.07,
and (c) the date of termination of the commitment of each Lender to make
Loans and of the obligation of the L/C Issuer to make L/C - BA Credit
Extensions pursuant to Section 9.02.

 

“Bank
of America” means Bank of America, N.A. and its successors.

 

“Bankers’
Acceptance” or “BA” means a time draft, drawn by the beneficiary under
an Acceptance Credit and accepted by the L/C Issuer upon presentation of
documents by the beneficiary of an Acceptance Credit pursuant to Section 2.04
hereof, in the standard form for bankers’ acceptances of  the L/C Issuer.

 

“BAS”
means Banc of America Securities LLC.

 

“Base
Rate” means for any day a fluctuating rate per annum equal to
the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the
rate of interest in effect for such day as publicly announced from time to time
by Bank of America as its “prime rate,” and (c) clause (b) of
the 

 

4

 

definition of “Eurodollar
Rate” plus 1.00%.  The “prime rate”
is a rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. 
Any change in such prime rate announced by Bank of America shall take
effect at the opening of business on the day specified in the public
announcement of such change.

 

“Base
Rate Loan” means a Loan (including a Segment) that bears
interest based on the Base Rate.

 

“Base
Rate Revolving Loan” means a Revolving Loan that is a Base Rate
Loan.

 

“Base
Rate Segment” means a Segment bearing interest or to bear
interest at the Base Rate.

 

“Book
Manager” means BAS, in its capacity as sole book manager.

 

“Borrower”
has the meaning specified in the introductory paragraph hereto.

 

“Borrower
Materials” has the meaning specified in Section 7.02.

 

“Borrowing”
means any of (i) the advance of the Term Loan pursuant to Section 2.01,
(ii) a Revolving Borrowing, or (iii) a Swing Line Borrowing, as the
context may require.

 

“Business
Day” means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent’s Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.

 

“Cardem”
means Cardem Insurance Co., Ltd., a Bermuda corporation and a wholly owned
indirect Subsidiary of the Borrower.

 

“Cash
Collateralize” has the meaning specified in Section 2.04(g).

 

“Cash
Equivalents” means any of the following types of property, to
the extent owned by the Borrower or any of its Non-Mueller Subsidiaries free
and clear of all Liens (other than Liens created under the Security
Instruments):

 

(a)                                  cash,
denominated in U.S. Dollars or in a currency other than U.S. Dollars that is
freely transferable or convertible into U.S. Dollars;

 

(b)                                 readily marketable
direct obligations of the government of the United States or any agency or
instrumentality thereof, or obligations the timely payment of principal and
interest on which are fully and unconditionally guaranteed by the government of
the United States or any state or municipality thereof, in each case so long as
such obligation has an investment grade rating by S&P and Moody’s;

 

5

 

(c)                                  commercial
paper rated at least P-1 (or the then equivalent grade) by Moody’s and A-1 (or
the then equivalent grade) by S&P, or carrying an equivalent rating by a
nationally recognized rating agency if at any time neither Moody’s and S&P
shall be rating such obligations, provided that up to 25% of the
aggregate amount of Investments in Cash Equivalents pursuant to this subpart
(c) of the definition thereof may be in commercial paper that is rated
(I) at least P-1 (or the then equivalent grade) by Moody’s and at least
A-2 (or the then equivalent grade) by S&P, or (II) at least P-2 (or
the then equivalent grade) by Moody’s and at least A-1 (or the then equivalent
grade) by S&P;

 

(d)                                 insured
certificates of deposit or bankers’ acceptances of, or time deposits with any
Lender or with any commercial bank that (i) is a member of the Federal
Reserve System, (ii) issues (or the parent of which issues) commercial
paper rated as described in the first portion of clause (c) above
(without regard to the proviso), (iii) is organized under the laws of the
United States or of any state thereof and (iv) has combined capital and
surplus of at least $250,000,000, provided that no more than 25% of the
aggregate amount of Investments in Cash Equivalents pursuant to this subpart
(d) of the definition thereof may be in such items with a maturity longer
than one year;

 

(e)                                  readily
marketable general obligations of any corporation organized under the laws of
any state of the United States of America, payable in the United States of
America, expressed to mature not later than twelve months following the date of
issuance thereof and rated A or better by S&P or A2 or better by Moody’s;
and

 

(f)                                    readily
marketable shares of investment companies or money market funds that, in each
case, invest solely in the foregoing Investments described in clauses (a) through
(e) above.

 

“Cash
Income Taxes” means, with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis, for any period the aggregate
amount of all payments in respect of income taxes made in cash by the Borrower
and its Restricted Subsidiaries to any applicable Governmental Authority during
such period, after giving effect, to the extent available, to the application
of net operating losses available to the Borrower and its Restricted
Subsidiaries, but excluding in each case any payment of taxes imposed on New
Holdco and its Subsidiaries and their properties, income or assets and paid by
the Borrower or any Non-Mueller Subsidiary pursuant to any Tax Sharing
Agreement.

 

“Change
in Law” means the occurrence, after the date of this Agreement,
of any of the following: (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request,
guideline or directive (whether or not having the force of law) by any
Governmental Authority.

 

“Change
of Control” means an event or series of events by which:

 

(a)                                  any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other 

 

6

 

fiduciary or administrator of any such plan) becomes
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire
(such right, an “option right”), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
33-1/3%  or more of the equity
securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and taking into account all such securities that such person or group has the
right to acquire pursuant to any option right); or

 

(b)                                 during any
period of 24 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Borrower cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals referred
to in clauses (i) and (ii) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause (ii) and
clause (iii), any individual whose initial nomination for, or assumption
of office as, a member of that board or equivalent governing body occurs as a
result of an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group other than
a solicitation for the election of one or more directors by or on behalf of the
board of directors).

 

“Closing
Date” means October 3, 2005.

 

“Coal”
means all of the coal owned, leased or subject to mineral rights owned or
leased by any Coal Mining Entity and (i) located on, under, or within, or (ii) produced
and severed from, the properties owned or leased by any such Coal Mining
Entity.

 

“Coal
Mining Entities” means individually or collectively as the
context may indicate, Jim Walter Resources, Inc. and its Subsidiaries,
along with any successor entity that at any time after the Closing Date
operates any of the mines operated by Jim Walter Resources, Inc. or any of
its Subsidiaries as of the Closing Date.

 

“Code”
means the Internal Revenue Code of 1986.

 

“Collateral”
means, collectively, all personal and real property (including mineral rights)
of the Borrower, any Non-Mueller Subsidiary or any other Person in which the
Administrative Agent or any Lender is granted a Lien under any Security
Instrument as security for all or any portion of the Obligations or any other
obligation arising under any Loan Document.

 

“Commitment
Fee” has the meaning specified in Section 2.10(a).

 

“Compliance
Certificate” means a certificate substantially in the form of Exhibit D-1.

 

7

 

“Consolidated
Capital Expenditures” means, with respect to the Borrower and
its Restricted Subsidiaries on a consolidated basis, for any period the sum of
(without duplication) (i) all expenditures (whether paid in cash or
accrued as liabilities) by the Borrower or any Restricted Subsidiary during
such period for items that would be classified as “property, plant or equipment”
or comparable items on the consolidated balance sheet of the Borrower and its
Restricted Subsidiaries, including without limitation all transactional costs
incurred in connection with such expenditures provided the same have been
capitalized (but excluding the amount of any Consolidated Capital Expenditures
paid for with proceeds of property insurance or casualty insurance as evidenced
in writing and submitted to the Administrative Agent together with any
Compliance Certificate delivered pursuant to Section 7.02(b)), and (ii) any
portion of the purchase price of an Acquisition which is accounted for as a
capital expenditure.

 

“Consolidated
Cash Interest Charges” means, for any period, for the Borrower
and its Restricted Subsidiaries on a consolidated basis, that portion of
Consolidated Interest Charges paid or payable in cash during such period, but
excluding prepayments or similar premiums paid in cash in connection with any
prepayment, repurchase or redemption of Consolidated Funded Indebtedness.

 

“Consolidated
Current Assets” means, with respect to the Borrower and its
Non-Mueller Subsidiaries on a consolidated basis, all assets (other than cash,
restricted cash and cash equivalents) that are expected to be realized in cash,
sold in the ordinary course of business, or consumed within one year or which
would be classified as a current asset.

 

“Consolidated
Current Liabilities” means, with respect to the Borrower and its
Non-Mueller Subsidiaries on a consolidated basis, all liabilities that by their
terms are payable within one year, but excluding in all cases Indebtedness of
the Borrower and its Non-Mueller Subsidiaries and accrued interest related to
MSH Trusts.

 

“Consolidated
EBITDA” means, for any period and in each case without
duplication, with respect to the Borrower and its Non-Mueller Subsidiaries, on
a consolidated basis determined in accordance with GAAP, an amount equal to:

 

(a)                                  Consolidated Net Income for
such period,

 

plus                       (b)                                  Consolidated
Interest Charges for such period, to the extent deducted in computing
Consolidated Net Income,

 

plus                       (c)                                   the provision
for federal, state, local and foreign income taxes payable for such period, to
the extent deducted in computing Consolidated Net Income (but excluding therefrom
any provision for taxes imposed on New Holdco and its Subsidiaries or their
properties, income or assets and paid or payable by the Borrower or any
Non-Mueller Subsidiary pursuant to any Tax Sharing Agreement),

 

plus                       (d)                                  depreciation
and depletion expense and all other non-cash charges and expenses, to the
extent deducted in computing Consolidated Net Income,

 

8

 

plus                       (e)                                   amortization
expense, to the extent deducted in computing Consolidated Net Income,

 

minus              (f)                                     the gain (or plus
the loss or any associated write-down of assets) (net of any tax effect)
resulting from the sale of any capital assets other than in the ordinary course
of business to the extent added (deducted) in computing Consolidated Net Income,

 

minus              (g)                                  extraordinary
nonrecurring after-tax gains (or plus extraordinary nonrecurring
non-cash after-tax losses) to the extent added (deducted) in computing
Consolidated Net Income,

 

minus              (h)                                  any gain
resulting from any write-up of assets to the extent added in computing
Consolidated Net Income,

 

plus                       (i)                                      cash
restructuring charges not to exceed $10,000,000 in the aggregate from the
Closing Date, to the extent deducted in computing Consolidated Net Income

 

plus                       (j)                                      any non-cash
expense arising from other postemployment benefits to the extent deducted in
computing Consolidated Net Income,

 

plus                       (k)                                   non-cash
charges resulting from the application of Statement of Financial Accounting
Standards No. 142, to the extent deducted in computing Consolidated Net
Income,

 

minus              (l)                                      any cash
expenditure made in connection with other postemployment benefits to the extent
such expenditures are not deducted in computing Consolidated Net Income, and

 

plus                       (m)                                any amounts
representing mark-to-market losses (or minus mark-to-market gains) that
must be recognized currently in Consolidated Net Income under Financial
Accounting Standards Board Statement 133;

 

provided, however, (i) Consolidated EBITDA shall
be decreased by the amount of any cash expenditures in such period related to
non-cash charges added back to Consolidated Net Income in computing
Consolidated EBITDA during any prior periods and (ii) notwithstanding
anything to the contrary in this definition, Consolidated EBITDA shall not be
increased by adding to Consolidated Net Income any amount representing the
minority interest of a Person other than the Borrower or a Non-Mueller
Subsidiary in any joint venture whose results of operations are consolidated
with the Borrower’s in accordance with GAAP.

 

“Consolidated
Fixed Charge Coverage Ratio” means, as of any date of
determination, the ratio of (i) Consolidated EBITDA for the Four-Quarter
Period ending on such date minus (without duplication) Cash Income Taxes
for such period to (ii) Consolidated Fixed Charges for such period.

 

9

 

“Consolidated
Fixed Charges” means, with respect to the Borrower and its
Restricted Subsidiaries for any period ending on the date of computation
thereof, the sum of, without duplication, (i) Consolidated Cash Interest
Charges, (ii) Restricted Payments (but excluding those Restricted Payments
made to repurchase, redeem or acquire shares of the capital stock of the
Borrower permitted under Section 8.06), and (iii) Consolidated
Principal Payments, all determined on a consolidated basis in accordance with
GAAP (except Consolidated Principal Payments with respect to Attributable
Indebtedness shall be included in any event).

 

“Consolidated
Funded Indebtedness” means, as of any date of determination, for
the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum
of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments (but excluding Indebtedness permitted by Section 8.03(i)),
(b) all purchase money Indebtedness, (c) all direct obligations
arising under standby and commercial letters of credit (excluding the undrawn
amount thereof), bankers’ acceptances (including all BAs hereunder), bank
guaranties (excluding the amounts available thereunder as to which demand for
payment has not yet been made), surety bonds (excluding the amounts available
thereunder as to which demand for payment has not yet been made) and similar
instruments, (d) all obligations in respect of the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business), (e) Attributable Indebtedness in respect of capital
leases and Synthetic Lease Obligations, (f) without duplication, all
Guarantees with respect to outstanding Indebtedness of the types specified in clauses
(a) through (e) above of Persons other than the Borrower
or any Restricted Subsidiary, and (g) all Indebtedness of the types
referred to in clauses (a) through (f) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrower or a Restricted
Subsidiary is a general partner or joint venturer, to the extent such
Indebtedness is recourse to the Borrower or such Restricted Subsidiary.

 

“Consolidated
Interest Charges” means, for any period, for the Borrower and
its Restricted Subsidiaries on a consolidated basis, the sum of the following
(without duplication), in each case net of interest income earned (without
duplication) on cash balances or under Swap Contracts hedging against, or
otherwise entered into to manage risks relating to, fluctuations in interest
rates to the extent such interest income is included in the calculation of
Consolidated Net Income: (a) all interest, (b) the current amortized
portion of premium payments, debt discount, fees (including fees payable in
respect of Swap Contracts hedging against, or otherwise entered into to manage
risks relating to, fluctuations in interest rates), charges and related
expenses of the Borrower and its Restricted Subsidiaries in connection with
borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, (c) the portion of rent expense of the
Borrower and its Restricted Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP, and (d) the
amount of payments in respect of Synthetic Lease Obligations that are in the
nature of interest.

 

“Consolidated
Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated
EBITDA for the Four-Quarter Period most recently ended for which the Borrower
has delivered financial statements pursuant to Section 7.01(a) or
(b).

 

10

 

“Consolidated
Net Income” means, for any period, for the Borrower and its
Non-Mueller Subsidiaries on a consolidated basis, the net income after taxation
of the Borrower and its Non-Mueller Subsidiaries for that period.

 

“Consolidated
Principal Payments” means, at any date of measurement thereof,
payments of Consolidated Funded Indebtedness that were scheduled to be made
(including adjustments for any mandatory prepayments previously made) during
the Four-Quarter Period ending on the date of measurement thereof.

 

“Consolidated
Senior Secured Indebtedness” means, as of any date of
determination, all Consolidated Funded Indebtedness that, as of such date, is
secured by any Lien on any asset or property of the Borrower or any of its
Non-Mueller Subsidiaries.

 

“Consolidated
Senior Secured Leverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated Senior Secured Indebtedness
as of such date to (b) Consolidated EBITDA for the Four-Quarter
Period most recently ended for which the Borrower has delivered financial
statements pursuant to Section 7.01(a) or (b), as such
ratio is set forth in a Pro Forma Effect Compliance Certificate.

 

“Consolidated
Total Assets” means, as of any date on which the amount thereof
is to be determined, the net book value of all assets of the Borrower and its
Restricted Subsidiaries as determined on a consolidated basis.

 

“Consolidated
Working Capital” means, as of any date on which the amount
thereof is to be determined, the excess of Consolidated Current Assets over
Consolidated Current Liabilities.

 

“Contractual
Obligation” means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have
meanings correlative thereto.  Without
limiting the generality of the foregoing, a Person shall be deemed to be
Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 10% or more of the securities having ordinary voting
power for the election of directors, managing general partners or the
equivalent.

 

“Core
Business” means any material line of business conducted by the
Borrower and its Non-Mueller Subsidiaries as of the Amendment No. 6
Effective Date and any business substantially related or incidental thereto.

 

“Cost
of Acquisition” means, with respect to any Acquisition, as at
the date of entering into any agreement therefor, the sum of the following
(without duplication):  (i) the
amount of any cash and fair market value of other property (excluding the value
of any capital stock, warrants or options to acquire capital stock of the
Borrower or any Non-Mueller Subsidiary and the unpaid principal amount of any
debt instrument) given as consideration, (ii) the amount (determined by
using the face amount or the amount payable at maturity, whichever is greater)
of 

 

11

 

any Indebtedness
incurred, assumed or acquired by the Borrower or any Non-Mueller Subsidiary in
connection with such Acquisition, and (iii) all additional purchase price
amounts in the form of earnouts and other contingent obligations that are to be
paid in cash and that should be recorded on the financial statements of the
Borrower and its Non-Mueller Subsidiaries in accordance with GAAP, (iv) all
amounts paid in cash in respect of covenants not to compete, and consulting
agreements that should be recorded on financial statements of the Borrower and
its Non-Mueller Subsidiaries in accordance with GAAP, (v) the aggregate
fair market value of all other consideration given by the Borrower or any
Non-Mueller Subsidiary in connection with such Acquisition (but excluding the
value of any capital stock, warrants or options to acquire capital stock of the
Borrower or any Non-Mueller Subsidiary), and (vi) out-of-pocket
transaction costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such transaction, and other similar
transaction costs so incurred and capitalized in accordance with GAAP.

 

“Credit
Extension” means each of the following: (a) a Borrowing and
(b) an L/C — BA Credit Extension.

 

“Debtor
Relief Laws” means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights
of creditors generally.

 

“Default”
means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would be an Event of
Default.

 

“Default
Rate” means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate with respect to Base Rate Loans plus (c) 2%
per annum; provided, however, that (i) with respect to a
Eurodollar Rate Loan, until the end of the Interest Period during which the
Default Rate is first applicable, the Default Rate shall be an interest rate
equal to the interest rate (including any Applicable Rate) otherwise applicable
to such Eurodollar Rate Loan plus 2% per annum, and thereafter as set
forth in the portion of this sentence preceding this proviso, and (ii) with
respect to Letter of Credit — BA Fees, the Default Rate shall equal the Letter
of Credit — BA Fee, then in effect plus 2% per annum, in each case to
the fullest extent permitted by applicable Laws.

 

“Defaulting
Lender” means any Lender that (a) has failed to fund any
portion of the Revolving Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder within one Business Day of
the date when due, unless the subject of a good faith dispute, or (c) has
been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.

 

“Direct
Foreign Subsidiary” means a Non-Mueller Subsidiary other than a
Domestic Subsidiary a majority of whose Voting Securities, or a majority of
whose Subsidiary Securities, are owned by the Borrower or a Domestic
Subsidiary.

 

12

 

“Disposition”
or “Dispose”
means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction, and including any Qualified Homebuilding
Transaction) of any property by any Person, including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated therewith.

 

“Dividend
Distribution” means the distribution by Mueller Group to Mueller
Water Products, and the further distribution by Mueller Water Products to New
Holdco of a dividend on or prior to the Closing Date of not less than
$400,000,000.

 

“Documentation
Agent” means Calyon New York Branch, in its capacity as
documentation agent.

 

“Dollar”
and “$”
mean lawful money of the United States.

 

“Domestic
Subsidiary” means any Non-Mueller Subsidiary that is organized
under the laws of any political subdivision of the United States (but excluding
any territory or possession thereof).

 

“Eligible
Assignee” means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent and, in the case
of any assignment of a Revolving Credit Commitment, the L/C Issuer and the
Swing Line Lender, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

“Entity
Conversion” means, individually or collectively as the context
may indicate, the conversion under the general corporate law of the state of
Delaware or Alabama, as applicable, of (a) United States Pipe and Foundry
Company, Inc., an Alabama corporation, into United States Pipe and
Foundry, LLC, an Alabama limited liability company, (b) Mueller Water
Products, Inc, a Delaware corporation, into Mueller Water Products, LLC, a
Delaware limited liability company, and (c) Mueller Group, Inc., a
Delaware corporation, into Mueller Group, LLC, a Delaware limited liability
company.

 

“Environmental
Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

“Environmental
Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation,
fines, penalties or indemnities), of the Borrower, any other Loan Party or any
of their respective Non-Mueller Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous

 

13

 

Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

 

“Equity
Interests” means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person,
all of the warrants, options or other rights for the purchase or acquisition
from such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, and all of the other ownership or profit interests
in such Person (including partnership, member or trust interests therein),
whether voting or nonvoting, and whether or not such shares, warrants, options,
rights or other interests are outstanding on any date of determination.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974.

 

“ERISA
Affiliate” means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

 

“ERISA
Event” means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from
a Pension Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing by the Borrower or any ERISA
Affiliate or the PBGC of a notice of intent to terminate, the treatment by the
PBGC of a Pension Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Borrower or any ERISA Affiliate.

 

“Eurodollar
Rate” means:

 

(a)           for
any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum
equal to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period or, (ii) if such rate is not available at such time for any reason,
the rate per annum determined by the Administrative Agent to be the rate at
which deposits in Dollars for delivery on the first day of such Interest Period
in same day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America and with a term 

 

14

 

equivalent to such
Interest Period would be offered by Bank of America’s London Branch to major banks
in the London interbank eurodollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of
such Interest Period; and

 

(b)           for
any interest calculation with respect to a Base Rate Loan, the rate per annum
equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time two
Business Days prior to such date (provided that if such day is not a
Business Day, the next preceding Business Day) for Dollar deposits being
delivered in the London interbank market for a term of one month commencing
that day or (ii) if such published rate is not available at such time for
any reason, the rate per annum determined by the Administrative Agent to be the
rate at which deposits in Dollars for delivery on the date that is two Business
Days prior to such date in same day funds in the approximate amount of the Base
Rate Loan being made or maintained by Bank of America and with a term equal to
one month would be offered by Bank of America’s London Branch to major banks in
the London interbank Eurodollar market at their request.

 

“Eurodollar
Rate Loan” means a Loan (including a Segment) that bears
interest at a rate based on the Eurodollar Rate (excluding any Base Rate Loan
the interest rate on which is determined by reference to the Eurodollar Rate
component of the Base Rate).

 

“Eurodollar
Rate Segment” means a Segment bearing interest or to bear
interest at the Eurodollar Rate.

 

“Event
of Default” has the meaning specified in Section 9.01.

 

“Excess
Cash Flow” means, with respect to the Borrower and its
Non-Mueller Subsidiaries on a consolidated basis for any fiscal year, the
following:

 

(a)           Consolidated EBITDA for such period (but adjusted to
include the effect of cash losses or gains added or deducted pursuant to part
(f) or part (g) of the definition of Consolidated EBITDA),

 

minus

 

(b)           the sum of (i) the change in Consolidated
Working Capital as at the end of such fiscal year; plus (ii) Consolidated
Capital Expenditures paid in cash during such period; plus (iii) Consolidated
Cash Interest Charges for such period; plus (iv) taxes paid in cash
for such period and added in the calculation of Consolidated EBITDA pursuant to
part (c) of the definition thereof;  plus (v) the aggregate amount of all scheduled
payments of Consolidated Funded Indebtedness made during such period; plus
(vi) the aggregate amount of any optional prepayments of the Term Loan
made by the Borrower pursuant to Section 2.06(a) hereof during
such period; plus (vii) the aggregate amount of any required prepayments
of the Term Loan made by the Borrower pursuant to Section 2.06(d) hereof
during such period; and plus (viii) Restricted Payments in the
nature of ordinary quarterly dividends made in cash during such period.

 

“Exchange
Act” means the Securities Exchange Act of 1934 and the
regulations promulgated thereunder.

 

15

 

“Excluded
Taxes” means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) taxes imposed
on or measured by its overall net income (however denominated), and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 11.13), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 4.01(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section 4.01(a).

 

“Existing
Credit Agreement” means that certain Credit Agreement dated as
of April 17, 2003 among the Borrower, Bank of America, as agent, and a
syndicate of lenders, as amended through the Closing Date.

 

“Existing
Mueller Credit Agreement” means that certain Second Amended and
Restated Credit Agreement dated as of April 23, 2004 among Mueller Group,
Credit Suisse First Boston, acting through its Cayman Islands Branch, as
administrative agent, and a syndicate of lenders, as amended through the Closing
Date.

 

“Facility
Termination Date” means the date as of which all of the
following shall have occurred:  (a) the
Borrower shall have permanently terminated the Revolving Credit Facility and
the Term Loan Facility by final payment in full of all Outstanding Amounts,
together with all accrued and unpaid interest and fees thereon, other than (i) the
undrawn portion of Letters of Credit, (ii) the aggregate face amount of
all outstanding Bankers’ Acceptances and (iii) all fees relating to any
Letters of Credit accruing after such date (which fees shall be payable solely
for the account of the L/C Issuer and shall be computed (based on interest
rates and the Applicable Rate then in effect) on such undrawn amounts to the
respective expiry dates of the Letters of Credit), in each case as have been
fully Cash Collateralized or as to which other arrangements with respect
thereto satisfactory to the Administrative Agent and the L/C Issuer shall have
been made, (b) the Aggregate Revolving Credit Commitments, if any, shall
have terminated or expired, (c) the obligations and liabilities of the
Borrower and each other Loan Party under all Related Credit Arrangements shall
have been fully, finally and irrevocably paid and satisfied in full and the
Related Credit Arrangements shall have expired or been terminated, or other
arrangements satisfactory to the counterparties shall have been made with
respect thereto, and (d) each Guarantor shall have fully, finally and
irrevocably paid and satisfied in full its respective obligations and
liabilities arising under the Loan Documents, (except for future obligations
consisting of continuing indemnities and other contingent Obligations of the
Borrower or any Loan Party that may be owing to the Administrative Agent or any
of its Related Parties or any Lender pursuant to the Loan Documents and
expressly survive termination of this Agreement).

 

16

 

“Federal
Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by
the Administrative Agent.

 

“Foreign
Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax
purposes.  For purposes of this
definition, the United States, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.

 

“Four-Quarter
Period” means a period of four full consecutive fiscal quarters
of the Borrower and its Non-Mueller Subsidiaries, taken together as one
accounting period.

 

“FRB”
means the Board of Governors of the Federal Reserve System of the United
States.

 

“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course.

 

“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and pronouncements
of the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession in the United
States, that are applicable to the circumstances as of the date of
determination, consistently applied.

 

“Governmental
Authority” means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government
(including any supra-national bodies such as the European Union or the European
Central Bank).

 

“Granting
Lender” has the meaning specified in Section 11.06(h).

 

“Guarantee”
means, as to any Person, any (a) any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such 

 

17

 

Indebtedness or other
obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or
other obligation of the payment or performance thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Indebtedness to obtain any such Lien). 
The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantors”
means, collectively, all Restricted Subsidiaries of the Borrower executing a
Guaranty on the Closing Date and all other Subsidiaries that are at any time
after the Closing Date required to enter into a Guaranty Joinder Agreement
pursuant to Section 7.12.

 

“Guaranty”
means, collectively, the Subsidiary Guaranty and the Mid-State Homes Guaranty.

 

“Guaranty
Joinder Agreement” means each Guaranty Joinder Agreement,
substantially in the form thereof attached to the Subsidiary Guaranty, executed
and delivered by a Guarantor to the Administrative Agent pursuant to Section 7.12,
as amended, modified, supplemented or amended and restated.

 

“Hazardous
Materials” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Homebuilding
Assets” means, individually or collectively, the MSH Trusts and
all interests therein retained or acquired by the Borrower or any Non-Mueller
Subsidiary, Mortgage Accounts, Third Party Mortgage Accounts, the assets of and
Equity Interests in JWH Holding Company, LLC or any direct or indirect
Subsidiary of JWH Holding Company, LLC, tracts of land relating solely to the
homebuilding business of the Borrower,
and, if applicable, the Equity Interests in any QHT Interim Entity.

 

“Honor
Date” has the meaning set forth in Section 2.04(c).

 

“Increase Effective Date”
has the meaning set forth in Section 2.15(d).

 

18

 

“Increased Revolving Credit
Commitment Amount” has the meaning set forth in Section 2.15(a).

 

“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

 

(a)           all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

 

(b)           all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)           net obligations of such Person under any Swap Contract;

 

(d)           all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts payable in
the ordinary course of business);

 

(e)           indebtedness (excluding prepaid interest thereon) secured
by a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;

 

(f)            capital leases and Synthetic Lease Obligations; and

 

(g)           all Guarantees of such Person in respect of any of the
foregoing.

 

For all purposes hereof, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which such Person is a general partner or a joint venturer, to the
extent such Indebtedness is recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.  The amount of
any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such
date.

 

“Indemnified
Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees”
has the meaning specified in Section 11.04(b).

 

“Information”
has the meaning specified in Section 11.07.

 

“Interest
Payment Date” means, (a) as to any Eurodollar Rate Loan,
the last day of the relevant Interest Period, any date that such Loan is
prepaid or converted, in whole or in part, and the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as applicable; provided, however,
that if any Interest Period for a Eurodollar Rate Loan exceeds three months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also 

 

19

 

be Interest Payment
Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), (i) the
fifteenth (or the next Business Day after the fifteenth, if the fifteenth is
not a Business Day) of each January, April, July and October with
respect to interest accrued through the last day of each fiscal quarter of the
Borrower ending immediately prior to such date, and (ii) the Revolving
Credit Maturity Date or the Term Loan Maturity Date, as applicable, with
respect to interest accrued through such date; provided, further,
that interest accruing at the Default Rate shall be payable from time to time
upon demand of the Administrative Agent.

 

“Interest
Period” means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to
or continued as a Eurodollar Rate Loan and ending, in each case, on the date
one, two, three or six months thereafter, as selected by the Borrower in its
Revolving Loan Notice or Term Loan Interest Rate Selection Notice; provided
that:

 

(i)            any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;

 

(ii)           any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and

 

(iii)          no Interest Period shall extend beyond (a) with
respect to Revolving Loans, the Revolving Credit Maturity Date, and (b) with
respect to the Term Loan, the date set forth in part (a) of the definition
of the Term Loan Maturity Date.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance
or capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute a business unit, or (d) the purchase of land and related
infrastructure improvements.  For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

“IP
Rights” has the meaning set forth in Section 6.17.

 

“IRS”
means the United States Internal Revenue Service.

 

“ISP”
means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

 

20

 

“Issuer
Documents” means with respect to any Letter of Credit or
Acceptance Credit, the Letter of Credit Application, and any other document,
agreement and instrument entered into by the L/C Issuer and the Borrower (or
any Subsidiary) or in favor the L/C Issuer and relating to any such Letter of
Credit or Acceptance Credit.

 

“Joinder
Agreements” means, collectively, Guaranty Joinder Agreements,
the Pledge Joinder Agreements and the Security Joinder Agreements.

 

“Joint
Fee Letter” means the letter agreement, dated as of June 17,
2005, among the Borrower, the Administrative Agent and the Arrangers.

 

“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.

 

“L/C
— BA Advance” means, with respect to each Revolving Lender, such
Revolving Lender’s funding of its participation in any L/C — BA Borrowing in
accordance with its Pro Rata Revolving Share.

 

“L/C
— BA Borrowing” means an extension of credit resulting from (i) a
drawing under any Letter of Credit (other than an Acceptance Credit) or (ii) a
payment of a Bankers’ Acceptance upon presentation, in each case which has not
been reimbursed on the date when made or refinanced as a Revolving Borrowing.

 

“L/C
— BA Credit Extension” means, with respect to any Letter of
Credit or Bankers’ Acceptance, the issuance thereof or extension of the expiry
date thereof, or the renewal or increase of the amount thereof.

 

“L/C
— BA Obligations” means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit, plus the
sum of the maximum aggregate amount which is, or at any time thereafter may
become, payable by the L/C Issuers under all then outstanding Bankers’
Acceptances, plus the aggregate of all Unreimbursed Amounts, including all L/C —
BA Borrowings.  For purposes of computing
the amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

 

“L/C
Issuer” means each of Bank of America and SunTrust Bank, each in
its capacity as an issuer of Letters of Credit and Bankers’ Acceptances  hereunder, or any successor issuer of
Letters of Credit and Bankers’ Acceptances  hereunder.  At any time there is more than one L/C
Issuer, all singular references to the L/C Issuer shall mean any L/C Issuer,
either L/C Issuer, each 

 

21

 

L/C Issuer, the L/C
Issuer that has issued the applicable Letter of Credit, or both L/C Issuers, as
the context may require.

 

“Lender”
has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the L/C Issuer and the Swing Line Lender.

 

“Lending
Office” means, as to any Lender, the office or offices of such
Lender described as such in such Lender’s Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.

