Document:

ex10_08.htm

    
      
        
          

        
EXHIBIT
10.08

       

       

      CONSULTING
AGREEMENT

       

      This Agreement is
made and entered into as of March 11, 2006, by and between Bank of Marin, a
California corporation (the "Company") and W. Robert Griswold, Jr. (hereinafter
referred to as "Consultant").

       

      RECITALS

       

      Consultant has, by
reason of his many years of experience in the banking business and particularly
in the banking business in Marin County, California and through his employment
with the Company, acquired a unique and valuable knowledge of the business of
the Company.

       

      The Company wishes
to engage Consultant's expertise in order to facilitate the future growth and
prosperity of the Company.

       

      Consultant is
desirous of making his expertise available to the Company on the terms set forth
below.

       

      NOW, THEREFORE, in
consideration of the foregoing premises and of the mutual covenants contained
herein, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:

       

      1.           Effectiveness.   This
Agreement has been executed in connection with the Retirement Agreement and
Release of even date herewith between the Company and Consultant, and the
effectiveness of this Agreement is subject to the fulfillment by the parties' of
their obligations under the Retirement Agreement and Release.

       

      2.           Duties.   The Company
retains Consultant and Consultant agrees to render reasonable bank related
services to the Company to the best of his ability, upon and subject to the
terms and conditions set forth herein.  Consultant shall render such
consulting services to the Company as are requested by the Company from time to
time during the Consultation Period, as defined in Section 4
below.  Consultant shall have no obligation to render any consulting
services to the Company unless requested pursuant to this
Agreement.  Consultant will devote his utmost skill and knowledge to
the performance of consulting duties to the extent requested to provide
consulting services by the Company, but in no event to exceed sixteen (16) hours
in any one (1) month period, except that whenever Consultant does not provide
sixteen (16) hours of service in a month, the hours of service not provided
shall be carried forward and added to the maximum number of hours that may be
required in any subsequent month, except that not more than a cumulative current
total of thirty-two (32) hours may be carried forward at any time.

       

      3.           Independent Contractor.
  Consultant is an independent contractor and it is understood and
agreed by Consultant and the Company that, as a result of entering into this
Agreement, the Company does not intend to appoint Consultant the agent, employee
or other legal representative of the Company and that Consultant shall have no
power or authority to assume, create or incur any liability or obligation of any
kind, express or implied, against or in the name of, or on behalf of the Company
in any transaction with a third party.  Consultant shall not be
eligible to participate in any benefit plan or program available to Company
employees nor shall the Company be responsible for tax withholding or other
requirements imposed by federal or state law upon employees.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      4.           Term.   The Company hereby
retains Consultant's services, and Consultant accepts such retention, for the
period beginning July 1, 2006, and ending June 30, 2008, or such earlier date as
the parties mutually agree, unless terminated earlier pursuant to Section 7
below. Such term is herein referred to as the "Consultation
Period."

       

      5.           Compensation.   Consultant
shall not be entitled to any compensation of any kind from the Company except
the Company shall pay to Consultant an annual consulting fee of $261,300,
payable in 12 equal monthly installments of $21,555 (the "Consulting
Fee").  The Consulting Fee during the term of this Agreement is due to
Consultant as consideration for Consultant committing to perform and performing
the duties required by Section 2 above.

       

      6.           Method of Work and Benefits.
  Consultant shall not receive, and shall not be entitled to receive,
any benefits from the Company other than payment of the sums due under Section 5
above.  Consultant shall not have an office at the Company premises
but may use available space and equipment necessary for him to discharge his
responsibilities within the Company premises or otherwise necessary when
undertaking consulting assignments outside the Company premises, i.e., cell
phone.  Consultant shall determine his own working hours and methods
for carrying out the consulting assignments requested by the
Company.

