Exhibit 10.4
 
EXECUTION COPY
 
 Published CUSIP Number: 94274CAC9
 
 

CREDIT AGREEMENT

Dated as of  June 18, 2010

among

WATTS WATER TECHNOLOGIES, INC.

and

CERTAIN SUBSIDIARIES,
as Borrowers,

BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and L/C Issuer,

JPMORGAN CHASE BANK, N.A.
and
KEYBANK NATIONAL ASSOCIATION,
as Co-Syndication Agents,

WELLS FARGO BANK, N.A.,
as Documentation Agent

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,
J.P. MORGAN SECURITIES INC.
and
KEYBANC CAPITAL MARKETS INC.,
as Joint Lead Arrangers and Joint Book Managers

 
 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
 
Section
Page
   
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
1
1.01
Defined Terms
1
1.02
Other Interpretive Provisions
28
1.03
Accounting Terms
29
1.04
Rounding
30
1.05
Exchange Rates; Currency Equivalents
30
1.06
Change of Currency
30
1.07
Times of Day
30
1.08
Letter of Credit Amounts
31
   
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
31
2.01
Committed Loans
31
2.02
Borrowings, Conversions and Continuations of Committed Loans.
31
2.03
Letters of Credit.
33
2.04
Swing Line Loans.
43
2.05
Prepayments
45
2.06
Termination or Reduction of Commitments
47
2.07
Repayment of Loans
47
2.08
Interest
48
2.09
Fees
48
2.10
Computation of Interest and Fees.
49
2.11
Evidence of Debt
50
2.12
Payments Generally; Administrative Agent’s Clawback
50
2.13
Sharing of Payments by Lenders
52
2.14
Designated Borrowers
53
2.15
Domestic Subsidiary Guarantors
54
2.16
Increase in Commitments
55
2.17
[intentionally omitted].
56
2.18
Cash Collateral.
56
2.19
Defaulting Lenders
57
   
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
59
3.01
Taxes.
59
3.02
Illegality
63
3.03
Inability to Determine Rates
64
3.04
Increased Costs; Reserves on Eurocurrency Rate Loans.
64
3.05
Compensation for Losses
66
3.06
Mitigation Obligations; Replacement of Lenders.
67
3.07
Survival
67
   

 
i

--------------------------------------------------------------------------------

 

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
68
4.01
Conditions of Initial Credit Extension
68
4.02
Conditions to all Credit Extensions
69
   
ARTICLE V. REPRESENTATIONS AND WARRANTIES
70
5.01
Existence, Qualification and Power
70
5.02
Authorization; No Contravention
71
5.03
Governmental Authorization; Other Consents
71
5.04
Binding Effect
71
5.05
Financial Statements; No Material Adverse Effect.
71
5.06
Litigation
72
5.07
No Default
72
5.08
Ownership of Property; Liens
72
5.09
Environmental Compliance
72
5.10
Insurance
72
5.11
Taxes
73
5.12
ERISA Compliance.
73
5.13
Subsidiaries; Equity Interests
74
5.14
Margin Regulations; Investment Company Act.
74
5.15
Disclosure
74
5.16
Compliance with Laws
74
5.17
Intellectual Property; Licenses, Etc
75
5.18
Senior Note Documents
75
5.19
Material Domestic Subsidiaries
75
5.20
Representations as to Foreign Loan Parties
75
5.21
Dutch Companies
77
5.22
OFAC
77
   
ARTICLE VI. AFFIRMATIVE COVENANTS
77
6.01
Financial Statements
77
6.02
Certificates; Other Information
78
6.03
Notices
80
6.04
Payment of Obligations
81
6.05
Preservation of Existence, Etc
81
6.06
Maintenance of Properties
81
6.07
Maintenance of Insurance
81
6.08
Compliance with Laws
81
6.09
Books and Records
82
6.10
Inspection Rights
82
6.11
Use of Proceeds
82
6.12
Approvals and Authorizations
82
6.13
Amendments to Governing Documents
82
6.14
Additional Domestic Subsidiary Guarantors.
82
6.15
Foreign Subsidiary Guarantors
83
6.16
Watts Radiant, Inc.
83
6.17
Further Assurances
84
   

 
ii

--------------------------------------------------------------------------------

 

ARTICLE VII. NEGATIVE COVENANTS
84
7.01
Liens
84
7.02
Investments
85
7.03
Indebtedness
86
7.04
Fundamental Changes; Permitted Acquisitions
87
7.05
Dispositions
89
7.06
Restricted Payments
90
7.07
Change in Nature of Business
90
7.08
Transactions with Affiliates
90
7.09
Burdensome Agreements
90
7.10
Use of Proceeds
91
7.11
Modification of Organization Documents
91
7.12
Senior Note Documents
91
7.13
Financial Covenants.
91
   
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
91
8.01
Events of Default
91
8.02
Remedies Upon Event of Default
94
8.03
Application of Funds
94
   
