Document:

Industrial Services of America, Inc. - Exhibit 10.4 to Form 8-K

Exhibit 10.4

 

		
			Borrower:
	
			INDUSTRIAL
			SERVICES OF AMERICA, INC

	
			Account Number:
	
			9580514992
	
			BB&T
	
			Note Number:
	
			
			00012

	
			Address:
	
			7100 GRADE LN BLDG
			1
	
			LOUISVILLE ,
	
			Kentucky

	 	
			LOUISVILLE. KY
			40213-3424
	
			Date:
	
			May 7, 2008

 

 

PROMISSORY NOTE

 

THE UNDERSIGNED REPRESENTS
THAT THE LOAN EVIDENCED HEREBY IS BEING OBTAINED FOR BUSINESS/COMMERClAL OR
AGRICULTURAL PURPOSES. For value received. the undersigned, jointly and
severally. if more than one, promises to pay to BRANCH BANKING AND TRUST
COMPANY, a North Carolina banking corporation (the "Bank"). or order, at any
of Bank's offices in the above referenced city (or such other place or places
that may be hereafter designated by Bank), the sum of THREE MILLION DOLLARS &
00/100 Dollars ($3,000,000.00), in immediately available coin or currency of
the United States of America.

 

[   ] Borrower shall pay a
prepayment penalty as set forth in the Prepayment Penalw Addendum attached
hereto.

 

Interest shall accrue from the
date hereof on the unpaid principal balance outstanding from time to time at
the:

[   ] Fixed rate of
__________________% per annum.

[   ] Variable rate of the
Bank's Prime Rate plus % per annum to be adjusted, as the Bank's Prime Rate
changes. If checked here [   ], the interest rate will not exceed a(n) [   ]
fixed  [   ] average maximum rate of ____________% or a [   ] floating maximum
rate of the greater of _____________% or the Bank's Prime Rate; and the interest
rate will not decrease below a fixed minimum rate of _____________%. If an
average maximum rate is specified, a determination of any required reimbursement
of interest by Bank will be made: [   ] when Note is repaid in full by Borrower
 [   ] annually beginning on __________________________

[   ] Fixed rate of
__________________% per annum through ______________________________________
which automatically converts on ____________________________ to a variable rate
equal to the Bank's Prime Rate plus ________________% per annum which shall be
adjusted ____________________________ as such Prime Rate changes.

[X] The Adjusted LIBOR
Rate, as Defined in the Attached Addendum to Promissory Note

Principal and Interest is
payable as follows

		
			[   ] Principal
			(plus any accrued interest not otherwise scheduled herein)
	
			)
	 
	
			[   ] Principal
			plus accrued interest 
	
			)
	
			Is due in full at
			maturity on _____________________

	
			[X] Payable in
			consecutive Monthly installments of 
	
			[   ] Principal
	
			)
	
			)

	 	
			[X] Principal and
			Interest 
	 	
			)   commencing on
			06/07/2008

and continued on the same day
of each calendar period thereafter, in 59 equal payments of $30,966.76, with one
final payment of all remaining principal and accrued interest due on 105/07/2013.

[   ] ChoiceLine Payment
Option: 2% of outstanding balance is payable monthly commencing on
______________. and continuing on the same day of each calendar period
thereafter, with one final payment of all remaining principal and accrued
interest due on __________________

[   ] Accrued interest is
payable _____________commencing on ___________________ and continuing on the same day of each
calendar period thereafter, with one final payment of all remaining Interest due
on ___________________.

[   ] Bank reserves the right
in its sole discretion to adjust the fixed payment due hereunder
_______________________ on ________________ and continuing on the same day of
each calendar period thereafter, in order to maintain an amortization period of
no more than _______ months from the date of the Initial principal payment due
hereunder. Borrower understands the payment may increase if interest rates
increase.

[   ] Prior to an event of
default, Borrower may borrow, repay, and reborrow hereunder pursuant to the
terms of the Loan Agreement, hereinafter defined.

 

[   ] Borrower hereby
authorizes Bank to automatically draft from its demand deposit or savings account(s) with Bank or other bank, any payment(s) due under this Note on the
date(s) due. Borrower shall provide appropriate account number(s) for account(s)
at Bank or other bank.