       

      7.           Termination.   This
Agreement and the services required of Consultant hereunder, shall terminate
prior to its expiration date under the following conditions:

       

      (a)     
   Termination for Good
Cause.   The Company
shall have "good cause" to terminate Consultant's relationship if Consultant
engages in the following:

       

      (i)          
 any willful appropriation, destruction, or damage to property or funds
belonging to the Company or its employees, clients, or visitors;

       

      (ii)           sexual,
verbal or physical harassment or discrimination towards any employee, customer,
supplier, contractor or visitor of the Company;

       

      (iii)           dishonesty
in connection with the Company's business;

       

      (iv)           breach
of any of the provisions of Section 9 hereof;

       

      (v)           Consultant
fails or refuses to perform faithfully and diligently the consulting duties
described in Section 2 after fifteen (15) days written notice from the Company;
or

       

      (vi)          Consultant
fails or refuses to comply with the written policies, standards and regulations
of the Company which from time to time may be established, which failure or
refusal is not cured within fifteen (15) days after written notice thereof is
given by the Company.

      

        
          
             

          

          
            2

            
              

            

          

          
             

          

        

      

       

      8.           Payment Upon Termination for Good
Cause.   In the event Consultant's relationship with the
Company is terminated for good cause, as set forth in Section 7(a), he shall
receive notice of termination and shall be entitled only to the compensation set
forth in Section 5 above prorated through the date of said notice.  As
an independent contractor Consultant recognizes that he has no rights to other
benefits otherwise accruing to employees of the Company.

       

      9.           Covenants Regarding Competitive and Other
Businesses.   Consultant covenants and agrees, and such
covenants and agreements are of the essence of this Agreement,
that:

       

      (a)         Protection of Confidential
Information.   Consultant recognizes and acknowledges that
during his tenure as President and Chief Executive Officer of the Company, he
has dealt with and has had access to information relating to the Company’s
business which is not in the public domain, and that during his term as a
consultant to the Company hereunder he may deal with and have access to
additional information of that nature.  With the exception of such
information that is included in public filings made with state or federal
agencies or associations or that otherwise falls into the category of
information generally known to the public, Consultant recognizes and stipulates
that information designated or treated by the Company as confidential
(“Confidential Information”) is a valuable and unique asset of the Company’s
business, developed and perfected over considerable time and at substantial
expense to the Company.  Consultant agrees that he will not divulge,
disclose, or communicate to anyone, directly or indirectly, either during the
term of his consulting or thereafter, any Confidential Information of any kind,
nature, or description.  The parties hereto acknowledge that any
breach of the terms of this subsection is a material breach of this
Agreement.

       

      (b)         Surrender of Documents.
  Upon termination of his consulting duties for any reason, Consultant
will immediately surrender to the Company all Confidential Information of the
Company in his possession, including all correspondence, written memoranda,
computer files, diagrams, books, records and notebooks, as well as any and all
other tangible Confidential Information, and all copies thereof, relating in any
way to the business of the Company, whether prepared by Consultant or by
others.

       

      (c          Non-Competition.   Although
Consultant is free to accept other consulting engagements during the term of
this Agreement, Consultant will at all times devote reasonable time and effort
to the duties described in Section 2 above and Consultant expressly agrees that
during the term of his engagement by the Company he will not, without the prior
written consent of the Company, be interested or involved, directly or
indirectly. in any form, fashion, or manner, as a partner, officer, director,
stockholder owning or controlling in excess of ten percent (10%) of the
outstanding shares or equity, advisor, employee, consultant, agent, or in any
other form or capacity, in any other bank or financial institution in the
California counties of Marin, Sonoma or San Francisco.

       

      (d)         Non-Solicitation.   During
the term of his consulting and for six months thereafter, Consultant agrees that
he will not, directly or indirectly, either for himself or for any other person,
firm, company or corporation (i) call upon, solicit, divert, or attempt to
solicit or divert business from any person, firm or corporation which was a
customer of the Company during Consultant's consulting with the Company or prior
employment with the Company or (ii) solicit or induce any of the Company's
employees to terminate their employment relationship with the Company, or any
subcontractor to terminate any business relationship with the Company, in either
case, for any reason.

      

        
          
             

          

          
            3

            
              

            

          

          
             

          

        

      

       

      (e)         Enforcement of Covenants. 
 If, at the time of enforcement of any of the provisions of this Agreement,
a court shall hold that the period, scope or geographical area of the
restrictions stated herein are unreasonable under the circumstances then
existing, the parties agree that the maximum period, scope or area reasonable
under such circumstances shall be substituted for the period, scope or area
stated herein, with respect to the enforcement of such provisions then at
issue.