ARTICLE IX. ADMINISTRATIVE AGENT
96
9.01
Appointment and Authority
96
9.02
Rights as a Lender
96
9.03
Exculpatory Provisions
97
9.04
Reliance by Administrative Agent.
98
9.05
Delegation of Duties
98
9.06
Resignation of Administrative Agent
98
9.07
Non-Reliance on Administrative Agent and Other Lenders
99
9.08
No Other Duties, Etc
99
9.09
Administrative Agent May File Proofs of Claim.
99
9.10
Guaranty Matters
100
   
ARTICLE X. MISCELLANEOUS
100
10.01
Amendments, Etc
100
10.02
Notices; Effectiveness; Electronic Communication.
102
10.03
No Waiver; Cumulative Remedies; Enforcement
104
10.04
Expenses; Indemnity; Damage Waiver.
105
10.05
Payments Set Aside
106
10.06
Successors and Assigns.
107
10.07
Treatment of Certain Information; Confidentiality
112
10.08
Right of Setoff
112
10.09
Interest Rate Limitation
113
10.10
Counterparts; Integration; Effectiveness
113
10.11
Survival of Representations and Warranties
114
10.12
Severability
114
10.13
Replacement of Lenders
114
10.14
Governing Law; Jurisdiction; Etc
115
10.15
Waiver of Jury Trial
116
10.16
No Advisory or Fiduciary Responsibility
116
10.17
Electronic Execution of Assignments and Certain Other Documents
116
10.18
USA PATRIOT Act Notice
117
10.19
Judgment Currency
117

 
iii

--------------------------------------------------------------------------------

 

SCHEDULES

 
1.01
 
Existing Letters of Credit
 
1.02
 
Mandatory Cost Formulae
 
2.01
 
Commitments and Applicable Percentages
 
5.06
 
Litigation
 
5.12(d)
 
Pension Plans
 
5.13
 
Subsidiaries
 
5.19
 
Material Domestic Subsidiaries
 
6.15
 
Foreign Subsidiary Guarantors
 
7.01
 
Existing Liens
 
7.02
 
Existing Investments
 
7.03
 
Existing Indebtedness
 
10.02
 
Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

     
Form of
 
A
 
Committed Loan Notice
 
B
 
Swing Line Loan Notice
 
C
 
Note
 
D
 
Compliance Certificate
 
E
 
Assignment and Assumption
 
F
 
Guaranty Agreement
 
G
 
Designated Borrower Request and Assumption Agreement
 
H
 
Designated Borrower Notice

 
iv

--------------------------------------------------------------------------------

 

CREDIT AGREEMENT
 
This CREDIT AGREEMENT (this “Agreement”) is entered into as of June 18,
2010, among WATTS WATER TECHNOLOGIES, INC., a Delaware corporation (the
“Company”), certain Subsidiaries of the Company party hereto pursuant to Section
2.14 (each a “Designated Borrower” and, together with the Company, the
“Borrowers” and, each a “Borrower”), each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”) and BANK OF AMERICA,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
 
PRELIMINARY STATEMENTS
 
The Borrowers have requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
 
In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree:
 
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
 
1.01           Defined Terms.  As used in this Agreement, the following terms
shall have the meanings set forth below:
 
“2003 Senior Note Purchase Agreement” means that certain Note Purchase
Agreement, dated as of May 15, 2003, as amended pursuant to Amendment No. 1
thereto dated as of April 27, 2006, pursuant to which the Company issued the
2003 Senior Notes, together with any further permitted amendments, supplements
or modifications thereto.
 
“2003 Senior Notes” means the Company’s $75,000,000 5.47% Senior Notes, Series
B, due May 15, 2013.
 
“2006 Senior Note Purchase Agreement” means that certain Note Purchase
Agreement, dated as of April 27, 2006, pursuant to which the Company issued the
2006 Senior Notes, together with any permitted amendments, supplements or
modifications thereto.
 
“2006 Senior Notes” means the Company’s 5.85% Senior Notes due April 30, 2016.
 
“2010 Senior Note Purchase Agreement” means that certain Note Purchase
Agreement, dated as of June 18, 2010, pursuant to which the Company issued the
2010 Senior Notes, together with any permitted amendments, supplements or
modifications thereto.
 
“2010 Senior Notes” means the Company’s 5.05% Senior Notes due June 18, 2020.
 
“Acquisition” means the acquisition, by purchase, merger or otherwise, of all or
substantially all of the assets (or any part of the assets constituting all or
substantially all of a business or line of business) of any Person, whether such
acquisition is direct or indirect, including through the acquisition of the
business of, or more than 50% of the outstanding Voting Stock of, such Person,
and whether such acquisition is effected in a single transaction or in a series
of related transactions, and the acquisition, by purchase, merger or otherwise,
of additional shares of the outstanding Voting Stock of any Subsidiary that is
not then a wholly-owned Subsidiary of the Company; provided, that an Investment
permitted under Section 7.02(g) shall not constitute an Acquisition.
 

