Document:

EX 4.2 First supplemental indenture 8.50% Notes

FIRST SUPPLEMENTAL INDENTURE

FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”) dated as of  April 9, 2011, among AMERICAN AUTOGARD LLC  (the “New Guarantor”), an indirect subsidiary of RBS GLOBAL, INC. (or its successor), a Delaware corporation (the “Company”), the Company, REXNORD LLC, a Delaware limited liability company (“Rexnord” and, together with the Company, the “Issuers”), the existing guarantors  (the “Guarantors”) under the Indenture (as defined below), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Issuers and the existing Guarantors have heretofore executed and delivered to the Trustee an indenture (as amended, supplemented or otherwise modified, the “Indenture”) dated as of April 28, 2010, providing for the issuance of the Issuers' 81⁄2% Senior Notes due 2018 (the “Securities”), initially in the aggregate principal amount of $1,145,000,000;

WHEREAS, Section 4.11 of the Indenture provides that under certain circumstances the Issuers are required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all the Issuers' Obligations under the Securities and the Indenture pursuant to a Guarantee on the terms and conditions set forth herein; 

WHEREAS, for purposes of clarification, after the date of this First Supplemental Indenture, the Guarantors under the Indenture will be the following entities:  The Falk Service Corporation, Prager Incorporated, PT Components, Inc., RBS Acquisition Corporation, RBS China Holdings, L.L.C., Rexnord Industries, LLC, Rexnord International Inc., Rexnord-Zurn Holdings, Inc., OEI, Inc., OEP, Inc., Krikles, Inc., Zurco, Inc., Zurn International, Inc., Zurn Pex, Inc., Environmental Energy Company, HL Capital Corp., Sanitary-Dash Manufacturing Co., Inc., Zurn Industries, LLC, GA Industries Holdings, LLC, GA Industries, LLC, Rodney Hunt Company, Inc., and American Autogard LLC; and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Issuers and the existing Guarantors are authorized to execute and deliver this First Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of each other and the holders of the Securities as follows:

1.Defined Terms.  As used in this First Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “Holders” in this Guarantee shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders.  The words “herein,” “hereof” and “hereby” and other words of similar import used in this First Supplemental Indenture refer to this First Supplemental Indenture as a whole and not to any particular section hereof.

2.Agreement to Guarantee.  The New Guarantor hereby agrees, jointly and severally with all existing Guarantors, to unconditionally guarantee the Issuers' Obligations under the Securities and the Indenture on the terms and subject to the conditions set forth in Article 11 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Securities and to perform all of the 

obligations and agreements of a Guarantor under the Indenture.

3.Notices.  All notices or other communications to the New Guarantor shall be given as provided in Section 13.02 of the Indenture.

4.Ratification of Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This First Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby.

5.Governing Law.  THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

6.Trustee Makes No Representation.  The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture.

7.Counterparts.  The parties may sign any number of copies of this First Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

8.Effect of Headings.  The Section headings herein are for convenience of reference only and shall not effect the construction thereof.

[SIGNATURE PAGE FOLLOWS.]

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first above written.

AMERICAN AUTOGARD LLC
By:    /s/  Patricia M. Whaley    
Name:  Patricia M. Whaley
Title:  Vice President,  General Counsel & Secretary
RBS GLOBAL, INC.
By:    /s/  Patricia M. Whaley    
Name:  Patricia M. Whaley
Title:  Vice President,  General Counsel & Secretary
REXNORD LLC
By:    /s/  Patricia M. Whaley    
Name:  Patricia M. Whaley
Title:  Vice President,  General Counsel & Secretary

The Falk Service Corporation
Prager Incorporated
PT Components, Inc.
RBS Acquisition Corporation
RBS China Holdings, L.L.C.
Rexnord industries, LLC
Rexnord International Inc.
Rexnord-Zurn Holdings, Inc.
OEI, Inc.
OEP, Inc.
Krikles, Inc.
Zurco, Inc.
Zurn International, Inc.
Zurn PEX, Inc.
Environmental Energy Company
HL Capital Corp.
Sanitary-Dash Manufacturing Co., Inc.
Zurn Industries, LLC
GA Industries Holdings, LLC
GA Industries, LLC
Rodney Hunt Company, INC.

By:    /s/  Patricia M. Whaley            
Name:  Patricia M. Whaley
Title:  Vice President,  General Counsel & Secretary
WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE
By:    /s/  Gregory S. Clarke    
Name: Gregory S. Clarke
Title: Vice PresidentMYRIAD INTERACTIVE MEDIA, INC.