       

      10.        Life
Insurance.   Employer shall be entitled, at its expense
and for its benefit, to obtain life insurance with respect to Employee during
the Consultation Period, and Employee shall, to the extent requested by
Employer, cooperate with Employer in obtaining such coverage.

       

      11.        General Provisions.

       

      (a)         Payments.   All
payments due to Consultant pursuant to the terms of this Agreement shall be
delivered in person or by electronic deposit as directed by Consultant in
writing, with the first payment due July 31, 2006.

       

      (b)         Assignability.   This
Agreement is for the personal services of Consultant and as such is not
assignable by Consultant to or assumable by any other party without the consent
of the Company.  The Company may assign this Agreement to any
successor in interest to the Company or to any other entity controlling,
controlled by or under common control with the Company or buy out the remaining
term of this Consulting Agreement.

       

      (c)         Notices.   Any notices
to be given hereunder by either party to the other may be affected by either
personal delivery in writing, or by mail, registered or certified, postage
prepaid, with a return receipt requested.  Mailed notices shall be
addressed to the other party to the address appearing beneath the party's
signature on this Agreement, but each party may change its address by written
notice in accordance with this Section 11(c).  Notice delivered
personally shall be deemed communicated as of the date of delivery.

       

      (d)         Entire
Agreement.   Consultant acknowledges receipt of this
Agreement and agrees that this Agreement represents the entire agreement with
the Company concerning the subject matter hereof.

       

      (e)         Severability.   If any
provision of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in any
way.

       

      (f)    
     No
Waiver.   Either party's failure to enforce any provision
of this Agreement shall not in any way be construed as a waiver of any such
provision, or prevent that party from thereafter enforcing each and every other
provision of this Agreement.

       

      (g)         Applicable Law.   This
Agreement shall be interpreted, construed, governed and enforced in accordance
with the laws of the State of California.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (h)         Amendments.   No
amendment or modification of the terms of this Agreement shall be valid unless
in writing and signed by the parties thereto.

       

      (i)     
    Arbitration.   If a
dispute or controversy arises regarding the performance of either party under
the terms of this Agreement or regarding the enforceability of any terms of this
Agreement, then the parties agree that such dispute or controversy shall be
resolved by binding arbitration in Marin County, California in accordance with
the Commercial Arbitration Rules of the American Arbitration Association or such
other rules or arbitrator as the parties mutually agree.  A judgment
upon any decision of the arbitrator may be entered in any court having
jurisdiction thereof.  The costs of the arbitration shall be borne
equally by the parties.  The prevailing party in any such proceeding
shall be entitled to recover a sum equal to its reasonable attorneys' fees
incurred.

       

       

      
        	
                /s/WRG

              	 
    	
                /s/J.A.

              
	
                Consultant

              	 
    	
                The
      Company

              
	
                Initials

              	 
    	
                Initials

              

      

       

      IN
WITNESS WHEREOF, this Consulting Agreement has been executed and delivered by
and on behalf of the parties hereto as of the first day above
written.

       

       

      
        	
                THE
      CONSULTANT

              	 
    	
                THE
      COMPANY

              
	 
    	 
    	
                BANK OF
      MARIN

              

      

       

      
        	
                /s/ W. Robert
      Griswold, Jr.

              	 
    	
                By:

              	
                /s/ Judith
      O'Connell Allen

              
	
                W. Robert
      Griswold, Jr.

              	 
    	
                Its:

              	
                Chairman of
      Board

              

      

       

      
        	
                Address:

              	
                149 So.
      Temelec Circle

              	 
    	 
    	 
    
	 
    	
                Sonoma, CA
      95476

              	 
    	
                Address:

              	
                50 Madera
      Blvd.

              
	 
    	 
    	 
    	 
    	
                Corte Madera,
      CA  94925

              

      

       

       

       5Unassociated Document

    
      
        

      
Exhibit 4.1

     