 

“Letter
of Credit” means any letter of credit issued hereunder.  A Letter of Credit may be a commercial letter
of credit (including an Acceptance Credit) or a standby letter of credit.

 

“Letter
of Credit Application” means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time
in use by the L/C Issuer and, in the case of any Acceptance Credit, shall
include the related Acceptance Documents.

 

“Letter
of Credit — BA Expiration Date” means the day that is seven days
prior to the Revolving Credit Maturity Date then in effect (or, if such day is
not a Business Day, the next preceding Business Day).

 

“Letter
of Credit — BA Fees” means, collectively or individually as the
context may indicate, the fees with respect to Letters of Credit described in Sections
2.04(i)(i) and (ii).

 

“Letter
of Credit — BA Sublimit” means an amount equal to the lesser of (a) $100,000,000
and (b) the Aggregate Revolving Credit Commitments.  The Letter of Credit — BA Sublimit is part
of, and not in addition to, the Aggregate Revolving Credit Commitments.

 

“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loan”
means an extension of credit by a Lender to the Borrower under Article II
in the form of a Revolving Loan, a Term Loan or a Swing Line Loan, including
any Segment.

 

“Loan
Documents” means this Agreement, each Note, each Guaranty
(including each Guaranty Joinder Agreement), each Security Instrument, each
Revolving Loan Notice, each Term Loan Interest Rate Selection Notice, each
Issuer Document and each Compliance Certificate, and all other instruments and
documents heretofore or hereafter executed or delivered to or in favor of any
Lender or the Administrative Agent in connection with the Loans made and
transactions contemplated by this Agreement.

 

“Loan
Parties” means, collectively, the Borrower, each Guarantor and
each other Person providing Collateral pursuant to any Security Instrument.

 

22

 

“Material
Adverse Effect” means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, assets, properties,
liabilities (actual or contingent), condition (financial or otherwise) or
prospects of the Borrower and its Non-Mueller
Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party.

 

“Material
Subsidiary” means, as of any date of determination thereof (and,
as of the Closing Date, giving effect to the US Pipe Contribution), each direct
or indirect Restricted Subsidiary of the Borrower that (i) has total
assets (including Equity Interests in other Subsidiaries) of equal to or
greater than 3% of Consolidated Total Assets (calculated as of the most recent
fiscal period with respect to which the Administrative Agent shall have
received financial statements required to be delivered pursuant to Sections
7.01(a) or (b) (the “Required Financial Information”)), or (ii) has
revenues equal to or greater than 3% of the total revenues (on a consolidated
basis) of the Borrower and its Restricted Subsidiaries (calculated for the most
recent period for which the Administrative Agent has received the Required
Financial Information); provided, however, that notwithstanding
the foregoing, the term “Material Subsidiaries” shall mean Restricted
Subsidiaries of the Borrower that together have assets equal to not less than
90% of Consolidated Total Assets (calculated as described above) and revenues
of not less than 90% of the total revenues of the Borrower and its Restricted
Subsidiaries (calculated as described above).

 

“Maximum
Restricted Payment Amount” means, with respect to any fiscal
year of the Borrower, $25,000,000 plus 50% of Consolidated Net Income
for the immediately preceding fiscal year (without carrying forward any amount
from a prior fiscal year).

 

“Merger”
means the acquisition by the Borrower of all of the issued and outstanding
capital stock of Mueller Water Products by means of the merger of Mueller Water
Products with and into JW MergerCo, Inc., a Delaware corporation and a
direct Subsidiary of New Holdco prior to giving effect to the Merger, with
Mueller Water Products being the surviving entity of such merger.

 

“Merger
Agreement” means that certain Agreement and Plan of Merger dated
as of June 17, 2005 by and among Mueller Water Products, the Borrower, JW
MergerCo, Inc. and DLJ Merchant Banking II, Inc., as the Stockholders’
Representative (including all schedules and exhibits thereto and the Disclosure
Letter (as defined therein)).

 

“Merger
Documents” means, individually or collectively as the context
may indicate, (a) the Merger Agreement, (b) the Escrow Agreement (as
defined in the Merger Agreement), (c) the Voting Agreement (as defined in
the Merger Agreement) and (d) each other material agreement, instrument
and document relating to the Merger.

 

“Mid-State
Capital” means Mid-State Capital Corporation, a Delaware
corporation.

 

“Mid-State
Holdings” means Mid-State Holdings Corporation, a Delaware
corporation.

 

23

 

“Mid-State
Homes” means Mid-State Homes, Inc., a Florida corporation.

 

“Mid-State
Homes Guaranty” means that certain Guaranty Agreement (Mid-State
Homes and Walter Mortgage) dated as of the date hereof by each of Mid-State
Homes, Inc., a Florida corporation, and Walter Mortgage Company, a
Delaware corporation, in favor of the Administrative Agent (on behalf of the
Secured Parties) and subsequently released pursuant to that certain Release
Agreement dated as of May 19, 2009.

 

“Mine”
means any excavation or opening into the earth now and hereafter made from
which Coal is or can be extracted on or from any of the properties owned or
leased by any Loan Party, together with all appurtenances, fixtures,
structures, improvements, and all tangible property of whatsoever kind or
nature in connection therewith.

 

“Mineral
Rights Mortgage” means, individually or collectively as the
context may indicate, those mortgages, leasehold mortgages, deeds of trust,
leasehold deeds of trust, deeds to secure debt, leasehold deeds to secure debt
and comparable real estate Lien documents delivered on or after the Closing
Date to the Administrative Agent with respect to any Mortgaged Coal Property.

 

“Moody’s”
means Moody’s Investors Service, Inc. and any successor thereto.

 

“Morgan
Stanley” means Morgan Stanley Senior Funding, Inc. and its
successors.

 

“Mortgage”
means, individually or collectively as the context may indicate, those
mortgages, deeds of trust, deeds to secure debt and comparable real estate Lien
documents delivered on or after the Closing Date to the Administrative Agent
with respect to any Mortgaged Fee Property, substantially in the form attached
hereto as Exhibit J.

 

“Mortgage
Accounts” means certain building and installment contracts and
related mortgages and instruments originated by Jim Walter Homes, LLC,
Neatherlin Homes, LLC, Dream Homes, LLC, Dream Homes USA, Inc., Crestline
Homes, Inc. and notes and mortgages and related instruments originated by
Walter Mortgage Company, each a Non-Mueller Subsidiary of the Borrower.

 

“Mortgage-Backed
Securities” means, collectively, (i) the Asset Backed Notes
issued by Mid-State Trust IV, a Delaware business trust established by
Mid-State Homes, having an aggregate principal amount outstanding as of December 31,
2004 of approximately $322,357,000, (iii) the Asset Backed Notes issued by
Mid-State Trust VI, a Delaware business trust established by Mid-State Homes,
having an aggregate principal amount outstanding as of December 31, 2004
of approximately $148,366,000, (iv) the Asset Backed Notes issued by
Mid-State Trust VII, a Delaware business trust established by Mid-State Homes,
having an aggregate principal amount outstanding as of December 31, 2004
of approximately $167,525,000, (v) the Asset Backed Notes issued by
Mid-State Trust VIII, a Delaware business trust established by Mid-State Homes,
having an aggregate principal amount outstanding as of December 31, 2004
of approximately $214,994,000, (vi) the Asset Backed Notes issued by
Mid-State Trust X, a Delaware business trust established by Mid-State Homes,
having an aggregate principal amount outstanding as of December 31, 2004
of approximately $292,178,000, (vii) the Asset Backed 

 

24

 

Notes issued by Mid-State
Trust XI, a Delaware business trust established by Mid-State Homes, having an
aggregate principal amount outstanding as of December 31, 2004 of
approximately $257,086,000, and (viii) the Asset Backed Notes issued by
Mid-State Capital Corporation 2004-1 Trust, a Delaware business trust
established by Mid-State Capital, having an aggregate principal amount
outstanding as of December 31, 2004 of approximately $374,347,000.

 

“Mortgaged
Coal Property” means, collectively, the leasehold or other
rights of the Borrower or any Guarantor or any other Person, as applicable, to
mine or otherwise extract coal on certain real property as may be granted to
the Administrative Agent on the Closing Date or from time to time thereafter in
accordance with the terms of this Agreement pursuant to a Mineral Rights
Mortgage, it being understood that some parcels of real property may constitute
both Mortgaged Coal Property and Mortgaged Fee Property.

 

“Mortgaged
Coal Property Support Documents” shall mean, for each Mortgaged
Coal Property, (i) the Title Policy pertaining thereto, if determined to
be necessary by the Administrative Agent, (ii) such lessor’s estoppel,
waiver and consent certificates as the Administrative Agent may reasonably
require and the Borrower can deliver using its best efforts (which shall not
require the expenditure of cash or the making of any material concessions under
the relevant lease unless the Administrative Agent reasonably determines that
such Mortgaged Coal Property constitutes a material part of the overall Coal Collateral
for the Obligations and the obtaining of such consent is necessary for the
effective grant of a first-priority, perfected mortgage on such Mortgaged Coal
Property) and subordination, nondisturbance and attornment agreements as the
Administrative Agent may reasonably require and the Borrower can deliver using
its best efforts (which shall not require the expenditure of cash or the making
of any material concessions under the relevant lease), (iii) such opinions
of local counsel with respect to the Mineral Rights Mortgages, as applicable,
as the Administrative Agent may reasonably require, and (iv) such other
documentation as the Administrative Agent may reasonably require, in each case
as shall be in form and substance reasonably acceptable to the Administrative
Agent.

 

“Mortgaged
Fee Property” means, collectively, the fee interests of the
Borrower or any Guarantor, as applicable, in such real property, improvements,
fixtures and other items of real and personal property related thereto (and the
products and proceeds thereof) as may be granted to the Administrative Agent on
the Closing Date or from time to time thereafter in accordance with the terms
of this Agreement pursuant to a Mortgage.

 

“Mortgaged
Property Support Documents” shall mean, for each Mortgaged Fee
Property, (i) the Title Policy pertaining thereto, (ii) such surveys
and flood hazard certifications thereof as the Administrative Agent may require
prepared by recognized experts in their respective fields selected by the
Borrower and reasonably satisfactory to the Administrative Agent provided
that if the Title Policy for any Mortgaged Fee Property does not contain a
blanket survey exception and contains survey coverage and survey related
endorsements which are reasonably acceptable to the Administrative Agent, then
no survey shall be required for such Mortgaged Fee Property, (iii) as to
the Mortgaged Properties located in a flood hazard area, such flood hazard
insurance as the Administrative Agent may require, (iv) such lessee’s
affidavits as the Administrative Agent may reasonably require with respect to
any such property leased to a third party, (v) such opinions of local
counsel with respect to the Mortgages, as applicable, as the 

 

25

 

Administrative Agent may
reasonably require, and (vi) such other documentation as the
Administrative Agent may reasonably require, in each case as shall be in form
and substance reasonably acceptable to the Administrative Agent.

 

“MSH
Trusts” means, collectively, each of the Mid-State Trust II,
Mid-State Trust III, Mid-State Trust IV, Mid-State Trust VI, Mid-State Trust
VII, Mid-State Trust VIII, Mid-State Trust X, Mid-State Trust XI and Mid-State
Capital Corporation 2004-1 Trust entities referred to in the definition of “Mortgage-Backed
Securities,” Mid-State Trust V, Mid-State Trust IX and Mid-State Trust XIV, and
any other special purpose entity in which Mid-State Homes and/or Walter
Mortgage Company and/or Mid-State Capital shall own all of the equity or residual
beneficial interest created and operated solely for the purpose of issuing
asset-backed securities permitted by Section 8.03(i).

 

“Mueller
Group” means Mueller Group, LLC, a Delaware limited liability
company, as successor to Mueller Group, Inc., a Delaware corporation, as a
result of the Entity Conversion.

 

“Mueller
Group Notes” means those 10% senior subordinated notes due 2012
issued by Mueller Group pursuant to that certain Indenture dated as of April 23,
2004 by and among Mueller Group, as issuer, certain subsidiaries of Mueller
Group as guarantors thereunder, and Law Debenture Trust Company of New York, as
trustee.

 

“Mueller
Group Second Lien Notes” means those second priority senior
secured floating rate notes due 2011 issued by Mueller Group pursuant to that
certain Indenture dated as of April 23, 2004 by and among Mueller Group,
as issuer, certain subsidiaries of Mueller Group as guarantors thereunder, and
Law Debenture Trust Company of New York, as trustee.

 

“Mueller
Water Products” means Mueller Water Products, LLC, a Delaware
limited liability company, as successor to Mueller Water Products, Inc., a
Delaware corporation, as a result of the Entity Conversion.

 

“Mueller
Water Products Notes” means those 14.75% senior discount notes
due 2014 issued by Mueller Water Products pursuant to that certain Indenture
dated as of April 29, 2004 by and between Mueller Water Products (f/k/a
Mueller Holdings (N.A.), Inc.), as issuer, and Law Debenture Trust Company
of New York, as trustee.

 

“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

 

“Net
Cash Proceeds” means:

 

(a)                                  with respect to
the sale of any asset by the Borrower or any Restricted Subsidiary, the excess,
if any, of (i) the sum of cash and cash equivalents received in connection
with such sale (including any cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by such asset and that is required to be repaid in
connection with the sale thereof 

 

26

 

(other than Indebtedness under the Loan Documents
and Indebtedness owing to the Borrower or any Restricted Subsidiary), (B) the
out-of-pocket expenses incurred by the Borrower or any Restricted Subsidiary in
connection with such sale, including any brokerage commissions, underwriting
fees and discount, legal fees, finder’s fees and other similar fees and
commissions, (C) taxes paid or reasonably estimated to be payable by the
Borrower or any Restricted Subsidiary in connection with the relevant asset
sale, and (D) the amount of any reasonable reserve required to be
established in accordance with GAAP against liabilities (other than taxes
deducted pursuant to clause (C) above) to the extent such reserves
are (I) associated with the assets that are the object of such sale and (II) retained
by the Borrower or any Restricted Subsidiary; provided that the amount
of any subsequent reduction of any reserve provided for in clause (D) above
(other than in connection with a payment in respect of such liability) shall (X) be
deemed to be Net Cash Proceeds of such asset sale occurring on the date of such
reduction, and (Y) immediately be applied to the prepayment of Loans in accordance
with Section 2.06(d);

 

(b)                                 with respect to
the public and private issuance of any Indebtedness by the Borrower or any
Restricted Subsidiary, the excess of (i) the sum of the cash and cash
equivalents received in connection with such issuance over (ii) the sum of
(A) the underwriting discounts and commissions, and all legal, accounting,
printing, rating agency, banking, title and recording fees and expenses and
other out-of-pocket expenses, incurred by the Borrower or such Restricted
Subsidiary in connection with such issuance, and (B) all taxes required to
be paid or accrued as a consequence of such issuance; and

 

(c)                                  with respect to
the sale or issuance of any Equity Interest by the Borrower or any Restricted
Subsidiary or any Permitted Securities Transaction described in part (b),
(c) or (d) of the definition thereof, the excess of (i) the
sum of the cash and cash equivalents received in connection with such sale or
issuance over (ii) the sum of (A) the underwriting discounts
and commissions, and all legal, accounting, printing, banking and other
out-of-pocket expenses, incurred by the Borrower, such Restricted Subsidiary or
New Holdco in connection with such issuance or sale, and (B) all taxes
required to be paid or accrued as a consequence of such issuance or sale.

 

“New
Holdco” means Mueller Holding Company, Inc., a Delaware
corporation.

 

“Non-Core
Subsidiaries” means, individually or collectively as the context
may indicate, (a) Cardem and (b) Walter Coke, Inc. (formerly
known as Sloss Industries Corporation) and its Subsidiaries.

 

“Non-Mueller
Subsidiaries” means those Subsidiaries of the Borrower other
than New Holdco and its Subsidiaries (after giving effect to the Transactions).

 

“Notes”
means, collectively, the Revolving Loan Notes and the Term Loan Notes.

 

“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and
duties of, any Loan Party arising under any Loan Document or otherwise with
respect to any Loan, Letter of Credit or Bankers’ Acceptance, or arising under
any Related Credit Arrangement, in each case whether direct or indirect
(including those acquired by assumption), absolute or 

 

27

 

contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.

 

“Organization
Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Other
Taxes” means all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

 

“Outstanding
Amount” means (i) with respect to the Term Loan on any
date, the aggregate outstanding principal amount thereof after giving effect to
the Borrowing of the Term Loan on the Closing Date, and any prepayments or
repayments of the Term Loan (or any Segment) occurring on such date, (ii) with
respect to Revolving Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any Revolving Borrowings and any
prepayments or repayments of Revolving Loans occurring on such date; (iii) with
respect to Swing Line Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of Swing Line Loans occurring on such date; and (iv) with
respect to any L/C — BA Obligations on any date, the amount of such L/C — BA
Obligations on such date after giving effect to any L/C — BA Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
— BA Obligations as of such date, including as a result of any reimbursements
of amounts paid under Bankers’ Acceptances or outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.

 

“Participant”
has the meaning specified in Section 11.06(d).

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

“Pension
Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
that is subject to Title IV of ERISA and is sponsored or maintained by the
Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.

 

28

 

“Permitted
Securities Transaction” means any of (a) a Restricted
Payment by the Borrower to its shareholders of all or any portion of the Equity
Interests of New Holdco owned by the Borrower and made in compliance with Section 8.06(e),
(b) an initial public offering of Equity Interests of New Holdco, (c) a
secondary public offering of Equity Interests of New Holdco, (d)  the Disposition
for fair market value by the Borrower of any of its Equity Interests of New
Holdco (other than pursuant to a Restricted Payment described in subpart (a) of
this definition), so long as in the case of any transaction or combination of
transactions permitted by subparts (b), (c) and/or (d) of
this definition, the prepayment of the Term Loan required by Section 2.06(d)(vi) is
made within the time provided after the occurrence of such Permitted Securities
Transaction.

 

“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.

 

“Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is
subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Platform”
has the meaning specified in Section 7.02.

 

“Pledge
Agreement” means that certain Securities Pledge Agreement dated
as of the date hereof among the Borrower, certain Guarantors and the
Administrative Agent, as supplemented from time to time by the execution and
delivery of Pledge Joinder Agreements pursuant to Sections 3.01 and 7.12,
as the same may be otherwise supplemented (including by Pledge Agreement
Supplement).

 

“Pledge
Agreement Supplement” means the Pledge Agreement Supplement in
the form affixed as an exhibit to the Pledge Agreement.

 

“Pledged
Interests” means, in each case excluding the Voting Securities
and Subsidiary Securities of any Unrestricted Subsidiary (other than Mid-State
Capital and New Holdco), (i) the Subsidiary Securities of each of the
existing or hereafter organized or acquired Domestic Subsidiaries of the
Borrower and Direct Foreign Subsidiaries of the Borrower that at any time are
on Schedule I to the Pledge Agreement (or any similar schedule serving
the same purpose in the Pledge Agreement); (ii) all of the Subsidiary
Securities of each of the existing or hereafter organized or acquired Domestic
Subsidiaries of the Borrower that is a Material Subsidiary; (iii) all of
the Subsidiary Securities of New Holdco; and (iv) 65% of the Voting
Securities (or if the relevant Person shall own less than 65% of such Voting
Securities, then 100% of the Voting Securities owned by such Person) and 100%
of the nonvoting Subsidiary Securities of each of the existing or hereafter
organized or acquired Direct Foreign Subsidiaries of the Borrower that is a
Material Subsidiary.

 

“Pledge
Joinder Agreement” means each Pledge Joinder Agreement,
substantially in the form thereof attached to the Pledge Agreement, executed
and delivered by a Guarantor to the Administrative Agent pursuant to Section 7.12.

 

29

 

“Pro
Forma Effect  Compliance Certificate”
means a certificate substantially in the form of Exhibit D-2.

 

“Pro
Rata Revolving Share” means, with respect to each Revolving
Lender at any time, a fraction (expressed as a percentage, carried out to the
ninth decimal place), the numerator of which is the amount of the Revolving
Credit Commitment of such Revolving Lender at such time and the denominator of
which is the amount of the Aggregate Revolving Credit Commitments at such time;
provided that if the Aggregate Revolving Credit Commitments have been
terminated at such time, then the Pro Rata Revolving Share of each Revolving
Lender shall be the Pro Rata Revolving Share of such Revolving Lender
immediately prior to such termination and after giving effect to any subsequent
assignments made pursuant to Section 11.06.  The Pro Rata Revolving Share of each
Revolving Lender as of the Amendment No. 6 Effective Date is set forth
opposite the name of such Revolving Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Revolving Lender becomes a
party hereto, as applicable.

 

“Pro
Rata Term Share” means, with respect to each Term Loan Lender,
the percentage (carried out to the ninth decimal place) of the principal amount
of the Term Loan funded by such Term Loan Lender.  The initial Pro Rata Term Share of each Term
Loan Lender as of the Closing Date is set forth opposite the name of such Term
Loan Lender on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Term Loan Lender becomes a party hereto, as applicable.

 

“Put
Backstop Commitment Letter” means that certain commitment letter
dated as of June 17, 2005 by and among the Borrower, Banc of America
Bridge LLC, Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc.
regarding the commitments for the Put Backstop Facilities.

 

“Put
Backstop Commitment Letter Amendment” means that certain Letter
Amendment to the Commitment Letter dated as of the Closing Date by and among
the Borrower, Banc of America Bridge LLC, Banc of America Securities LLC and
Morgan Stanley Senior Funding, Inc. extending one element of the
termination of the commitments under the Put Backstop Commitment Letter for the
Put Backstop Facilities to a date that is not earlier than the date that is 60
days after the Closing Date.

 

“Put
Backstop Facilities” means, individually or collectively as the
context may indicate, each of (a) a senior subordinated bridge facility of
Mueller Group entered into, if at all, within 60 days after the Closing Date in
an aggregate principal amount of not less than $320,000,000 for the purpose of
providing liquidity in the event that more than $25,000,000 of the existing
Mueller Group Notes are tendered in response to an offer to repurchase such
notes as a result of the consummation of the Merger, and (b) a senior
bridge facility of Mueller Water Products entered into, if at all, within 60
days after the Closing Date in an aggregate principal amount of not less than
$145,000,000 for the purpose of providing liquidity in the event that more than
$25,000,000 of the Mueller Water Products Notes are tendered in response to an
offer to repurchase such notes as a result of the consummation of the Merger.

 

30

 

“QHT
Interim Entity” means one or more direct or indirect
Subsidiaries of the Borrower formed and utilized solely for the purpose of
consummating a Qualified Homebuilding Transaction or for holding and operating
Homebuilding Assets for a period no longer than reasonably necessary under the
circumstances to facilitate the consummation of a Qualified Homebuilding
Transaction.

 

“Qualified
Homebuilding Transaction” or “QHT” means a Disposition by the Borrower
or applicable Subsidiaries (including for purposes of this definition by way of
Restricted Payment) of any of the Homebuilding Assets through one or more
transactions (including, without limitation, any sale, transfer, license, lease
or other disposition) or through the distribution to the Borrower’s
shareholders of Equity Interests in any of the Homebuilding Assets (including,
without limitation, investments in any such QHT in an amount not to exceed, in
the aggregate for all QHTs, $35,000,000), but excluding any Disposition
described in Section 8.05(f)(i).

 

“Register”
has the meaning specified in Section 11.06(c).

 

“Registered
Public Accounting Firm” has the meaning specified in the
Securities Laws and shall be independent of the Borrower as prescribed in the
Securities Laws.

 

“Related
Credit Arrangements” means, collectively, Related Swap Contracts
and Related Treasury Management Arrangements.

 

“Related
Parties” means, with respect to any Person, such Person’s
Affiliates and the partners, directors, trustees, officers, employees, agents
and advisors of such Person and of such Person’s Affiliates.

 

“Related
Swap Contract” means all Swap Contracts that are entered into or
maintained with a Lender or Affiliate of a Lender that are not prohibited by
the express terms of the Loan Documents.

 

“Related
Treasury Management Arrangements” means all arrangements for the
delivery of treasury management services to or for the benefit of any Loan
Party which are entered into or maintained with a Lender or Affiliate of a
Lender and which are not prohibited by the express terms of the Loan Documents.

 

“Replacement
Mueller Facilities” means the senior, secured credit facilities
of Mueller Group pursuant to that certain Credit Agreement dated as of the
Closing Date by and among Mueller Group, Bank of America, as administrative
agent, Morgan Stanley, as syndication agent, and the lenders from time to time
party thereto, which such facilities refinance the Existing Mueller Credit
Agreement, and any other senior credit facility that may from time to time
replace or refinance the facilities provided by such Credit Agreement.

 

“Reportable
Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Request
for Credit Extension” means (a) with respect to a
Borrowing, conversion or continuation of Revolving Loans, a Revolving Loan
Notice, (b) with respect to a conversion or 

 

31

 

continuation of Segments,
a Term Loan Interest Rate Selection Notice, (c) with respect to an L/C -
BA Credit Extension, a Letter of Credit Application, and (d) with respect
to a Swing Line Loan, a Swing Line Loan Notice.

 

“Required
ECF Prepayment Percentage” has the meaning specified in Section 2.06(d)(iv).

 

“Required
Equity Prepayment Percentage” has the meaning specified in Section 2.06(d)(iii).

 

“Required
Lenders” means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuers to make L/C — BA Credit
Extensions have been terminated pursuant to Section 9.02, Lenders
holding in the aggregate more than 50% of the Total Outstandings (with the
aggregate amount of each Lender’s risk participation and funded participation
in L/C — BA Obligations and Swing Line Loans being deemed “held” by such Lender
for purposes of this definition); provided that any Revolving Credit
Commitment of, and the portion of the Total Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders.

 

“Required
Revolving Lenders” means, as of any date of determination,
Revolving Lenders having more than 50% of the Aggregate Revolving Credit
Commitments and Outstanding Amount (including risk participations in Letters of
Credit and Swing Line Loans) under the Revolving Credit Facility; provided
that the Revolving Credit Commitment of, and the portion of the Outstanding
Amount (including risk participations in Letters of Credit and Swing Line
Loans) under the Revolving Credit Facility held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Revolving Lenders.

 

“Required
Term Loan Lenders” means, as of any date of determination, Term
Loan Lenders having more than 50% of the Outstanding Amount of the Term Loan; provided
that the Outstanding Amount of the Term Loan held or deemed held by any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Term Loan Lenders.

 

“Responsible
Officer” means, with respect to each Loan Party, the chief
executive officer, president, chief financial officer, treasurer, controller or
assistant treasurer of such Loan Party. 
Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.

 

“Restricted
Payment” means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of the Borrower or any Non-Mueller Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to the Borrower’s
stockholders, partners or members (or the equivalent Person thereof).

 

32

 

“Restricted
Subsidiaries” means all Subsidiaries of the Borrower other than
the Unrestricted Subsidiaries.

 

“Revolving
Borrowing” means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period, made by each of the Revolving Lenders pursuant
to Section 2.02.

 

“Revolving
Credit Commitment” means, as to each Revolving Lender, its
obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.02,
(b) purchase participations in L/C - BA Obligations, and (c) purchase
participations in Swing Line Loans, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Revolving
Lender’s name on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted (or, pursuant to Section 2.15, increased)
from time to time in accordance with this Agreement.

 

“Revolving
Credit Facility” means the facility described in Sections
2.02, 2.04 and 2.05 providing for Revolving Loans, Swing Line
Loans, Letters of Credit and BAs to or for the benefit of the Borrower by the
Revolving Lenders, Swing Line Lender and L/C Issuer, as the case may be, in the
maximum aggregate principal amount at any time outstanding of, as of the
Amendment No. 6 Effective Date after giving effect thereto, $300,000,000
(subject to an increase pursuant to Section 2.15 so that the
maximum aggregate principal amount at any time outstanding is not greater than
$425,000,000), as adjusted from time to time pursuant to the terms of this
Agreement.

 

“Revolving
Credit Maturity Date” means July 2, 2012.

 

“Revolving
Lender” means each Lender that has a Revolving Credit Commitment
or, following termination of the Revolving Credit Commitments, has Revolving
Loans outstanding or participations in an outstanding Letter of Credit, Bankers’
Acceptance or Swing Line Loan.

 

“Revolving
Loan” means a Base Rate Loan or a Eurodollar Rate Loan made to
the Borrower by a Revolving Lender in accordance with its Pro Rata Revolving
Share pursuant to Section 2.02, except as otherwise provided
herein.

 

“Revolving
Loan Note” means a promissory note made by the Borrower in favor
of a Revolving Lender evidencing Revolving Loans made by such Revolving Lender,
substantially in the form of Exhibit C-2.

 

“Revolving
Loan Notice” means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.03(a),
which, if in writing, shall be substantially in the form of Exhibit A-1.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

 

“Sarbanes-Oxley”
means the Sarbanes-Oxley Act of 2002.

 

33

 

“SEC”
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.

 

“Secured
Parties” means, collectively, with respect to each of the
Security Instruments, the Administrative Agent, the Lenders and such other
Persons for whose benefit the Lien thereunder is conferred, as therein
provided.

 

“Securities
Laws” means the Securities Act of 1933, the Exchange Act,
Sarbanes-Oxley and the applicable accounting and auditing principles, rules,
standards and practices promulgated, approved or incorporated by the SEC or the
Public Company Accounting Oversight Board, as each of the foregoing may be
amended and in effect on any applicable date hereunder.

 

“Security
Agreement” means the Security Agreement dated as of the date
hereof by the Borrower and one or more of the Guarantors to the Administrative
Agent for the benefit of the Secured Parties, substantially in the form of Exhibit I,
as supplemented from time to time by the execution and delivery of Security
Joinder Agreements pursuant to Section 7.12.

 

“Security
Instruments” means, collectively or individually as the context
may indicate, the Security Agreement (including the Security Joinder
Agreements), the Pledge Agreement (including the Pledge Joinder Agreements and
the Pledge Agreement Supplements), each Mortgage, each Mineral Rights Mortgage,
each Title Policy and each other Mortgaged Property Support Document and all
other agreements (including control agreements), instruments and other
documents, whether now existing or hereafter in effect, pursuant to which the
Borrower or any Restricted Subsidiary or other Person shall grant or convey to
the Administrative Agent or the Lenders a Lien in, or any other Person shall
acknowledge any such Lien in, property as security for all or any portion of
the Obligations or any other obligation under any Loan Document, as any of them
may be reinstated from time to time in accordance with the terms hereof and
thereof.

 

“Security
Joinder Agreement” means each Security Joinder Agreement,
substantially in the form thereof attached to the Security Agreement, executed
and delivered by a Guarantor or any other Person to the Administrative Agent
pursuant to Section 7.12.

 

“Segment”
means a portion of any Term Loan (or all thereof) with respect to which a particular
interest rate is (or is proposed to be) applicable.

 

“Senior
Credit Facility” means, collectively, the Term Loan Facility and
the Revolving Credit Facility.

 

“Solvent”
means, when used with respect to any Person, that at the time of determination:

 

(a)                                  the fair value
of its assets (both at fair valuation and at present fair saleable value on an
orderly basis) is in excess of the total amount of its liabilities, including
contingent obligations; and

 

(b)                                 it is then able
and expects to be able to pay its debts as they mature; and

 

34

 

(c)                                  it has capital
sufficient to carry on its business as conducted and as proposed to be
conducted.

 

“SPC”
has the meaning specified in Section 11.06(h).

 

“STRH”
means SunTrust Robinson Humphrey, Inc. and its successors.

 

“Subordinated
New Holdco Note” means that certain 9% Subordinated Note due
2013 by New Holdco in favor of Mueller Group representing a subordinated loan
from Mueller Group to New Holdco in an initial principal amount of $20,000,000,
and including a subordinated guarantee by the Borrower of the obligations of
New Holdco thereunder.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower and shall include, without
limitation, the Unrestricted Subsidiaries.

 

“Subsidiary
Guaranty” means that certain Guaranty Agreement dated as of the
date hereof among the Guarantors (other than Mid-State Homes and Walter
Mortgage Company) and the Administrative Agent (on behalf of the Lenders)
substantially in the form of Exhibit F, as supplemented from time
to time by the execution and delivery of Guaranty Joinder Agreements pursuant
to Section 7.12, as from time to time the same may be otherwise
supplemented or amended, modified, amended and restated or replaced.

 

“Subsidiary
Securities” means the Equity Interests issued by or in any
Subsidiary, whether or not constituting a “security” under Article 8 of
the Uniform Commercial Code as in effect in any jurisdiction.

 

“Swap
Contract” means (a) any and all rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether
or not any such transaction is governed by or subject to any master agreement,
and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed
by, any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules,

 

35

 

a “Master Agreement”), including any such obligations or
liabilities under any Master Agreement.