 

The
undersigned shall pay to Bank a late fee In the amount of five percent (5%) of
any Installment past due for ten (10) or more days. When any installment payment
is past due for ten (10) or more days, subsequent payments shall first be
applied to the past due balance. In addition, the undersigned shall pay to Bank
a returned payment fee if the undersigned or any other obligor hereon makes any
payment at any lime by check or other instrument, or by any electronic means,
which is returned to Bank because of nonpayment due to nonsufficient funds.

All
interest shall be computed and charged for the actual number of days elapsed on
the basis of a year consisting of three hundred sixty (360) days. In the event
periodic accruals of interest shall exceed any periodic fixed payment amount
described above, the fixed payment amount shall be immediately increased, or
additional supplemental interest payments required on the same periodic basis as
specified above (increased fixed payments or supplemental payments to be
determined in the Bank's sole discretion). In such amounts and at such times as
shall be necessary to pay all accruals of interest for the period and all
accruals of unpaid interest from previous periods. Such adjustments to the fixed
payment amount or supplemental payments shall remain in effect for so long as
the interest accruals shall exceed the original fixed payment amount and shall
be further adjusted upward or downward to reflect changes in the variable
interest rate; provided that unless elected otherwise above, the fixed payment
amount shall not be reduced below the original fixed payment amount. However.
Bank shall have the right, in its sole discretion, to lower the fixed payment
amount below the original payment amount.

This note
("NOTE") is given by the undersigned in connection with the following agreements
(if any) between the undersigned and the Bank:

 

Deed(s) of Trust / Mortgage(s)
granted in favor of Bank as beneficiary / mortgagee:

 

[   ] dated
____________________ in the maximum principal amount of $___________________
granted by ______________

[   ] dated
____________________ in the maximum principal amount of $_____________________
granted by ______________

 

Security Agreement(s) granting
a security interest to Bank:

 

[X] dated 5/7/2008
given by INDUSTRIAL SERVICES OF AMERICA, INC.

[   ] dated _________________
given by ____________________________________________

[   ] Securities Account
Pledge and Security Agreement dated _______________________, executed by
_____________________________

[   ] Control Agreement(s)
dated _____________________ covering [   ] Deposit Account(s)          [   ]
Investment Property

                                                                               
         [   ] Letter of Credit Rights      [   ] Electronic Chattel Paper

[   ] Assignment of
Certificate of Deposit, Security Agreement, and Power of Attorney (for
Certificated Certificates of Deposit) dated ________________ executed by
______________________________

[   ] Pledge and Security
Agreement for Publicly Traded Certificated Securities dated _________________
executed by ____________________

[   ] Assignment of Life
Insurance Policy as Collateral dated ________________ executed by
___________________

[X] Loan Agreement dated 
5/7/2008 executed by Borrower and [   ] Guarantor(s).

[X] Commitment Letter dated
03/24/2008, executed by Borrower.

 

All of the
terms, conditions and covenants of the above described agreements (the
"Agreements") are expressly made a part of this Note by reference in the same
manner and with the same effect as if set forth herein at length and any holder
of this Note is entitled to the benefits of and remedies provided in the
Agreements and any other agreements by and between the undersigned and the Bank.

 

Borrower
agrees that the only interest charge is the interest actually stated in this
Note, and that any loan or origination fee shall be deemed charges rather than
Interest, which charges are fully earned and non-refundable. It is further
agreed that any late charges are not a charge for the use of money but are
imposed to compensate Bank for some of the administrative services, costs and
losses associated with any delinquency or default under this Note, and said
charges shall be fully earned and non-refundable when accrued. All other charges
imposed by Bank upon Borrower in connection with this Note and the loan
Including, without limitation, any commitment fees, loan fees, facility fees,
origination fees, discount points, default and late charges, prepayment fees,
reasonable attorneys' fees and reimbursements for costs and expenses paid by
Bank to third parties or for damages incurred by Bank are and shall be deemed to
be charges made to compensate Bank for underwriting and administrative services
and costs, other services, and costs or losses incurred and to be incurred by
Bank in connection with this Note and the Loan and shall under no circumstances
be deemed to be charges for the use of money. All such charges shall be fully
earned and non-refundable when due.