    [FACE
OF THE NOTE]

    

    UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE TO
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

    

    THIS
SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

    

    1.
REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED
INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT)
AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
ACCOUNT, AND

    

    2. AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT
IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY
SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAW, EXCEPT:

    

    (A) TO US
OR ANY OF OUR SUBSIDIARIES, OR

    

    (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT, OR

    

    (C) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, OR

    

    (D)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    PRIOR TO
THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY,
THE TRUSTEE AND THE REGISTRAR RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH
LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED
IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE
WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION
IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	      
              CUSIP:
      86074Q AD4

            
	 	ISIN:
      US86074QAD43

    

     

    1.875%
Convertible Senior Notes due 2028

    

    

    
      	
              No.
      R-1

            	
              $181,500,000

            

    

    

    

    Stillwater
Mining Company

    

    promises
to pay to CEDE & CO.

    

    or
registered assigns,

    

    the
principal sum of ONE HUNDRED EIGHTY ONE

    MILLION
AND FIVE HUNDRED THOUSAND

    DOLLARS

    

    Dollars
on March 15, 2028.

    

    Interest
Payment Dates: March 15 and September 15

    

    Record
Dates: March 1 and September 1

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, Stillwater
Mining Company has caused this Note to be signed manually or by facsimile by its
duly authorized officers.

    

    

    Dated:   March
12, 2008

    

    
      	 
      	
              Stillwater
      Mining Company

            

    

     

    
      	 
      	
              By:

            	
              /s/
      John R. Stark

            
	 
      	 
      	
              Name:
      John R. Stark

            
	 
      	 
      	
              Title:
      Vice President

            

    

    

    

    TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

    

    This is
one of the Notes referred to in the

    within-mentioned
Indenture:

    

    Law
Debenture Trust Company of New York,

    as
Trustee

    

    
      	
              By:

            	 
      	 
      
	 
      	
              Authorized
      Signatory

            	 
      

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    IN WITNESS WHEREOF, Stillwater
Mining Company has caused this Note to be signed manually or by facsimile by its
duly authorized officers.

    

     

    Dated:    March 12,
2008

    
      	 
      	
              Stillwater
      Mining Company

            

    

    

    
      	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    

    

    TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

    

    This is
one of the Notes referred to in the

    within-mentioned
Indenture:

    

    Law
Debenture Trust Company of New York,

    as
Trustee

    

    
      	
              By:

            	
              /s/
      illegible

            	 
      
	 
      	
              Authorized
      Signatory

            	 
      

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    [Back of
Note]

    1.875%
Convertible Senior Notes due 2028

    

    Capitalized
terms used herein have the meanings assigned to them in the Indenture referred
to below unless otherwise indicated.

    

    (1) Interest. Stillwater Mining
Company, a Delaware corporation (the “Company”), promises to pay
interest on the principal amount of this Note at 1.875% per annum from March 12,
2008 until Maturity. The Company will pay interest, if any, semi-annually in
arrears on March 15 and September 15 of each year (subject to limited exceptions
if the Note is converted or purchased prior to such date), or if any such day is
not a Business Day, on the immediately following Business Day (each, an “Interest Payment Date”).
Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from March 12, 2008; provided
that if there is no existing Default in the payment of interest, and if this
Note is authenticated between a Record Date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be September 15, 2008. The Company will pay interest on
overdue principal from time to time on demand at the rate then in effect to the
extent lawful; it will pay interest on overdue installments of interest, if any
(without regard to any applicable grace periods), from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30- day months.

    

    (2) Method of payment. The Company
will pay interest on the Notes, if any, to the Persons who are registered
Holders of Notes at the close of business on the March 1 or September 1 next
preceding the Interest Payment Date (each a “Regular Record Date”), even if
such Notes are canceled after such record date and on or before such Interest
Payment Date. The Notes will be payable as to principal, if any, and interest at
the office or agency of the Company maintained for such purpose within or
without the City and State of New York, or, at the option of the Company,
payment of interest, if any, may be made by check mailed to the Holders at their
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, if any, on, all Global Notes and all other Notes with
an aggregate principal amount in excess of $2 million for which the Holders have
provided wire transfer instructions at least 10 Business Days prior to the
Interest Payment Date to the Company or the Paying Agent. Such payment will be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.