 

“Swap
Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination value(s) determined
in accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined
as the mark-to-market value(s) for such Swap Contracts, as determined
based upon one or more mid-market or other readily available quotations
provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).

 

“Swing Line”
means the revolving credit facility made available by the Swing Line Lender
pursuant to Section 2.05.

 

“Swing Line
Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.05.

 

“Swing Line
Lender” means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan”
has the meaning specified in Section 2.05(a).

 

“Swing Line Loan
Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.05(b),
which, if in writing, shall be substantially in the form of Exhibit B.

 

“Swing Line
Sublimit” means an amount equal to the lesser of (a) $15,000,000
and (b) the Aggregate Revolving Credit Commitments.  The Swing Line Sublimit is part of, and not
in addition to, the Aggregate Revolving Credit Commitments.

 

“Syndication
Agent” means SunTrust Bank in its capacity as syndication agent
under any of the Loan Documents, or any successor syndication agent.

 

“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).

 

“Tax Sharing
Agreement” means that (a) certain Tax Sharing Agreement
dated as of the Closing Date by and between New Holdco and the Borrower
relating to the Borrower’s payment of taxes imposed on New Holdco and its
Subsidiaries and their properties, income or assets and (b) any other tax
sharing or similar agreement by and between the Borrower and any Person in
connection with a Qualified Homebuilding Transaction.

 

“Taxes”
means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 

36

 

“Term Loan”
means the loans made pursuant to the Term Loan Facility in accordance with Section 2.01.

 

“Term Loan
Facility” means the facility described in Section 2.01
providing for an advance of the Term Loan to the Borrower by the Term Loan
Lenders in the original principal amount of $450,000,000 (and which Outstanding
Amount, as of the Amendment No. 6 Effective Date, is approximately
$138,216,078.25), subject to adjustments as herein provided.

 

“Term Loan
Interest Rate Selection Notice” means the written notice
delivered by a Responsible Officer of the Borrower in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Segment or the
conversion of any Eurodollar Rate Segment into a Base Rate Segment or the
conversion of any Base Rate Segment into a Eurodollar Rate Segment, which, if
in writing, shall be substantially in the form of Exhibit A-2.

 

“Term Loan
Lender” means each Lender that has a portion of the Term Loan
outstanding under the Term Loan Facility.

 

“Term Loan
Maturity Date” means (a) October 3, 2012, or (b) such
earlier date upon which the Outstanding Amounts under the Term Loan Facility,
including all accrued and unpaid interest, are paid in full in accordance with
the terms hereof.

 

“Term Loan Note”
means a promissory note made by the Borrower in favor of a Term Loan Lender
evidencing the portion of the Term Loan made by such Term Loan Lender,
substantially in the form of Exhibit C-1.

 

“Third Party
Mortgage Accounts” means certain building and installment
contracts or loans and related mortgages and instruments that (a) are
originated by Persons other than the Borrower or a Non-Mueller Subsidiary, (b) constitute
first mortgages on single-family residential real property, and (c) are
acquired by Walter Mortgage Company, Mid-State Homes or Mid-State Capital, each
a Non-Mueller Subsidiary of the Borrower.

 

“Title Policy”
means an ALTA mortgagee title policy insuring the first lien priority of a
Mortgage or Mineral Rights Mortgage, and in each case reflecting only such
Liens as are permitted under Section 8.01(a), (c), (d),
(g) or (i) or which are otherwise acceptable to the
Administrative Agent, together in each case with all endorsements reasonably
requested by the Administrative Agent.

 

“Total
Outstandings” means the aggregate Outstanding Amount of all
Loans and all L/C - BA Obligations.

 

“Total Revolving
Outstandings” means the aggregate Outstanding Amount of all Revolving
Loans, Swing Line Loans and L/C - BA Obligations.

 

“Transactions”
means, individually or collectively as the context may indicate, (a) the
creation of New Holdco and the transfer of the Equity Interests of US Pipe and
of JW MergerCo, Inc. thereto, (b) the Merger, (c) the US Pipe
Contribution, (d) the receipt by New Holdco of the Dividend Distribution, (e) the
entering into by New Holdco and the Borrower (as guarantor) of, and the receipt
by New Holdco of the proceeds from, the Subordinated New Holdco Note, (f) the

 

37

 

entering into and funding of the Replacement Mueller
Facilities and the related repayment and retirement of the Existing Mueller
Credit Agreement, (g) the consummation of each of the Entity Conversions,
and (h) the entering into of the Put Backstop Commitment Letter Amendment.

 

“Type”
means with respect to (i) a Revolving Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan, and (ii) a Segment, its character as a
Base Rate Segment or a Eurodollar Rate Segment.

 

“Unencumbered Cash and Cash Equivalents”
means cash or cash equivalents owned by Borrower and its Non-Mueller
Subsidiaries on a consolidated basis (excluding assets of any retirement plan)
which (a) are not the subject of any Lien (other than any Lien of a type
permitted by Sections 8.01(a), (b), (c) or (d)),
and (b) may be converted to cash within thirty (30) days.

 

“Unfunded
Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Pension Plan’s assets, determined at the end of each immediately preceding
plan year that this Agreement is in effect in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for
the applicable plan year.

 

“United States”
and “U.S.”
mean the United States of America.

 

“Unreimbursed
Amount” has the meaning specified in Section 2.04(c)(i).

 

“Unrestricted
Subsidiaries” means (a) the entities identified on Schedule
1.01(a) hereto, (b) each MSH Trust created after the Closing
Date, (c) New Holdco and each of its Subsidiaries, (d) Mid-State
Capital, but only so long as it is a special purpose entity that is prohibited
by its Organization Documents and/or applicable Laws from being a Guarantor,
and 100% of its Equity Interests are owned by Mid-State Holdings and constitute
Pledged Interests pledged by Mid-State Holdings to the Administrative Agent for
the benefit of the Lenders, and (e) any other Subsidiary that is a special
purpose entity serving substantially the same function as Mid-State Capital
with respect to the MSH Trusts. 
Notwithstanding anything to the contrary contained in Section 11.01
or otherwise herein or in any of the other Loan Documents, the Borrower may,
from time to time and with the prior written consent of the Administrative
Agent, amend or supplement Schedule 1.01(a) by delivering
(effective upon receipt) to the Administrative Agent a copy of such revised
Schedule which shall be certified by a Responsible Officer of the Borrower as
true, complete and correct as of such date and as delivered in replacement for Schedule
1.01(a).

 

“US Pipe”
means United States Pipe and Foundry Company, LLC, an Alabama limited liability
company, as successor to United States Pipe and Foundry Company, Inc., an
Alabama corporation, as a result of the Entity Conversion.

 

“US Pipe
Contribution” means the contribution by the Borrower of 100% of
the Equity Interests of US Pipe to New Holdco, for further distribution to
Mueller Water Products and for further contribution to Mueller Group, such that
after giving effect to all such contributions, US Pipe is a wholly-owned direct
Subsidiary of Mueller Group.

 

38

 

“Voting
Securities” means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.

 

“Walter Mortgage
Company” means Walter Mortgage Company, a Delaware corporation.

 

1.02        Other Interpretive Provisions. 
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:

 

(a)           The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) other than the Merger Agreement shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (iii) the
words “herein,” “hereof” and “hereunder,” and words of
similar import when used in any Loan Document, shall be construed to refer to
such Loan Document in its entirety and not to any particular provision thereof,
(iv) all references in a Loan Document to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, the Loan Document in which such references appear, (v) any
reference to any law shall include all statutory and regulatory provisions
consolidating, amending, replacing or interpreting such law and any reference
to any law or regulation shall, unless otherwise specified, refer to such law
or regulation as amended, modified or supplemented from time to time, and (vi) the
words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

(b)           In the computation of periods of time from a specified
date to a later specified date, the word “from” means “from and
including;” the words “to” and “until” each mean “to but
excluding;” and the word “through” means “to and including.”

 

(c)           Section headings herein and in the other Loan
Documents are included for convenience of reference only and shall not affect
the interpretation of this Agreement or any other Loan Document.

 

1.03        Accounting Terms.  (a) Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in 

 

39

 

effect from time to time,
applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed
herein.

 

(b)           Changes in GAAP.  If at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Administrative Agent, the Lenders and
the Borrower shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of such change in GAAP
(subject to the approval of the Required Lenders); provided  that,
until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in
GAAP.

 

(c)           All defined terms used in the calculation of the
financial covenants set forth in Section 8.12 hereof shall be
calculated on an historical pro forma basis giving effect (by inclusion or
exclusion, as applicable), during any period of measurement that includes the
Merger or any Acquisition permitted by Section 8.13 or the US Pipe
Contribution or any Disposition permitted by Section 8.05(g), to
the actual historical results of the Person so acquired or disposed.

 

(d)           For the avoidance of doubt, the term “the Borrower and
its Restricted Subsidiaries” as used in the defined terms used in the
calculation of the financial covenants set forth in Section 8.12
hereof shall not include any consolidation of the assets, liabilities or
results of operations of the Unrestricted Subsidiaries in the assets,
liabilities or results of the Borrower or any Restricted Subsidiary.

 

(e)           Consolidation of Variable Interest Entities. 
Except as expressly provided otherwise herein, all references herein to
consolidated financial statements of the Borrower and its Subsidiaries or to
the determination of any amount for the Borrower and its Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that the Borrower is required to
consolidate pursuant to FASB Interpretation No. 46 — Consolidation of
Variable Interest Entities:  an
interpretation of ARB No. 51 (January 2003) as if such variable
interest entity were a Subsidiary as defined herein.

 

(f)            In computing financial ratios and other financial
calculations of the Borrower and its Restricted Subsidiaries required to be
submitted pursuant to this Agreement, all Indebtedness of the Borrower and its
Restricted Subsidiaries shall be calculated at par value irrespective if the
Borrower has elected the fair value option pursuant to FASB Interpretation No. 159 —  The Fair Value Option for
Financial Assets and Financial Liabilities—Including an amendment of FASB
Statement No. 115 (February 2007).

 

1.04        Rounding. 
Any financial ratios required to be maintained by the Borrower pursuant
to this Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of
places by which such 

 

40

 

ratio is expressed herein
and rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

 

1.05        Times of Day. 
Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).

 

1.06        Letter of Credit Amounts. 
Unless otherwise specified herein, the amount of a Letter of Credit at
any time shall be deemed to be the stated amount of such Letter of Credit in
effect at such time; provided, however, that with respect to any
Letter of Credit that, by its terms or the terms of any Issuer Document related
thereto, provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the maximum
stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

 

ARTICLE
II.

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01        Term Loan.

 

(a)           Subject to the terms and conditions of this Agreement,
each Term Loan Lender severally agrees to make an advance of its Pro Rata Term
Share of the Term Loan to the Borrower on the Closing Date, and from the
Closing Date to the Term Loan Maturity Date, convert and continue Segments from
time to time in accordance with the terms hereof.  The principal amount of each Segment of the
Term Loan outstanding hereunder from time to time shall bear interest and the
Term Loan shall be repayable as herein provided.  No amount of the Term Loan repaid or prepaid
by the Borrower may be reborrowed hereunder, and no subsequent advance under
the Term Loan Facility shall be allowed after the initial such advance of the
Term Loan on the Closing Date.  Segments
of the Term Loan may be Base Rate Segments or Eurodollar Rate Segments at the
Borrower’s election, as provided herein.

 

(b)           Not later than 1:00 P.M. New York time, on the
Closing Date, each Term Loan Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of its Pro Rata Term Share of
the Term Loan available by wire transfer to the Administrative Agent.  Such wire transfer shall be directed to the
Administrative Agent at the Administrative Agent’s Office and shall be in the
form of same day funds in Dollars.  The
amount so received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, including without limitation the satisfaction of
all applicable conditions in Sections 5.01 and 5.02, be made
available to the Borrower by delivery of the proceeds thereof as shall be
directed by the Responsible Officer of the Borrower and reasonably acceptable
to the Administrative Agent.  The initial
Borrowing of the Term Loan may be a Eurodollar Rate Segment, a Base Rate Segment,
or both; provided that if the Borrower desires that any portion of the
initial Borrowing of the Term Loan is advanced as a Eurodollar Rate Segment,
the Administrative Agent shall make such Borrowing as a Eurodollar Rate Segment
only if, not later than three Business Days prior to the date that is then
anticipated to be the Closing Date, the Administrative Agent has received from
the Borrower a Term Loan Interest Rate Selection Notice with respect thereto,
together with the Borrower’s written acknowledgement in form and substance
satisfactory to the Administrative Agent that the provisions of Section 4.05
hereof 

 

41

 

shall apply to any
failure by the Borrower to borrow on the date set forth in such Term Loan
Interest Rate Selection notice any or all of the amounts specified in such Term
Loan Interest Rate Selection Notice.

 

2.02        Revolving Loans. 
Subject to the terms and conditions set forth herein, each Revolving
Lender severally agrees to make, convert and continue Revolving Loans to the
Borrower from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time outstanding the amount of such
Revolving Lender’s Revolving Credit Commitment; provided, however,
that after giving effect to any Revolving Borrowing, (i) the Total
Revolving Outstandings shall not exceed the Aggregate Revolving Credit
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Revolving Lender, plus such Lender’s Pro Rata Revolving
Share of the Outstanding Amount of all L/C - BA Obligations, plus such
Lender’s Pro Rata Revolving Share of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Revolving Credit Commitment.  Within the limits of each Revolving Lender’s
Revolving Credit Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.02, prepay
under Section 2.06, and reborrow under this Section 2.02.  Revolving Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.  On the Amendment No. 6 Effective Date,
the Aggregate Revolving Credit Commitments shall be decreased from $350,000,000
to $300,000,000, and the Pro Rata Revolving Shares of each Revolving Lender
shall be as set forth opposite the name of such Revolving Lender on Schedule
2.01.  The Borrower shall prepay any
Revolving Loans outstanding on the Amendment No. 6 Effective Date (and pay
any amounts owing under Section 4.05) to the extent necessary to
keep the outstanding Revolving Loans ratable with any revised Pro Rata
Revolving Shares of the Revolving Lenders after giving effect to such decrease
in the Aggregate Revolving Credit Commitments, provided that, after
giving effect to the decrease in the Aggregate Revolving Credit Commitments,
the aggregate Outstanding Amount of the Revolving Loans of any Revolving
Lender, plus such Lender’s Pro Rata Revolving Share of the Outstanding
Amount of all L/C - BA Obligations, plus such Lender’s Pro Rata Revolving
Share of the Outstanding Amount of all Swing Line Loans shall not exceed such
Lender’s Revolving Credit Commitment.

 

2.03        Borrowings, Conversions and Continuations of Committed Loans.

 

(a)           Each Revolving Borrowing, each conversion of Revolving
Loans or Segments of the Term Loan from one Type to the other, and each
continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by
telephone.  Each such notice must be
received by the Administrative Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing
of Base Rate Loans.  Each telephonic
notice by the Borrower pursuant to this Section 2.03(a) must
be confirmed promptly by delivery to the Administrative Agent of a written
Revolving Loan Notice (as to Revolving Borrowings) or Term Loan Interest Rate
Selection Notice, appropriately completed and signed by a Responsible Officer
of the Borrower (unless such Revolving Loan Notice is being delivered by a
Swing Line Lender pursuant to Section 2.05(c) or by the
Administrative Agent on behalf of the L/C Issuer pursuant to Section 2.04(c)(i));
provided that the lack of such prompt confirmation shall not affect the
conclusiveness or binding effect of such telephonic 

 

42

 

notice.  Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Sections 2.04(c) and
2.05(c), each Borrowing of or conversion to Base Rate Loans shall be in
a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Each Revolving Loan Notice and
Term Loan Interest Rate Selection Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Revolving Borrowing
(applicable to Revolving Loan Notices only), a conversion of Revolving Loans
from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Revolving
Loans to be borrowed, converted or continued, (iv) the Type of Revolving
Loans to be borrowed or to which existing Revolving Loans are to be converted,
and (v) if applicable, the duration of the Interest Period with respect
thereto.  Each written Revolving Loan
Notice shall be substantially in the form of Exhibit A-1 attached
hereto, and each written Term Loan Interest Rate Selection Notice shall be
substantially in the form of Exhibit A-2 attached hereto.  If the Borrower fails to specify a Type of
Revolving Loans in a Revolving Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation of Loans, then the applicable
Loans shall, subject to the last sentence of this Section 2.03(a),
be made as, or continued as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Revolving
Loan Notice or Term Loan Interest Rate Selection Notice, but fails to specify
an Interest Period, it will be deemed to have specified an Interest Period of
one month.

 

(b)           Following receipt of a Revolving Loan Notice, the
Administrative Agent shall promptly notify each applicable Lender of its Pro
Rata Revolving Share of the applicable Revolving Loans, and if no timely notice
of a conversion or continuation is provided by the Borrower, the Administrative
Agent shall notify each applicable Lender of the details of any automatic
conversion to Base Rate Loans described in the preceding subsection.  In the case of a Revolving Borrowing, each
applicable Lender shall make the amount of its Revolving Loan available to the
Administrative Agent in immediately available funds at the Administrative Agent’s
Office not later than 1:00 p.m. on the Business Day specified in the
applicable Revolving Loan Notice.  Upon
satisfaction of the applicable conditions set forth in Section 5.02
(and, if such Borrowing is the initial Credit Extension, Section 5.01),
the Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance
with instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower; provided, however, that if, on the date the Revolving
Loan Notice with respect to such Borrowing is given by the Borrower, there are
Swing Line Loans or L/C Borrowings outstanding, then the proceeds of such
Borrowing shall be applied, first, to the payment in full of any such
L/C Borrowings, second, to the payment in full of any such Swing Line
Loans, and third, to the Borrower as provided above.

 

(c)           Except as otherwise provided herein, a Eurodollar Rate
Loan may be continued or converted only on the last day of an Interest Period
for such Eurodollar Rate Loan.  During
the existence of a Default, no Loans may be requested as, converted to or
continued as Eurodollar 

 

43

 

Rate Loans without the
consent of the Required Revolving Lenders or the Required Term Loan Lenders, as
applicable.

 

(d)           The Administrative Agent shall promptly notify the
Borrower and the applicable Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such interest
rate.  The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.  At any time that Base
Rate Loans are outstanding, the Administrative Agent shall notify the Borrower
and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

 

(e)           After giving effect to all Borrowings, all conversions
of Loans from one Type to the other, and all continuations of Loans as the same
Type, there shall not at any time be more than (a) five Interest Periods
in effect with respect to the Term Loan and (b) ten Interest Periods in
effect with respect to the Revolving Credit Facility.

 

2.04        Letters of Credit and Bankers’ Acceptances.

 

(a)           The Letter of Credit — BA Commitment.

 

(i)            Subject to the terms and conditions set forth herein, (A) the
L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set
forth in this Section 2.04, (1) from time to time on any
Business Day during the period from the Closing Date until the earlier to occur
of the Letter of Credit - BA Expiration Date or the termination of the
Availability Period, to issue Letters of Credit for the account of the Borrower
or the Borrower and a Restricted Subsidiary, and to amend Letters of Credit
previously issued by it, in accordance with subsection (b) below, (2) to
honor drafts under the Letters of Credit; and (3) with respect to
Acceptance Credits, to create Bankers’ Acceptances in accordance with the terms
thereof and hereof, and (B) the Revolving Lenders severally agree to
participate in Letters of Credit and Bankers’ Acceptances issued for the
account of the Borrower or the Borrower and a Restricted Subsidiary and any
drawings thereunder; provided that the L/C Issuer shall not be obligated
to make any L/C — BA Credit Extension with respect to any Letter of Credit, and
no Revolving Lender shall be obligated to participate in any Letter of Credit
if (A) as of the date of such L/C - BA Credit Extension, (x) the
Total Revolving Outstandings would exceed the Aggregate Revolving Credit
Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans
of any Revolving Lender, plus such Revolving Lender’s Pro Rata Revolving
Share of the Outstanding Amount of all L/C - BA Obligations, plus such
Revolving Lender’s Pro Rata Revolving Share of the Outstanding Amount of all
Swing Line Loans would exceed such Revolving Lender’s Revolving Credit
Commitment, or (z) the Outstanding Amount of the L/C - BA Obligations
would exceed the Letter of Credit - BA Sublimit, or (B) as to Acceptance
Credits, the Bankers’ Acceptance created or to be created thereunder shall not
be an eligible bankers’ acceptance under Section 13 of the Federal Reserve
Act (12 U.S.C. § 372).  Each request by
the Borrower for the issuance or amendment of a Letter of Credit shall be
deemed to be a representation by the Borrower that the L/C — BA Credit
Extension so requested complies with the conditions set forth in the proviso to
the preceding sentence.  Within the
foregoing limits, and subject to the 

 

44

 

terms and conditions hereof, the Borrower’s ability to
obtain Letters of Credit shall be fully revolving, and accordingly the Borrower
may, during the foregoing period, obtain Letters of Credit to replace Letters
of Credit that have expired or that have been drawn upon and reimbursed.

 

(ii)           The L/C Issuer shall not issue any Letter of Credit,
if:

 

(A)          subject to Section 2.04(b)(iii), the
expiry date of such requested Letter of Credit would occur (i) as to
standby Letters of Credit, more than twelve months after the date of issuance
or last renewal, and (ii) as to commercial Letters of Credit, later than
the earlier of (1) 180 days after the date of issuance thereof and (2) 60
days before the Letter of Credit - BA Expiration Date, unless in each case the
Required Revolving Lenders have approved such expiry date;

 

(B)           the maturity date of any Bankers’ Acceptance issued
under any such requested Acceptance Credit would occur earlier than 30 or later
than 120 days from date of issuance and in any event later than 60 days before
the Letter of Credit - BA Expiration Date, unless the Required Revolving
Lenders have approved such expiry date;

 

(C)           the expiry date of such requested Letter of Credit, or
the maturity date of any Bankers’ Acceptance issued under such requested Letter
of Credit, would occur after the Letter of Credit - BA Expiration Date, unless
all the Revolving Lenders have approved such expiry date;

 

(iii)          The L/C Issuer shall not be under any obligation to
issue any Letter of Credit if:

 

(A)          any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain the
L/C Issuer from issuing such Letter of Credit or any related Bankers’
Acceptance, or any Law applicable to the L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit or related bankers’ acceptances
generally or such Letter of Credit or any related Bankers’ Acceptance in
particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit or related Bankers’ Acceptance any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the L/C Issuer in good faith deems material to it;

 

(B)           the issuance of such Letter of Credit or any related
Bankers’ Acceptance would violate one or more policies of the L/C Issuer, or
the creation of any related Bankers’ Acceptance would cause the L/C Issuer to
exceed the

 

45

 

maximum amount of outstanding bankers’ acceptances
permitted by applicable Law;

 

(C)                                except as otherwise agreed by the
Administrative Agent and the L/C Issuer, such Letter of Credit or related
Bankers’ Acceptance is in an initial amount less than $100,000, in the case of
a commercial Letter of Credit, or $500,000, in the case of a standby Letter of
Credit, or is to be denominated in a currency other than Dollars; or

 

(D)                               a default of any Revolving Lender’s
obligations to fund under Section 2.04(c) exists or any
Revolving Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into satisfactory arrangements with the Borrower or such
Revolving Lender to eliminate the L/C Issuer’s risk with respect to such
Revolving Lender.

 

(iv)                              The L/C Issuer shall not amend any Letter
of Credit or Bankers’ Acceptance if the L/C Issuer would not be permitted at
such time to issue such Letter of Credit or Bankers’ Acceptance in its amended
form under the terms hereof.

 

(v)                                 The L/C Issuer shall be under no
obligation to amend any Letter of Credit or Bankers’ Acceptance if (A) the
L/C Issuer would have no obligation at such time to issue such Letter of Credit
or Bankers’ Acceptance in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit or Bankers’ Acceptance does not accept the
proposed amendment to such Letter of Credit or Bankers’ Acceptance.

 

(vi)                              The L/C Issuer shall act on behalf of the
Revolving Lenders with respect to any Letters of Credit or Bankers’ Acceptance
issued by it and the documents associated therewith, and the L/C Issuer shall
have all of the benefits and immunities (A) provided to the Administrative
Agent in Article X with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit and Bankers’
Acceptances issued by it or proposed to be issued by it and Issuer Documents
pertaining to such Letters of Credit and Bankers’ Acceptances as fully as if
the term “Administrative Agent” as used in Article X included the
L/C Issuer with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the L/C Issuer.

 

(b)                                 Procedures for Issuance and Amendment of
Letters of Credit; Auto-Extension Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower delivered to the
L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of the Borrower  and, if
applicable, of the applicable Restricted Subsidiary.  Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m.
at least two Business Days (or such later date and time as the Administrative
Agent and the L/C Issuer may agree in a particular instance in its sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request for
an initial issuance of a Letter of Credit, 

 

46

 

such Letter of Credit Application shall specify in
form and detail satisfactory to the L/C Issuer: (A) the proposed issuance
date of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing or presentation thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of any
drawing or presentation thereunder; and (G) such other matters as the L/C
Issuer may require.  In the case of a
request for an amendment of any outstanding Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date
of amendment thereof (which shall be a Business Day); (C) the nature of
the proposed amendment; and (D) such other matters as the L/C Issuer may
require.  Additionally, the Borrower
shall furnish to the L/C Issuer and the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may require.

 

(ii)                                  Promptly after receipt of any Letter of
Credit Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received a copy
of such Letter of Credit Application from the Borrower and, if not, the L/C
Issuer will provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received written
notice from any Lender, the Administrative Agent or any Loan Party, at least
one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained
in Article V shall not then be satisfied, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue
a Letter of Credit for the account of the Borrower or the Borrower and the
applicable Restricted Subsidiary or enter into the applicable amendment, as the
case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices. 
Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the L/C Issuer a risk participation in such Letter of Credit
in an amount equal to the product of such Revolving Lender’s Pro Rata Revolving
Share times the amount of such Letter of Credit.  Immediately upon the creation of each Bankers’
Acceptance, each Revolving Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Bankers’ Acceptance in an amount equal to the product of
such Revolving Lender’s Pro Rata Revolving Share times the amount of
such Bankers’ Acceptance.

 

(iii)                               If the Borrower so requests in any
applicable Letter of Credit Application, the L/C Issuer may, in its sole and
absolute discretion, agree to issue a Letter of Credit other than a commercial
Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit the
L/C Issuer to prevent any such extension at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued.  Unless otherwise
directed by the L/C Issuer, the Borrower 

 

47

 

shall not be required to make a specific request to
the L/C Issuer for any such extension. 
Once an Auto-Extension Letter of Credit has been issued, the Revolving
Lenders shall be deemed to have authorized (but may not require) the L/C Issuer
to permit the extension of such Letter of Credit at any time to an expiry date
not later than the Letter of Credit - BA Expiration Date; provided, however, that the L/C
Issuer shall not permit any such extension if (A) the L/C Issuer has
determined that it would not be permitted, or would have no obligation, at such
time to issue such Letter of Credit in its revised form (as extended) under the
terms hereof (by reason of the provisions of clause (ii) or (iii) of
Section 2.04(a) or otherwise), or (B) it has received
notice (which may be by telephone or in writing) on or before the day that is
five Business Days before the Non-Extension Notice Date (1) from the
Administrative Agent that the Required Revolving Lenders have elected not to
permit such extension or (2) from the Administrative Agent, any Revolving
Lender or the Borrower that one or more of the applicable conditions specified
in Section 5.02 is not then satisfied, and in each such case
directing the L/C Issuer not to permit such extension.

 

(iv)                              Promptly after its delivery of any Letter
of Credit or any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver
to the Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.

 

(c)                                  Drawings and Reimbursements; Funding of
Participations.

 

(i)                                     Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing or, with respect to any Acceptance
Credit, presentation of documents under such Letter of Credit, or any
presentation for payment of a Bankers’ Acceptance, the L/C Issuer shall notify
the Borrower and the Administrative Agent thereof.  Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit or Bankers’ Acceptance
(each such date, an “Honor
Date”), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing or
Bankers’ Acceptance, as applicable.  If
the Borrower fails so to reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Revolving Lender of the Honor
Date, the amount of the unreimbursed drawing or payment (the “Unreimbursed Amount”), and the
amount of such Revolving Lender’s Pro Rata Revolving Share thereof.  In such event, the Borrower shall be deemed
to have requested a Revolving Borrowing of Base Rate Loans to be disbursed on
the Honor Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.03 for the
principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Revolving Credit Commitments and the
conditions set forth in Section 5.02 (other than the delivery of a
Revolving Loan Notice).  Any notice given
by the L/C Issuer or the Administrative Agent pursuant to this Section 2.04(c)(i) may
be given by telephone if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.

 

(ii)                                  Each Revolving Lender shall upon any
notice pursuant to Section 2.04(c)(i) make funds available to
the Administrative Agent for the account of the L/C 

 

48

 

Issuer at the Administrative Agent’s Office in an
amount equal to its Pro Rata Revolving Share of the Unreimbursed Amount not
later than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section 2.04(c)(iii),
each Revolving Lender that so makes funds available shall be deemed to have
made a Base Rate Revolving Loan to the Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the L/C Issuer.

 

(iii)                               With respect to any Unreimbursed Amount
that is not fully refinanced by a Revolving Borrowing of Base Rate Loans
because the conditions set forth in Section 5.02 cannot be
satisfied or for any other reason, the Borrower shall be deemed to have
incurred from the L/C Issuer an L/C — BA Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C — BA Borrowing shall
be due and payable on demand (together with interest) and shall bear interest
at the Default Rate.  In such event, each
Revolving Lender’s payment to the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed
payment in respect of its participation in such L/C — BA Borrowing and shall
constitute an L/C - BA Advance from such Revolving Lender in satisfaction of
its participation obligation under this Section 2.04.

 

(iv)                              Until each Revolving Lender funds its
Revolving Loan or L/C - BA Advance pursuant to this Section 2.04(c) to
reimburse the L/C Issuer for any amount drawn under any Letter of Credit or
payments made on any Bankers’ Acceptance, interest in respect of such Revolving
Lender’s Pro Rata Revolving Share of such amount shall be solely for the
account of the L/C Issuer.

 

(v)                                 Each Revolving Lender’s obligation to
make Revolving Loans or L/C - BA Advances to reimburse the L/C Issuer for
amounts drawn under Letters of Credit and payments made on Bankers’
Acceptances, as contemplated by this Section 2.04(c), shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any set-off, counterclaim, recoupment, defense or other
right which such Revolving Lender may have against the L/C Issuer, the Borrower
or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however,
that each Revolving Lender’s obligation to make Revolving Loans pursuant to
this Section 2.04(c) is subject to the conditions set forth in
Section 5.02 (other than delivery by the Borrower of a Revolving
Loan Notice).  No such making of an L/C -
BA Advance shall relieve or otherwise impair the obligation of the Borrower to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit or Bankers’ Acceptance, together with interest as
provided herein.

 

(vi)                              If any Revolving Lender fails to make
available to the Administrative Agent for the account of the L/C Issuer any
amount required to be paid by such Revolving Lender pursuant to the foregoing
provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(ii),
the L/C Issuer shall be entitled to recover from such Revolving Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the L/C Issuer at a rate per annum equal 

 

49

 

to the greater of the Federal Funds Rate and a rate
determined by the L/C Issuer in accordance with banking industry rules on
interbank compensation.  A certificate of
the L/C Issuer submitted to any Revolving Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (vi) shall
be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after the L/C Issuer has made
a payment under any Letter of Credit or Bankers’ Acceptance and has received
from any Revolving Lender such Revolving Lender’s L/C - BA Advance in respect
of such payment in accordance with Section 2.04(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Revolving Lender its Pro Rata Revolving Share thereof
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Revolving Lender’s L/C - BA Advance was
outstanding) in the same funds as those received by the Administrative Agent.

 

(ii)                                  If any payment received by the
Administrative Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(i) is
required to be returned under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Revolving Lender shall pay to the Administrative Agent for
the account of the L/C Issuer its Pro Rata Revolving Share thereof on demand of
the Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Revolving Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The obligations of the Revolving Lenders under
this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e)                                  Obligations Absolute. 
The obligation of the Borrower to reimburse the L/C Issuer for each
drawing under each Letter of Credit and each payment under any Bankers’
Acceptance, and to repay each L/C — BA Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability of
such Letter of Credit or Bankers’ Acceptance, this Agreement, or any other
agreement or instrument relating thereto;

 

(ii)                                  the existence of any claim, counterclaim,
set-off, defense or other right that the Borrower or any Subsidiary may have at
any time against any beneficiary or any transferee of such Letter of Credit or
Bankers’ Acceptance (or any Person for whom any such beneficiary or any such
transferee may be acting), the L/C Issuer or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by such
Letter of Credit or Bankers’ Acceptance or any agreement or instrument relating
thereto, or any unrelated transaction;

 

50

 

(iii)                               any draft, demand, certificate or other
document or endorsement  presented under
or in connection with such Letter of Credit or Bankers’ Acceptance proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit or obtain payment under any Bankers’ Acceptance ;

 

(iv)                              any payment by the L/C Issuer under such
Letter of Credit or Bankers’ Acceptance against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of
Credit, or any payment made by the L/C Issuer under such Letter of Credit or
Bankers’ Acceptance to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit or Bankers’ Acceptance, including any
arising in connection with any proceeding under any Debtor Relief Law; or

 

(v)                                 any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a discharge
of, the Borrower or any Subsidiary.

