Document:

creditagreement.htm

	
CREDIT AGREEMENT

	  
	
dated as of December 1, 2006

	  
	
among

	  
	
MUELLER INDUSTRIES, INC.,

	  
	
THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,

	
as Banks,

	  
	
and

	  
	
LASALLE BANK MIDWEST NATIONAL ASSOCIATION,

	
as Agent

	  
	  
	  
	
SUNTRUST BANK,

	
as Syndication Agent

	  
	
REGIONS BANK,

	
as Documentation Agent

	  
	
FIRST TENNESSEE BANK NATIONAL ASSOCIATION,

	
as Senior Managing Agent

	  
	  
	
LASALLE BANK MIDWEST NATIONAL ASSOCIATION,

	
as Arranger

  

  

  

	
TABLE OF CONTENTS

	  	  	  	  	  	 
	
1.   

	
DEFINITIONS 

	
1

	 
	  	
1.1

	
Definitions 

	
1

	 
	  	
1.2

	
Accounting Terms

	
12

	 
	  	
1.3

	
Other Definitional Provisions

	
13

	 
	  	  	  	  	  	 
	
2.   

	
AMOUNT AND TERMS OF LOANS 

	
13

	 
	  	
2.1

	
Amount of Line of Credit

	
13

	 
	  	
2.2

	
Notice and Manner of Borrowing 

	
14

	 
	  	  	
2.2.1

	
Nature of Advances

	
14

	 
	  	  	
2.2.2

	
Method of Selecting Types and Interest Periods for New Advances 

	
14

	 
	  	  	
2.2.3

	
Conversion and-Continuation of Outstanding, Advances

	
14

	 
	  	  	
2.2.4

	
Changes in Interest Rate, etc

	
15

	 
	  	  	
2.2.5

	
Ratable Advances 

	
15

	 
	  	  	
2.2.6

	
Disbursement

	
16

	 
	  	  	
2.2.7

	
Minimum Advances

	
16

	 
	  	
2.3

	
Authorization and Issuance of Line of Credit Notes

	
16

	 
	  	
2.4

	
Facility Fees

	
16

	 
	  	
2.5

	
Use of Proceeds

	
16

	 
	  	
2.6

	
Interest Payment Dates, Interest Basis 

	
17

	 
	  	
2.7

	
Prepayments

	
17

	 
	  	
2.8

	
Loan Account

	
17

	 
	  	
2.9

	
Swingline Loans 

	
18

	 
	  	
2.10

	
Reduction or Termination of Commitments

	
18

	 
	  	
2.11

	
Increase of Commitments

	
18

	 
	  	  	  	  	  	 
	
3.   

	
GENERAL PROVISIONS

	
19

	 
	  	
3.1

	
Overdue Rate

	
19

	 
	  	  	
3.1.1

	
Overdue Rate

	
19

	 
	  	  	
3.1.2

	
Late Charge 

	
19

	 
	  	
3.2

	
Computation of Interest and Fees; Maximum Interest Rate

	
19

	 
	  	  	
3.2.1

	
Calculation Of Interest and Fees

	
20

	 
	  	  	
3.2.2

	
Maximum Rate

	
20

	 
	  	
3.3

	
Conditions Precedent to the Execution and Delivery of this Agreement

	
20

	 
	  	  	
3.3.1

	
Line Of Credit Note, Guaranties, etc

	
20

	 
	  	  	
3.3.2

	
Good Standing Certificates

	
21

	 
	  	  	
3.3.3

	
Resolutions

	
21

	 
	  	  	
3.3.4

	
Charter

	
21

	 
	  	  	
3.3.5

	
Incumbency Certificates

	
21

	 
	  	  	
3.3.6

	
Certificate Regarding Representations and Warranties

	
21

	 
	  	  	
3.3.7

	
Reimbursement

	
21

	 
	  	  	
3.3.8

	
No Litigation or Investigation

	
21

	 

  

i

  

	  	  	
3.3.9

	
Insurance

	
22

	 
	  	  	
3.3.10

	
No Event of Default

	
22

	 
	  	  	
3.3.11

	
Opinion of Counsel

	
22

	 
	  	  	
3.3.12

	
Repayment of Existing Obligations

	
22

	 
	  	  	
3.3.13

	
Fees

	
22

	 
	  	  	
3.3.14

	
Financial Statements

	
22

	 
	  	  	
3.3.15

	
Lien Searches

	
22

	 
	  	  	
3.3.16

	
Certificate Regarding USA Patriot Act

	
22

	 
	  	  	
3.3.17

	
Other Matters

	
22

	 
	  	
3.4

	
Conditions Precedent to all Advances under the Line of Credit Loans

	
22

	 
	  	  	
3.4.1

	
No Event Of Default

	
22

	 
	  	  	
3.4.2

	
Agreement in Full Force and Effect

	
23

	 
	  	  	
3.4.3

	
Representations and Warranties True and Correct

	
23

	 
	  	  	
3.4.4

	
Financial Statements

	
23

	 
	  	  	
3.4.5

	
No Change

	
23

	 
	  	
3.5

	
Compensation for Increased Costs

	
23

	 
	  	
3.6

	
Letters of Credit

	
24

	 
	  	
3.7

	
Termination of Commitments and Payment on Line of Credit Maturity

	
25

	 
	  	
3.8

	
Tax Documents

	
25

	 
	  	
3.9

	
Applicable Lending Office

	
26

	 
	  	
3.10

	
Limitation of Requests and Elections

	
27

	 
	  	
3.11

	
Substitution of Bank

	
27

	 
	  	
3.12

	
No Setoff or Deduction

	
28

	 
	  	
3.13

	
International Transaction

	
28

	 
	  	  	  	  	  	 
	
4.   

	
REPRESENTATIONS AND WARRANTIES

	
28

	 
	  	
4.1

	
Organization, Powers, Good Standing

	
29

	 
	  	  	
4.1.1

	
Organization and Good Standing

	
29

	 
	  	  	
4.1.2

	
Power and Authority

	
29

	 
	  	
4.2

	
Authorization of Borrowing Etc

	
29

	 
	  	  	
4.2.1

	
No Violation

	
29

	 
	  	  	
4.2.2

	
Legally Valid and Binding

	
29

	 
	  	
4.3

	
Subsidiaries

	
30

	 
	  	
4.4

	
Title

	
30

	 
	  	
4.5

	
Litigation; Adverse Facts

	
30

	 
	  	
4.6

	
Payment of Taxes

	
30

	 
	  	
4.7

	
Materially Adverse Agreements, Performance

	
30

	 
	  	  	
4.7.1

	
No Material Adverse Agreements

	
30

	 
	  	  	
4.7.2

	
No Default

	
31

	 
	  	  	
4.7.3

	
Ownership of Intellectual Properties

	
31

	 
	  	
4.8

	
Disclosure

	
31

	 
	  	
4.9

	
ERISA Compliance

	
31

	 
	  	
4.10

	
Environmental Matters

	
32

	 

 

  

ii

  

  

	  	
4.11

	
Investment Company

	
32

	 
	  	
4.12

	
Regulations T, U and X

	
32

	 
	  	
4.13

	
Indebtedness

	
32

	 
	  	
4.14

	
Solvency

	
33

	 
	  	
4.15

	
Reportable Transaction

	
33

	 
	  	
4.16

	
Survival

	
33

	 
	  	
4.17

	
Subordinated Debt Documents

	
33

	 
	  	  	  	  	  	 
	
5.   

	
AFFIRMATIVE COVENANTS

	
33

	 
	  	
5.1

	
Use of Proceeds

	
33

	 
	  	
5.2

	
Accounting Records

	
34

	 
	  	
5.3

	
Reports

	
34

	 
	  	  	
5.3.1

	
Quarterly Reports

	
34

	 
	  	  	
5.3.2

	
Annual Reports

	
34

	 
	  	  	
5.3.3

	
Accounts Receivable and Payable Aging

	
34

	 
	  	  	
5.3.4

	
Compliance Certificate

	
34

	 
	  	  	
5.3.5

	
Copies of Reports Sent to the Banks

	
34

	 
	  	  	
5.3.6

	
Report of Certain Events

	
34

	 
	  	  	
5.3.7

	
Threat of Bankruptcy

	
35

	 
	  	  	
5.3.8

	
Amendments to Charter or Bylaws 

	
35

	 
	  	  	
5.3.9

	
Copy of Process 

	
35

	 
	  	  	
5.3.10

	
Copy of SEC Filings

	
35

	 
	  	  	
5.3.11

	
Copy of Process From Governmental Authority 

	
35

	 
	  	  	
5.3.12

	
Notice Of Litigation

	
36

	 
	  	  	
5.3.13

	
Other Information

	
36

	 
	  	  	
5.3.14

	
Pro Forma Compliance Certificate

	
36

	 
	  	  	
5.3.15

	
Subordinated Debt Notices

	
36

	 
	  	  	
5.3.16

	
Other Information 

	
36

	 
	  	
5.4

	
Financial Covenants

	
36

	 
	  	  	
5.4.1

	
Total Debt to Capitalization Ratio

	
36

	 
	  	  	
5.4.2

	
Interest Coverage Ratio

	
36

	 
	  	
5.5

	
Corporate Existence

	
36

	 
	  	
5.6

	
Payment of Taxes and Claims

	
37

	 
	  	
5.7

	
Insurance

	
37

	 
	  	
5.8

	
Compliance With Laws, etc

	
37

	 
	  	  	
5.8.1

	
Workers Compensation Laws

	
37

	 
	  	  	
5.8.2

	
Pension Plans

	
38

	 
	  	  	
5.8.3

	
FLSA Compliance

	
38

	 
	  	  	
5.8.4

	
Environmental Compliance

	
38

	 
	  	
5.9

	
Payment of Indebtedness

	
38

	 
	  	
5.10

	
Maintenance of Franchises, etc

	
38

	 
	  	
5.11

	
Further Assurances

	
38

	 
	  	
5.12

	
New Guaranties

	
38

	 
	  	
5.13

	
Additional Covenants

	
39

	 

 

  

iii

  

	
6.   

	
NEGATIVE COVENANTS

	
39

	 
	  	
6.1

	
Indebtedness

	
39

	 
	  	
6.2

	
Liens

	
40

	 
	  	
6.3

	
Restriction on Fundamental Changes

	
40

	 
	  	
6.4

	
Environmental Statutes

	
41

	 
	  	
6.5

	
Conflicting Agreements

	
41

	 
	  	
6.6

	
Misrepresentations

	
41

	 
	  	
6.7

	
Violation of Regulations

	
41

	 
	  	
6.8

	
Subsidiary Distribution of Earnings

	
41

	 
	  	
6.9

	
Scope of Business Activity

	
41

	 
	  	
6.10

	
Dividends and Distributions; Capital Structure

	
42

	 
	  	
6.11

	
Payments and Modification of Debt

	
42

	 
	  	  	  	  	  	 
	
7.   

	
EVENTS OF DEFAULT, ACCELERATION, REMEDIES 

	
42

	 
	  	
7.1

	
Events of Default

	
42

	 
	  	  	
7.1.1

	
Failure to Make Payments When Due

	
42

	 
	  	  	
7.1.2

	
Breach of Representation, Warranty or Certification

	
42

	 
	  	  	
7.1.3

	
Default Under Loan Documents, etc 

	
43

	 
	  	  	
7.1.4

	
Default on Other Agreements 

	
43

	 
	  	  	
7.1.5

	
Other Defaults Under Loan Documents 

	
43

	 
	  	  	
7.1.6

	
Involuntary Bankruptcy; Appointment of Trustee, etc

	
43

	 
	  	  	
7.1.7

	
Voluntary Bankruptcy, Appointment of Trustee, etc 

	
44

	 
	  	  	
7.1.8

	
Judgments and Attachments

	
44

	 
	  	  	
7.1.9

	
Dissolution

	
44

	 
	  	  	
7.1.10

	
Termination of Loan Documents, etc

	
45

	 
	  	  	
7.1.11

	
Environmental Violations

	
45

	 
	  	  	
7.1.12

	
Change of Control

	
45

	 
	  	  	
7.1.13

	
Invalidity of subordination Provisions, etc. 

	
45

	 
	  	
7.2

	
Remedies, Termination of Commitments 

	
45

	 
	  	
7.3

	
Right of Set-Off

	
46

	 
	  	
7.5

	
Compensation

	
46

	 
	  	  	  	  	  	 
	
8.   

	
THE AGENT AND RELATIONS AMONG BANKS, ETC. 

	
46

	 
	  	
8.1

	
Appointment 

	
46

	 
	  	
8.2

	
Advances and Payments

	
47

	 
	  	  	
8.2.1

	
Advances: In General

	
47

	 
	  	  	
8.2.2

	
Advances

	
47

	 
	  	  	
8.2.3

	
Distribution of Payments 

	
47

	 
	  	  	
8.2.4

	
Return of Payments 

	
48

	 
	  	
8.3

	
Dissemination of Information 

	
48

	 
	  	
8.4

	
Amendments, Consents and Waivers for Certain Actions

	
48

	 
	  	
8.5

	
Exculpation

	
48

	 
	  	
8.6

	
Reliance

	
49

	 
	  	
8.7

	
Credit Decisions

	
49

	 
	  	
8.8

	
Indemnification 

	
50

	 
	  	  	
8.8.1

	
Agent Indemnification

	
50

	 

 

  

iv

  

	 	 	 	 	 	 
	  	  	
8.8.2

	
 Borrower Indemnification 

	
50

	 
	  	
8.9

	
Successor 

	
50

	 
	  	
8.10

	
Agent as a Bank 

	
51

	 
	  	
8.11

	
Borrower Not A Beneficiary

	
51

	 
	  	
8.12

	
Sharing Among Banks 

	
51

	 
	  	
8.13

	
Assignments/Participations 

	
51

	 
	  	  	
8.13.1.

	
Permitted Assignments

	
51

	 
	  	  	
8.13.2.

	
Effect, Closing Date 

	
52

	 
	  	  	
8.13.3.

	
Participations 

	
52

	 
	  	
8.14

	
Other Agents 

	
53

	 
	  	  	  	  	  	 
	
9.   

	
MISCELLANEOUS 

	
53

	 
	  	
9.1

	
Costs and Attorneys' Fees 

	
53

	 
	  	
9.2

	
Waivers, Modifications in Writing 

	
53

	 
	  	
9.3

	
Notices, etc

	
54

	 
	  	
9.4

	
Notice of Wrongful Act or Omission by Agent or Banks

	
54

	 
	  	
9.5

	
Agent's Failure to Advance 

	
54

	 
	  	
9.6

	
Headings

	
54

	 
	  	
9.7

	
Execution in Counterparts

	
54

	 
	  	
9.8

	
Binding Effect, Assignment

	
55

	 
	  	
9.9

	
Severability of Provisions

	
55

	 
	  	
9.10

	
Survival of Agreements; Representations, Warranties Indemnities and Covenants 

	
55

	 
	  	
9.11

	
Independence of Covenants

	
55

	 
	  	
9.12

	
Construction of Agreement

	
55

	 
	  	
9.13

	
Complete Agreement 

	
55

	 
	  	
9.14

	
Equitable Relief 

	
55

	 
	  	
9.15

	
No Fiduciary Relationship 

	
55

	 
	  	
9.16

	
Choice of Law 

	
56

	 
	  	
9.17

	
Venue, Jurisdiction

	
56

	 
	  	
9.18

	
Other Waivers

	
56

	 
	  	
9.19

	
Waivers Voluntary

	
56

	 
	  	
9.20

	
Waiver of July Trial

	
56

	 
	  	
9.21

	
Nonliability of Banks

	
56

	 

	
SCHEDULE 1.1 (A)

	
PERMITTED LIENS

	  	  
	
SCHEDULE 1.1(B)

	
SUBSIDIARIES

	  	  
	
SCHEDULE 3.3.9

	
INSURANCE POLICIES

	  	  
	
SCHEDULE 3.6

	
LETTERS OF CREDIT

	  	  
	
SCHEDULE 4.5

	
LITIGATION AND CONTINGENT LIABILITIES

 

  

v

  

	  	  
	
SCHEDULE 4.6

	
TAX SHARING AGREEMENTS

	  	  
	
SCHEDULE 4.7.3.

	
OWNERSHIP OF INTELLECTUAL PROPERTY

	  	  
	
SCHEDULE 4.9

	
ERISA REPORTABLE EVENTS

	  	  
	
SCHEDULE 4.10

	
ENVIRONMENTAL MATTERS

	  	  
	
SCHEDULE 4.13

	
OUTSTANDING INDEBTEDNESS

	  	  
	
SCHEDULE 6.2

	
EXISTING LIENS

	  	  
	
EXHIBIT 1.15(b)

	
DOMESTIC SUBSIDIARIES

	  	  
	
EXHIBIT 2.3

	
LETTER OF CREDIT NOTE

	  	  
	
EXHIBIT 3.3.1(b)

	
GUARANTY

	  	  
	
EXHIBIT 3.3.2

	
LIST OF GUARANTORS

	  	  
	
EXHIBIT 3.3.11

	
OPINION

	  	  
	
EXHIBIT 5.3.4

	
COMPLIANCE CERTIFICATE

	  	  
	
EXHIBIT 6.3

	
FUNDAMENTAL SUBSIDIARIES

	  	  
	
EXHIBIT 8.2.3

	
WIRING INSTRUCTIONS

	  	  
	
EXHIBIT 8.13.1

	
ASSIGNMENT AGREEMENT

  

vi

  

 Execution Copy

CREDIT AGREEMENT

    This Credit Agreement (the "Agreement"), dated as of December 1, 2006, is among each of the Banks (as defined below), LaSalle Bank Midwest National Association, as Agent (as defined below), and Mueller Industries, Inc., a Delaware corporation, as Borrower (as defined below).

    In consideration of the mutual covenants, conditions and provisions as hereinafter set forth, the parties hereto agree as follows:

1.           DEFINITIONS.

1.1           Definitions.  For purposes of this Agreement, the following capitalized terms will have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

"Acquired Debt" means any Indebtedness of any Person existing at the time such Person became a Subsidiary or assumed by the Borrower or a Subsidiary of the Borrower pursuant to an Acquisition permitted hereunder (and not created or incurred in connection with or in anticipation of such Acquisition).

"Acquisition" means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person, (b) the acquisition of in excess of 50% of the Capital Stock of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary).

"Advances" means the Loans and the Letter of Credit Advances.

"Advance Date" means a Business Day on which Borrower has requested in accordance with this Agreement that an Advance be made hereunder.

"Affiliate" when used with respect to any person means any other person which, directly or indirectly, controls or is controlled by or is under common control with such person. For purposes of this definition "control" (including the correlative meanings of the terms "controlled by" and "under common control with"), with respect to any person, means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract or otherwise.

"Agent" means, LaSalle Bank Midwest National Association, a national banking association, when acting in its capacity as contractual representative of the Banks, and not in its individual capacity as a Bank, and any permitted successor(s) thereto, when so acting.

  

1

  

"Agent's Address" means 800 Military Street, Port Huron, Michigan 48060, Attention: Joseph A. Vito, or at such other address as Agent may hereafter specify to Borrower in writing.

"Agent's Counsel" means Dickinson Wright PLLC.

"Aggregate Commitment Amount" means the aggregate amount of all the Commitments of the Banks.

"Alternate Base Rate" means the higher of (i) the Prime Rate or (ii) the Federal Funds Rate plus 0.50% per annum.

"Alternative Base Rate Advance" means Advances which bear interest calculated by reference to the Alternative Base Rate.

"Applicable Lending Office" means, with respect to any Advance made by any Bank or with respect to such Bank's Commitment, the office or branch of such Bank or of any Affiliate of such Bank located at the address specified as the applicable lending office or branch for such Bank set forth next to the name of such Bank in the signature pages hereof or any other office or Affiliate of such Bank or of any Affiliate of such Bank hereafter selected and notified to the Borrower and the Agent by such Bank.

"Applicable Margin" means, with respect to Eurocurrency Advances at any time, the percentage rate per annum which is applicable at such time as set forth in the Pricing Schedule.

"Bank" means each and, when used in the plural, includes all of the banking institutions and other lenders which have signed (or which may hereafter become parties to) this Agreement (including LaSalle Bank Midwest National Association, when acting as a Bank and not as Agent) and their respective successor(s) and permitted assign(s).

"Borrower's Address" means 8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125, Attention: Chief Financial Officer, or at such other address as Borrower may hereafter specify to Agent in writing.

"Borrower" means Mueller Industries, Inc., a Delaware corporation, and its permitted successor(s) and assign(s).

                “Borrowing Date" means the date on which an Advance is made hereunder.

"Borrowing Notice" is defined in Section 2.2.

"Borrower's Counsel" means Gary Wilkerson, General Counsel to Borrower.

"British Pounds Sterling" or "£" means the lawful currency of the United Kingdom.

"Business Day" means (i) with respect to any borrowing, payment or rate selection of Eurocurrency Advances, a day (other than a Saturday or Sunday) on which banks generally are

  

2

  

open in Detroit for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in deposits in Dollars or the relevant Permitted Currency are carried out in the relevant interbank market and (ii) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Detroit for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.

"Capital Lease" of any Person means any lease which, in accordance with GAAP, is or should be capitalized on the books of such Person.

"Capital Stock" means (i) in the case of any corporation, all capital stock and any securities exchangeable for or convertible into capital stock and any warrants, rights or other options to purchase or otherwise acquire capital stock or such securities or any other form of equity securities, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Capitalization" is the sum of Total Debt and Net Worth.

"Closing Date" means the date of this Agreement.

"Commitment" means, with respect to each Bank, the commitment of each such Bank to make Line of Credit Loans and to participate in Letter of Credit Advances and Swingline Loans made through the Agent pursuant to Section 2.1, in amounts not exceeding the Equivalent in Dollars of the aggregate principal amount outstanding at any time equal to the respective commitment amount for each such Bank set forth for such Bank on the signature pages hereto or otherwise established pursuant to Section 8.13 or 9.2, as such amounts may be modified from time to time pursuant hereto.

"Consolidated Interest Expense" means interest expense of the Borrower and its Subsidiaries on a consolidated basis under GAAP, excluding any amortization of any premium or discount in respect of the issuance of the 2004 Subordinated Debentures.

"Code" means the Internal Revenue Code of 1986, as amended.

"Consistent Basis" means, in reference to the application of GAAP (as hereinafter defined), that the accounting principles observed in the current period are comparable in all material respects to those applied in the preceding period.

"Defaulting Bank" means any Bank that fails to make available to the Agent such Bank's Loans required to be made hereunder or shall have not made a payment required to be made to the Agent hereunder. Once a Bank becomes a Defaulting Bank, such Bank shall continue as a Defaulting Bank until such time as such Defaulting Bank makes available to the Agent the

 

3

  

amount of such Defaulting Bank's Loans and all other amounts required to be paid to the Agent pursuant to this Agreement.

"Dollars" and "$" means the lawful money of the United States of America.

"Domestic Subsidiaries" means all Subsidiaries organized under the laws of any of the states of the United States of America which are engaged in the manufacturing business in the broadest sense of that term, but excluding Arava Natural Resources Company, Inc. and its Subsidiaries.

"Documents" means, in upper or lower case form, all "documents" and "instruments" as such terms are defined in the Uniform Commercial Code as adopted and in effect in the State of Michigan, in which Borrower now or hereafter has any right, title or interest.

"EBITDA" means consolidated net earnings of the Borrower and the Subsidiaries excluding extraordinary gains, plus, to the extent deducted in determining such net earnings, the sum of income taxes, interest expense, depreciation and amortization, all determined in accordance with GAAP.

"Effective Rate" means the interest rate in effect for each respective Loan from time to time when such Loan is not in default, as set forth in Section 2 hereof.

"Environmental Protection Statute" means any federal, state or local law, statute, or regulation enacted in connection with or relating to the protection or regulation of the environment, including, but not limited to, those laws, statutes and regulations regulating, relating to or imposing liability or standards of conduct concerning the disposal, removal, production, storing, refining, handling, transferring, processing or transporting of hazardous materials and any regulations issued or promulgated in connection with such statutes by any governmental agency or instrumentality, including, without limitation, the Comprehensive Environmental Response, Compensation and Liabilities Act, as amended (42 U.S.C. '9601 et seq.) and the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. '6901 et seq.).

"Equivalent" of an amount of one currency (the "first currency") denominated in another currency (the "second currency"), as of any date of determination, means the amount of the second currency which could be purchased with the amount of the first currency at the spot or other relevant rate of exchange quoted by the Agent at approximately 11:00 a.m. local time on such date.

"ERISA" means the Employee Retirement Income Security Act of 1974, as the same may from time to time be amended or supplemented, including any rules or regulations issued in connection therewith.

"Euro" and/or "€" means the Euro referred to in Council Regulation (EC) No. 1103/97 dated June 17, 1997 passed by the Council of the European Union, or, if different, the then

 

4

  

lawful currency of the member states of the European Union that participate in the third stage of Economic and Monetary Union.

"Eurocurrencv Advance" means an Advance which, except as otherwise provided m Section 3.1, bears interest at the applicable Eurocurrency Rate.

"Eurocurrency Base Rate" means, with respect to a Eurocurrency Advance for the relevant Interest Period, the rate determined by the Agent to be the rate at which the Agent offers to place deposits in Permitted Currency in which such Eurocurrency Advance is to be denominated with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, approximately in the amount of the Agent's relevant Eurocurrency Advance and having a maturity equal to such Interest Period, plus all other applicable costs, expenses and reserves (including without limitation the cost of compliance with any existing requirements of the Bank of England Act of 1998 and/or Bank of England and/or the Financial Services Authority to place non-interest bearing or special deposits with the Bank of England and/or pay fees to the Financial Services Authority in connection with Advances denominated in British Pounds Sterling) for any Eurocurrency Advance denominated in any Optional Currency.

"Eurocurrency Rate" means, with respect to a Eurocurrency Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurocurrency Base Rate applicable to such Interest Period, divided by (b) one, minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) the Applicable Margin.

"Event of Default" has the meaning set forth in Section 7.1 of this Agreement.

"FASB" means the Financial Accounting Standards Board.

"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 (i) if the day for which such rate is to be determined 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 (ii) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to the Agent on such day on such transactions, as determined by the Agent.

"FLSA" means the federal Fair Labor Standards Act, as the same may from time to time be amended or supplemented, including any rules or regulations issued in connection therewith.

"Fundamental Subsidiaries" are those Subsidiaries identified on Exhibit 6.3.

"GAAP" means generally accepted accounting principles as 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 FASB or in such other statements

  

5

  

by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination and which are applied on a Consistent Basis.

 

"Governmental Authority" means any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

"Guaranties" means, collectively, the guaranties of the Borrower's obligations under the Loan Documents by each of the Domestic Subsidiaries listed in Exhibit 1.15(b) to this Agreement and all Domestic Subsidiaries that are hereafter required to sign Guaranties as provided in Section 5.12 hereof (individually, a "Guarantor" and, collectively, the "Guarantors").

"Indebtedness" means all items of indebtedness of any Person, direct or indirect, joint or several, including (without implied limitation):

(a)           all obligations of such Person for borrowed money evidenced by bonds, notes, debentures or similar instruments, all reimbursement and similar obligations under outstanding letters of credit, banker's acceptances or similar instruments in respect of drafts or other claims which may be presented or have been presented and have not yet been paid, and the unpaid purchase price for goods, property or services acquired by such Person, except for trade accounts and accrued expenses payable arising in the ordinary course of business which are not past due within customary payment terms;

(b)           All indebtedness guaranteed, directly or indirectly, in any manner, or endorsed (other than for collection or deposit in the ordinary course of business), or discounted with recourse by the Person;

(c)           All indebtedness in effect guaranteed by the Person, directly or indirectly, through agreements, contingent or otherwise: (l) to purchase such indebtedness; or (2) to purchase, sell, or lease (as lessee or lessor) property, products, materials, or supplies or to purchase or sell services, primarily for the purpose of enabling the Person to make payment of such indebtedness or to insure the owner of the indebtedness against loss; or (3) to supply funds to, or in any other manner invest in, the Person;

(d)           All indebtedness secured by (or for which the holder of such indebtedness has a right, contingent or otherwise, to be secured by), any mortgage, deed of trust, pledge, lien, security interest, or other charge or encumbrance upon property owned or acquired by the Person subject thereto, whether or not the liabilities secured thereby have been assumed by the Person;

(e)           the aggregate outstanding amount of all Off Balance Sheet Liabilities, based on the aggregate outstanding amount as if such transactions were structured as an on balance sheet financing, whether or not shown as a liability on a consolidated balance sheet of such Person, determined in a manner satisfactory to the Agent; and

  

6

  

(f)           all obligations of such Person as lessee which are capitalized in accordance with GAAP under any Capital Lease.

“Interest Coverage Ratio” means the sum of EBITDA, less extraordinary cash and noncash income of the Borrower and its Subsidiaries, divided by the amount of Consolidated Interest Expense (including interest arising from any Capital Leases) for the applicable period, computed as of the end of each fiscal quarter for the period of four fiscal quarters then ended.

"Interest Period" means, with respect to a Eurocurrency Advance, a period of one, two or three months commencing on a Business Day selected by the Borrower pursuant to this Agreement. Such Interest Period shall end on the day which corresponds numerically to such date one, two or three months thereafter, provided, however, that if there is no such numerically corresponding day in such next, second or third succeeding month, such Interest Period shall end on the last Business Day of such next, second or third succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.

"Joint Venture" means a single-purpose corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed by the Borrower or any of its Subsidiaries with another Person (or such a pre-existing entity in which the Borrower or any of its Subsidiaries acquires an interest) in order to conduct a common venture or enterprise with such Person, provided that (a) the Borrower or any of its Subsidiaries owns a portion of the Capital Stock thereof, but such portion does not exceed 80% of the total Capital Stock thereof and (b) neither the Borrower nor any of its Subsidiaries is liable in any manner for any of its Indebtedness or other obligations or has any Indebtedness with respect thereto.

"Letter of Credit" means any letter of credit issued pursuant to this Agreement by the Agent, on behalf of the Banks, for the account of the Borrower.

"Letter of Credit Advance" has the meaning set forth in Section 2.2.5 of this Agreement.

"Lien" means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement or any lease in the nature thereof) and any agreement to give any lien, mortgage, pledge, assignment, security interest, charge or other encumbrance of any kind.

"Line of Credit" means the line of credit established under Section 2.1 of this Agreement.

"Line of Credit Loans" means any loans made by the Banks pursuant to Section 2.1 of this Agreement.

"Line of Credit Maturity" means the earlier of the date five years after the Closing Date or the date the Commitments are terminated.

  

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"Line of Credit Notes" has the meaning set forth in Section 2.3 of this Agreement.

"Loans" means the Line of Credit Loans and the Swingline Loans.

"Loan Documents" means this Agreement, the Notes, the Guaranties, applications for Letters of Credit, the Subordinated Debt Documents and all other documents, instruments or certificates executed and delivered to the Banks in connection with this Agreement and the Loans.

"Margin Stock" means "margin stock" as defined in Regulations U or X or "marginable OTC stock" or "foreign margin stock" within the meaning of Regulation T or X.

"Maximum Rate" means the maximum non-usurious rate of interest that the Banks are allowed to contract for, charge, take, reserve or receive under the applicable laws of any applicable state or of the United States of America (whichever from time to time permits the highest rate for the use, forbearance or detention of money) after taking into account, to the extent required by applicable law, any and all relevant payments or charges under this Agreement, the Notes or under any other document or instrument executed and delivered in connection herewith and the indebtedness evidenced by the Notes.

"Net Worth" means the sum of the par or stated value of all outstanding Capital Stock, amounts in excess of par or stated value, surplus and retained earnings and other comprehensive income, all as determined in accordance with GAAP for the Borrower and its Subsidiaries on a consolidated basis.

"Non-Recourse JV Indebtedness" means Indebtedness of Joint Ventures that IS non-recourse to the Borrower or any of its other Subsidiaries in any manner.

"Notes" means the Line of Credit Notes and any other promissory notes issued by Borrower to the order of any one or more of the Banks evidencing the Obligations of Borrower to repay the Loans.

"Obligations" means any and all liabilities, obligations, or indebtedness owing by Borrower to the Agent and/or the Banks, of any kind or description, irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising under any Loan Document.

"Off-Balance Sheet Liability" of a Person means (i) any obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, asset securitizations, factoring or similar transactions, (ii) any liability under any sale and leaseback transaction which is not a Capital Lease, (iii) any liability under any so-called "synthetic lease" or "tax ownership operating lease" transaction entered into by such Person, or (iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing (as reasonably determined by the Agent) but which does not constitute a liability on the balance sheets of such Person, but excluding from this clause (iv) operating leases.

  

8

  

"Optional Currency" means any currency which is freely transferable and convertible into Dollars and acceptable to all the Banks; provided, that, subject to the terms of this Agreement, Euros and British Pounds Sterling shall be deemed acceptable to the Banks.

"Overdue Rate" means (a) in respect of principal of Alternate Base Rate Advance, a rate per annum that is equal to the sum of two percent (2%) per annum plus the Alternate Base Rate, (b) in respect of principal of Eurocurrency Advances, a rate per annum that is equal to the sum of two percent (2%) per annum plus the per annum rate in effect thereon until the end of the then current Interest Period for such Advance and, thereafter, a rate per annum that is equal to the sum of two percent (2%) per annum plus the Alternate Base Rate (or, in the case of any Eurocurrency Advance denominated in any Optional Currency, the per annum rate equivalent to the Alternate Base Rate for such currency as determined by the Agent), and (c) in respect of other amounts payable by the Borrower hereunder (other than interest), a per annum rate that is equal to the sum of two percent (2%) per annum plus the Alternate Base Rate.

"Permitted Currency" means Dollars and any Optional Currency.

"Permitted Liens" means (a) Liens for taxes, assessments or governmental charges or levies which, for Borrower and all Subsidiaries other than Arava Natural Resources Company and its Subsidiaries and DENO Acquisition EURL and its Subsidiaries are not yet due, or delinquent, or which can thereafter be paid without penalty, or which are being contested in good faith in accordance with this Agreement and against which appropriate reserves are being maintained under GAAP, (b) unfiled inchoate construction Liens for construction work in progress, (c) workmen's, repairmen's, warehousemen's and carrier's Liens and other similar Liens, if any, arising in the ordinary course of business, (d) Liens granted by Subsidiaries in favor of Borrower in connection with inter-company loans, (e) each of the liens described in Schedule 1.1 (a) attached to this Agreement, and (f) other similar Liens incidental to the normal business conduct of the ordinary course of business of the Borrower and Subsidiaries in an aggregate amount not to exceed $1,000,000.

"Person" or "Persons" means natural persons, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, lenders, trust companies, land trusts, vehicle trusts, business trusts or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

"Pricing Schedule" means the following schedule:

	
Tier

	
Capitalization

Ratio1

	
Facility 

Fee

	
Eurocurrency 

Applicable Margin

 and

 Letter of Credit Fee

	
 

 

All-In 

Drawn Cost

	
V3

	
>55%

	
20.0 bp2

	
67.5 bp

	
87.5 bp

	
IV

	
>45%, but ≤55%

	
15.0 bp

	
60.0 bp

	
75.0 bp

	
III

	
>35%, but ≤45%

	
12.5 bp

	
50.0 bp

	
62.5 bp

	
II

	
>25%, but ≤35%

	
10.0 bp

	
40.0 bp

	
50.0 bp

	
I

	
≤25%

	
10.0 bp

	
27.5 bp

	
37.5 bp

 

9

  

1 Defined as Total Debt/Capitalization.

2 “bp” means basis points per annum.

3 All fees will be calculated by the Capitalization Ratio as of the latest fiscal quarter for which financial statements have been delivered pursuant to Section 5.3.1, provided, however, that if such statements are not delivered as required by Section 5.3.1, the Tier V fees shall apply.

 

As of the Closing Date, the Applicable Margin will be set at Tier III above.

 

"Prime Rate" means and refers to the rate of interest announced publicly from time to time by the Agent as its prime commercial lending rate. Reference to the Prime Rate shall not be affected by the fact that Agent may make loans at different rates from time to time with respect to the class of Loans for which the Prime Rate is established. Any change in any of the interest rates chargeable hereunder resulting from a change in the Prime Rate shall become effective on the day on which each change in the Prime Rate is effective.

"Prohibited Transaction" has the meaning set forth in Section 406 or Section 2003(a) of ERISA.

"Ratable Share" means for each Bank a percentage based on the ratio of such Bank's Commitment to the aggregate Commitments of all Banks, which as to aggregate Advances (including participations in Letter of Credit Advances and Swingline Loans) of such Bank will be limited to the respective Commitment amount for such Bank. If the Commitments have expired or been terminated, then such Bank's Commitment for purposes of determining its Ratable Share shall be deemed equal to the amount of its Commitment immediately prior to such expiration or termination.

"Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.

"Regulation T" means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors.

"Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors.

"Regulation X" means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors.

"Reportable Event" has the meaning set forth in Section 4043 of ERISA.

  

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"Requirement of Law" means, with respect to any Person, the certificate (or articles) of incorporation and bylaws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

"Requisite Banks" means Banks whose Ratable Shares equal or exceed 51%.

"Reserve Requirement" means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities.

"Restricted Subsidiaries" means those Domestic Subsidiaries that have executed or are required to execute Guarantees.

"Same Day Funds" means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in any Optional Currency, same day or other funds as may be determined by the Agent to be customary in the place of disbursement or payment for the settlement of international banking transactions in such Optional Currency.

"SEC" means the Securities and Exchange Commission or any successor agency.

"Subordinated Debt" means (a) the 2004 Subordinated Debt and (b) any other unsecured Indebtedness of the Borrower which has subordination terms, covenants, pricing and other terms which have been approved in writing by the Required Banks.

"Subordinated Debt Documents" means the 2004 Subordinated Debt Documents and all other agreements, documents and instruments relating to any other Subordinated Debt at any time and all amendments and modifications thereof approved by the Required Banks.

"Subsidiaries" means those entities listed on Schedule 1. 1(b) to this Agreement and all entities in which the Borrower hereafter acquires, directly or indirectly, any equity or ownership interest, except (1) Joint Ventures and (2) minority interests in other Persons, the aggregate value of which interests (on a cost basis) does not exceed $10,000,000.

"Swingline Loan" has the meaning set forth in Section 2.9 of this Agreement.

"Taxes" means any taxes, charges, fees, levies or other assessments based upon or measured by net or gross income, gross receipts, sales, use, ad valorem, transfer, franchise, withholding, payroll, employment, excise, premium or property taxes, together with any interest and penalties, additions to tax and additional amounts imposed by any federal, state, local or foreign taxing authority upon any Person.

"Total Debt" means all Indebtedness (other than Non-Recourse JV Indebtedness) of the Borrower and its Subsidiaries on a consolidated basis.

  

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"Total Outstanding Amount" means the aggregate principal amounts at any time outstanding of the Line of Credit Advances, the outstanding face amount of Letters of Credit and all outstanding Swingline Loans, which shall not exceed in the aggregate an Equivalent in Dollars equal to the amount of the Aggregate Commitment Amount.

"2004 Subordinated Debt" means all Indebtedness of the Borrower and the Guarantors under the 2004 Subordinated Debt Documents.

"2004 Subordinated Debt Documents" means the 2004 Subordinated Indenture, the 2004 Subordinated Debentures and all other agreements, documents and instruments relating to the 2004 Subordinated Debentures at any time and all amendments and modifications thereof approved by the Required Banks.

"2004 Subordinated Debentures" means the 6.00% Subordinated Debentures issued by the Borrower in the aggregate outstanding principal amount (as of the Closing Date) of $297,688,000 due 2014 issued pursuant to the 2004 Subordinated Indenture and any other securities issued pursuant to the 2004 Subordinated Indenture at any time.

"2004 Subordinated Indenture" means the Subordinated Indenture between the Borrower, the subsidiary guarantors named therein and the trustee thereunder, dated November 30, 2004, pursuant to which the 2004 Subordinated Debentures were issued, as amended or modified from time to time.

"Type" means, with respect to any Advance, its nature as a Alternative Base Rate Advance or a Eurocurrency Advance.

"United Kingdom" means the United Kingdom of Great Britain and Northern Ireland.

"Unmatured Event of Default" means an event, act, or occurrence which with the giving of notice or the lapse of time, or both, would become an Event of Default.

1.2           Accounting Terms.  (a)      All accounting terms not specifically defined herein, to the extent not inconsistent with definitions set forth in Section 1.1 of this Agreement, will be construed in accordance with GAAP as in effect from time to time, including, without limitation, applicable statements, bulletins and interpretations issued by the FASB and bulletins, opinions, interpretations and statements issued by the American Institute of Certified Public Accountants or its committees, provided that, if the Borrower notifies the Banks that it wishes to amend any covenant or term hereof to eliminate the effect of any change in GAAP (or if the Requisite Banks notify the Borrower that the Banks wish to amend any covenant or term for such purpose), then the Borrower's compliance with such covenants and terms shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective until either such notice is withdrawn or such covenant or term is amended in a manner satisfactory to the Borrower and the Requisite Banks. When used herein, the term "financial statements" will include the notes and schedules thereto.