    

    (3) Trustee, Paying Agent, Registrar and
Conversion Agent. Initially, Law Debenture Trustee Company of New York
will act as Trustee under the Indenture and Deutsche Bank Trust Company Americas
will act as Paying Agent, Registrar and Conversion Agent. The Company may change
any Paying Agent, Registrar or Conversion Agent without notice to any Holder.
The Company or any of its Subsidiaries may act in any such
capacity.

    

    (4) Indenture. The Company issued
the Notes under the Indenture dated as of March 12, 2008 (the “Indenture”) between the
Company, the Trustee and Deutsche Bank Trust Company Americas. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the TIA upon qualification of the Indenture under the TIA. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and the TIA for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are senior, unsecured
obligations of the Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (5) Denominations, transfer,
exchange. The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of
a Note selected for conversion or repurchase, except for the unconverted or
unrepurchased portion of any Note being converted or repurchased in part. Also,
the Company need not exchange or register the transfer of any Notes during the
period between a Regular Record Date and the corresponding Interest Payment
Date.

    

    (6) Persons deemed owners. The
registered Holder of a Note may be treated as its owner for all
purposes.

    

    (7) Amendment, supplement and
waiver. The Indenture contains provisions permitting the Company and the
Trustee in certain circumstances, without the consent of the Holders of the
Notes, and in other circumstances, with the consent of the Holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, evidenced as in the Indenture provided, to execute supplemental
indentures modifying the terms of the Indenture and the Notes as described
therein. It is also provided in the Indenture that, subject to certain
exceptions, the holders of a majority in aggregate principal amount of the Notes
at the time outstanding may on behalf of the holders of all of the Notes waive
any past Default or Event of Default under the Indenture and its
consequences.

    

    (8) Events of default. In case an
Event of Default, as defined in the Indenture, shall have occurred and be
continuing, the principal and interest (including Liquidated Damages and
Additional Interest, if any) on all Notes may be declared, by either the Trustee
or Noteholders of not less than 25% in aggregate principal amount of Notes then
outstanding, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions and certain exceptions set
forth in the Indenture.

    

    (9) Trustee dealings with Company.
The Trustee, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not the
Trustee.

    

    (10)
No recourse against
others. A director, officer, employee, incorporator or stockholder of the
Company, as such, will not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability to the extent permitted by law. The
waiver and release are part of the consideration for the issuance of the
Notes.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (11)
Open market purchases.
The Company may, to the extent permitted by applicable law, at any time, and
from time to time, purchase Notes at any price in the open market or
otherwise.

    

    (12)
Authentication. This
Note will not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent.

    

    (13)
Abbreviations. Customary
abbreviations may be used in the name of a Holder or an assignee, such as: TEN
COM (=tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

    

    (14)
CUSIP numbers. Pursuant
to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed on
the Notes, and the Trustee may use CUSIP numbers in notices of repurchase or
conversion as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of repurchase or conversion, and reliance may be placed only on the other
identification numbers placed thereon.

    

    (15)
Governing law. THIS
INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
FORM

    

    To assign
this Note, fill in the form below:

    

    (I)
or

    (we)
assign

    and
transfer

    
      
        
          
            	this Note
    to	 

          

        

      

    

    (Insert
assignee’s legal name)

    
 

    
      	 
      

    

    (Insert
assignee’s Soc. Sec. or tax I.D. No.)

    

    
      	 
      
	 
      
	 
      

    

    (Print or
type assignee’s name, address and zip code)

    

    
      	
              and
      irrevocably appoint to

            	
              transfer
      this Note on the books of the

            

    

    Company.
The agent may substitute another to act for him.

    

    

    Date:________________

    

    
      	 
      	
              Your

            	 
      
	 
      	
              Signature:

            	 
      
	 
      	 
      	
              (Sign
      exactly as your name

            
	 
      	 
      	
              appears
      on the face of this Note)

            

    

    

    Signature
Guarantee*: _____________________________

    

    __________________________________

    
      	
            	
              *

            	
              Participant
      in a recognized Signature Guarantee Medallion Program (or other signature
      guarantor acceptable to the
Trustee).