 

The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto, and each Bankers’ Acceptance, that is delivered to it
and, in the event of any claim of noncompliance with the Borrower’s
instructions or other irregularity, the Borrower will immediately notify the
L/C Issuer.  The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and
its correspondents unless such notice is given as aforesaid.

 

(f)                                    Role of L/C Issuer.  Each Lender and the Borrower agree
that, in paying any drawing under a Letter of Credit or making any payment
under a Bankers’ Acceptance, the L/C Issuer shall not have any responsibility
to obtain any document (other than any sight draft, certificates and documents
expressly required by the Letter of Credit) or to ascertain or inquire as to
the validity or accuracy of any such document or the authority of the Person
executing or delivering any such document. 
None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders, the Revolving Lenders, the Required Lenders or the Required Revolving
Lenders, as applicable; (ii) any action taken or omitted in the absence of
gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit, Bankers’ Acceptance or Issuer Document.  The Borrower hereby assumes all risks of the
acts or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit or Bankers’ Acceptance; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties, nor any correspondent, participant or assignee of
the L/C Issuer, shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.04(e);
provided, however, that anything in such clauses to the contrary 

 

51

 

notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrower
which the Borrower proves were caused by the L/C Issuer’s willful misconduct or
gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a
Letter of Credit or to honor any Bankers’ Acceptance presented for payment in
strict compliance with its terms and conditions.  In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument endorsing,
transferring or assigning or purporting to endorse, transfer or assign a Letter
of Credit or Bankers’ Acceptance or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.

 

(g)                                 Cash Collateral. 
Upon the request of the Administrative Agent, (i) if the L/C Issuer
has honored any full or partial drawing request under any Letter of Credit or
made any payment under any Bankers’ Acceptance and such drawing has resulted in
an L/C — BA Borrowing, or (ii) if, as of the Letter of Credit - BA
Expiration Date, any Letter of Credit for any reason remains outstanding and
partially or wholly undrawn, any Bankers’ Acceptance for any reason remains
outstanding, or any L/C — BA Obligation for any reason remains outstanding,
then in each such case the Borrower shall immediately Cash Collateralize the
then Outstanding Amount of all L/C - BA Obligations (in an amount equal to such
Outstanding Amount determined as of the date of such L/C Borrowing or the
Letter of Credit - BA Expiration Date, as the case may be).  Sections 2.06 and 9.02(c) set
forth certain additional requirements to deliver Cash Collateral
hereunder.  For purposes hereof, “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for
the benefit of the L/C Issuer and the Revolving Lenders, as collateral for the
L/C - BA Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the Revolving
Lenders).  Derivatives of such term have corresponding
meanings.  The Borrower hereby grants to
the Administrative Agent, for the benefit of the L/C Issuer and the Revolving  Lenders, a security interest in all such
cash, deposit accounts and all balances therein and all proceeds of the
foregoing.  Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of
America.

 

(h)                                 Applicability of ISP and UCP. 
Unless otherwise expressly agreed by the L/C Issuer and the Borrower
when a Letter of Credit is issued, (i) the rules of the ISP shall
apply to each standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance
shall apply to each commercial Letter of Credit.

 

(i)                                     Letter of Credit — BA Fees. 
Subject to the provisions of the last sentence of this subsection (i),
the Borrower shall pay to the Administrative Agent for the account of each
Revolving Lender in accordance with its Pro Rata Revolving Share (i) a
Letter of Credit — BA Fee for each commercial Letter of Credit and each Bankers’
Acceptance equal to 50% of the Applicable Rate times the daily maximum
amount available to be drawn under such Letter of 

 

52

 

Credit (whether or not
such maximum amount is then in effect under such Letter of Credit) or the
maximum stated amount of such Bankers’ Acceptance, as the case may be, and (ii) a
Letter of Credit — BA Fee for each standby Letter of Credit equal to the
Applicable Rate times the daily maximum amount available to be drawn
under such Letter of Credit (whether or not such maximum amount is then in
effect under such Letter of Credit).  For
purposes of computing the daily amount available to be drawn under any Letter
of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. 
Such Letter of Credit — BA Fees shall be computed on a quarterly basis
in arrears.  Such Letter of Credit — BA
Fees accrued through the last day of each fiscal quarter of the Borrower and
shall be due and payable on the fifteenth (or the next Business Day after the
fifteenth, if the fifteenth is not a Business Day) of each January, April, July and
October, commencing with the first such date to occur after the issuance of
such Letter of Credit or Bankers’ Acceptance (as the case may be), on the
Letter of Credit - BA Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate
during any quarter, the daily maximum amount of each Letter of Credit and
Bankers’ Acceptance shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.  At all times that the Default
Rate shall be applicable to any Loans pursuant to Section 2.09(b),
the Letter of Credit — BA Fees payable under this subsection (i) shall
accrue and be payable at the Default Rate.

 

(j)                                     Fronting Fee and Documentary and
Processing Charges Payable to L/C Issuer.  The Borrower
shall pay directly to the L/C Issuer for its own account a fronting fee with
respect to each Letter of Credit and each Bankers’ Acceptance issued by the L/C
Issuer in the amount of 0.125% times the daily maximum amount available to be
drawn under such Letter of Credit (whether or not such maximum amount is then
in effect under such Letter of Credit) or the maximum stated amount of such
Bankers’ Acceptance, as the case may be. 
Such fronting fees shall be computed on a quarterly basis in
arrears.  Such fronting fee shall accrue
through the last day of each fiscal quarter of the Borrower and shall be due
and payable on the fifteenth (or the next Business Day after the fifteenth, if
the fifteenth is not a Business Day) of each January, April, July and
October, commencing with the first such date to occur after the issuance of
such Letter of Credit or Bankers’ Acceptance, as applicable, on the Letter of
Credit - BA Expiration Date and thereafter on demand.  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  In addition, the Borrower shall pay directly
to the L/C Issuer for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit and bankers’ acceptances issued by
it as from time to time in effect.  Such
customary fees and standard costs and charges are due and payable on demand and
are nonrefundable.

 

(k)                                  Conflict with Issuer Documents. 
In the event of any conflict between the terms hereof and the terms of
any Issuer Document, the terms hereof shall control.

 

(l)                                     Letters of Credit Issued for Restricted
Subsidiaries.  Notwithstanding that a Letter of Credit or
Bankers’ Acceptance issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Restricted Subsidiary, the Borrower
shall be obligated to reimburse the L/C Issuer hereunder for any and all
drawings under such Letter of Credit. 
The Borrower hereby acknowledges that the issuance of Letters of Credit
and/or Bankers’ Acceptances for the account of Restricted Subsidiaries inures
to the benefit of the Borrower, and 

 

53

 

that the Borrower’s
business derives substantial benefits from the businesses of such Restricted
Subsidiaries.

 

2.05                        Swing Line Loans.

 

(a)                                  The Swing Line. 
Subject to the terms and conditions set forth herein, the Swing Line
Lender may, in its sole discretion and in reliance upon the agreements of the
other Lenders set forth in this Section 2.05, make loans (each such
loan, a “Swing Line Loan”) in Dollars to the Borrower from time to time
on any Business Day during the Availability Period in an aggregate amount not
to exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Pro Rata Revolving Share of the Outstanding Amount of Revolving Loans and L/C -
BA Obligations of the Revolving Lender acting as Swing Line Lender, may exceed
the amount of such Revolving Lender’s Revolving Credit Commitment; provided,
however, that after giving effect to any Swing Line Loan, (i) the
Total Revolving Outstandings shall not exceed the Aggregate Revolving Credit
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Revolving Lender, plus such Revolving Lender’s Pro Rata
Revolving Share of the Outstanding Amount of all L/C - BA Obligations, plus
such Revolving Lender’s Pro Rata Revolving Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Credit
Commitment, and provided, further, that the Borrower shall not
use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan.  Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.05, prepay under Section 2.06, and
reborrow under this Section 2.05. 
Each Swing Line Loan shall be a Base Rate Revolving Loan.  Immediately upon the making of a Swing Line
Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Revolving Lender’s Pro Rata Revolving Share times the amount of such
Swing Line Loan.

 

(b)                                 Borrowing Procedures. 
Each Swing Line Borrowing shall be made upon the Borrower’s irrevocable
notice to the Swing Line Lender and the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Swing Line Lender
and the Administrative Agent not later than 2:00 p.m. on the requested
borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $500,000 and integral multiples of $100,000 in excess
thereof, and (ii) the requested borrowing date, which shall be a Business
Day.  Each such telephonic notice must be
confirmed promptly by delivery to the Swing Line Lender and the Administrative
Agent of a written Swing Line Loan Notice, appropriately completed and signed
by a Responsible Officer of the Borrower. 
Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender will
notify the Administrative Agent (by telephone or in writing) of the contents
thereof.  Unless the Swing Line Lender
has received notice (by telephone or in writing) from the Administrative Agent
(including at the request of any Lender) prior to 3:00 p.m. on the date of
the proposed Swing Line Borrowing (A) directing the Swing Line Lender not
to make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of Section 2.05(a), or (B) that
one or more of the applicable conditions specified in Article V is
not then satisfied, then, subject 

 

54

 

to the terms and
conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on
the borrowing date specified in such Swing Line Loan Notice, make the amount of
its Swing Line Loan available to the Borrower at its office by crediting the
account of the Borrower on the books of the Swing Line Lender in immediately
available funds.

 

(c)                                  Refinancing of Swing Line Loans.

 

(i)                                     The Swing Line Lender at any time in its
sole and absolute discretion may request, on behalf of the Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Revolving Lender make a Base Rate Revolving Loan in an amount
equal to such Revolving Lender’s Pro Rata Revolving Share of the amount of
Swing Line Loans then outstanding.  Such
request shall be made in writing (which written request shall be deemed to be a
Revolving Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.03, without regard to the minimum and
multiples specified therein for the principal amount of Base Rate Loans, but
subject to the unutilized portion of the Aggregate Revolving Credit Commitments
and the conditions set forth in Section 5.02.  The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Revolving Loan Notice promptly after
delivering such notice to the Administrative Agent.  Each Revolving Lender shall make an amount
equal to its Pro Rata Revolving Share of the amount specified in such Revolving
Loan Notice available to the Administrative Agent in immediately available
funds for the account of the Swing Line Lender at the Administrative Agent’s
Office not later than 1:00 p.m. on the day specified in such Revolving
Loan Notice, whereupon, subject to Section 2.05(c)(ii), each
Revolving Lender that so makes funds available shall be deemed to have made a
Base Rate Revolving Loan to the Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

 

(ii)                                  If for any reason any Swing Line Loan
cannot be refinanced by such a Revolving Borrowing in accordance with Section 2.05(c)(i),
the request for Base Rate Revolving Loans submitted by the Swing Line Lender as
set forth herein shall be deemed to be a request by the Swing Line Lender that
each of the Revolving Lenders fund its risk participation in the relevant Swing
Line Loan and each Revolving Lender’s payment to the Administrative Agent for
the account of the Swing Line Lender pursuant to Section 2.05(c)(i) shall
be deemed payment in respect of such participation.

 

(iii)                               If any Revolving Lender fails to make
available to the Administrative Agent for the account of the Swing Line Lender
any amount required to be paid by such Revolving Lender pursuant to the
foregoing provisions of this Section 2.05(c) by the time
specified in Section 2.05(c)(i), the Swing Line Lender shall be
entitled to recover from such Revolving Lender (acting through the Administrative
Agent), on demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is immediately
available to the Swing Line Lender at a rate per annum equal to the greater of
the Federal Funds Rate and a rate determined by the Swing Line Lender in
accordance with banking industry rules on interbank compensation.  A certificate of the Swing Line Lender
submitted to any Revolving Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.

 

55

 

(iv)          Each Revolving Lender’s obligation to
make Revolving Loans or to purchase and fund risk participations in Swing Line
Loans pursuant to this Section 2.05(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such Revolving
Lender may have against the Swing Line Lender, the Borrower or any other Person
for any reason whatsoever, (B) the occurrence or continuance of a Default,
or (C) any other occurrence, event or condition, whether or not similar to
any of the foregoing; provided, however, that each Revolving Lender’s
obligation to make Revolving Loans pursuant to this Section 2.05(c) is
subject to the conditions set forth in Section 5.02.  No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to repay Swing Line
Loans, together with interest as provided herein.

 

(d)                                 Repayment of Participations.

 

(i)            At any time after any Revolving
Lender has purchased and funded a risk participation in a Swing Line Loan, if
the Swing Line Lender receives any payment on account of such Swing Line Loan,
the Swing Line Lender will distribute to such Revolving Lender its Pro Rata
Revolving Share of such payment (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Revolving
Lender’s risk participation was funded) in the same funds as those received by
the Swing Line Lender.

 

(ii)           If any payment received by the Swing
Line Lender in respect of principal or interest on any Swing Line Loan is
required to be returned by the Swing Line Lender under any of the circumstances
described in Section 11.05 (including pursuant to any settlement
entered into by the Swing Line Lender in its discretion), each Revolving Lender
shall pay to the Swing Line Lender its Pro Rata Revolving Share thereof on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to the
Federal Funds Rate.  The Administrative
Agent will make such demand upon the request of the Swing Line Lender.  The obligations of the Lenders under this clause
shall survive the payment in full of the Obligations and the termination of
this Agreement.

 

(e)                                  Interest for Account of Swing Line Lender. 
The Swing Line Lender shall be responsible for invoicing the Borrower
for interest on the Swing Line Loans. 
Until each Revolving Lender funds its Base Rate Revolving Loan or risk
participation pursuant to this Section 2.05 to refinance such
Lender’s Pro Rata Revolving Share of any Swing Line Loan, interest in respect
of such Pro Rata Revolving Share shall be solely for the account of the Swing
Line Lender.

 

(f)                                    Payments Directly to Swing Line Lender. 
The Borrower shall make all payments of principal and interest in
respect of the Swing Line Loans directly to the Swing Line Lender.

 

2.06                        Prepayments.

 

(a)                                  The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay Loans
under the Revolving Credit Facility or the Term Loan 

 

56

 

Facility in whole or in
part without premium or penalty; provided that (i) such notice must
be received by the Administrative Agent not later than 11:00 a.m. (A) three
Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on
the date of prepayment of Base Rate Loans; (ii) any prepayment of
Eurodollar Rate Loans under any such credit facility shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any
prepayment of Base Rate Loans under any such credit facility shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof or, in each case, the entire principal amount thereof then
outstanding.  Each such notice shall
specify the date and amount of such prepayment, the credit facility to which
the prepayment is to be applied, and the Type(s) of Loans to be prepaid.  Prepayments of the Term Loan shall be applied
pro rata to remaining installments of the scheduled amortization of the Term
Loan Facility.  The Administrative Agent
will promptly notify each applicable Lender of its receipt of each such notice,
and of the amount of such Lender’s ratable share of such prepayment.  If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 4.05.  Each such prepayment shall be applied to the
Loans of the applicable Lenders in accordance with their Pro Rata Revolving
Shares and Pro Rata Term Shares, as applicable.

 

(b)                                 The Borrower may, upon notice to the
Swing Line Lender (with a copy to the Administrative Agent), at any time or
from time to time, voluntarily prepay Swing Line Loans in whole or in part
without premium or penalty; provided that (i) such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the date of the prepayment, and (ii) any such prepayment
shall be in a minimum principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof.  Each such
notice shall specify the date and amount of such prepayment.  If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

 

(c)                                  If for any reason the Total Revolving
Outstandings at any time exceed the Aggregate Revolving Credit Commitments then
in effect, the Borrower shall immediately prepay Revolving Loans and/or Swing
Line Loans and/or Cash Collateralize the L/C - BA Obligations in an aggregate
amount equal to such excess; provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C - BA Obligations pursuant
to this Section 2.06(c) unless after the prepayment in full of
the Revolving Loans and Swing Line Loans, the Total Revolving Outstandings
exceed the Aggregate Revolving Credit Commitments then in effect.

 

(d)                                 In addition to any required payments of
principal of the Term Loan and any optional payments of principal of the Term
Loan and the Revolving Loans effected under subsection (a) above,
the Borrower shall make the following required prepayments, each such payment
to be made to the Administrative Agent for the benefit of the applicable
Lenders within the time period specified below:

 

(i)            At any time after the aggregate Net
Cash Proceeds from all issuances of Indebtedness permitted by Section 8.03(i) and
all Dispositions permitted by Section 8.05(f)(i) after the
Closing Date has reached $75,000,000, the Borrower shall make, or 

 

57

 

shall cause each applicable Restricted Subsidiary to
make, a prepayment of the Outstanding Amount of the Term Loan in an amount
equal to one hundred percent (100%) of any further Net Cash Proceeds (including
any portion of the Net Cash Proceeds thereof that causes the aggregate Net Cash
Proceeds to exceed the $75,000,000 threshold) of (A) each private or
public issuance of Indebtedness of the Borrower or any Restricted Subsidiary
permitted by Section 8.03(i), and (B) each Disposition
permitted by Section 8.05(f)(i). 
Each such prepayment will be made within ten (10) Business Days of
receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the Net Cash Proceeds
of such issuance or Disposition.

 

(ii)           The Borrower shall make, or shall
cause each applicable Restricted Subsidiary to make, a prepayment of the
Outstanding Amount of the Term Loan (A) in an amount equal to one hundred
percent (100%) of the Net Cash Proceeds of each private or public issuance of
Indebtedness of the Borrower or any Restricted Subsidiary other than
Indebtedness permitted under Section 8.03, (B) in an amount
equal to one hundred percent (100%) of the Net Cash Proceeds of each private or
public issuance of Indebtedness of the Borrower or any Restricted Subsidiary
permitted by Section 8.03(l), but excluding any Net Cash Proceeds
used or to be used, in the good faith judgment of the Administrative Agent, for
the purpose of financing one or more Acquisitions or Restricted Payments
permitted hereunder and (C) in an amount equal to one hundred percent
(100%) of the Net Cash Proceeds of each private or public issuance of
Indebtedness of the Borrower or any Restricted Subsidiary permitted by Section 8.03(p).  Each prepayment required to be made pursuant
to this Section 2.06(d)(ii) shall be made within ten (10) Business
Days of receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the Net Cash Proceeds
of such issuance; provided that despite the application of this Section 2.06(d)(ii) to
any issuance of Indebtedness that is not otherwise permitted under this
Agreement, nothing in this Section 2.06(d)(ii) shall be deemed
to permit any Indebtedness not expressly permitted under this Agreement or to
constitute a waiver or cure of any Default or Event of Default that arises as a
result of the incurrence of Indebtedness that is not permitted under this
Agreement.

 

(iii)          The Borrower shall make, or shall
cause each applicable Restricted Subsidiary to make, a prepayment of the
Outstanding Amount of the Term Loan in an amount equal to the Required Equity
Prepayment Percentage (defined below) of the Net Cash Proceeds of each private
or public issuance of Equity Interests of the Borrower or any Restricted
Subsidiary.  Each prepayment required to
be made pursuant to this Section 2.06(d)(iii) will be made
within ten (10) Business Days of receipt of such Net Cash Proceeds and
upon not less than five (5) Business Days’ prior written notice to the
Administrative Agent, which notice shall include a certificate of a Responsible
Officer of the Borrower setting forth in reasonable detail the calculations
utilized in computing the Net Cash Proceeds of such issuance.  Notwithstanding the application of this Section 2.06(d)(iii) to
any issuance of Equity Interests that is not otherwise permitted under this 

 

58

 

Agreement, nothing in this Section 2.06(d)(iii) shall
be deemed to permit any issuance of Equity Interests of the Borrower or any
Restricted Subsidiary not expressly permitted under this Agreement or to
constitute a waiver or cure of any Default or Event of Default that arises as a
result of the issuance of any such Equity Interest that is not permitted under
this Agreement.  For purposes of this Section 2.06(d)(iii),
the term “Required
Equity Prepayment Percentage” means 50%, provided that
such prepayment shall only be required to be made at the 50% level to the
extent that the amount of Consolidated Senior Secured Indebtedness, as reduced
by giving effect to such prepayment at the 50% level, would result in a
Consolidated Senior Secured Leverage Ratio greater than or equal to 2.00 to
1.00, and shall thereafter be made by substituting “25%” for “50%”, provided
further that if the Required Equity Prepayment Percentage is 25%
(including as applied to a portion of a prepayment for which the 50% rate
applied to the first portion) then such prepayment shall only be required to be
made at the 25% level to the extent that the amount of Consolidated Senior Secured
Indebtedness, as reduced by giving effect to such prepayment at the 25% level,
would result in a Consolidated Senior Secured Leverage Ratio greater than or
equal to 1.00 to 1.00, and shall thereafter be made by substituting “0%” for “25%”.

 

(iv)          Within ten Business Days after
financial statements have been delivered pursuant to Section 7.01(a) and
the related Compliance Certificate has been delivered pursuant to Section 7.02(b),
the Borrower shall make a prepayment of the Outstanding Amount of the Term Loan
in an amount equal to the Required ECF Prepayment Percentage (defined below) of
Excess Cash Flow for the fiscal year covered by such financial statements; provided
that for the fiscal year of the Borrower ending December 31, 2005, the
prepayment required by this Section 2.06(d)(iv) will be equal
to the Required Prepayment Percentage of the ratable portion of Excess Cash
Flow for such fiscal year from the Closing Date to December 31, 2005, with
Excess Cash Flow (and the elements thereof) being calculated pro forma for the
US Pipe Contribution in accordance with Section 1.03(c).  For purposes of this Section 2.06(d)(iv),
the term “Required ECF
Prepayment Percentage” means 75%, provided that such
prepayment shall only be required to be made at the 75% level to the extent
that the amount of Consolidated Senior Secured Indebtedness, as reduced by
giving effect to such prepayment at the 75% level, would result in a
Consolidated Senior Secured Leverage Ratio greater than or equal to 2.00 to
1.00, and shall thereafter be made by substituting “50%” for “75%”, provided
further that if the Required ECF Prepayment Percentage is 50% then such
prepayment shall only be required to be made at the 50% level to the extent
that the amount of Consolidated Senior Secured Indebtedness, as reduced by
giving effect to such prepayment at the 50% level, would result in a
Consolidated Senior Secured Leverage Ratio greater than or equal to 1.00 to
1.00, and shall thereafter be made by substituting “0%” for “50%”.

 

(v)           In the event that the aggregate Net
Cash Proceeds from a Disposition of any single Non-Core Subsidiary, whether in
one or a series of related transactions, permitted by Section 8.05(g)(ii)(A) exceeds
$25,000,000, the Borrower shall make, or shall cause each applicable Restricted
Subsidiary to make, a prepayment in an amount equal to one hundred percent
(100%) of any further Net Cash Proceeds (including any portion of the Net Cash
Proceeds thereof that causes the aggregate Net Cash Proceeds to 

 

59

 

exceed the $25,000,000 threshold) from each such
Disposition.  Each such prepayment will
be made within ten (10) Business Days of receipt of such Net Cash Proceeds
and upon not less than five (5) Business Days’ prior written notice to the
Administrative Agent, which notice shall include a certificate of a Responsible
Officer of the Borrower setting forth in reasonable detail the calculations
utilized in computing the Net Cash Proceeds of such Disposition.

 

(vi)          In the event that there shall occur
any Permitted Securities Transaction described in parts (b), (c) and/or
(d) of the definition thereof, the Borrower shall make, or shall
cause each applicable Restricted Subsidiary to make, a prepayment in an amount
equal to one hundred percent (100%) of the Net Cash Proceeds from each such
Permitted Securities Transaction (or combination thereof occurring
substantially simultaneously) received by the Borrower, but in any event in an
amount not less than fifty percent (50%) of the aggregate Net Cash Proceeds
from such Permitted Securities Transaction(s). 
Each such prepayment will be made within ten (10) Business Days of
receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the Net Cash Proceeds
of such Permitted Securities Transaction(s).

 

(vii)         The Borrower shall make, or shall cause
each applicable Restricted Subsidiary to make, a prepayment of the Outstanding
Amount of the Term Loan in an amount equal to one hundred percent (100%) of any
Net Cash Proceeds received pursuant to each Disposition permitted by Section 8.05(i).  Each such prepayment will be made within ten (10) Business
Days of receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the Net Cash Proceeds
of such Disposition.

 

Each prepayment of the Term Loan required under Section 2.06(d) shall
be applied pro rata to remaining installments of the scheduled amortization of
the Term Loan Facility (including the scheduled payment of all remaining
Outstanding Amounts of the Term Loan on the Term Loan Maturity Date).

 

(e)                                  Any prepayment of a Eurodollar Rate Loan
under this Section 2.06 shall be accompanied by all accrued
interest thereon, together with any additional amounts required pursuant to Section 4.05.  Each prepayment under this Section 2.06
shall be applied to the Loans of the applicable Lenders in accordance with
their Pro Rata Term Shares or Pro Rata Revolving Shares, as applicable.

 

2.07                        Termination or Reduction of
Commitments.  The Borrower may, upon notice to the
Administrative Agent, terminate the Aggregate Revolving Credit Commitments, or
from time to time permanently reduce the Aggregate Revolving Credit
Commitments; provided that (i) any such notice shall be received by
the Administrative Agent not later than 11:00 a.m. five Business Days
prior to the date of termination or reduction, (ii) any such partial
reduction shall be in an aggregate amount of $5,000,000 or any whole multiple
of $1,000,000 in excess thereof, 

 

60

 

or the entire remaining
Aggregate Revolving Credit Commitments, (iii) the Borrower shall not
terminate or reduce the Aggregate Revolving Credit Commitments if, after giving
effect thereto and to any concurrent prepayments hereunder, the Total Revolving
Outstandings would exceed the Aggregate Revolving Credit Commitments, and (iv) if,
after giving effect to any reduction of the Aggregate Revolving Credit
Commitments, the Letter of Credit - BA Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate Revolving Credit Commitments, such sublimit
shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify
the Lenders of any such notice of any such termination or reduction of the
Aggregate Revolving Credit Commitments. 
Any reduction of the Aggregate Revolving Credit Commitments shall be
applied to the Revolving Credit Commitment of each Revolving Lender according
to its Pro Rata Revolving Share.  Any
Commitment Fees accrued until the effective date of any termination of the
Aggregate Revolving Credit Commitments shall be paid on the effective date of
such termination.

 

2.08                        Repayment of Loans.

 

(a)                                  The Borrower shall repay to the Revolving
Lenders on the Revolving Credit Maturity Date the aggregate principal amount of
Revolving Loans outstanding on such date.

 

(b)                                 The Borrower shall repay each Swing Line
Loan on the earlier to occur of (i) the date ten Business Days after such
Loan is made and (ii) the Revolving Credit Maturity Date.

 

(c)                                  The Borrower shall repay the principal
amount of the Term Loan in twenty-seven (27) consecutive quarterly installments
equal to $1,125,000 on the last Business Day of each March, June, September and
December, commencing on December 31, 2005, and in a final installment
equal to the aggregate Outstanding Amount of the Term Loan on the Term Loan
Maturity Date, in each case subject to adjustments for prepayments made
pursuant to Section 2.06.

 

2.09                        Interest.

 

(a)                                  Subject to the provisions of subsection
(b) below, (i) each Eurodollar Rate Loan shall bear interest on
the outstanding principal amount thereof for each Interest Period at a rate per
annum equal to the Eurodollar Rate for such Interest Period plus the
Applicable Rate; (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Rate.

 

(b)                                 If any amount payable by the Borrower
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, such
amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.  Furthermore, while any
Event of Default exists, the Borrower shall pay interest, at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws, on the principal amount of all (a) outstanding
Obligations under 

 

61

 

the Revolving Credit
Facility upon the affirmative vote of the Required Revolving Lenders, (b) outstanding
Obligations under the Term Loan Facility upon the affirmative vote of the
Required Term Loan Lenders and (c) other Obligations hereunder upon the
affirmative vote of the Required Lenders. 
Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

 

(c)                                  Interest on each Loan shall be due and
payable in arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein. 
Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

2.10                        Fees. 
In addition to certain fees described in subsections (i) and
(j) of Section 2.04:

 

(a)                                  Commitment Fee. 
The Borrower shall pay to the Administrative Agent for the account of
each Revolving Lender in accordance with its Pro Rata Revolving Share, a
commitment fee (the “Commitment
Fee”) equal to fifty basis points (50 “bps”) times the
actual daily amount by which the Aggregate Revolving Credit Commitments exceed
the sum of (i) the Outstanding Amount of Revolving Loans and (ii) the
Outstanding Amount of L/C - BA Obligations. 
The Commitment Fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in Article V
is not met, and the amount accrued through the end of each fiscal quarter of
the Borrower shall be due and payable in arrears on the fifteenth (or the next
Business Day after the fifteenth, if the fifteenth is not a Business Day) of
each January, April, July and October, and on the Revolving Credit
Maturity Date.  The Commitment Fee shall
be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.

 

(b)                                 Other Fees.  The Borrower
shall pay to the Arrangers, the Administrative Agent and each of the Lenders,
for their own respective accounts, such fees as shall have been separately
agreed upon in writing (including in the Joint Fee Letter, the Agency Fee
Letter and the Amendment No. 6 Engagement Letter, as applicable) in the
amounts and at the times so specified, including an annual administrative fee
payable to the Administrative Agent. 
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.

 

2.11                        Computation of Interest
and Fees.  (a)  All computations of interest for
Base Rate Loans (including Base Rate Loans determined by reference to the
Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. 
All other computations of fees and interest shall be made on the basis
of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year).  Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid,
provided that any Loan that is repaid on the same day on which it is made
shall, subject to Section 2.13(a), bear interest for one
day.  Each determination by the 

 

62

 

Administrative Agent of
an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.

 

(b)                                 If, as a result of any restatement of the
financial statements of the Borrower, the Borrower or the Lenders determine
that (i) the Adjusted Consolidated Leverage Ratio as calculated by the
Borrower as of any applicable date was inaccurate and (ii) a proper
calculation of the Adjusted Consolidated Leverage Ratio would have resulted in
higher pricing for such period, the Borrower shall immediately and
retroactively be obligated to pay to the Administrative Agent for the account
of the applicable Lenders, promptly on demand by the Administrative Agent (or,
after the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States,
automatically and without further action by the Administrative Agent, any
Lender or the L/C Issuer), an amount equal to the excess of the amount of
interest and fees that should have been paid for such period over the amount of
interest and fees actually paid for such period.  This paragraph shall not limit the rights of
the Administrative Agent, any Lender or the L/C Issuer, as the case may be,
under Section 2.04(c)(iii), 2.04(i) or 2.09(b) or
under Article IX.  The
Borrower’s obligations under this paragraph shall survive the termination of
the Aggregate Commitments and the repayment of all other Obligations hereunder.

 

2.12                        Evidence of Debt.

 

(a)                                  The Credit Extensions made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrower and
the interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error. 
Upon the request of any Lender made through the Administrative Agent,
the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in
addition to such accounts or records. 
Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

(b)                                 In addition to the accounts and records
referred to in subsection (a), each Lender and the Administrative Agent
shall maintain in accordance with its usual practice accounts or records
evidencing the purchases and sales by such Lender of participations in Letters
of Credit and Swing Line Loans.  In the
event of any conflict between the accounts and records maintained by the Administrative
Agent and the accounts and records of any Lender in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.

 

(c)                                  Entries made in good faith by the
Administrative Agent in the Register pursuant to Section 2.12(b),
and by each Lender in its account or accounts pursuant to Section 2.12(a),

 

63

 

shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
and, in the case of such account or accounts, such Lender, under this Agreement
and the other Loan Documents, absent manifest error; provided that the
failure of the Administrative Agent or any Lender to make an entry, or any
finding that any entry is incorrect, in the Register or such account or
accounts shall not limit or otherwise affect the Obligations.