  

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(b)           Notwithstanding anything herein, in any financial statements of the Borrower and its Subsidiaries or in GAAP to the contrary, for purposes of calculating and determining compliance with the financial covenants in Section 5.4 and the Applicable Margin, including defined terms used therein, Joint Ventures shall not be consolidated with the Borrower and its Subsidiaries and all income, liabilities and assets of each Joint Venture, and all investments of the Borrower or any Subsidiary in any Joint Venture, shall be excluded from all such calculations and determinations thereunder.

(c)           The Borrower shall deliver to the Banks, at the same time as the delivery of any annual or quarterly financial statement, (i) a description in reasonable detail of any material variation between the application or other modification of accounting principles employed in the preparation of such statement and the application or other modification of accounting principles employed in the preparation of the immediately prior annual or quarterly financial statements as to which no objection has been made in accordance with the first sentence of subsection (a) above, (ii) a description in reasonable detail of the adjustments made in calculating and determining compliance with the financial covenants in Section 5.4 and the Applicable Margin due to the requirements of subsection (b) above and (iii) if requested by the Agent, reasonable estimates of the difference between such statements arising as a consequence thereof.

(d)           The Borrower agrees to take all necessary action, including without limitation any necessary acknowledgments or consents from the Borrower's auditors as may be required under applicable law, to ensure that the Agent and the Banks may rely on the audited financial statements of the Borrower and its Subsidiaries delivered to the Agent and the Banks after the Closing Date.

1.3           Other Definitional Provisions.

(a)           Unless otherwise specified therein, all terms defined in this Agreement will have the defined meanings when used in the Loan Documents or any certificate or other document made or delivered pursuant hereto.

(b)           The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, Schedule and Exhibit references contained in this Agreement are references of Sections, subsections, Schedules and Exhibits in or to this Agreement unless otherwise specified.

2.           AMOUNT AND TERMS OF LOANS.

2.1           Amount of Line of Credit.  Each Bank agrees, for itself only, subject to the terms and conditions of this Agreement, to make Line of Credit Loans to the Borrower and to participate in Letter of Credit Advances to the Borrower pursuant to Section 3.6 from time to time from and including the Closing Date to but excluding the Line of Credit Maturity not to exceed an aggregate principal amount at any time outstanding the Dollar Equivalent of the amount of its respective Commitment as of the date any such Advance is made; provided, however, that (i) the Equivalent in Dollars of the aggregate principal amount of Letter of Credit Advances outstanding at any time 

 

  

13

  

shall not exceed $50,000,000, (ii) the Equivalent in Dollars of the aggregate principal amount of all Advances in Optional Currencies outstanding at any time shall not exceed $25,000,000, and (iii) the Equivalent in Dollars of the aggregate principal amount of all Advances outstanding at any time shall not exceed the Aggregate Commitment Amount; and the Borrower will not be entitled to obtain any Advance if each such condition, in addition to other conditions contained herein, is not satisfied both before and after giving effect to such Advance.

2.2           Notice and Manner of Borrowing.

2.2.1            Nature of Advances. The Advances (other than Swingline Loans) may be Alternative Base Rate Advances or Eurocurrency Advances, or a combination thereof, selected by Borrower in accordance with Sections 2.2.2 and 2.2.3, provided that, notwithstanding anything herein to the contrary, Advances denominated in any Optional Currency cannot be Alternative Base Rate Advances.

2.2.2           Method of Selecting Types and Interest Periods for New Advances. The Borrower shall select the Type of Advances and, in the case of each Eurocurrency Advance, the Interest Period and Permitted Currency applicable thereto from time to time. The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Detroit time) at least one Business Day before the Borrowing Date of each Alternative Base Rate Advance and three Business Days before the Borrowing Date for each Eurocurrency Advance, specifying:

(i)           the Borrowing Date, which shall be a Business Day, of such Advance,

(ii)           the aggregate amount of such Advance,

(iii)           the Type of Advance selected, and

 (iv)           in the case of each Eurocurrency Advance, the Interest Period and

Permitted Currency applicable thereto.

Agent shall deliver to each Bank a copy of the Borrowing Notice timely received by Agent from Borrower on the day received. Not later than noon (local time) on each Borrowing Date, each Bank shall make available its Loan or Loans in Same Day Funds at the principal office of Agent in the case of Advances denominated in Dollars and to the designated Applicable Lending Office of the Agent or at such other place specified by the Agent in the case of Advances denominated in any Optional Currency. The Agent will make the funds so received from the Banks available to the Borrower at the Agent's aforesaid location.

2.2.3           Conversion and Continuation of Outstanding Advances. Alternative Base Rate Advances shall continue as Alternative Base Rate Advances unless and until such Alternative Base Rate Advances are converted into Eurocurrency Advances pursuant to this Section 2.2.3. Each Eurocurrency Advance shall continue as a Eurocurrency Advance until the end of the then applicable Interest Period therefor, at which time such Eurocurrency Advance shall either be paid, or it will automatically be converted into an Alternative Base Rate Advance unless the Borrower shall have given the Agent a Conversion/Continuation Notice (as defined 

 

  

14

  

below) requesting that, at the end of such Interest Period, such Eurocurrency Advance shall continue as a Eurocurrency Advance for the same or another Interest Period; provided, that (a) Eurocurrency Advances may not be converted from one Permitted Currency to a different Permitted Currency and (b) Eurocurrency Advances owing in any Optional Currency shall not be automatically converted but shall be due and payable at the end of the relevant Interest Period. Subject to the terms of Section 2.6, the Borrower may elect from time to time to convert all or any part of an Alternative Base Rate Advance into a Eurocurrency Advance. The Borrower shall give the Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion of an Alternative Base Rate Advance into a Eurocurrency Advance or continuation of a Eurocurrency Advance not later than 10:00 a.m. (Detroit time) at least three Business Days prior to the date of the requested conversion or continuation, specifying:

(i)           the requested date, which shall be a Business Day, of such conversion or 

                 continuation,

(ii)           the aggregate amount and Type of the Advance which is to be converted or 

                 continued, and

(iii)           the amount of such Advance which is to be converted into or continued as a 

                 Eurocurrency Advance and the duration of the Interest 

                 Period and Permitted Currency applicable thereto.

2.2.4           Changes in Interest Rate, etc.  Each Alternative Base Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is automatically converted from a Eurocurrency Advance into a Alternative Base Rate Advance pursuant to Section 2.2.3, but excluding the date it is paid or is converted into a Eurocurrency Advance pursuant to Section 2.2.3 hereof, at a rate per annum equal to the Alternative Base Rate for such day. Changes in the rate of interest on that portion of any Advance maintained as a Alternative Base Rate Advance will take effect simultaneously with each change in the Alternate Base Rate. Each Eurocurrency Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate determined by the Agent as applicable to such Eurocurrency Advance based upon the Borrower's selections under Sections 2.2.2 and 2.2.3 and otherwise in accordance with the terms hereof. No Interest Period may end after the Line of Credit Maturity.

2.2.5            Ratable Advances.  Each Bank, on the date any Advance (other than Swingline Loans) is requested to be made, shall make its Ratable Share of such Advance available in Same Day Funds at the principal office of Agent in the case of Advances denominated in Dollars and to the designated Applicable Lending Office of the Agent or at such other place specified by the Agent in the case of Advances denominated in any Optional Currency, in each case for disbursement to Borrower. Unless Agent shall have received notice from any Bank prior to the date such Advance is requested to be made under this Section 2.2 that such Bank will not make available to Agent such Bank's Ratable Share of such Advance, Agent may assume that such Bank has made such portion available to Agent on the date such Advance is requested to be made in accordance with this Section 2.2.  If and to the extent such Bank shall

 

  

15

  

 not have so made such Ratable Share available to Agent, Agent may (but shall not be obligated to) make such amount available to Borrower, and such Bank agrees to pay to Agent forthwith on demand such amount together with interest thereon, for each day from the date such amount is made available to Borrower by Agent until the date such amount is repaid to Agent, at the Federal Funds Rate (or, in the case of any Eurocurrency Advance denominated in any Optional Currency, the per annum rate equivalent to the Federal Funds Rate for such currency as determined by the Agent) for the first five days and thereafter at the applicable interest rate. If such Bank shall pay such amount to Agent together with interest, such amount so paid shall constitute a Loan by such Bank as a part of such Advance for purposes of this Agreement. The failure of any Bank to make its Ratable Share of any such Advance available to Agent shall not relieve any other Bank of its obligations to make available its Ratable Share of such Advance on the date such Advance is requested to be made, but no Bank shall be responsible for failure of any other Bank to make such Ratable Share available to Agent on the date of any such Advance. Subject to the terms and conditions of this Agreement, Agent shall, on the date any issuance of a Letter of Credit advance (a "Letter of Credit Advance") is requested to be made, issue the related Letter of Credit on behalf of the Banks for the account of the Borrower. Notwithstanding anything herein to the contrary, Agent may decline to issue any requested Letter of Credit on the basis that the beneficiary, the purpose of issue or the terms and conditions of drawing are unacceptable to it in its reasonable discretion, including without limitation, if Agent determines that the purpose of such issuance is outside the ordinary course of business of Borrower.

2.2.6           Disbursement.  Upon fulfillment of the conditions set forth in this Section 2.2, Section 3.5 (and subject to Agent's then current deadlines for wire transfers and crediting of Agent and Bank accounts), and Sections 8.2.1 and 8.2.2, Agent will disburse such Advance to Borrower in Same Day Funds at Borrower's expense.

2.2.7           Minimum Advances.  Except for Swingline Loans, no Advances shall be for an aggregate amount of less than $5,000,000 (or the approximate Equivalent thereof in any applicable Optional Currency). No more than five different Interest Periods may exist at any time.

2.3           Authorization and Issuance of Line of Credit Notes.  All Advances made by the Banks pursuant to the Line of Credit will be evidenced by separate promissory notes of Borrower, in the form of Exhibit 2.3 to this Agreement (each a "Line of Credit Note" and collectively the "Line of Credit Notes"), to be executed and delivered by Borrower to each of the Banks, in the principal amount of each such Bank's Commitment, on the Closing Date.

2.4           Facility Fees.  On the last day of each March, June, September and December, commencing December 31, 2006, for the pro rata benefit of the Banks, the Borrower shall pay a Facility Fee equal to the per annum percentage identified as the Facility Fee in the Pricing Schedule on the aggregate amount of the Commitments, whether used or unused.

2.5           Use of Proceeds.  The proceeds of the Line of Credit Loans will be used by Borrower (i) for working capital, (ii) to finance Acquisitions, (iii) to reimburse any Bank for any payment under Letters of Credit and (iv) for general corporate purposes.

  

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2.6           Interest Payment Dates; Interest Basis.  Interest accrued on each Alternative Base Rate Advance shall be payable on the last day of each March, June, September and December, commencing with the first such date to occur after the date hereof. Interest accrued on each Eurocurrency Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurocurrency Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurocurrency Advance having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (local time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment.

2.7           Prepayments.  Borrower may prepay, in whole or in part, but in an amount not less than $10,000,000 (or the approximate Equivalent thereof in the applicable Optional Currency) at any time upon one (1) Business Day's notice, without premium or penalty, any Alternative Base Rate Advances. Eurocurrency Advances may only be prepaid at the end of an Interest Period as provided above in Section 2.2.3. Swingline Loans may only be prepaid with the permission of the Agent. Any other provisions of this Agreement to the contrary notwithstanding, if at any time during the term of this Agreement, (a) the Equivalent in Dollars of the aggregate principal amount of Letter of Credit Advances outstanding at any time shall exceed $50,000,000, (b) the Equivalent in Dollars of the aggregate principal amount of all Advances in Optional Currencies outstanding at any time shall exceed $25,000,000, or (c) the Equivalent in Dollars of the aggregate principal amount of all Advances outstanding at any time shall exceed the Aggregate Commitment Amount, the Borrower will immediately, and in any event within two (2) Business Days, remit and pay to Agent such amounts as may be necessary so that no such excess as described in the foregoing clauses (a), (b) or (c) shall exist. Borrower may terminate the Line of Credit at any time upon delivery of written notice to Agent sixty (60) days prior to such termination.

2.8           Loan Account.  Advances will be charged to an account in Borrower's name on Agent's books, and Agent will debit to such account the amount of each Advance when made and credit to such account the amount of each repayment thereunder. Agent will render Borrower, from time to time, a statement setting forth the debit balance in the loan account, which will be deemed conclusive absent manifest error. Such statement will be prima facie evidence of the correctness of the Advances owing to the Banks by Borrower hereunder, unless there is manifest error evident on its face. Similarly, each Bank is hereby authorized by Borrower to record in its books and records, the date, and amount and type of each Advance and the duration of the related Interest Period (if applicable), the amount of each payment or prepayment of principal thereon, which books and records shall constitute prima facie evidence of the information so recorded, provided, however, that failure of any Bank to record, or any error in recording, any such information shall not relieve Borrower of its obligation to repay the outstanding principal amounts of the Loans, all accrued interest thereon and other amounts payable with respect thereto in accordance with the terms of the Notes and this Agreement.

  

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2.9           Swingline Loans.  The Agent may, in its sole discretion and without having any obligation to do so, make interim advances (hereinafter sometimes referred to as "Swingline Loans") of its own funds to the Borrower prior to the Line of Credit Maturity in an aggregate amount not to exceed an Equivalent in Dollars of $15,000,000 at anyone time outstanding; provided, however, that no Swingline Loans shall be made after the Agent has received written requests not to make Swingline Loans from the Requisite Banks. Swingline Loans shall bear interest at a rate determined by the Agent, and interest and principal shall be payable by the Borrower upon demand by the Agent. The aggregate amount of all Swingline Loans outstanding on the date any regular Advance is made shall be included as a previously disbursed portion of such regular Advance in which each Bank shall participate based upon its Ratable Share and the Agent shall thereupon be immediately reimbursed for the full amount of such Swingline Loans from the proceeds of such regular Advance. If no regular Advance is made for any period of 60 days, whether by reason of the failure to comply with any condition for a regular Advance or otherwise, or at any other time as determined by the Agent in its sole discretion, each Bank shall absolutely and unconditionally, upon request of the Agent, on the Business Day after receiving such request, remit to the Agent such Bank's Ratable Share of all outstanding Swingline Loans, whereupon, such Swingline Loans shall be automatically converted to a regular Alternative Base Rate Advance in Dollars effective on such next Business Day. In no event will any Swingline Loan be made if, after giving effect to such Swingline Loan, the Equivalent in Dollars of the aggregate principal amount of all Advances would exceed the Aggregate Commitment Amount or the Equivalent in Dollars of the aggregate principal amount of all Swingline Loans would exceed $15,000,000.

2.10           Reduction or Termination of Commitments.  The Borrower may from time to time on at least five Business Days' prior written notice received by the Agent (which shall promptly advise each Bank thereof) permanently reduce the Commitment to an amount not less than the Total Outstanding Amount. Any such reduction shall be in an amount not less than $10,000,000 or a higher integral multiple of $10,000,000 or such other amount agreed to between the Borrower and the Agent. Concurrently with any reduction of the Commitments to zero, the Borrower shall pay all interest on the Loans, all fees and all other amounts owing hereunder and shall cash collateralize in full all obligations arising with respect to the Letters of Credit in a manner satisfactory to the Agent. All reductions of the Commitments shall reduce the Commitments ratably among the Banks according to their respective Ratable Share.

2.11           Increase of Commitments.  With the prior consent of the Agent, the Borrower may request to increase the Aggregate Commitment Amount in increments of $10,000,000 from time to time, provided that the aggregate increase in the Aggregate Commitment Amount from the date hereof shall not exceed $50,000,000. Any such request to increase the Aggregate Commitment Amount shall be deemed to be a certification by the Borrower that at the time of such request, there exists no Default or Unmatured Event of Default and the representations and warranties contained in Section 4 are true and correct in all material respects as of such date or, if applicable only to a prior date, as of such prior date. Any request from the Borrower to increase the Aggregate Commitment Amount shall be implemented by one or more existing Banks agreeing to increase their Commitments (provided that no Bank shall have any obligation to increase its Commitment) or by one or more new lenders agreeing to become a Bank hereunder or by any combination of the foregoing, as determined by the Agent in consultation with the 

 

  

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Borrower. Any such new lender agreeing to become a Bank under this Agreement shall become a Bank party hereto upon the execution and delivery by it, the Agent and the Borrower of a joinder and assumption agreement in form and substance satisfactory to the Agent. Prior to any such increase in the Aggregate Commitment Amount becoming effective, the Agent shall have received:

(i)           copies, certified by the secretary of the Borrower of their Board of Directors'

resolutions and of resolutions or actions of any other body authorizing the

increase in the Aggregate Commitment Amount and the confirmation and ratification of the Loan Documents;

(ii)           a certificate, signed by the chief financial officer of the Borrower, showing

that after giving effect to the increase in the Aggregate Commitment Amount, no Default or Unmatured Event of Default shall occur, the Borrower shall be in compliance in all material respects with all covenants in this Agreement and the representations and warranties contained in Section 4 are true and correct in all material respects;

(iii)           a confirmation and ratification of all Loan Documents signed by the Borrower

and the Guarantors and in form and substance satisfactory to the Agent; and

(iv)           such other documents and conditions as the Agent or its counsel may have

reasonably requested.

On the effective date of any such increase, (x) each Bank's Ratable Share(and its participation interest in all outstanding Letters of Credit) shall be adjusted to equal its Ratable Share thereof determined after giving effect to such increase and (y) all Loans will be replaced with new Loans hereunder from the Banks based on such adjusted Ratable Share.

3.           GENERAL PROVISIONS.

3.1           Overdue Rate.

3.1.1           Overdue Rate.  Upon the occurrence and during the continuance of an Event of Default, all outstanding Advances will bear interest thereafter, at the option of Agent and/or at the request of the Requisite Banks or automatically without any action by the Agent or the Banks in the case of any Event of Default under Section 7.1.6 or 7.1. 7, and without affecting any of the Bank's rights and remedies provided for herein and in the Notes, at the Overdue Rate.

3.1.2           Late Charge.  If any required payment under any Advance is not paid within ten (10) days from the date it is due, at the option of Agent and/or at the request of the Requisite Banks, a late charge of five cents ($.05) for each Dollar of the payment so overdue may be charged.

3.2           Computation of Interest and Fees; Maximum Interest Rate.

  

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3.2.1           Calculation Of Interest and Fees.  Interest and Facility Fees under Section 2.4 shall be calculated for actual days elapsed on the basis of a 360-day year, except for interest on Loans denominated in British Pounds Sterling and Alternate Base Rate Loans which shall be calculated for actual days elapsed on the basis of a 365/366-day year. Interest will accrue from the date of any Advance up to but excluding the date of repayment of the Loan, in accordance with the provisions hereof.

3.2.2           Maximum Rate.  Notwithstanding anything to the contrary contained in this Agreement, Borrower will not be obligated to pay, and the Banks will not be entitled to charge, collect or receive, interest in excess of the Maximum Rate and in the event the Banks ever receive, collect or apply, as interest, any such excess, such amount which would be excessive interest will be deemed a partial prepayment of principal and treated hereunder as such; and, if the principal hereof is paid in full, any remaining excess will immediately be returned to Borrower. If any construction of this Agreement, the Notes or the other Loan Documents indicates a different right given to the Banks to ask for, demand or receive any larger sum as interest, such as a mistake in calculation or wording, this clause will override and control, it being the intention of Borrower and the Banks that this Agreement, the Notes and the other Loan Documents will in all respects comply with applicable law, and proper adjustment will automatically be made accordingly. In determining whether or not the interest paid or payable, under any specific contingency, exceeds the Maximum Rate, Borrower and the Banks will, to the maximum extent permitted by law (i) characterize any non-principal payment as an expense, fee or premium rather than as interest; (ii) exclude voluntary prepayments and the effects thereof; and (iii) amortize, prorate, allocate and spread the total amount of interest through the entire contemplated term of such indebtedness until payment in full of the principal (including the period of any extension or renewal thereof) so that the interest on account of such indebtedness will not exceed the Maximum Rate.

3.3           Conditions Precedent to the Execution and Delivery of this Agreement.  The obligation of the Banks to execute and deliver this Agreement and make any Advance hereunder is subject to the fulfillment, in form and substance satisfactory to Agent and its counsel, of each of the following conditions, unless otherwise noted.

3.3.1           Line Of Credit Note, Guaranties, etc.  Agent will have received each of the following documents, duly executed and delivered by Borrower, each of which will be in full force and effect:

(a)           The Line of Credit Notes, in the form of Exhibit 2.3.

(b)           The Guaranties, in the form of Exhibit 3.3.1(b) to this Agreement.

(c)           Such other documents and certificates as may be necessary or

desirable to evidence the Obligations, representations, warranties and covenants of Borrower hereunder and the Guarantors under the Guaranties.

  

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3.3.2           Good Standing Certificates.  Agent will have received a good standing certificate of Borrower and each of the Guarantors listed on Exhibit 3.3.2 hereto from each state in which Borrower and each such Guarantor is organized and each other state, if different, in which the principal part of its business activity is conducted, dated a recent date, indicating that Borrower and each such Guarantor is in good standing in each such state; provided, if such good standing certificates for any Guarantor is not available at closing, Borrower shall certify that such Guarantor is in good standing.

3.3.3           Resolutions.  Agent will have received a copy of the resolutions of the Board of Directors of Borrower and each Restricted Subsidiary (i) authorizing the execution, delivery and performance of the Loan Documents, (ii) authorizing the borrowing contemplated hereunder, and (iii) certified by the Secretary of Borrower or the Restricted Subsidiary, respectively, as of the Closing Date, which certificate will state that the resolutions thereby certified have not been amended, modified, revoked or rescinded as of the date of such certificate.

3.3.4   Charter.  Agent will have received certified copies of the charter of Borrower and each Restricted Subsidiary, certified by an officer of Borrower and each Restricted Subsidiary, respectively, on the Closing Date, as true, complete and correct copies thereof.

3.3.5           Incumbency Certificates.  Agent will have received a certificate of the Secretary of Borrower and each Restricted Subsidiary as to the incumbency and signatures of the person or persons authorized to execute and deliver the Loan Documents.

3.3.6           Certificate Regarding Representations and Warranties. Agent will have received a certificate of the Chief Financial Officer, the Vice President-Legal or Chief Executive Officer of Borrower stating, on behalf of Borrower, that each of the representations and warranties made in or pursuant to Section 4 of this Agreement or which are contained in any other Loan Document or any certificate, document or financial or other statement furnished by Borrower at any time under or in connection herewith, is true and correct in all respects on and as of the Closing Date.

3.3.7           Reimbursement.  Agent will have received reimbursement for legal fees and expenses incurred by Agent in the preparation of the transactions contemplated by this Agreement.

3.3.8           No Litigation or Investigation.  No suit, action, investigation, inquiry or other proceeding, including, without limitation, the enactment or promulgation of a statute or rule by or before any arbitrator or any Governmental Authority will be pending and no preliminary or permanent injunction or order by a state or federal court will have been entered (i) in connection with any Loan Document or any of the transactions contemplated hereby or thereby or (ii) which, in any such case, in the reasonable judgment of the Banks, would have a material adverse effect on (A) the transactions contemplated by this Agreement or (B) the business, operations, properties, condition (financial or otherwise) or prospects of Borrower.

  

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3.3.9           Insurance.  Agent will have received a schedule, entitled Schedule 3.3.9, setting forth the policies of insurance, including the effective dates of such policies, carried by Borrower and its Subsidiaries on the Closing Date.

3.3.10            No Event of Default.  No Event of Default and no Unmatured Event of Default will have occurred and be continuing on the date of the Loans, nor will either result from the making of such Loans.

3.3.11            Opinion of Counsel.  Agent and each of the Banks will have received the written opinion, dated the Closing Date, of Borrower's and Restricted Subsidiaries' Counsel in substantially the same form as that attached hereto as Exhibit 3.3.11.

3.3.12            Repayment of Existing Obligations.  The entire amount owing under the Credit Agreement dated November 6, 2003 among the Borrower, the Banks named therein and the Agent is fully paid and all obligations to loan money or make advances thereunder are terminated.

3.3.13            Fees.  The Borrower shall have paid the Agent and the Banks all closing fees agreed upon among the Borrower, the Agent and the Banks, or any of them.

3.3.14            Financial Statements.  The Agent shall have received audited consolidated financial statements for the Borrower and its Subsidiaries for the fiscal years ending in 2003, 2004 and 2005, unaudited interim consolidated financial statements for the Borrower and its Subsidiaries for each fiscal quarter ended after the most recently ended fiscal year, and such other financial statements as required by the Agent, in each case in form and substance satisfactory to the Agent. 

                                

3.3.15            Lien Searches.  The Agent shall have received satisfactory results of such Lien searches as required by the Agent.

3.3.16            Certificate Regarding USA Patriot Act.  Agent shall have received a certificate of the Borrower with respect to the USA Patriot Act in form satisfactory to the Agent.

3.3.17            Other Matters.  All other documents and legal matters in connection with the transactions contemplated by this Agreement will have been delivered and/or executed and will be in form and substance satisfactory to Agent and its counsel.

3.4           Conditions Precedent to all Advances under the Line of Credit Loans.  The obligation of the Banks and each of them to make Advances, including any Letter of Credit Advance, is subject to the fulfillment, in form and substance satisfactory to Agent and its counsel, of each of the following conditions on or before the date of each such Advance.

3.4.1           No Event Of Default.  As of the date of making the Advance, no Event of Default and no Unmatured Event of Default will have occurred or be continuing, nor will either result from or exist after the making of such Advance.

  

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3.4.2           Agreement in Full Force and Effect.  This Agreement and each of the other Loan Documents will be in full force and effect.

3.4.3           Representations and Warranties True and Correct.  Each of the representations and warranties made in or pursuant to Section 4 of this Agreement or which are contained in any other Loan Document or any certificate, document or financial or other statement furnished by Borrower and/or any Subsidiary at any time under or in connection with any of the transactions contemplated by the Loan Documents, will be true and correct in all material respects on and as of the date of the Advance as if made on and as of the date of the Advance (unless stated to relate to a specific earlier date, in which case such representations and warranties will be true and correct in all material respects as of such earlier date).

3.4.4           Financial Statements. Agent will have received the consolidated quarterly financial statements of Borrower as delivered to Agent in accordance with Sections 5.3.1 and 5.3.2 below.

3.4.5           No Change. There has been no change that has a materially adverse effect on the business, operations, properties, condition (financial or otherwise) or prospects of Borrower and its Subsidiaries, taken as a whole, since the date of the last financial statements of Borrower delivered to Agent.

3.5           Compensation for Increased Costs.

(a)           In the event after the date of execution of this Agreement, any introduction of any law, or any change in any law, or the interpretation or application thereof by any court or Governmental Authority charged with the administration thereof, or the compliance with any guideline or request from any Governmental Authority (whether or not having the force of law), which has the effect of:

(i)           subjecting any Bank to any tax, deduction or withholding with respect to this Agreement or any other Loan Document (other than any tax based upon the overall net income of any such Bank), or

(ii)           imposing, modifying or deeming applicable any reserve, special deposit, insurance premium or similar requirement against assets held by, or deposits in or for the account of, or loans by, any Bank, with respect to this Agreement or the other Loan Documents, or

(iii)           imposing upon any Bank any other condition or expense with respect to this Agreement or any other Loan Document and the result of any of the foregoing is to increase the cost to any such Bank, reduce the income receivable by any such Bank, impose any expense upon any such Banker reduce the amount of any payment receivable by any such Bank with respect to any Note, or with respect to any Bank's Commitment hereunder or under any Letter of Credit Advance, or any portion thereof, by an amount which any such Bank deems to be material, such Bank shall from time to time notify the Agent and Borrower thereof by delivery of a certificate of an officer of such Bank of the nature described in 

 

  

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the next sentence, and the Borrower shall pay to the Agent for delivery to such Bank that amount which shall compensate such Bank (on an after tax basis) for such increase in cost, reduction in income, additional expense, reduced amount or reduced rate of return. A certificate setting forth in reasonable detail such increase in cost, reduction in income or additional expense or reduced amount or reduced rate of return, and the manner of calculating the same as determined by such Bank, shall be submitted by such Bank to the Agent and Borrower and, absent manifest error, shall be conclusive as to the amount thereof (provided that such determination be made reasonably and in good faith).

(b)           If any Bank shall have determined that the introduction of or any change in any applicable law regarding capital adequacy, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or any of its branches) with any request or directive regarding capital adequacy (whether or not having the force of law) or any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Bank's capital as a consequence of its obligations hereunder, its Commitment hereunder, or the transactions contemplated hereby to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank's policies with respect to liquidity and capital adequacy) by an amount deemed by such Bank to be material, then the Borrower shall pay to the Agent for delivery to such Bank promptly, such additional amount or amounts determined by such Bank as will compensate such Bank for such reduced rate of return.

(c)           Borrower acknowledges that compensation to the Bank for any increased costs incurred by the Bank and payable by Borrower pursuant to this subsection may take the form of an effective increase in the interest rate payable under the Loans. 

 

        (d)     Borrower shall have access to any and all documentation relied upon by the Bank in determining the events set forth in subsection (b) of this Section 3.5, any calculations of a reduced rate of return, and the interest rate calculation pursuant to Section 3.5(c).

3.6           Letters of Credit.  Any Letter of Credit shall have a term expiring no later than the Line of Credit Maturity. In no event shall the aggregate face amount of all outstanding Letter of Credit Advances exceed an Equivalent in Dollars of $50,000,000. Borrower will pay to Agent for the pro rata benefit of the Banks a per annum fee equal to the Applicable Margin multiplied by the face amount of any newly issued or renewed Letter of Credit at the time of issuance or renewal of such Letter of Credit. Additionally, Borrower will pay a fee to the Agent for its own account computed at a rate agreed upon between the Agent and the Borrower multiplied by the face amount of any newly issued or renewed Letter of Credit at the time of issuance or renewal of such Letter of Credit. The Borrower further agrees to pay to the Agent, on demand, such other customary administrative fees, charges and expenses of the Agent in respect of the issuance, negotiation, acceptance, amendment, transfer and payment of such Letter of Credit or otherwise payable pursuant to the application and related documentation under which such Letter of Credit is issued. Such fees are non-refundable and Borrower shall not be entitled to any rebate of any portion thereof if such Letter of Credit does not remain outstanding through its stated expiry 

 

  

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date or for any other reason. Nothing in this Agreement shall be construed to require or authorize any Bank to issue any Letter of Credit, it being recognized that Agent has the sole obligation under this Agreement (subject to the terms and conditions of this Agreement) to issue Letters of Credit on behalf of the Banks. Upon such issuance by Agent, each Bank shall automatically acquire a pro rata risk participation interest in such Letter of Credit Advance based on its Ratable Share. If Agent shall honor a draft or other demand for payment presented or made under any Letter of Credit, Agent shall provide notice thereof to each Bank prior to 2:00 p.m. Eastern Time on the second Business Day immediately preceding the date such draft or demand is to be honored. Unless Borrower shall have satisfied its reimbursement obligation by payment to Agent on the date that such draft or demand is to be honored, each Bank, on the date the draw under the Letter of Credit is to be honored, shall make its Ratable Share of the amount paid by Agent available in Same Day Funds at the principal office of Agent for the account of Agent. If and to the extent such Bank shall not have made such Ratable Share portion available to Agent, such Bank agrees to pay to Agent forthwith on demand such amount together with interest thereon, for each day from the date such amount was paid by Agent until such amount is so made available to Agent at a per annum rate equal to the Federal Funds Rate (or, in the case of any Eurocurrency Advance denominated in any Optional Currency, the per annum rate equivalent to the Federal Funds Rate for such currency as determined by the Agent) for the first five days and thereafter at the applicable interest rate. If such Bank shall pay such amount to Agent together with such interest, such amount so paid shall constitute an Advance by such Bank disbursed in respect of the reimbursement obligation of Borrower. The failure of any Bank to make its pro rata portion of any such amount paid by Agent available to Agent shall not relieve any other Bank of its obligation to make available its pro rata portion of such amount, but no Bank shall be responsible for failure of any other Bank to make such pro rata portion available to Agent. All existing letters of credit issued listed on Schedule 3.6 shall be deemed (a) Letters of Credit issued under this Agreement and shall be subject to the terms of this Agreement and (b) issued on the date hereof for purposes of determining fees payable under this Agreement for Letters of Credit.

3.7           Termination of Commitments and Payment on Line of Credit Maturity.  Notwithstanding anything to the contrary contained herein, no Bank shall be obligated to make any Line of Credit Advance beyond the date of the Line of Credit Maturity, and all amounts due and owing the Banks shall be due and payable on the date of the Line of Credit Maturity.

3.8           Tax Documents.   (a) At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of any Bank, each Bank that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to each of the Borrower and the Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI and Form W-8 or W-9 and any additional forms necessary for claiming complete exemption from United States withholding taxes (or any successor or substitute forms), certifying in either case that such Bank is entitled to receive payments under this Agreement and the Loans without deduction or withholding of any United States federal income taxes. Each Bank which so delivers a Form W-8BEN or W-8ECI and a Form W-8 or w-9 and any additional forms necessary for claiming complete exemption from United States withholding taxes (or any successor or substitute forms) further undertakes to deliver to each of the Borrower and the Agent two additional copies of such forms (or any successor or substitute forms) on or before the date that such form expires or becomes obsolete 

 

  

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or after the occurrence of any event requiring a change in the most recent form so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Agent to the extent it may lawfully do so, in each case certifying that such Bank is entitled to receive payments under this Agreement and the Loans without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Bank from duly completing and delivering any such form with respect to it and such Bank advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

(b)           Each Bank which is neither a resident of the United Kingdom nor a bank carrying on a bona fide banking business in the United Kingdom agrees to furnish, to the extent it is required to do so to be exempt from any withholding tax, on or before the date such Bank makes a Loan to the Borrower in British Pounds Sterling in the United Kingdom, to the Agent and the relevant Borrower evidence satisfactory to the Agent and the Borrower that such Bank has filed with the United Kingdom Inland Revenue a "Claim on Behalf of a United States Domestic Corporation to Relief from United Kingdom Income Tax on Interest and Royalties Arising in the United Kingdom" or other appropriate form or forms of exemption from withholding tax and received from the Inland Revenue authority that payments to such Bank by the Borrower hereunder may be made gross; provided that such Bank's failure to furnish such evidence shall not relieve the Borrower of any of its obligations under this Agreement.

(c)           If any governmental authority of any jurisdiction asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Bank (because the appropriate form was not delivered or was not properly executed, or because such Bank failed to notify the Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason relating to such Bank's failure to comply with the terms of this Agreement) such Bank shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Agent under this Section, together with all costs and expenses (including attorney costs). The obligations of the Banks under this subsection shall survive the payment of all Obligations.

3.9           Applicable Lending Office.  Each Bank and the Agent may make and book its Loans and, in the case of the Agent, issue Letters of Credit, at any Applicable Lending Office(s) selected by such Bank or the Agent, as the case may be, and each Bank and the Agent may change its Applicable Lending Office(s) from time to time. Each Bank may, by written notice to the Agent and the Borrower, designate one or more Applicable Lending Offices which are to make and book Loans and for whose account Loan payments are to be made. The Agent may, by written notice to the Borrower, designate one or more Applicable Lending Offices which are to make and book Swingline Loans and issue and book Letters of Credit and for whose accounts Loan payments and Letter of Credit reimbursements are to be made and through which its functions are to be performed. All terms of this Agreement shall apply to any such Applicable Lending Office(s) and the Notes shall be deemed held by each Bank and the Agent, as the case may be, for the benefit of such Applicable Lending Office.

  

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3.10           Limitation of Requests and Elections.  Notwithstanding any other provision of this Agreement to the contrary, if, upon receiving a request for a Eurocurrency Advance, or a request for a continuation or conversion of a Eurocurrency Advance or a request for a conversion of a Alternate Base Rate Advance to a Eurocurrency Advance, (a) in the case of any Eurocurrency Advance, deposits in the relevant Permitted Currency for periods comparable to the Interest Period elected by the Borrower are not available to any Bank in the relevant interbank or secondary market, or (b) any Bank reasonably determines that the Eurocurrency Base Rate will not adequately and fairly reflect the cost to such Bank of making, funding or maintaining the related Eurocurrency Advance and such Bank has provided to the Agent and the Borrower a certificate prepared in good faith to that effect, or (c) by reason of national or international financial, political or economic conditions or by reason of any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect, or the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Bank with any directive of such authority (whether or not having the force of law), including without limitation exchange controls, it is impracticable, unlawful or impossible for any Bank (i) to make or fund the relevant Eurocurrency Advance or (ii) to continue such Eurocurrency Advance as a Eurocurrency Advance of the then existing type or (iii) to convert a Loan to such a Eurocurrency Advance, then the Borrower shall not be entitled, so long as such circumstances continue, to request a Eurocurrency Advance of the affected type or a continuation of or conversion to a Eurocurrency Advance of the affected type. In the event that such circumstances no longer exist, the Banks shall again honor requests, subject to this Agreement, for Eurocurrency Advances of the affected type and requests for continuations of and conversions to Eurocurrency Advances of the affected type.

3.11           Substitution of Bank.  If (i) the obligation of any Bank to make or maintain Eurocurrency Advances has been suspended pursuant to Section 3.10 when not all Banks' obligations have been suspended, (ii) any Bank does not agree to an amendment or other modification to this Agreement or any other Loan Document which requires the approval of all Banks when the Requisite Banks have agreed or (iii) any Bank is a Defaulting Bank, the Borrower shall have the right, if no Default or Event of Default then exists, to replace such Bank (a "Replaced Bank") with one or more other Banks or other lenders (collectively, the "Replacement Bank") acceptable to the Agent, provided that (x) at the time of any replacement pursuant to this Section 3.11, the Replacement Bank shall enter into one or more Assignment and Acceptances, pursuant to which the Replacement Bank shall acquire the Commitments and outstanding Advances and other obligations of the Replaced Bank and, in connection therewith, shall pay to the Replaced Bank in respect thereof an amount equal to the sum of (A) the amount of principal of, and all accrued interest on, all outstanding Loans of the Replaced Bank, (B) the amount of all accrued, but theretofore unpaid, fees owing to the Replaced Bank and (C) the amount which would be payable by the Borrower to the Replaced Bank pursuant to Section 7.4 if the Borrower prepaid at the time of such replacement all of the Loans of such Replaced Bank outstanding at such time and (y) all obligations of the Borrower then owing to the Replaced Bank (other than those specifically described in clause (x) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Bank concurrently with such replacement. Upon the execution of the respective Assignment and Acceptances, the payment of amounts referred to in clauses (x) and (y) above and, if so requested by the Replacement Bank, delivery to the Replacement Bank of the appropriate Note or Notes 

 

  

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executed by the Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank hereunder. The provisions of this Agreement shall continue to govern the rights and obligations of a Replaced Bank with respect to any Loans made or any other actions taken by such Bank while it was a Bank. Nothing herein shall release any Defaulting Bank from any obligation it may have to the Borrower, the Agent or any other Bank. Each Bank agrees to take such actions, at the Borrower's expense, as may be reasonably necessary to effect the foregoing if it shall become a Replaced Bank.

3.12           No Setoff or Deduction.  All payments of principal of and interest on the Advances and other amounts payable by the Borrower hereunder shall be made by the Borrower without setoff or counterclaim, and free and clear of, and without deduction or withholding for, or on account of, any present or future taxes, levies, imposts, duties, fees, assessments, or other charges of whatever nature, imposed by any governmental authority, or by any department, agency or other political subdivision or taxing authority, unless required by applicable laws. If any such taxes, levies, imposts, duties, fees, assessments, or other charges are required to be withheld from any amounts payable hereunder with respect to any Advance in any Optional Currency, the amounts so payable shall be increased to the extent necessary to yield to the payee thereof the interest or any such other amounts payable hereunder at the rates and in the amounts specified in this Agreement.

3.13           International Transaction.  (a) This Agreement arises in the context of an international transaction, and the specification of payment in a specific currency at a specific place pursuant to this Agreement is of the essence. Such specified currency shall be the currency of account and payment under this Agreement.  The obligations of the Borrower hereunder shall not be discharged by an amount paid in any other currency or at another place, whether pursuant to a judgment or otherwise, to the extent that the amount so paid, on prompt conversion into the applicable currency and transfer to the Banks under normal banking procedure, does not yield the amount of such currency due under this Agreement. In the event that any payment, whether pursuant to a judgment or otherwise, upon conversion and transfer, does not result in payment of the amount of such currency due under this Agreement, the Banks shall have an independent cause of action against the Borrower for the currency deficit.