 

No delay or
omission on the part of the holder in exercising any right hereunder shall
operate as a waiver of such right or of any other right of such holder, nor
shall any delay, omission or waiver on any one occasion be deemed a bar to or
waiver of the same or of any other right on any future occasion. Every one of
the undersigned and every endorser or guarantor of this Note regardless of the
time, order or place of signing waives presentment, demand, protest and notices
of every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral if at any time there be available to the holder
collateral for this Note, and to the additions or releases of any other parties
or persons primarily or secondarily liable.

 

The failure
to pay any part of the principal or interest when due on this Note or to fully
perform any covenant, obligation or warranty on this or on any other liability
to the Bank by any one or more of the undersigned, by any affiliate of the
undersigned (as defined in 11 USC Section (101) (2)), or by any guarantor or
surety of this Note (said affiliate, guarantor. and surety are herein called
Obligor); or if any financial statement or other representation made to the Bank
by any of the undersigned or any Obligor shall be found to be materially
incorrect or incomplete; or if any of the undersigned shall fail to furnish
Information to the Bank sufficient to verify the identity of the undersigned as
required under the USA Patriot Act or in the event of a default pursuant to any
of the Agreements or any other obligation of any of the undersigned or any
Obligor in favor of the Bank; or in the event the Bank demands that the
undersigned secure or provide additional security for its obligations under this
Note and security deemed adequate and sufficient by the Bank is not given when
demanded: or in the event one or more of the undersigned or any Obligor shall
die, terminate its existence, allow the appointment of a receiver for any part
of its property, make an assignment for the benefit of creditors, or where a
proceeding under bankruptcy or insolvency laws is initiated by or against any of
the undersigned or any Obligor; or in the event the Bank should otherwise deem
itself, its security interest, or any collateral unsafe or insecure; or should
the Bank in good faith believe that the prospect of payment or other performance
is impaired; or if there is an attachment, execution, or other judicial seizure
of all or any portion of the Borrower's or any Obligor's assets, including an
action or proceeding to seize any funds on deposit wit hthe Bank, and such
seizure is not discharged within 20 days; or if final judgment for the payment
of money shall be rendered against the Borrower or any Obligor which is not
covered by insurance or debt cancellation and shall remain undischarged for a
period of 30 days unless such judgment or execution thereon is effectively
stayed; or the termination of any guaranty agreement given in connection with
this Note, then any one of the same shall be a material default hereunder and
this Note and other debts due the Bank by any one or more of undersigned shall
immediately become due and payable without notice, at the option of the Bank. 
From and after any event of default hereunder, interest shall accrue on the sum
of the principal balance and accrued interest then outstanding at the variable
rate equal to the Bank's Prime Rate plus 5% per annum ("Default Rate"), provided
that such rate shall not exceed at any time the highest rate of interest
permitted by the laws of the State of Kentucky; and further rprovided that such
rate shall apply after judgement.  In the event of any default, the then
remaining unpaid principal amount and accrued but unpaid Interest then
outstanding shall bear interest at the Default Rate called for hereunder until
such principal and interest have been paid in full.  In addition, upon default,
the Bank may pursue its full legal remedies at law or equity, and the balance
due hereunder may be charged against any obligation of the Bank to any party
including any Obligor.  Bank shall not be obligated to accept any check, money
order, or other payment instrument marked "payment in full" on any disputed
amount due hereunder, and Bank expressly reserves the right to reject all such
payment instruments.  Borrower agrees that tender of its check or other payment
instrument so marked will not satisfy or discharge its obligation under this
Note, disputed or otherwise, even if such check or payment instrument is
inadvertently processed by Bank unless in fact such payment is in fact
sufficient to pay the amount due hereunder.

 

WAIVER
OF TRIAL BY JURY. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE
UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS
ARISING OUT OF THIS NOTE OR ANY LOAN DOCUMENT EXECUTED IN CONNECTION HEREWITH OR
OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND BANK. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN EVIDENCED BY THIS
NOTE. FURTHER. THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF
BANK, NOR BANK'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK
WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION IN THE
EVENT OF LITIGATION. NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK'S COUNSEL, HAS
THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

 

Unless
otherwise required under a Loan Agreement, If applicable, and as long as any
indebtedness evidenced by this Note remains outstanding or as long as Bank
remains obligated to make advances, the undersigned shall furnish annually an
updated financial statement in a form satisfactory to Bank, which, when
delivered shall be the property of the Bank.