 

2.13                        Payments Generally;
Administrative Agent’s Clawback.

 

(a)                                  General.  All payments
to be made by the Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. 
Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than
2:00 p.m. on the date specified herein. 
The Administrative Agent will promptly distribute to such Lender its
ratable share (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

 

(b)                                 (i)  Funding by Lenders;
Presumption by Administrative Agent. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in
the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date
of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.03 (or, in the case of a Borrowing of
Base Rate Loans, that such Lender has made such share available in accordance
with and at the time required by Section 2.03) and may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case
of a payment to be made by the Borrower, the interest rate applicable to Base
Rate Loans; provided that the Administrative Agent agrees that it shall
first make a request (which request may be telephonic) for payment from such
applicable Lender before making a request with respect thereto to the
Borrower.  If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Revolving Loan or 

 

64

 

Pro Rata Term Share of
the Term Loan, as applicable, included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

(ii)           Payments by Borrower; Presumptions
by Administrative Agent.  Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the L/C Issuer hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be,
the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the L/C
Issuer, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or the L/C
Issuer, in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (b) shall be
conclusive, absent manifest error.

 

(c)                                  Failure to Satisfy Conditions Precedent. 
If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this Article II,
and such funds are not made available to the Borrower by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in Article V
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

(d)                                 Obligations of Lenders Several. 
The obligations of the Lenders hereunder to make Revolving Loans, to
fund their respective Pro Rata Term Shares of the Term Loan, to fund
participations in Letters of Credit and Swing Line Loans and to make payments
pursuant to Section 11.04(c) are several and not joint.  The failure of any Lender to make any
Revolving Loan, to fund its Pro Rata Term Share of the Term Loan, to fund any
participation in Letters of Credit and Swing Line Loans or to make any payment
under Section 11.04(c) on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such
date, and no Lender shall be responsible for the failure of any other Lender to
so make its Revolving Loan, to fund its Pro Rata Term Share of the Term Loan,
to purchase its participations in Letters of Credit and Swing Line Loans or to
make its payment under Section 11.04(c).

 

(e)                                  Funding Source. 
Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

65

 

2.14        Sharing of Payments by Lenders. 
If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of the Revolving Loans or the portion of the Term Loan made by it, or the
participations in L/C — BA Obligations or in Swing Line Loans held by it
resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of such Loans or participations and accrued interest thereon greater
than its ratable share thereof as provided herein, then the Lender receiving
such greater proportion shall (a) notify the Administrative Agent of such
fact, and (b) purchase (for cash at face value) participations in the
applicable Revolving Loans and/or portion of the Term Loan made by it and/or
subparticipations in the participations in L/C — BA Obligations or Swing Line
Loans of the other Lenders, as the case may be, or make such other adjustments
as shall be equitable, so that the benefit of all such payments shall be shared
by the applicable Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Revolving Loans, portion
of the Term Loan and/or other amounts owing them, provided that:

 

(i)            if any such participations or
subparticipations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations or subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(ii)           the provisions of this Section shall
not be construed to apply to (x) any payment made by the Borrower pursuant
to and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Revolving Loans, portion of the Term Loan or
subparticipations in L/C — BA Obligations or Swing Line Loans to any assignee
or participant, other than to the Borrower or any Subsidiary thereof (as to
which the provisions of this Section shall apply).

 

The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

 

2.15        Increase in Commitments.

 

(a)           Request for Increase.  At any time after the Amendment No. 6
Effective Date, provided there exists no Default, and upon notice to the
Administrative Agent (which shall promptly notify the Revolving Lenders), the
Borrower may, from time to time, request an increase in the Aggregate Revolving
Credit Commitments by an amount (for all such requests) not exceeding, subject
to proviso clause (iii) below, $125,000,000 (the aggregate amount
of all such increases, the “Increased Revolving Credit
Commitment Amount”); provided that (i) any such
request for an increase shall be in a minimum amount of $5,000,000, (ii) the
Borrower may make a maximum of three such requests, and (iii) after giving
effect to such increase, the sum of (A) the Increased Revolving Credit
Commitment Amount pursuant to this Section and (B) the aggregate
outstanding amount at any time of any Additional Secured Indebtedness incurred
pursuant to Section 8.03(p) shall not exceed
$325,000,000.  At the time of sending
such notice, 

 

66

 

the Borrower (in
consultation with the Administrative Agent) shall specify the time period
within which each Revolving Lender is requested to respond (which shall in no
event be less than ten Business Days from the date of delivery of such notice
to the Revolving Lenders).

 

(b)           Lender Elections to Increase.  Each Revolving Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Revolving Credit Commitment and, if so, whether by an amount equal
to, greater than, or less than its Pro Rata Revolving Share of such requested
increase.  Any Revolving Lender not
responding within such time period shall be deemed to have declined to increase
its Revolving Credit Commitment.

 

(c)           Notification by Administrative
Agent; Additional Lenders.  The
Administrative Agent shall notify the Borrower and each Revolving Lender of the
Revolving Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested
increase and subject to the approval of the Administrative Agent, the L/C
Issuer and the Swing Line Lender (which approvals shall not be unreasonably
withheld), the Borrower may also invite additional Eligible Assignees to become
Revolving Lenders pursuant to a joinder agreement in form and substance satisfactory
to the Administrative Agent and its counsel.

 

(d)           Effective Date and Allocations.  If the Aggregate Revolving Credit Commitments
are increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the “Increase
Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly
notify the Borrower and the Revolving Lenders of the final allocation of such
increase and the Increase Effective Date.

 

(e)           Conditions to Effectiveness of
Increase.  As a condition precedent
to such increase, the Borrower shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Increase Effective Date signed
by a Responsible Officer of such Loan Party (i) certifying and attaching
the resolutions adopted by such Loan Party approving or consenting to such
increase, and (ii) in the case of the Borrower, certifying that, before
and after giving effect to such increase, (A) the representations and
warranties contained in Article VI and the other Loan Documents are
true and correct on and as of the Increase Effective Date, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they are true and correct as of such earlier date, and except
that for purposes of this Section 2.15, the representations and
warranties contained in subsections (a) and (b) of Section 6.05
shall be deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 7.01, and (B) no
Default exists.  The Borrower shall
prepay any Revolving Loans outstanding on the Increase Effective Date (and pay
any additional amounts required pursuant to Section 4.05) to the
extent necessary to keep the outstanding Revolving Loans ratable with any
revised Pro Rata Revolving Shares arising from any nonratable increase in the
Revolving Credit Commitments under this Section.

 

(f)            Conflicting Provisions.  This Section shall supersede any
provisions in Section 2.14 or 11.01 to the contrary.

 

67

 

ARTICLE
III.

SECURITY

 

3.01        Security. 
As security for the full and timely payment and performance of all
Obligations, the Borrower shall, and shall cause all other Loan Parties to, on
or before the Closing Date, do or cause to be done all things necessary in the
opinion of the Administrative Agent and its counsel to grant to the
Administrative Agent for the benefit of the Secured Parties a duly perfected
first priority security interest in all Collateral subject to no prior Lien or
other encumbrance or restriction on transfer, except as expressly permitted
hereunder.  Without limiting the
foregoing, on the Closing Date the Borrower shall deliver, and shall cause each
Guarantor (other than, solely with respect to the Security Agreement, Mid-State
Homes and Walter Mortgage Company) to deliver, to the Administrative Agent, in
form and substance reasonably acceptable to the Administrative Agent, (a) if
such party has rights in any Pledged Interests (i) the Pledge Agreement
which shall pledge all of the Pledged Interests held by such party to the
Administrative Agent for the benefit of the Secured Parties, and (ii) if
such Pledged Interests are in the form of certificated securities, such
certificated securities, together with undated stock powers or other
appropriate transfer documents indorsed in blank pertaining thereto, (b) the
Security Agreement, which shall pledge to the Administrative Agent for the
benefit of the Secured Parties certain personal property of the Borrower and
the Guarantors more particularly described therein, (c) if such party has
a fee interest in any of the real property set forth on Schedule 3.01, a
Mortgage with respect thereto and such Mortgaged Property Support Documents as
the Administrative Agent may request, (d) if such party has any leasehold
interest in, or other grant of, mineral rights relating to the Coal mining or
natural gas operations of any Coal Mining Entity, a Mineral Rights Mortgage
with respect thereto and such Mortgaged Coal Property Support Documents as the
Administrative Agent may request, (e) Uniform Commercial Code financing
statements in form, substance and number as requested by the Administrative
Agent, reflecting the Lien in favor of the Secured Parties on the Pledged
Interests and all other Collateral, and shall take such further action and
deliver or cause to be delivered such further documents as required by the
Security Instruments or otherwise as the Administrative Agent may request to
effect the transactions contemplated by this Article III.  The Borrower shall also, and shall cause each
Guarantor, to pledge to the Administrative Agent for the benefit of the Secured
Parties (and as appropriate to reaffirm its prior pledge of) all of the Pledged
Interests acquired or created after the Closing Date and held by such party, or
otherwise acquired by such party and not theretofore pledged to the
Administrative Agent for the benefit of the Secured Parties, and to deliver to
the Administrative Agent all of the documents and instruments in connection
therewith as are required pursuant to the terms of Section 7.12 and
of the Security Instruments.

 

3.02        Further Assurances.

 

(a)           At the request of the Administrative
Agent, the Borrower will or will cause all other Loan Parties, as the case may
be, from time to time to execute, by its duly authorized officers, alone or
with the Administrative Agent, any certificate, instrument, financing
statement, control agreement, statement or document, or to procure any such
certificate, instrument, statement or document, or to take such other action
(and pay all connected costs) which the Administrative Agent reasonably deems
necessary from time to time to create, continue or preserve the liens and security
interests in Collateral (and the perfection and priority thereof) of the
Administrative Agent contemplated hereby and by the other Loan Documents and 

 

68

 

specifically including
all Collateral acquired by the Borrower or other Loan Party after the Closing
Date.

 

(b)           Without limiting the generality of
the foregoing subsection (a), in the event that the Borrower or any Loan
Party (or any Domestic Subsidiary that is required to be a Loan Party pursuant
to the terms of this Agreement) shall acquire (including as a result of the
creation or acquisition of a Restricted Subsidiary or an existing Subsidiary
becoming a Restricted Subsidiary, in each case in accordance with the terms of
this Agreement) any fee interest in real property having a fair market value as
determined in good faith by the Administrative Agent or the Borrower in excess
of $10,000,000 in the aggregate, the Borrower or the applicable Domestic
Subsidiary shall, promptly after such acquisition, execute and deliver to the
Administrative Agent a Mortgage in favor of the Administrative Agent, as
mortgagee for the ratable benefit of the Lenders, and provide the
Administrative Agent with evidence of the completion (or reasonably
satisfactory arrangements for the completion) of all recordings and filings of
such Mortgage as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to effectively create a valid, perfected, first
priority Lien, subject to Liens permitted by Section 8.01(a), (c),
(d), (g), (h) or (i), against the properties
purported to be covered thereby, including evidence of the payment of any
filing or recordation fees or taxes, and deliver to the Administrative Agent
such Mortgaged Property Support Documents as the Administrative Agent may
request with respect to the property purported to be covered by such Mortgage;

 

(c)           Without limiting the generality of
the foregoing subsection (a), in the event that the Borrower or any
other Loan Party (or any Domestic Subsidiary that is required to be a Loan
Party pursuant to the terms of this Agreement) shall acquire (including as a
result of the creation or acquisition of a Restricted Subsidiary or an existing
Subsidiary becoming a Restricted Subsidiary, in each case in accordance with
the terms of this Agreement) any fee, leasehold or grantee interest in any
mineral rights relating or adjacent to the Coal or natural gas operations of
any Coal Mining Entity or otherwise acquired for the commercial value of such
mineral rights, the Borrower shall or shall cause the applicable Domestic
Subsidiary to, promptly after such acquisition, (i) notify the
Administrative Agent of such acquisition and provide to the Administrative
Agent the location, acreage, facility size and use of such real property or
mineral rights interest, (ii) if requested by the Administrative Agent,
execute and deliver to the Administrative Agent a Mineral Rights Mortgage in
favor of the Administrative Agent, as mortgagee for the ratable benefit of the
Lenders, and provide the Administrative Agent with evidence of the completion
(or reasonably satisfactory arrangements for the completion) of all recordings
and filings of such Mineral Rights Mortgage as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable to effectively create
a valid, perfected, first priority Lien, subject to Liens permitted by Section 8.01(a),
(c), (d), (g), (h) or (i), against the
properties and interests purported to be covered thereby, including evidence of
the payment of any filing or recordation fees or taxes, and deliver to the
Administrative Agent such Mortgaged Coal Property Support Documents as the
Administrative Agent may request with respect to the property purported to be
covered by such Mineral Rights Mortgage;

 

(d)           Without limiting the generality of
the foregoing subsection (a), prior to entering into any new lease of
real property or renewing any existing lease of real property following the
Closing Date, the Borrower shall, and shall cause each of its Domestic
Subsidiaries that are or are required to be Loan Parties to, use its (and
their) best efforts (which shall not require the 

 

69

 

expenditure of cash or
the making of any material concessions under the relevant lease) to deliver to
the Administrative Agent a waiver, in form and substance reasonably
satisfactory to the Administrative Agent, executed by the lessor of any real
property that is to be leased by the Borrower or such Domestic Subsidiary for a
term in excess of one year in any state which by statute grants such lessor a “landlord’s”
(or similar) Lien which is superior to the Administrative Agent’s, to the
extent the value of any personal property of the Borrower and its Domestic
Subsidiaries that are Restricted Subsidiaries held or to be held at such leased
property exceeds (or it is anticipated that the value of such personal property
will, at any point in time during the term of such leasehold term, exceed)
$12,000,000.

 

(e)           The Administrative Agent is hereby
irrevocably authorized to execute (if necessary) and file or cause to be filed,
with or if permitted by applicable law without the signature of the Borrower or
any Loan Party appearing thereon, all Uniform Commercial Code financing statements
reflecting the Borrower or any other Loan Party as “debtor” and the
Administrative Agent as “secured party”, and continuations thereof and
amendments thereto, as the Administrative Agent reasonably deems necessary or
advisable to give effect to the transactions contemplated hereby and by the
other Loan Documents.

 

3.03        Information Regarding Collateral. 
The Borrower represents, warrants and covenants that (a) the chief
executive office of the Borrower and each other Person providing Collateral
pursuant to a Security Instrument (each, a “Grantor”) at the Closing Date is located
at the address or addresses specified on Schedule 3.03, and (b) Schedule
3.03 contains a true and complete list of (i) the exact legal name,
jurisdiction of formation, and address within the United States of each Grantor
and of each other Person that has effected any merger or consolidation with a
Grantor or contributed or transferred to a Grantor any property constituting
Collateral as of the Amendment No. 6 Effective Date (excluding Persons
making sales in the ordinary course of their businesses to a Grantor of
property constituting inventory in the hands of such seller), (ii) the
exact legal name, jurisdiction of formation, jurisdiction identification
number, and each location of the chief executive office of each Grantor as of
the Amendment No. 6 Effective Date, (iii) each location within the
United States in which material goods constituting Collateral are located as of
the Amendment No. 6 Effective Date (together with the name of each owner
of the property located at such address if not the applicable Grantor, and a
summary description of the relationship between the applicable Grantor and such
Person), and (iv) each trade name, trademark or other trade style used by
any Grantor since April 17, 2003 and the purposes for which it was
used.  The Borrower shall not change, and
shall not permit any other Grantor to change, its name, jurisdiction of
formation (whether by reincorporation, merger or otherwise), the location of
its chief executive office or any location specified in clause (b)(iii) of
the immediately preceding sentence, or use or permit any other Grantor to use,
any additional trade name, trademark or other trade style, except upon giving
not less than thirty (30) days’ prior written notice to the Agent and taking or
causing to be taken all such action at Borrower’s or such other Grantor’s
expense as may be reasonably requested by the Administrative Agent to perfect
or maintain the perfection of the Lien of the Administrative Agent in
Collateral.

 

70

 

ARTICLE
IV.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

4.01        Taxes.

 

(a)           Payments Free of Taxes.  Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
L/C Issuer, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b)           Payment of Other Taxes by the
Borrower.  Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

(c)           Indemnification by the Borrower.  The Borrower shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, within 30 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender or the L/C Issuer (with a
copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent
manifest error.

 

(d)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing such
payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.

 

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or
under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

 

71

 

Without limiting the generality of the foregoing, in the event that the
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the request of the Borrower or the Administrative Agent,
but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

 

(i)            duly completed copies of Internal
Revenue Service Form W-8BEN claiming eligibility for benefits of an income
tax treaty to which the United States is a party,

 

(ii)           duly completed copies of Internal
Revenue Service Form W-8ECI,

 

(iii)          in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under section 881(c) of
the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal
Revenue Service Form W-8BEN, or

 

(iv)          any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in United
States Federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the Borrower to
determine the withholding or deduction required to be made.

 

(f)            Treatment of Certain Refunds.  If the Administrative Agent, any Lender or
the L/C Issuer determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses
of the Administrative Agent, such Lender or the L/C Issuer, as the case may be,
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon
the request of the Administrative Agent, such Lender or the L/C Issuer, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such
refund to such Governmental Authority. 
This subsection shall not be construed to require the Administrative
Agent, any Lender or the L/C Issuer to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.

 

4.02        Illegality. 
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or
to determine or charge 

 

72

 

interest rates based upon
the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Loans to Eurodollar Rate Loans or, if such notice relates to the unlawfulness
or asserted unlawfulness of charging interest based on the Eurodollar Rate, to
make Base Rate Loans as to which the interest rate is determined with reference
to the Eurodollar Rate, shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist.  Upon receipt of such notice, the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such
Lender and Base Rate Loans as to which the interest rate is determined with
reference to the Eurodollar Rate to Base Rate Loans as to which the rate of
interest is not determined with reference to the Eurodollar Rate, either on the
last day of the Interest Period therefor, if such Lender may lawfully continue
to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans or Base Rate
Loan.  Notwithstanding the foregoing and despite the illegality for such a
Lender to make, maintain or fund Eurodollar Rate Loans or Base Rate Loans as to
which the interest rate is determined with reference to the Eurodollar Rate,
that Lender shall remain committed to make Base Rate Loans and shall be
entitled to recover interest at the Base Rate.  Upon any such prepayment
or conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted.

 

4.03                        Inability to Determine
Rates.  If the Required Lenders determine that for
any reason in connection with any request for a Loan or a conversion to or
continuation thereof that (a) Dollar deposits are not being offered to
banks in the London interbank eurodollar market for the applicable amount and
Interest Period of such Loan, (b) adequate and reasonable means do not
exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan or in connection with a Base
Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan or in connection with a
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Borrower and each Lender.  Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans and Base Rate Loans as to which the
interest rate is determined with reference to the Eurodollar Rate shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice.  Upon receipt of such notice, the Borrower
may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.

 

4.04                        Increased Costs; Reserves on Eurodollar Rate
Loans.

 

(a)                                  Increased Costs Generally. 
If any Change in Law shall:

 

(i)            impose, modify or deem applicable
any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with 

 

73

 

or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement contemplated by Section 4.04(e))
or the L/C Issuer;

 

(ii)           subject any Lender or the L/C Issuer
to any tax of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any Bankers’ Acceptance, any participation in a Letter of Credit or a
Bankers’ Acceptance, or any Eurodollar Rate Loan made by it, or change the
basis of taxation of payments to such Lender or the L/C Issuer in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 4.01
and the imposition of, or any change in the rate of, any Excluded Tax payable
by such Lender or the L/C Issuer); or

 

(iii)          impose on any Lender or the L/C Issuer
or the London interbank market any other condition, cost or expense affecting
this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of
Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Rate Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or the L/C Issuer of participating in, issuing or maintaining any
Letter of Credit or Bankers’ Acceptance (or of maintaining its obligation to
participate in or to issue any Letter of Credit or Bankers’ Acceptance), or to
reduce the amount of any sum received or receivable by such Lender or the L/C
Issuer hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or the L/C Issuer, the Borrower will pay to such
Lender or the L/C Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.

 

(b)           Capital Requirements.  If any Lender or the L/C Issuer determines
that any Change in Law affecting such Lender or the L/C Issuer or any Lending
Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if
any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the L/C Issuer’s capital or on the
capital of such Lender’s or the L/C Issuer’s holding company, if any, as a
consequence of this Agreement, the Revolving Credit Commitments of such Lender
or the Loans made by, or participations in Letters of Credit or Bankers’
Acceptances held by, such Lender, or the Letters of Credit or Bankers’ Acceptances
issued by the L/C Issuer, to a level below that which such Lender or the L/C
Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved
but for such Change in Law (taking into consideration such Lender’s or the L/C
Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding
company with respect to capital adequacy), then from time to time pursuant to subsection
(c) below the Borrower will pay to such Lender or the L/C Issuer, as
the case may be, such additional amount or amounts as will compensate such
Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company
for any such reduction suffered.

 

(c)           Certificates for Reimbursement.  A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in subsection
(a) or (b) of this Section and delivered to the
Borrower shall be conclusive absent manifest error.  The Borrower shall pay 

 

74

 

such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 Business Days after receipt thereof.

 

(d)           Delay in Requests.  Failure or delay on the part of any Lender or
the L/C Issuer to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender’s or the L/C
Issuer’s right to demand such compensation, provided that the Borrower
shall not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six months prior to the date that such Lender or
the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
L/C Issuer’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

(e)           Reserves on Eurodollar Rate Loans.  The Borrower shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal
amount of each Eurodollar Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, provided the
Borrower shall have received at least 10 days’ prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable 10 days from receipt of such notice.

 

4.05        Compensation for Losses. 
Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, the Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:

 

(a)           any continuation, conversion, payment
or prepayment of any Loan other than a Base Rate Loan on a day other than the
last day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);

 

(b)           any failure by the Borrower (for a
reason other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or

 

(c)           any assignment of a Eurodollar Rate
Loan on a day other than the last day of the Interest Period therefor as a
result of a request by the Borrower pursuant to Section 11.13;

 

including any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable
to terminate the deposits from which such funds were obtained.  The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.

 

75

 

For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 4.05, each Lender shall be deemed to
have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for
such Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.

 

4.06                        Mitigation Obligations;
Replacement of Lenders.

 

(a)                                  Designation of a Different Lending Office. 
If any Lender requests compensation under Section 4.04, or
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.01,
or if any Lender gives a notice pursuant to Section 4.02, then such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 4.01 or 4.04,
as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 4.02, as applicable, and (ii) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

 

(b)                                 Replacement of Lenders. 
If any Lender requests compensation under Section 4.04, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.01,
the Borrower may replace such Lender in accordance with Section 11.13.

 

4.07                        Survival. 
All of the Borrower’s obligations under this Article IV
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE
V.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

5.01                        Conditions of Initial
Credit Extension.  The obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)                                  The Administrative Agent’s receipt of the
following, each of which shall be originals or facsimiles (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each dated the Closing Date (or, in the case
of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative Agent
and its legal counsel:

 

(i)                                     executed counterparts of this Agreement,
each of the Security Instruments, the Subsidiary Guaranty and the Mid-State
Homes Guaranty, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrower;

 

(ii)                                  Revolving Loan Notes executed by the
Borrower in favor of each Revolving Lender requesting such a Note;

 

76

 

(iii)                               Term Loan Notes executed by the Borrower
in favor of each Term Loan Lender requesting such a Note;

 

(iv)                              such certificates of resolutions or other
action, incumbency certificates (including specimen signatures), and/or other
certificates of Responsible Officers of each Loan Party as the Administrative
Agent may require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a
party;

 

(v)                                 such documents and certifications as the
Administrative Agent may reasonably require to evidence that each Loan Party is
duly organized or formed, and that each of the Borrower and each Guarantor is
validly existing, in good standing and qualified to engage in business in (A) its
jurisdiction of formation and (B) in Alabama if the Borrower or such Loan
Party is formed in a jurisdiction other than Alabama but has assets or
operations in Alabama, including in each such case certified copies of each
Loan Party’s Organization Documents, shareholders’ agreements, certificates of
good standing and/or qualification to engage in business;

 

(vi)                              a favorable opinion of Simpson Thacher &
Bartlett LLP, counsel to the Loan Parties, and appropriate local counsel to the
Loan Parties, each addressed to the Administrative Agent and each Lender, as to
the matters set forth in Exhibit G and such other matters
concerning the Loan Parties and the Loan Documents as the Required Lenders may
reasonably request;

 

(vii)                           a certificate of a Responsible Officer of
the Borrower either (A) identifying all consents, licenses and approvals
required in connection with the execution, delivery and performance by each
Loan Party and the validity against each such Loan Party of the Loan Documents
to which it is a party, and stating that such consents, licenses and approvals shall
be in full force and effect, and attaching true and correct copies thereof or (B) stating
that no such consents, licenses or approvals are so required;

 

(viii)                        a certificate signed by a Responsible
Officer of the Borrower certifying:

 

(A)                              that the conditions specified in Sections
5.02(a) and (b) have been satisfied,

 

(B)                                as to the matters described in Section 5.01(d);

 

(C)                                that none of the Merger Documents
(including any condition to consummation of the Merger) has been altered,
amended, waived or otherwise changed or supplemented since their execution on June 17,
2005, in any respect materially adverse to the Lenders, except to the extent
agreed to by prior written consent of the Arrangers, which consent shall not be
unreasonably withheld;

 

(D)                               that the Merger has been consummated
prior to, or is being consummated substantially simultaneously with, the
Closing Date, in accordance 

 

77

 

with the terms of the Merger Documents (only as
amended, altered, waived or otherwise changed in compliance with subpart (D) above);

 

(E)                                 that there has been no material adverse
change in the facts and information regarding the Loan Parties as represented
to date;

 

(ix)                                evidence satisfactory to the Arrangers of
the consummation, prior to or substantially simultaneously with the occurrence
of the Closing Date, of each of the following, in each case in compliance with
all applicable laws and regulations, with the receipt of all necessary material
governmental, shareholder and third party consents (including Hart-Scott-Rodino
clearance) and approvals:  (A) the
creation of New Holdco and the transfer of the Equity Interests of US Pipe and
of JW MergerCo thereto, such that after giving effect thereto (but prior to
giving effect to the Merger and to the US Pipe Contribution) New Holdco is a
direct subsidiary of the Borrower and JW MergerCo, Inc. and US Pipe are
direct Subsidiaries of New Holdco, (B) the Entity Conversions, including
the filing of any certificates of conversion required or requested by the
Administrative Agent, (C) the US Pipe Contribution in accordance with the
terms of, and such that after giving effect thereto US Pipe is a “Restricted
Subsidiary” under, the Indentures for both the Mueller Water Products Notes and
the Mueller Group Notes, and otherwise on terms and conditions reasonably
satisfactory to the Arrangers, (D) the receipt by New Holdco of not less
than $400,000,000 of net proceeds from the Dividend Distribution and of not
less than $20,000,000 of net proceeds from the Subordinated New Holdco Note,
and the application of all such proceeds as consideration for the Merger, (E) the
refinancing (in an amount sufficient, inter alia, to support the tender,
defeasance or satisfaction and discharge of the Mueller Group Second Lien
Notes), termination and payment in full of all obligations outstanding under
the Existing Mueller Credit Agreement with the Replacement Mueller Facilities,
and (F) the Put Backstop Commitment Letter Amendment;

 

(x)                                   a certificate signed by the Chief
Financial Officer of the Borrower certifying that after giving effect to the
entering into of the Loan Documents, the termination of the Existing Credit
Agreement, and the consummation of all of the Transactions, the Borrower and
its Subsidiaries, measured on a consolidated basis, are Solvent;

 

(xi)                                evidence satisfactory to the Arrangers
that the Existing Credit Agreement has been or concurrently with the Closing
Date is being terminated and all Liens securing obligations under the Existing
Credit Agreement have been or concurrently with the Closing Date are being
released;

 

(xii)                             evidence that all insurance required to
be maintained pursuant to the Loan Documents has been obtained and is in
effect;

 

(xiii)                          an initial Revolving Loan Notice, if any;

 

(xiv)                         an initial Term Loan Interest Rate
Selection Notice, if any;

 

78

 

(xv)                            delivery of Uniform Commercial Code
financing statements suitable in form and substance for filing in all places
required by applicable law to perfect the Liens of the Administrative Agent
under the Security Instruments as a first priority Lien as to items of
Collateral in which a security interest may be perfected by the filing of
financing statements, and such other documents and/or evidence of other actions
as may be reasonably necessary under applicable law to perfect the Liens of the
Administrative Agent under such Security Instruments as a first priority Lien
in and to such other Collateral as the Administrative Agent may require, including
without limitation the delivery by the Borrower of all certificates evidencing
Pledged Interests, accompanied in each case by duly executed stock powers (or
other appropriate transfer documents) in blank affixed thereto;

 

(xvi)                         Mineral Rights Mortgages and such
Mortgaged Coal Property Support Documents as the Administrative Agent may
request with respect to each lease or other grant of mineral rights as to which
the Borrower or a Guarantor is a lessee or grantee, with such exceptions as are
agreed by the Arrangers;

 

(xvii)                      with respect to those parcels of real
property set forth on Schedule 3.01, a Mortgage and such Mortgaged
Property Support Documents as the Administrative Agent may request;

 

(xviii)                   Uniform Commercial Code search results showing only
those Liens as are acceptable to the Lenders;

 

(xix)                           such other assurances, certificates,
documents, consents or opinions as the Administrative Agent, the L/C Issuer,
the Swing Line Lender or the Required Lenders may reasonably require.

 

(b)                                 Any fees required to be paid on or before
the Closing Date shall have been paid.

 

(c)                                  Unless waived by the Administrative
Agent, the Borrower shall have paid all reasonable fees, charges and
disbursements of counsel to the Administrative Agent to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of such
reasonable fees, charges and disbursements as shall constitute its reasonable
estimate of such reasonable fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).

 

(d)                                 The Administrative Agent shall be
satisfied that after giving effect to the initial Credit Extension hereunder,
the remaining amount available to be drawn under the Revolving Credit Facility
shall not be less than $112,500,000.

 

Without limiting the generality of the provisions of Section 10.04,
for purposes of determining compliance with the conditions specified in this Section 5.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved 

 

79

 

by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received notice from such Lender prior to
the proposed Closing Date specifying its objection thereto.

 

5.02                        Conditions to all Credit
Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Revolving Loan Notice or Term Loan
Interest Rate Selection Notice requesting only a conversion of Revolving Loans
or Segments, as applicable, to the other Type or a continuation of Eurodollar
Rate Loans or Eurodollar Rate Segments, as applicable) is subject to the
following conditions precedent:

 

(a)                                  The representations and warranties of the
Borrower and each other Loan Party contained in Article VI or any
other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that
for purposes of this Section 5.02, the representations and
warranties contained in subsections (a) and (b) of Section 6.05
shall be deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 7.01.

 

(b)                                 No Default or Event of Default shall have
occurred and be continuing, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

 

(c)                                  The Administrative Agent and, if
applicable, the L/C Issuer or the Swing Line Lender shall have received a
Request for Credit Extension in accordance with the requirements hereof.

 

(d)                                 No limitation exists on any Borrowing or
Credit Extension contained in Article II.

 

Each Request for Credit Extension (other than a Revolving Loan Notice
or Term Loan Interest Rate Selection Notice requesting only a conversion of
Revolving Loans or Segments, as applicable, to the other Type or a continuation
of Eurodollar Rate Loans or Eurodollar Rate Segments, as applicable) submitted
by the Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 5.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE
VI.

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and
the Lenders that:

 

6.01                        Existence, Qualification
and Power; Compliance with Laws.  Each Loan
Party (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of
the jurisdiction of its incorporation, organization or formation, (b) has
all requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and
carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party and to consummate
the Transactions, (c) is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all 

 

80

 

Laws; except in each case
referred to in clause (b)(i), (c) or (d), to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

6.02                        Authorization; No
Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, and the
consummation of the Transactions, have been duly authorized by all necessary
corporate or other organizational action, and do not and will not (a) contravene
the terms of the Organization Documents of any such Person or of any Person
whose Equity Interests are being pledged; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under (i) any
Contractual Obligation to which such Person or any Person whose Equity
Interests are being pledged is a party or (ii) any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any Law.

 

6.03                        Governmental
Authorization; Other Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document or the
consummation of the Transactions.

 

6.04                        Binding Effect. 
This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that
is party thereto.  This Agreement
constitutes, and each other Loan Document when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against
each Loan Party that is party thereto in accordance with its terms.

 

6.05                        Financial Statements; No Material
Adverse Effect.

 

(a)                                  The Audited Financial Statements and the
related consolidating balance sheets and financial statements of the Borrower
and its Subsidiaries (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of
the Borrower and its Subsidiaries (or, with respect to the consolidating
financial statements, of the Borrower or the applicable Subsidiary) as of the
date thereof and its or their results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; and (iii) show
all material indebtedness and other liabilities, direct or contingent, of the
Borrower and its Subsidiaries (or, with respect to the consolidating financial
statements, of the Borrower or the applicable Subsidiary) as of the date
thereof, including liabilities for taxes, material commitments and
Indebtedness.