(b) If for purposes of obtaining judgment in any court it becomes necessary to convert any currency due hereunder into any other currency, the Borrower will pay such additional amount, if any, as may be necessary to ensure that the amount paid in respect of such judgment is the amount in such other currency which, when converted at the Agent's spot rate of exchange prevailing on the date of payment, would yield the same amount of the currency due hereunder. Any amount due from the Borrower under this Section 3.12(b) will be due as a separate debt and shall not be affected by judgment being obtained for any other sum due under or in respect of this Agreement.

4.           REPRESENTATIONS AND WARRANTIES. In order to induce each Bank to enter into this Agreement and to provide the Loans, Borrower represents and warrants to each Bank that the following statements are true, correct and complete at the date hereof and at the date of each Advance and the issuance of each Letter of Credit:

  

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4.1           Organization, Powers, Good Standing.

4.1.1           Organization and Good Standing.  Each of the Borrower and its Subsidiaries (a) is a legal entity duly organized, validly existing and in good standing under the laws of the respective jurisdiction of its organization, (b) has full power, authority and legal right to own and operate its property and to conduct the business in which it is currently engaged, (c) is duly qualified and is in good standing under the laws of each jurisdiction in which the failure to so qualify may have a material adverse affect on its business, its Subsidiaries, taken as a whole, or the ability of the Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents, and (d) is in compliance in all material respects with all Requirements of Law, except where the lack of compliance could not reasonably be expected to materially adversely impact the business, operations, properties or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the ability of the Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

4.1.2           Power and Authority.  Borrower has full power and authority to execute, deliver and perform the Loan Documents, including, without limitation, to borrow under this Agreement. Each Guarantor has full power and authority to execute, deliver and perform the Guaranties. Borrower and each Guarantor has taken all necessary action to authorize the execution, delivery and performance of the Loan Documents and Borrower has taken all necessary action to borrow under this Agreement. No consent or authorization of, or filing with, any Person (including, without limitation, any Governmental Authority) is required in connection with the execution, delivery and performance by Borrower or any Guarantor or the validity or enforceability against Borrower or any Guarantor of the Loan Documents.

4.2           Authorization of Borrowing; Etc.

4.2.1           No Violation. The execution, delivery and performance by Borrower of this Agreement and the other Loan Documents and the execution, delivery and performance by any Guarantor of the Guaranties do not and will not (a) violate any Requirement of Law applicable to Borrower or any Subsidiary, (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any contractual obligation of Borrower or any Subsidiary, (c) result in or require the creation or imposition of any Lien of any nature whatsoever upon any of Borrower's or any Subsidiary's properties or assets, other than in favor of the Banks, or (d) require any approval of any court or Governmental Authority or any approval or consent of any Person under any contractual obligation of Borrower.

4.2.2           Legally Valid and Binding.  The Loan Documents and all other documents contemplated hereby and thereby, when executed and delivered, will be the legally valid and binding obligations of Borrower and of the Guarantors, as the case may be, enforceable against it and them in accordance with their respective terms, except as enforcement may be limited by equitable principals or by bankruptcy, insolvency, reorganization, moratorium or similar laws, or equitable principles relating to or limiting creditors' rights generally.

  

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4.3           Subsidiaries.   Schedule 1.1 (b) correctly sets forth as to each Subsidiary, its name, the jurisdiction of its organization, the name of its immediate parent and the percentage of its Capital Stock that is directly or indirectly owned by Borrower. Other than (1) as set forth in its annual reports as filed with the SEC, which have been disclosed in writing to the Banks, (2) stock acquisitions made since its most recent annual report filed with the SEC, and (3) the Subsidiaries, Borrower does not own more than $10,000,000 (on a cost basis) in the aggregate of Capital Stock in any Persons.

4.4           Title.  Borrower and Subsidiaries, as applicable, have good and valid legal title to the assets reflected in Borrower's consolidated financial statements dated as of December 31, 2005 previously submitted to each of the Banks. There are no Liens, charges or encumbrances (other than Permitted Liens), on such property or assets referenced in the prior sentence except those reflected on such financial statements.

4.5           Litigation; Adverse Facts.  Except as set forth on Schedule 4.5 to this Agreement, there is no action, suit, dispute, investigation, inquiry, arbitration, tax claim or other proceeding (including, without limitation, the enactment or promulgation of a statute or rule) at law or in equity or before or by any arbitrator or Governmental Authority pending or, to the knowledge of Borrower, threatened, against Borrower or any Subsidiary which might reasonably be expected to result in any material adverse change in the business, operations, properties or in the business prospects or condition (financial or otherwise), of Borrower and its Subsidiaries, taken as a whole, or would materially adversely affect Borrower's ability to perform its Obligations hereunder and under any other Loan Document. 

 

    4.6   Payment of Taxes. Other than Mining Remedial Recovery Corporation and its Subsidiaries and DENO Acquisition EURL and its Subsidiaries all material tax returns and reports required to be filed by Borrower and each Subsidiary have been prepared in accordance with acceptable standards and have been timely filed, and all Taxes, assessments, fees and amounts required to be withheld and paid to a Governmental Authority, and other governmental charges upon Borrower and each Subsidiary and upon their properties, assets, income and franchises which are shown on such returns to be due and payable have been paid when due and payable. Borrower does not know of any proposed, asserted or assessed tax deficiency against it or any Subsidiary which might reasonably be expected to result in any material adverse change in the condition (financial or otherwise) of Borrower or any Subsidiary (other than Mining Remedial Recovery Corporation and its Subsidiaries). Neither Borrower nor any Subsidiary is a party to, bound by or obligated under any tax sharing or similar agreement.

4.7           Materially Adverse Agreements; Performance.

4.7.1           No Material Adverse Agreements.  Neither Borrower nor any Subsidiary is a party to or subject to any material agreement, instrument, charter or other internal restriction materially adversely affecting the business, properties or assets of Borrower or any Guarantor or the operations, business prospects or condition (financial or otherwise) of Borrower and Guarantors, taken as a whole.

  

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4.7.2           No Default.  Neither Borrower nor any Subsidiary is in material default in the performance, observance or fulfillment of any of the material obligations, covenants or conditions contained in any of its contractual obligations and no condition exists which, with the giving of notice or the lapse of time or both, would constitute such a default, which, taken as a whole, could reasonably be expected to adversely affect the business, operations, property or assets, the business prospects, or condition (financial or otherwise), of its Subsidiaries taken as a whole, or the ability of Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

4.7.3           Ownership of Intellectual Property.  Borrower and each Domestic Subsidiary owns or possesses all patents, trademarks, service marks, trade names, copyrights, licenses and rights necessary for the present and planned future conduct of its business, without any known conflict with the rights of others, except as listed on Schedule 4.7.3 to this Agreement.

4.8           Disclosure.  No representation or warranty of Borrower contained in this Agreement or in any other Loan Document or other document, certificate or written statement furnished to the Banks by or on behalf of Borrower with respect to the business prospects or condition (financial or otherwise) of Borrower and each Subsidiary for use in connection with the transactions contemplated by this Agreement, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading. For purposes of the previous sentence the phrase "material fact," is a fact or facts which, taken as a whole, could reasonably be expected to adversely affect the business, operations, property or assets, the business prospects, or condition (financial or otherwise), of Borrower and its Subsidiaries taken as a whole, or the ability of Borrower to repay the Loans or to observe and perform its obligations under the Loan Documents. There is no material fact known to Borrower which adversely affects the business, operations, property or assets, the business prospects, or condition (financial or otherwise), of Borrower and its Subsidiaries, taken as a whole, which has not been disclosed herein or in such other documents, certificates and statements furnished to the Banks for use in connection with the transactions contemplated hereby.

4.9           ERISA Compliance.  Borrower and Subsidiaries are in compliance in all material respects with any applicable provisions of ERISA. Except as set forth on Schedule 4.9 to this Agreement, (i) neither a Reportable Event nor a Prohibited Transaction has occurred or is continuing in relation to any pension plan, which, taken as a whole, could reasonably be expected to adversely affect the business, operations, property or assets, the business prospects, or condition (financial or otherwise), of Borrower and its Subsidiaries taken as a whole, or the ability of Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents, and (ii) Borrower and each Subsidiary have not incurred any liability to the Pension Benefit Guaranty Corporation, except where the occurrence of such event could not reasonably be expected to adversely affect the business, operations, property or assets, the business prospects, or condition (financial or otherwise), of Borrower and its Subsidiaries taken as a whole, or the ability of Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

  

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4.10           Environmental Matters.  Except as set forth in Schedule 4.10 to this Agreement, Borrower and each Subsidiary has complied in all respects with all Environmental Protection Statutes, except where the lack of compliance could not reasonably be expected to materially adversely impact the business, operations, properties or condition (financial or otherwise) of Borrower and its Subsidiaries, taken as a whole, or the ability of Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents. Except as set forth on Schedule 4.10 to this Agreement, neither Borrower nor any Subsidiary, nor, to the best of Borrower's knowledge, any other person, used any real property owned or leased by Borrower or any Subsidiary in the disposal of or to refine, generate, produce, store, treat, transfer, release or transport any hazardous waste or hazardous substance, or been designated by the United States Environmental Protection Agency or under any Environmental Protection Statute as a hazardous waste or hazardous substance disposal or removal site, superfund or clean-up site or candidate for removal or closure pursuant to any Environmental Protection Statute, which, taken as a whole, could reasonably be expected to materially adversely affect the business, operations, property or assets, the business prospects, or condition (financial or otherwise), of its Subsidiaries taken as a whole, or the ability of Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents. Other than Mining Remedial Recovery Corporation and its Subsidiaries and Deno Acquisition EURL and its Subsidiaries, no lien arising under or in connection with any environmental protection statute has attached to any revenues or to any real or personal property owned by Borrower or any Subsidiary. Borrower agrees to indemnify and hold each Bank harmless from any and all violations by Borrower or any Subsidiary of any Environmental Protection Statute.

4.11           Investment Company.  Borrower is not directly or indirectly controlled by, or acting on behalf of, a Person which is an "Investment Company" within the meaning of the Investment Company Act of 1940, as amended, that is organized or otherwise created under the laws of the United States, any State of the United States, the District of Columbia, Puerto Rico, the Philippine Islands, the Virgin Islands or any other possession of the United States.

4.12           Regulations T, U and X.  No part of the proceeds of the Advances will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock. Neither Borrower nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purposes of purchasing or carrying any Margin Stock. If requested by Agent, Borrower will furnish Agent with a statement in conformity with the requirements of Federal Reserve Form U-l referred to in said Regulation. Borrower also warrants that no part of the proceeds of the borrowings hereunder will be used by it for any purpose which violates, or which is inconsistent with, the provisions of Regulation T, U or X. After applying the proceeds of each Advance, Margin Stock will not constitute more than 25% of the value of the assets (either of the Borrower alone or of the Borrower and its Subsidiaries on a consolidated basis) that are subject to any provisions of this Agreement that may cause the Advances to be deemed secured, directly or indirectly, by Margin Stock.

4.13           Indebtedness.  Neither Borrower nor any Subsidiary has any outstanding Indebtedness except Indebtedness described in (l) Schedule 4.13 to this Agreement or (2) permitted under Section 6.1 of this Agreement.

  

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4.14.           Solvency.  Immediately after the consummation of the transactions to occur on the date hereof and immediately following the making of each Advance, including Line of Credit Loans and the issuance of any Letter of Credit, if any, made on the date hereof and after giving effect to the application of the proceeds of such Advances, (a) the fair value of the assets of the Borrower and its Fundamental Subsidiaries on a consolidated basis will exceed the debts and liabilities, subordinated, contingent or otherwise, of the Borrower and its Fundamental Subsidiaries on a consolidated basis; (b) the Borrower and its Fundamental Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (c) the Borrower and its Fundamental Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are not conducted and are proposed to be conducted after the date hereof.

4.15           Reportable Transaction.  Unless the Borrower has made the determination referred to in the following sentence, the Borrower does not intend to treat the Obligations and related transactions contemplated by the Loan Documents as a "reportable transaction" under Sections 6011, 6111 or 6112 of the Internal Revenue Code or the treasury regulations promulgated thereunder. In the event the Borrower determines to treat any of the Obligations or such transactions as such a "reportable transaction", the Borrower shall immediately notify the Agent.

4.16           Survival.  All of the representations and warranties set forth in this Section 4 will survive until all of the Obligations are satisfied in full and there remain no outstanding Commitments hereunder.

4.17           Subordinated Debt Documents.  All representations and warranties of the Borrower contained in any Subordinated Debt Document are true and correct in all material respects as of the date such representations and warranties are made. The subordination provisions of the Subordinated Debt are enforceable against the holders of the Subordinated Debt by the Agent and the Banks. All Obligations are senior debt as defined in the Subordinated Debt Documents entitled to the benefits of the subordination provisions contained in the Subordinated Debt Documents, and are and will be incurred in compliance with all Subordinated Debt Documents. There is no event of default or event or condition which would become an event of default with notice or lapse of time or both, under any Subordinated Debt Document and each of the Subordinated Debt Documents is in full force and effect. The Borrower acknowledges that the Agent and each Bank are entering into this Agreement and are extending the Commitments and making Advances in reliance upon the subordination provisions of the Subordinated Debt.

5.           AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, until all of the Obligations are satisfied and the Commitments hereunder have been terminated, Borrower will perform each and all of the following:

5.1           Use of Proceeds.  Borrower will use the proceeds of the Advances only for the purposes set forth in Section 2.5.

  

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5.2           Accounting Records.  Borrower will maintain adequate records in accordance with sound business practices and GAAP, applied on a Consistent Basis, except for changes required by GAAP, changes in accordance with GAAP and approved by the Agent or other changes consented to in writing by the Requisite Banks (which consent will not be unreasonably withheld). Upon five (5) days' prior notice, Borrower will provide, and cause each Subsidiary to provide, access to representatives of each Bank to visit any of the properties of Borrower or any Subsidiary and examine the books of account and discuss Borrower's and each Subsidiary's affairs, finances and accounts with, and be advised of the same by, Borrower's and each Subsidiary's officers and outside auditors, all at such reasonable times and as often as any Bank may reasonably request.

5.3           Reports.  Borrower will deliver to the Banks and the Agent:

5.3.1           Quarterly Reports.  As soon as available and in any event within forty five (45) days after the end of each of the first three quarters of each fiscal year of Borrower, management prepared consolidated financial statements of Borrower and Subsidiaries as of the end of such quarter, and the consolidated statements of profit and loss and surplus of Borrower and Subsidiaries from the beginning of Borrower's and Subsidiaries' fiscal year to the end of such quarter, certified as correct (subject to year end adjustments) by the chief financial officer of Borrower.

5.3.2           Annual Reports.  As soon as available, and in any event within ninety (90) days after the end of each fiscal year of Borrower, the complete audited, consolidated financial statements of Borrower and Subsidiaries, including the consolidated balance sheet of Borrower and Subsidiaries as of the end of such year and the consolidated statements of profit and loss and surplus of Borrower and Subsidiaries for the fiscal year then ended, certified by Ernst & Young (without a going concern or similar financially adverse qualification), or such other independent certified public accountants of recognized standing, to be prepared in accordance with GAAP and to present fairly the financial position and results of operation of Borrower and Subsidiaries. Additionally, if requested by the Agent, the Borrower will provide internally prepared consolidating financial statements within 90 days after the end of each fiscal year.

5.3.3           Accounts Receivable and Payable Aging.  Upon the request of Agent or Requisite Banks, accounts receivable aging reports, accounts payable aging reports and inventory certifications.

5.3.4           Compliance Certificate.  Within forty five (45) days after the end of each calendar quarter, a compliance certificate in the form of Exhibit 5.3.4 to this Agreement, duly completed and executed by the Chief Financial Officer of Borrower.

5.3.5           Copies of Reports Sent to the Banks.  Unless otherwise specified, copies of all of the reports furnished under this Section 5.3 shall be sent by Borrower directly to the Banks.

5.3.6           Report of Certain Events.  Promptly upon Borrower becoming aware of the occurrence of any: (a) Unmatured Event of Default or Event of Default; (b) Reportable 

 

  

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Event; or (c) Prohibited Transaction in connection with any pension plan or any trust created thereunder, a written notice specifying the nature thereof, what action Borrower is taking or proposes to take with respect thereto, and, when known, any action taken by the Internal Revenue Service with respect thereto, will be delivered to Agent by Borrower.

5.3.7           Threat of Bankruptcy.  Promptly upon becoming aware of any Person's seeking to obtain or threatening in writing to seek to obtain a decree or order for relief with respect to Borrower or any Restricted Subsidiary in an involuntary case under any applicable bankruptcy, insolvency, or other similar law now or hereafter in effect, a written notice thereof specifying what action Borrower or such Restricted Subsidiary is taking or proposes to take with respect thereto.

5.3.8           Amendments to Charter or Bylaws.  Promptly, copies of all amendments to the charter or bylaws of Borrower and, if requested by the Agent, any Guarantor.

5.3.9           Copy of Process.  Promptly, and in any event within five (5) days after the receipt thereof by Borrower or any Subsidiary, a copy of any notice, summons, citation, directive, letter or other form of communication from any Governmental Agency or instrumentality, in any way concerning any action or omission on the part of Borrower or any Subsidiary in connection with any Environmental Protection Statute, or concerning the filing of a lien upon, against or in connection with Borrower or any Subsidiary, or any of their real or personal property, in connection with any Environmental Protection Statute, except where such action or omission by Borrower or any Subsidiary could not reasonably be expected to materially adversely impact the business, operations, properties or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the ability of the Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

5.3.10            Copy of SEC Filings.  Promptly after the sending or filing thereof, notice of the filing of all reports, proxy statements and financial statements which Borrower files with its shareholders or any securities exchange or the SEC, including, without limitation, all reports on Form 10-K, 10-Q, and 8-K. Such reports need not include exhibits. Borrower agrees to promptly provide Agent with exhibits specifically requested by Agent or any Bank.

5.3.11            Copy of Process From Governmental Authority. Promptly, and in any event within five (5) days of the receipt thereof by Borrower, a copy of a notice, summons, citation, directive, letter, complaint, or other form of communication from the U.S. Department of Labor, or any other Governmental Authority or instrumentality, or any other Person, in any way concerning any action or omission on the part of Borrower or any Subsidiary in connection with the payment of minimum and/or overtime wages to its employees, or concerning the filing of a lien upon, against or in connection with Borrower or any Subsidiary, or any of its real or personal property, in connection with the FLSA, except where such action or omission by Borrower or any Subsidiary could not reasonably be expected to materially adversely impact the business, operations, properties or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the ability of the Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

  

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5.3.12            Notice Of Litigation.  Promptly, upon Borrower making a determination with respect to any litigation or proceeding in which it or any Restricted Subsidiary is a party that an adverse decision in any such matter is reasonably likely to require it to pay more than $10,000,000 in excess of the amount of any insurance covering such claim, or deliver assets the value of which exceeds such sum or of the institution of any other suit or proceeding to which Borrower or any Subsidiary is a party that, by itself or together with any other such matters, might materially and adversely affect the operations, financial condition, property, or business prospects of the Borrower and its Subsidiaries, taken as a whole.

5.3.13            Other Information.  Promptly, such other information and data with respect to Borrower or any Subsidiary as from time to time may be reasonably requested by any Bank.

5.3.14            Pro Forma Compliance Certificate.  Not less than 30 days prior to the consummation of any proposed Acquisition which, when aggregated with all other Acquisitions consummated directly or indirectly by the Borrower since the date of the most recent Compliance Certificate furnished pursuant to Section 5.3.4 hereof, will result in a cumulative increase in the Borrower's Total Debt as a result of all such Acquisitions of $25,000,000 or more, a pro forma management compliance certificate certifying that all covenants set forth in Sections 5 and 6 hereof will be complied with as of the date of such Acquisition(s).

5.3.15            Subordinated Debt Notices.  Promptly following receipt or filing, copies of (i) any notices of default or acceleration or of the exercise of any material rights or remedies received from any holder or trustee (or similar representative) with respect to any Subordinated Debt, (ii) any notices of reports required by the Trust Indenture Act of 1939, or any successor statute, or filed with the Securities and Exchange Commission with respect to any Subordinated Debt, (iii) any other notice from the trustee (or similar representative) with respect to any Subordinated Debt and (iv) any other notices with respect to any Subordinated Debt requested by the Agent.

5.3.16            Other Information.  Such other information as any Bank may reasonably request.

5.4           Financial Covenants.  Borrower will at all times comply with the following financial covenants:

5.4.1           Total Debt to Capitalization Ratio.  Borrower will not permit the ratio of Borrower's Total Debt to Capitalization to exceed 60.0%, on a consolidated basis.

5.4.2           Interest Coverage Ratio.  Borrower will not permit the Interest Coverage Ratio to be less than 3.50 to 1.00, on a consolidated basis as calculated on a rolling four (4) quarter basis.

5.5           Corporate Existence.  Except as permitted under Section 6.3, Borrower will at all times preserve and keep in full force and effect its and each Restricted Subsidiary's corporate existence except for (i) Mining Remedial Recovery Corporation and its Subsidiaries, the book 

 

  

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value of which, when combined with other Restricted Subsidiaries made subject to this exception is less than $5,000,000 in the aggregate, and (ii) individual Restricted Subsidiaries whose book value is less than $1,000,000 and any rights material to its business and will maintain its and each Restricted Subsidiary's right to transact business in each jurisdiction where its assets or the nature of its activities makes such qualification necessary, except where the failure could not reasonably be expected to materially impact, adversely impact for business, operations, properties or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the ability of Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

5.6           Payment of Taxes and Claims.  Borrower will pay all Taxes, assessments and other governmental charges imposed upon Borrower or any Restricted Subsidiary (other than Mining Remedial Recovery Corporation and its Subsidiaries) before any penalty or interest accrues thereon; provided, however, that Borrower will not be required to pay any such Taxes, assessments, or charges if (a) the validity thereof will currently be contested in good faith by appropriate proceedings, (b) Borrower will have set aside on its books adequate reserves with respect to such Taxes, assessments, or charges and (c) Borrower gives notice in writing of such action to Agent and the Banks; provided that any such Taxes, assessments, or charges will be paid immediately upon the commencement of proceedings to foreclose any liens securing the same, or upon institution of distrait proceedings.

5.7           Insurance.  Borrower will maintain and cause each Subsidiary to maintain, in full force and effect, adequate fire and extended risk coverage, business interruption, workers' compensation, public liability and such other insurance coverage's as may be required by law and/or in such amounts as is customary in the case of entities of well-established reputation engaged in the same or similar business. Borrower will allow representatives of each Bank to meet with senior management of Borrower and any Subsidiary, from time to time as the Banks reasonably request in order to assess the adequacy of such insurance policies.

5.8           Compliance With Laws, etc.  Borrower will exercise all due diligence in order to comply, in all material respects, with all Requirements of Laws, except where the lack of compliance could not reasonably be expected to materially adversely impact the business, operations, properties or condition (financial or otherwise) of Borrower and the Subsidiaries, taken as a whole, or the ability of Borrower to repay the Loan or observe and perform any of its obligations under the Loan Documents, including, without limitation, the following:

5.8.1           Workers Compensation Laws. Borrower will comply with all applicable workers' compensation laws, regulations and administrative rules, directives or requirements. Borrower will furnish Agent upon demand evidence in form and substance as Agent or its counsel may reasonably require in order to verify such compliance. In the event that Borrower is qualified to self-insure under such laws, regulations and administrative rules, directives or requirements, and that Borrower is not otherwise precluded from so self-insuring by the terms of this Agreement, Borrower will fully comply with all such laws, regulations, rules, directives and requirements pertaining to its self-insured status.

  

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5.8.2           Pension Plans.  Neither Borrower nor any of its pension plans will engage in any Prohibited Transaction; incur any "accumulated funding deficiency" (as such term is defined in Section 302 of ERISA)whether or not waived; or terminate any such pension plan in a manner which could result in the imposition of a lien on the property of Borrower, pursuant to Section 4068 of ERISA or any successor provision thereto.

5.8.3           FLSA Compliance.  Borrower will comply with FLSA and will furnish Agent upon demand evidence in form and substance as Agent or its counsel will require to verify such compliance.

5.8.4           Environmental Compliance.  Borrower will comply with all applicable Environmental Protection Statutes.

5.9           Payment of Indebtedness.  Borrower and each of its majority owned Subsidiaries (except Mining Remedial Recovery Corporation and its Subsidiaries and DENO Acquisition EURL and its Subsidiaries) will pay all of its Indebtedness, promptly when due in accordance with the terms of such Indebtedness, except to the extent that failure to pay such Indebtedness would not constitute an Event of Default under Section 7.1.4 hereof.

5.10           Maintenance of Franchises, etc.  Borrower and each Restricted Subsidiary will do or cause to be done all things necessary to preserve, renew and keep in full force and effect the rights, licenses, permits, franchises, agency agreements, and trade names material to the conduct of its business, and maintain and operate such businesses properly and efficiently, and in substantially the manner in which they are presently conducted and operated (subject to changes in the ordinary course of business), except where the failure to do so could not reasonably be expected to materially adversely impact the business, operations, properties or condition (financial or otherwise) of Borrower and the Subsidiaries, taken as a whole, or the ability of Borrower to repay the Loan or observe and perform any of its obligations under the Loan Documents.

5.11           Further Assurances.  At any time or from time to time, upon the request of Agent, Borrower will execute and deliver such further documents and do such other acts and things as Agent may reasonably request in order to effect fully the purpose of this Agreement, the other Loan Documents and other agreements contemplated hereby and to provide for payment of and security for the Loan made hereunder in accordance with the terms of this Agreement.

5.12           New Guaranties.  If at the end of any Fiscal Year, as required under Section 6.3 or as otherwise required hereunder, the Restricted Subsidiaries do not meet the test set forth in the following sentence, additional Domestic Subsidiaries must, within sixty (60) days of the end of such most recent Fiscal Year, execute Guaranties so that the Domestic Subsidiaries that have executed guarantees meet such test. The test is that the Domestic Subsidiaries that have executed Guarantees must have (a) the net earnings, before taxes, which, together with the respective Subsidiaries, and Borrower (but excluding Subsidiaries that are not Restricted Subsidiaries) for the most recent fiscal year of the Borrower constitute seventy-five percent (75%) percent or more of the consolidated net earnings of the Borrower and the Subsidiaries, as determined in accordance with GAAP, and (b) total assets, calculated in accordance with GAAP, which, 

 

  

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together with their respective Subsidiaries and Borrower (but excluding Subsidiaries that are not Restricted Subsidiaries) for most recent fiscal year end of the Borrower, constitute sixty percent (60%) percent or more of the consolidated Total Assets of the Borrower and the Subsidiaries. The Borrower represents that this test is satisfied (based on the most recent financial statements of the Borrower and its Subsidiaries prior to the Closing Date) for the Guarantors as of the Closing Date. The Guaranty shall be in the form of Exhibit 3.3.1 (b) and the Subsidiaries executing the guaranty shall deliver with the executed guaranty certified copies of such Subsidiary's organizational documents, including resolutions authorizing the execution and delivery of such Guaranty, and together with an opinion of counsel for such Subsidiary in form and substance satisfactory to the Agent and its counsel. Notwithstanding the foregoing, no newly acquired Domestic Subsidiary shall be required to deliver such a guaranty so long as the giving of such a guaranty would constitute a default under the terms of any loan document between such acquired Domestic Subsidiary and a bona fide lending institution which was

entered into prior to, but not in contemplation of, such Acquisition.

5.13           Additional Covenants.  If at any time the Borrower shall enter into or be a party to any instrument or agreement with respect to any Indebtedness which in the aggregate, together with any related Indebtedness, exceeds $5,000,000, including all such instruments or agreements in existence as of the date hereof and all such instruments or agreements entered into after the date hereof, relating to or amending any terms or conditions applicable to any of such Indebtedness which includes covenants or defaults or the equivalent thereof not substantially provided for in this Agreement or more favorable to the lender or lenders thereunder than those provided for in this Agreement, then the Borrower shall promptly so advise the Agent and the Banks. Thereupon, if the Required Banks shall request, upon notice to the Borrower, the Agent and the Banks shall enter into an amendment to this Agreement or an additional agreement (as the Required Banks may request), providing for substantially the same covenants or defaults or the equivalent thereof, as those provided for in such instrument or agreement to the extent required and as may be selected by the Required Banks.

6.           NEGATIVE COVENANTS.  Borrower covenants and agrees that, until all of the Obligations are satisfied and the Commitments hereunder have been terminated, Borrower will not, without the prior written consent of the Requisite Banks do any of the following:

6.1           Indebtedness.  Except as set forth on Schedule 4.13 to this Agreement, Borrower will not, and will cause each of the Subsidiaries (but excluding any Subsidiary organized in Europe and any Subsidiary in which Borrower directly or indirectly owns less than a majority interest) not to, create, incur, assume, permit or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness except for:

(i)           the Obligations,

(ii)           Indebtedness under the 2004 Subordinated Debt Documents in an aggregate principal amount not to exceed $297,688,000, as reduced from time to time

  

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(iii)           consolidating inter-company indebtedness among Borrower and its Subsidiaries as shown on consolidating financial statements delivered pursuant to Section 5.3.1 of this Agreement, and

(iv)           Other Indebtedness of Borrower and its Subsidiaries in an aggregate amount not to exceed 10% of Net Worth.

Furthermore, Borrower and Restricted Subsidiaries, from and after the Closing Date, shall not make new loans or advances to transfer assets to, or make investments in Subsidiaries that are not Restricted Subsidiaries, net of repayments or advances from Subsidiaries that are not Restricted Subsidiaries, in excess of $45,000,000.

6.2           Liens.  Borrower will not, and will cause each Restricted Subsidiary not to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind of Borrower or any Subsidiary, whether now owned or hereafter acquired except (i) Permitted Liens, (ii) liens created by or resulting from any litigation or legal proceeding (including any regulatory enforcement actions) and against which adequate reserves under GAAP are being maintained which is currently being contested in good faith by appropriate proceedings, and, if the amount of any such Lien exceeds $1,000,000 and the Requisite Banks so request, such Lien shall have been bonded over in a manner reasonably satisfactory to the Requisite Banks, (iii) Liens for taxes not delinquent or being contested in good faith, (iv) Liens created in connection with workers' compensation, unemployment insurance, and social security, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money), leases, statutory obligations, surety and appeal bonds, (v) Liens existing on the Closing Date as set forth on Schedule 6.2 hereof, (vi) Liens representing the extension, renewal or replacement of a Lien under immediately preceding clause (v) in respect of the same property of the same Subsidiary, (vii) Liens securing other Indebtedness permitted under Section 6.1(iv) up to an aggregate amount not to exceed 5% of Net Worth.

6.3           Restriction on Fundamental Changes.  Borrower will not, and will cause each Fundamental Subsidiary not to fundamentally change the nature of its business, enter into any merger, consolidation, reorganization or recapitalization, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell (other than in the ordinary course of its business), assign, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, property, assets or securities, whether now owned or hereafter acquired, or acquire by purchase or otherwise, all or substantially all the business, property, assets, securities or interest of any Person; provided that (a) a Domestic Subsidiary may merge or consolidate with Borrower, provided that the Borrower will be the surviving corporation; (b) a Domestic Subsidiary may merge or consolidate with another Domestic Subsidiary that is both a Fundamental Subsidiary and a Restricted Subsidiary; (c) a Domestic Subsidiary may sell, lease, transfer or otherwise dispose of any of its assets to Borrower or another Domestic Subsidiary that is both a Fundamental Subsidiary and a Restricted Subsidiary; (d) Borrower may acquire or form additional Subsidiaries; provided that each such newly formed or acquired Subsidiary is wholly-owned by Borrower (unless Borrower has obtained the prior written consent of the Requisite Banks to acquire or form a Subsidiary which will not be wholly owned, which consent will not be unreasonably withheld); and further provided that each such 

 

  

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newly formed or acquired Subsidiary becomes, on its formation, both a Restricted Subsidiary and a Fundamental Subsidiary; and (e) Borrower and its Subsidiaries may dispose of any assets if the aggregate book value (disregarding any write-downs of such book value other than ordinary depreciation and amortization) of all of the business, assets, rights, revenues and property disposed of after the date of this Agreement shall be less than 5% of such aggregate book value of the Consolidated total assets of the Borrower and its Subsidiaries as of the most recently ended fiscal year, and if immediately after such transaction, no Unmatured Event of Default or Event of Default shall exist or shall have occurred and be continuing. On the closing of any transaction permitted by this Section 6.3, the test required by Section 5.12 must be met.

6.4           Environmental Statutes.  Borrower will not, and will not permit any other Person to violate an Environmental Protection Statute, except where such violation could not reasonably be expected to materially adversely impact the business, operations, properties or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or the ability of the Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

6.5           Conflicting Agreements.  Borrower will not, and will cause each Subsidiary not to, enter into any agreement containing any material provisions which would be violated or breached by the performance of its obligations hereunder or under any instrument or document delivered or to be delivered by it hereunder or in connection herewith.

6.6           Misrepresentations.  Borrower will not, and will cause each Subsidiary not to, furnish any Bank any certificate or other document that will contain any untrue statement of material fact or that will omit to state a material fact necessary to make it not misleading in light of the circumstances under which it was furnished. For purposes of the previous sentence the phrase "material fact," is a fact or facts which, taken as a whole, could reasonably be expected to adversely affect the business, operations, property or assets, the business prospects, or condition (financial or otherwise), of Borrower and its Subsidiaries taken as a whole, or the ability of Borrower to repay the Loan or to observe and perform its obligations under the Loan Documents.

6.7           Violation of Regulations.  Borrower will not make any investment of any nature which would result in the violation of Regulations T, U or X.

6.8           Subsidiary Distribution of Earnings.  Borrower will not, and will cause each Subsidiary not to, enter into any agreement which could prohibit, or have the effect of prohibiting, the payment of dividends by or other distribution of the earnings of any Subsidiary to Borrower.

6.9           Scope of Business Activity.  Borrower will not and will cause each Subsidiary not to engage in any business or activities other than those representing its respective, present business, provided that Borrower or any Subsidiary may acquire or commence new or additional related businesses which do not materially adversely affect the nature or operation of Borrower's or such Subsidiary's existing business.

  

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6.10           Dividends and Distributions; Capital Structure. Borrower will not, and will cause each Subsidiary not to, pay or declare any dividends or other distributions upon its Capital Stock (except, in the case of the Subsidiaries, dividends or other distributions to such Subsidiary's parent corporation), or purchase or retire, or commit Borrower or any Subsidiary to purchase or retire, any of its Capital Stock at any time, during any period that Borrower is in default under Section 5.4 hereof or such distribution, purchase or retirement would render Borrower in default under Section 5.4 hereof.

6.11           Payments and Modification of Debt.  The Borrower will not, nor will it permit any Subsidiary to:

(i)           make any optional payment, defeasance (whether a covenant defeasance, legal defeasance or other defeasance), prepayment, repurchase (including without limitation any offer to repurchase) or other redemption of any of its or any of its Subsidiaries' Subordinated Debt unless, in each of the foregoing cases, immediately before and after giving effect thereto on a pro forma basis, (a) no Event of Default and no Unmatured Event of Default will have occurred or be continuing, nor will either result from or exist after any such payment or other transaction is consummated, and (b) the representations and warranties contained in Section 4 of this Agreement or which are contained in any other Loan Document shall be true and correct in all material respects on and as of the date thereof (both before and after any such payment or other transaction is consummated) as if made on the date any such payment or other transaction is consummated; or

(ii)           amend or modify, or consent or agree to any amendment or modification of (including without limitation any supplemental agreement or other direct of indirect method of providing additional or supplemental terms or consideration) any Subordinated Debt Document.

7.           EVENTS OF DEFAULT; ACCELERATION; REMEDIES.

7.1           Events of Default.  The occurrence of anyone or more of the following events, acts or occurrences will constitute an event of default (an "Event of Default") hereunder:

7.1.1           Failure to Make Payments When Due.  Borrower fails to pay any principal and/or interest owing under any Note when such amount is due (whether at stated maturity, as a result of a mandatory prepayment requirement, by acceleration, by notice of prepayment or otherwise) and the continuation thereof for three (3) days beyond the date due, or Borrower fails to pay any other amounts (including, without limitation, interest, fees, costs and expenses) payable under this Agreement, and the continuation thereof for three (3) days beyond the date due, or any other Loan Document or in connection with any Letter of Credit, when such amounts are due.

7.1.2           Breach of Representation, Warranty or Certification.  Any representation, warranty or certification made or furnished by Borrower or any Subsidiary under this Agreement, any other Loan Document or in any statement, document, letter or other writing or instrument furnished or delivered to any Bank pursuant to or in connection with this Agreement 

 

  

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or other Loan Document or as an inducement to the Banks to enter into this Agreement, will, at any time, prove to have been materially false, incorrect or incomplete when made, effective or reaffirmed, as the case maybe.

7.1.3           Default Under Loan Documents, etc.  Borrower or any Subsidiary (to the extent such term, covenant, condition or agreement is applicable to such Subsidiary) fails to observe, or perform any term, covenant, condition, agreement set forth in Sections 5.1, 5.2, 5.4, 5.5, 5.8, 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9 and 6.10.

7.1.4           Default on Other Agreements.  (i) the Borrower or any Subsidiary shall fail to make any payment in respect of Indebtedness owing on any bond, debenture, note or other evidence of Indebtedness for borrowed money in an aggregate amount in excess of $15,000,000 (other than the Notes) when due or within any applicable grace period; or (ii) any event or condition shall occur which results in the acceleration of the maturity of Indebtedness owing on any bond, debenture, note or other evidence of Indebtedness for borrowed money outstanding in an aggregate amount in excess of $15,000,000 of the Borrower or any Subsidiary (including, without limitation, any required mandatory prepayment or "put" of such Indebtedness to the Borrower or any Subsidiary) or enables (or, with the giving of notice or lapse of time or both, would enable) the holders of such Indebtedness or commitment or any Person acting on such holders' behalf to accelerate the maturity thereof or terminate any such commitment (including, without limitation, any required mandatory prepayment or "put" of such Indebtedness to the Borrower or any Subsidiary). As used in this Section 7.1.4, the term "Subsidiary" shall be deemed to exclude Mining Remedial Recovery Corporation and its Subsidiaries and Deno Acquisition EURL and its Subsidiaries.

7.1.5           Other Defaults Under Loan Documents.  Borrower or any Subsidiary will default in the performance of or compliance with any term or covenant contained in this Agreement or the other Loan Documents (other than those referred to above in Sections 7.1.1, 7.1.2 or 7.1.3 of this Agreement or in the following sentence), and such default will continue unremedied for a period of thirty (30) days; provided, that the thirty (30) day time period will not start until Agent or any Bank provides Notice to Borrower in the case of defaults under Sections 5.3.1, 5.3.2, 5.3.3, 5.3.4, 5.3.5, 5.9, 5.10, 5.11 and 5.12.

7.1.6           Involuntary Bankruptcy; Appointment of Trustee, etc.

(a)           If an involuntary case seeking the liquidation or reorganization of Borrower or any Restricted Subsidiary under any chapter of the federal Bankruptcy Code or any similar proceeding will be commenced against Borrower or any Restricted Subsidiary under any other applicable law and anyone or more of the following events occur: (i) Borrower or such Subsidiary consents to the institution of the involuntary case; (ii) the petition commencing the involuntary case is not timely controverted; (iii) the petition commencing the involuntary case is not dismissed within sixty (60) days of its filing; (iv) an interim trustee is appointed to take possession of all or a substantial portion of the property and/or to operate all or any substantial portion of the business of Borrower or such Subsidiary; or (v) an order for relief will have been issued or entered therein.

  

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(b)           A decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, custodian, trustee or other officer having similar powers of Borrower or any Restricted Subsidiary to take possession of all or a substantial portion of the property and/or to operate all or a substantial portion of the business of Borrower or such Subsidiary will have been entered and, within sixty (60) days from the date of entry, is not vacated, discharged or bonded against, or any similar relief will be granted against Borrower or such Subsidiary under any applicable federal or state law, and, within sixty (60) days from the date of entry, is not vacated, discharged or bonded against.

7.1.7           Voluntary Bankruptcy; Appointment of Trustee. etc.

(a)           Borrower or any Restricted Subsidiary will (i) institute a voluntary case seeking liquidation or reorganization under any chapter of the federal Bankruptcy Code; (ii) file a petition, answer or complaint or will otherwise institute any similar proceeding under any other applicable law, or will consent thereto; (iii) consent to the conversion of a voluntary case to an involuntary case; (iv) consent to the conversion of an involuntary case to a voluntary case; (v) consent or acquiesce to the appointment of a trustee, receiver, liquidator, sequestrator, custodian or other officer with similar powers to take possession of all or a substantial portion of the property and/or to operate all or a substantial portion of the business of Borrower or any Restricted Subsidiary; or (vi) make a general assignment for the benefit of creditors.