 

The term
"Prime Rate," if used herein, means the rate of interest per annum announced by
the Bank from time to time and adopted as its Prime Rate. The Prime Rate is one
of several rate indexes employed by the Bank when extending credit. Any change
in the Interest rate resulting from a change in the Bank's Prime Rate shall
become effective as of the opening of business on the effective date of the
change.  If this Note is placed with an attorney for collection, the undersigned
agrees to pay, in addition to principal and Interest, all costs of collection,
including but not limited to reasonable attorneys' fees. All obligations of the
undersigned and of any Obligor shall bind his heirs, executors, administrators,
successors, and/or assigns. Use of the masculine pronoun herein shall include
the feminine and the neuter, and also the plural. If more than one party shall
execute this Note, the term "undersigned" as used herein shall mean all the
parties signing this Note and each of them, and all such parties shall be
jointly and severally obligated hereunder. Wherever possible, each provision of
this Note shall be interpreted in such a manner to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited by or
invalid under such law, such provision shall be ineffective but only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Note. All of the undersigned
hereby waive all exemptions and homestead laws. The proceeds of the loan
evidenced by this Note may be paid to any one or more of the undersigned. 

 

From time
to time the maturity date of this Note may be extended, or this Note may be
renewed in whole or in part, or a new note of different form may be substituted
for this Note, or the rate of interest may be modified, or changes may be made
in consideration of loan extensions, and the holder hereof, from time to time
may waive or surrender, either in whole or in part any rights, guaranties,
secured interest, or liens, given for the benefit of the holder in connection
with the payment and the securing the payment of this Note; but no such
occurrence shall in any manner affect, limit, modify, or otherwise impair any
rights, guaranties or security of the holder not specifically waived, released,
or surrendered in writing, nor shall the undersigned makers, or any guarantor,
endorser, or any person who is or might be liable hereon, either primarily or
contingently, be released from such event.  The holder hereof, from time to
time, shall have the unlimited right to release any person who might be liable
hereon, and such release shall not affect or discharge the liability of any
other person who is or might be liable hereon. No waivers and modifications
shall be valid unless in writing and signed by the Bank. The Bank may, at its
option, charge any fees for the modification, renewal, extension, or amendment
of any of the terms of the Note not prohibited by Kentucky law. In case of a
conflict between the terms of this Note and the Loan Agreement or Commitment
Letter executed in connection herewith, the priority of controlling terms shall
be first this Note, then the Loan Agreement, and then the Commitment Letter.
This Note shall be governed by and construed in accordance with the laws of
Kentucky.

 

 

(SIGNATURES ON FOLLOWING PAGE)

 

 

 

PROMISSORY NOTE SIGNATURE PAGE

 

		
			Borrower:
	
			INDUSTRIAL
			SERVICES OF AMERICA, INC

	
			Account Number:
	
			9580514992
	 	
			Note Number:
	
			
			00012

	
			Note Amount:
	
			$3,000,000.00
	
			Date:
	
			May 7, 2008

 

Notice of Right to
Company of Appraisal:  If a 1-4 family residential dwelling is pledged
as collateral for this Note, you, the undersigned, have a right to a copy of the
real estate appraisal report used in connection with your application for
credit.  If you wish to receive a copy, please notify in writing the branch
office where you applied for credit.  You must forward your request to the Bank
no later than 90 days after the date of this Note.  In your request letter,
please provide your name, mailing address, appraised property address, the date
of this Note, and the Account and Note Numbers shown on the front of this Note.

 

 

IN WITNESS WHEREOF, the
undersigned, on the day and year first written above, has caused this Note to be
executed.

 

If Borrower is
a Corporation:

 

		
			WITNESS:
	 	
			Industrial Services of America, Inc.

	 	 	 
	
			/s/ John L. Perry
	
			By:
	
			/s/ Harry Kletter

	 	 	
			Harry Kletter

	 	
			Title:
	
			Chief Executive Officer and President

	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	
			If
			Borrower is a Partnership, Limited Liability Company, Limited
			Liability Partnership,

			or Limited Liability Limited Partnership:

	 	 	 
	
			WITNESS:
	 	 
	 	 	
			
			NAME OF PARTNERSHIP, LLC, LLP OR LLLP

	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	 	 	 
	
			IF
			Borrower is an Individual:

	 	 	 
	
			WITNESS:
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
			
			Additional Co-makers:

	
			WITNESS:
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

 

 

ADDENDUM TO PROMISSORY NOTE

 

 

                THIS ADDENDUM
TO PROMISSORY NOTE ("Addendum") is hereby made a part of the Promissory Note
dated May 7, 2008 from INDUSTRIAL SERVICES OF AMERICA, INC. ("Borrower")
payable to the order of Branch Banking and Trust Company ("Bank") in the
principal amount of $ 6,000,000.00 (including all renewals, extensions,
modifications and substitutions therefore, the "Note").