 

(b)                                 The unaudited consolidated balance sheet
of the Borrower and its Subsidiaries dated as of June 30, 2005, the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for the fiscal quarter ended on that date, and the related
consolidating balance sheets and financial statements of the Borrower and its
Subsidiaries (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the
Borrower and its Subsidiaries (or, with respect to the consolidating financial
statements, of the Borrower or the applicable Subsidiary) as of the date
thereof and its or their 

 

81

 

results of operations for
the period covered thereby, subject, in the case of clauses (i) and
(ii), to the absence of footnotes and to normal year-end audit
adjustments.

 

(c)                                  Since the date of the most recent audited
financial statements delivered pursuant to Section 7.01(a), there
has been no event or circumstance, either individually or in the aggregate,
that has had or could reasonably be expected to have a Material Adverse Effect.

 

(d)                                 The Borrower and its Non-Mueller  Subsidiaries, on a consolidated basis,
have no material indebtedness or other liabilities, direct or contingent,
including liabilities for taxes, material commitments and Indebtedness, except
to the extent (i) set forth in the financial statements most recently
delivered pursuant to Section 7.01(a) or (b), (ii) set
forth on Schedule 8.03, or (iii) incurred since the date referred
to in subsection (i) hereof in accordance with the terms of this
Agreement and the other Loan Documents.

 

6.06                        Litigation. 
Except as specifically disclosed in Schedule 6.06, there are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower after due investigation, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, by or against the
Borrower or any of its Non-Mueller  Subsidiaries
or against any of their properties or revenues that (a) purport to affect
or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby, or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

 

6.07                        No Default. 
Neither the Borrower nor any Non-Mueller Subsidiary is in default under
or with respect to any Contractual Obligation that could, either individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.  No Default has occurred and is
continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

 

6.08                        Ownership of Property; Liens. 
Each of the Borrower and each Non-Mueller Subsidiary has good record and
marketable title in fee simple to, or valid leasehold interests in, all real
property (including mineral rights and interests) necessary or used in the
ordinary conduct of its business, except for such defects in title as could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  The property of
the Borrower and its Non-Mueller  Subsidiaries
is subject to no Liens, other than Liens permitted by Section 8.01.

 

6.09                        Environmental Compliance. 
The Borrower and its Restricted Subsidiaries conduct in the ordinary
course of business a review of the effect of existing Environmental Laws and
claims alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 6.09, such Environmental Laws and
claims could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

6.10                        Insurance. 
The properties of the Borrower and its Non-Mueller  Subsidiaries are insured with financially
sound and reputable insurance companies in such amounts, with such 

 

82

 

deductibles and covering
such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Borrower or
the applicable Non-Mueller  Subsidiary
operates, none of which insurance shall be provided by any Subsidiary or any
other Affiliate of the Borrower.

 

6.11                        Taxes. 
The Borrower and its Non-Mueller  Subsidiaries
have filed all Federal, state and other material tax returns and reports
required to be filed (including any such requirement arising under any Tax
Sharing Agreement), and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets (or on New Holdco and its Subsidiaries or
their properties, income or assets to the extent required to be paid by the
Borrower or any Non-Mueller Subsidiary pursuant to any Tax Sharing Agreement)
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP. 
Except as specifically described on Schedule 6.11 hereto, there
is no proposed tax assessment against the Borrower or any Non-Mueller  Subsidiary that would, if made, have a
Material Adverse Effect.  Neither any
Loan Party nor any Non-Mueller  Subsidiary
thereof is party to any tax sharing agreement other than any Tax Sharing
Agreement.

 

6.12                        ERISA Compliance.

 

(a)                                  Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto or an application
for such a letter will be filed within twelve months of the first Plan year for
a newly adopted Plan and, to the best knowledge of the Borrower, nothing has
occurred which would reasonably be expected to prevent, or cause the loss of,
such qualification.  The Borrower and
each ERISA Affiliate have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

 

(b)                                 There are no pending or, to the best
knowledge of the Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect. 
Neither the Borrower nor any ERISA Affiliate has engaged in a non-exempt
prohibited transaction or violation of the fiduciary responsibility rules described
in section 4975 of the Code or Part 4 of Title I of ERISA with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.

 

(c)                                  (i) No ERISA Event has occurred for
which any liability remains unsatisfied or is reasonably expected to occur; (ii) except
to the extent it could reasonably be expected to have  a Material Adverse Effect, no Pension Plan
has any Unfunded Pension Liability; (iii) neither the Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any material
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums or contributions due and not delinquent under Section 4007 of ERISA);
(iv) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any material liability (and 

 

83

 

no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would
reasonably be expected to result in such liability) under Sections 4201 or 4243
of ERISA with respect to a Multiemployer Plan; and (v) to the knowledge of
the Borrower, neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

 

6.13                        Subsidiaries; Equity
Interests.  The Borrower (a) has no Subsidiaries
other than those specifically disclosed in Schedule 6.13(a) or
created or acquired in compliance with Section 7.12, (b) has
no equity investments in any other corporation or entity other than those
specifically disclosed Schedule 6.13(b) or made after the Closing
Date in compliance with this Agreement and the other Loan Documents.

 

6.14                        Margin Regulations; Investment Company
Act.

 

(a)                                  The Borrower is not engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock.

 

(b)                                 None of the Borrower, any Person
Controlling the Borrower, or any Subsidiary is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.

 

6.15                        Disclosure. 
The Borrower has disclosed to the Administrative Agent and the Lenders
all agreements, instruments and corporate or other restrictions to which it or
any of its Non-Mueller  Subsidiaries
is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.  No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in each
case, as modified or supplemented by other information so furnished) contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.

 

6.16                        Compliance with Laws. 
Each of the Borrower and each Non-Mueller Subsidiary is in compliance in
all material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its properties, except in such
instances in which (a) such requirement of Law or order, writ, injunction
or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

 

6.17                        Intellectual Property;
Licenses, Etc.  The Borrower and its Non-Mueller Subsidiaries
own, or possess the right to use, all of the trademarks, service marks, trade
names, 

 

84

 

copyrights, patents,
patent rights, franchises, licenses and other intellectual property rights
(collectively, “IP
Rights”) that are reasonably necessary for the operation of
their respective businesses, without known conflict with the IP Rights of any
other Person, except to the extent any failure so to own or possess the right
to use could not reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Borrower, the
operation by the Borrower and its Non-Mueller Subsidiaries of their respective
businesses does not infringe upon any IP Rights held by any other Person.

 

ARTICLE
VII.

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Revolving Credit Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit or Bankers’ Acceptance shall remain
outstanding, the Borrower shall, and shall (except in the case of the covenants
set forth in Sections 7.01, 7.02, 7.03 and 7.11)
cause each Non-Mueller Subsidiary to:

 

7.01                        Financial
Statements.  Deliver to the Administrative Agent and
each Lender:

 

(a)                                  as soon as available, but in any event
within 90 days after the end of each fiscal year of the Borrower (or if
earlier, 15 days after the date required to be filed with the SEC (without
giving effect to any extension permitted by the SEC)), a consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal year, and the related consolidated and consolidating statements
of income or operations, consolidated shareholders’ equity and cash flows for
such fiscal year, setting forth (except with respect to the consolidating
balance sheet and related consolidating statements) in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, and (except with respect to the consolidating
balance sheet and related consolidating statements) audited and accompanied by (i) a
report and opinion of a Registered Public Accounting Firm of nationally
recognized standing reasonably acceptable to the Administrative Agent (the “Auditor”), which
report and opinion shall be prepared in accordance with audit standards of the
Public Company Accounting Oversight Board and applicable Securities Laws and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit or with respect
to the absence of material misstatement and (ii) so long as required by
applicable Securities Laws, the report(s) of management on the Borrower’s
internal control over financial reporting pursuant to Items 308(a) and 308(c) of
Regulation S-K promulgated under the Exchange Act, the Auditor’s attestation
report on management’s assessment of the Borrower’s internal control over
financial reporting as filed with the SEC on Form 10-K for the Borrower,
and an independent assessment by the Auditor as to the effectiveness of the
Borrower’s internal control over financial reporting as required by Auditing
Standard No. 2 of the Public Company Accounting Oversight Board, and such
consolidating statements to be certified by a Responsible Officer of the
Borrower to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements
of the Borrower and its Subsidiaries;

 

(b)                                 as soon as available, but in any event
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower (or if earlier, five Business Days

 

85

 

after the date required
to be filed with the SEC (without giving effect to any extension permitted by
the SEC)), a consolidated and consolidating balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal quarter, and the related consolidated
and consolidating statements of income or operations, consolidated shareholders’
equity and cash flows for such fiscal quarter and for the portion of the
Borrower’s fiscal year then ended, setting forth (except with respect to the
consolidating balance sheet and related consolidating statements) in each case
in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
consolidated shareholders’ equity and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes;

 

As to any information contained in materials furnished pursuant to Section 7.02(e),
the Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be
in derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at
the times specified therein.

 

7.02        Certificates; Other Information. 
Deliver to the Administrative Agent and each Lender, in form and detail
satisfactory to the Administrative Agent and the Required Lenders:

 

(a)           concurrently with the delivery of the
financial statements referred to in Section 7.01(a), a certificate
of its independent certified public accountants certifying such financial
statements and stating that in making the examination necessary therefor no
knowledge was obtained of any Default or, if any such Default shall exist,
stating the nature and status of such event;

 

(b)           concurrently with the delivery of the
financial statements referred to in Sections 7.01(a) and (b),
a duly completed Compliance Certificate signed by a Responsible Officer of the
Borrower;

 

(c)           promptly after any request by the
Administrative Agent, copies of any detailed audit reports, management letters
or recommendations submitted to the board of directors (or the audit committee
of the board of directors) of the Borrower by independent accountants in
connection with the accounts or books of the Borrower or any Subsidiary, or any
audit of any of them;

 

(d)           promptly after any request by the
Administrative Agent, documents and other information supporting the
calculation of any defined term used in the computation in any Compliance
Certificate of the financial covenants set forth in Section 8.12;

 

(e)           promptly after the same are available,
copies of each annual report, proxy or financial statement sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the
Exchange Act, and not otherwise required to be delivered to the Administrative
Agent pursuant hereto;

 

86

 

(f)            as soon as available and in any
event no later than 75 days after the beginning of each fiscal year of the
Borrower, a consolidated business plan for the Borrower and its Non-Mueller  Subsidiaries prepared by management of the
Borrower, substantially similar in form and detail to the business plans
prepared prior to the Closing Date and furnished under the Existing Credit
Agreement, but taking into account the US Pipe Contribution,  to the Administrative Agent and including
balance sheets, and related statements of operations, retained earnings and
cash flow (to include separate forecasts for Consolidated Capital Expenditures
and Consolidated EBITDA), on a quarterly basis for such fiscal year, and a
reasonably detailed explanation of any underlying assumptions with respect
thereto; and

 

(g)           promptly, such additional information
regarding the business, financial or corporate affairs of the Borrower or any
Non-Mueller Subsidiary, or compliance with the terms of the Loan Documents, as
the Administrative Agent or any Lender may from time to time reasonably
request.

 

Documents required to be delivered pursuant to Section 7.01(a) or
(b) or Section 7.02(e) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 11.02; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent
or such Lender and (ii) the Borrower shall notify (which may be by
facsimile or electronic mail) the Administrative Agent and each Lender of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such
documents.  Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the Compliance Certificates required by Section 7.02(b) to
the Administrative Agent.  Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its copies of
such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arrangers will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or
another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with
respect to the Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that, so long as
the Borrower is the issuer of any outstanding debt or equity securities that
are registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities, (w) all Borrower Materials that
are to be made available to Public Lenders shall be clearly and conspicuously 

 

87

 

marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to have
authorized the Administrative Agent, the Arrangers, the L/C Issuer and the
Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall
be treated as set forth in Section 11.07); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated “Public Investor”; and (z) the Administrative
Agent and the Arrangers shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated “Public Investor”. 
Notwithstanding the foregoing, the Borrower shall be under no obligation
to mark any Borrower Materials “PUBLIC.”

 

7.03        Notices. 
Promptly notify the Administrative Agent and each Lender:

 

(a)           of the occurrence of any Default;

 

(b)           of any matter that has resulted or
could reasonably be expected to result in a Material Adverse Effect, including (i) breach
or non-performance of, or any default under, a Contractual Obligation of the Borrower
or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding
or suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in,
any litigation or proceeding affecting the Borrower or any Subsidiary,
including pursuant to any applicable Environmental Laws;

 

(c)           of the occurrence of any ERISA Event;
and

 

(d)           of any material change in accounting
policies or financial reporting practices by the Borrower or any Non-Mueller
Subsidiary, including any determination by the Borrower referred to in Section 2.11(b).

 

Each notice pursuant to this Section 7.03 shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 7.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

 

7.04        Payment of Obligations. 
Pay and discharge as the same shall become due and payable, all its
obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets (or on New Holdco and its Subsidiaries and their properties or assets to
the extent required to be paid by the Borrower or any Non-Mueller Subsidiary
pursuant to any Tax Sharing Agreement), unless the same are being contested in
good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by the Borrower or such
Subsidiary; (b) all lawful claims which, if unpaid, would by law become a
Lien upon its property, except to the extent that any such Lien would otherwise
be permitted by Section 8.01; and (c) all Indebtedness having
an 

 

88

 

aggregate principal
amount (including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than $5,000,000, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

 

7.05        Preservation of Existence, Etc.  (a) Preserve,
renew and maintain in full force and effect its legal existence and good
standing under the Laws of the jurisdiction of its organization or formation
except in a transaction permitted by Section 8.04 or 8.05; (b) take
all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.

 

7.06        Maintenance of Properties.

 

(a)           Maintain, preserve and protect all of
its properties and equipment necessary in the operation of its business in good
working order and condition, ordinary wear and tear excepted, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

(b)           Make all necessary repairs thereto
and renewals and replacements thereof except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

 

(c)           Use the standard of care typical in
the industry in the operation and maintenance of its facilities.

 

(d)           Keep in full force and effect all of
its leases and other contract rights, and all rights of way, easements and
privileges necessary or appropriate for the proper operation of the Mines being
operated by the Borrower or a Non-Mueller Subsidiary except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect.

 

(e)           Obtain and comply with each permit,
license, authorization and other governmental approval necessary to recover
Coal from any Mine being operated by the Borrower or a Non-Mueller Subsidiary
and observe the requirements thereof in all material respects, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

(f)            Cause each Mine being operated by
the Borrower or a Non-Mueller Subsidiary to be operated, maintained, developed
and mined and cause the associated processing plants and other fixed and
operating assets to be operated and maintained, in a workmanlike manner, as would
a prudent coal mine operator, and in accordance with generally accepted mining
practices and all applicable requirements of Law, including but not limited to
applicable Environmental Laws, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

7.07        Maintenance of Insurance. 
In the event compliance with the insurance requirements set forth in the
Security Instruments does not satisfy the following requirements, 

 

89

 

and not in limitation of
such insurance requirements in the Security Instruments, maintain, with
financially sound and reputable insurance companies, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar
circumstances by such other Persons  and
providing for not less than 15 days’ prior notice to the Administrative Agent
of termination, lapse or cancellation of such insurance, none of which
insurance (other than worker’s compensation insurance, disability insurance and
other similar types of insurance that do not constitute the insurance of its
properties or of interruptions to its business operations) shall be provided by
any Subsidiary or any other Affiliate of the Borrower.

 

7.08        Compliance with Laws. 
Comply in all material respects with the requirements of all Laws
(including without limitation all applicable Environmental Laws) and all
orders, writs, injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted; or (b) the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.

 

7.09        Books and Records.  (a) 
Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Borrower or such Non-Mueller Subsidiary, as the case may be; and (b) maintain
such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Non-Mueller Subsidiary, as the case may be.

 

7.10        Inspection Rights. 
Permit representatives and independent contractors of the Administrative
Agent and each Lender to visit and inspect any of its properties, to examine
its corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
officers, and independent public accountants, all at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Borrower; provided, however,
that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.

 

7.11        Use of Proceeds. 
Use the proceeds of the Credit Extensions (i) to pay a portion of
the cost of acquiring Mueller Water Products and its Subsidiaries in connection
with the Merger, (ii) pay fees and expenses in connection with the
Transactions, and (iii) for working capital, capital expenditures, and
other general corporate purposes not in contravention of any Law or of any Loan
Document.

 

7.12        New Subsidiaries, Pledgors and Real
Property.

 

(a)           As soon as practicable but in any
event within 30 Business Days following the acquisition or creation of any
Subsidiary that is a Restricted Subsidiary, or the time any existing Subsidiary
becomes a Material Subsidiary (other than, in each case, a QHT Interim Entity),
cause to be delivered to the Administrative Agent each of the following:

 

90

 

(i)            if such Subsidiary is both a
Domestic Subsidiary and a Material Subsidiary, a Guaranty Joinder Agreement
duly executed by such Material Subsidiary;

 

(ii)           if such Subsidiary is both a Domestic
Subsidiary and a Material Subsidiary, (A) a Security Joinder Agreement
duly executed by such Material Subsidiary (with all schedules thereto
appropriately completed) and (B) if such Material Subsidiary owns a fee
interest in any real property having a fair market value in excess of
$10,000,000, or has a fee, leasehold or grantee interest in any mineral rights
relating or adjacent to the Coal or natural gas operations of any Coal Mining
Entity or otherwise acquired for the commercial value of such mineral rights,
those documents required by Section 3.02(b) and/or (c),
as applicable;

 

(iii)          if such Subsidiary is both a Material
Subsidiary and either a Domestic Subsidiary or a Direct Foreign Subsidiary, and
if any of the Subsidiary Securities issued by such Material Subsidiary are
owned by a Material Subsidiary who has not then executed and delivered to the
Administrative Agent the Pledge Agreement or a Pledge Joinder Agreement
granting a Lien to the Administrative Agent, for the benefit of the Secured
Parties, in such Pledged Interests, a Pledge Joinder Agreement (with all
schedules thereto appropriately completed) duly executed by the Material
Subsidiary that directly owns such Pledged Interests;

 

(iv)          if such Subsidiary is both a Material
Subsidiary and either a Domestic Subsidiary or a Direct Foreign Subsidiary, and
if any of the Subsidiary Securities issued by such Material Subsidiary are
owned by the Borrower or a Material Subsidiary who has previously executed a
Pledge Agreement or a Pledge Joinder Agreement, a Pledge Agreement Supplement
by the Borrower (if applicable) and each Material Subsidiary that owns any of
such Pledged Interests with respect to such Pledged Interests in the form
required by the Pledge Agreement;

 

(v)           if such Subsidiary is a Material
Subsidiary and owns any Domestic Subsidiary or Direct Foreign Subsidiary that
is also a Material Subsidiary, a Pledge Joinder Agreement (with all schedules
thereto appropriately completed) duly executed by such Material Subsidiary;

 

(vi)          if the Pledged Interests issued or
owned by such Subsidiary constitute securities under Article 8 of the
Uniform Commercial Code (A) the certificates representing 100% of such
Pledged Interests and (B) duly executed, undated stock powers or other
appropriate powers of assignment in blank affixed thereto;

 

(vii)         with respect to any Person that has
executed a Pledge Joinder Agreement, a Pledge Agreement Supplement, or a
Security Joinder Agreement, Uniform Commercial Code financing statements naming
such Person as “Debtor” and naming the Administrative Agent for the benefit of
the Secured Parties as “Secured Party,” in form, substance and number
sufficient in the reasonable opinion of the Administrative Agent and its
special counsel to be filed in all Uniform Commercial Code filing offices and
in all jurisdictions in which filing is necessary to perfect in favor of the
Administrative Agent for the benefit of the Secured Parties the Lien on the
Collateral conferred under 

 

91

 

such Security Instrument to the extent such Lien may
be perfected by Uniform Commercial Code filing;

 

(viii)        upon the reasonable request of the
Administrative Agent, an opinion of counsel to each Subsidiary executing any
Joinder Agreement or Pledge Supplement, and the Borrower if it executes a
Pledge Agreement Supplement, pursuant to this Section 7.12, dated
as of the date of delivery of such applicable Joinder Agreements (and other
Loan Documents) provided for in this Section 7.12 and addressed to the
Administrative Agent and the Lenders, in form and substance reasonably
acceptable to the Administrative Agent, each of which opinions may be in form
and substance, including assumptions and qualifications contained therein,
substantially similar to those opinions of counsel delivered pursuant to Section 5.01(a);
and

 

(ix)           with respect to each Subsidiary
executing any Joinder Agreement or Pledge Supplement, and the Borrower if it
executes a Pledge Agreement Supplement, pursuant to this Section 7.12,
current copies of the Organization Documents of each such Person, minutes of
duly called and conducted meetings (or duly effected consent actions) of the
Board of Directors, partners, or appropriate committees thereof (and, if
required by such Organization Documents or applicable law, of the shareholders,
members or partners) of such Person authorizing the actions and the execution
and delivery of documents described in this Section 7.12, all
certified by the applicable Governmental Authority or appropriate officer as
the Administrative Agent may elect;

 

provided
that in the event the Borrower or any Domestic Subsidiary forms a joint venture
permitted hereunder and otherwise satisfactory to the Administrative Agent that
is a Domestic Subsidiary and a Restricted Subsidiary but whose Organization
Documents prohibit such Subsidiary from Guaranteeing Indebtedness of the
Borrower, such Subsidiary shall not be required to become a Loan Party, but
unless otherwise agreed to by the Administrative Agent the Equity Interests of
such Person owned by the Borrower or any Loan Party shall be pledged to the
Administrative Agent for the benefit of the Secured Parties in accordance with
the provisions of this Section 7.12(a).

 

(b)           As soon as practicable but in any
event within 30 Business Days following the acquisition of any Pledged
Interests by any Material Subsidiary who has not theretofore executed the
Pledge Agreement or a Pledge Joinder Agreement and who is not otherwise
required to deliver a Pledge Joinder Agreement pursuant to Section 7.12(a),
cause to be delivered to the Administrative Agent a Pledge Joinder Agreement
(with all schedules thereto appropriately completed) duly executed by such
Material Subsidiary, and the documents, stock certificates, stock powers,
financing statements, opinions, Organization Documents and organizational
action relating thereto and to the pledge contained therein and described in Section 7.12(a)(vi),
(vii), (viii) and (ix).

 

7.13        [Intentionally Omitted].

 

7.14        Compliance with ERISA.  Do, and cause each of its ERISA
Affiliates to do, each of the following: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of ERISA,
the Code and other Federal or state law; (b) cause each Plan 

 

92

 

which is qualified under Section 401(a) of
the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code.

 

7.15        Further Assurances.  At the Borrower’s cost and expense,
upon request of the Administrative Agent, duly execute and deliver or cause to
be duly executed and delivered, to the Administrative Agent such further
instruments, documents, certificates, financing and continuation statements,
and do and cause to be done such further acts that may be reasonably necessary
or advisable in the reasonable opinion of the Administrative Agent to carry out
more effectively the provisions and purposes of this Agreement, the Guaranty,
the Security Instruments and the other Loan Documents.

 

ARTICLE
VIII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any Revolving Credit Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit or Bankers’ Acceptance shall remain
outstanding, the Borrower shall not, nor shall it permit any Non-Mueller  Subsidiary to, directly or indirectly:

 

8.01        Liens.  Create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following:

 

(a)           Liens pursuant to any Loan Document;

 

(b)           Liens existing on the date hereof and
listed on Schedule 8.01 and any renewals or extensions thereof, provided
that the property covered thereby consists only of the property covered by the
Liens being renewed or extended and any renewal or extension of the obligations
secured or benefited thereby is permitted by Section 8.03(b);

 

(c)           Liens for taxes, assessments or other
governmental charges not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

 

(d)           carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, landlord’s or other like Liens imposed by Law or
arising in the ordinary course of business which are not overdue for a period
of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

 

(e)           Liens, pledges or deposits in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other social security legislation, other than any
Lien imposed by ERISA;

 

(f)            Liens or deposits to secure the
performance of bids, trade contracts and leases (other than Indebtedness),
statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature incurred
in the 

 

93

 

ordinary course of
business, and including deposits (but not Liens) related to the acquisition of
property;

 

(g)           easements, rights-of-way, covenants,
consents, reservations, encroachments, variations and zoning and other similar
restrictions, charges, encumbrances or title defects affecting real property
which, in the aggregate, are not substantial in amount, and which do not in any
case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
applicable Person;

 

(h)           with respect to any Mortgaged Fee
Property or Mortgaged Coal Property, Liens which appear as exceptions to the
Title Policy delivered to the Administrative Agent with respect to such
Mortgaged Fee Property or Mortgaged Coal Property that are not otherwise
permitted by Section 8.01(a), (c), (d), (g) or
(i) and are acceptable to the Administrative Agent, it being
understood that the Liens appearing on the Title Policies delivered to the
Administrative Agent on the Closing Date are acceptable to the Administrative
Agent;

 

(i)            any interest or title of a lessor or
sublessor and any restriction or encumbrance to which the interest or title of
such lessor or sublessor may be subject that is incurred in the ordinary course
of business and, either individually or when aggregated with all other Liens
described in clauses (a) through (h) in effect on any
date of determination, could not be reasonably expected to have a Material
Adverse Effect;

 

(j)            Liens securing judgments for the
payment of money not constituting an Event of Default under Section 9.01
or securing appeal or other surety bonds related to such judgments;

 

(k)           Liens securing Indebtedness permitted
under Section 8.03(e); provided that (i) such Liens do
not at any time encumber any property other than the property financed by such
Indebtedness and (ii) the Indebtedness secured thereby does not exceed the
cost or fair market value, whichever is lower, of the property being acquired
on the date of acquisition;

 

(l)            [Intentionally Omitted];

 

(m)          [Intentionally Omitted];

 

(n)           Liens on assets (other than Equity
Interests of New Holdco or of any Non-Mueller Subsidiary constituting
Collateral, and other than real estate interests (including mineral rights
relating to Coal) constituting Collateral)  securing
Indebtedness the amount of which Indebtedness shall not exceed in the aggregate
at any time $20,000,000 and the book value of the property securing such
Indebtedness shall not exceed $25,000,000; and

 

(o)           Liens securing Additional Secured
Indebtedness permitted under Section 8.03(p).

 

8.02        Investments. 
Make any Investments, except:

 

(a)           Investments held by the Borrower or
such Non-Mueller Subsidiary in the form of Cash Equivalents;

 

94

 

(b)           loans and advances to officers,
directors and employees of the Borrower and Non-Mueller Subsidiaries the
ordinary course of the business of the Borrower and its Non-Mueller
Subsidiaries as conducted on the Closing Date to the extent permitted by
applicable Law;

 

(c)           Investments consisting of extensions
of credit in the nature of accounts receivable or notes receivable arising from
the grant of trade credit in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;

 

(d)           Guarantees permitted by Section 8.03;

 

(e)           Investments existing as of the date
hereof and as set forth in Schedule 6.13;

 

(f)            [Intentionally Omitted];

 

(g)           [Intentionally Omitted];

 

(h)           [Intentionally Omitted];

 

(i)            Investments by Cardem and each of the
MSH Trusts in the ordinary course of business and in conformity with their
respective investment policies in effect from time to time;

 

(j)            Investments in securities or assets
of any Person acquired in an Acquisition permitted hereunder;

 

(k)           Investments in (i) land or
tracts of land held by the Borrower or a Subsidiary on the Amendment No. 5
Effective Date and replacements thereof made in accordance with Section 8.05(b),
and (ii) land or mineral rights relating to the coal mining or natural gas
operations of any Subsidiaries in the business of coal mining acquired, leased
or held in the ordinary course of business by any Subsidiaries in the business
of coal mining;

 

(l)            other Investments of (i) the
Borrower in any Guarantor (other than Investments in the Homebuilding Assets), (ii) any
Non-Mueller Subsidiary in the Borrower or in a Guarantor, and (iii) of the
Borrower or any Guarantor in any Non-Mueller  Subsidiary
that is not a Guarantor provided that such Investments in non-Guarantor
Non-Mueller  Subsidiaries do not
exceed $15,000,000 in the aggregate at any time outstanding;

 

(m)          Investments in Swap Contracts
permitted to be maintained under Section 8.03(d);

 

(n)           other Investments within the meaning
of clause (b) of the definition of “Investment” (and otherwise
excluding Homebuilding Assets) not exceeding $25,000,000 in any fiscal year of
the Borrower, provided that (i) the aggregate of all Investments
made under this clause (n) at any time outstanding shall not exceed
$75,000,000 and (ii) the aggregate amount of all Investments in New Holdco
or any of its Subsidiaries made under this clause (n) at any time
outstanding shall not exceed $15,000,000 (without increasing the aggregate
limit in the preceding clause (n)(ii)); provided  further
that (A) the aggregate amount of Investments at any time outstanding under
clause (i) of the immediately preceding proviso shall be increased
on any date of measurement thereof by an amount equal to the sum of
fifty percent (50%) of the portion

 

95

 

of Excess Cash Flow each
year not required to be paid to reduce the Term Loan pursuant to Section 2.06(d)(iv) plus
fifty percent (50%) of the portion of the Net Cash Proceeds from the public or
private issuance of Equity Interests of the Borrower or any Restricted
Subsidiary not required to be paid to reduce the Term Loan pursuant to Section 2.06(d)(iii) plus
fifty percent (50%) of the portion of the Net Cash Proceeds from a Permitted
Securities Transaction actually received the Borrower and paid to reduce the
Term Loan pursuant to Section 2.06(d)(vi), in each case net of any
such amounts utilized in Section 8.06(c) and/or in Section 8.13
on or prior to such date, and (B) the annual limit of $25,000,000 provided
in this Section 8.02(n) shall be increased on any date of
measurement thereof by an amount equal to 1/3 of the amount by which the
$75,000,000 limit is increased pursuant to the immediately preceding proviso
(A) as of such date;

 

(o)           Investments in Cardem made in the
ordinary course of its insurance business as conducted on the Closing Date;

 

(p)           an Investment in a joint venture of
the Borrower in which the Borrower owns more than 50% of the voting interest
and is approved by the Administrative Agent, not to exceed $27,000,000 in the
aggregate at any time outstanding;

 

(q)           Investments by the Borrower in New
Holdco and/or one or more of its Subsidiaries in the form of Equity Interests
of the Borrower;

 

(r)            Investments by the Borrower in New
Holdco on the Closing Date of those amounts necessary to consummate the Merger
and the other Transactions in accordance with the sources and uses of funds
provided to the Lenders prior to the Closing Date;

 

(s)           [Intentionally Omitted]; and

 

(t)            prior to the applicable Qualified
Homebuilding Transaction, Investments in the Homebuilding Assets in an amount
not to exceed $35,000,000 at any one time outstanding in the aggregate.