(b)           The Board of Directors of Borrower or the governing body of any Restricted Subsidiary adopts any resolution or otherwise authorizes action to approve any of the foregoing; provided, that nothing herein shall be construed to prevent Arava Natural Resources Company, Inc., in its capacity as a shareholder of Mining Remedial Recovery Corporation, from adopting resolutions or authorizing action with respect to Mining Remedial Recovery Corporation and or its Subsidiaries.

7.1.8           Judgments and Attachments.

(a)           Borrower or any Restricted Subsidiary will suffer any money judgment(s), fines or penalties not covered by insurance, writes) or warrant(s) of attachment or similar process(es) involving an amount, in the aggregate, in excess of$15,000,000 and will not satisfy, discharge, vacate, bond or stay the same within a period of thirty (30) days or, in any event, within ten (10) days of the date of any proposed sale thereunder.

       (b)           A judgment creditor will obtain possession of any material portion of the properties or assets of Borrower or any Restricted Subsidiary by any means, including, without limitation, levy, distraint, replevin or self-help.

7.1.9           Dissolution.  Any order, judgment or decree will be entered against Borrower or any Restricted Subsidiary having assets in excess of $1,000,000 decreeing the dissolution or division of it and such order will remain undischarged or unstayed for a period in excess of thirty (30) days.

  

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7.1.10            Termination of Loan Documents, etc.  Any of the Loan Documents will cease to be in full force and effect for any reason other than a release or termination thereof upon the full payment and satisfaction of the Obligations.

7.1.11           Environmental Violations.  A breach of Sections 4.10, 5.8.4 or 6.4 will have occurred.

7.1.12            Change of Control. (i) Any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 35% or more of the outstanding shares of the voting stock of the Borrower; or (ii) as of any date a majority of the Board of Directors of the Borrower consists of individuals who were not either (A) directors of the Borrower as of the corresponding date of the previous year, (B) selected or nominated to become directors by the Board of Directors of the Borrower of which a majority consisted of individuals described in clause (A), or (C) selected or nominated to become directors by the Board of Directors of the Borrower of which a majority consisted of individuals described in clause (A) and individuals described in clause (B), or (iii) any "Change of Control", "Change in Control" or similar default or event shall occur under any Subordinated Debt Document.

7.1.13            Invalidity of Subordination Provisions, etc.  Any subordination provision in any document or instrument governing any Subordinated Debt, or any subordination provision in any guaranty by any Subsidiary of any Subordinated Debt, shall cease to be in full force and effect, or the Borrower or any Subsidiary shall contest in any manner the validity, binding nature or enforceability of any such provision.

7.2            Remedies; Termination of Commitments.  Upon the occurrence of an Event of Default all Obligations will, at the request of the Requisite Banks, immediately be due and payable without presentment, demand, protest, notice or other requirements of any kind, all of which are hereby expressly waived by Borrower, and all Commitments of the Banks hereunder will terminate, at the direction of the Requisite Banks, without further action of any kind, provided, however, if any oft he events described in Section 7.1.6 or 7.1.7 occurs, all Obligations and Commitments of the Banks shall immediately terminate. Upon acceleration, Agent will proceed to protect, exercise and enforce the Banks' rights and remedies hereunder and under the other Loan Documents and any other rights and remedies as are provided bylaw or equity. If the Loan being repaid is a Eurocurrency Advance, the Borrower shall pay the compensation set forth in Section 7.4 below. Agent may determine, in its sole discretion, the order and manner in which the Banks' rights and remedies are to be exercised, and all payments received by Agent will be applied as follows: first, to all costs and expenses incurred by Agent in collecting any Obligations by reason of such Event of Default; second, pro rata to accrued interest; third, pro rata to other Obligations; fourth, to a cash collateral account maintained at the Agent up to the aggregate face amount of all outstanding Letters of Credit issued hereunder to secure Borrower's reimbursement obligation in connection with such Letters of Credit; and fifth, to Borrower or as otherwise provided by any Requirement of Law. During the existence of any Event of Default, at the request of the Agent and/or the Requisite Banks, Borrower shall forthwith deposit into a cash collateral account with the Agent an amount of cash equal to the aggregate face amount of 

 

  

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all outstanding Letters of Credit issued hereunder, to secure Borrower's reimbursement obligation in connection with such Letters of Credit.

7.3           Right of Set-Off.  In addition to all other remedies available to the Banks, after any Event of Default, each Bank is hereby authorized at any time and from time to time, without further notice to Borrower, to setoff and proportionately apply said amount between the other Banks, any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of Borrower, against any and all the obligations of Borrower, now or hereafter existing under any Loan Document.

7.4           Compensation.  Upon the request of any Bank, delivered to the Borrower and the Agent, the Borrower shall pay to such Bank such amount or amounts as shall compensate such Bank for any loss, cost or expense incurred by such Bank as a result of:

(a)           any payment or prepayment of a Eurocurrency Advance on a date other than the last day of an Interest Period for such Loan; or

(b)           any failure by the Borrower to prepay a Eurocurrency Advance on the date for such prepayment specified in the relevant notice of prepayment hereunder; or

(c)           any failure by the Borrower to borrow a Eurocurrency Advance on the date for the Borrowing of which such Eurocurrency Advance is a part specified in the applicable Borrowing Notice delivered pursuant to Section 2.2.2; such compensation to include, without limitation, an amount equal to the excess, if any, of (x) the amount of interest which would have accrued on the amount so paid or prepaid or not prepaid or borrowed for the period from the date of such payment, prepayment or failure to prepay or borrow to the last day of the then current Interest Period for such Eurocurrency Advance (or, in the case of a failure to prepay or borrow, the Interest Period for such Eurocurrency Advance which would have commenced on the date of such failure to prepay or borrow) at the applicable rate of interest for such Eurocurrency Advance provided for herein over (y) the amount of interest (as reasonably determined by such Bank) such Bank would have paid on deposits in Dollars of comparable amounts having terms comparable to such period placed with it by leading lenders in the London interbank market (if such Loan is a Eurocurrency Advance).

8.           THE AGENT AND RELATIONS AMONG BANKS, ETC.

8.1           Appointment.  Each Bank hereby designates and appoints the Agent the limited administrative agent for all Banks under this Agreement and the other Loan Documents. Each Bank hereby irrevocably authorizes Agent on its behalf to take or refrain from taking any action, and to exercise or refrain from the exercise of any power, as is required or permitted by the Banks to be taken under the provisions of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto, subject only to the express limitations of this Agreement. The duties of Agent under this Agreement and the other Loan Documents are mechanical and administrative in nature, are limited to those expressly provided herein, and do not establish a fiduciary relationship as between the Agent and any Bank. In 

 

  

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performing its function and duties under this Agreement and the other Loan Documents, Agent will act solely as an agent of Banks and assumes no obligation towards or relationship of agency or trust with Borrower. Agent may perform any of its duties under this Agreement or another Loan Document by or through its agents or employees.

8.2           Advances and Payments.

8.2.1           Advances:  In General. All Advances will be made by Agent on behalf of the Banks on the requested Advance Date, except that the Ratable Share of any Bank which the Agent receives after 12:00 p.m. Eastern Time on the Advance Date, or at any time after the Advance Date, will be disbursed on the Business Day following its receipt. Nothing in this Agreement or any other Loan Document is to be construed to require Agent to advance funds on behalf of any Bank or to relieve any Bank from its obligation to make Advances or to prejudice any rights that Borrower may have against any Bank as a result of any default by that Bank hereunder.

8.2.2           Advances.  In order to minimize transfers between the Agent and each Bank of funds representing the Bank's Ratable Share of an Advance, a Borrower payment, or (to the extent that Agent has not been promptly reimbursed by Borrower) other amounts for which the Agent is entitled to Bank reimbursement or indemnification, coincidental transfer and loan account adjustments may be made on a "net" basis. Not later than the Business Day immediately preceding an Advance Date or a date on which Bank reimbursement of the Agent is requested, Agent will advise each Bank by telephone or telecopy as to the purpose and aggregate amount to be disbursed or paid by Agent and the Advance Date or actual or anticipated payment date, as the case may be; the amount which is such Bank's Ratable Share thereof; and, if in order to cause all loan accounts maintained by Agent for such Bank to conform to its Ratable Share of the Loan, the amount which such Bank is requested to remit to Agent will be different, the identity of the loan account(s) requiring adjustment and the nature and amounts due to or from the Bank with respect thereto. All amounts which a Bank is required to remit to Agent will be made available to Agent by transfer of same day funds to the designated wire account of Agent not later than 12:00 p.m. Eastern Time on the Advance Date, as evidenced by a wire transfer number or actual receipt by Agent. Agent will have no liability to Borrower for the failure of any Bank to make an Advance on the Advance Date, and if any Advance Date is on a day when any of the Banks are not open for business, then each Bank shall transfer to Agent its Ratable Share on the next day such Bank is open for business.

8.2.3           Distribution of Payments.  All Loan payments in respect of Advances, interest, fees or expenses incurred by the Banks and required by Borrower to be reimbursed will be deemed paid when immediately available U.S. currency or its equivalent is paid in the amount required by Borrower to Agent. On the Business Day Agent receives a Borrower payment, Agent will advise each Bank by telephone or telecopy of the aggregate amount and such Bank's Ratable Share of amounts actually received by Agent in respect of Advances, interest, fees, or, to the extent that the Banks previously have remitted to Agent therefor, reimbursements for other amounts for which Agent has required Bank reimbursement or indemnification. Agent will pay to such Bank on the same Business Day, by transfer to such Bank's wire account (as specified by such Bank on Exhibit 8.2.3 to this Agreement or as amended by such Bank from time to time

 

  

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 after the date hereof) its Ratable Share, "netted" as permitted herein, of any such payment received by Agent not later than 12:00 p.m. (Eastern Time), and otherwise on the next Business Day.

8.2.4           Return of Payments.  Any Agent payment to a Bank under this Agreement in the belief or expectation that a related payment has been or will be received by Agent from Borrower, which related payment in fact is not received by Agent, will entitle Agent to recover such amount from the Bank without set-off, counterclaim or deduction of any kind. If Agent determines at any time that an amount received by Agent under this Agreement must be returned to Borrower or paid to any other Person pursuant to any solvency law or otherwise, then, notwithstanding any other term or condition of this Agreement, Agent will not be required to distribute any portion thereof to any Bank. However, if Agent has previously distributed such amount, each Bank will repay to Agent on demand any portion of such amount that Agent has distributed to such Bank, together with interest at such rate, if any, as Agent is required to pay to Borrower or such other Person, without set-off, counterclaim or deduction of any kind by the Bank.

8.3           Dissemination of Information.  Agent will distribute promptly to each Bank the executed promissory notes evidencing such Bank's Ratable Share of the Loans. Agent will have no duty or responsibility, either initially or on a continuing basis, to provide any Bank with any credit or other information with respect to Borrower (other than information or notices received by it in accordance herewith and only if not received by the Banks from Borrower), whether coming into its possession before the date of this Agreement or at any time or times thereafter. Agent will use its best efforts after written request therefor by any Bank, and only if not received by such Bank from Borrower, to distribute promptly to each Bank copies of every notice, request, communication, report or other information received by Agent from Borrower pursuant to this Agreement or another Loan Document; provided, that Agent will be liable to the Banks for a failure to do so only if such failure is attributable to Agent's gross negligence or willful misconduct, which will not include the Agent's failure to obtain any of the foregoing from Borrower.

8.4           Amendments, Consents and Waivers for Certain Actions.  Agent is authorized and empowered on behalf of the Banks to amend or modify in writing any provision of this Agreement or another Loan Document which relates or pertains to the Borrower, or to consent to or waive Borrower's performance of any obligation hereunder or of any Event of Default, only with the prior written consent of the Requisite Banks or, if required under Section 9.2, all of the Banks, as the case may be. When Agent requests the written consent of any Bank and does not receive a written approval of such consent from any Bank within ten (10) Business Days after such Bank's receipt of such request, then such Bank will be deemed to have denied such consent.  Borrower agrees that it will not assert any claim of amendment, modification, consent or waiver which is not in writing, which writing (i) references this Agreement or any of the other Loan Documents and (ii) is signed by the Requisite Banks or all of the Banks, as the case may be. 

 

     8.5    Exculpation. Agent and its officers, directors, employees and agents will be liable to any Bank only for the performance of their express obligations under this Agreement and the other Loan Documents and for their own gross negligence or willful misconduct in the 

 

  

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performance of any action taken or omitted in connection therewith. If any apportionment or distribution of payments made by Agent in good faith is subsequently determined to have been made in error, Agent will not be liable therefor, but the sole recourse of any Bank to whom payment was due but not made will be to recover from other Banks any payment in excess of the amount to which they are determined to be entitled (and such other Banks hereby agree to return to such Bank any such erroneous payments received by them). The Agent shall use its best efforts to assist the Banks in determining when any such excess payment has been made and in facilitating the recovery thereof. In performing its functions and duties hereunder, Agent will exercise the same care which it would in dealing with loans for its own account. Agent will not be responsible to any Bank for the truth or completeness of any recitals, statements, representations or warranties herein, the execution, effectiveness, genuineness, validity, enforceability, collectability, or sufficiency of this Agreement or any other Loan Document or the transactions contemplated thereby, or the financial condition of Borrower. Agent will not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Loan Document, the financial condition of Borrower, or the existence or possible existence of any Event of Default. Agent at any time may request instructions from the Requisite Banks with respect to any action, inaction, failure or approval which, by the terms of this Agreement or any other Loan Document, Agent is permitted or required to take or to grant, and if such instructions are promptly requested, Agent may refrain from taking any action or withhold any approval and may refrain from any action or withhold any approval until it has received such instructions from the Requisite Banks.  No Bank will have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting in accordance with instructions of the Requisite Banks or all of the Banks, as the case may require.

8.6           Reliance. Agent may rely upon any written notices, statements, certificates, orders or other documents or any telephone message or other communication (including any writing, telecopy or telegram) believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any other Loan Document, upon advice of legal counsel as to legal matters, independent accountants as to audit and accounting matters, and other experts selected by it, and when doing so will not be liable to any Bank for any action taken or omitted by Agent in good faith. If any written confirmation of a telephonic notice or instructions differs from the action taken by Agent in connection with such telephonic notice of instructions, Agent's records will govern absent manifest error.

8.7           Credit Decisions.  Each Bank acknowledges that, independently of Agent and each other Bank and based on the financial information received by it and such other documents, information, and independent investigation of the financial condition and affairs of Borrower as it has deemed appropriate, it has made and will continue to make its own appraisal of the creditworthiness of Borrower and credit decisions to participate in the Loans in accordance with this Agreement. Each Bank also acknowledges that, independently of Agent and each other Bank, and based on such other documents, information, and investigations as it deems appropriate at anytime, it will continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.

  

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8.8           Indemnification.

8.8.1           Agent Indemnification.  Each Bank agrees (which agreement shall survive any termination of this Agreement) to indemnify Agent according to such Bank's Ratable Share from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, excess Advances or payments of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against Agent in any way relating to or arising out of this Agreement or another Loan Document, including (without limitation) the reimbursement of Agent for all expenses (including reasonable attorneys' and paralegals' fees, the allocated expense of in-house attorneys and paralegals, and all out-of-pocket expenses) incurred by Agent under or in connection with this Agreement or another Loan Document or in enforcing the Obligations, in all cases as to which Agent is not reimbursed by Borrower, provided that no Bank will be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, Advances or payments as are determined by a court of competent jurisdiction in a final, non-appealable decision or order to have resulted solely from Agent's gross negligence or, willful misconduct. Agent will not be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any action or proceeding in respect of this Agreement or another Loan Document, unless it is indemnified to its satisfaction by the Banks against losses, costs, liabilities, and expenses. If any indemnity in favor of Agent is impaired, Agent may call for additional indemnity and cease to do the acts indemnified against until such additional indemnity is given.

8.8.2           Borrower Indemnification.  The Borrower hereby agrees to indemnify the Agent, each Bank, their respective affiliates, and each of their directors, officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Agent, any Bank or any affiliate is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby or the direct or indirect application or proposed application of the proceeds of any Loan hereunder except to the extent that they are determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the party seeking indemnification. In no event will any Bank's claim for indemnification, as damages, losses arising, in the ordinary course of each Bank's business, out of Loans for which the rate charged by Bank is less than the rate paid by such Bank for borrowed funds. The obligations of the Borrower under this Section 8.8.2 shall survive the termination of this Agreement.

8.9           Successor.  Agent may resign as such at any time upon at least 30 days' prior notice to Borrower and all Banks, which resignation will be effective when a successor Agent is in place. If Agent resigns, the Requisite Banks may appoint another Person as a successor Agent which thereupon will become the Agent. If no successor to the Agent is appointed by the Requisite Banks and accepts such appointment within 30 days after the retiring Agent's notice of resignation, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which will be one of the Banks or a commercial banking institution organized under the laws of 

 

  

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the United States or a United States branch or agency of a commercial banking institution, and having a combined capital and surplus of at least $250,000,000. Upon the acceptance by any successor an appointment as Agent hereunder, such successor Agent will be entitled to receive from the retiring Agent such documents of transfer and assignment as such successor Agent may reasonably request, and will thereupon succeed to, and become vested with all rights, powers, privileges, and duties of the retiring Agent, and the retiring Agent will be discharged from all duties and obligations arising under this Agreement and the other Loan Documents from and after the date on which its resignation is effective. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Agreement and the other Loan Documents will continue to bind and inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent. If the successor Agent is not one of the Banks, Borrower shall have right to reasonably approve such successor Agent.

8.10           Agent as a Bank.  Agent, in its capacity as a Bank, will have the same rights, powers, duties and liabilities with respect to the Loans as any other Bank and may exercise the same as if it were not the Agent. Unless otherwise required by the context, the terms "Bank", "Banks" and" Requisite Banks" or any similar terms will include the Agent when acting in its individual capacity. Agent may lend money to, and generally engage in any kind of banking, trust or other business with Borrower to the same extent as any other financial institution.

8.11           Borrower Not A Beneficiary.  The provisions of this Section 8 are solely for the benefit of Agent and the Banks and Borrower will have no rights as a third party beneficiary of any of the provisions hereof; provided, however, Borrower will be bound by the provisions hereof. Borrower will have no right against Agent acting in its capacity as Agent, for any claims of Borrower arising from this Agreement, all such claims being assertable only against the Banks.

8.12           Sharing Among Banks.  Without affecting the rights of the Borrower hereunder, each of the Banks agrees with every other Bank that, in the event it shall receive payment on account of the Loan in excess of its pro rata portion, according to the principal amount of its participation in Advances then outstanding, of a payment due all of the Banks, whether such payment be voluntary, involuntary or by operation of law, by application of setoff of any indebtedness or otherwise, then such Bank shall promptly purchase from each of the other Banks, without recourse, for cash and at face value, ratably in accordance with the principal amounts of the participations in Advances then outstanding, interest of the other Banks in the Loans in such an amount that each of the Banks shall have received payment pro rata on account of its participation in the Loans in accordance with the unpaid principal amount thereof then owing to it; provided, that if any such purchase be made by any Bank and if any such excess payment relating thereto or any part thereof is thereafter recovered from such Bank, appropriate adjustments in the related purchases from the other Banks shall be made by rescission and restoration of the purchase price as to the portion of such excess payment so recovered.

8.13           Assignments/Participations.

8.13.1.                      Permitted Assignments.  Any Bank may, in the ordinary course of its business and in accordance with applicable law, at any time assign to one or more banks or other 

 

  

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entities ("Purchasers") all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of Exhibit 8.13.1 or in such other form as may be agreed to by the parties thereto.· The consent of the Borrower and the Agent shall be required prior to an assignment becoming effective with respect to a Purchaser which is not a Bank or an affiliate thereof; provided, however, that if an Event of Default has occurred and is continuing, the consent of the Borrower shall not be required. Such consent shall not be unreasonably withheld or delayed. Each such assignment with respect to a Purchaser which is not a Bank or an affiliate thereof shall (unless each of the Borrower and the Agent otherwise consents) be in an amount not less than the lesser of (i) $10,000,000 or (ii) the remaining amount of the assigning Bank's outstanding Loans.

8.13.2.                      Effect; Closing Date.  Upon (i) delivery to the Agent of an assignment, together with any consents required by Section 8.13.1, and (ii) payment of a $3,500 fee to the Agent for processing such assignment (unless such fee is waived by the Agent), such assignment shall become effective on the effective date specified in such assignment. The assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Loans under the applicable assignment agreement constitutes "plan assets" as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be "plan assets" under ERISA. On and after the effective date of such assignment, such Purchaser shall for all purposes be a Bank party to this Agreement and any other Loan Document executed by or on behalf of the Banks and shall have all the rights and obligations of a Bank under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by the Borrower, the Banks or the Agent shall be required to release the transferor Bank with respect to the percentage of the Aggregate Loans assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this Section 8.13.2, the transferor Bank, the Agent and the Borrower shall, if the transferor Bank or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Bank and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each casein principal amounts reflecting their respective and outstanding Loans, as adjusted pursuant to such assignment.

8.13.3.                      Participations.  Any Bank may sell to any financial institution or institutions, and such financial institution or institutions may further sell, a participation interest (undivided or divided) in, the Advances and such Bank's rights and benefits under this Agreement, the Notes and the other Loan Documents, and to the extent of that participation interest such participant or participants shall have the same rights and benefits against the Borrower under Section 3.5 and 7.3 as it or they would have had if such participant or participants were the Bank making the Advances to the Borrowers hereunder, provided, however, that (i) such Bank's obligations under this Agreement shall remain unmodified and fully effective and enforceable against such Bank, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Bank shall remain the holder of its Notes for all purposes of this Agreement, (iv) the Borrowers, the Agent and the other Banks shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement, and (v) such Bank shall not grant to its participant (other than a participant which is an Affiliate of that Bank) 

 

  

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any rights to consent or withhold consent to any action taken by such Bank or the Agent under this Agreement other than action requiring the consent of all of the Banks hereunder.

8.14           Other Agents.  No Bank designated as a "managing agent", "syndication agent", "documentation agent" or "co-agent" in its capacity as such shall have any rights, duties or responsibilities hereunder, or any fiduciary relationship with any Bank or the Borrower, and no implied covenants, functions, responsibilities, duties, obligations, or liabilities shall be read into this Agreement or otherwise exist against any it in such capacity.

9.           MISCELLANEOUS.

9.1           Costs and Attorneys' Fees.  All fees, costs and expenses incurred by Agent in connection with the preparation, execution, delivery, performance and administration of the Loan Documents, any and all amendments, supplements and modifications thereof and the other instruments and documents to be delivered hereunder in connection with any matters contemplated by or arising out of this Agreement, whether (a) to commence, defend any action commenced by any party other than Borrower, or intervene in any litigation or to file a petition, complaint, answer, motion or other pleadings, (b) to take any other action in or with respect to any suit or proceedings (bankruptcy or otherwise), (c) to consult with officers of Agent or to advise Agent or (d) to enforce any rights of the Banks to collect any of the Obligations, including, without limitation, reasonable fees, costs and expenses of Agent's attorneys and paralegals, the allocated costs of Agent's internal counsel, together with interest thereon at the rate equal to 2% above the highest Effective Rate hereunder, will be part of the Obligations, payable on demand. Upon and during the continuance of an Event of Default, Borrower shall reimburse each Bank for such Bank's reasonable fees, costs and expenses incurred in connection with the enforcement of this Agreement and the other Loan Documents. All of the foregoing amounts may, at Agent's option, be charged as an Advance under the Loan.

9.2           Waivers, Modifications in Writing.  No failure or delay on the part of Agent or any Bank in exercising any right, power or remedy hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for under this Agreement, in the Notes and in the other Loan Documents are cumulative and are not exclusive of any remedies that may be available to the Banks at law, in equity or otherwise. No amendment, modification, supplement, termination, consent or waiver of or to any provision of this Agreement, the Notes or the other Loan Documents, nor any consent to any departure therefrom, will in any event be effective unless the same will be in writing and signed by or on behalf of the Borrower and the Requisite Banks and, to the extent any rights or duties of the Agent may be affected thereby, the Agent, provided, however, that no such amendment, modification, termination, waiver or consent shall, without the consent of the Agent and all of the Banks, (i) authorize or permit the extension of time for, or any reduction of the amount of, any payment of the principal of, or interest on, the Notes or any Letter of Credit reimbursement obligation, or any fees or other amount payable hereunder, (ii) amend or terminate the respective Commitment of any Bank or modify the provisions of this Section regarding the taking of any action under this Section or the provisions of this Section 9.2 or the definition of Requisite Banks, 

 

  

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or (iii) provide for the discharge of any material Guarantor, except to the extent provided in this Agreement.  Notwithstanding anything herein to the contrary, no Defaulting Bank shall be entitled to vote (whether to consent or to withhold its consent) with respect to any amendment, modification, termination or waiver of any provision of this Agreement or any departure therefrom or any direction from the Banks to the Agent, and, for purposes of determining the Requisite Banks at any time when any Bank is a Defaulting Bank under this Agreement, the Commitments and Advances of such Defaulting Banks shall be disregarded.

9.3           Notices, etc.  All notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto will be in writing and (except for financial statements and other related informational documents to be furnished pursuant hereto which maybe sent by first-class mail, postage prepaid), will be personally delivered or sent by registered or certified mail, postage prepaid or sent by nationally recognized overnight delivery service and, if mailed, will be deemed to be received for purposes of this Agreement three (3) Business Days after mailing by the sender or one (1) Business Day if sent by overnight delivery service. Unless otherwise specified in a notice sent or delivered in accordance with the foregoing provisions of this Section 9.3, notices, demands, instruments and other communications in writing will be given to or made upon the respective parties hereto as follows: if to Agent, at Agent's Address, with a copy to Agent's Counsel; if to Borrower, at Borrower's Address, with a copy to Borrower's Counsel and if to a Bank, the address that appears on the signature page to this Credit Agreement.

9.4           Notice of Wrongful Act or Omission by Agent or Banks.  No action will be commenced by Borrower against Agent or any Bank arising out of or attributable to any act or omission of Agent or any Bank unless a notice specifically describing the act or omission will have been given to Agent or such Bank thirty (30) days prior to such judicial action.

9.5           Agent's Failure to Advance.  If Agent will be in breach of the Banks' obligation under this Agreement by reason of failure to make an Advance, notwithstanding Borrower's conformance with the provisions of hereof, Borrower's sole remedies on account thereof will be: (a) to compel Agent to make the Advance which is determined to have been wrongfully withheld; and (b) to recover actual and provable damages on account of such breach, and neither Agent nor any Bank will ever be liable to Borrower for consequential damages, whatever the nature of the breach by Agent or such Bank hereunder.

9.6           Headings.  Section headings used in this Agreement are for convenience of reference only and will not constitute a part of this Agreement for any other purpose or affect the construction of this Agreement.

9.7           Execution in Counterparts.  This Agreement may be executed in counterparts and by different parties on separate counterparts, both of which counterparts, when so executed and delivered, will be deemed to be an original and both of which counterparts, taken together, will constitute but one and the same agreement. This Agreement will become effective upon the execution of a counterpart hereof by each of the parties hereto.

  

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9.8           Binding Effect; Assignment.  This Agreement will be binding upon, and inure to the benefit of, Borrower and the Banks, and the irrespective successors and assigns; provided, however, that Borrower may not assign its rights hereunder or in connection herewith or any interest herein (voluntarily, by operation of law or otherwise) without the prior written consent of all of the Banks. This Agreement will not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and each of their respective successors and assigns.

9.9           Severability of Provisions.  Any provision of this Agreement which is illegal, invalid, prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

9.10           Survival of Agreements; Representations, Warranties Indemnities and Covenants. All agreements, representations, warranties, indemnities and covenants made herein will survive the execution and delivery of this Agreement, the making of the Loans hereunder and the execution and delivery of the Notes.

9.11           Independence of Covenants.  All covenants under this Agreement will each be given independent effect so that if a particular action or condition is not permitted by any such covenant, the fact that it would be permitted by another covenant, by an exception thereto, or be otherwise within the limitations thereof, will not avoid the occurrence of an Event of Default or Unmatured Event of Default if such action is taken or condition exists.

9.12           Construction of Agreement.  Neither this Agreement nor any uncertainty or ambiguity herein will be construed or resolved against any Bank, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the parties and their counsel and will be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

9.13           Complete Agreement.  This Agreement, together with the exhibits and schedules to this Agreement, the Notes and the other Loan Documents, and the other agreements referred to herein or by their terms referring hereto, is intended by the parties as a final expression of their agreement and is intended as a complete statement of the terms and conditions of their agreement.

9.14           Equitable Relief.  Borrower recognizes that, in the event Borrower fails to perform, observe or discharge any of its Obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Banks; therefore, Borrower agrees that the Banks will be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

9.15           No Fiduciary Relationship.  No provision herein or in any of the other Loan Documents and no course of dealing between the parties will be deemed to create any fiduciary duty by Agent or the Banks to Borrower.

  

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9.16            Choice of Law.  The validity of this Agreement, its construction, interpretation and enforcement and the rights of the parties hereto will be determined under, governed by and construed in accordance with the internal laws of the State of Michigan, without regard to principles of conflicts of law.

9.17           Venue; Jurisdiction.  The parties agree that all actions or proceedings arising in connection with this Agreement, the Loan Documents, the Advances may be tried and litigated in the federal courts of the United States of the Eastern District of Michigan. Borrower hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of such courts. Borrower irrevocably consents to the service of process out of any such courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to Borrower, at its address set forth for notices in this Agreement, such service to become effective ten (10) days after such mailing. Nothing herein will affect the right of any Bank to serve process in any other manner permitted by law. Borrower irrevocably waives any right it may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this Section 9.17.

9.18           Other Waivers.  Borrower hereby waives, to the extent permitted by applicable law, in connection with a "claim and delivery" action by any Bank or Agent on any Bank's behalf pursuant to Michigan Court Rule 3.105, the right to request that a court require any Bank to post a bond pursuant to Michigan Court Rule 3.105(E)(4)(c)(i).

9.19           Waivers Voluntary.  The waivers contained in this Agreement are freely, knowingly and voluntarily given by each party, without any duress or coercion, after each party has had opportunity to consult with its counsel and has carefully and completely read all of the terms and provisions of this Agreement, specifically including the waivers contained in this Section 9.  Neither the Banks nor Borrower will be deemed to have relinquished the waivers contained herein except by a writing signed by the party to be charged with having relinquished any such waiver.

9.20           Waiver of Jury Trial.  Banks and Borrower acknowledge and agree that there may be a constitutional right to a jury trial in connection with any claim, dispute or lawsuit arising between them, but that such right may be waived. Accordingly, the parties agree that notwithstanding such constitutional right, in this commercial matter the parties believe and agree that it will be in their best interest to waive such right, and accordingly, hereby waive such right to jury trial, and further agree that the best forum for hearing any claim, dispute or lawsuit, if any, arising in connection with this Agreement, any Loan Document or the relationship between the Banks and Borrower, will be a court of competent jurisdiction sitting without a jury.

9.21           Nonliability of Banks.  The relationship between the Borrower on the one hand and the Banks and the Agent on the other hand shall be solely that of borrower and lender. Neither the Agent nor any Bank has any fiduciary relationship with or duty to the Borrower or any Guarantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Borrower and Guarantors, on the one hand, and the Agent and the Banks, on the other hand, in connection herewith or therewith is solely that of 

 

  

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debtor and creditor. Neither the Agent nor any Bank undertakes any responsibility to the Borrower or any Guarantor to review or inform the Borrower or any Guarantor of any matter in connection with any phase of the Borrower's or any Guarantor's business or operations. The Borrower agrees, on behalf of itself and each Guarantor, that neither the Agent nor any Bank shall have liability to the Borrower or any Guarantor (whether sounding in tort, contract or otherwise) for losses suffered by the Borrower or any Guarantor in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought. NEITHER THE AGENT NOR ANY BANK SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL THE AGENT OR ANY BANK HAVE ANY LIABILITY WITH RESPECT TO, AND THE BORROWER ON BEHALF OF ITSELF AND EACH OTHER GUARANTOR, HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE). The Borrower acknowledges that it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party. No joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Banks and the Agent or among the Borrower, the Guarantors, the Agent and the Banks

BORROWER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AND BORROWER ACKNOWLEDGES AND AGREES THAT (a) EACH OF THE WAIVERS SET FORTH HEREIN, WERE KNOWINGLY AND VOLUNTARILY MADE; (b) THE OBLIGATIONS OF THE BANKS HEREUNDER, INCLUDING THE OBLIGATION TO ADVANCE AND LEND FUNDS TO BORROWER IN ACCORDANCE HEREWITH, WILL BE STRICTLY CONSTRUED AND WILL BE EXPRESSLY SUBJECT TO SUCH BORROWER'S COMPLIANCE IN ALL RESPECTS WITH THE TERMS AND CONDITIONS HEREIN SET FORTH; AND (c) NO REPRESENTATIVE OF ANY BANK HAS WAIVED OR MODIFIED ANY OF THE PROVISIONS OF THIS AGREEMENT AS OF THE DATE HEREOF AND NO SUCH WAIVER OR MODIFICATION FOLLOWING THE DATE HEREOF WILL BE EFFECTIVE UNLESS MADE IN ACCORDANCE WITH SECTION 9.2 HEREOF.

[INTENTIONALLY LEFT BLANK -SIGNATURES ON FOLLOWING PAGES]

  

57

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed

and delivered as of the date first hereinabove set forth.

	  	
"BORROWER"

	  	  
	  	
MUELLER INDUSTRIES, INC.

	  	  
	  	
By: /S/Gary C. Wilkerson

	  	  
	  	
Its: Vice President, General Counsel and Secretary

	  	  
	  	  
	  	
"BANKS"

	  	  
	  	
LASALLE BANK MIDWEST NATIONAL

	  	
ASSOCIATION, as a Bank and as Agent

	  	  
	  	
By:/S/J Vito

	  	  
	  	
Print Name: _______________________

	  	  
	  	
Its:______________________________

	  	  
	  	
Ratable Share as of the Closing Date: 25.000000000%

	  	  
	  	
Commitment as of the Closing Date: $50,000,000.00

	  	  
	  	
Address for Notice:

	  	  
	  	
800 Military Street

	  	
Port Huron, MI 48060-5440

	  	
Attn: Joe Vito

  

58

  

	  	
REGIONS BANK

	  	  
	  	
BY: /S/James Gummel

	  	  
	  	
Print Name: James Gummel

	  	  
	  	
Its: Senior Vice-President

	  	  
	  	
Ratable Share as of the Closing Date: 20.000000000%

	  	  
	  	
Commitment as of the Closing Date: $40,000,000.00

	  	  
	  	
Address for Notice:

	  	
_________________________________

	  	
_________________________________

	  	
Attn:_____________________________

	  	  

  

  

  

	  	
SUNTRUST BANK

	  	  
	  	
BY: /S/J. H. Miles

	  	  
	  	
Print Name: J. H. Miles

	  	  
	  	
Its: Managing Director

	  	  
	  	
Ratable Share as of the Closing Date: 20.000000000%

	  	  
	  	
Commitment as of the Closing Date: $40,000,000.00

	  	  
	  	
Address for Notice:

	  	
850 Ridge Lake Blvd #450___________

	  	
Memphis, TN 38120________________

	  	
Attn: Bryan W. Ford________________

	  	  

  

  

  

	  	
FIRST TENNESSEE BANK NATIONAL ASSOCIATION

	  	  
	  	
By: /S/ Philip E. Stevenson

	  	  
	  	
Print Name: Philip E. Stevenson

	  	  
	  	
Its: Senior Vice President

	  	  
	  	
Ratable Share as of the Closing Date: 15.000000000%

	  	  
	  	
Commitment as of the Closing Date: $30,000,000.00

	  	  
	  	
Address for Notice:

	  	
165 Madison Avenue, 10th Floor

	  	
Memphis, TN 38103

	  	
Attn: Metropolitan Division

	  	  

  

  

  

	  	
WELLS FARGO HSBC TRADE BANK, N.A.

	  	  
	  	
By: /S/ Scott J. Albert

	  	  
	  	
Print Name: Scott J. Albert

	  	  
	  	
Its: Vice President

	  	  
	  	
Ratable Share as of the Closing Date: 11.250000000%

	  	  
	  	
Commitment as of the Closing Date: $22,500,000.00

	  	  
	  	
Address for Notice:

	  	
230 West Monroe St., Suite 2900

	  	
Chicago, L 60606

	  	
Attn: Scott L. Albert

	  	  

 

  

  

  

	  	
HSBC BANK USA, NATIONAL ASSOCIATION

	  	  
	  	
By: /S/ Robert J. McArdle

	  	  
	  	
Print Name: Robert J. McArdle

	  	  
	  	
Its: Vice President

	  	  
	  	
Ratable Share as of the Closing Date: 8.750000000%

	  	  
	  	
Commitment as of the Closing Date: $17,500,000.00

	  	  
	  	
Address for Notice:

	  	
One HSBC Center

	  	
Buffalo, New York, 14203

	  	
Attn: Robert J. McArdle

	  	  

  

  

  

EXHIBIT 1.15(b)

RESTRICTED SUBSIDIARIES

 

 

	
B&K Industries, Inc.

	
Itawamba Industrial Gas Company, Inc.

	
Micro Gauge, Inc.

	
MicroGauge Machining, Inc.

	
Mueller Brass Co.

	
Mueller Brass Forging Company, Inc.

	
Mueller Casting Company, Inc.

	
Mueller Copper Fittings Company, Inc.

	
Mueller Copper Tube Company, Inc.

	
Mueller Copper Tube Products, Inc.

	
Mueller East, Inc.

	
Mueller Fittings Company, Inc.

	
Mueller Formed Tube Company, Inc.

	
Mueller Impacts Company, Inc.

	
Mueller Industrial Realty Co.

	
Mueller Line Set, Inc.

	
Mueller Plastics Corporation, Inc.

	
Mueller Plastics Holding Company, Inc.

	
Mueller Press Company, Inc.

	
Mueller Refrigeration Company, Inc.

	
Mueller Refrigeration Products Company, Inc.

	
Mueller Streamline Co.

	
Overstreet-Hughes Co., Inc.

	
WTC Holding Company

 

  

  

  

ADVANCE REQUEST FORM

 

 

(See Section 2.2.2 -Borrowing Notice)

 

 

(Cut-off is 11 :00 a.m. Eastern Time)

 

 

 

	 TO:	 	  LASALLE BANK MIDWEST NATIONAL ASSOCIATION
	 	 	 
	 ATTENTION:	 	 JOSEPH VITO
	 	 	 
	 FAX:	 	 (810) 987-1865
	 	 	 
	 FROM:	 	 MUELLER INDUSTRIES, INC.
	 	 	 
	 RE:	 	 $200,000,000 REVOLVING LINE OF CREDIT
	 	 	 Dated: December 1, 2006

              

 

 

                         

 

	 	 ADVANCE REQUEST DATE: 	 ______/______/______	 
	 	 ADVANCE DATE:	 ______/______/______	 
	 	 ADVANCE AMOUNT:	 $__________________	 

 

 

TYPE OF ADVANCE (Check to Indicate):

	 	 PRIME                  _______________________________	 	 
	 	 LIBOR _______1 Mo. _______2 Mos. _________ Mos.	 	 
	 	 CURRENCY:___________________________________	 	 
	 	 LETTER OF CREDIT (See attached Letter of Credit Application)	 	 

 

METHOD OF ADVANCE:

	 	 -CREDIT TO MUELLER INDUSTRIES, INC.	 	 
	 	 ACCOUNT NO. _________________________________	 	 
	 	 	 	 
	 	 -SPECIAL WIRE INSTRUCTIONS AS FOLLOWS:	 	 
	 	
_____________________________________________

	 	 
	 	
_____________________________________________

	 	 
	 	
_____________________________________________

	 	 

 

  

  

  

	 	 -ISSUE LETTER OF CREDIT TO:	 	 
	 	
_____________________________________________

	 	 
	 	
_____________________________________________

	 	 
	 	
_____________________________________________

	 	 

 

	 	 -SPECIAL LETTER OF CREDIT INSTRUCTIONS:	 	 
	 	
_____________________________________________

	 	 
	 	_____________________________________________	 	 
	 	
_____________________________________________

	 	 
	 

 

	 REQUESTED BY:	
 ______________________________________________

	 	 
	 	
                        (AUTHORIZED SIGNATURE)

	 	 
	 	
 

	 	 
	 

 

  

  

  

 

EXHIBIT 2.3

 

 

LINE OF CREDIT NOTE

 

 

Amount: $ ______________

 

 

Due Date: December 1, 2011                                                                                                Dated as of December 1, 2006

 

 

FOR VALUE RECEIVED, MUELLER INDUSTRIES, INC., a Delaware corporation ("Borrower"), promises to pay to the order of ________________________ in immediately available United States funds, the principal sum of _______________ MILLION ____________ HUNDRED THOUSAND and ______________ no/100 Dollars or such lesser sum as will have been advanced by Bank to Borrower under this Note, pursuant to the terms of the Credit Agreement dated as of December 1, 2006, as from time to time amended, among Borrower, the Banks identified therein, and LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as Agent (the "Credit Agreement"), plus interest, per annum, at the Effective Rate (as hereafter defined). Except as otherwise defined herein, all capitalized terms used herein shall have the meanings set forth in the Credit Agreement, all of the terms and conditions of which are herein incorporated by this reference.