 

STOCK OPTION AGREEMENT

GRANTED UNDER THE 2007 STOCK OPTION PLAN

 

This Stock Option Agreement (the “Agreement”) evidences
the grant by Myriad Interactive Media, Inc., a Delaware corporation (the “Company”), on July 29, 2011, (the “Grant
Date”) to Leandro Dumlao, (the “Optionee”), of an option to purchase, in whole or in part, on the terms provided
herein and in the Company’s 2007 Stock Option Plan (the “Plan”), a total of 1,500,000 shares (the “Shares”)
of common stock, $0.001 par value per share of the Company’s Common Stock at $0.10 per Share. Unless earlier terminated,
this option shall expire on July 29, 2013 (the “Final Exercise Date”).

 

It is intended that the option evidenced by this agreement shall,
to the extent it so qualifies, be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended and any regulations promulgated there under (the "Code"). To the extent that the option does not on the date
of grant, or hereafter ceases to, qualify as an incentive stock option, it shall be a non-qualified stock option. Except as otherwise
indicated by the context, the term "Participant", as used in this option, shall be deemed to include any person who acquires
the right to exercise this option validly under its terms.

 

Vesting Schedule:

 

Subject to the terms and conditions set forth in this Agreement,
this option will become exercisable (“vest”) immediately upon the signing of the Agreement by the Company and Leandro
Dumlao.

 

Notice and Payment:

 

Any exercisable portion of this Stock Option may be exercised only
by:

 

(a) delivery of a written notice to the Company
prior to the time when such Stock Option becomes un-exercisable herein, stating the number of shares being purchased and complying
with all applicable rules established by the Plan Administrator;

 

(b) payment in full of the exercise
price of such Option by, as applicable by

delivery of:

(i) cash or check for an amount equal
to the aggregate Stock Option exercise price for the number of shares being purchased,

 

(ii) in the discretion of the Plan
Administrator, upon such terms as the Plan Administrator shall approve, a copy of instructions to a broker directing such broker
to sell the Common Stock for which such Option is exercised, and to remit to the Company the aggregate exercise price of such Stock
Option (a “cashless exercise”), or

 

(iii) at the discretion of the Plan
Administrator, upon such terms as the Plan Administrator shall approve, shares of the Company’s Common Stock owned by the
Optionee, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the aggregate purchase
price of the shares with respect to which such Stock Option or portion is thereby exercised (a “stock-for-stock exercise”);

    	 

    	 

    

 

(c) payment of the amount of tax required to be withheld
(if any) by the

Company, or any parent or subsidiary corporation as a result of
the exercise of a Stock Option. At the discretion of the Plan Administrator, upon such terms as the Plan Administrator shall approve,
the Optionee may pay all or a portion of the tax withholding by:

 

(i)                  
cash or check payable to the Company, 

 

(ii)                
a cashless exercise, 

 

(iii)               
a stock-for-stock exercise, or 

 

(iv)              
a combination of one or more of the foregoing payment methods; and

 

 (d) delivery of a written notice to the Company
requesting that the Company direct the transfer agent to issue to the Optionee (or his designee) a certificate for the number of
shares of Common Stock for which the Option was exercised or, in the case of a cashless exercise, for any shares that were not
sold in the cashless exercise. Notwithstanding the foregoing, the Company, in its sole discretion, may extend and maintain, or
manage for the extension and maintenance of credit to any Optionee to finance the Optionee’s purchase of shares pursuant
to the exercise of any Stock Option, on such terms as may be approved by the Plan Administrator, subject to applicable regulations
of the Federal Reserve Board and any other laws or regulations in effect at the time such credit is extended.

 

Terms of Option:

 

No Option shall be exercisable after the expiration of the earliest
of:

 

(a) two years after the date the Option is granted,

 

(b) three months after the date the Optionee’s
employment with the Company and its subsidiaries terminates, or a Non-Employee Director or Consultant ceases to provide services
to the Company, if such termination or cessation is for any reason other than Disability or death,

 

(c) one year after the date the Optionee’s
employment with the Company, and its subsidiaries, terminates, or a Non-Employee Director or Consultant ceases to provide services
to the Company, if such termination or cessation is a result of death or Disability; provided, however, that the Option agreement
for any Option may provide for shorter periods in each of the foregoing instances. In the case of an Incentive Stock Option granted
to an employee who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company,
or any of its parent or subsidiary corporations, the term set forth in (a) above shall not be more than five years after the date
the Option is granted.

 

Exercise of an Option:

 

No Option shall be exercisable during the lifetime of the Optionee
by any person other than the Optionee. Subject to the foregoing, the Plan Administrator shall have the power to set the time or
times within which each Option shall be exercisable and to accelerate the time or times of exercise. To the extent that an Optionee
has the right to exercise an Option and purchase shares pursuant hereto, the Option may be exercised from time to time by written
notice to the Company, stating the number of shares being purchased and accompanied by payment in full of the exercise price for
such shares.

 

No Transfer of Option:

 

No Option shall be transferable by an Optionee otherwise than by
will or the laws of descent and distribution.