 

I.              DEFINITIONS

 

1.1           Adjusted
LlBOR Rate means a rate of interest per annum equal to the sum obtained
(rounded upwards, if necessary, to the next higher 1/100th of 1.0%) by adding (i)
the One Month LlBOR plus (ii) 1.625% per annum, which shall be adjusted
monthly on the first day of each month for each LlBOR lnterest Period. If the
first day of any month falls on a date when the Bank is closed, the Adjusted
LlBOR Rate shall be determined as of the last preceding business day. The
Adjusted LlBOR Rate shall be adjusted for any change in the LIBOR Reserve
Percentage so that Bank shall receive the same yield. If checked here [   ] the
interest rate will not exceed a(n) [   ] fixed [   ] average maximum rate of
_____________% and will not decrease below a minimum rate of ___________%. If an
average maximum rate is specified, a determination of the average interest rate
assessed and a reimbursement by Bank of interest paid in excess of the maximum
rate, if any, will be made on _____________. If the loan has been repaid prior
to this date, no reimbursement will be made.

 

1.2           One Month
LlBOR means the average rate (rounded upwards, if necessary, to the next
higher 1/100th of 1.0%) quoted on Bloomberg Screen BBAM1 or Page 3750 (or such
replacement page) of the Telerate Service on the determination date for deposits
in U.S. Dollars offered in the London interbank market for one month, or if the
above method for determining the One Month LIBOR shall not be available, the
rate quoted in The Wall Street Journal, or a rate determined by a substitute
method of determination agreed on by Borrower and Bank; provided, if such
agreement is not reached within a reasonable period of time (in Bank's sole
judgement), a rate reasonably determined by Bank in its sole discretion as a
rate being paid, as of the determination date, by first class banking
organizations (as determined by Bank) in the London interbank market for U.S.
Dollar deposits.

 

1.3           LlBOR Advance
means the advances made by Bank to Borrower evidenced by this Note upon which
the Adjusted LlBOR Rate of interest shall apply.

 

1.4           LlBOR
lnterest Period means a period of one calendar month as may be elected by
the Borrower applicable to any LlBOR Advance which shall begin on first day of
any month notwithstanding the maturity date of this Note; provided, however,
that a LlBOR lnterest Period may be less than one calendar month in and only in
the calendar month in which the Note originates or matures.

 

1.5           LlBOR Reserve
Percentage means the maximum aggregate rate at which reserves (including,
without limitation, any marginal supplemental or emergency reserves) are
required to be maintained under Regulation D by member banks of the Federal
Reserve System with respect to dollar funding in the London interbank market.
Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall
reflect any other reserves required to be maintained by such member banks by
reason of any applicable regulatory change against (i) any category of liability
which includes deposits by reference to which the Adjusted LIBOR Rate is to be
determined or (ii) any category of extensions of credit or other assets related
to LIBOR.

 

1.6           Standard Rate
means, for any day, a rate per annum (rounded upwards, if necessary, to the next
higher 1/100th of 1.0%) equal to the Bank's announced Prime Rate minus 1.125%
per annum, and each change in the Standard Rate shall be effective on the date
any change in the Prime Rate is publicly announced as being effective.

 

 

II.             LOAN
BEARING ADJUSTED LlBOR RATE

 

2.1           Application
Of Adjusted LIBOR Rate.  The Adjusted LlBOR Rate shall apply to the entire
principal balance outstanding of a LIBOR Advance for any LlBOR Interest Period.

 

2.2           Adjusted
LIBOR-Based Rate Protections.

 

                (a)          
Inability to Determine Rate. In the event that Bank shall have
determined, which determination shall be final, conclusive and binding, that by
reason of circumstances occurring after the date of this Note affecting the
London interbank market, adequate and fair means do not exist for ascertaining
the One Month LlBOR on the basis provided for in this Note, Bank shall give
notice (by telephone confirmed in writing or by telecopy) to Borrower of such
determination, whereupon (i) no LIBOR Advance shall be made until Bank notifies
Borrower that the circumstances giving rise to such notice no longer exist, and
(ii) any request by Borrower for a LIBOR Advance shall be deemed to be a request
for an advance at the Standard Rate.