 

This Note is one of the Line of Credit Notes referred to in the Credit Agreement.  Advances of principal, repayment, and re-advances may be made under the Credit Agreement and this Note from time to time as provided therein, but the Bank may refuse to make advances or re-advances during the existence of any Event of Default or Unmatured Event of Default or when the conditions precedent set forth in the Credit Agreement are not satisfied. No individual Advance will have a maturity date beyond the Line of Credit Maturity.

 

Advances under this Note shall bear interest as provided in the Credit Agreement (each, an "Effective Rate").

 

Interest and principal shall be paid on the dates and in the manner provided in the Credit Agreement. The outstanding principal balance of the Line of Credit Loan, together with accrued interest, will be due and payable in full at the Line of Credit Maturity.

 

Borrower may prepay, in whole or in part, but in an amount not less than Ten Million Dollars ($10,000,000.00) at one (1) business day's notice, without premium or penalty, any Alternate Base Rate Advances under this Note at any time. Eurodollar Advances may only be prepaid at the end of an Interest Period and in the manner provided in the Credit Agreement. If at any time during the term of this Note, the Total Outstanding Amount will exceed $200,000,000, Borrower will immediately, and in any event within two (2) Business Days, remit and pay to Agent such amounts as may be necessary to reduce the Total Outstanding Amount to $200,000,000.

 

  

1

  

All Advances will be charged to an account in Borrower's name on Agent's books, and Agent will debit to such account the amount of each Advance when made and credit to such account the amount of each repayment thereunder. Agent will render Borrower, from time to time, a statement setting forth the debit balance in the loan account, which will be deemed to be correct and accepted by Borrower, unless Agent receives a written statement of exceptions within ten (10) days after such statement has been rendered to Borrower. Such statement will be prima facie evidence of the correctness of the Advances owing to the Bank by Borrower hereunder, unless there will be manifest error evident on its face. Similarly, each Bank is hereby authorized by Borrower to record in its books and records, the date, and amount and type of each Advance and the duration of the related Interest Period (if applicable), the amount of each payment or prepayment of principal thereon, which books and records shall constitute prima facie evidence of the information so recorded, provided, however, that failure of any Bank to record, or any error in recording, any such information shall not relieve Borrower of its obligation to repay the outstanding principal amounts of the Loan, all accrued interest thereon and other amounts payable with respect thereto ill accordance with the terms of this Note and the Credit Agreement.

 

Both principal and interest are payable in immediately available United States funds to the Agent on behalf of the Bank at 800 Military Street, Port Huron, Michigan 48060, Attention: Joseph A. Vito, or at such other address as Agent may hereto specify to Borrower in writing.

 

Interest will be calculated on a daily, outstanding balance basis and will be computed for the actual number of days elapsed on the basis of a 360 day year unless otherwise required under the Credit Agreement. At no time will the interest charged hereunder be greater than the Maximum Rate. Payments received by Agent which would otherwise cause said interest rate to exceed such Maximum Rate will, to the extent of such excess, be deemed principal payments.

 

During the existence of any Event of Default, or after the Line of Credit Maturity, or after demand or acceleration of maturity, Borrower will be obligated to Bank and will pay Bank, in addition to the interest stated above, additional interest which will accrue at a default rate equal to two percent (2%) per annum of the outstanding principal balance hereof and which will be reflected in the statement of account sent to Borrower prior to each payment date.

 

If any required installment is not paid within ten (10) days after the date the same is due, upon Agent's demand Borrower will forthwith pay Bank a late charge equal to 5 cents ($.05) for each dollar of the installment so overdue. The late charge will apply individually to all payments past due, and there will be no daily pro rata adjustment.

 

Any other provision of the Credit Agreement or any other Loan Document to the contrary notwithstanding, Borrower hereby grants Bank a right to set off and apply any and all deposits general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by Bank to or for the credit or the account of Borrower, against any and all the 

 

  

2

  

obligations of Borrower, now or hereafter existing under any Loan Document. Borrower agrees to pay all of Agent's costs incurred in the collection of this Note, including reasonable attorneys' fees.

 

 

Acceptance by Bank of any payment in an amount less than the amount then due will be deemed an acceptance on account only, and Borrower's failure to pay the entire amount then due will be and continue to be an event of default. Borrower waives presentment for payment, demand, notice of non-payment, notice of protest or protest of this Note. The liability of Borrower under this Note will be absolute and unconditional, without regard to the liability of any other party.

 

Borrower expressly assumes all risk of loss or delay in the delivery of any payments by mail, and no course of conduct or dealing will affect Borrower's assumption of these risks.

 

Upon any occurrence of an Event of Default as defined in the Credit Agreement ("Event of Default"), Bank may, without further notice and without demand or presentation, declare the entire unpaid paid balance hereunder and all accrued interest, to be immediately due and payable, anything contained herein or in any document executed in connection herewith to the contrary notwithstanding.

 

Upon the occurrence of an Event of Default, neither the failure of the Bank-promptly to exercise its right to declare the outstanding principal and accrued and unpaid interest hereunder to be immediately due and payable, nor failure to exercise any other right or remedy the Bank may have upon default, nor the acceptance by the Bank of late payments, nor the failure of the Bank to demand strict performance of any obligation of Borrower or of any other person who may be liable hereunder, will constitute a waiver of any such rights in connection with any future Event of Default.

 

Bank may hold and apply at any time after an Event of Default its own indebtedness or liability to Borrower in payment of any indebtedness hereunder.

 

Borrower and all endorsers, sureties and guarantors hereof, hereby jointly and severally waive presentment for payment, notice of non payment, notice of protest or protest of this Note, diligence in collection or bringing suit, and hereby consent to any and all extensions of time, renewals, waivers, or modifications that may be granted by Bank with respect to payment or any other provisions of this Note, and to the release of any collateral or any part thereof, with or without substitution and hereby waive any and all defenses of a surety. The liability of Borrower will be absolute and unconditional, without regard to the liability of any other party hereto.

 

Borrower, and any other person who may be liable hereunder in any capacity, agrees to pay all reasonable costs of collection, including reasonable attorney's fees and expenses, in case the principal on this Note or any payment of interest hereon is not paid on the respective dates due (whether by demand, maturity, acceleration or otherwise), or in case it becomes necessary to protect any security for this Note, whether suit is brought or not.

 

  

3

  

Any default in any of the conditions, covenants, obligations or agreements contained in any of the Loan Documents or any other instruments securing and/or evidencing this indebtedness will constitute an Event of Default under this Note. Reference is hereby made to the agreement(s) and document(s) described above for additional terms and conditions relating to this Note.

 

This Note, made in the State of Michigan, will be governed and construed according to the laws of the State of Michigan.

 

 

	
WITNESS

	
MUELLER INDUSTRIES, INC.

	
_______________________________

	
_______________________________

	
By:

	  
	  	
Its:   Vice President

	
_______________________________

	  
	  	  
	  	  
	  	  
	  	  

 

  

4

  

 

Exhibit 3.3.2

B&K Industries, Inc.

Itawamba Industrial Gas Company, Inc.

Micro Gauge, Inc.

MicroGauge Machining Inc.

Mueller Brass Co.

Mueller Brass Forging Company, Inc.

Mueller Casting Company, Inc.

Mueller Copper Fittings Company, Inc.

Mueller Copper Tube Company, Inc.

Mueller Copper Tube Products, Inc.

Mueller East, Inc.

Mueller Fittings Company, Inc.

Mueller Formed Tube Company, Inc.

Mueller Impacts Company, Inc.

Mueller Industrial Realty Co.

Mueller Line Set Inc.

Mueller Plastics Corporation, Inc.

Mueller Plastics Holding Company, Inc.

Mueller Press Company, Inc.

Mueller Refrigeration Company, Inc.

Mueller Refrigeration Products Company, Inc.

Mueller Streamline Co.

Overstreet-Hughes Co., Inc.

WTC Holding Company

 

  

  

  

EXHIBIT 3.3.2

GOOD STANDING CERTIFICATES

B&K Industries, Inc.

Itawamba Industrial Gas Company, Inc.

Micro Gauge, Inc.

MicroGauge Machining, Inc.

Mueller Brass Co.

Mueller Brass Forging Company, Inc.

Mueller Casting Company, Inc.

Mueller Copper Fittings Company, Inc.

Mueller Copper Tube Company, Inc.

Mueller Copper Tube Products, Inc.

Mueller East, Inc.

Mueller Fittings Company, Inc.

Mueller Formed Tube Company, Inc.

Mueller Impacts Company, Inc.

Mueller Industrial Realty Co.

Mueller Industries, Inc.

Mueller Line Set, Inc.

Mueller Plastics Corporation, Inc.

Mueller Plastics Holding Company, Inc.

Mueller Press Company, Inc.

Mueller Refrigeration Company, Inc.

Mueller Refrigeration Products Company, Inc.

Mueller Streamline Co.

Overstreet-Hughes Co., Inc.

WTC Holding Company, Inc.

 

  

  

  

SECTION 3.3.4

CERTIFIED CHARTERS

LaSalle Bank Midwest, National Association

800 Military Street, Suite 400

Port Huron, MI 48060

Ladies and Gentlemen:

The undersigned, being the Vice President, General Counsel and Secretary of Mueller Industries, Inc. (the "Borrower"), hereby certifies on behalf of Borrower to Agent that:

1.           The charter documents of Mueller Industries, Inc. and of the subsidiaries of the Borrower listed in Exhibit A remain in full force and effect and have not been modified, amended or rescinded since December 1, 2006.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Company this 1st day of December, 2006.

____________________________________

Gary C. Wilkerson

Mueller Industries, Inc.

Vice President, General Counsel and Secretary

 

  

  

  

EXHIBITS 3.3.3 AND 3.3.5

CERTIFIED RESOLUTIONS

CERTIFICATE OF INCUMBENCY

LaSalle Bank Midwest, National Association

800 Military Street, Suite 400

Port Huron, MI  48060

 

Ladies and Gentlemen:

 

    I hereby certify that I am the Secretary of Mueller Industries, Inc., a Delaware corporation (the “Company”), and Vice President – Legal of each of the Guarantors other than WTC Holding Company, Inc.  In such capacities, I have access to the Company’s and Guarantors’ corporate records and am familiar with the matters therein contained and herein certified, and that:

    1.           Attached hereto as Annex 1 is a true and correct copy of resolutions of the Boards of Directors of the Company and of the Guarantors, which resolutions were duly adopted by said Boards of Directors and are in full force and effect on and as of the date hereof, not having been in any way amended, altered or repealed.

    2.           The following persons are duly qualified and acting officers of the Company, duly elected to the offices set forth opposite their respective names, and the signature appearing opposite the name of each such officer is his authentic signature:

	
NAME

	
OFFICE

	
SIGNATURE

	
Kent A. McKee

	
Vice President and Chief Financial Officer, Mueller Industries, Inc.

	
 

________________________

	
Gary C. Wilkerson

	
Vice President, General Counsel and Secretary

	
 

_______________________

	
Gary C. Wilkerson

	
Vice President – Legal (all Guarantors other than WTC Holding Company, Inc.

	
 

_______________________

	
James H. Rourke

	
President, WTC Holding Company, Inc.

	
 

_______________________

    IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Company this 1st day of December, 2006.

Gary C. Wilkerson, Secretary

Mueller Industries, Inc.

 

  

  

  

ASSISTANT SECRETARY CERTIFICATE

OF

MUELLER INDUSTRIES, INC.

LaSalle Bank Midwest, National Association

800 Military Street, Suite 400

Port Huron, MI  48060

 

Ladies and Gentlemen:

 

    I hereby certify that I am the Assistant Secretary of Mueller Industries, Inc., a Delaware corporation (the “Company”), and that Gary C. Wilkerson is the duly qualified and elected Vice President, General Counsel and Secretary of the Company.

    IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Company this 1st day of December, 2006.

James E. Browne, Assistant Secretary

Mueller Industries, Inc.

 

  

  

  

EXHIBIT 3.3.11

FORM OF OPINION

December 1, 2006

LaSalle Bank Midwest National Association, as Agent,

and the Banks party to the Credit Agreement described below

c/o LaSalle Bank Midwest National Association, as Agent

800 Military Street

Port Huron, MI 48060

a.           Re: Credit Agreement

Ladies and Gentlemen:

I am Vice President, General Counsel and Secretary of Mueller Industries, Inc., a Delaware corporation (the "Company") and except for WTC Holding Company, Inc., I am Vice President -Legal and Secretary of each of the Guarantors as that term is defined in the Credit Agreement dated as of December 1, 2006, between the above listed bank syndicate members and the Company (the "Credit Agreement"). I have acted as counsel for the Company and the Guarantors in connection with the various documents referred to herein. This opinion is furnished to you under the Credit Agreement and each Guaranty of the Credit Agreement, each dated as of December 1, 2006, between the Company, and the Banks (collectively the "Agreements").

Unless otherwise defined herein or unless the context requires, terms defined in the Credit Agreement shall have the same meaning herein.

I have examined the original or a copy certified or otherwise identified to my satisfaction as a true copy of each of the Loan Documents.

I have participated in the preparation of, and have assisted the Company and the Guarantors in their activities relative to the transactions contemplated by, or referred to in, the Loan Documents. I have examined such records, documents, instruments, certificates of public officials and of the Company and its Subsidiaries, made such inquiries of officials of the Company and its Subsidiaries, and considered such questions of law as I have deemed necessary for the purpose of rendering the opinions set forth herein.

In rendering this opinion I have assumed that, to the extent the enforceability of the Agreements under applicable law is affected thereby, each Bank is in compliance with all laws, rules, and regulations applicable to it, including the laws of any domicile in which it is or will be doing business, and each Bank has taken and will take all steps necessary to comply with all laws, rules, and regulations with respect to its participation in this transaction.

2.           QUALIFICATIONS

 

  

1

  

The opinions hereinafter expressed are subject to the following further qualifications and assumptions:

1.           My opinion is subject to the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws relating to or affecting the right of creditors generally, and to the discretionary nature of specific performance and other equitable remedies.

2.           My opinion is subject to limitations imposed by general principles of equity and public policy upon the specific enforceability of any of the Agreements, and upon the availability of injunctive relief or other equitable remedies, and the application of principles of equity (regardless of whether enforcement is considered in proceedings in law or in equity). Such principles of equity are of general application, and in applying such principles a court, among other things, might not allow a creditor to accelerate maturity of a debt, or to realize upon any security for the payment of such debt upon the occurrence of a default deemed immaterial, or might decline to order the Company or its Subsidiaries to perform covenants.  However, to the extent that the provisions of the Agreements may not be enforceable strictly in accordance with their terms, there are adequate remedies to permit the practical realization of the benefits intended to be conferred by the Agreements.

3.           The Banks' enforcement of the rights and remedies available to the Banks under the Agreements will not violate the Banks' implied covenant of good faith and fair dealings.

4.           I express no opinion with respect to any provision in any of the Agreements purporting to allow the collection of attorneys' fees.

5.           I express no opinion as to the validity, binding effect, or enforceability of any provision in the Agreements which: (a) provides that delays by a Bank will not operate as a waiver, (b) grants to a Bank a power of attorney to act for the Company or its Subsidiaries, (c) attempts to modify or waive any requirements of commercial reasonableness or notice, or (d) purports to grant a Bank rights of summary possession or non judicial foreclosure.

i. OPINIONS

Based upon and subject to the foregoing, I am of the opinion that:

a.           The Company and each Guarantor is a corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. The Company and each Guarantor has full corporate power and authority to conduct its business as presently conducted. The Company and each Guarantor is qualified to transact business as a foreign corporation in those states in which they are required to do so by reason of their ownership or leasing of real property located in the state or its maintaining an office in the state.

  

2

  

b.           The Company and the Guarantors have full corporate power and authority to execute and deliver, and to perform and observe the provisions of, the Agreements and the Notes executed by the Company and the Guarantors, respectively.

c.           The Agreements and the Notes have been duly authorized, executed, and delivered by the Company or a Guarantor, as the case may be, and the Agreements and the Notes constitute valid and binding obligations of the Company (with respect to the Credit Agreement and the Notes) or the appropriate Guarantor (with respect to the Agreements to which they are a party) enforceable against the Company and the Guarantors (with respect to Agreements to which they are a party) in accordance with their respective terms.

d.           No registration with, consent or approval of, notice to, or other action by, any government entity is required for the execution and delivery of the Agreements and the Notes by the Company or the Guarantors, as the case may be, or if required, such registration has been made, such consent or approval has been obtained, such notice has been given, or such other appropriate action has been taken.

e.           The execution and delivery of the Agreements and the Notes, and the performance and observance of and compliance with the provisions of them by the company and the Guarantors, do not conflict with or result in a violation of the Charter or Bylaws of the Company or any Guarantor. The execution, delivery, and performance of, and compliance with, the Agreements and the Notes by the Company and the Guarantors will not contravene any applicable law or to my knowledge any court orders, and further will not violate or result in any breach of any of the terms, conditions or provisions of, or constitute a default under or result in a creation of any lien, charge, or encumbrance on any property or assets of the Company or any Guarantor, and is not contrary to the terms of any indenture, mortgage, deed of trust, or other agreement by which the Company or any Guarantor is bound or to which the Company or any Guarantor is subject.

f.           There is no litigation, arbitration, or mediation pending before any court, arbitrator, mediator, or administrative body, or, to my knowledge, threatened against the Company or any Guarantor which might reasonably be expected to result in any material adverse change in the business, operations, properties or the business prospects or condition (financial or otherwise), of the Company and its Subsidiaries, taken as a whole, or would materially adversely affect the ability of the Company and the Guarantors to perform their respective obligations under the Agreements and the Notes, except as heretofore disclosed to the Banks in writing.

I am admitted to the practice of law only in the States of Oklahoma and Tennessee.  I do not purport to be expert in and am not rendering any opinion as to matters under or involving the laws of any jurisdiction except the federal law of the United States, the corporation law of the State of Delaware, and the laws of Oklahoma and 

 

  

3

  

Tennessee.  To the extent any of the opinions expressed herein involve the consideration of the laws of any other state, I have assumed that the laws of such state are substantially similar to the laws of Tennessee.

    The opinion is being delivered to you, is intended solely for your use (including use by you or your representatives, including counsel, and your permitted successors, assigns and participants) in connection with enforcement and administration of the Agreements, and may not be otherwise reproduced, filed publicly, or relied upon by any other person for any purpose without the express written consent of the undersigned.

Very truly yours,

Gary C. Wilkerson

Vice President, General Counsel and Secretary

Mueller Industries, Inc.

 

  

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EXHIBIT 3.5.1(b)

GUARANTY

This Guaranty ("Guaranty") is made on and as of December 1, 2006, by each of the undersigned (each a "Guarantor" and, collectively, the "Guarantors"), in favor of LASALLE BANK MIDWEST NATIONAL ASSOCIATION, a national banking association, and each of the other banking institutions and other lenders that are or may hereafter become "Banks" under the Credit Agreement, as hereafter defined and their respective successors and assigns (collectively, the "Banks"), and LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as agent ("Agent").

Recitals

A.           The Banks have established a line of credit (the "Line of Credit") in favor of Mueller Industries, Inc., a Delaware corporation ("Borrower"), which directly or indirectly holds an ownership interest in each Guarantor.

B.           The terms and conditions of the Line of Credit are set forth in the Credit Agreement dated as of December 1, 2006, among Borrower, the Banks and the Agent (as amended or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms not otherwise defined in this Guaranty have the meanings given those terms in the Credit Agreement.

C.           To further evidence the obligations of Borrower under the Credit Agreement, and particularly borrower's payment obligations to each of the Banks thereunder, Borrower has executed and/or will execute in favor of the Banks separate Line of Credit Notes (as the same have been and may hereafter be amended, restated and/or substituted, collectively, the "Notes").

D.           Under the terms of the Credit Agreement, Agent has been appointed to act as "Agent" for the Banks to, among other things, administer and enforce the provisions of the Credit Agreement and the Notes, including the Provisions regarding payment and collection of amounts owing by Borrower to the Banks thereunder.

E.            Under the Credit Agreement, each Guarantor is required to execute a guaranty agreement containing terms and conditions substantially identical to the terms and conditions of this Guaranty. Each Guarantor believes that establishment of the Line of Credit under such terms is highly desirable as the most economic means of obtaining additional working capital for Borrower and the entire corporate group of which Guarantors, Borrower and the other subsidiaries of Borrower are a part, and that by establishing such a joint credit the best terms and conditions are being made available to the corporate group.

  

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F.           Guarantor's most recent financial statements reflect that its assets exceed its liabilities.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Guarantor agrees as follows:

1.           GUARANTY.  Each Guarantor, as primary obligor and not as surety, hereby, jointly and severally with the other Guarantors, unconditionally guarantees to the Banks (a) the full and prompt payment of all sums due or to become due to the Agent and/or one or more of the Banks under or in connection with the Credit Agreement and the other Loan Documents, including without limitation, the principal on the Notes when and as the same will become due, whether at the stated maturity thereof, by acceleration or otherwise, (b) the full and prompt payment of interest on the Notes when and as the same will become due, and (c) the full and prompt payment of all amounts payable by the Borrower in connection with the issuance of letters of credit under the Credit Agreement ("Letters of Credit"), and agrees, in the event of any failure of Borrower to make such payments of principal and interest, when due, to make such payments plus all other Obligations and sums payable under the Notes, the Credit Agreement, and the other Loan Documents. All payments by Guarantor will be paid in lawful money of the United States of America in immediately available funds. Each and every default in payment of the principal of or interest on the Notes will give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises.

2.           UNCONDITIONAL OBLIGATIONS.

(a)           The obligations of Guarantor under this Guaranty will be absolute and unconditional and will remain in full force and effect until the entire principal of and interest on the Notes will have been paid, all other Obligations and amounts owing to the Banks under the Loan Documents have been paid and all Letters of Credit have expired and such Obligations will not be affected, modified or impaired upon the happening from time to time of any event, including without limitation any of the following, whether or not with notice to, or the consent of Guarantor:

(i)           the failure to give notice to Guarantor of the occurrence of an Event of Default under the terms and provisions of any of the Loan Documents;

(ii)           the waiver, compromise, settlement, release or termination of any of Borrower's obligations, covenants or agreements contained in the Loan Documents or of the payment, performance or observance thereof;

(iii)           the extension of the time for payment or amount of any principal of or interest on the Notes owing or payable on the Notes or of the time for performance of any obligations, covenants or agreements under or arising out of, any of the Loan Documents or the extension or the renewal thereof;

(iv)           the modification or amendment (whether material or otherwise) of any, obligation, covenant or agreement set forth in any of the Loan Documents;

  

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(v)           the taking or the omission of any of the actions referred to in any of the Loan Documents;

(vi)           any failure, omission, delay or lack on the part of the Agent or the Banks to enforce, assert or exercise any right, power or remedy conferred on the Agent or the Banks in this Guaranty or the other Loan Documents or any other act or acts on the part of the Agent or the Banks, if any;

(vii)           the voluntary or involuntary liquidation, dissolution, sale or other disposition (other than by way of mortgage or granting of security interest to secure borrowing of the Borrower from the Banks) of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors or readjustment or other similar proceedings affecting Guarantor, or Borrower or any of the assets of either of them, or any allegation or contest of the validity of this Guaranty or the other Loan Documents or the disaffirmance of the other Loan Documents or this Guaranty in any such proceeding;

(viii)           to the extent permitted by law, any event or action that would, in the absence of this clause, result in the release or discharge by operation of law of Guarantor from the performance or agreement contained in this Guaranty;

(ix)           the default or failure of Guarantor fully to perform any of its obligations set forth in this Guaranty;

(x)           the substitution, exchange or release of any collateral at any time securing payment of the Notes;

(xi)           the invalidity, illegality or unenforceability of the Notes or any provision of the other Loan Documents, or any other document or agreement delivered in connection with the issuance of the Notes; or

(xii)           any default or Event of Default under the Credit Agreement.

(b)           No setoff, counterclaim, reduction, or diminution of an obligation, or any defense of any kind or nature (other than performance by Guarantor of its obligations hereunder) which Guarantor or Borrower has or may have against any Bank will be available hereunder to Guarantor against any Bank. No invalidity, irregularity or unenforceability of all or any part of the obligations guaranteed hereunder or of any security therefor will affect, impair or constitute a defense to Guarantor's obligations under this Guaranty.

(c)           Each Bank will have the right to proceed first and directly against Guarantor under this Guaranty without proceeding against or exhausting any other remedies which it may have and without resorting to any other security held by the Agent or such Bank.

  

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(d)           Guarantor hereby expressly waives notice from the Banks of their respective acceptance and reliance on this Guaranty and waives presentment, demand, protest, and any other notice of any other kind with respect to this Guaranty. Guarantor also waives the Banks' promptness or diligence in collecting the indebtedness guaranteed hereunder or making any demand or claim hereunder. Guarantor agrees to pay all costs, expenses and fees, including all reasonable attorneys' fees which may be incurred by any Bank in enforcing or attempting to enforce this Guaranty or protecting the rights of a Bank hereunder following any default on the part of Guarantor hereunder, whether the same will be enforced by suit or otherwise.

(e)           This Guaranty will not be deemed to create any right in, or to be in whole or in part for the benefit of any person other than the Banks or any other bank which may purchase the interest of a Bank or a participation in the Notes from a Bank. This Guaranty is entered into by Guarantor for the benefit of each of the Banks and may be enforced jointly or severally by the Banks.

(f)           Guarantor's obligation under this Guaranty will survive the repayment of the Notes and will be reinstated if at any time any payment to any Bank is required to be restored.

(g)           Guarantor agrees that any indebtedness of Borrower to Guarantor will be fully subordinate and junior in priority in right of payment to any indebtedness of Borrower to the Banks, and Guarantor will have no right of subrogation, reimbursement or indemnity nor any right of recourse to security for the debts and obligations of Borrower to Guarantor, unless and until the entire principal of and interest on the Notes have been paid and all other amounts owing to the Banks under the other Loan Documents and all other Obligations required to be paid by Borrower to the Banks have been paid in full and all Letters of Credit have expired. If any amount shall be paid to Guarantor on account of such subrogation rights at any time when all the indebtedness of Borrower to the Banks shall not have been paid in full, such amount shall be held in trust for the benefit of the Banks and shall forthwith be paid to the Agent to be credited and applied upon such Indebtedness.

(h)           Notwithstanding any other provision of this Guaranty to the contrary, if the obligations of the Guarantor hereunder would otherwise be held or determined by a court of competent jurisdiction in any action or proceeding involving any state corporate law or any state or federal bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other law affecting the rights of creditors generally, to be void, invalid or unenforceable to any extent on account of the amount of the Guarantor's liability under this Guaranty, then notwithstanding any other provision of this Guaranty to the contrary, the amount of such liability shall, without any further action by the Guarantor or any other Person, be automatically limited and reduced to the highest amount which is valid and enforceable as determined in such action or proceeding.

(i)           The obligations of Guarantor will be absolute and unconditional irrespective of the validity, legality or enforceability of any provision of any commitment or document between Borrower and any Bank.

(j)           The obligation of Guarantor will be joint and several with anyone or more of the other parties now or hereafter guaranteeing the indebtedness guaranteed by Guarantor, and such 

 

  

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obligation of Guarantor may be enforced against each guarantor separately or against any two or more jointly, or against some separately and some jointly.

3.           REPRESENTATIONS AND WARRANTIES.  In order to induce the Banks to accept this Guaranty, each Guarantor represents and warrants to each Bank that Guarantor (a) is a legal entity duly organized, validly existing and in good standing under the laws of the State of its organization, (b) has full power, authority and legal right to own and operate its property and to conduct the business in which it is currently engaged, (c) is duly qualified and is in good standing under the laws of each Jurisdiction in which the failure to so qualify may have a material adverse affect on its business, (d) is in compliance with all Requirements of Law, except where the lack of compliance could not reasonably be expected to materially impact the future of Guarantor and the other Subsidiaries, taken as a whole, or the ability of Guarantor to observe and perform its obligations under this Guaranty, (e) Guarantor has full power and authority to execute, deliver and perform this Guaranty, (f) Guarantor has taken all necessary action to authorize the execution, delivery and performance of this Guaranty, and (g) no consent or authorization of, or filing with, any Person (including, without limitation, any Governmental Authority) is required in connection with the execution, delivery and performance by Guarantor or the validity or enforceability against Guarantor of this Guaranty.

4.           EVENTS OF DEFAULT, ACCELERATION, REMEDIES.

4.1           Events of Default.  Any Event of Default under the Credit Agreement will constitute an event of default ("Event of Default") under this Guaranty.

4.2           Remedies.  Upon the occurrence of an Event of Default, all Obligations will, at the option of the Requisite Banks, be immediately due and payable, without presentment, demand, protest, notice or other requirements of any kind, all of which are hereby expressly waived by Guarantor. Upon acceleration, Agent may proceed to protect, exercise and enforce its rights and remedies hereunder and any other rights and remedies as are provided by law or equity. Agent may determine, in its sole discretion, the order and manner in which the Bank's rights and remedies are to be exercised, and all payments received by Agent will be applied as follows: first, to all costs and expenses incurred by Agent in collecting any Obligations by reason of such Event of Default; second, to accrued interest; third, to other Obligations in such order as Agent may determine in its sole discretion; and fourth, to Guarantor or as otherwise provided by any Requirement of Law.

4.3           Right of Set-Off.  In addition to all other remedies available to the Banks, after any Event of Default, each Bank is hereby authorized at any time and from time to time, without further notice to Guarantor, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of Guarantor, against any and all the obligations of Guarantor, now or hereafter existing.

4.4           Remedies Cumulative.  No remedy herein conferred upon or reserved to the Banks is intended to be exclusive of any other available remedy or remedies, but each and every such remedy will be cumulative and will be in addition to every other remedy given under this 

 

  

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Guaranty and the other Loan Documents or now or hereafter existing at law or in equity.  No delay or omission to exercise any right or power accruing upon any default, omission or failure of performance hereunder will impair any such right or power or will be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle any Bank to exercise any remedy reserved to it in this Guaranty, it will not be necessary to give any notice, other than such notice as may be expressly required herein or in the Credit Agreement. In the event any provision contained in this Guaranty should be breached by any party and thereafter duly waived by the other party so empowered to act, such waiver will be limited to the particular breach so waived and will not be deemed to waive any other breach hereunder. No waiver, amendment, release or modification of this Guaranty will be established by conduct, custom or course of dealing, but solely by an instrument in writing duly executed by the parties to this Guaranty.

5.           MISCELLANEOUS.

5.1           Costs and Attorneys' Fees.  All fees, costs and expenses incurred by the Agent in connection with the preparation, execution, delivery, performance and administration of this Guaranty, any and all amendments, supplements and modifications thereof and the other instruments and documents to be delivered hereunder in connection with any matters contemplated by or arising out of this Guaranty, whether (a) to commence, defend any action commenced by any party other than Guarantor, or intervene in any litigation or to file a petition, complaint, answer, motion or other pleadings, (b) to take any other action in or with respect to any suit or proceedings (bankruptcy or otherwise), (c) to consult with officers of Agent or to advise Agent or (d) to enforce any rights of the Banks to collect any of the Obligations, including, without limitation, reasonable fees, costs and expenses of Agent's and the Bank's attorneys and paralegals, the allocated costs of Agent's internal counsel, together with interest thereon at the highest applicable default or overdue rate under the Credit Agreement, will be part of the Obligations, payable on demand.

5.2            Waivers, Modifications in Writing.  No failure or delay on the part of Agent or any Bank in exercising any right, power or remedy hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for under this Guaranty are cumulative and are not exclusive of any remedies that may be available to the Banks at law, in equity or otherwise. No amendment, modification, supplement, termination, consent or waiver of or to any provision of this Guaranty, nor any consent to any departure therefrom, will in any event be effective unless the same will be in writing and signed by or on behalf of the Requisite Banks and Guarantor.

5.3           Notices, etc.  All notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto will be given in accordance with the terms of the Credit Agreement.

5.4           Notice of Wrongful Act or Omission by Agent or any Bank.  No action will be commenced by Guarantor against Agent or any Bank arising out of or attributable to any act or omission of Agent or any Bank unless a notice specifically describing the act or omission will

 

  

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have been given to Agent or such Bank, as the case may be, thirty (30) days prior to such judicial action.

5.5           Headings.  Section headings used in this Guaranty are for convenience of reference only and will not constitute a part of this Guaranty for any other purpose or affect the construction of this Guaranty.

5.6           Execution in Counterparts.  This Guaranty may be executed in by different parties on separate counterparts, all of which counterparts, when so executed and delivered, will be deemed to be an original and all of which counterparts, taken together, will constitute but one and the same agreement. This Guaranty will become effective upon the execution of a counterpart hereof by each of the parties hereto.

5.7           Binding Effect; Assignment.  This Guaranty will be binding upon Guarantor and its successors and assigns. Guarantor may not assign its rights hereunder or in connection herewith or any interest herein (voluntarily, by operation of law or otherwise) without the prior written consent of the Requisite Banks.

5.8           Severability of Provisions.  Any provision of this Guaranty which is illegal, invalid, prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

5.9           Survival of Agreements; Representations, Warranties, Indemnities and Covenants.  All agreements, representations, warranties, indemnities and covenants made herein will survive the execution and delivery of this Guaranty.

5.10           Independence of Covenants.  All covenants under this Guaranty will each be given independent effect so that if a particular action or condition is not permitted by any such covenant, the fact that it would be permitted by another covenant, by an exception thereto, or be otherwise within the limitations thereof, will not avoid the occurrence of an Event of Default or Unmatured Event of Default if such action is taken or condition exists.

5.11           Construction of Guaranty.  Neither this Guaranty nor any uncertainty or ambiguity herein will be construed or resolved against any Bank, whether under any rule of construction or otherwise. On the contrary, this Guaranty has been reviewed by each of the parties and their counsel and will be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

5.12           Agent.  Where action or participation by Agent is required or permitted hereunder, Agent shall act on behalf of the Banks in the same manner and in accordance with the same terms as are set forth in Section 8 of the Credit Agreement, particularly to take or refrain from taking any action, and to exercise or refrain from the exercise of any power, as is required or permitted by the Banks to be taken under the provisions of this Guaranty, together with such other powers as are reasonably incidental thereto, subject only to the express limitations of this 

 

  

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Guaranty. In performing its function and duties under this Guaranty, Agent will act solely as an agent of Banks and assumes no obligation towards or relationship of agency or trust with Guarantor. Agent may perform any of its duties under this Guaranty by or through its agents or employees.

5.13            Complete Agreement.  This Guaranty and the other agreements referred to herein or by their terms referring hereto, is intended by the parties as a final expression of their agreement and is intended as a complete statement of the terms and conditions of their agreement.

5.14           Equitable Relief.  Guarantor recognizes that, in the event Guarantor fails to perform, observe or discharge any of its obligations under this Guaranty, any remedy at law may prove to be inadequate relief to the Banks; therefore, Guarantor agrees that the Banks will be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

5.15           Choice of Law.  The validity of this Guaranty, its construction, interpretation and enforcement and the rights of the parties hereto will be determined under, governed by and construed in accordance with the internal laws of the State of Michigan, without regard to principles of conflicts of law.

5.16           Venue; Jurisdiction.  The parties agree that all actions or proceedings arising in connection with this Guaranty will be tried and litigated only in the federal courts of  the United States of the Eastern District of Michigan. Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of such courts. Guarantor irrevocably consents to the service of process out of any such courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to Guarantor, at its address set forth for notices in the Credit Agreement, such service to become effective ten (l0) days after such mailing. Nothing herein will affect the right of any Bank to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against Guarantor in any other jurisdiction. Guarantor irrevocably waives any right it may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this Section 5.16.

5.17           Other Waivers.  Guarantor hereby waives, to the extent permitted by applicable law, in connection with a "claim and delivery" action by any Bank or Agent on any Bank's behalf pursuant to Michigan Court Rule 3.105, the right to request that a court require the Agent or any Bank to post a bond pursuant to Michigan Court Rule 3.105(E)(4)(c)(i). 

 

       5.18    Waivers Voluntary. The waivers contained in this Guaranty are freely, knowingly and voluntarily given by each party, without any duress or coercion, after each party has had opportunity to consult with its counsel and has carefully and completely read all of the terms and provisions of this Guaranty, specifically including the waivers contained in this Section 5.  Neither the Banks nor Guarantor will be deemed to have relinquished the waivers contained herein except by a writing signed by the party to be charged with having relinquished any such Waiver.

  

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5.19           Waiver of July Trial.  Banks and Guarantor acknowledge and agree that there may be a constitutional right to a jury trial in connection with any claim, dispute or lawsuit arising between them, but that such night may be waived. Accordingly, the parties agree that notwithstanding such constitutional right, in this commercial matter the parties believe and agree that it will be in their best interest to waive such right, and accordingly, hereby waive such right to jury trial, and further agree that the best forum for hearing any claim, dispute or lawsuit, if any, arising in connection with this Guaranty or the relationship between the Banks and Guarantor, will be a court of competent jurisdiction sitting without a jury.

GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS GUARANTY AND THE TRANSACTIONS CONTEMPLATED HEREBY, AND GUARANTOR ACKNOWLEDGES ANTI AGREES THAT (a) EACH OF THE WAIVERS SET FORTH HEREIN, WERE KNOWINGLY AND VOLUNTARILY MADE; (b) THE OBLIGATIONS OF THE BANKS HEREUNDER WILL BE STRICTLY CONSTRUED AND WILL BE EXPRESSLY SUBJECT TO GUARANTOR'S COMPLIANCE IN ALL RESPECTS WITH THE TERMS AND CONDITIONS HEREIN SET FORTH; AND (c) NO REPRESENTATIVE OF ANY BANK HAS WAIVED OR MODIFIED ANY OF THE PROVISIONS OF THIS GUARANTY AS OF THE DATE HEREOF AND NO SUCH WAIVER OR MODIFICATION FOLLOWING THE DATE HEREOF WILL BE EFFECTIVE UNLESS MADE IN ACCORDANCE WITH SECTION 5.2 HEREOF.

5.19           Release.  Upon the sale or liquidation of any Guarantor permitted under the Credit Agreement or otherwise expressly approved by the Requisite Banks, such Guarantor shall be automatically released from any further liability under this Guaranty, provided that no Event of Default and no event that would become an Event of Default with the passage of time and/or the giving of notice exists at the time of, or immediately after giving effect to, such sale or liquidation.

  

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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be executed and delivered as of the date first hereinabove set forth.

	  	
"GUARANTORS":

	  	  
	  	
WTC HOLDING COMPANY

	  	  
	  	
By: ________________________

	  	
James H. Rourke, President

	  	  

  

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____________________________

	  	
Gary C. Wilkerson as Vice President –Legal

	  	
for each of the following Guarantors:

	  	  
	  	
B&K Industries, Inc.

	  	
Itawamba Industrial Gas Company, Inc.

	  	
Micro Gauge, Inc.

	  	
MicroGauge Machining, Inc.

	  	
Mueller Brass Co.

	  	
Mueller Brass Forging Company, Inc.

	  	
Mueller Casting Company, Inc.

	  	
Mueller Copper Fittings Company, Inc.

	  	
Mueller Copper Tube Company, Inc.

	  	
Mueller Copper Tube Products, Inc.

	  	
Mueller East, Inc.

	  	
Mueller Fittings Company, Inc.

	  	
Mueller Formed Tube Company, Inc.

	  	
Mueller Impacts Company, Inc.

	  	
Mueller Industrial Realty Co.

	  	
Mueller Line Set, Inc.

	  	
Mueller Plastics Corporation, Inc.

	  	
Mueller Plastics Holding Company, Inc.

	  	
Mueller Press Company, Inc.

	  	
Mueller Refrigeration Company, Inc.

	  	
Mueller Refrigeration Products Company, Inc.

	  	
Mueller Streamline Co.

	  	
Overstreet-Hughes Co., Inc.

	  	
WTC Holding Company

	  	  

  

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Accepted:

	  	  
	  	
"AGENT"

	  	  
	  	
LASALLE BANK MIDWEST NATIONAL ASSOCIATION, As Agent on behalf of all of the Banks

	  	  
	  	
By:___________________________________

	  	  
	  	
Its:___________________________________

	  	  
	  	  
	  	  

  

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EXHIBIT 5.3.4

Compliance Certificate Pursuant

to Section 5.3.4 of Amended and Restated Credit Agreement

dated as of December I, 2006 ("Credit Agreement")

LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as Agent

800 Military Street

Port Huron, Michigan 48060

Attention: Joseph A. Vito

The undersigned, being the Chief Financial Officer of Mueller Industries, Inc. (the "Borrower"), hereby certifies on behalf of Borrower to Agent that:

(1)           The representations and warranties contained in Section 4 of the Credit Agreement and, to the best of its knowledge after due inquiry, each other Loan Document (as defined in the Credit Agreement) are true and correct in all material respects as of this date.