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

    

    The
following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been
made:

     

    
      	 
      	 	 
      	 	 
      	 	
              Principal
      Amount

            	 	 
      
	 
      	 	
              Amount
      of

            	 	
              Amount
      of

            	 	
              of
      this Global Note

            	 	
              Signature
      of

            
	 
      	 	
              decrease
      in

            	 	
              increase
      in

            	 	
              following
      such

            	 	
              authorized
      officer

            
	 
      	 	
              Principal
      Amount

            	 	
              Principal
      Amount

            	 	
              decrease
      (or

            	 	
              of
      Trustee or

            
	
              Date
      of Exchange

            	 	
              of
      this Global Note

            	 	
              of
      this Global Note

            	 	
              increase)

            	 	
              Custodian

            

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    FORM
OF CONVERSION NOTICE

    

    Stillwater
Mining Company

    1321
Discovery Drive

    Billings,
MT 59102

    Attn:
John R. Stark

    

    Re:
1.875% Convertible Senior Notes due 2028

    —
CONVERSION NOTICE (CUSIP 86074Q AD4)

    

    Reference
is hereby made to the Indenture, dated as of March 12, 2008 (the “Indenture”), between
Stillwater Mining Company, as issuer (the “Company”), Law Debenture Trust
Company of New York, as trustee (the “Trustee”), and Deutsche Bank
Trust Company Americas, as registrar (the “Registrar”), conversion agent
(the “Conversion Agent”)
and paying agent (the “Paying
Agent”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.

    

    ___________
(the “Owner”) owns and
proposes to convert the Note[s] or interest in such Note[s] specified herein, in
the principal amount of $__________ in such Note[s] or interests (the “Conversion”) pursuant to
Article VI of the Indenture. In connection with the Conversion, the Owner hereby
certifies that, as Owner of this Note, he/she hereby irrevocably exercises the
option to convert this Note, or such portion of this Note in the principal
amount designated above into the number of shares of Common Stock of the Company
equal to (x) the aggregate principal amount of Notes to be converted divided by
(y) the Applicable Conversion Price. The Owner directs that such shares,
together with a check in payment for any fractional share and any Notes
representing any unconverted principal amount hereof, be delivered to and be
registered in the name of the undersigned unless a different name has been
indicated below. If shares of Common Stock or Notes are to be registered in the
name of a Person other than the undersigned, (a) the undersigned will pay all
transfer taxes payable with respect thereto and (b) signature(s) must be
guaranteed by an Eligible Guarantor Institution with membership in an approved
signature guarantee program pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934. Any amount required to be paid by the undersigned on
account of interest accompanies this Note.

    

    
      	
              Dated:

            	
               

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Signature(s)

            

    

    

    

    If shares
of Common Stock or Notes are

    to be
registered in the name of a Person

    other
than the Holder, please print such

    Person’s
name and address:

    ____________________________

    (Name)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ____________________________

    ____________________________

    (Address)

    ____________________________

    Social
Security or other Identification

    Number,
if any.

    ____________________________

    Signature
Guaranteed

    

    If only a
portion of a Definitive Note is to be converted, please indicate:

    

    1.
Principal amount to be converted: $

    

    2.
Principal amount and denomination of Notes representing unconverted principal
amount to be issued:

    

    
      	
              Amount:
      $

            	
              Denominations:
      $

            

    

    

    ($1,000
or any integral multiple of $1,000 in excess thereof, provided that the
unconverted portion of such principal amount is $1,000 or any integral multiple
of $1,000 in excess thereof.)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
OF PURCHASE NOTICE

     

    
      	
              TO:

            	
              STILLWATER
      MINING COMPANY and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Conversion
      Agent

            

    

    

    The
undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Stillwater Mining Company (the “Company”) regarding the right
of Holders to elect to require the Company to purchase the Notes and requests
and instructs the Company to repay the entire principal amount of this Note, or
the portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture at the price of 100%
of such entire principal amount or portion thereof, together with accrued and
unpaid interest, if any, (including Liquidated Damages and Additional Interest,
if any) to, but excluding, the Purchase Date to the registered Holder hereof.
Capitalized terms used herein but not defined shall have the meanings ascribed
to such terms in the Indenture. The Notes shall be purchased by the Company as
of the Purchase Date pursuant to the terms and conditions specified in the
Indenture.