 

8.03        Indebtedness. 
Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)           Indebtedness under the Loan
Documents;

 

(b)           Indebtedness outstanding on the date
hereof and listed on Schedule 8.03 and any refinancings, refundings,
renewals or extensions thereof; provided that the amount of such
Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any existing
commitments unutilized thereunder; provided further that any
refinancing, refunding, renewal or extension of Indebtedness subordinated to
the Obligations shall be on terms no less favorable to the Administrative Agent
and the Lenders, and no more restrictive to the Borrower, than the subordinated
Indebtedness being refinanced, refunded, renewed or extended and in an amount
not less than the amount outstanding at the time thereof;

 

96

 

(c)           Guarantees of the Borrower or any
Guarantor in respect of Indebtedness otherwise permitted hereunder of the
Borrower or any other Guarantor;

 

(d)           obligations (contingent or otherwise)
of the Borrower or any Non-Mueller Subsidiary existing or arising under any
Swap Contract, provided that (i) such obligations are (or were) entered
into by such Person in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments,
investments, assets, cash flows or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a “market view;” and (ii) such
Swap Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party;

 

(e)           Indebtedness in respect of capital
leases, Synthetic Lease Obligations and purchase money obligations for real
property (other than purchase money obligations for real property including
mineral rights utilized or to be utilized in the Coal operations of any Coal
Mining Entity) and fixed or capital assets within the limitations set forth in Section 8.01(k),
which Indebtedness may include Indebtedness existing on any property so
acquired at the time of such acquisition (other than any such Indebtedness
created in contemplation of such acquisition that does not secure the purchase
price of such property), and including any refinancings, refundings, renewals
or extensions thereof so long as the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount
paid, and fees and expenses reasonably incurred, in connection with such
refinancing; provided, however, that the aggregate amount of all
such Indebtedness at any one time outstanding shall not exceed $75,000,000;

 

(f)            the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business;

 

(g)           [Intentionally Omitted];

 

(h)           [Intentionally Omitted];

 

(i)            Indebtedness either existing on the
Amendment No. 5 Effective Date or issued after the Amendment No. 5
Effective Date but before the first Qualified Homebuilding Transaction, in each
case that is  secured solely by
residual beneficial interests in MSH Trusts, including the issuance of
securities by one or more MSH Trusts that are secured or otherwise supported
thereby; provided that no such Indebtedness (including any securities)
shall restrict the actions or businesses of the Borrower or any of its
Non-Mueller Subsidiaries in any manner and shall not include terms requiring
any guarantee or other credit support from or recourse to the Borrower or any
of its Restricted Subsidiaries that are less favorable to the Borrower and its
Restricted Subsidiaries than those contained in the Mortgage-Backed Securities;

 

(j)            Indebtedness (i) of the
Borrower or any Guarantor owing to the Borrower or any Guarantor, (ii) of
any Non-Mueller Subsidiary that is not a Guarantor owing to any other
Non-Mueller Subsidiary that is not a Guarantor, (iii) of any Non-Mueller  Subsidiary that is not a Guarantor owing
to the Borrower or any Guarantor in an aggregate amount at any time outstanding
not to exceed $15,000,000; and (iv) of the Borrower owing to Mueller Group

 

97

 

pursuant to the Borrower’s
guarantee of the obligations of New Holdco under the Subordinated New Holdco
Note, so long as the Borrower’s obligations owing under such Subordinated New
Holdco Note are unsecured and subordinated in payment to the Obligations in a
manner satisfactory to the Administrative Agent and no payment of principal or
cash interest thereunder is scheduled to occur prior to the date that is six months
after the Term Loan Maturity Date;

 

(k)           surety bonds permitted under Section 8.01;

 

(l)            Indebtedness subordinated in payment
to the Obligations hereunder in an aggregate principal amount not to exceed
$350,000,000 at any time outstanding so long as (i) the terms of such
Indebtedness are acceptable to the Administrative Agent, (ii) none of the
maturity date, any scheduled payment of principal or any obligation to
repurchase or prepay such Indebtedness (whether absolute or at the option of
the holder (other than as a result of the occurrence of a specified event that
would constitute an Event of Default)) occurs before the Revolving Credit
Maturity Date, and (iii) on or prior to the date of incurrence thereof,
the Borrower has delivered to the Administrative Agent a Compliance Certificate
demonstrating pro forma compliance, giving effect to the incurrence of such
Indebtedness, with the financial covenants set forth in Sections 8.12(a) and
(b);

 

(m)          [Intentionally Omitted];

 

(n)           additional unsecured Indebtedness in
an aggregate principal amount at any time outstanding not to exceed
$50,000,000;

 

(o)           Indebtedness of any QHT Interim
Entity that is non-recourse to the Borrower and incurred pursuant to, and
substantially concurrently with, a Qualified Homebuilding Transaction; and

 

(p)           Additional Secured Indebtedness in an
aggregate principal amount not to exceed $225,000,000 at any time outstanding; provided,
however, that after giving effect to any creation, incurrence,
assumption or sufferance of any Additional Secured Indebtedness under this clause
(p), the aggregate outstanding amount of any such Additional Secured
Indebtedness plus the aggregate Increased Revolving Credit Commitment
Amount shall not exceed, at any time, $325,000,000.

 

8.04        Fundamental Changes. 
Merge, dissolve, liquidate, consolidate with or into another Person, or
Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default exists or would
result therefrom, and in each case subject to Section 8.15:

 

(a)           except as limited by Section 8.15(c),
any Non-Mueller Subsidiary may merge with any one or more other Non-Mueller
Subsidiaries, provided that when any Guarantor is merging with another
Non-Mueller Subsidiary, the Guarantor shall be the continuing or surviving
Person; and

 

(b)           any Non-Mueller Subsidiary may
Dispose of all or substantially all of its assets (upon voluntary liquidation
or otherwise) to another Non-Mueller Subsidiary or to the Borrower, 

 

98

 

provided that if the transferor in such a
transaction is a Guarantor, then the transferee must also be a Guarantor or the
Borrower;

 

(c)           a merger or consolidation necessary
to consummate (i) an Acquisition permitted by and in compliance with Section 8.13
or (ii) a Disposition permitted by and in compliance with Section 8.05;
and

 

(d)           the Borrower or any applicable
Subsidiary may effect any Qualified Homebuilding Transaction; and

 

(e)           any QHT Interim Entity may liquidate
or dissolve.

 

8.05        Dispositions. 
Make any Disposition or enter into any agreement to make any
Disposition, except:

 

(a)           Dispositions of inventory in the
ordinary course of business;

 

(b)           Dispositions for fair market value of
equipment or real property to the extent that (i) such equipment or real
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are
reasonably promptly applied to the purchase price of such replacement equipment
or real property, and in each case if the disposed property constituted
Collateral then the relevant Loan Party shall grant a Lien to the
Administrative Agent (including the delivery of any necessary Mortgage, Mineral
Rights Mortgage, Mortgaged Property Support Documents and Mortgaged Coal
Property Support Documents) on such new or replacement property;

 

(c)           subject to Section 8.15,
Dispositions of property by the Borrower or any Non-Mueller  Subsidiary to a wholly-owned Non-Mueller  Subsidiary or, solely with respect to
Dispositions of the stock of a Non-Mueller Subsidiary of the Borrower, the
Borrower; provided that if the transferor of such property is the
Borrower or a Guarantor, the transferee thereof must be a Guarantor or, subject
to the limitation above, the Borrower;

 

(d)           Dispositions for fair market value
permitted by Section 8.02 or 8.04(a) or (b);

 

(e)           [Intentionally Omitted];

 

(f)            transfers for fair market value by
Mid-State Homes or Mid-State Capital of any interest in an MSH Trust to (i) third
parties, or (ii) an MSH Trust in connection with the issuance of
asset-backed securities permitted under Section 8.03(i);

 

(g)           Dispositions for fair market value
not otherwise permitted under this Section 8.05, provided
that (i) at the time of such Disposition, no Default shall exist or would
result from such Disposition and (ii) each such Disposition is either (A) a
Disposition of Non-Core Subsidiaries so long as such Non-Core Subsidiary has
not been the transferee of any material additional assets or operations
(whether by transfer of assets or equity or by merger or consolidation with any
other Person) since the Closing Date and any prepayment required by Section 2.06(d)(v) is
made, (B) a Disposition of mining equipment, including longwall shields,
with an aggregate book value not in excess of $30,000,000, or (C) a
Disposition of property that, when combined with all other 

 

99

 

Dispositions made in
reliance on this clause (g)(ii)(C) during such fiscal year, has an
aggregate book value of not in excess of $40,000,000;

 

(h)           Dispositions of all or any portion of
the Equity Interests in New Holdco owned by the Borrower in a Permitted Securities
Transaction conducted in compliance with Section 8.06(e) and/or
8.15(c) and with respect to which any mandatory prepayment of the
Term Loan required by Section 2.06(d)(vi) has been made, provided
that any such Disposition other than pursuant to a Restricted Payment permitted
by Section 8.06(e) shall be for fair market value; and

 

(i)            (i) the Disposition of any
Homebuilding Assets to a QHT Interim Entity and (ii) any Qualified
Homebuilding Transaction.

 

8.06        Restricted Payments. 
Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that, in each
case (except Section 8.06(a)) so long as no Default or Event of
Default shall have occurred and be continuing (both before and after the making
of such Restricted Payment):

 

(a)           each Non-Mueller Subsidiary may make
Restricted Payments to the Borrower and to wholly-owned Non-Mueller
Subsidiaries (and, in the case of a Restricted Payment by a non-wholly-owned
Non-Mueller Subsidiary, to the Borrower and any Non-Mueller Subsidiary and to
each other owner of capital stock or other Equity Interests of such Non-Mueller
Subsidiary on a pro rata basis based on their relative ownership interests);

 

(b)           the Borrower and each Non-Mueller
Subsidiary may declare and make dividend payments or other distributions
payable solely in the common stock or other common Equity Interests of such
Person;

 

(c)           to the extent available after making any
prepayment required by Section 2.06(d), and subject to the making
of each such prepayment, the Borrower and each Non-Mueller Subsidiary may
purchase, redeem or otherwise acquire shares of, or pay dividends or make
distributions with respect to, its common stock or other common Equity
Interests or warrants or options to acquire any such shares with the Net Cash
Proceeds received from the issue of new shares of its common stock or other
common Equity Interests, provided that any amount so utilized under this
Section 8.06(c) shall reduce the applicable amount of the Net
Cash Proceeds from any such issuance available to be utilized pursuant to Section 8.02(n) and/or
Section 8.13, and any amount of such Net Cash Proceeds utilized
under Section 8.02(n) and/or Section 8.13 shall
reduce the amount permitted to be utilized pursuant to this Section 8.06(c);

 

(d)           the Borrower may, up to an aggregate
amount in any fiscal year not to exceed the Maximum Restricted Payment Amount, (i) so
long as after giving effect to any such Restricted Payment the remaining amount
available to be drawn under the Revolving Credit Facility shall not be less
than $50,000,000, repurchase shares of its own capital stock for cash, and (ii) declare
and pay cash dividends to its stockholders;

 

(e)           the Borrower may make a Restricted
Payment to its shareholders of all or any portion of the Equity Interests in
New Holdco owned by the Borrower in a Permitted Securities Transaction so long
as prior to the making of any such Restricted Payment the Borrower has 

 

100

 

made prepayments (whether
optional prepayments pursuant to Section 2.06(a) or mandatory
prepayments pursuant to Section 2.06(d), or any combination
thereof) of the Term Loan in an aggregate amount of not less than $50,000,000
(exclusive of any prepayments pursuant to Section 2.06(d)(iv)); and

 

(f)            the Borrower and its Subsidiaries
may declare or make, directly or indirectly, non-cash Restricted Payments
pursuant to any Qualified Homebuilding Transaction.

 

8.07        Change in Nature of Business. 
Engage in any material line of business that is not a Core Business.

 

8.08        Transactions with Affiliates. 
Enter into any transaction of any kind with any Affiliate of the
Borrower, whether or not in the ordinary course of business, other than (a) transactions
on fair and reasonable terms substantially as favorable to the Borrower or such
Non-Mueller Subsidiary as would be obtainable by the Borrower or such
Non-Mueller Subsidiary at the time in a comparable arm’s length transaction
with a Person other than an Affiliate, (b) the consummation by the
Borrower and its Non-Mueller Subsidiaries of the transactions effected by the
Loan Documents, (c) any employment arrangement entered into by the
Borrower or any of its Non-Mueller Subsidiaries in the ordinary course of
business and consistent with the past practices of the Borrower or such
Non-Mueller Subsidiary, (d) transactions between or among the Borrower and
its Non-Mueller Subsidiaries or between or among Non-Mueller Subsidiaries of
the Borrower, in each case to the extent permitted under the terms of the Loan
Documents, (e) the declaration and payment of dividends and the making of
distributions to all holders of any class of capital stock of the Borrower or
any of its Non-Mueller Subsidiaries to the extent otherwise permitted under Section 8.06,
(f) any Tax Sharing Agreement, and (g) shared service arrangements
entered into in the ordinary course of business and allocating expenses and
fees reasonably in accordance with the services provided.

 

8.09        Burdensome Agreements.  Enter
into any Contractual Obligation (other than this Agreement or any other Loan
Document) that:

 

(a)           requires the grant of a Lien to
secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person; or

 

(b)           limits the ability (i) of any
Non-Mueller  Subsidiary to make
Restricted Payments to the Borrower or any Guarantor or to otherwise transfer
property to the Borrower or any Guarantor other than customary restrictions
required in connection with (x) financings permitted by this Agreement,
the limitations of which are no more restrictive than the corresponding
limitations applicable to the Borrower hereunder, and (y) Dispositions
permitted by this Agreement and which limitations cover only such assets or
Person(s) which are the subject matter of such Dispositions and, prior to
such Disposition, permit the Liens granted under the Loan Documents therein, (ii) of
any Restricted Subsidiary to Guarantee the Indebtedness of the Borrower, or (iii) of
the Borrower or any Non-Mueller Subsidiary to create, incur, assume or suffer
to exist Liens on property of such Person; provided, however,
that this clause (iii) shall not prohibit:

 

101

 

(A)          a negative pledge contained in either (x) Indebtedness
of any Non-Mueller Subsidiary as of the date it becomes a Non-Mueller
Subsidiary of the Borrower in any transaction otherwise permitted hereunder or (y) Indebtedness
outstanding on the date hereof and listed on Schedule 8.03, in each case
so long as such provision does not impair or conflict with any Security
Instrument or with Section 7.12 hereof;

 

(B)           [Intentionally omitted];

 

(C)           provisions limiting Liens on property as may be contained
in the terms of any Indebtedness permitted under Section 8.03(e) and
(n) solely to the extent any such limitations relates to the
property financed by or the subject of such Indebtedness;

 

(D)          provisions limiting Liens on property, and only on such
property, subject to a prior Lien permitted under Section 8.01(d), (e),
(f), (h), (j), and (k); and

 

(E)           such provisions as may be contained in any refinancing or
replacing Indebtedness permitted under Section 8.03, provided that
the terms of such provisions shall be no less favorable to the Administrative
Agent and the Lenders as were contained in the Indebtedness being refinanced or
replaced.

 

8.10        Use of Proceeds. 
Use the proceeds of any Credit Extension, whether directly or
indirectly, and whether immediately, incidentally or ultimately, in any manner
that might cause the Credit Extension or the application of such proceeds to
violate Regulations T, U or X of the FRB, in each case as in effect on the date
or dates of such Credit Extension and such use of proceeds.

 

8.11        Prepayment of Indebtedness; Amendment to
Material Agreements.

 

(a)           Prepay, redeem, purchase, repurchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of,
Indebtedness that is subordinated to the Indebtedness hereunder (including, the
Borrower’s guaranty obligations under the Subordinated New Holdco Note),
including pursuant to any change of control, sale of assets, issuance of any
equity or otherwise as may be set forth in the terms thereof or available to
the Borrower at its option, except those prepayments that (i) are made in
connection with a refinancing thereof otherwise permitted by Section 8.03(b) or
(ii) after giving effect to which, as demonstrated by the Borrower in a
certificate signed by a Responsible Officer and delivered to the Administrative
Agent, no Default exists or will have occurred, the Consolidated Senior Secured
Leverage Ratio is not greater than 1.50 to 1.00 and the remaining amount
available to be drawn under the Revolving Credit Facility is not less than
$50,000,000; provided that the Borrower may use an amount not greater
than the portion of Excess Cash Flow each year not required to be paid to
reduce the Term Loan pursuant to Section 2.06(d)(iv) to prepay
amounts outstanding under the Subordinated New Holdco Note; or

 

(b)           Amend, modify or change in any manner
any term or condition of (i) any material lease, (ii) the
Subordinated New Holdco Note or (iii) any Tax Sharing Agreement, so that
the terms and conditions thereof are less favorable in any material respect to
the Administrative 

 

102

 

Agent and the Lenders
than the terms of such Indebtedness as of the Closing Date, but in no event
shall terms of recourse, guarantees or credit support or, with respect to the
Subordinated New Holdco Note, any requirement to pay interest or principal in
cash, be any less favorable to the Administrative Agent and the Lenders than
the terms of such Indebtedness as of the Closing Date.

 

8.12        Financial Covenants.

 

(a)           Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio at any
time during any Four-Quarter Period of the Borrower to be greater than 3.00 to
1.00.

 

(b)           Consolidated Fixed Charge Coverage
Ratio.  Permit the Consolidated Fixed
Charge Coverage Ratio as of the end of any Four-Quarter Period of the Borrower
to be less than 2.50 to 1.00.

 

8.13        Acquisitions.  Enter into any agreement, contract,
binding commitment or other arrangement providing for any Acquisition
(including Investments within the meaning of clauses (a), (c) and
(d) of the definition of “Investment”), or take any action to
solicit the tender of securities or proxies in respect thereof in order to
effect any Acquisition, unless (i) the Person to be (or whose assets are to
be) acquired does not oppose such Acquisition and the line or lines of business
of the Person to be acquired constitute Core Businesses, (ii) no Default
or Event of Default shall have occurred and be continuing either immediately
prior to or immediately after giving effect to such Acquisition and, if the
Cost of Acquisition is in excess of $75,000,000, the Borrower shall have
furnished to the Administrative Agent (A) pro forma historical financial
statements as of the end of the most recently completed fiscal year of the
Borrower and most recent interim fiscal quarter, if applicable, giving effect
to such Acquisition, and (B) a Compliance Certificate prepared on a
historical pro forma basis as of the most recent date for which financial
statements have been furnished pursuant to Section 7.01(a) or (b),
giving effect to such Acquisition, which Compliance Certificate shall
demonstrate that no Default or Event of Default would exist immediately after
giving effect thereto, (iii) the Person acquired shall be a wholly-owned
Restricted Subsidiary, or be merged with or into a Restricted Subsidiary,
immediately upon consummation of the Acquisition (or if assets are being
acquired, the acquiror shall be a Restricted Subsidiary), (iv) upon
consummation of the Acquisition each Non-Mueller Subsidiary shall have complied
with the provisions of Section 7.12, including with respect to any
new assets (including real property or mineral rights) acquired, (v) after
giving effect to such Acquisition, the aggregate Costs of Acquisition incurred
since the Closing Date shall not exceed the Aggregate Acquisition Limit then in
effect, and (vi) after giving effect to such Acquisition, the sum of (x) the
Borrower’s Unencumbered Cash and Cash Equivalents plus (y) the
aggregate amounts available to the Borrower under the Aggregate Revolving
Credit Commitments shall equal or exceed $100,000,000; provided that an
agreement, contract, binding commitment or other arrangement providing for an
Acquisition that would not otherwise satisfy the provisions of this Section 8.13
at such time may be entered into so long as an express condition to the
consummation thereof is the full compliance with this Agreement and the other
Loan Documents.

 

For purposes of this Section 8.13(a),
the term “Aggregate Acquisition
Limit” means (a) if as of the end of the most recently
ended fiscal quarter of the Borrower the Consolidated 

 

103

 

Leverage Ratio is greater than or equal to 3.00 to
1.00, $80,000,000, (b) if as of the end of the most recently ended fiscal
quarter of the Borrower the Consolidated Leverage Ratio is less than 3.00 to
1.00 but greater than or equal to 2.50 to 1.00, $150,000,000, and (c) if
as of the end of the most recently ended fiscal quarter of the Borrower the
Consolidated Leverage Ratio is less than 2.50 to 1.00, $200,000,000; provided
that as of any date of measurement the amount set forth in (a), (b) or
(c) of this definition, as applicable, shall be increased by an
amount equal to the sum of fifty percent (50%) of the portion of Excess
Cash Flow each year not required to be paid to reduce the Term Loan pursuant to
Section 2.06(d)(iv) plus fifty percent (50%) of the
portion of the Net Cash Proceeds from the public or private issuance of Equity
Interests of the Borrower or any Restricted Subsidiary not required to be paid
to reduce the Term Loan pursuant to Section 2.06(d)(iii) plus
fifty percent (50%) of the portion of the Net Cash Proceeds from a Permitted
Securities Transaction actually received the Borrower and paid to reduce the
Term Loan pursuant to Section 2.06(d)(vi), in each case net of any
such amounts utilized in Section 8.06(c) and/or in Section 8.02(n) on
or prior to such date.

 

8.14        Creation of New Subsidiaries.  Create or acquire any new
Non-Mueller Subsidiary after the Closing Date other than (a) any new
Subsidiary created in connection with a Qualified Homebuilding Transaction, or (b) MSH
Trusts and Restricted Subsidiaries created or acquired in accordance with Section 7.12,
provided that any Unrestricted Subsidiary may create a Subsidiary that
is an Unrestricted Subsidiary and the Borrower or any Non-Mueller Subsidiary
may create a Subsidiary that is an Unrestricted Subsidiary described in part
(e) of the definition of “Unrestricted Subsidiary”.

 

ARTICLE
IX.

EVENTS OF DEFAULT AND REMEDIES

 

9.01        Events of Default. 
Any of the following shall constitute an Event of Default:

 

(a)           Non-Payment.  The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of
any Loan or any L/C Obligation, or (ii) within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any
commitment or other fee due hereunder, or (iii) within five days after the
same becomes due, any other amount payable hereunder or under any other Loan
Document; or

 

(b)           Specific Covenants.  The Borrower fails to perform or observe any
term, covenant or agreement contained (i) in any of Section 7.03(a),
(b) or (g), 7.05 (other than with respect to the
maintenance of good standing), 7.10, 7.11 or 7.12 or Article VIII,
or (ii) in either Section 7.01 or 7.02 and such failure
continues for 15 days;  or

 

(c)           Other Defaults.  Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in subsection (a) or
(b) above) contained in any Loan Document on its part to be
performed or observed and such failure continues for 30 days after the earlier
of (i) receipt of notice of such default by a Responsible Officer of the
Borrower from the Administrative Agent, or (ii) any Responsible Officer of
the Borrower becomes aware of such default; or

 

(d)           Representations and Warranties.  Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
other Loan Party 

 

104

 

herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading when made or deemed made; or

 

(e)           Cross-Default.  (i) The Borrower or any Non-Mueller
Subsidiary (A) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise, and after
passage of any grace period) in respect of any Indebtedness or Guarantee (other
than Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $20,000,000, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, and such default continues for
more than the period of grace, if any, therein specified, the effect of which
default or other event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an
Early Termination Date (as defined in such Swap Contract) resulting from (A) any
event of default under such Swap Contract as to which the Borrower or any
Non-Mueller Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap
Contract as to which the Borrower or any Non-Mueller Subsidiary is an Affected
Party (as so defined) and, in either event, the Swap Termination Value owed by
the Borrower or such Non-Mueller Subsidiary as a result thereof is greater than
$20,000,000; or

 

(f)            Insolvency Proceedings, Etc.  Any Loan Party or any of its Non-Mueller
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

 

(g)           Inability to Pay Debts; Attachment.  (i) The Borrower or any Non-Mueller
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or

 

(h)           Judgments.  There is entered against the Borrower or any
Non-Mueller Subsidiary (i) a final judgment or order for the payment of
money in an aggregate amount exceeding

 

105

 

$15,000,000 (to the
extent not covered by insurance provided by a Person described in Section 7.07
as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order and remain unstayed, or (B) there is a period
of 30 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or

 

(i)            ERISA.  (i) An
ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or would reasonably be expected to result in liability of the
Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the
PBGC in an aggregate amount in excess of $15,000,000, or (ii) the Borrower
or any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $15,000,000; or

 

(j)            Invalidity of Loan Documents. 
Any Loan Document, at any time after its execution and delivery and for
any reason other than as expressly permitted hereunder or satisfaction in full
of all the Obligations, ceases to be in full force and effect; or any Loan
Party or any other Person contests in any manner the validity or enforceability
of any Loan Document or any Lien granted to the Administrative Agent pursuant
to the Security Instruments; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document; or

 

(k)           Change of Control.  There occurs
any Change of Control.

 

9.02        Remedies Upon Event of Default. 
If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders, take any or all of the following actions:

 

(a)           declare the commitment of each Lender to make Loans
and any obligation of the L/C Issuer to make L/C – BA Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;

 

(b)           declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Borrower;

 

(c)           require that the Borrower Cash Collateralize the L/C –
BA Obligations (in an amount equal to the then Outstanding Amount thereof); and

 

(d)           exercise on behalf of itself and the Lenders all
rights and remedies available to it and the Lenders under the Loan Documents or
applicable Law;

 

provided,
however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C – BA Credit 

 

106

 

Extensions shall automatically terminate, the unpaid principal amount
of all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the Borrower to
Cash Collateralize the L/C — BA Obligations as aforesaid shall automatically
become effective, in each case without further act of the Administrative Agent
or any Lender.

 

9.03        Application of Funds.  After the exercise of remedies provided for in Section 9.02
(or after the Loans have automatically become immediately due and payable and
the L/C – BA Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 9.02), any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

 

First, to
payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including reasonable fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under Article IV)
payable to the Administrative Agent in its capacity as such;

 

Second,
to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal, interest and Letter of Credit – BA
Fees) payable to the Lenders and the L/C Issuer (including reasonable fees,
charges and disbursements of counsel to the respective Lenders and the L/C
Issuer and amounts payable under Article IV), ratably among them in
proportion to the respective amounts described in this clause Second
payable to them;

 

Third, to
payment of that portion of the Obligations constituting accrued and unpaid
Letter of Credit – BA Fees and interest on the Loans, L/C – BA Borrowings and
other Obligations, ratably among the Lenders and the L/C Issuer in proportion
to the respective amounts described in this clause Third payable to
them;

 

Fourth,
(ratably among the Lenders and the L/C Issuer in proportion to the respective
amounts described in this clause Fourth held by them) to (i) the payment
of that portion of the Obligations constituting unpaid principal of the Loans
and L/C – BA Borrowings, (ii) the payment of the maximum amount of all
Bankers’ Acceptances then outstanding, such payment to be for the account of
the L/C Issuer (or to the extent Revolving Lenders have theretofore funded
their participations in any such Bankers’ Acceptance, ratably among such
Revolving Lenders in accordance with their Pro Rata Revolving Shares) and (iii) to
Cash Collateralize that portion of L/C – BA Obligations comprising the
aggregate undrawn amount of Letters of Credit, to the Administrative Agent for
the account of the L/C Issuer; provided that if the amounts available
are insufficient to make all payments provided for in this clause Fourth,
that portion allocable to clause (iii) shall be applied first to
pay Outstanding Amounts of Revolving Loans and L/C – BA Borrowings before being
utilized to Cash Collateralize L/C – BA Obligations;

 

Fifth, to
payment of Swap Termination Values and amounts owing under Related Treasury
Management Arrangements, in each case to the extent owing to any Lender or any
Affiliate of any Lender arising under Related Credit Arrangements that shall
have been terminated and as to which the Administrative Agent shall have
received notice of such termination and the Swap Termination Value thereof or
the amount owing under the applicable Related Treasury Management Arrangement
from the applicable Lender or Affiliate of a Lender;

 

107

 

Sixth, to
the payment of all other Obligations of the Loan Parties owing under or in
respect of the Loan Document that are due and payable to the Administrative
Agent and the other Secured Parties, or any of them, on such date, ratably
based on the respective aggregate amounts of all such Obligations owing to the
Administrative Agent and the other Secured Parties on such date; and

 

Last, the
balance, if any, after all of the Obligations have been indefeasibly paid in
full, to the Borrower or as otherwise required by Law.

 

Subject to Section 2.04(c), amounts used to Cash
Collateralize the aggregate undrawn amount of Letters of Credit pursuant to
clause Fourth above shall be applied to satisfy drawings under such
Letters of Credit as they occur.  If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE
X.

ADMINISTRATIVE AGENT

 

10.01      Appointment and Authority. 
Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank
of America to act on its behalf as the Administrative Agent hereunder and under
the other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.  The provisions of this Article are
solely for the benefit of the Administrative Agent, the Lenders and the L/C
Issuer, and neither the Borrower nor any other Loan Party shall have rights as
a third party beneficiary of any of such provisions.

 

10.02      Rights as a Lender. 
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term “Lender”
or “Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as the Administrative Agent
hereunder in its individual capacity. 
Such Person and its Affiliates may accept deposits from, lend money to,
act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.

 

10.03      Exculpatory Provisions. 
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the
foregoing, the Administrative Agent:

 

(a)           shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing;

 

(b)           shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in 

 

108

 

writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Loan Document or applicable law; and

 

(c)           shall not, except as expressly set forth herein and in
the other Loan Documents, have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or any of
its Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 11.01 and 9.02)
or (ii) in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or the L/C Issuer.

 

The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article V or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

10.04      Reliance by Administrative Agent. 
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any
electronic message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person.  The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. 
In determining compliance with any condition hereunder to the making of
a Loan, or the issuance of a Letter of Credit or Bankers’ Acceptance, that by
its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer,
the Administrative Agent may presume that such condition is satisfactory to
such Lender or the L/C Issuer unless the Administrative Agent shall have
received notice to the contrary from such Lender or the L/C Issuer prior to the
making of such Loan or the issuance of such Letter of Credit or Bankers’
Acceptance.  The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

109

 

10.05      Delegation of Duties. 
The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and powers
by or through their respective Related Parties. 
The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

 

10.06      Resignation of Administrative Agent. 
The Administrative Agent may at any time give notice of its resignation
to the Lenders, the L/C Issuer and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the
United States.  If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may on behalf
of the Lenders and the L/C Issuer, appoint a successor Administrative Agent
meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any Collateral held by the Administrative Agent on behalf of the
Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such Collateral until such time as
a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable
by the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and
such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

Any resignation by Bank of America as Administrative Agent pursuant to
this Section shall also constitute its resignation as L/C Issuer and Swing
Line Lender.  Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer and Swing Line Lender, (b) the
retiring L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan 

 

110

 

Documents, and (c) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit and/or
Bankers’ Acceptances, if any, outstanding at the time of such succession or
make other arrangements satisfactory to the retiring L/C Issuer to effectively
assume the obligations of the retiring L/C Issuer with respect to such Letters
of Credit and/or Bankers’ Acceptances.

 

10.07      Non-Reliance on Administrative Agent
and Other Lenders.  Each Lender and the L/C Issuer acknowledges
that it has, independently and without reliance upon the Administrative Agent
or any other Lender or any of their Related Parties and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder.

 

10.08      No Other Duties, Etc. 
Anything herein to the contrary notwithstanding, none of the Arrangers,
and none of the Book Manager, Arrangers, Syndication Agent or Documentation
Agent listed on the cover page hereof, shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents,
except in its capacity, as applicable, as the Administrative Agent, a Lender or
the L/C Issuer hereunder.

 

10.09      Administrative Agent May File
Proofs of Claim.  In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan or L/C –
BA Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise

 

(a)           to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C – BA
Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders, the L/C Issuer and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the L/C Issuer and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders, the L/C
Issuer and the Administrative Agent under Sections 2.04(i) and (j),
2.10 and 11.04) allowed in such judicial proceeding; and

 

(b)           to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender and the L/C Issuer to make such payments to
the Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders and the L/C
Issuer, to pay to the 

 

111

 

Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections
2.10 and 11.04.

 

Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender or the L/C Issuer any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender
or to authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.

 

10.10      Collateral and Guaranty Matters. 
The Lenders and the L/C Issuer irrevocably authorize the Administrative Agent,
at its option and in its discretion,

 

(a)           to release any Pledged Interest and any Lien on any
property granted to or held by the Administrative Agent under any Loan Document
(i) subject to Section 11.01, if approved, authorized or
ratified in writing by the Required Lenders, or (ii) without the approval
of any of the Lenders (A) upon the occurrence of the Facility Termination
Date, (B) to the extent such property is Disposed or to be Disposed as
part of or in connection with any Disposition permitted hereunder or under any
other Loan Document (including a Disposition of Equity Interests in New Holdco
as a result of a Permitted Securities Transaction permitted hereunder) or (C) if
such Pledged Interest is in or such Collateral is held by any Subsidiary that
becomes an Unrestricted Subsidiary.

 

(b)           to subordinate any Lien on any property granted to or
held by the Administrative Agent under any Loan Document to the holder of any
Lien on such property that is permitted by Section 8.01(j); and

 

(c)           to release any Guarantor from its obligations under
the applicable Guaranty if such Person (i) ceases to be a Subsidiary as a
result of a transaction permitted hereunder or (ii) becomes an
Unrestricted Subsidiary.

 

Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent’s authority to release
or subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under the applicable Guaranty
pursuant to this Section 10.10.

 

ARTICLE
XI.