(2)           No event of default and no event which might become such an event of default after the lapse of time or the giving of notice and the lapse of time under the Credit Agreement and, to the best of its knowledge after due inquiry, under the other Loan Documents, has occurred and is continuing.

(3)           Borrower is in compliance with all of the terms and conditions of the Credit Agreement, as of the date hereof.

(4)           Except as set forth on Schedule IA to this Certificate, there has been no change that, taken as a whole, has a materially adverse effect on the business, operations, properties or condition (financial or otherwise) of Borrower or any Subsidiary', since the date of the last financial statements of Borrower delivered to Agent.

(5)           Attached hereto is a complete and accurate calculation for each of the financial covenants set forth in the Credit Agreement.

_______________________________

(Title)

 

  

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EXHIBIT 6.3

FUNDAMENTAL SUBSIDIARIES

Mueller Brass Co.

Mueller Casting Company, Inc.

Mueller Copper Fittings Company, Inc.

Mueller Copper Tube Company, Inc.

Mueller Copper Tube Products, Inc.

Mueller Fittings Company, Inc.

Mueller Industrial Realty Co.

Mueller Plastics Corporation, Inc.

Mueller Refrigeration Company, Inc.

 

  

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EXHIBIT 8.2.3

WIRING INSTRUCTIONS

As provided to the Agent in writing by each Bank

 

  

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EXHIBIT 8.13.1

ASSIGNMENT AGREEMENT

This Assignment Agreement (this "Assignment Agreement") between ____________________ (the "Assignor") and _____________________ (the "Assignee") is dated as of , 200_. The parties hereto agree as follows:

1.           PRELIMINARY STATEMENT.  The Assignor is a party to a Credit Agreement (which, as it may be amended, modified, renewed or extended from time to time is herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").   Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Credit Agreement.

2.           ASSIGNMENT AND ASSUMPTION.  The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor's rights and obligations under the Credit Agreement and the other Loan Documents, such that after giving effect to such assignment the Assignee shall have purchased pursuant to this Assignment Agreement the percentage interest specified in Item 3 of Schedule 1 of the Aggregate Commitment Amount and all outstanding rights and obligations under the Credit Agreement and the other Loan Documents relating to the facilities listed in Item 3 of Schedule 1. The aggregate Commitment (or Loans, if the applicable Commitment has been terminated) purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1.

3.           EFFECTIVE DATE.  The effective date of this Assignment Agreement (the "Effective Date") shall be the later of the date specified in Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by the Agent) after this Assignment Agreement, together with any consents required under the Credit Agreement, are delivered to the Agent. In no event will the Effective Date occur If the payments required to be made by the Assignee to the Assignor on the Effective Date are not made on the proposed Effective Date.

4.           PAYMENT OBLIGATIONS.  In consideration for the sale and assignment of Loans hereunder, the Assignee shall pay the Assignor, on the Effective Date, the amount agreed to by the Assignor and the Assignee. On and after the Effective Date, the Assignee shall be entitled to receive from the Agent all payments of principal, interest and fees with respect to the interest assigned hereby. The Assignee will promptly remit to the Assignor any interest on Loans and fees received from the Agent which relate to the portion of the Commitment or Loans assigned to the Assignee hereunder for periods prior to the Effective Date and not previously paid by the Assignee to the Assignor. In the event that either party hereto receives any payment to which the other party hereto is entitled under this Assignment Agreement, then the party receiving such amount shall promptly remit it to the other party hereto.

5.           RECORDATION FEE.  The Assignor and Assignee each agree to pay one-half of the recordation fee required to be paid to the Agent in connection with this Assignment Agreement unless otherwise specified in Item 6 of Schedule 1.

  

1

  

6.           REPRESENTATIONS OF THE ASSIGNOR, LIMITATIONS ON THE ASSIGNOR'S LIABILITY.  The Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder, (ii) such interest is free and clear of any adverse claim created by the Assignor and (iii) the execution and delivery of this Assignment Agreement by the Assignor is duly authorized. It is understood and agreed that the assignment and assumption hereunder are made without recourse to the Assignor and that the Assignor makes no other representation or warranty of any kind to the Assignee. Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i) the due execution, legality, validity, enforceability, genuineness, sufficiency or collectability of any Loan Document, including without limitation, documents granting the Assignor and the other Lenders a security interest in assets of the Borrower or any guarantor, (ii) any representation, warranty or statement made in or in connection with any of the Loan Documents, (iii) the financial condition or creditworthiness of the Borrower or any guarantor, (iv) the performance of or compliance with any of the terms or provisions of any of the Loan Documents, (v) inspecting any of the property, books or records of the Borrower, (vi) the validity, enforceability, perfection, priority, condition, value or sufficiency of any collateral securing or purporting to secure the Loans or (vii) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Loans or the Loan Documents.

7.           REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE.  The Assignee confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements requested by the Assignee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement, (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information at it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, (iii) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) confirms that the execution and delivery of this Assignment Agreement by the Assignee is duly authorized, (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender, (vi) agrees that its payment instructions and notice instructions are as set forth in the attachment to Schedule 1, (vii) confirms that none of the funds, monies, assets or other consideration being used to make the purchase and assumption hereunder are "plan assets" as defined under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be "plan assets" under ERISA, (viii) agrees to indemnify and hold the Assignor harmless against all losses, costs and expenses (including, without limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the Assignee's nonperformance of the obligations assumed under this Assignment Agreement, and (ix) if applicable, attaches the forms prescribed by the Internal Revenue Service of the United States certifying that the Assignee is entitled to receive payments under the Loan Documents without deduction or withholding of any United States federal income taxes.

  

2

  

8.      GOVERNING LAW. This Assignment Agreement shall be governed by the  internal law, and not the law of conflicts, of the State of Michigan.

9.     NOTICES.  Notices shall be given under this Assignment Agreement in the manner set forth in the Credit Agreement. For the purpose hereof, the addresses of the parties hereto (until notice of a change is delivered) shall be the address set forth in the attachment to Schedule 1.

10.           COUNTERPARTS; DELIVERY BY FACSIMILE.  This Assignment Agreement may be executed in counterparts. Transmission by facsimile of an executed counterpart of this Assignment Agreement shall be deemed to constitute due and sufficient delivery of such counterpart and such facsimile shall be deemed to be an original counterpart of this Assignment Agreement.

 

IN WITNESS WHEREOF, the duly authorized officers of the parties hereto

have executed this Assignment Agreement by executing Schedule I hereto as of the date first above written.

 

  

3

  

SCHEDULE 1

to Assignment Agreement

1.           Description and Date of Credit Agreement: Credit Agreement dated as of December 1, 2006 among each of the lenders party thereto, LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as agent and Mueller Industries, Inc., a Delaware corporation, as Borrower

2.           Date of Assignment Agreement:                                                                ___________, 200_

3.           Amounts (As of Date of Item 2 above):

a.           Assignee's percentage of

Aggregate Commitment Amount purchased

under the Assignment

Agreement*                                                                ______________%

b.           Amount of Assignor's Commitment

purchased under the Assignment

Agreement                                                                $_______________

4.           Assignee's Commitment

Commitment (or Advances of the Commitment has been terminated)

purchased hereunder:                                                                           $_______________

5.           Proposed Effective Date:                                                                ________________

6.           Non-standard Recordation Fee

Arrangement                                                                           N/A**

[Assignor/Assignee

to pay 100% of fee]

	
Accepted and Agreed:

	  
	  	  
	
[NAME OF ASSIGNOR]

	
[NAME OF ASSIGNEE]

	  	  
	
By:___________________________

	
By:___________________________

	
Title:__________________________

	
Title:__________________________

	  	  

  

4

  

	
ACCEPTED AND CONSENTED TO BY

	  
	
MUELLER INDUSTRIES, INC.***

	  
	  	  
	
By: _________________________

	  
	
Title: ________________________

	  
	  	  
	
ACCEPTED AND CONSENTED TO BY

	  
	
LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as Agent ***

	  
	  	  
	
By: _________________________

	  
	
Title: ________________________

	  
	  	  
	
* Percentage taken to 10 decimal places

	  
	
** If fee is split 50-50, pick N/A as option

	  
	
*** Delete if not required by Credit Agreement

	  
	  	  

  

5

  

SCHEDULE 1.1(a)

PERMITTED LIENS

Liens created by funding custodial accounts under IRB financing by Restricted Subsidiaries. (In Mueller's outstanding Mississippi IRB financing, Subsidiaries have the right to cure defaults or events of default under such IRB financing by depositing case or government obligations into a custodial account sufficient to pay off the outstanding principal and interest on the bonds. This feature was designed to ensure that Mueller could keep the debt outstanding and realize the underlying tax benefits inherent in such financing.)

Liens granted by Subsidiaries in favor of their direct parent company in connection with inter-company loans.

Liens created by Non-U.S. Subsidiaries in the ordinary course of business consistent with past practice and which do not secure any Indebtedness.

 

  

  

  

SCHEDULE 1.1(B)

SUBSIDIARIES

See attached

 

  

  

  

Schedule 1.1(b)  MUELLER INDUSTRIES, INC.  Draft 10/24/2006

Subsidiary list

	  	  	  	  	  	  	  	  	  	  	  
	
Subsidiary*

	
State or Country of Domestication

	
Arava National Resources Company, Inc.

	  	  	  	  	  	
Delaware

	  	
Amwest Exploration Company

	  	  	  	  	  	
Delaware

	  	  	
Arava Exploration Company

	  	  	  	  	
Colorado

	  	  	
Kennet Ltd.

	  	  	  	  	  	  	
Bermuda

	  	  	
Richmond-Eureka Mining Company (1)

	  	  	  	
Maine

	  	  	  	
Ruby Hill Mining Company (2)

	  	  	  	
Nevada

	  	  	
Summit Systems, Inc.

	  	  	  	  	  	
Delaware

	  	  	
USSRAM Exploration Company

	  	  	  	  	
Maine

	  	  	
White Knob Mining Company

	  	  	  	  	
Idaho

	  	
Bayard Mining Corp.

	  	  	  	  	  	  	
Delaware

	  	
Canco Oil & Gas Ltd.

	  	  	  	  	  	  	
Canada

	  	  	
Aegis Oil & Gas Leasing Ltd.

	  	  	  	  	
Canada

	  	
Mining Remedial Recovery Co.

	  	  	  	  	  	
Delaware

	  	  	
Carpentertown Coal & Coke Company

	  	  	  	
Pennsylvania

	  	  	
Leon Water Enterprises, Inc. (3)

	  	  	  	  	
Texas

	  	  	
U.S.S. Lead Refinery, Inc.

	  	  	  	  	  	
Maine

	  	
United States Fuel Company

	  	  	  	  	  	
Nevada

	  	  	
King Coal Company

	  	  	  	  	  	
Utah

	  	
Washington Mining Company

	  	  	  	  	  	
Maine

	
B&K Industries, Inc.

	  	  	  	  	  	  	  	
Illinois

	
DENO Holding Company, Inc.

	  	  	  	  	  	  	
Michigan

	  	
DENO Acquisition EURL

	  	  	  	  	  	  	
France

	  	
Mueller Europe, S.A. (4)

	  	  	  	  	  	  	
France

	
DENO Investment Company, Inc.

	  	  	  	  	  	  	
Michigan

	  	
Mueller de Mexico, S.A. de C.V. (5)

	  	  	  	  	
Mexico

	
DENO Investment Company II, Inc.

	  	  	  	  	  	
Michigan

	
Macomber, Incorporated

	  	  	  	  	  	  	  	
Ohio

	
Macomber Building and Land Corporation

	  	  	  	  	  	
Delaware

	
Macomber Construction Company

	  	  	  	  	  	
Ohio

	
MII Financial Corporation

	  	  	  	  	  	  	  	
Michigan

	  	
Mueller Streamline II, LLC

	  	  	  	  	  	
Delaware

	  	  	
Changzhou Mueller Refrigeration Products Co., Ltd. (6)

	  	
China

	  	
Mueller Streamline China, LLC [d/b/a Mueller Delaware]

	  	  	  	
Delaware

	  	  	
JiangSu Mueller-Xingrong Copper Industries, Ltd. (7)

	  	
China

	  	
Mueller Streamline Holding, S.L.U.

	  	  	  	  	  	
Spain

	  	  	
WTC Hold Co I, LLC

	  	  	  	  	  	
Delaware

	  	  	  	
Mueller Comercial de Mexico S. de R.L. de C.V. (8)

	  	  	
Mexico

	  	  	  	  	
NICNA Mexico S. de R.L. de C.V. (9)

	  	
Mexico

	  	  	  	  	
NICNA Mexico Comercial S. de R.L. de C.V. (9)

	  	
Mexico

	  	  	  	  	
NICNA Mexico Maquinaria S. de R.L. de C.V. (9)

	  	
Mexico

	  	  	  	  	
NICNA Mexico Proyvectos S. de R.L. de C.V. (9)

	  	
Mexico

	  	  	  	  	
NICNA Mexico Servicios S. de R.L. de C.V. (9)

	  	
Mexico

 

  

  

  

Schedule 1.1(b)  MUELLER INDUSTRIES, INC.  Draft 10/24/2006

Subsidiary list

	  	  	  	  	  	  	  	  	  	  	  
	
Subsidiary*

	
State or Country of Domestication

	  	  	
WTC HoldCo II, LLC

	  	  	  	  	
Delaware

	  	
Mueller Streamline Trading, LLC

	  	  	  	  	  	
Delaware

	
Mueller Brass Co. [d/b/a Mueller Brass Products]

	  	  	  	  	  	
Michigan

	  	
Itawamba Industrial Gas Company, Inc.

	  	  	  	  	  	
Mississippi

	  	
Micro Gauge, Inc.

	  	  	  	  	  	  	
Michigan

	  	
Microgauge Machining, Inc.

	  	  	  	  	  	
Michigan

	  	
Mueller Brass Forging Company, Inc.

	  	  	  	  	  	
Delaware

	  	
Mueller Casting Company, Inc.

	  	  	  	  	  	
Delaware

	  	
Mueller Copper Fittings Company, Inc.

	  	  	  	  	  	
Delaware

	  	  	
Mueller Fittings Company, Inc.

	  	  	  	  	
Michigan

	  	
Mueller Copper Tube Company, Inc.

	  	  	  	  	  	
Delaware

	  	
Mueller East, Inc.

	  	  	  	  	  	
Delaware

	  	
Mueller Formed Tube, Inc.

	  	  	  	  	  	
Delaware

	  	
Mueller Impacts Company, Inc.

	  	  	  	  	  	
Delaware

	  	
Mueller Industrial Realty Co.

	  	  	  	  	  	
Michigan

	  	
Mueller Line Set, Inc.

	  	  	  	  	  	  	
Delaware

	  	
Mueller Plastics Holding Company, Inc.

	  	  	  	  	  	
Ohio

	  	  	
MPC Foundry, Inc.

	  	  	  	  	
Delaware

	  	  	
MPC Machine Shop, Inc.

	  	  	  	  	
Delaware

	  	  	
Mueller Plastics Corporation, Inc.

	  	  	  	  	
Delaware

	  	
Mueller Press Company, Inc.

	  	  	  	  	  	
Mississippi

	  	
Mueller Refrigeration Holding Co., Inc.

	  	  	  	  	
Delaware

	  	
Mueller Refrigeration Products Company, Inc.

	  	  	  	  	
Delaware

	  	  	
Mueller Refrigeration Company, Inc.

	  	  	  	  	
Michigan

	  	  	  	
Mueller LBHC, Inc.

	  	  	
Delaware

	  	  	  	  	
Lincoln Brass Works, Inc. [d/b/a Mueller Gas Products]

	
Michigan

	  	  	  	  	  	
Overstreet-Hughes Co., Inc.

	  	  	
Tennessee

	  	
Mueller Streamline Co.

	  	  	  	  	  	  	  	
Delaware

	  	  	
Precision Tube Company, Inc.

	  	  	  	  	
Pennsylvania

	  	  	
Southland Pipe Nipples Company, Inc.

	  	  	  	
Texas

	  	
Mueller Tool and Machine, Inc.

	  	  	  	  	  	
Delaware

	  	
Propipe Technologies, Inc. [d/b/a Mueller Gas Products]

	  	
Ohio

	  	
Streamline Copper & Brass, Ltd.

	  	  	  	  	  	
Canada

	
Mueller Copper Tube Products, Inc.

	  	  	  	  	
Delaware

	
WTC Holding Company

	  	  	  	  	  	  	  	
Michigan

	  	
Mueller Europe Limited

	  	  	  	  	  	  	
United Kingdom

	  	  	
KX Company Limited

	  	  	  	  	  	
United Kingdom

	  	  	  	
Brassware Sales Limited

	  	  	  	  	
United Kingdom

	  	  	  	
Instox Limited

	  	  	  	  	
United Kingdom

	  	  	
Vemco Brasscapri, Ltd.

	  	  	  	  	  	
United Kingdom

	  	  	  	
Brasscapri, Ltd.

	  	  	  	  	
United Kingdom

	  	  	  	
Primaflow Limited

	  	  	  	  	
United Kingdom

 

  

  

  

Schedule 1.1(b)  MUELLER INDUSTRIES, INC.  Draft 10/24/2006

Subsidiary list

	  	  	  	  	  	  	  	  	  	  	  
	
* All subsidiaries are owned 100% except as footnoted.

	
(1) 80.89% owned by Amwest Exploration Company; non-affiliated individuals (third parties) hold 19.11%.

	
(2) 75% owned by Richmond-Eureka Mining Company and 25% owned by Silver Eureka Corp., a nonaffiliated entity.

	
(3) 50% owned by Mining Remedial Recovery Co. and ________________

	
(4) On March 3, 2003, Mueller Europe S.A. (formerly Desnoyers) filed a petition for liquidation with the

	
Commercial Court of Provins Province, France, and, on March 4, the Court declared the entity to be in

	
liquidation.  Less than 1% of the outstanding common stock of Mueller Europe S.A. is owned by non-affiliated

	
individuals (third parties).

	
(5) 99.9% owned by DENO Investment Company, Inc. and .1% owned by Mueller Streamline Co.

	
(6) 95% owned by Mueller Streamline II, LLC and 5% owned by Mueller Streamline Holding, S.L.U.

	
(7) 45.5% owned by Mueller Streamline China, LLC and 5% owned by Mueller Streamline Holding, S.L.U.

	
Two nonaffiliated joint venture partners, Jiangsu Xingrong Hi-Tech Co., Ltd. and Jiangsu Baiyang Industries, Ltd.,

	
own 29.93% and 19.57%, respectively.

	
(8) 51.7% owned by Mueller Streamline Holding, S.L.U. and 48.3% owned by WTC HoldCo I, LLC.

	
(9) Less than 1% of the outstanding common stock is owned by WTC HoldCo I, LLC

	  

  

  

  

 

SCHEDULE 3.3.9

INSURANCE POLICIES

Dated as of November 27, 2006

Aviation Hull & Liability:

Carrier:  USAIG

Policy Term:  04/01/06 – 04/01/07

$12,490,000 physical damage; $150 million each occurrence liability for company plane.  No deductible.

Aviation Products Liability

Carrier:  USAIG

Policy Term:  04/01/06 – 04/01/07

$100 million per occurrence/aggregate coverage for products and completed operations; $100 million per occurrence/aggregate coverage for grounding; $100 million per occurrence/aggregate for spacecraft; $100 million per occurrence/aggregate for launch vehicle.  $50 million per occurrence/aggregate for war, hi-jacking and other perils limited write-back endorsement.  No deductible.

Boat

Carrier:  Federal Insurance Company

Policy Term:  02/15/06 - 02/15/07

$2 million liability and $1,490,000 physical damage on company boat.

Business Auto Liability

Carrier:  Zurich Insurance Company

Policy Term:  04/01/06 - 04/01/07

Liability coverage of $1 million combined single limit with $250,000 deductible for scheduled vehicles.  Vehicles are self-insured for physical damage.

Business Automobile - UK

Carrier:  Allianz Cornhill

Policy Term:  04/01/06 - 04/01/07

  

  

  

Comprehensive cover for any motor vehicle owned, hired, leased or borrowed with unlimited limits of indemnity for passenger/manslaughter defense; third-party property damage limits: ≤20,000,000 private cars, ≤5,000,000 all other vehicles.  Unlimited limits for death or bodily injury.

Commercial Crime - Primary

Carrier:  AIG

Policy Term:  12/21/06 – 12/21/07

Policy limits of $5 million subject to a deductible of $100,000 per occurrence.

Excess Commercial Crime – 2nd Layer

Carrier:  Zurich Insurance Company

Policy Term:  12/21/06 – 12/21/07

Limits of $5 million excess of $5 million underlying.

 

Directors and Officers Liability – Primary

Carrier:  National Union Fire Insurance Company

Policy Term:  12/21/06 – 12/21/07

Limits of $10 million aggregate for all loss with $1,000,000 deductible.

Excess Directors and Officers Liability – 2nd Layer

Carrier:  Continental Casualty Company

Policy Term:  12/21/06 – 12/21/07

$10 million excess of $10 million underlying.

Excess Directors and Officers Liability – 3rd Layer

 

Carrier:  Federal Insurance Company (Chubb)

Policy Term: 12/21/06 – 12/21/07

$10 million excess of $20 million underlying.

  

  

  

Excess Directors and Officers Liability – 4th Layer

 

Carrier:  Twin City Fire Insurance Company

Policy Term: 12/21/06 – 12/21/07

$10 million excess of $30 million underlying.

Excess Directors and Officers Liability – 5th Layer

 

Carrier:  US Specialty Insurance Company

Policy Term: 12/21/06 – 12/21/07

$10 million excess of $40 million underlying.

Side A Directors & Officers with Difference in Conditions (DIC)

Carrier:  Federal Insurance Company

Polity Term:  12/21/06 – 12/21/07

$10 million excess $50 million non-rescindable excess Side A with DIC feature.

Employer’s Liability – UK

Carrier:  Zurich Insurance Company

Policy Term:  04/01/06 – 04/01/07

£10 million any one occurrence; no deductible.

Employment Practices Liability – Primary

Carrier:  National Union Fire Insurance Co.

Policy Term:  04/01/06 - 04/01/07

$10 million limits of coverage with $1,000,000 deductible.

Employment Practices Liability – Excess

Carrier: Twin City Fire Insurance co.

Policy Term:  04/01/06 - 04/01/07

$5 million limits excess of $10 million underlying.

Fiduciary Liability

Carrier:  Federal Insurance Company (Chubb)

Policy Term:  12/21/06 – 12/21/07

$10 million limits of coverage with $50,000 deductible.

Foreign Excess /DIC Liability (Master)

Carrier:  Zurich Insurance Company

Policy Term:  04/01/06 - 04/01/07

$1 million per occurrence; $5 million general aggregate; $1 million 

 

  

  

  

products/completed operations aggregate General Liability; $1 million each employee/aggregate Employee Benefits (claims-made); $1 million each accident Automobile Liability; $1 million bodily injury each accident/$1 million bodily injury policy limit/$1million bodily injury each employee Employer’s Liability; $50,000 per occurrence deductible.

Foreign General Liability (Local - UK)

Carrier:  Zurich Insurance Company

Policy Term:  04/01/06 - 04/01/07

$1 million each occurrence/aggregate, subject to $50,000 per occurrence deductible.

Foreign General Liability (Local - Mexico)

Carrier:  Zurich Insurance Company

Policy Term:  04/01/06 - 04/01/07

$1 million each occurrence/aggregate, subject to $50,000 per occurrence deductible.

General Liability

Carrier:  Zurich Insurance Company

Policy Term: 04/01/06 - 04/01/07

Limits of $750,000 per occurrence/$5,000,000 general aggregate; $2 million products/completed operations aggregate, subject to $250,000 self-insured retention per occurrence.

General Liability – Canada

Carrier:  Zurich Insurance Company

Policy Term: 04/01/06 - 04/01/07

$750,000 per occurrence/$5 million general aggregate/$2 million products/completed operations aggregate subject to $250,000 deductible per occurrence.

Ocean Cargo

Carrier:  Fireman's Fund Insurance Company

Policy Term:  Continuous until cancelled

Coverage on imported/exported goods with $1 million limits; $5,000 deductible per occurrence.

  

  

  

Property

Carrier:  FM Global

Policy Term:  06/30/06 – 06/30/07

Blanket coverage on Real and Personal Property and Business Interruption, subject to $250,000 deductible, except $500,000 for Fulton, MS Tube; Wynne, AR Tube; Bilston, UK; and Port Huron, MI.

Property (Flood)

Carrier:  Fidelity National Property and Casualty (Federal Flood Program)

Policy Term:  08/01/06 – 08/01/07

$500,000 building/contents per building Flood coverage for Wynne, AR; $5,000 deductible.

Property – Mexico

Carrier:  Zurich

Policy Term:  12/15/05 – 12/15/06

All risk including fire, earthquake, flood, business interruption, premises liability and theft.  Deductibe 2% over value of the damaged structure and contents.

Ocean and Land Transit – Mexico

Carrier:  Zurich

Policy Term:  12/15/05 – 12/15/06

Policy limits of $150,000 and coverage for 4 to 5 shipments up to $2,000,000 (shipments must be reported to carrier).  Deductible:  25% over the total shipment value for total and partial theft; 5% over the total shipment value for other risks.

Special Coverage

Carrier: The Federal Insurance Company (Chubb)

Policy Term:  06/07/07 – 06/07/07

$5 million Kidnap/Ransom & Extortion Coverage; $5 million Delivery Coverage;  $5 million Expense Coverage; $5 million Legal Liability Coverage; $5 million Political Threat Coverage; no deductible.

  

  

  

Umbrella/Excess Liability – Primary

Carrier:  St. Paul Surplus

Policy Term:  04/01/06 - 04/01/07

$25 million per occurrence/aggregate limit of liability, excess of the following coverages:  general liability, foreign liability, employers’ liability, railroad liability, automobile liability, employment practices liability.  Aviation products liability is excluded.

Excess Liability (2nd layer)

Carrier:  Great American Assurance Co.

Policy Term:  04/01/06 - 04/01/07

$25 million excess of $25 million underlying.

Excess Liability (3rd layer)

Carrier:  Liberty Insurance Underwriters

Policy Term:  04/01/06 - 04/01/07

$50 million excess of $50 million underlying.

Workers' Compensation & Employer's Liability

Carrier:  Zurich Insurance Company

Policy Term:  04/01/06 - 04/01/07

Statutory benefits with $1,000,000 employers’ liability coverage subject to $500,000 retention each accident.  All operations are covered for workers’ compensation under this policy except Ohio.

Workers' Compensation - Ohio Excess

Carrier:  Zurich Insurance Company

Policy Term:  04/01/06 - 04/01/07

Statutory benefits.  $750,000 excess of $250,000 self-insured retention.  Propipe Technologies excluded.

 

  

  

  

SCHEDULE 3.6

EXISTING LETTERS OF CREDIT

 

	 	Reference No.	 Beneficiary	 Expires	Amount	 
	 	 	 	 	 	 
	 	 LC 450475	 Zurich American	 04/01/2007	 $423,000	 
	 	 	 	 	 	 
	 	 LC450482	 UMWA	 01/04/2008	 $1,994,661	 
	 	 	 	 	 	 
	 	 LC450488	 Employers Reinsurance Corp.	 09/17/2007	 $250,000	 
	 	 	 	 	 	 
	 	 LC450502	 Travelers Indemnity	 03/31/2007	 $7,904,562	 
	 	 	 	 	 	 
	 	 LC452645 	 Washington Intl. Insurance	 12/31/2007	 $260,000	 

  

  

  

EXHIBIT 4.5

LEGAL PROCEEDINGS

The Borrower (“Company”) is involved in certain litigation as a result of claims that arose in the ordinary course of business, which management believes will not have a material adverse effect on the Company’s financial position or results of operations.  Additionally, the Company may realize the benefit of legal claims and litigation in the future; these gain contingencies are not recognized in the Condensed Consolidated Financial Statements.

Copper Tube Antitrust Litigation

Beginning in September 2004, the Company has been named as a defendant in several purported class action complaints brought by direct and indirect purchasers alleging anticompetitive activities with respect to the sale of copper tubes in the United States (the Copper Tube Actions).  Two such purported class actions were filed in the United States District Court for the Western District of Tennessee (the Federal Actions).  One such action has been dismissed.  The remaining Copper Tube Actions were filed in state courts in Tennessee, California and Massachusetts.

Certain of the Copper Tube Actions purport to address the sale of copper plumbing tube in particular.  Plaintiffs’ motions to consolidate the Federal Actions and the actions pending in California state court, respectively, have been granted.  All of the Copper Tube Actions, which are similar, seek monetary and other relief.

Wholly owned Company subsidiaries, WTC Holding Company, Inc., Deno Holding Company, Inc., and Mueller Europe Ltd. (Mueller Europe), are named in all of the Copper Tube Actions, and Deno Acquisition Eurl is named in two of the Copper Tube Actions.  The claims against WTC Holding Company, Inc. and Deno Holding Company Inc. have been dismissed without prejudice in the Copper Tube Actions pending in California and Massachusetts state courts.

In September 2006, the Federal Actions were dismissed as to Mueller Europe for lack of personal jurisdiction.  Plaintiffs have filed a motion for reconsideration of the dismissal of Mueller Europe.  In October 2006, the Federal Actions were dismissed in their entirety for lack of subject matter jurisdiction as to all defendants.  The time to file a notice of appeal from the dismissal for lack of subject matter jurisdiction has not yet expired.

The Company’s demurrer to the complaint and the Company’s motion to dismiss for failure to state a claim are pending in the state court actions filed in California and Tennessee, respectively.  The Company has not yet been required to respond to the complaint in the action pending in Massachusetts state court.  Mueller Europe has not yet been required to respond to the complaints in any of the state court actions pending in Tennessee, California or Massachusetts.

  

  

  

The Company believes that the claims for relief in the Copper Tube Actions are without merit and intends to defend the Copper Tube Actions vigorously.

In March 2006, the Company and Mueller Europe were named in a complaint brought by Carrier Corporation, Carrier S.A., and Carrier Italia S.p.A. alleging anticompetitive activities with respect to the sale of copper tubes used in the manufacturing of air-conditioning and refrigeration units (ACR copper tubes) in the United States and elsewhere (the Carrier Action).  The Carrier Action was filed in United States District Court for the Western District of Tennessee.

In addition, beginning in April 2006, the Company has been named as a defendant in several purported class action lawsuits brought by direct and indirect purchasers alleging anticompetitive activities with respect to the sale of ACR copper tubes in the United States and elsewhere (the ACR Class Actions, and with the Carrier Action, the ACR Actions). Two of the ACR Class Actions were filed in the United States District Court for the Northern District of California.  Five of the ACR Class Actions (two of which have been consolidated to become the “Indirect ACR Class Actions” and three of which have been consolidated to become the “Direct ACR Class Actions”) were filed in the United States District Court for the Western District of Tennessee.

Mueller Europe and the Company are named in all of the ACR Actions.  WTC Holding Company, Inc., Deno Holding Company, Inc., and Deno Acquisition Eurl are named in one of the ACR Class Actions filed in the United States District Court for the Northern District of California.  Motions to dismiss by the Company and by Mueller Europe are pending in the Carrier Action and in the Direct ACR Class Actions.  No defendant has yet been served with the consolidated complaint in the Indirect ACR Class Actions.  The Company, Mueller Europe, WTC Holding Company, Inc., and Deno Holding Company, Inc. have been served, but not yet required to respond, in one of the ACR Class Actions filed in the United States District Court for the Northern District of California.  The Company, but not Mueller Europe, has been served in the second of the ACR Class Actions filed in the United States District Court for the Northern District of California, but has not yet been required to respond.

The Company believes that the claims for relief in the ACR Actions are without merit and intends to defend the ACR Actions vigorously.

Copper Price Manipulation Litigation

Two of the Company’s subsidiaries, Mueller Copper Tube Products Inc. and Mueller Copper Tube Company Inc., brought a lawsuit (the Price Manipulation Action) against J.P. Morgan Chase & Co. and Morgan Guaranty Trust Company of New York (collectively Morgan) to recover damages the Company believes it suffered on first purchases of copper cathode resulting from an alleged conspiracy to manipulate the price of copper cathode by Morgan (and certain of its predecessors and affiliates) and others in violation of the federal antitrust laws. The lawsuit was filed on June 12, 2003, in the U.S. District Court for the Western 

 

  

  

  

District of Wisconsin.  The Company’s lawsuit was consolidated with those of certain other first purchasers of copper cathode and rod under the name In re Copper Antitrust Litigation.  Although the Price Manipulation Action was dismissed by the district court on March 2, 2004, as barred by the statute of limitations, the U.S. Court of Appeals for the Seventh Circuit, on February 6, 2006, reversed the district court’s decision in part and remanded the Price Manipulation Action for further proceedings in the district court.  Although the Company is unable to predict the likely outcome of the Price Manipulation Action at this time, the Company is prosecuting the case vigorously, and intends to continue to do so in the future.

Canadian Dumping and Countervail Investigation

In June 2006, the Canada Border Services Agency (CBSA) initiated an investigation into the alleged dumping of copper pipe fittings from the United States and from South Korea and the dumping and subsidizing of these same goods from China.  The Company and certain affiliated companies were identified by the CBSA as possible U.S. exporters and importers of these goods and requested to provide information to Canadian authorities.

The Company responded to the CBSA’s requests for information in the investigation and will supply additional data as may be available.  The CBSA issued its Preliminary Determination on October 20, 2006, estimating margins of dumping for these goods.  Shipments of the subject goods into Canada on or after October 20th will bear these significant duties until a final determination is made on or about January 18, 2007.  The Company does not anticipate any material adverse effect on its financial condition as a result of the Preliminary Determination by the CBSA.

Other Matters

The Company is aware of an investigation of competition in markets in which it participates, or has participated in the past, in Canada.  The Company does not anticipate any material adverse effect on its business or financial condition as a result of that investigation.

On September 22, 2005, the European Commission adopted a statement alleging infringements in Europe of competition rules by manufacturers of copper fittings including the Company and a business in England that it acquired in 1997.  The Company took the lead in bringing these copper-fitting issues to the attention of the European Commission and has fully cooperated in the resulting investigation from its inception.  On September 20, 2006, the European Commission adopted its copper-fittings decision, finding infringements in Europe of competition rules by various companies, including the Company and certain of its subsidiaries, and imposing fines on various companies.  Neither the Company nor its subsidiaries were assessed any fines.

 

  

  

  

EXHIBIT 4.7.3

TRADEMARK OPPOSITIONS

United States - Mueller Industries, Inc. has filed extensions of time to oppose registration of the mark MUELLER WATER PRODUCTS owned by Mueller Water Products, Inc.  However, no contested proceedings have been filed by a third party against any applications or registrations owned by Mueller Industries, Inc.

Canada - Mueller Industries, Inc. has filed cancellation actions against Mueller International registrations for the marks MUELLER, MUELLER HP, and MUELLER 110.  In addition, Mueller Industries, Inc. has filed an opposition against Mueller International's application to register MUELLER FLOW CONTROL & Design.  However, no contested proceedings have been filed by a third party against any applications or registrations owned by Mueller Industries, Inc.

Mexico – Mueller Industries, Inc. is in the process of obtaining trademark registrations for the MUELLER mark in Mexico.  No contested proceedings have been filed by a third party against any applications or registrations owned by Mueller Industries, Inc.

 

  

  

  

SCHEDULE 4.9

ERISA DISCLOSURES

Reportable Events within ERISA:

Terminated Plans:  None

Merged Plans:

Effective July 1, 2006 the net assets of the Overstreet Hughes Company 401(k) Plan was merged into the Mueller Industries, Inc. 401(k) Plan.

Prohibited Transactions within ERISA:  None

 

  

  

  

EXHIBIT 4.10

ENVIRONMENTAL MATTERS

Compliance with environmental laws and regulations is a matter of high priority for the Company.  Mueller Industries, Inc.’s provision for environmental compliance related to non-operating properties was $0.6 million in 2005, $1.0 million in 2004, and $1.2 million in 2003.  Environmental costs related to operating properties are classified as cost of goods sold and is not significant.  Other than as discussed below, the Company is not involved in any Superfund sites other than as one of numerous potentially responsible parties (PRPs) in which cases management believes that any obligation would be insignificant.  Except as discussed below, the Company does not anticipate that it will need to make material expenditures for such compliance activities during the remainder of the 2006 fiscal year, or for the next two fiscal years.

Mining Remedial Recovery Company

Mining Remedial Recovery Company (MRRC), a wholly owned subsidiary, was formed for the purpose of managing the remediation of certain properties and the appropriate disposition thereof.  These properties and related obligations were transferred to MRRC as part of a court-ordered bankruptcy reorganization in 1990.  MRRC was the owner of property at a Superfund site in Midvale, Utah, but the Company’s obligation to contribute to remediation was resolved by a settlement with the Government in 1990.  This property was sold during 2004.

Mammoth Mine Site

MRRC owns certain inactive mines in Shasta County, California.  MRRC has continued a program, begun in the late 1980s, of sealing mine portals with concrete plugs in mine adits which were discharging water.  The sealing program has achieved a reduction in the metal load in discharges from these adits; however, additional reductions are required pursuant to an order issued by the California Regional Water Quality Control Board (QCB).  In response to a 1996 Order issued by the QCB, MRRC completed a feasibility study in 1997 describing measures designed to mitigate the effects of acid rock drainage.  In December 1998, the QCB modified the 1996 order extending MRRC’s time to comply with water quality standards.  In September 2002, the QCB adopted a new order requiring MRRC to adopt Best Management Practices (BMP) to control discharges of acid mine drainage.  The new order extends the time to comply with water quality standards until September 2007.  MRRC has agreed to implement BMP to reduce or prevent the discharge of acid mine drainage until such point as compliance with the order is achieved or, through the Use Attainability Analysis process, the designated beneficial uses of the respective watercourses are modified, allowing for the adoption of alternative receiving water limits.  At this site, MRRC spent approximately $0.3 million in 2005, and estimates it will spend between approximately $0.3 and $0.8 million annually over the next ten years.  Future 

 

  

  

  

expenditures beyond a ten-year horizon are not reasonably estimable or foreseeable.

 

U.S.S. Lead

In 1991, U.S.S. Lead Refinery, Inc., a wholly owned subsidiary (Lead Refinery), responded to an information request from the EPA under Superfund for information on whether Lead Refinery arranged for the disposal of hazardous substances in the vicinity of the Grand Calumet River/Indiana Harbor Ship Canal.  By letter dated February 4, 1997, the Indiana Department of Environmental Management notified Lead Refinery that a pre-assessment screening of the Grand Calumet River and the Indiana Harbor Canal conducted pursuant to Superfund had identified releases of hazardous substances from Lead Refinery and other PRPs that had adversely impacted natural resources.  Lead Refinery is in settlement negotiations in an effort to settle its natural resources damages.

In 1991, Lead Refinery also responded to an information request under Superfund regarding a site in East Chicago, Indiana.  In 1992, the EPA advised Lead Refinery of its intent to list the property as a Superfund site; however, to date, the EPA had deferred such listing.  In 1993, Lead Refinery entered into a Consent Order with the EPA pursuant to Section 3008(h) of the Resource Conservation and Recovery Act.  The Consent Order covers remediation activities at the East Chicago, Indiana site and provides for Lead Refinery to complete certain on-site interim remedial activities and studies that extend off-site.  In November 1996, the EPA approved, with modifications, the Interim Stabilization Measures Work plan and designated a Corrective Action Management Unit at the Lead Refinery site.  Site activities, which began in December 1996, have been substantially concluded.  Additionally, Lead Refinery is aware that the EPA is evaluating whether further action in the area near Lead Refinery’s facility should be undertaken.  Lead Refinery, without additional assistance from MRRC, lacks the financial resources needed to complete any additional remediation that may be required.

Lead Refinery has been informed by the former owner and operator of a Superfund site located in Pedricktown, New Jersey that it intends to seek CERCLA response costs for alleged shipments of hazardous substances to the site.  Lead Refinery has executed an agreement regarding that site, which indefinitely extends the statute of limitations.  By letter dated January 26, 1996, Lead Refinery and other PRPs received from the EPA a proposed Administrative Order on Consent to perform the remedial design for operable Unit 1 of the Pedricktown Superfund Site.  Lead Refinery determined not to execute the Administrative Order on Consent based on its lack of ability to finance the clean up or pay response costs incurred by the EPA.  Several other PRPs, however, executed the agreement and are conducting the remedial design.