 

                (b)          
Illegality; Impracticability.  In the event that Bank shall determine,
which determination shall be final, conclusive and binding, that the making,
maintaining or continuance of any portion of a LlBOR Advance (i) has become
unlawful as a result of compliance by Bank with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any of the same not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause Bank material
hardship, as a result of contingencies occurring after the date of this Note
materially and adversely affect the London interbank market or Bank's ability to
make LlBOR Advances generally, then, and in any such event, Bank shall give
notice (by telephone confirmed in writing or by telecopy) to Borrower of such
determination. Thereafter, (x) the obligation of Bank to make any LlBOR Advances
or to convert any portion of the loan to a LlBOR Advance shall be suspended
until such notice shall be withdrawn by Bank, and (y) any request by Borrower
for a LIBOR Advance shall be deemed to be a request for an advance at the
Standard Rate.

 

If Borrower
is a Corporation:

		
			WITNESS:
	 	
			Industrial Services of America, Inc.

	 	 	 
	
			/s/ John L. Perry
	
			By:
	
			/s/ Harry Kletter

	 	 	
			Harry Kletter

	 	
			Title:
	
			Chief Executive Officer and President

	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	
			If
			Borrower is a Partnership, Limited Liability Company, Limited
			Liability Partnership,

			or Limited Liability Limited Partnership:

	 	 	 
	
			WITNESS:
	 	 
	 	 	
			
			NAME OF PARTNERSHIP, LLC, LLP OR LLLP

	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	 	
			By:
	 
	 	 	 
	 	
			Title:
	 
	 	 	 
	 	 	 
	
			IF
			Borrower is an Individual:

	 	 	 
	
			WITNESS:
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
			
			Additional Co-makers:

	
			WITNESS:AMENDMENT NO. 1 TO
CREDIT AGREEMENT  

        This
Amendment No. 1 to Credit Agreement (this “Amendment”) is entered into as
of May 18, 2008 by and among The Manitowoc Company, Inc., a Wisconsin corporation (the
“Borrower”), the Subsidiary Borrowers signatory hereto (together with the
Borrower, the “Borrowers”), JPMorgan Chase Bank, N.A., individually, as
administrative agent (the “Administrative Agent”) and as Collateral
Agent, and the other financial institutions signatory hereto. 

RECITALS 

        A.                 The
Borrowers, the Administrative Agent and the Lenders are party to that           certain
credit agreement dated as of April 14, 2008 (the “Credit           Agreement”).
Unless otherwise specified herein, capitalized terms used           in this Amendment
shall have the meanings ascribed to them by the Credit           Agreement.  

        B.                 The
Borrowers, the Administrative Agent and the undersigned Lenders wish to           amend
the Credit Agreement on the terms and conditions set forth below.  

        Now,
therefore, in consideration of the mutual execution hereof and other good and valuable
consideration, the parties hereto agree as follows: 

            1.       Amendment
to Credit Agreement. Upon the “Effective Date” (as           defined
below), the Credit Agreement shall be amended as follows:  

		    (a)       The
defined term “Press Release” in Section 1.01 of the Credit           Agreement
is hereby deleted and replaced with the following:  

	 	
“Press
Release” means the Original Press Release as supplemented and modified by the
Supplemental Press Release. 

		    (b)       The
defined term “Term Y Commitment” in Section 1.01 of the Credit
          Agreement is hereby deleted and replaced with the following:  

	 	
“Term
Y Commitment” means, with respect to each Lender, the commitment of such Lender
to make Term Y Loans hereunder, expressed as an amount representing the maximum aggregate
principal amount of such Lender’s Term Y Loans. The amount of each Lender’s Term
Y Commitment is set forth on Schedule 2.01. The initial aggregate amount of the
Lenders’ Term Y Commitment is $1,075,000,000. 

		    (c)       The
defined terms “Original Press Release” and “Supplemental           Press
Release” are added to Section 1.01 of the Credit Agreement in           appropriate
alphabetical order as follows:  

	 	
“Original
Press Release” means the press release dated April 14, 2008 announcing
Newco’s firm intention to make an offer for the Target Shares by way of a Scheme. 