    	 

    	 

    

Restriction on Issuance of Shares:

 

The issuance of Options and shares shall be subject to compliance
with all of the applicable requirements of law with respect to the issuance and sale of securities, including, without limitation,
any required qualification under state securities laws.

 

Investment Representation:

 

Any Optionee may be required, as a condition of issuance of shares
covered by his or her Option, to represent that the shares be acquired pursuant to exercise will be acquired for investment and
without a view toward distribution thereof, and in such case, the Company may place a legend on the share certificate(s) evidencing
the fact that they were acquired for investment and cannot be sold or transferred unless registered under the Securities Act of
1933, as amended, or unless counsel for the Company is satisfied that the circumstances of the proposed transfer do not require
such registration.

 

Rights as a Shareholder or Employee:

 

An Optionee or transferee of an Option shall have no right as a
stockholder of the Company with respect to any shares covered by an Option until the date of the issuance of a share certificate
for such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether cash, securities, or other property),
or distributions or other rights for which the record date is prior to the date such share certificate is issued, except as provided
in paragraph (m) below. Nothing in the Plan or in any Option agreement shall confer upon any employee any right to continue in
the employ of the Company or any of its subsidiaries or interfere in any way with any right of the Company or any subsidiary to
terminate the Optionee’s employment at any time.

 

No Fractional Shares:

 

In no event shall the Company be required to issue fractional shares
upon the exercise of an Option.

 

Exercise in the Event of Death:

 

In the event of the death of the Optionee, any Option or unexercised
portion thereof granted to the Optionee, to the extent exercisable by him or her on the date of death, may be exercised by the
Optionee’s personal representatives, heirs, or legatees subject to the provisions of paragraph (d) above.

 

Recapitalization or Reorganization of the Company:

 

Except as otherwise provided herein, appropriate and proportionate
adjustments shall be made:

 

(1) in the number and class of shares subject to the Plan,

 

(2) to the Option rights granted under the Plan, and

 

(3) in the exercise price of such Option rights, in the event that
the number of shares of common Stock of the Company are increased or decreased as a result of a stock dividend (but only on Common
Stock), stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, separation, or like change in
the corporate or capital structure of the Company. In the event there shall be any other change in the number or kind of the outstanding
shares of Common Stock of the Company, or any stock or other securities into which such common stock shall have been changed, or
for which it shall have been exchanged, whether by reason of a complete liquidation of the Company or a merger, reorganization,
or consolidation with any other corporation in which the Company is not the surviving corporation, or the Company becomes a wholly-owned
subsidiary of another corporation, then if the Plan Administrator shall, in its sole discretion, determine that such change equitably
requires an adjustment to shares of Common Stock currently subject to Options under the Plan, or to prices or terms of outstanding
Options, such adjustment shall be made in accordance with such determination.

    	 

    	 

    

To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustment shall be made by the Plan Administrator, the determination of which in that respect
shall be final, binding, and conclusive. No right to purchase fractional shares shall result from any adjustment of Options pursuant
to this Section. In case of any such adjustment, the shares subject to the Option shall be rounded down to the nearest whole share.
Notice of any adjustment shall be given by the Company to each Optionee whose Options shall have been so adjusted and such adjustment
(whether or not notice is given) shall be effective and binding for all purposes of the Plan.

 

In the event of a complete liquidation of the Company or a merger,
reorganization, or consolidation of the Company with any other corporation in which the company is not the surviving corporation,
or the Company becomes a wholly-owned subsidiary of another corporation, any unvested Options granted under the Plan shall be deemed
to be immediately vested and the Optionee shall have the right to exercise such Option in whole or in part without regard to any
installment exercise provisions in the Option agreement.

 

Modification, Extension and Renewal of Options:

 

Subject to the terms and conditions and within the limitations of
the Plan, the Plan Administrator may modify, extend or renew outstanding options granted under the Plan and accept the surrender
of outstanding Options (to the extent not theretofore exercised). The Plan Administrator shall not, however, without the approval
of the Board, modify any outstanding Incentive Stock Option in any manner that would cause the Option not to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code. Notwithstanding the foregoing, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights of the Optionee under the Option.

 

Other Provisions:

 

Each Option may contain such other terms, provisions, and conditions
not inconsistent with the Plan as may be determined by the Plan Administrator.

 

IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take effect immediately.

 

 

MYRIAD INTERACTIVE MEDIA, INC.

 

Dated:___________ day of ________________, 2011

 

Signature: ______________________________________

 

Title: ______________________________________

 

PARTICIPANT'S ACCEPTANCE

 

Dated:___________ day of ________________, 2011

 

The undersigned hereby accepts the foregoing option and agrees to
the terms and conditions thereof.

 

 

PARTICIPANT:

 

 

______________________________________

Signature

 

______________________________________

Print Name

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