In October 2003, Lead Refinery received a settlement offer from private settlers of $0.9 million for CERCLA contribution to past and future response costs incurred at the NL/Taracorp Superfund site located in Granite City, Illinois.  Lead 

 

  

  

  

Refinery declined that offer.  In February of 2004, NL Industries, Inc. filed a contribution action against all non-settling PRPs on the EPA’s allocation list, including Lead Refinery, seeking payments of an equitable share of clean-up costs incurred by that corporation.  Lead Refinery has not been served with a complaint and will, if necessary, contest this action.

Other

In connection with acquisitions, the Company established environmental reserves to fund the cost of remediation at sites currently or formerly owned by various acquired entities.  The Company, through its acquired subsidiaries, is engaged in ongoing remediation and site characterization studies.

Mueller Copper Tube Products, Inc.

In 1999, Mueller Copper Tube Products, Inc. (MCTP) commenced a cleanup and remediation of soil and groundwater at its Wynne, Arkansas plant.  MCTP is currently removing trichloroethylene, a cleaning solvent formerly used by MCTP, from the soil and groundwater.  On August 30, 2000, MCTP received approval of its Final Comprehensive Investigation report and Storm Water Drainage Investigation Report addressing the treatment of soils and groundwater, from the Arkansas Department of Environmental Quality.  The Company established a reserve for this project in connection with the acquisition of MCTP in 1998.

Altoona, Kansas Site

By letter dated October 10, 2006, the Kansas Department of Health and Environment (KDHE) advised the Company that environmental contamination has been identified at a former smelter in Altoona, Kansas.  KDHE asserts that the Company is a corporate successor to an entity that is alleged to have owned and operated the smelter from 1915-1918.  KDHE has requested that the Company negotiate a consent order with KDHE to address contamination at the site.  The Company is in the process of evaluating this request.

 

  

  

  

Schedule 4.13

Indebtedness

	 	
Debt Issue

	  	  	
As of

October 28, 2006

In $000

	  
	 	  	  	  	  	  
	 	
Domestic Debt

	  	  	  	  	  
	 	
1997 Series Industrial Revenue Bonds (Casting) due through

	  	  	  	  	  
	 	
2014 with interest at 5.17%

	  	  	
$

	
400

	  
	 	  	  	  	  	  	  
	 	
2001 Series Industrial Revenue Bonds (Press) due through

	  	  	  	  	  
	 	
2021 with interest at 6.63%

	  	  	  	
10,000

	  
	 	  	  	  	  	  	  
	 	
6% Subordinated Debentures due November 1, 2014

	  	  	  	
297,688

	  
	 	  	  	  	  	  	  
	 	
Overstreet-Hughes Capitalized Lease Obligations

	  	  	  	
503

	  
	 	  	  	  	  	  	  
	 	
Revolving Credit Facility with LaSalle Bank Midwest

	  	  	  	  	  
	 	
(formerly Standard Federal) and Bank Syndicate

	
(A)

	  	  	
150,000

	  
	 	
Total Domestic

	  	  	  	
458,591

	  
	 	  	  	  	  	  	  
	 	
Wholly Owned Foreign Subsidiaries' Debt

	  	  	  	  	  
	 	
(Non-Guarantors to the Credit Agreement)

	  	  	  	  	  
	 	  	  	  	  	  	  
	 	
Revolving Debt Agreement (Vemco)  with interest at

	  	  	  	  	  
	 	
LIBOR + 1.25%

	
(B)

	  	  	
5,669

	  
	 	  	  	  	  	  	  
	 	
Note Payable (Mueller Europe Ltd.) due January 2007

	  	  	  	  	  
	 	
with interest at LIBOR + 1.00% (C)

	  	  	  	
1,965

	  
	 	  	  	  	  	  	  
	 	
Total Wholly Owned Foreign Subsidiaries

	  	  	  	
7,634

	  
	 	  	  	  	  	  	  
	 	
Total

	  	  	
$

	
466,225

	  
	 	  	  	  	  	  	  
	 	
Non-Recourse JV Indebtedness

	  	  	  	  	  
	 	
Revolving Credit Facility with Bank Syndicate

	
(D)

	  	
$

	
39,900

	  
	 	  	  	  	  	  	  
	 	
(A) Represents maximum borrowings under this agreement. Actual balance as of October 28, 2006 is $0.

	 	  
	 	
(B)  Non-Recourse debt to Mueller Industries, Inc. or Restricted Subsidiaries

	 	  
	 	
(C) Note represents a portion of the consideration paid to the sellers of KX Group (Brassware)

	 	  
	 	
(D) Represents maximum borrowings under this agreement in U.S. dollar equivalents (RMB 320 million).  

	 	
Actual balance as of October 28, 2006 is $16.7 million  U.S. dollars with interest at 5.42%.

 

  

  

  

Schedule 6.2

Existing Liens

See Attached

 

  

  

  

SCHEDULE 6.2 EXISTING LIENS

	
Client:

	
Mueller Industries, Inc.

	
Date:

	
November 28, 2006

UCC Search Summary Chart

	
DEBTOR: Mueller Industries, Inc., A Delaware corporation

	
1.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
NMHG Financial Services, Inc.

	
3007617-7

1/10/03

	
N/A

	
Equipment lease

	  
	
2.

	  	  	
Cupertino National Bank c/o Greater Bay Capital

	
3088096-6 4/4/03

	
N/A

	
Equipment lease

	  
	
3.

	  	  	
NMHG Financial Services, Inc.

	
3235682-5

9/11/03

	
N/A

	
Equipment lease

	  
	
4.

	  	  	
UC Bancorp

	
4220483-4

8/5/04

	
N/A

	
Equipment lease

	  
	
5.

	  	  	
Greater Bay Bank N.A.

	
4352087-3

12/14/04

	
N/A

	
Specific equipment described and all proceeds arising or relating to said equipment

	  

  

  

  

 

	
DEBTOR: Mueller Brass Co., A Michigan corporation

	
2.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Michigan SOS / UCC / Federal Tax

	
11/15/06

	
City of Port Huron

	
45440A

10/15/75

	
Amendment: Secured Party address change.  53253A 10/15/80

 

Continuation:

53253AA

10/15/80

 

Continuation:

B700825

8/15/85

 

Continuation:

C372478

7/3/1990

 

	
Water and Air Pollution Control machinery and equipment, building improvements.  All machinery, equipment and other property acquired by the City of Port Huron, Michigan with proceeds of the Bonds issued by MNBD dated 10/1/75 under the terms of the lease agreement

	
Filing lapsed:

10/15/1995

 

 

 

  

  

  

 

	  

DEBTOR: Mueller Brass Co., A Michigan corporation

	  

2.

	 Jurisdiction and Index Searched	  Thru Date or Periods Covered	  Secured Party	  Initial File No. and File Date	  Amendments (with File No. and File Date)	  Collateral Description	 Comments
	
2.

	  	  	
Great Lakes Power Lift

 

Hyster Credit Company

	
D168091

12/03/96

	
Amendment:

Debtor name change from Muller Brass Company, Inc. to Muller Brass Co.

D809673

8/22/01

Continuation:

D810479

8/24/01

	
Specific Equipment

	
Filing will lapse on 12/03/06

	
3.

	  	  	
Associates Commercial Corporation

 

CitiCapital Commercial Corporation

	
D769587

5/1/1

	
Continuation:

2006071577-0

4/20/06

 

Amendment:

2006073368-9

4/21/06

Change SP from Associates Commercial Corporation to CitiCapital Commercial Corporation

	
Specific Equipment

	
Debtor name listed as Muller Brass Products Company

 

  

  

  

	
DEBTOR: Mueller Fittings Company, Inc., A Michigan corporation

	
3.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Michigan SOS / UCC / Federal Tax

	
11/15/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Industrial Realty Co., A Michigan corporation

	
4.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Michigan SOS / UCC / Federal Tax

	
11/15/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Refrigeration Company, Inc., A Michigan corporation

	
5.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Michigan SOS / UCC / Federal Tax

	
11/15/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: WTC Holding Company, A Michigan corporation

	
6.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Michigan SOS / UCC / Federal Tax

	
11/15/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

  

  

  

	
DEBTOR: B&K Industries, Inc., A Illinois corporation

	
7.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Illinois SOS / UCC / Federal Tax

	
11/16/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Itawamba Industrial Gas Company, Inc., A Mississippi corporation

	
8.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Mississippi SOS / UCC / Federal Tax

	
11/16/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Brass Forging Company, Inc., A Delaware corporation

	
9.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Casting Company, Inc., A Delaware corporation

	
10.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

  

  

  

	
DEBTOR: Mueller Copper Fittings Company, Inc., A Delaware corporation

	
11.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
Citicapital Commercial Leasing Corporation

	
6116219-7

4/6/06

	
N/A

	
In Lieu Financing Statement:

Mississippi SOS File No. 01514602 (4/12/01) Equipment listed as collateral

	  

	
DEBTOR: Mueller Copper Tube Company, Inc., A Delaware corporation

	
12.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
De Lage Landen Financial Services Inc.

	
3295473-6

11/10/03

	
N/A

	
Equipment lease under Master Lease Agreement Number 393

	  

	
DEBTOR: Mueller Copper Tube Products, Inc., A Delaware corporation

	
13.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
De Lage Landen Financial Services, Inc.

	
3297726-5

11/12/03

	
N/A

	
Equipment lease under Master Lease Agreement Number 400

	  

  

  

  

	
DEBTOR: Mueller East, Inc., A Delaware corporation

	
14.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Formed Tube Company, Inc., A Delaware corporation

	
15.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Impacts Company, Inc., A Delaware corporation

	
16.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
Magid Glove & Safety Mfg. Co. LLC.

	
4087924-9

3/29/04

	
N/A

	
All Debtor’s inventory of goods now or hereafter acquired by debtor and financed by secured party.  This consists of work gloves, safety clothing and safety products.

	  

  

  

  

 

	
DEBTOR: Mueller Line Set, Inc., A Delaware corporation

	
17.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Plastics Corporation, Inc., A Delaware corporation

	
18.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
Polyone Corporation

	
4081820-5

3/24/04

	
Amendment:

4102185-8

4/12/04

Debtor address change

	
In Lieu Financing Statement: Tennessee SOS File No. D562977 (9/8/99) Consignment goods

	  

	
DEBTOR: Mueller Refrigeration Products Company, Inc., A Delaware corporation

	
19.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
CIT Communications Finance Corporation

	
3000484-9

12/13/02

	
N/A

	
Equipment Lease pursuant to Lease No. S101967

	  

  

  

  

	
DEBTOR: Mueller Streamline Co., A Delaware corporation

	
20.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Delaware SOS / UCC / Federal Tax

	
10/30/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Plastics Holding Company, Inc., A Ohio corporation

	
21.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Ohio SOS / UCC / Federal Tax

	
11/03/06

	
No Liens of Record

	
N/A

	
N/A

	
N/A

	  

	
DEBTOR: Mueller Press Company, Inc., A Mississippi corporation

	
22.

	
Jurisdiction and Index Searched

	
Thru Date or Periods Covered

	
Secured Party

	
Initial File No. and File Date

	
Amendments (with File No. and File Date)

	
Collateral Description

	
Comments

	
1.

	
Mississippi SOS / UCC / Federal Tax

	
11/16/06

	
No Liens of Record

	
N/A

	
N/A

	
N/Aexhibit101.htm

 

 

Exhibit 10.1

 

NIKE, INC.

 

1990 STOCK INCENTIVE PLAN

 

NON-STATUTORY STOCK OPTION AGREEMENT

 

Pursuant to the 1990 Stock Incentive Plan (the “Plan”) of NIKE, Inc., an Oregon corporation (the “Company”), the Company grants to ______________ (the “Optionee”) the right and the option (the “Option”) to purchase all or any part of __________ of the Company’s Class B Common Stock
at a purchase price of $____________ per share, subject to the terms and conditions of this agreement between the Company and the Optionee (this “Agreement”).  By accepting this Option grant, the Optionee agrees to all of the terms and conditions of the Option grant.  The terms and conditions of the Option grant set forth in the attached Exhibit A and in the attached Appendix For Non-U.S. Optionees are incorporated into and made a part of this Agreement.  Capitalized
terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.

 

1.           Grant Date; Expiration Date.  The Grant Date for this Option is _______.  The Option shall continue in effect until ________ (the “Expiration Date”) unless earlier terminated as provided
in Sections 1 or 6 of Exhibit A.  The Option shall not be exercisable on or after the Expiration Date.

 

2.           Vesting of Option.  The Vesting Reference Date of this Option is ________.  Until it expires or is terminated as provided in Sections 1 or 6 of Exhibit A, the Option may be exercised from time
to time to purchase whole shares as to which it has become exercisable.  The Option shall become exercisable for 25% of the shares on each of the first four anniversaries of the Vesting Reference Date, so that the Option will be fully exercisable on the fourth anniversary of the Vesting Reference Date.

 

3.           Non-Statutory Stock Option.  The Company hereby designates the Option to be a non-statutory stock option, rather than an Incentive Stock Option as defined in Section 422 of the United States Internal Revenue
Code of 1986, as amended.

 

NIKE, Inc.

 

 

 

 

Mark G. Parker

Chief Executive Officer

  

  

  

NIKE, INC.

 

EXHIBIT A TO

 

1990 STOCK INCENTIVE PLAN

 

NON-STATUTORY STOCK OPTION AGREEMENT

 

1.           Termination of Employment or Service.

 

1.1           General Rule.  Except as provided in this Section 1 or in Section 6.2, the Option may not be exercised unless at the time of exercise the Optionee is employed by or in the service of the Company and shall
have been so employed or provided such service continuously since the Grant Date.  For purposes of this Agreement, the Optionee is considered to be employed by or in the service of the Company if the Optionee is employed by or in the service of the Company or any parent or subsidiary corporation of the Company (an “Employer”).

 

1.2           Termination Generally. If the Optionee’s employment or service with the Company terminates for any reason other than total disability, death, normal retirement or early retirement as provided in Sections 1.3,
1.4, 1.5 or 1.6, or cause or good reason in connection with a change in control as provided in Section 6.2, the Option may be exercised at any time before the Expiration Date or the expiration of three months after the date of termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled to exercise the Option at the date of termination.

 

1.3           Termination Because of Total Disability.  If the Optionee’s employment or service with the Company terminates because of total disability, the Option shall, following the receipt and processing by
the Company’s legal department of any necessary and appropriate documentation in connection with the Optionee’s termination (the “Processing Period”), become exercisable in full and may be exercised at any time before the Expiration Date or before the date that is four years after the date of termination, whichever is the shorter period.  The term “total disability” means a medically determinable mental or physical impairment that is expected to result in death or
has lasted or is expected to last for a continuous period of 12 months or more and that, in the opinion of the Company and two independent physicians, causes the Optionee to be unable to perform duties as an employee, director, officer or consultant of the Employer and unable to be engaged in any substantial gainful activity.  Total disability shall be deemed to have occurred on the first day after the two independent physicians have furnished their written opinion of total disability to the Company
and the Company has reached an opinion of total disability.

 

1.4           Termination Because of Death.  If the Optionee dies while employed by or in the service of the Company, the Option shall, following the Processing Period, become
exercisable in full and may be exercised at any time before the Expiration Date or before the date that is four years after the date of death, whichever is the shorter period, but only by the person or persons to whom the Optionee’s rights under the Option shall pass by the Optionee’s will or by the laws of descent and distribution of the state or country of domicile at the time of death.

 

1.5           Termination Because of Normal Retirement.  Subject to Section 6.2, if the Optionee’s employment or service with the Company terminates because of the Optionee’s normal retirement before
the first anniversary of the Vesting Reference Date, the Option shall immediately terminate.  If the Optionee’s employment or service with the Company terminates because of the Optionee’s normal retirement on or after the first anniversary of the Vesting Reference Date, the Option shall, following the Processing Period, become exercisable in full and may be exercised at any time before the Expiration Date or before the expiration of four years after the date of termination, whichever is
the shorter period.  For purposes of this Section 1.5, the term “normal retirement” means a termination of employment or service other than as a result of death or total disability that occurs at a time when (a) the Optionee’s age is at least 60 years, and (b) the Optionee has been employed by or in the service of the Company or a parent or subsidiary corporation of the Company for at least five full years.

 

1.6           Termination Because of Early Retirement.  Subject to Section 6.2, if the Optionee’s employment or service with the Company terminates because of the Optionee’s early retirement before the first
anniversary of the Vesting Reference Date, the Option shall immediately terminate.  If the Optionee’s employment or service with the Company terminates because of the Optionee’s early retirement on or after the first anniversary of the Vesting Reference Date, the Option shall continue to become exercisable according to the schedule specified in this Agreement with no forfeiture of any portion of the Option resulting from such termination, and the Option may be exercised at any time before
the Expiration Date or before the expiration of four years after the date of termination, whichever is the shorter period.  For purposes of this Section 1.6, the term “early retirement” means a termination of employment or service other than as a result of death or total disability that occurs at a time when (a) the Optionee’s age is at least 55 years and less than 60 years, and (b) the Optionee has been employed by or in the service of the Company or a parent or subsidiary corporation
of the Company for at least five full years.

 

1.7           Absence on Leave.  Absence on leave or on account of illness or disability under rules established by the committee of the Board of Directors of the Company appointed to administer the Plan (the “Committee”)
shall not be deemed an interruption of employment or service. 

 

1.8           Failure to Exercise Option.  To the extent that following termination of employment or service, the Option is not exercised within the applicable periods described above or in Section 6.2, all further rights
to purchase shares pursuant to the Option shall cease and terminate.

 

2.           Method of Exercise of Option. The Option may be exercised only by notice in writing from the Optionee to the Company, or a broker designated by the Company, of the Optionee’s binding commitment to purchase shares,
specifying the number of shares the Optionee desires to purchase under the Option and the date on which the Optionee agrees to complete the transaction and, if required to comply with the Securities Act of 1933, containing a representation that it is the Optionee’s intention to acquire the shares for investment and not with a view to distribution (the “Exercise Notice”).  On or before the date specified for completion of the purchase, the Optionee must pay the Company the full purchase
price of those shares by either of, or a combination of, the following methods at the election of the Optionee:  (a) cash payment by wire transfer; or (b) delivery of an Exercise Notice, together with irrevocable instructions to a broker to deliver promptly to the Company the amount of sale proceeds required to pay the full purchase price.  Unless the Committee determines otherwise, no shares shall be issued upon exercise of an Option until full payment for the shares has been made, including
all amounts owed for tax withholding as discussed in Section 4 below.

 

3.           Nontransferability.  The Option is nonassignable and nontransferable by the Optionee, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or
country of the Optionee’s domicile at the time of death, and during the Optionee’s lifetime, the Option is exercisable only by the Optionee.

 

4.           Responsibility for Taxes.  The Optionee shall, immediately upon notification of the amount due, if any, pay to the Company by wire transfer, or irrevocably instruct a broker to pay from stock sales proceeds,
amounts necessary to satisfy any applicable federal, state and local tax withholding requirements.  If additional withholding is or becomes required (as a result of exercise of the Option or as a result of disposition of shares acquired pursuant to exercise of the Option) beyond any amount deposited before delivery of the certificates, the Optionee shall pay such amount to the Company, by wire transfer, on demand.  If the Optionee fails to pay the amount demanded, the Company or the Employer
may withhold that amount from other amounts payable to the Optionee, including salary, subject to applicable law.

 

5.           Changes in Capital Structure.  If the outstanding shares of Common Stock of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification, stock split, combination of shares or dividend payable in shares, appropriate adjustment shall be made by the Committee in the number and kind of shares subject to the Option, and the purchase price for shares subject to the Option, so that the Optionee’s proportionate interest before and after the occurrence of the event is maintained.  Notwithstanding the foregoing, the Committee shall have no obligation to effect
any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Committee.  Any such adjustments made by the Committee shall be conclusive.

 

6.           Sale of the Company; Change in Control.

 

6.1           Sale of the Company.  If there shall occur a merger, consolidation or plan of exchange involving the Company pursuant to which the outstanding shares of Common Stock of the Company are converted into cash
or other stock, securities or property, or a sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company, then either:

 

6.1.1           the Option shall be converted into an option to acquire stock of the surviving or acquiring corporation in the applicable transaction for a total purchase price equal to the total price applicable to the unexercised portion of the Option, and with the amount and type
of shares subject thereto and purchase price per share thereof to be conclusively determined by the Committee, taking into account the relative values of the companies involved in the applicable transaction and the exchange rate, if any, used in determining shares of the surviving corporation to be held by the former holders of the Company’s Class B Common Stock following the applicable transaction, and disregarding fractional shares; or

 

6.1.2           the Option will become exercisable in full effective as of the consummation of such transaction, and the Committee shall approve some arrangement by which the Optionee shall have a reasonable opportunity to exercise the Option effective as of the consummation of such
transaction or otherwise realize the value of the Option, as determined by the Committee.  If the Option is not exercised in accordance with procedures approved by the Committee, the Option shall terminate (notwithstanding any provisions apparently to the contrary in this Agreement).

 

6.2           Change in Control.  If Section 6.1.2 does not apply, the Option shall, following a reasonable Processing Period, become exercisable in full and may be exercised at any time before the Expiration Date or
before the date that is four years after the date of termination of employment or service, whichever is the shorter period, if a Change in Control (as defined below) occurs and at any time after the earlier of Shareholder Approval (as defined below), if any, or the Change in Control and on or before the second anniversary of the Change in Control, (i) the Optionee’s employment or service is terminated by the Company (or its successor) without Cause (as defined below), or (ii) the Optionee’s employment
or service is terminated by the Optionee for Good Reason (as defined below).

 

6.2.1           For purposes of this Agreement, a “Change in Control” of the Company shall mean the occurrence of any of the following events:

 

(a)           At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided,
however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office;

 

(b)           At any time that the holders of the Class A Common Stock of the Company have the right to elect (voting as a separate class) a majority of the members of the Board of Directors of the Company, any “person” or “group” (within the meaning of Sections
13(d) and 14(d)(2) of the Exchange Act) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the then outstanding Class A Common Stock of the Company;

 

(c)           At any time after such time as the holders of the Class A Common Stock of the Company cease to have the right to elect (voting as a separate class) a majority of the members of the Board of Directors of the Company, any “person” or “group” (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) representing thirty percent (30%) or more of the combined voting
power of the then outstanding Voting Securities;

 

(d)           A consolidation, merger or plan of exchange involving the Company (“Merger”) as a result of which the holders of outstanding Voting Securities immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding
Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger; or

 

(e)           A sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company.

 

6.2.2           For purposes of this Agreement, “Shareholder Approval” shall mean approval by the shareholders of the Company of a transaction, the consummation of which would be a Change in Control.

 

6.2.3           For purposes of this Agreement, “Cause” shall mean (a) the willful and continued failure to perform substantially the Optionee’s reasonably assigned duties with the Company or the Employer (other
than any such failure resulting from incapacity due to physical or mental illness) after a demand for substantial performance is delivered to the Optionee by the Company or the Employer which specifically identifies the manner in which the Company or the Employer believes that the Optionee has not substantially performed the Optionee’s duties, or (b) the willful engagement in illegal conduct which is materially and demonstrably injurious to the Company or
the Employer.  No act, or failure to act, shall be considered “willful” if the Optionee reasonably believed that the action or omission was in, or not opposed to, the best interests of the Company or the Employer.

 

6.2.4           For purposes of this Agreement, “Good Reason” shall mean:

 

(a)           the assignment of a different title, job or responsibilities that results in a decrease in the level of responsibility of the Optionee after Shareholder Approval, if applicable, or the Change in Control when compared to the Optionee’s level of responsibility for
the Company’s or the Employer’s operations prior to Shareholder Approval, if applicable, or the Change in Control; provided that Good Reason shall not exist if the Optionee continues to have the same or a greater general level of responsibility for Company operations after the Change in Control as the Optionee had prior to the Change in Control even if the Company operations are a subsidiary or division of the surviving company,

 

(b)           a reduction in the Optionee’s base pay as in effect immediately prior to Shareholder Approval, if applicable, or the Change in Control,

 

(c)           a material reduction in total benefits available to the Optionee under cash incentive, stock incentive and other employee benefit plans after Shareholder Approval, if applicable, or the Change in Control compared to the total package of such benefits as in effect prior
to Shareholder Approval, if applicable, or the Change in Control, or

 

(d)           the Optionee is required to be based more than 50 miles from where the Optionee’s office is located immediately prior to Shareholder Approval, if applicable, or the Change in Control except for required travel on company business to an extent substantially consistent
with the business travel obligations which the Optionee undertook on behalf of the Company prior to Shareholder Approval, if applicable, or the Change in Control.

 

7.           Clawback Policy.  The Optionee acknowledges and agrees that all shares purchased upon exercise of the Option shall be subject to the NIKE, Inc. Policy for Recoupment of Incentive Compensation as approved
by the Board of Directors and the Committee and in effect on the Grant Date.

 

8.           Conditions on Obligations.  The Company shall not be obligated to issue shares of Class B Common Stock upon exercise of the Option if the Company is advised by its legal counsel that such issuance would
violate applicable foreign, state or federal laws, including securities laws or exchange control regulations.

 

9.           No Right to Employment or Service.  Nothing in the Plan or this Agreement shall (a) confer upon the Optionee any right to be continued in the employment of an Employer or interfere in any way with the Employer’s
right to terminate the Optionee’s employment at will at any time, for any reason, with or without cause, or to decrease the Optionee’s compensation or benefits, or (b) confer upon the Optionee any right to be retained or employed by the Employer or to the continuation, extension, renewal or modification of any compensation, contract or arrangement with or by the Employer.  The determination of whether to grant any option under the Plan is made by the Company in its sole discretion.  The
grant of the Option shall not confer upon the Optionee any right to receive any additional option or other award under the Plan or otherwise.

 

10.           No Advice Regarding Grant.  The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Optionee’s participation in the Plan, or the
Optionee’s acquisition or sale of the underlying shares of Class B Common Stock.  The Optionee is hereby advised to consult with the Optionee’s own personal tax, legal and financial advisors regarding the Optionee’s participation in the Plan before taking any action related to the Plan.

 

11.           Successors of Company.  This Agreement shall be binding upon and shall inure to the benefit of any successor of the Company but, except as provided herein, the Option may not be assigned or otherwise transferred
by the Optionee.

 

12.           Rights as a Shareholder.  The Optionee shall have no rights as a shareholder with respect to any shares of Class B Common Stock until the date the Optionee becomes the holder of record of those shares.  No
adjustment shall be made for dividends or other rights for which the record date occurs before the date the Optionee becomes the holder of record.

 

13.           Amendments.   The Company may at any time amend this Agreement to extend the expiration periods provided in Sections 1 or 6.2 or to increase the portion of the Option that is exercisable.  Otherwise,
this Agreement may not be amended without the written consent of the Optionee and the Company.

 

14.           Committee Determinations.  The Optionee agrees to accept as binding, conclusive and final all decisions and interpretations of the Committee or other administrator of the Plan as to the provisions of the
Plan or this Agreement or any questions arising thereunder.

 

15.           Governing Law; Attorneys’ Fees.  The Option grant and the provisions of this Agreement are governed by, and subject to, the laws of the State of Oregon.  For purposes of litigating any dispute
that arises under this grant or the Agreement, the parties hereby submit to and consent to the jurisdiction of, and agree that such litigation shall be conducted, in the courts of Washington County, Oregon or the United States District Court for the District of Oregon, where this grant is made and/or to be performed.  In the event either party institutes litigation hereunder, the prevailing party shall be entitled to reasonable attorneys’ fees to be set by the trial court and, upon any appeal,
the appellate court.

 

16.           Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in
the Plan by electronic means.  The Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

17.           Severability.  The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall
nevertheless be binding and enforceable.

 

18.           Appendix. Notwithstanding any provisions in this Agreement, if the Optionee is a resident of any country other than the United States on the Grant Date, the Option grant shall be subject to the special terms and
conditions set forth in the Appendix to this Agreement, including additional terms for all non-U.S. optionees and additional terms for the Optionee’s country.  Moreover, if the Optionee relocates outside of the United States to one of the countries included in the Appendix, or from one such country to another such country, the special terms and conditions for all non-U.S. optionees and for such country will apply to the Optionee, to the extent the Company determines that the application of such
terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan.  The Appendix constitutes part of this Agreement.

 

19.           Imposition of Other Requirements.  The Company reserves the right to impose other requirements upon the Optionee’s participation in the Plan, on the Option and on any shares of Class B Common Stock
acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require the Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

20.           Complete Agreement.  This Agreement, including the Appendix, constitutes the entire agreement between the Optionee and the Company, both oral and written concerning the matters addressed herein, except
with regard to the imposition of other requirements as described under Section 19 above, and all prior agreements or representations concerning the matters addressed herein, whether written or oral, express or implied, are terminated and of no further effect.

 

  

  

  

NIKE, INC.

 

APPENDIX FOR NON-U.S. OPTIONEES

 

1990 STOCK INCENTIVE PLAN

 

NON-STATUTORY STOCK OPTION AGREEMENT

 

This Appendix includes additional terms and conditions that govern Options for Optionees residing outside of the United States and in one of the countries listed herein.  Capitalized terms not explicitly defined in this Appendix but defined in the Agreement shall have the same definitions as in the Agreement.

 

This Appendix also includes information regarding certain issues of which the Optionee should be aware with respect to participation in the Plan.  The information is based on the securities, exchange control and other laws in effect in the respective countries as of July 2010.  Such laws are often complex and change
frequently.  As a result, the Company strongly recommends that the Optionee not rely on the information in this Appendix as the only source of information relating to the consequences of participation in the Plan because the information may be out of date at the time that the Optionee exercises the Option or sells shares of Class B Common Stock acquired upon exercise of the Option.

 

In addition, the information contained herein is general in nature and may not apply to the Optionee’s particular situation, and the Company is not in a position to assure the Optionee of a particular result.  Accordingly, the Optionee is advised to seek appropriate professional advice as to how the relevant laws in the
Optionee’s country may apply to a particular situation.

 

Further, if the Optionee is a citizen or resident of a country other than the one in which the Optionee is currently working, the information contained herein may not be applicable.

 

Finally, the Company may, at any time and at its own discretion, restrict the available methods of exercising the Option/paying the purchase price or direct the repatriation of the proceeds of the sale of shares of Class B Common Stock acquired upon exercise of the Option to facilitate compliance with any tax, securities or other relevant
laws in the Optionee’s country.

  

  

  

ADDITIONAL TERMS FOR ALL NON-U.S. OPTIONEES

 

The following additional terms and conditions apply to the Option if the Optionee is a resident of any country other than the United States at the time of grant, vesting or exercise of the Option.  Additional country-specific terms and conditions that apply to the Option if the Optionee is a resident of the particular country
begin on page APP-6.

 

1.           Active Employment.  Notwithstanding Section 1 of Exhibit A to the Agreement, in the event of termination of the Optionee’s employment or service (whether or not in breach of local labor laws):

 

1.1           the Optionee’s right to vest in the Option, if any, will terminate effective as of the date that the Optionee is no longer actively employed or in service,

 

1.2           the Optionee’s right to exercise the Option after termination of employment or service, if any, will be measured by the date of termination of active employment or service, and

 

1.3           neither the right to vest nor the right to exercise will be extended by any notice period mandated under local law (e.g., active employment or service would not include a period of “garden leave” or similar period pursuant to local law).

 

The Committee shall have the exclusive discretion to determine when the Optionee is no longer actively employed or in service for purposes of the Option.

 

2.           Responsibility for Taxes.  This provision replaces Section 4 of Exhibit A to the Agreement.

 

Regardless of any action the Company or the Employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Optionee’s participation in the Plan and legally applicable to the Optionee or deemed
by the Company or the Employer to be an appropriate charge to the Optionee even if technically due by the Company or the Employer (“Tax-Related Items”), the Optionee acknowledges that the ultimate liability for all Tax-Related Items is and remains the Optionee’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  The Optionee further acknowledges that the Company
and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the issuance of shares of Class B Common Stock upon exercise of the Option, the subsequent sale of shares of Class B Common Stock acquired pursuant to such issuance and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the
grant or any aspect of the Option to reduce or eliminate the Optionee’s liability for Tax-Related Items or achieve any particular tax result.  Further, if the Optionee has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Optionee acknowledges that the Company and/or the Employer (or former employer, as
applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

 

Prior to any relevant taxable or tax-withholding event, as applicable, the Optionee will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.  In this regard, the Optionee authorizes the Company and/or the
Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

 

	
  
	
(1)
	
withholding from the Optionee’s wages or other cash compensation paid to the Optionee by the Company and/or the Employer;

 

	
  
	
(2)
	
withholding from proceeds of the sale of shares of Class B Common Stock acquired upon exercise of the Option either through a voluntary sale or through a mandatory sale arranged by the Company (on the Optionee’s behalf pursuant to this authorization); or

 

	
  
	
(3)
	
withholding in shares to be issued upon exercise of the Option.

 

The Company shall withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates.  If the obligation for Tax-Related Items is satisfied by withholding in shares, for tax purposes, the Optionee is deemed to have been issued the full number of shares
subject to the exercised Option, notwithstanding that a number of the shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Optionee’s participation in the Plan.

 

Finally, the Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Optionee’s participation in the Plan that are not, in the discretion of the Company or the Employer, satisfied by the means previously described.  The
Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Class B Common Stock, if the Optionee fails to comply with the Optionee’s obligations in connection with the Tax-Related Items.

 

3.           Nature of Grant.  In accepting this Option grant, the Optionee acknowledges that:

 

3.1           the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

 

3.2           the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if Options have been granted repeatedly in the past;

 

3.3           all decisions with respect to future Option grants, if any, will be at the sole discretion of the Company;

 

3.4           the Optionee is voluntarily participating in the Plan;

 

3.5           the Option and the shares of Class B Common Stock subject to the Option are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which are outside the scope of the Optionee’s employment
contract, if any;

 

3.6           the Option and the shares of Class B Common Stock subject to the Option are not intended to replace any pension rights or compensation;

 

3.7           the Option and the shares of Class B Common Stock subject to the Option are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service
payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any subsidiary or affiliate of the Company;

 

3.8           the Option grant and the Optionee’s participation in the Plan will not be interpreted to form an employment contract or relationship with the Company or any subsidiary or affiliate of the Company;

 

3.9           the future value of the underlying shares of Class B Common Stock is unknown and cannot be predicted with certainty;

 

3.10           if the underlying shares of Class B Common Stock do not increase in value, the Option will have no value;

 

3.11           if the Optionee exercises the Option and obtains shares of Class B Common Stock, the value of the shares of Class B Common Stock acquired upon exercise may increase or decrease in value, even below the purchase price; and

 

3.12           no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from termination of the Optionee’s employment or service with the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor
laws) and in consideration of the grant of the Option to which the Optionee is not otherwise entitled, the Optionee irrevocably agrees never to institute any claim against the Company or the Employer, waives his or her ability, if any, to bring such a claim, and releases the Company and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then by participating in the Plan, the Optionee shall be deemed irrevocably to have waived any
entitlement to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim.

 

4.           Data Privacy.  The Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Optionee’s personal data as described
in this Agreement and any other Option grant materials by and among, as applicable, the Employer, the Company and its subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing the Optionee’s participation in the Plan.

 

The Optionee understands that the Company and the Employer may hold certain personal information about the Optionee, including, but not limited to, the Optionee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality,
job title, any shares of Common Stock or directorships held in the Company, details of all Options or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in the Optionee’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”).

 

The Optionee understands that Data will be transferred to a designated Plan broker or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  The Optionee understands
that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than the Optionee’s country.  The Optionee understands that the Optionee may request a list with the names and addresses of any potential recipients of the Data by contacting the Optionee’s local human resources representative.  The Optionee authorizes the Company, a designated Plan
broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Optionee’s participation in the Plan.  The Optionee understands that Data will be held only as long as is necessary to implement, administer and manage the Optionee’s participation in
the Plan.  The Optionee understands that the Optionee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Optionee’s local human resources representative.  The Optionee understands, however, that refusing or withdrawing the Optionee’s consent may affect the Optionee’s ability to participate
in the Plan.  For more information on the consequences of the Optionee’s refusal to consent or withdrawal of consent, the Optionee understands that the Optionee may contact the Optionee’s local human resources representative.

 

5.           Language.  If the Optionee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than
the English version, the English version will control.

 

6.           Exception to Retirement Provisions.  If the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in the country of Optionee’s residence that would likely
result in the favorable retirement treatment under Sections 1.5 and 1.6 of Exhibit A being deemed unlawful and/or discriminatory, then the Company will not apply Sections 1.5 and 1.6 of Exhibit A at the time of the Optionee’s termination of employment or service, and instead will apply Section 1.2 of Exhibit A.

 

ARGENTINA

 

Securities Law Information.  Shares of the Company’s Class B Common Stock are not publicly offered or listed on any stock exchange in Argentina.  The offer is private and not subject to the supervision of any Argentine governmental authority.

 

Exchange Control Information.  Depending upon the method of exercise the Optionee chooses with respect to the Option, the Optionee may be subject to restrictions with respect
to the purchase and/or transfer of foreign currency pursuant to Argentine currency exchange regulations.  The Optionee hereby agrees to comply with any and all Argentine currency exchange restrictions, approvals and reporting requirements in connection with the exercise of the Option.

Under current regulations adopted by the Argentine Central Bank (“BCRA”), the Optionee may purchase and remit foreign currency with a value of up to US$2,000,000 per month for the purpose of acquiring foreign securities, including shares of Class B Common Stock acquired under the Plan, without prior approval from the BCRA.  However,
the Optionee must register the purchase with the BCRA and execute and submit an affidavit to the entity selling the foreign currency confirming that the Optionee has not purchased and remitted funds in excess of US$2,000,000 during the relevant month.

In the event that the Optionee transfers proceeds in excess of US$2,000,000 from the sale of shares of Class B Common Stock acquired under the Plan into Argentina in a single month, the Optionee will be required to place 30% of any proceeds in excess of US$2,000,000 in a non-interest bearing dollar denominated mandatory deposit account
for a holding period of 365 days.

 

Please note that exchange control regulations in Argentina are subject to frequent change.  The Optionee should consult with his or her personal legal advisor regarding any exchange control obligations that the Optionee may have prior to exercising the Option or receiving proceeds from the sale of shares of Class B Common Stock
acquired upon exercise of the Option.

 

AUSTRALIA

 

Limitations on Exercise.  The following supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

If the Option vests when the market price per share of Class B Common Stock is equal to or less than the purchase price for the Option, the Optionee shall not be permitted to exercise the Option.  The Option may only be exercised starting on the business day following the first day on which the market price per share of Class
B Common Stock exceeds the purchase price for the Option.

 

Lastly, due to tax laws in Australia, the Expiration Date of the Option shall be the date that is seven (7) years from the Grant Date.

 

Securities Law Information.  If the Optionee acquires shares of Class B Common Stock upon exercise of the Option and subsequently offers the shares for sale to a person or entity resident in Australia, such an offer may be subject to disclosure requirements under Australian
law, and the Optionee should obtain legal advice regarding any applicable disclosure requirements prior to making any such offer.

 

AUSTRIA

 

Consumer Protection Information. To the extent that the provisions of the Austrian Consumer Protection Act are applicable to the Agreement and the Option, the Optionee may be entitled to revoke his or her acceptance of the
Agreement if the conditions listed below are met:

 

	
  
	
(i)
	
If the Optionee accepts the Option outside of the business premises of the Company, the Optionee may be entitled to revoke his or her acceptance of the Agreement, provided the revocation is made within one week after the Optionee accepts the Agreement.

 

	
  
	
(ii)
	
The revocation must be in written form to be valid.  It is sufficient if the Optionee returns the Agreement to the Company or the Company’s representative with language that can be understood as the Optionee’s refusal to conclude or honor the Agreement, provided the revocation is sent within the period set forth above.

 

BELGIUM

 

Taxation of Option.  The Option must be accepted in writing either (i) within 60 days of the offer (for tax at offer), or (ii) after 60 days of the offer (for tax at exercise).

 

Reporting Information.  The Optionee is required to report any bank or brokerage accounts opened and maintained outside Belgium on his or her annual tax return.

 

BRAZIL

 

Compliance with Law.  By accepting the Option, the Optionee acknowledges his or her agreement to comply with applicable Brazilian laws and to pay any and all applicable taxes associated with the exercise of the Option, the receipt of any dividends, and the sale of shares
issued upon exercise of the Option.

 

Exchange Control Information.  If the Optionee is a resident or domiciled in Brazil, he or she will be required to submit an annual declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal
to or greater than US$100,000.  Assets and rights that must be reported include shares issued upon exercise of the Option.

 

CANADA

 

Method of Exercise.  This provision supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

Notwithstanding anything to the contrary in the Plan or this Agreement, the Optionee will not be permitted to pay the purchase price or any Tax-Related Items by delivery to the Company, or attestation to the Company of ownership, of other Class B Common Stock.

 

French Language Provision.  The following provision will apply if the Optionee is a resident of Quebec:

 

The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

 

Les parties reconnaissent avoir exigé la rédaction en anglais de la convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.

 

Termination of Employment or Service.  This provision supplements Section 1 of the Additional Terms For All Non-U.S. Optionees in this Appendix.