	 	
“Supplemental
Press Release” means the first press release in the form agreed by the
Administrative Agent announcing the Borrower’s increase of its prior offer for the
Target Shares to a price of 294 pence per Target Share and supplementing the Original
Press Release. 

		    (d)        Section
5.14(a)(v) of the Credit Agreement is hereby deleted and replaced with           the
following:  

	 	
(v)
                     issue the Original Press Release or ensure that the Original Press
Release is                     issued within five days of the date of this Agreement and
issue the Supplemental                     Press Release or ensure that the Supplemental
Press Release is issued within                     five days of the date of Amendment No.
1 to this Agreement.  

		    (e)       Section
9.02(b) of the Credit Agreement is hereby amended by deleting the phrase           “April
13, 2008” and replacing it with “May 18, 2008".  

		    (f)       Schedule
1.01 to the Credit Agreement is hereby deleted and replaced with the           form of
Schedule 1.01 attached hereto.  

		    (g)       Schedule
2.01 to the Credit Agreement is hereby deleted and replaced with the           form of
Schedule 2.01 attached hereto.  

		    (h)       Schedule
3.13 of the Credit Agreement is hereby amended to insert the following           beneath
the heading of “Subsidiaries of Manitowoc Crane Group Asia Pte           Ltd”:  

	Tai’an Dongyue Heavy Machinery	(China)
	Company Ltd. (50%)

		    (i)        Schedule
6.05 of the Credit Agreement is amended to add the following at the           conclusion
thereof:  

	 	
“Note:
 Existing  Investments  in  Subsidiaries  are set forth on Schedule 3.13
                  hereof.” 

        2.       Amendment
to All Credit Documents. Upon the Effective Date all references           in the
Credit Documents (including, but not limited to, in the Credit Agreement)           to
“$2,400,000,000” shall be deemed deleted and corresponding           references
to “$2,675,000,000” shall be substituted in lieu thereof.  

        3.       Representations
and Warranties of the Borrowers. The Borrowers represent           and warrant that:  

2 

		    (a)       The
execution, delivery and performance by the Borrowers of this Amendment have
          been duly authorized by all necessary corporate action and that this Amendment
          is a legal, valid and binding obligation of the Borrowers enforceable against
          the Borrowers in accordance with its terms, except as the enforcement thereof
          may be subject to the effect of any applicable bankruptcy, insolvency,
          reorganization, moratorium or similar law affecting creditors’ rights
          generally;  

		    (b)       Each
of the representations and warranties contained in the Credit Agreement is           true
and correct in all material respects (except that any representation or
          warranty which is already qualified as to materiality or by reference to
          Material Adverse Effect is true and correct in all respects) on and as of the
          date hereof (other than representations and warranties that relate solely to an
          earlier date);  

		    (c)       After
giving effect to this Amendment, no Default has occurred and is           continuing.  

        4.       Effective
Date. This Amendment shall become effective upon the execution           and delivery
hereof by the Borrowers, the Administrative Agent and all of the           Lenders;
provided that Sections 1 and 2 hereof shall not become effective until           the date
(the “Effective Date”) when the following additional
          conditions have also been satisfied:  

		    (a)       The
Administrative Agent shall have received documents and certificates relating           to
the authorization of this Amendment and the transactions contemplated hereby           by
the Borrowers and each Subsidiary Guarantor in form and substance           satisfactory
to the Administrative Agent.  

		    (b)       The
Administrative Agent shall have received a reasonably satisfactory solvency
          certificate from a Financial Officer of the Borrower as to the solvency of the
          Borrower and its Subsidiaries (other than the Target and its Subsidiaries)
after           giving effect to the Transactions.  

		    (c)       Each
of the Credit Parties shall have executed and delivered to the           Administrative
Agent a Reaffirmation of Guaranty and Collateral Documents in the           form of
Exhibit A hereto.  

		    (d)       The
Administrative Agent shall have received an executed legal opinion from           Foley
& Lardner LLP in form and substance satisfactory to the Administrative
          Agent. The Borrower hereby requests such counsel to deliver such opinion.  