MISCELLANEOUS

 

11.01      Amendments, Etc. 
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other
Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Loan Party, as the case may
be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

 

112

 

(a)           waive any condition set forth in Section 5.01(a) without
the written consent of each Lender except to the extent otherwise provided for
in Section 5.01(a);

 

(b)           extend or increase (i) the Revolving Credit
Commitment of any Revolving Lender (or reinstate any Revolving Credit
Commitment terminated pursuant to Section 9.02) without the written
consent of such Revolving Lender, or (ii) the obligation of any Term Loan
Lender to make any portion of the Term Loan without the written consent of such
Term Loan Lender;

 

(c)           postpone any date fixed by this Agreement or any other
Loan Document for any payment (but excluding mandatory prepayments) of
principal, interest, fees or other amounts due to the Lenders (or any of them),
including the Term Loan Maturity Date and the Revolving Credit Maturity Date,
or any scheduled reduction of the Aggregate Revolving Credit Commitments
hereunder or under any other Loan Document, in each case without the written
consent of each Lender directly affected thereby;

 

(d)           except as subject to adjustments for prepayments made
pursuant to Section 2.06, reduce the principal of, or the rate of
interest specified herein on, any Loan or L/C Borrowing, or (subject to clause
(v) of the second proviso to this Section 11.01) any fees
or other amounts payable hereunder or under any other Loan Document, without
the written consent of each Lender directly affected thereby; provided, however,
that only the consent of the Required Lenders shall be necessary (i) to
amend the definition of “Default Rate” (so long as such amendment does not
result in the Default Rate being lower than the interest rate then applicable
to Base Rate Loans or Eurodollar Rate Loans, as applicable) or to waive any
obligation of the Borrower to pay interest or Letter of Credit – BA Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any
defined term used therein) even if the effect of such amendment would be to
change the Applicable Rate, the Required Equity Prepayment Percentage or the
Required ECF Prepayment Percentage;

 

(e)           change Section 2.14 or Section 9.03
in a manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender directly affected thereby;

 

(f)            change any provision of this Section or
the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to amend, waive or otherwise
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender;

 

(g)           change any provision of this Section or the
definition of “Required Revolving Lenders” or any other provision hereof
specifying the number or percentage of Revolving Lenders required to amend,
waive or otherwise modify any rights hereunder or make any determination or
grant any consent hereunder, without the written consent of each Revolving
Lender;

 

(h)           change any provision of this Section or the
definition of “Required Term Loan Lenders” or any other provision hereof
specifying the number or percentage of Term Loan Lenders required to amend,
waive or otherwise modify any rights hereunder or make any 

 

113

 

determination or grant
any consent hereunder, without the written consent of each Term Loan Lender;

 

(i)            impose any greater restriction on the ability of any
Lender to assign any of its rights or obligations hereunder without the written
consent of Lenders having more than 50% of the Aggregate Credit Exposures then
in effect within each of the following classes of commitments:  (i) the class consisting of the
Revolving Lenders, and (ii) the class consisting of the Term Loan Lenders;
provided that for purposes of this clause, the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans shall be deemed to be held by such Lender;

 

(j)            release any Guarantor from the applicable
Guaranty without the written consent of each Lender, except to the extent such
Guarantor is the subject of a Disposition permitted by Section 8.05
or the release of any Guarantor is permitted pursuant to Section 10.10
(in each of which case such release may be made by the Administrative Agent
acting alone);

 

(k)           release all or a material part of the Collateral
without the written consent of each Lender except with respect to Dispositions
and releases of Collateral permitted or required hereunder (including pursuant
to Section 8.05) or as otherwise provided in the other Loan
Documents (in each of which case such release may be made by the Administrative
Agent acting alone); or

 

(l)            reduce the number or type of events that give rise to
a mandatory prepayment pursuant to Section 2.06(d) or change
the order or manner of application of the Net Cash Proceeds provided therein,
in each case without the written consent of each Lender directly affected thereby;

 

and, provided  further, that (i) no amendment, waiver
or consent shall, unless in writing and signed by the L/C Issuer in addition to
the Lenders required above, affect the rights or duties of the L/C Issuer under
this Agreement or any Issuer Document relating to any Letter of Credit or
Bankers’ Acceptance issued or to be issued by it; (ii) no amendment,
waiver or consent shall, unless in writing and signed by the Swing Line Lender
in addition to the Lenders required above, affect the rights or duties of the
Swing Line Lender under this Agreement; (iii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv) Section 11.06(h) may
not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at
the time of such amendment, waiver or other modification; (v) each of the
Joint Fee Letter and the Agency Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the respective
parties thereto; and (vi) no amendment, waiver or consent which has the effect
of  enabling the Borrower to satisfy any
condition to a Borrowing contained in Section 5.02 hereof which,
but for such amendment, waiver or consent would not be satisfied, shall be
effective to require the Revolving Lenders, the Swing Line Lender or the L/C
Issuer to make any additional Revolving Loan or Swing Line Loan, or to issue
any additional or renew any existing Letter of Credit or issue any Bankers’
Acceptance, unless and until the Required Revolving Lenders (or, if applicable,
all Revolving Lenders) shall have approved such amendment, waiver or
consent.  Notwithstanding anything to 

 

114

 

the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that
the Revolving Credit Commitment of such Lender may not be increased or extended
without the consent of such Lender.

 

11.02      Notices; Effectiveness; Electronic Communication.

 

(a)           Notices Generally.  Except in the
case of notices and other communications expressly permitted to be given by
telephone or in the case of notices otherwise expressly provided herein (and
except as provided in subsection (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

 

(i)            if to the Borrower, the Administrative Agent, the L/C
Issuer or the Swing Line Lender, to the address, telecopier number, electronic
mail address or telephone number specified for such Person on Schedule 11.02,
as changed pursuant to subsection (d) below; and

 

(ii)           if to any other Lender, to the address, telecopier
number, electronic mail address or telephone number specified in its
Administrative Questionnaire, as changed pursuant to subsection (d) below.

 

Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient).  Notices delivered
through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).

 

(b)           Electronic Communications. 
Notices and other communications to the Lenders and the L/C Issuer
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
the Administrative Agent, provided that the foregoing shall not apply to
notices to any Lender or the L/C Issuer pursuant to Article II if
such Lender or the L/C Issuer, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by
electronic communication.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices
and other communications sent to an e-mail address shall be deemed received
upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, as available, return
e-mail or other written acknowledgement), provided that if such notice
or other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the

 

115

 

next business day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification
that such notice or communication is available and identifying the website
address therefor.

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event shall
the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have
any liability to the Borrower, any Lender, the L/C Issuer or any other Person
for losses, claims, damages, liabilities or expenses of any kind (whether in
tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any
Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

 

(d)           Change of Address, Etc.  Each of the Borrower, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the other parties hereto. 
Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the Borrower, the
Administrative Agent, the L/C Issuer and the Swing Line Lender.  In addition, each Lender agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent
has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such
Lender.

 

(e)           Reliance by Administrative Agent,
L/C Issuer and Lenders.  The Administrative Agent, the L/C
Issuer and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Revolving Loan Notices, Swing Line Loan Notices and Term
Loan Interest Rate Selection Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrower shall indemnify the
Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower.  All telephonic notices to
and other 

 

116

 

telephonic communications
with the Administrative Agent may be recorded by the Administrative Agent, and
each of the parties hereto hereby consents to such recording.

 

11.03      No Waiver; Cumulative Remedies. 
No failure by any Lender, the L/C Issuer or the Administrative Agent to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

 

11.04      Expenses; Indemnity; Damage Waiver.

 

(a)          Costs and Expenses.  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates and the Arrangers (including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent and the Arrangers), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the L/C Issuer, the Swing Line Lender or the Arrangers
(including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Swing Line Lender, the L/C Issuer or the Arrangers),
in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

 

(b)          Indemnification by the Borrower.  The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby
or, in the case of the Administrative Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other Loan
Documents, (ii) any Loan, Letter of Credit or Bankers’ Acceptance or the
use or proposed use of the proceeds therefrom (including any refusal by the L/C
Issuer to honor a demand for payment under a Letter of Credit or Bankers’
Acceptance if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit or Bankers’ 

 

117

 

Acceptance), (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Borrower or any of its Non-Mueller  Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of its Non-Mueller  Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower or any
other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.

 

(c)           Reimbursement by Lenders.  To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by it to the Administrative
Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of
the foregoing, each Lender severally agrees to pay to the Administrative Agent
(or any such sub-agent), the L/C Issuer or such Related Party, as the case may
be, such Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought based on such Lender’s
portion of Loans, commitments and risk participations with respect to the
Revolving Credit Facility and the Term Loan Facility) of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or L/C Issuer in connection with
such capacity.  The obligations of the
Lenders under this subsection (c) are subject to the provisions of Section 2.13(d);
provided  further that any amount due exclusively to the L/C
Issuer in its capacity as such shall be borne pursuant to this Section 11.04(c) pro
rata by the Revolving Lenders, and not by any Term Lender.

 

(d)          Waiver of Consequential Damages,
Etc.  To the fullest extent permitted
by applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan, Letter of Credit or
Bankers’ Acceptance or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

(e)           Payments.  All amounts due under this Section shall
be payable not later than ten Business Days after demand therefor.

 

118

 

(f)           Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, the L/C Issuer and the
Swing Line Lender, the replacement of any Lender and the occurrence of the
Facility Termination Date.

 

11.05      Payments Set Aside.  To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or
the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each
Lender and the L/C Issuer severally agrees to pay to the Administrative Agent
upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per
annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders and the L/C
Issuer under clause (b) of the preceding sentence shall survive the
occurrence of the Facility Termination Date.

 

11.06      Successors and Assigns.

 

(a)           Successors and Assigns Generally.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of
this Section, (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section, or (iv) to
an SPC in accordance with the provisions of subsection (h) of this Section (and
any other attempted assignment or transfer by any party hereto shall be null
and void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)          Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Credit Commitment
and its Revolving Loans (including for purposes of this subsection (b),
participations in L/C — BA Obligations and in Swing Line Loans) or of its Pro
Rata Term Share of the Term Loan at the time owing to it (such Lender’s portion
of Loans, commitments and risk participations with respect to each of the
Revolving Credit Facility 

 

119

 

and the Term Loan
Facility (each, an “Applicable
Facility”) being referred to in this Section 11.06
as its “Applicable Share”))
at the time owing to it); provided that

 

(i)            except in the case of an assignment
of the entire remaining amount of the assigning Lender’s Applicable Share of
the Applicable Facility at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Applicable Share (which for this purpose
includes Loans outstanding thereunder) with respect to each Applicable
Facility, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than (A) $5,000,000 with respect to the Revolving Credit Facility
and (B) $1,000,000 with respect to the Term Loan Facility, unless in
either case each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed), provided, however,
that concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met;

 

(ii)           each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement with respect to the Applicable Facility,
except that this clause (ii) shall not (A) prohibit any Lender
from assigning all or a portion of its rights and obligations among the
Applicable Facilities on a non-pro rata basis or (B) apply to rights in
respect of Swing Line Loans;

 

(iii)          any assignment of a Revolving Credit
Commitment must be approved by the Administrative Agent, the L/C Issuer and the
Swing Line Lender unless the Person that is the proposed assignee is itself a
Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and

 

(iv)          the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee in the amount, if any, required
as set forth in Schedule 11.06, and the Eligible Assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the
effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Revolving Lender or a Term Lender, as applicable, under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 4.01, 4.04, 4.05,
and 11.04 with respect to facts and circumstances 

 

120

 

occurring prior to the effective date of such
assignment.  Upon request, the Borrower
(at its expense) shall execute and deliver applicable Notes to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower (in such capacity, subject to Section 11.17),
shall maintain at the Administrative Agent’s Office a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Credit Commitments of, and
principal amounts of the Loans and L/C — BA Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by each of the Borrower
and the L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice.  In addition, at any time
that a request for a consent for a material or substantive change to the Loan
Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register.

 

(d)          Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Revolving Credit Commitment and/or the Loans
(including such Lender’s participations in L/C — BA Obligations and/or Swing
Line Loans) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent, the
Lenders and the L/C Issuer shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

 

(e)           Any agreement or instrument pursuant
to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any 
provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.01 that affects such
Participant.  Subject to subsection (e) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 4.01, 4.04 and 4.05 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.08
as though it were a Lender, provided such Participant agrees to be
subject to Section 2.14 as though it were a Lender.

 

(f)           Limitations upon Participant
Rights.  A Participant shall not be
entitled to receive any greater payment under Section 4.01 or 4.04
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the 

 

121

 

participation to such
Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 4.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 4.01(e) as
though it were a Lender.

 

(g)          Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(h)          Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption shall be deemed to
include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.

 

(i)            Special Purpose Funding Vehicles.  Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to
provide all or any part of any Loan that such Granting Lender would otherwise
be obligated to make pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if
an SPC elects not to exercise such option or otherwise fails to make all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof or, if it fails to do so, to make such payment to
the Administrative Agent as is required under Section 2.13(b)(ii).  Each party hereto hereby agrees that (i) neither
the grant to any SPC nor the exercise by any SPC of such option shall increase
the costs or expenses or otherwise increase or change the obligations of the
Borrower under this Agreement (including its obligations under Section 4.04),
(ii) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, and (iii) the
Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. 
The making of a Loan by an SPC hereunder shall utilize the Revolving
Credit Commitment or commitment to make a Term Loan of the Granting Lender to
the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the occurrence of the
Facility Termination Date) that, prior to the date that is one year and one day
after the payment in full of all outstanding commercial paper or other senior
debt of any SPC, it will not institute against, or join any other Person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or
any State thereof.  Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to,
but 

 

122

 

without prior consent of
the Borrower and the Administrative Agent and with the payment of a processing
fee in the amount of $2,500, assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (ii) disclose
on a confidential basis any non-public information relating to its funding of
Loans to any rating agency, commercial paper dealer or provider of any surety
or Guarantee or credit or liquidity enhancement to such SPC.

 

(j)            Resignation as L/C Issuer or
Swing Line Lender after Assignment. 
Notwithstanding anything to the contrary contained herein, if at any
time Bank of America assigns all of its Revolving Credit Commitment, Revolving
Loans and any Pro Rata Term Share of the Term Loan pursuant to subsection (b) above,
Bank of America may, (i) upon 30 days’ notice to the Borrower and the
Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the
Borrower, resign as Swing Line Lender. 
In the event of any such resignation as L/C Issuer or Swing Line Lender,
the Borrower shall be entitled to appoint from among the Lenders willing to
serve in such capacity a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing Line
Lender, as the case may be.  If Bank of
America resigns as L/C Issuer, it shall retain all the rights, powers,
privileges and duties of the L/C Issuer hereunder with respect to all Letters
of Credit and Bankers’ Acceptances outstanding as of the effective date of its
resignation as L/C Issuer and all L/C — BA Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund
risk participations in Unreimbursed Amounts pursuant to Section 2.04(c)).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.05(c). Upon the appointment of a
successor L/C Issuer and/or Swing Line Lender, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and
(b) the successor L/C Issuer shall issue letters of credit in substitution
for the Letters of Credit and/or Bankers’ Acceptances, if any, outstanding at
the time of such successor or make other arrangements satisfactory to Bank of
America to effectively assume the obligations of Bank of America with respect
to such Letters of Credit and/or Bankers’ Acceptances.

 

11.07      Treatment of Certain Information;
Confidentiality.  Each of the Administrative Agent, the Lenders
and the L/C Issuer agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
trustees, officers, employees, agents, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any 

 

123

 

prospective assignee of
or Participant in, any of its rights or obligations under this Agreement or any
Eligible Assignee invited to be a Lender pursuant to Section 2.15(c) or
(ii) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y) becomes
available to the Administrative Agent, any Lender, the L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Borrower.

 

For purposes of this Section, “Information” means all information received
from the Borrower or any Non-Mueller  Subsidiary
relating to the Borrower or any Non-Mueller  Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrower or any Non-Mueller  Subsidiary, provided that, in the
case of information received from the Borrower or any Non-Mueller  Subsidiary after the date hereof, any information
not marked “PUBLIC” at the time of delivery will be deemed to be confidential; provided
that any information marked “PUBLIC” may also be marked “Confidential”.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

Each of the Administrative Agent, the Lenders and the L/C Issuer
acknowledges that (a) the Information may include material non-public
information concerning the Borrower or a Non-Mueller  Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and (c) it
will handle such material non-public information in accordance with applicable
Law, including Federal and state securities Laws.

 

11.08      Right of Setoff. 
If an Event of Default shall have occurred and be continuing, each
Lender, the L/C Issuer and each of their respective Affiliates is hereby
authorized at any time and from time to time, after obtaining the prior written
consent of the Administrative Agent, to the fullest extent permitted by applicable
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the L/C
Issuer or any such Affiliate to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C
Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower  may be contingent or unmatured or are owed
to a branch or office of such Lender or the L/C Issuer different from the
branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender, the L/C Issuer and
their respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender, the
L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.

 

124

 

11.09      Interest Rate Limitation.  Notwithstanding anything to the contrary contained in
any Loan Document, the interest paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the “Maximum
Rate”).  If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the
Borrower.  In determining whether the
interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate,
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Obligations hereunder.

 

11.10      Counterparts; Integration;
Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
provided in Section 5.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

11.11      Survival of Representations and
Warranties.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.

 

11.12      Severability.  If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

11.13      Replacement of Lenders. 
If any Lender requests compensation under Section 4.04, if
the Borrower is required to pay any additional amount to any Lender or any 

 

125

 

Governmental Authority
for the account of any Lender pursuant to Section 4.01, if any
Lender is a Defaulting Lender, or if any Lender fails to approve any amendment,
waiver or consent requested by Borrower pursuant to Section 11.01
that has received the written approval of not less than the Required Lenders
but also requires the approval of such Lender, then in each such case the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.06), all of its interests, rights
and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

 

(a)           the Borrower shall have paid to the Administrative
Agent the assignment fee specified in Section 11.06(b);

 

(b)          such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and L/C —
BA Advances, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents (including any
amounts under Section 4.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

 

(c)           in the case of any such assignment
resulting from a claim for compensation under Section 4.04 or
payments required to be made pursuant to Section 4.01, such
assignment will result in a reduction in such compensation or payments
thereafter;

 

(d)          in the case of any such assignment
resulting from the refusal of a Lender to approve a requested amendment, waiver
or consent, the Person to whom such assignment is being made has agreed to
approve such requested amendment, waiver or consent; and

 

(e)           such assignment does not conflict
with applicable Laws.

 

A Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

 

11.14      Governing Law; Jurisdiction; Etc.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)          SUBMISSION TO JURISDICTION.  THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT 

 

126

 

OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           WAIVER OF VENUE.  THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

 

(d)          SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

 

11.15      Waiver of Jury Trial. 
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

11.16      USA PATRIOT Act Notice. 
Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, 

 

127

 

verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act.

 

11.17      No Advisory or Fiduciary
Responsibility.  In connection with all aspects
of each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrower acknowledges and agrees, and acknowledges its Affiliates’
understanding, that:  (i) (A) the
arranging and other services regarding this Agreement provided by the
Administrative Agent, SunTrust Bank and the Arrangers are arm’s-length
commercial transactions between the Borrower and its Affiliates, on the one
hand, and the Administrative Agent, SunTrust Bank and the Arrangers, on the
other hand, (B) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms,
risks and conditions of the transactions contemplated hereby and by the other
Loan Documents; (ii) (A) each of the Administrative Agent, SunTrust
Bank and the Arrangers is and has been acting solely as a principal and, except
as expressly agreed in writing by the relevant parties, has not been, is not,
and will not be acting as an advisor, agent or fiduciary for the Borrower or
any of its Affiliates or any other Person and (B) neither the
Administrative Agent, SunTrust Bank nor either Arranger has any obligation to
the Borrower or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents and (iii) the Administrative Agent, SunTrust Bank
and the Arrangers and their respective Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Borrower and its Affiliates, and neither the Administrative Agent, SunTrust
Bank nor either Arranger has any obligation to disclose any of such
interests  to the Borrower or its Affiliates
except as may otherwise be required by applicable Laws.  To the fullest extent permitted by law, the
Borrower hereby waives and releases any claims that it may have against the
Administrative Agent, SunTrust Bank and each Arranger with respect to any
breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

 

[Remainder of page is
intentionally left blank.]

 

128Exhibit
10.1

 

FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of September 2, 2009 (this “Agreement”), and effective as
of August 31, 2009 (the “Effective Date”) is entered into among Goldleaf
Financial Solutions, Inc., a Tennessee corporation (the “Borrower”),
the Guarantors party hereto, the Lenders party hereto and Bank of America,
N.A., as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).  All capitalized terms used
herein and not otherwise defined herein shall have the meanings given to such
terms in the Credit Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent entered
into that certain Second Amended and Restated Credit Agreement, dated as of November 30,
2006, as amended by (i) that certain First Amendment to Second Amended and
Restated Credit Agreement and Consent dated as of January 17, 2008, (ii) that
certain Second Amendment to Second Amended and Restated Credit Agreement dated
as of December 24, 2008, (iii) that certain Third Amendment to Second
Amended and Restated Credit Agreement dated as of February 18, 2009 and (iv) that
certain Fourth Amendment to Second Amended and Restated Credit Agreement,
Consent and Waiver dated as of August 14, 2009 (as so amended, and as may
be further amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), pursuant to which the Lenders extended certain
financial accommodations to the Borrower;

 

WHEREAS,
the Borrower has requested that the Lenders amend the Credit Agreement as of the Effective Date subject
to the terms and conditions set forth below; and

 

WHEREAS,
the Lenders are willing to do so subject to the terms and conditions specified
in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1.                                       Reaffirmation.  Each of the Loan Parties acknowledges and
reaffirms (a) that it is bound by all of the terms of the Credit Agreement
and the Loan Documents to which it is a party and (b) that it is responsible
for the observance and full performance of all Obligations, including without
limitation, the repayment of the Loans and reimbursement of any drawings on a
Letter of Credit.  Furthermore, the Loan
Parties acknowledge and confirm (i) that the Administrative Agent and the
Lenders have performed fully all of their respective obligations under the
Credit Agreement and the other Loan Documents and (ii) by entering into
this Agreement, the Lenders do not waive or release any term or condition of
the Credit Agreement or any of the other Loan Documents or any of their rights
or remedies under such Loan Documents or applicable law or any of the
obligations of the Loan Parties thereunder.

 

2.                                       Amendment.  As of the Effective Date, the definition of “Applicable
Rate” in Section 1.01 of the Credit Agreement is hereby amended
to read as follows:

 

‘APPLICABLE RATE’ means, from time to time,
the following percentages per annum, based upon the Funded Debt to EBITDA Ratio
(the “Applicable  Financial Covenant”) 

 

 

as
set forth in the most recent Compliance Certificate received by Administrative
Agent pursuant to Section 6.2(b):

 

	
  Pricing Level

  	
   

  	
  Funded Debt to EBITDA

  Ratio

  	
   

  	
  LIBOR Margin

  	
   

  	
  Base Rate Margin

  	
   

  	
  Commitment Fee

  	
   

  
	
  I

  	
   

  	
  > 3.50 to 1.0

  	
   

  	
  3.00

  	
  %

  	
  0.50

  	
  %

  	
  0.625

  	
  %

  
	
  II

  	
   

  	
  > 3.00 to 1.0 but < 3.50 to 1.0

  	
   

  	
  2.75

  	
  %

  	
  0.25

  	
  %

  	
  0.50

  	
  %

  
	
  III

  	
   

  	
  > 2.50 to 1.0 but < 3.00 to 1.0

  	
   

  	
  2.50

  	
  %

  	
  0.00

  	
  %

  	
  0.50

  	
  %

  
	
  IV

  	
   

  	
  > 1.50 to 1.0 but < 2.50 to 1.0

  	
   

  	
  2.00

  	
  %

  	
  0.00

  	
  %

  	
  0.35

  	
  %

  
	
  V

  	
   

  	
  < 1.50 to 1.0

  	
   

  	
  1.375

  	
  %

  	
  0.00

  	
  %

  	
  0.25

  	
  %

  

 

Any increase or decrease in the Applicable Rate resulting from a change
in the Applicable Financial Covenant shall become effective commencing on the
5th Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.2(b); provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level I shall apply commencing on the 5th Business Day
following the date such Compliance Certificate was required to have been
delivered.  Commencing upon the 5th
Business Day following receipt of such delinquent Compliance Certificate, the
Applicable Rate shall be adjusted to the appropriate Pricing Level.

 

3.                                       Condition
Precedent.  This
Agreement shall be effective as of the Effective Date upon receipt by the
Administrative Agent of counterparts of this Agreement, duly executed by the
Borrower, the Guarantors, each Lender and the Administrative Agent.

 

4.                                       Guarantor
Acknowledgement.

 

(a)                                  Each of the Guarantors
hereby acknowledges that it has reviewed the terms and provisions of the Credit
Agreement and this Agreement.  Each of
the Guarantors hereby confirms that the Subsidiary Guaranty, as applicable, to
which it is a party or otherwise bound will continue to guarantee, as the case
may be, to the fullest extent possible in accordance with such Guarantee the
payment and performance of all “Guarantied Obligations” under each of
the Guarantees, as the case may be (in each case as such terms are defined in
the applicable Guarantee), including without limitation the payment and performance
of all such “Obligations” under each of the Guarantees, as the case may
be, in respect of the Obligations of the Borrower now or hereafter existing
under or in respect of the Credit Agreement and the Notes defined therein.

 

(b)                                 Each of the Guarantors
acknowledges and agrees that any of the Guarantees to which it is a party or
otherwise bound shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be impaired
or limited by the execution or effectiveness of this Agreement.  Each of the Guarantors represents and
warrants that all representations and warranties contained in the Credit
Agreement, this Agreement and the Guarantee to which it is a party or otherwise
bound are true, correct and complete in all material respects on and as of the
date hereof to the same extent as though made on and as of that date, except to
the extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.

 

2

 

5.                                       Release.  As a material part of the consideration for the
Administrative Agent, the L/C Issuer and the Lenders entering into this
Agreement, the Loan Parties agree as follows (the “Release Provision”):

 

(a)                                  By their signatures below,
the Borrower and the other Loan Parties hereby agree that the Administrative
Agent, the L/C Issuer and each of the Lenders, and each of their respective
Affiliates, officers, directors, agents and employees, and their respective
successors and assigns (hereinafter all of the above collectively referred to
as the “Bank Group”), are irrevocably and unconditionally released,
discharged and acquitted from any and all actions, causes of action, claims,
demands, damages and liabilities of whatever kind or nature, in law or in
equity, now known or unknown, suspected or unsuspected to the extent that any
of the foregoing arises from any action or failure to act solely in connection
with the Loan Documents on or prior to the date hereof.

 

(b)                                 Each Loan Party hereby
acknowledges, represents and warrants to the Bank Group that:

 

(i)                                     such Loan Party
has read and understands the effect of the Release Provision.  Such Loan Party has had the assistance of
independent counsel of its own choice, or has had the opportunity to retain
such independent counsel, in reviewing, discussing, and considering all the
terms of the Release Provision; and if counsel was retained, counsel for such
Loan Party has read and considered the Release Provision and advised such Loan
Party with respect to the same.  Before
execution of this Agreement, such Loan Party has had adequate opportunity to make
whatever investigation or inquiry it may deem necessary or desirable in
connection with the subject matter of the Release Provision.

 

(ii)                                  such Loan Party
is not acting in reliance on any representation, understanding, or agreement
not expressly set forth herein.  Such
Loan Party acknowledges that the Bank Group has not made any representation
with respect to the Release Provision except as expressly set forth herein.

 

(iii)                               such Loan Party
has executed this Agreement and the Release Provision thereof as its free and
voluntary act, without any duress, coercion, or undue influence exerted by or
on behalf of any person.

 

(iv)                              such Loan Party
is the sole owner of the claims released by the Release Provision, and such
Loan Party has not heretofore conveyed or assigned any interest in any such
claims to any other Person.

 

(c)                                  Such Loan Party understands
that the Release Provision was a material consideration in the agreement of the
Administrative Agent, the L/C Issuer and the Lenders to enter into this
Agreement.

 

6.                                       Representations
and Warranties.

 

(a)                                  The Borrower
and each Guarantor hereby represent and warrant to and in favor of the Lenders
as follows:

 

3

 

(i)                                     the Borrower and each
Guarantor has the corporate power and authority (1) to enter into this
Agreement and (2) to do all acts and things as are required or
contemplated hereunder to be done, observed and performed by it;

 

(ii)                                  this Agreement has been duly
authorized, validly executed and delivered by one or more Responsible Officers
of the Borrower and each Guarantor, and constitutes the legal, valid and
binding obligations of the Borrower and each Guarantor, enforceable against the
Borrower and each Guarantor in accordance with its terms, subject, as to
enforcement of remedies, to the following qualifications:  (1) an order of specific performance and
an injunction are discretionary remedies and, in particular, may not be
available where damages are considered an adequate remedy at law and (2) enforcement
may be limited by bankruptcy, insolvency, liquidation, reorganization,
reconstruction and other similar laws affecting enforcement of creditors’
rights generally (insofar as any such law relates to the bankruptcy, insolvency
or similar event of the Borrower); and

 

(iii)                               the execution and delivery
of this Agreement does not and will not require the consent or approval of any
regulatory authority or governmental authority or agency having jurisdiction
over the Borrower or any Guarantor which has not already been obtained, nor be
in contravention of or in conflict with the articles of incorporation or
by-laws of the Borrower or any Guarantor, or any provision of any statute,
judgment, order, indenture, instrument, agreement, or undertaking, to which the
Borrower or any Guarantor is party or by which the Borrower’s or any Guarantor’s
assets or properties are bound.

 

(b)                                 The Borrower hereby
represents and warrants to and in favor of the Lenders as follows:

 

(i)                                     each representation and
warranty set forth in Article 5 of the Credit Agreement, as amended hereby,
is hereby restated and affirmed as true and correct in all material respects as
of the date hereof, except to the extent (1) previously fulfilled in
accordance with the terms of the Credit Agreement, (2) the Borrower has
provided the Lenders updates to information provided to the Lenders in
accordance with the terms of such representations and warranties or (3) relating
specifically to the Closing Date or otherwise inapplicable; and

 

(ii)                                  no Default exists both
before and after giving effect to this Agreement and there has been no Material
Adverse Effect both before and after giving effect to this Agreement.

 

7.                                       Miscellaneous.

 

(a)                                  Except as expressly set
forth herein, the Credit Agreement shall remain unchanged and in full force and
effect and shall constitute the legal, valid, binding and enforceable
obligation of the Borrower to the Lenders, and the Borrower hereby restates,
ratifies and reaffirms each and every term and condition set forth in the
Credit Agreement, as amended hereby.  The
terms of this Agreement are not intended to and do not serve as a novation as
to the Credit Agreement or any Note or the indebtedness evidenced thereby.  The parties hereto expressly do not intend to
extinguish any debt or security interest created pursuant to the Credit

 

4

 

Agreement
or any document executed in connection therewith.  Instead it is the express intention to affirm
the Credit Agreement and the security created thereby.

 

(b)                                 This Agreement
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together,
shall constitute but one and the same instrument.

 

(c)                                  This Agreement
shall be binding upon and inure to the benefit of the successors and permitted
assigns of the parties hereto.

 

(d)                                 THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF GEORGIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

 

[remainder of page intentionally left blank]

 

5

 

Each of the parties hereto has caused a counterpart of this Agreement
to be duly executed and delivered as of the date first above written.

 

	
  BORROWER:

  	
  GOLDLEAF
  FINANCIAL SOLUTIONS, INC.,

  
	
   

  	
  as
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory L. Boggs

  
	
   

  	
  Name:

  	
  Lynn Boggs

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
  GOLDLEAF
  TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory L. Boggs

  
	
   

  	
  Name:

  	
  Lynn Boggs

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TOWNE
  SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory L. Boggs

  
	
   

  	
  Name:

  	
  Lynn Boggs

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FORSEON
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory L. Boggs

  
	
   

  	
  Name:

  	
  Lynn Boggs

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GOLDLEAF
  LEASING, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory L. Boggs

  
	
   

  	
  Name:

  	
  Lynn Boggs

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GOLDLEAF
  INSURANCE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory L. Boggs

  
	
   

  	
  Name:

  	
  Lynn Boggs

  
	
   

  	
  Title:

  	
  CEO

  

 

GOLDLEAF FINANCIAL
SOLUTIONS, INC.

FIFTH AMENDMENT

 

 

	
  LENDERS:

  	
  BANK
  OF AMERICA, N.A.,

  
	
   

  	
  as
  Lender and L/C Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ethan S. Grossman

  
	
   

  	
  Name:

  	
  Ethan S. Grossman

  
	
   

  	
  Title:

  	
  AVP

  
	
   

  	
   

  	
   

  
	
   

  	
  THE PEOPLES BANK,

  
	
   

  	
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Rice

  
	
   

  	
  Name:

  	
  Paul Rice

  
	
   

  	
  Title:

  	
  FVP/Commercial Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, N.A.,

  
	
   

  	
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elaine Eaton

  
	
   

  	
  Name:

  	
  Elaine Eaton

  
	
   

  	
  Title:

  	
  Senior Vice President

  

 

GOLDLEAF FINANCIAL
SOLUTIONS, INC.

FIFTH AMENDMENT

 

 

	
  ADMINISTRATIVE
  AGENT:

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Rosanne Parsill

  
	
   

  	
  Name:

  	
  Rosanne
  Parsill

  
	
   

  	
  Title:

  	
  Assistant
  Vice President

  

 

GOLDLEAF FINANCIAL
SOLUTIONS, INC.

FIFTH AMENDMENT

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