 

In the event of involuntary termination of the Optionee’s employment or service (whether or not in breach of local labor laws), the Optionee’s right to receive and vest in the Option, if any, will terminate effective as of the date that is the earlier of: (1) the date the Optionee receives notice of termination of employment
or service from the Company or the Optionee’s Employer, or (2) the date the Optionee is no longer actively employed by or in the service of the Company or his or her Employer regardless of any notice period or period of pay in lieu of such notice required under local law (including, but not limited to, statutory law, regulatory law and/or common law); the Committee shall have the exclusive discretion to determine when the Optionee no longer actively employed or in service for purposes of the Option grant.

 

Data Privacy.  This provision supplements Section 4 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

The Optionee hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan.  The Optionee further authorizes the Company, any subsidiary or affiliate and the Committee to
disclose and discuss the Option with their advisors.  The Optionee further authorizes the Company and any subsidiary or affiliate to record such information and to keep such information in the Optionee’s employee file.

 

CHINA

 

Method of Exercise.  This provision supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

Notwithstanding anything to the contrary in the Agreement or the Plan, due to exchange control laws in China, the Optionee will be required to exercise his or her Option using the cashless sell-all exercise method pursuant to which all shares subject to the exercised Option will be sold immediately upon exercise and the proceeds of sale,
less the purchase price, any Tax-Related Items and broker’s fees or commissions, will be remitted to the Optionee in accordance with any applicable exchange control laws and regulations.  The Company reserves the right to provide additional methods of exercise depending on the development of local law.  This restriction will not apply to non-PRC citizens.

 

Exchange Control Requirements.  The Optionee understands and agrees that, pursuant to local exchange control requirements, the Optionee will be required to immediately repatriate the cash proceeds from the cashless exercise of the Option to China.  The Optionee
further understands that, under local law, such repatriation of his or her cash proceeds may need to be effectuated through a special exchange control account established by the Company, subsidiary, affiliate or the Employer, and the Optionee hereby consents and agrees that any proceeds from the sale of shares may be transferred to such special account prior to being delivered to the Optionee.  The Company is under no obligation to secure any particular exchange conversion rate and the Company may face
delays in converting the proceeds to local currency due to exchange control restrictions.  The Optionee further agrees to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.  These requirements will not apply to non-PRC citizens.

 

CHILE

 

Securities Law Information.  Neither the Company nor the shares of Class B Common Stock subject to the Option are registered with the Chilean Registry of Securities or under the control of the Chilean Superintendence of Securities.

 

Exchange Control Information.  It is the Optionee’s responsibility to make sure that the Optionee complies with exchange control requirements in Chile when the value of his or her Option transaction is in excess of US$10,000, regardless of whether the Optionee exercises
his or her Option through a cash exercise or cashless method of exercise.

 

If the Optionee uses the cash exercise method to exercise his or her Option and the Optionee remits funds in excess of US$10,000 out of Chile, the remittance must be made through the Formal Exchange Market (i.e., a commercial bank or registered foreign exchange office).  In
such case, the Optionee must provide to the bank or registered foreign exchange office certain information regarding the remittance of funds (e.g., destination, currency, amount, parties involved, etc.).

 

If the Optionee exercises his or her Option using a cashless exercise method and the aggregate value of the purchase price exceeds US$10,000, the Optionee must sign Annex 1 of the Manual of Chapter XII of the Foreign Exchange Regulations and file it directly with the Central Bank within 10 days of the exercise date.

 

The Optionee is not required to repatriate funds obtained from the sale of shares or the receipt of any dividends.  However, if the Optionee decides to repatriate such funds, the Optionee must do so through the Formal Exchange Market if the amount of the funds exceeds US$10,000.  In such case, the Optionee must report
the payment to a commercial bank or registered foreign exchange office receiving the funds.

 

If the Optionee’s aggregate investments held outside of Chile exceeds US$5,000,000 (including the investments made under the Plan), the Optionee must report the investments annually to the Central Bank.  Annex 3.1 of Chapter XII of the Foreign Exchange Regulations must be used to file this report.

 

Please note that exchange control regulations in Chile are subject to change.  The Optionee should consult with his or her personal legal advisor regarding any exchange control obligations that the Optionee may have prior to exercising the Option or receiving proceeds from the sale of shares acquired upon exercise of the Option.

 

Annual Tax Reporting Obligation.  The Chilean Internal Revenue Service (“CIRS”) requires all taxpayers to provide information annually regarding:  (i) the taxes paid abroad which they will use as a credit against Chilean income taxes, and (ii) the results
of foreign investments.  These annual reporting obligations must be complied with by submitting a sworn statement setting forth this information before March 15 of each year.  The forms to be used to submit the sworn statement are Tax Form 1853 “Annual Sworn Statement Regarding Credits for Taxes Paid Abroad” and Tax Form 1851 “Annual Sworn Statement Regarding Investments Held Abroad.”  If the Optionee is not a Chilean citizen and has been a resident in Chile
for less than three years, the Optionee is exempt from the requirement to file Tax Form 1853.  These statements must be submitted electronically through the CIRS website:  www.sii.cl.

 

CZECH REPUBLIC

 

Exchange Control Information.  Upon request of the Czech National Bank, the Optionee may need to file a notification within 15 days of the end of the calendar quarter in which he or she acquires shares upon exercise of the Option.

 

DENMARK

 

Exchange Control and Tax Reporting Information.  The Optionee may hold shares acquired upon exercise of the Option in a safety-deposit account (e.g., a brokerage account) either with a Danish bank or with an approved
foreign broker or bank.  If the shares are held with a foreign broker or bank, the Optionee is required to inform the Danish Tax Administration about the safety-deposit account.  For this purpose, he or she must file a Form V (Erklaering V) with the Danish Tax Administration.  Both the Optionee and the broker or bank must sign the Form V.  By signing the Form V, the broker or bank undertakes an obligation, without
further request each year, to forward information to the Danish Tax Administration concerning the shares in the account.  By signing the Form V, the Optionee authorizes the Danish Tax Administration to examine the account.

 

In addition, if the Optionee opens a brokerage account (or a deposit account with a U.S. bank), the brokerage account (or bank account, as applicable) will be treated as a deposit account because cash can be held in the account.  Therefore, the Optionee must also file a Form K (Erklaering
K) with the Danish Tax Administration.  Both the Optionee and the broker must sign the Form K.  By signing the Form K, the broker undertakes an obligation, without further request each year, to forward information to the Danish Tax Administration concerning the content of the deposit account.  By signing the Form K, the Optionee authorizes the Danish Tax Administration to examine the account.

 

FINLAND

 

There are no country specific provisions.

 

FRANCE

 

Language Consent.  By accepting the Option, the Optionee confirms having read and understood the documents relating to this grant (the Plan, the Agreement and this Appendix) which were provided in English language.  The Optionee accepts the terms of those documents
accordingly.

 

En acceptant l’attribution, vous confirmez ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan, le contrat et cette Annexe) qui ont été communiqués en langue anglaise. Vous acceptez les termes en connaissance de cause.

 

Exchange Control Information.  The Optionee may hold shares of Class B Common Stock obtained under the Plan outside of France provided that the Optionee declares all foreign accounts whether open, current, or closed on his or her annual income tax return.

 

GERMANY

 

Exchange Control Information.  If the Optionee remits proceeds in excess of €12,500 out of or into Germany, such cross-border payment must be reported monthly to the State Central Bank.  This reporting is normally accomplished through the German bank involved
in processing the Optionee's payment.  In addition, the Optionee must report any receivables or payables or debts in foreign currency exceeding an amount of €5,000,000 on a monthly basis.

GREECE

 

Exchange Control Information.  If the Optionee exercises his or her Option through a cash exercise, withdraws funds from a bank in Greece and remits those funds out of Greece, the Optionee will be required to submit a written application to the bank containing the following
information:  (i) amount and currency to be remitted; (ii) account to be debited; (iii) name and contact information of the beneficiary (the person or company to whom the funds are to be remitted); (iv) bank of the beneficiary with address and code number; (v) account number of the beneficiary; (vi) details of the payment such as the purpose of the transaction (e.g., exercise of shares); and (vii) expenses of the transaction.

 

If the Optionee exercises his or her Option by way of a cashless method of exercise, this application will not be required since no funds will be remitted out of Greece.

 

HONG KONG

 

Securities Law Information:  Warning:  The Option and shares acquired upon exercise
of the Option do not constitute a public offering of securities under Hong Kong law and are available only to employees of the Company, its subsidiaries or affiliates.  The Plan, the Agreement, and other incidental communication materials have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong.  Nor have the documents been reviewed by any regulatory authority
in Hong Kong.  The Option is intended only for the personal use of each eligible employee of the Employer, the Company or any subsidiary or affiliate and may not be distributed to any other person.  The Optionee is advised to exercise caution in relation to the Option.  If the Optionee is in any doubt about any of the contents of the Agreement, including this Appendix, or the Plan, the Optionee should obtain independent professional advice.

 

Sale Restriction.  Notwithstanding anything contrary in the Agreement or the Plan, in the event the Option vests and the Optionee or his or her heirs and representatives exercise the Option such that shares are issued to the Optionee or his or her heirs and representatives
within six months of the Grant Date, the Optionee agrees that the Optionee or his or her heirs and representatives will not dispose of any shares acquired prior to the six-month anniversary of the Grant Date.

 

Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance.

 

HUNGARY

 

There are no country specific provisions.

 

INDIA

 

Method of Exercise.  Notwithstanding anything to the contrary in the Plan or the Agreement, due to legal restrictions in India, the Optionee will not be permitted to pay the purchase price by a “sell-to-cover”
exercise (i.e., where shares of Class B Common Stock subject to the Option will be sold immediately upon exercise and the proceeds of the sale will be remitted to the Company to cover the purchase price for the purchased shares and any Tax-Related Items or Fringe Benefit Tax withholding).  The Company reserves the right to permit this method of payment depending on the development of local law.

 

Repatriation of Proceeds of Sale.  The Optionee agrees to repatriate all proceeds received from the sale of shares of Class B Common Stock to India within a reasonable time following the sale of the shares of Class B
Common Stock (i.e., within 90 days).  The Optionee must maintain the foreign inward remittance certificate received from the bank where the foreign currency is deposited in the event that the Reserve Bank of India or the Company requests proof of repatriation. It is the Optionee’s responsibility to comply with applicable exchange control laws in India.

 

INDONESIA

 

Method of Exercise.  The following provision supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

Due to regulatory requirements, the Optionee understands that the Optionee will be restricted to the cashless sell-all method of exercise.  To complete a cashless sell-all exercise, the Optionee understands that the Optionee needs to instruct his or her broker to:  (i) sell all of the shares issued upon exercise; (ii)
use the proceeds to pay the purchase price, brokerage fees and any applicable Tax-Related Items; and (iii) remit the balance in cash to the Optionee.  The Optionee will not be permitted to hold shares after exercise.  Depending on the development of local laws or the Optionee’s country of residence, the Company reserves the right to modify the methods of exercising the Option and, in its sole discretion, to permit cash exercise, cashless sell-to cover exercise or any other method of
exercise and payment of Tax-Related Items permitted under the Agreement.

 

ISRAEL

 

Securities Law Notification.  This offer of the Option does not constitute a public offering under the Securities Law, 1968.

 

Method of Exercise.  The following provision supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

Due to regulatory requirements, the Optionee understands that the Optionee will be restricted to the cashless sell-all method of exercise.  To complete a cashless sell-all exercise, the Optionee understands that the Optionee needs to instruct his or her broker to:  (i) sell all of the shares issued upon exercise; (ii)
use the proceeds to pay the purchase price, brokerage fees and any applicable Tax-Related Items; and (iii) remit the balance in cash to the Optionee.  The Optionee will not be permitted to hold shares after exercise.  Depending on the development of local laws or the Optionee’s country of residence, the Company reserves the right to modify the methods of exercising the Option and, in its sole discretion, to permit cash exercise, cashless sell-to cover exercise or any other method of
exercise and payment of Tax-Related Items permitted under the Agreement.

 

ITALY

 

Method of Exercise.  The following provision supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

Due to regulatory requirements, the Optionee understands that the Optionee will be restricted to the cashless sell-all method of exercise.  To complete a cashless sell-all exercise, the Optionee understands that the Optionee needs to instruct his or her broker to:  (i) sell all of the shares issued upon exercise; (ii)
use the proceeds to pay the purchase price, brokerage fees and any applicable Tax-Related Items; and (iii) remit the balance in cash to the Optionee.  The Optionee will not be permitted to hold shares after exercise.  Depending on the development of local laws or the Optionee’s country of residence, the Company reserves the right to modify the methods of exercising the Option and, in its sole discretion, to permit cash exercise, cashless sell-to cover exercise or any other method of
exercise and payment of Tax-Related Items permitted under the Agreement.

 

Data Privacy Notice.  This provision replaces Section 4 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

The Optionee understands that the Company and the Employer as a data processor of the Company may hold certain personal information about the Optionee, including, but not limited to, the Optionee’s name, home address and telephone number, date of birth, social insurance or other identification
number, salary, nationality, job title, any shares of stock or directorships held in the Company or any subsidiary or affiliate, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Optionee’s favor, and that the Company and the Employer will process said data and other data lawfully received from third parties (collectively, “Personal Data”) for the exclusive purpose of managing and administering the Plan and
complying with applicable laws, regulations and legislation. The Optionee also understands that providing the Company with Personal Data is mandatory for compliance with laws and is necessary for the performance of the Plan and that the Optionee’s denial to provide Personal Data would make it impossible for the Company to perform its contractual obligations and may affect the Optionee’s ability to participate in the Plan.  The Optionee understands that Personal Data will not be publicized,
but it may be accessible by the Employer as a data processor of the Company and within the Employer’s organization by its internal and external personnel in charge of processing.  Furthermore, Personal Data may be transferred to banks, other financial institutions or brokers involved in the management and administration of the Plan.  The Optionee understands that Personal Data may also be transferred to the independent registered public accounting firm engaged by the Company, and also
to the legitimate addressees under applicable laws.  The Optionee further understands that the Company and its subsidiaries or affiliates will transfer Personal Data amongst themselves as necessary for the purpose of implementation, administration and management of the Optionee’s participation in the Plan, and that the Company and its subsidiaries or affiliates may each further transfer Personal Data to third parties assisting the Company in the implementation, administration and management of
the Plan, including any requisite transfer of Personal Data to a broker or other third party with whom the Optionee may elect to deposit any shares acquired under the Plan or any proceeds from the sale of such shares.  Such recipients may receive, possess, use, retain and transfer Personal Data in electronic or other form, for the purposes of implementing, administering and managing the Optionee’s participation in the Plan.  The Optionee understands that these recipients may be acting
as controllers, processors or persons in charge of processing, as the case may be, according to applicable privacy laws, and that they may be located in or outside the European Economic Area, such as in the United States or elsewhere, including countries that do not provide an adequate level of data protection as intended under Italian privacy law.

 

Should the Company exercise its discretion in suspending all necessary legal obligations connected with the management and administration of the Plan, it will delete Personal Data as soon as it has accomplished all the necessary legal obligations connected with the management and administration of
the Plan.

 

The Optionee understands that Personal Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data is collected and with confidentiality and security provisions
as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/2003.

 

The processing activity, including communication, the transfer of Personal Data abroad, including outside of the European Economic Area, as specified herein and pursuant to applicable laws and regulations, does not require the Optionee’s consent thereto as the processing is necessary to performance
of law and contractual obligations related to implementation, administration and management of the Plan.  The Optionee understands that, pursuant to Section 7 of the Legislative Decree no. 196/2003, he or she has the right at any moment to, including, but not limited to, obtain confirmation that Personal Data exists or not, access, verify its content, origin and accuracy, delete, update, integrate, correct, block or stop, for legitimate reason, the Personal Data processing.  To exercise privacy
rights the Optionee should address the Data Controller as defined in the employee privacy policy.  Furthermore, the Optionee is aware that Personal Data will not be used for direct marketing purposes.  In addition, Personal Data provided can be reviewed and questions or complaints can be addressed by contacting the Optionee’s human resources department.

 

Plan Document Acknowledgment.  By accepting the Option, the Optionee acknowledges that he or she has received a copy of the Plan, the Agreement and this Appendix and has reviewed the Plan, the Agreement and this Appendix in their entirety and fully accepts all provisions
thereof.  The Optionee further acknowledges that he or she has read and specifically and expressly approves (a) the following provisions of Exhibit A to the Agreement: (i) Section 9: No Right to Employment or Service; (ii) Section 15: Governing Law; Attorneys’ Fees; and (iii) Section 18: Appendix; (b) the following provisions of the Additional Terms For All Non-U.S. Optionees in this Appendix: (i) Section 2: Responsibility for Taxes; (ii) Section
3: Nature of Grant; and (iii) Section 5: Language; and (c) the Data Privacy Notice section set forth immediately above in this Appendix.

 

Exchange Control Information.  The Optionee is required to report the following on his or her annual tax return: (1) any transfers of cash or shares to or from Italy exceeding €10,000, (2) any foreign investments or investments held outside
of Italy at the end of the calendar year exceeding €10,000 if such investments (e.g., Options, shares of Class B Common Stock, or cash) may result in income taxable in Italy (this will include reporting any vested Options if their intrinsic value (i.e., the difference between the fair market value of the shares underlying the vested options at the end of the year and the purchase price) combined with other foreign assets exceed €10,000), and (3) the amount of the transfers to and from abroad which
have had an impact during the calendar year on the Optionee’s foreign investments or investments held outside of Italy. Under certain circumstances, the Optionee may be exempt from the requirement under (1) above if the transfer or investment is made through an authorized broker resident in Italy.

 

JAPAN

 

There are no country specific provisions.

 

KOREA

 

Exchange Control Information.  If the Optionee remits funds out of Korea to pay the purchase price, the remittance of funds must be confirmed by a foreign exchange bank in Korea.  The Optionee should submit the following supporting documents evidencing the nature
of the remittance to the bank together with the confirmation application:  (i) the Agreement; (ii) the Plan; and (iii) his or her certificate of employment.  This confirmation is not necessary if the Optionee pays the purchase price through any form of payment whereby some or all of the shares purchased upon exercise of the Option are sold to pay the purchase price, because in this case there is no remittance of funds out of Korea.

 

If the Optionee realizes US$500,000 or more from the sale of shares, he or she must repatriate the proceeds to Korea within eighteen (18) months of the sale.

 

MALAYSIA

 

Malaysian Insider Trading Notification.  The Optionee should be aware of the Malaysian insider-trading rules, which may impact his or her acquisition or disposal of shares or rights to shares under the Plan.  Under the Malaysian insider-trading rules, the Optionee
is prohibited from purchasing or selling shares (e.g., an Option, shares) when he or she is in possession of information which is not generally available and which he or she knows or should know will have a material effect on the price of shares once such information is generally available.

 

Director Notification Obligation.  If the Optionee is a director of the Company’s Malaysian subsidiary, he or she is subject to certain notification requirements under the Malaysian Companies Act.  Among these requirements is an obligation to notify the Malaysian
subsidiary in writing when the Optionee receives or disposes of an interest (e.g., Option, shares) in the Company or any related company.  Such notifications must be made within 14 days of receiving or disposing of any interest in the Company or any related company.

 

MEXICO

 

No Entitlement or Claims for Compensation.  This provision supplements Section 3 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

By accepting the Option, the Optionee understands and agrees that any modification of the Plan or the Agreement or its termination shall not constitute a change or impairment of the terms and conditions of employment.

 

Policy Statement.  The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.

 

The Company, with registered offices at One Bowerman Drive, Beaverton OR, 97005, U.S.A., is solely responsible for the administration of the Plan and participation in the Plan and, in the Optionee’s case, the acquisition of shares does not, in any way, establish an employment relationship between the Optionee and the Company since
the Optionee is participating in the Plan on a wholly commercial basis and the sole employer is NIKE de Mexico S.A. de C.V., Ontario 1107, Col. Providencia, C.P. 44630, Guadalajara, Mexico, CP 44620, nor does it establish any rights between the Optionee and the Employer.

 

Plan Document Acknowledgment.  By accepting the Option, the Optionee acknowledges that he or she has received copies of the Plan, has reviewed the Plan and the Agreement in their entirety and fully understands and accepts all provisions of the Plan and the Agreement.

 

In addition, by accepting the Option, the Optionee further acknowledges that he or she has read and specifically and expressly approves the terms and conditions in Section 3 of the Additional Terms For All Non-U.S. Optionees in this Appendix, in which the following is clearly described and established: (i) participation in the Plan does
not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company and its parent, subsidiaries and affiliates are not responsible for any decrease in the value of the shares underlying the Option.

 

Finally, the Optionee hereby declares that he or she does do not reserve any action or right to bring any claim against the Company for any compensation or damages as a result of participation in the Plan and therefore grants a full and broad release to the Employer and the Company and its parent, subsidiaries and affiliates with respect
to any claim that may arise under the Plan.

 

Spanish Translation

 

Reconocimiento de la Ley Laboral.  Estas disposiciones complementan el apartado 3 Condiciones adicionales para todos los no-EE.UU. Optionees en el presente Apéndice :

 

Por medio de la aceptación de la Opción, quien tiene la opción manifiesta que entiende y acuerda que cualquier modificación del Plan o su terminación no constituye un cambio o desmejora en los términos y condiciones de empleo.

 

Declaración de Política.  La invitación por parte de la Compañía bajo el Plan es unilateral y discrecional y, por lo tanto, la Compañía se reserva el derecho absoluto de modificar y discontinuar el mismo en cualquier
momento, sin ninguna responsabilidad.

 

La Compañía, con oficinas registradas ubicadas en One Bowerman Drive, Beaverton OR, 97005, EE.UU., es la única responsable por la administración del Plan y de la participación en el mismo y, en el caso del que tiene la opción, la adquisición de acciones no establece de forma alguna,
una relación de trabajo entre el que tiene la opción y la Compañía, ya que la participación en el Plan por parte del que tiene la opción es completamente comercial y el único patrón es NIKE de Mexico S.A. de C.V., Ontario 1107, Col. Providencia, C.P. 44630, Guadalajara, Mexico, CP 44620, así como tampoco establece ningún derecho entre el que
tiene la opción y el patrón.

 

Reconocimiento del Plan de Documentos.  Por medio de la aceptación de la Opción, el que tiene la opción reconoce que ha recibido copias del Plan, que el mismo ha sido revisado al igual que la totalidad del Acuerdo y, que ha entendido y aceptado
las disposiciones contenidas en el Plan y en el Acuerdo.

 

Adicionalmente, por medio de la aceptación de la Opción, el que tiene la opción reconoce que ha leído, y que aprueba específica y expresamente los términos y condiciones contenidos en el apartado 3 Condiciones adicionales para todos los no-EE.UU. Optionees en el presente Apéndice, sección
en la cual se encuentra claramente descrito y establecido lo siguiente:  (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo es ofrecida por la Compañía de forma enteramente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Compañía, así como su sociedad controlante, subsidiaria or filiales no son responsables por cualquier detrimento en el valor de las acciones en relación
con la Opción.

 

Finalmente, por medio de la presente quien tiene la opción declara que no se reserva ninguna acción o derecho para interponer una demanda en contra de la Compañía por compensación, daño o perjuicio alguno como resultado de la participación en el Plan y en consecuencia, otorga el más
amplio finiquito a su patrón, así como a la Compañía, a su sociedad controlante, subsidiaria or filiales con respecto a cualquier demanda que pudiera originarse en virtud del Plan.

 

NETHERLANDS

 

Labor Law Acknowledgment.  By accepting the Option, the Optionee acknowledges that: (i) the Option is intended as an incentive for the Optionee to remain employed with the Employer and is not intended as remuneration for labor performed; and (ii) the Option is not intended
to replace any pension rights or compensation.

 

Securities Law Information. The Optionee should be aware of the Dutch insider-trading rules, which may impact the sale of shares of Class B Common Stock issued upon exercise of the
Option.  In particular, the Optionee may be prohibited from effectuating certain transactions if he or she has inside information about the Company.

 

Under Article 5:56 of the Dutch Financial Supervision Act, anyone who has “insider information” related to an issuing company is prohibited from effectuating a transaction in securities in or from the Netherlands.  “Inside information” is defined as knowledge of specific information concerning the issuing
company to which the securities relate or the trade in securities issued by such company, which has not been made public and which, if published, would reasonably be expected to affect the share price, regardless of the development of the price.  The insider could be any employee of the Company or a subsidiary in the Netherlands who has inside information as described herein.

 

Given the broad scope of the definition of inside information, an Optionee working at a subsidiary or affiliate in the Netherlands may have inside information and, thus, would be prohibited from effectuating a transaction in securities in the Netherlands at a time when he or she has such inside information.

 

If the Optionee is uncertain whether the insider-trading rules apply to him or her, then the Optionee should consult with his or her personal legal advisor.

 

NEW ZEALAND

 

Securities Law Notification.  The Optionee will receive the following documents (in addition to this Appendix) in connection with the Option grant:

 

(i)           an Agreement which sets forth the terms and conditions of the Option grant;

 

	
(ii)
	
a copy of the Company’s most recent annual report and most recent financial reports that have been made publicly available to enable the Optionee to make informed decisions concerning the Option; and

 

	
(iii)
	
a copy of a summary of the Plan (“Summary”) (i.e., the Company’s Form S-8 Plan Prospectus under the U.S. Securities Act of 1933, as amended), and the Company will provide any attachments or documents incorporated by reference into the Summary upon written request.  The documents incorporated by reference into the Summary are updated
periodically.  Should the Optionee request copies of the documents incorporated by reference into the Summary, the Company will provide the Optionee with the most recent documents incorporated by reference.

 

NORWAY

 

No country-specific terms apply.

 

PHILIPPINES

 

Securities Law Information.  The sale or disposal of shares of Class B Common Stock acquired under the Plan may be subject to certain restrictions under Philippines securities
laws.  Those restrictions should not apply if the offer and resale of Class B Common Stock takes place outside of the Philippines through the facilities of a stock exchange on which the shares of Class B Common Stock are listed.  The shares of Class B Common Stock are currently listed on the New York Stock Exchange.  The Optionee’s designated broker should be able to assist the Optionee in the sale of shares of Class B Common Stock on the New York Stock Exchange.  If
the Optionee has questions with regard to the application of Philippines securities laws to the disposal or sale of the shares of Class B Common Stock acquired under the Plan then the Optionee should consult with his or her legal advisor.

 

POLAND

 

Exchange Control Information.  If the Optionee transfers funds in excess of €15,000 into or out of Poland in connection with the purchase or sale of shares acquired upon exercise of the Option, the funds must be transferred via a bank account.  The Optionee
is required to retain the documents connected with a foreign exchange transaction for a period of five (5) years, as measured from the end of the year in which such transaction occurred.  If the Optionee holds shares acquired upon exercise of the Option and/or maintains a bank or brokerage account abroad, the Optionee will have reporting duties to the National Bank of Poland. The Optionee should
consult with his or her personal legal advisor to determine what he or she must do to fulfill any applicable reporting duties.

 

PORTUGAL

 

Exchange Control Information.  If the Optionee holds shares purchased upon exercise of the Option, the acquisition of shares should be reported to the Banco de Portugal for statistical purposes.  If
the shares are deposited with a commercial bank or financial intermediary in Portugal, such bank or financial intermediary will submit the report on the Optionee’s behalf.  If the shares are not deposited with a commercial bank or financial intermediary in Portugal, the Optionee is responsible for submitting the report to the Banco de Portugal.

 

RUSSIA

 

U.S. Transaction.  The Optionee understands that the Option shall be valid and this Agreement shall be concluded and become effective only when the Agreement is electronically received by the Company in the United States.  Upon exercise of the Option, any shares
to be issued to the employee shall be delivered to the Optionee through a bank or brokerage account in the United States. The Optionee is not permitted to sell the shares of Class B Common Stock directly to other Russian legal entities or individuals.

Securities Law Notification.  This Appendix, the Agreement, the Plan and all other materials that the Optionee may receive regarding participation in the Plan do not constitute advertising or an offering of securities in Russia.  The issuance of securities pursuant
to the Plan has not and will not be registered in Russia; hence, the securities described in any Plan-related documents may not be used for offering or public circulation in Russia.

 

Exchange Control Information.  In order to perform a cash exercise of the Option, the Optionee must remit the funds from a foreign currency account at an authorized bank in Russia.  This requirement does not apply if the Optionee uses a cashless method of exercise,
such that there is no remittance of funds out of Russia.

 

Under current exchange control regulations, within a reasonably short time after sale of the shares acquired upon exercise of the Option, the Optionee must repatriate the sale proceeds to Russia.  Such sale proceeds must be initially credited to the Optionee through a foreign currency account at an authorized bank in Russia.  After
the sale proceeds are initially received in Russia, they may be further remitted to foreign banks in accordance with Russian exchange control laws.  If the Optionee exercises his or her Option through a cashless sell-all method of exercise (whereby the Optionee instructs the broker to sell all of the shares issued upon exercise of his or her Option, use the proceeds to pay the purchase price, brokerage fees and any Tax-Related Items and remit the balance in cash to the Optionee), to the extent that
the Optionee receives the exercise proceeds through the Optionee’s local payroll, the requirement to credit the proceeds through a Russian authorized bank will not apply to the Optionee.

 

The Optionee is encouraged to contact his or her personal advisor before remitting the Optionee’s sale proceeds to Russia as exchange control requirements may change.

 

SINGAPORE

 

Securities Law Notification. The Options were granted to the Optionee pursuant to the “Qualifying Person” exemption under section 273(1)(f)
of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”).  The Plan document has not been lodged or registered as a prospectus with the Monetary Authority of Singapore.  The Optionee should note that his or her Options are subject to section 257 of the SFA and the Optionee will not be able to make any subsequent sale in Singapore, or any offer of such subsequent sale of the shares of Class B Common Stock underlying the Option unless such sale or offer in Singapore
is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA (Cap 289, 2006 Ed.).

 

Director Notification Obligation.  If the Optionee is a director, associate director or shadow director of a Singapore subsidiary of the Company, the Optionee is subject to certain notification requirements under the Singapore Companies Act.  Among these requirements
is an obligation to notify the Singaporean subsidiary in writing when the Optionee receives an interest (e.g., Option, shares) in the Company or any related companies.  Please contact the Company to obtain a copy of the notification form.  In addition, the Optionee must notify the Singapore subsidiary when the Optionee sells shares of the Company or any related company (including when the Optionee sells shares acquired under the Plan).  These
notifications must be made within two days of acquiring or disposing of any interest in the Company or any related company.  In addition, a notification must be made of the Optionee’s interests in the Company or any related company within two days of becoming a director.

 

SOUTH AFRICA

 

Responsibility for Taxes.  The following provision supplements Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

By accepting the Option, the Optionee agrees that, immediately upon exercise of the Option, he or she will notify the Employer of the amount of any gain realized.  If the Optionee fails to advise the Employer of the gain realized upon exercise, he or she may be liable for a fine.  The Optionee will be solely responsible
for paying any difference between the actual tax liability and the amount withheld.

 

Tax Clearance Certificate for Cash Exercises.  If the Optionee exercises the Option using a cash exercise method, the Optionee must obtain and provide to the Employer, or any third party designated by the Employer or the Company, a Tax Clearance Certificate (with respect
to Foreign Investments) bearing the official stamp and signature of the Exchange Control Department of the South African Revenue Service (“SARS”).  The Optionee must renew this Tax Clearance Certificate every twelve months, or such other period as may be required by the SARS.  If the Optionee exercises by a cashless exercise method whereby no funds are remitted out of South Africa, no Tax Clearance Certificate is required.

 

Exchange Control Information.  The Optionee should consult his or her personal advisor to ensure compliance with applicable exchange control regulations in South Africa; as such regulations are subject to frequent change.  The Optionee is responsible for ensuring
compliance with all exchange control laws in South Africa.

 

SPAIN

 

Nature of Grant.  This provision supplements Section 3 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

In accepting the Option, the Optionee consents to participate in the Plan and acknowledges that he or she has received a copy of the Plan.

 

The Optionee understands that the Company has unilaterally, gratuitously and discretionally decided to grant stock options under the Plan to individuals who may be employees of the Company or a subsidiary or affiliate throughout the world.  The decision is a limited decision that is entered into upon the express assumption and
condition that any grant will not economically or otherwise bind the Company or any subsidiary or affiliate.  Consequently, the Optionee understands that the Option is granted on the assumption and condition that the Option and any shares acquired upon exercise of the Option are not part of any employment contract (either with the Company or any subsidiary or affiliate) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever.  In
addition, the Optionee understands that the Option would not be granted to the Optionee but for the assumptions and conditions referred to herein; thus, the Optionee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then the grant of this Option shall be null and void.

 

This Option is a conditional right to shares of Class B Common Stock and can be forfeited in the case of, or affected by, the Optionee’s termination of employment.  This will be the case, for example, even if (1) the Optionee is considered to be unfairly dismissed without good cause; (2) the Optionee is dismissed for disciplinary
or objective reasons or due to a collective dismissal; (3) the Optionee terminates employment due to a change of work location, duties or any other employment or contractual condition; (4) the Optionee terminates employment due to unilateral breach of contract of the Company or any of its subsidiaries; or (5) the Optionee’s employment terminates for any other reason whatsoever, except for reasons specified in Sections 1.3, 1.4, 1.5, or 1.6 of Exhibit A to the Agreement.  Consequently, upon termination
of the Optionee’s employment for any of the reasons set forth above, the Optionee may automatically lose any rights to the unvested Options granted to him or her as of the date of the Optionee’s termination of employment, as described in Exhibit A to the Agreement.

 

Exchange Control Information.  The Optionee must declare the acquisition of shares to the Dirección General de Politica Comercial y de Inversiones Extranjeras (the “DGPCIE”) of the Ministerio
de Economia for statistical purposes.  The Optionee must also declare ownership of any shares with the Directorate of Foreign Transactions each January while the shares are owned.  In addition, if the Optionee wishes to import the ownership title of any shares (i.e., share certificates) into Spain, he or she must declare the importation of such securities to the DGPCIE.

 

When receiving foreign currency payments derived from the ownership of shares (i.e., cash dividends or sale proceeds), the Optionee must inform the financial institution receiving the payment of the basis upon which such payment is made.  The Optionee will need to provide
the financial institution with the following information: (i) the Optionee’s name, address and fiscal identification number; (ii) the name and corporate domicile of the Company; (iii) the amount of the payment; (iv) the currency used; (v) the country of origin; (vi) the reasons for the payment; and (vii) additional information that may be required.

 

Securities Law Information.  The grant of Options and the shares of Class B Common Stock issued pursuant to the exercise of the Option are considered a private placement outside of the scope of Spanish laws on public offerings and issuances of securities.

 

SWEDEN

 

Tax Reporting Information.  When the Optionee exercises the Option, the employer is required to report and withhold preliminary income tax on the spread at exercise.  However, it is the Optionee's obligation to inform the employer, no later than the month after
exercise, that the Optionee has exercised the Option and to disclose the taxable amount.

 

SWITZERLAND

 

Securities Law Information.  The grant of the Option is considered a private offering in Switzerland and is, therefore, not subject to registration in Switzerland.

 

Method of Exercise. The following provision supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

Due to regulatory requirements, the Optionee understands that the Optionee will be restricted to the cashless sell-all method of exercise.  To complete a cashless sell-all exercise, the Optionee understands that the Optionee needs to instruct his or her broker to:  (i) sell all of the shares issued upon
exercise; (ii) use the proceeds to pay the purchase price, brokerage fees and any applicable Tax-Related Items; and (iii) remit the balance in cash to the Optionee.  The Optionee will not be permitted to hold shares after exercise.  Depending on the development of local laws or the Optionee’s country of residence, the Company reserves the right to modify the methods of exercising the Option and, in its sole discretion, to permit cash exercise, cashless sell-to cover exercise or any other
method of exercise and payment of Tax-Related Items permitted under the Agreement. 

 

TAIWAN

 

There are no country specific provisions.

 

THAILAND

 

Exchange Control Information.  If the Optionee remits funds out of Thailand to exercise his or her Option, it is the Optionee’s responsibility to comply with applicable exchange control laws.  Under current exchange control regulations, Optionee may remit
funds out of Thailand up to U.S.$1,000,000 per year to purchase shares (and otherwise invest in securities abroad) by submitting an application to an authorized agent, (i.e., a commercial bank authorized by the Bank of Thailand to engage in the purchase, exchange and withdrawal of foreign currency).  The application includes the Foreign Exchange Transaction Form, a letter describing the Option, a copy of the Plan and related documents, and evidence showing the nexus between the Company and the Employer.  If
the Optionee uses a cashless method of exercise that does not involve remitting funds out of Thailand, this requirement does not apply.

 

When the Optionee sells shares issued upon exercise of the Option, the Optionee must repatriate all cash proceeds to Thailand and then convert such proceeds to Thai Baht within 360 days of repatriation.  If the amount of the Optionee’s proceeds is US$20,000 or more, the Optionee must specifically report the inward remittance
to the Bank of Thailand on a foreign exchange transaction form.  If the Optionee fails to comply with these obligations, the Optionee may be subject to penalties assessed by the Bank of Thailand.

 

The Optionee should consult his or her personal advisor prior to taking any action with respect to remittance of proceeds from the sale of shares into Thailand.  The Optionee is responsible for ensuring compliance with all exchange control laws in Thailand.

 

TURKEY

 

Exchange Control Information.  Exchange control regulations require Turkish residents to purchase securities through financial intermediary institutions that are approved under the Capital Market Law (i.e., banks licensed
in Turkey).  Therefore, if the Optionee exercises his or her Option using a cash exercise method, the funds must be remitted through a bank or other financial institution licensed in Turkey.  A wire transfer of funds by a Turkish bank will satisfy this requirement.  This requirement does not apply to a cashless exercise, as no funds are remitted out of Turkey.

 

UNITED KINGDOM

 

Tax Obligations.  The following provisions supplement Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

The Optionee agrees that, if Optionee does not pay or the Employer or the Company does not withhold from the Optionee the full amount of Tax-Related Items that the Optionee owes at exercise of the Option, or the release or assignment of the Option for consideration, or the receipt of any other benefit in connection with the Option (the
“Taxable Event”) within 90 days after the Taxable Event, or such other period specified in section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, then the amount that should have been withheld shall constitute a loan owed by the Optionee to the Employer, effective 90 days after the Taxable Event.  The Optionee agrees that the loan will bear interest at the HMRC’s official rate and will be immediately due and repayable by the Optionee, and the Company and/or the
Employer may recover it at any time thereafter by withholding the funds from salary, bonus or any other funds due to the Optionee by the Employer, by withholding in shares issued upon exercise of the Option or from the cash proceeds from the sale of shares or by demanding cash or a check from the Optionee. The Optionee also authorizes the Company to delay the issuance of any shares unless and until the loan is repaid in full.

 

Notwithstanding the foregoing, if the Optionee is an officer or executive director (as within the meaning of section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), the terms of the immediately foregoing provision will not apply.  In the event that the Optionee is an officer or executive director and Tax-Related
Items are not collected from or paid by the Optionee within 90 days of the Taxable Event, the amount of any uncollected Tax-Related Items may constitute a benefit to the Optionee on which additional income tax and National Insurance Contributions may be payable.  The Optionee acknowledges that the Company or the Employer may recover any such additional income tax and National Insurance Contributions at any time thereafter by any of the means referred to in Section 2 of the Additional Terms For All Non-U.S.
Optionees in this Appendix, although the Optionee acknowledges that he/she ultimately will be responsible for reporting any income tax or National Insurance Contributions due on this additional benefit directly to the HMRC under the self-assessment regime.

 

URUGUAY

 

There are no country specific provisions.

 

VIETNAM

 

Method of Exercise.  The following provision supplements Section 2 of Exhibit A to the Agreement and Section 2 of the Additional Terms For All Non-U.S. Optionees in this Appendix:

 

Due to regulatory requirements, the Optionee understands that the Optionee will be restricted to the cashless sell-all method of exercise.  To complete a cashless sell-all exercise, the Optionee understands that the Optionee needs to instruct his or her broker to:  (i) sell all of the shares issued upon exercise; (ii)
use the proceeds to pay the purchase price, brokerage fees and any applicable Tax-Related Items; and (iii) remit the balance in cash to the Optionee.  The Optionee will not be permitted to hold shares after exercise.  Depending on the development of local laws or the Optionee’s country of residence, the Company reserves the right to modify the methods of exercising the Option and, in its sole discretion, to permit any other method of exercise and payment of Tax-Related Items permitted
under the Agreement.

 

Exchange Control Information.  All cash proceeds from the sale of shares as described above must be immediately repatriated to Vietnam.  Such repatriation of proceeds may need to be effectuated through a special exchange control account established by the Company
or its subsidiary or affiliate, including the Employer.  By accepting the Option, the Optionee consents and agrees that the cash proceeds may be transferred to such special account prior to being delivered to the Optionee.

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