    

    
      	
              Dated:

            	
               

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Signature(s)

            

    

    

    

    NOTICE:
The above signatures of the Holder(s) hereof must correspond with the name as
written upon the face of the Notes in every particular without alteration or
enlargement or any change whatever.

    

    Notes
Certificate Number (if applicable): ______

    

    Principal
amount to be purchased

    (if less
than all, must be $1,000 or whole multiples thereof): ______

    

    Social
Security or Other Taxpayer Identification Number: _____

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
OF FUNDAMENTAL CHANGE PURCHASE NOTICE

    

    
      	
              TO:

            	
              STILLWATER
      MINING COMPANY and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Conversion
      Agent

            

    

    

    The
undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Stillwater Mining Company (the “Company”) regarding the right
of Holders to elect to require the Company to purchase the Notes and requests
and instructs the Company to repay the entire principal amount of this Note, or
the portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture at the price of 100%
of such entire principal amount or portion thereof, together with accrued and
unpaid interest, if any, (including Liquidated Damages and Additional Interest,
if any) to, but excluding, the Fundamental Change Purchase Date to the
registered Holder hereof. Capitalized terms used herein but not defined shall
have the meanings ascribed to such terms in the Indenture. The Notes shall be
purchased by the Company as of the Fundamental Change Purchase Date pursuant to
the terms and conditions specified in the Indenture.

    

    
      	
              Dated:

            	
               

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Signature(s)

            

    

    

    

    NOTICE:
The above signatures of the Holder(s) hereof must correspond with the name as
written upon the face of the Notes in every particular without alteration or
enlargement or any change whatever.

    

    Notes
Certificate Number (if applicable): _____

    

    Principal
amount to be purchased

    (if less
than all, must be $1,000 or whole multiples thereof): _____

    

    Social
Security or Other Taxpayer Identification Number: _____

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
OF CERTIFICATE OF EXCHANGE

    

    Stillwater
Mining Company

    1321
Discovery Drive

    Billings,
MT 59102

    Attn:
John R. Stark

    

    Law
Debenture Trust Company of New York

    400
Madison Avenue, 4th
Floor

    New York,
NY 10017

    Attn:
Vice President

    

    Re:
1.875% Convertible Senior Notes due 2028

    —
Certificate of Exchange (CUSIP 86074Q AD4)

    

    Reference
is hereby made to the Indenture, dated as of March 12, 2008 (the “Indenture”), among Stillwater
Mining Company., a Delaware corporation (the “Company”), Law Debenture Trust
Company of New York, as trustee (the “Trustee”) and Deutsche Bank
Trust Company Americas as Registrar, Conversion Agent and Paying Agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

     

    __________________________
(the “Owner”) owns and
proposes to exchange the Note[s] or interest in such Note[s] specified herein,
in the principal amount at maturity of $____________ in such Note[s] or
interests (the “Exchange”). In connection
with the Exchange, the Owner hereby certifies that in connection with the
Exchange of the Owner’s beneficial interest in a Global Note for a Definitive
Note with an equal principal amount at maturity, the Owner hereby certifies that
the Definitive Note is being acquired for the Owner’s own account without
transfer. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the Definitive Note issued will continue to be subject
to the restrictions on transfer enumerated in the Legend printed on the
Definitive Note and in the Indenture and the Securities Act.

    

    [form of
signature page follows]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
certificate and the statements contained herein are made for your benefit and
the
benefit of the Company.

    

    
      	 
      	
              Dated:

            	 	 
      

    

    

    
      	 
      	 
      
	 
      	
              [Insert
      Name of Transferor]

            

    

    

    

    
      	 
      	
              By:

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

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