		    (e)       The
Borrower shall have paid (or made arrangements satisfactory to the
          Administrative Agent for payment) to the Administrative Agent (for the benefit
          of the Lenders and their applicable Affiliates) all separately agreed fees,
          which fees shall be deemed fully earned and non-refundable on the Effective
          Date.  

		    (f)       The
Borrowers shall have provided such other corporate and other certificates,
          opinions, documents, instruments and agreements as the Administrative Agent may
          reasonably request.  

3 

The Administrative Agent shall notify
the Borrower and the Lenders promptly of the occurrence of the Effective Date and such
notice shall be conclusive and binding on all parties hereto. In the event the Effective
Date has not occurred on or before May 21, 2008, Sections 1 and 2 hereof shall not become
operative and shall be of no force or effect. 

        5.       Reference
to and Effect Upon the Credit Agreement.  

		    (a)       Except
as specifically amended or waived above, the Credit Agreement and the           other
Credit Documents shall remain in full force and effect and are hereby           ratified
and confirmed in all respects.  

		    (b)       The
execution, delivery and effectiveness of this Amendment shall not operate as           a
waiver of any right, power or remedy of the Administrative Agent, the
          Collateral Agent or any Lender under the Credit Agreement or any other Credit
          Document, nor constitute a waiver of any provision of the Credit Agreement or
          any other Credit Document, except as specifically set forth herein. Upon the
          effectiveness of this Amendment, each reference in the Credit Agreement to
          “this Agreement”, “hereunder”, “hereof”,
          “herein” or words of similar import shall mean and be a reference to
          the Credit Agreement as amended hereby.  

		    (c)       This
Amendment shall be deemed to be a Credit Document for all purposes of the
          Credit Documents.  

        6.       Costs
and Expenses. The Borrower hereby affirms its obligations under           Section
9.03 of the Credit Agreement to reimburse the Administrative Agent for           all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
          connection with the preparation, negotiation, execution and delivery of this
          Amendment, including but not limited to the reasonable fees, charges and
          disbursements of attorneys for the Administrative Agent with respect thereto.  

        7.       Governing
Law. This Agreement shall be construed in accordance with and           governed by
the law (without regard to conflict of law provisions) of the State           of New
York.  

        8.       Headings.
Section headings in this Amendment are included herein for           convenience of
reference only and shall not constitute a part of this Amendment           for any other
purposes.  

        9.       Counterparts.
This Amendment may be executed in any number of           counterparts, each of which
when so executed shall be deemed an original but all           such counterparts shall
constitute one and the same instrument.  

[SIGNATURE PAGES
FOLLOW] 

4 

        IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first
above written. 

	 	THE MANITOWOC COMPANY, INC.
	

 	By  /s/ Maurice D. Jones
		Name:  Maurice D. Jones
		Title:  Senior Vice President,
		           General Counsel & Secretary
	

 	MANITOWOC EMEA HOLDING SARL
	
 	By  /s/ Maurice D. Jones
		Name:  Maurice D. Jones
		Title:  Manager
	

 	MANITOWOC HOLDING ASIA SAS
	
 	By  /s/ Maurice D. Jones
		Name:  Maurice D. Jones
		Title:  General Manager

[The Manitowoc Company,
Inc. Amendment No. 1] 

	 	JPMORGAN CHASE BANK, N.A., individually and as
	 	Administrative Agent and Collateral Agent
	

 	By  /s/ Mike Kelly
		Name:  Mike Kelly
		Title:  Vice President

[The Manitowoc Company,
Inc. Amendment No. 1] 

	 	DEUTSCHE BANK AG NEW YORK BRANCH
	

 	By  /s/ Evelyn Thierry
		Name:  Evelyn Thierry
		Title:  Vice President
	
 	By  /s/ Susan LeFevre
		Name:  Susan LeFevre
		Title:  Director

[The Manitowoc Company,
Inc. Amendment No. 1] 

	 	MORGAN STANLEY SENIOR FUNDING, INC.
	

 	By  /s/ Jonathan Tunis
		Name:  Jonathan Tunis
		Title:  Vice President

[The Manitowoc Company,
Inc. Amendment No. 1] 

		BNP PARIBAS
	

 	By  /s/ Dimitri Jobert
		Name:  Dimitri Jobert
		Title:  Director
	
 	By /s/ Andrew Kirby
		Name:  Andrew Kirby
		Title:  Vice President

[The Manitowoc Company,
Inc. Amendment No. 1]

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