 
1

--------------------------------------------------------------------------------

 

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.
 
“Administrative Agent Fee Letter” means the letter agreement, dated May 26,
2010, among the Company, the Initial Designated Borrower, the Administrative
Agent and Banc of America Securities LLC.
 
“Administrative Agent’s Office” means, with respect to any currency, the
Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 10.02 with respect to such currency, or such other address or account
with respect to such currency as the Administrative Agent may from time to time
notify to the Company and the Lenders.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
 
“Aggregate Commitments” means the Commitments of all the Lenders.
 
“Agreement” has the meaning specified in the introductory paragraph hereto.
 
“Applicable Foreign Loan Party Documents” has the meaning specified in Section
5.20(a).
 
“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time, subject to adjustment as
provided in Section 2.19.  If the commitment of each Lender to make Loans and
the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02 or if the Aggregate Commitments have
expired, then the Applicable Percentage of each Lender shall be determined based
on the Applicable Percentage of such Lender most recently in effect, giving
effect to any subsequent assignments.  The initial Applicable Percentage of each
Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable.
 
“Applicable Rate” means, from time to time, the following percentages per annum,
based upon the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section
6.02(a) or 7.04(c)(iv), as set forth below:
 

 
2

--------------------------------------------------------------------------------

 
 
Applicable Margin
Pricing
Level
Consolidated
Leverage Ratio
Facility Fee
Eurocurrency
Rate and Letter
of Credit Fee
Base Rate
1
< 0.75:1
0.30%
1.70%
0.70%
2
 
> 0.75:1 but < 1.50:1
 
0.35%
1.90%
0.90%
3
 
> 1.50:1 but < 2.25:1
 
0.40%
2.10%
1.10%
4
> 2.25:1
0.45%
2.30%
1.30%

 
Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(a) or 7.04(c)(iv); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with either such Section,
then Pricing Level 4 shall apply as of the first Business Day after the date on
which such Compliance Certificate was required to have been
delivered.  Initially, the Applicable Rate shall be determined based upon
Pricing Level 2.
 
“Applicable Time” means, with respect to any borrowings and payments in Euros,
the local time in the place of settlement for Euros as may be determined by the
Administrative Agent or the L/C Issuer, as the case may be, to be necessary for
timely settlement on the relevant date in accordance with normal banking
procedures in the place of payment.
 
“Applicant Borrower” has the meaning specified in Section 2.14.
 
“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
 
“Arrangers” means, collectively, Banc of America Securities LLC, J.P. Morgan
Securities Inc. and KeyBanc Capital Markets Inc., in each case in its capacity
as joint lead arranger and joint book manager.
 
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.06(b)), and accepted by the Administrative Agent, in substantially
the form of Exhibit E or any other form approved by the Administrative Agent.
 

 
3

--------------------------------------------------------------------------------

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
(b) in respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP if such
lease were accounted for as a capital lease, and (c) in respect of any Permitted
Receivables Purchase Facility, the amount of obligations outstanding under such
Permitted Receivables Purchase Facility that would be characterized as principal
if such facility were structured as a secured lending transaction rather than as
a purchase, whether such obligations constitute on-balance sheet Indebtedness or
an off-balance sheet liability.
 
“Audited Financial Statements” means the audited consolidated balance sheet of
the Company and its Subsidiaries for the fiscal year ended December 31, 2009,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Company and its Subsidiaries,
including the notes thereto.
 
“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06(a), (c) the date of the reduction
of the Aggregate Commitments to zero pursuant to Section 2.06(b) and (d) the
date of termination of the commitment of each Lender to make Loans and of the
obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section
8.02.
 
“Bank of America” means Bank of America, N.A. and its successors.
 
“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
“prime rate,” and (c) the Eurocurrency Rate plus 1.00%.  The “prime rate” is a
rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.  Any change in such prime rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.
 
“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.
 
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.  All
Base Rate Loans shall be denominated in Dollars.
 
“Borrower” and “Borrowers” each has the meaning specified in the introductory
paragraph hereto.
 
“Borrower Materials” has the meaning specified in Section 6.02.
 
“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.
 

 
4

--------------------------------------------------------------------------------

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office with respect to
Obligations denominated in Dollars is located and:
 
(a)           if such day relates to any interest rate settings as to a
Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements,
settlements and payments in Dollars in respect of any such Eurocurrency Rate
Loan, or any other dealings in Dollars to be carried out pursuant to this
Agreement in respect of any such Eurocurrency Rate Loan, means any such day that
is also a London Banking Day; and
 
(b)           if such day relates to any interest rate settings as to a
Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements,
settlements and payments in Euro in respect of any such Eurocurrency Rate Loan,
or any other dealings in Euro to be carried out pursuant to this Agreement in
respect of any such Eurocurrency Rate Loan, means a TARGET Day.
 
“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent, L/C Issuer or
Swing Line Lender (as applicable) and the Lenders, as collateral for L/C
Obligations, Obligations in respect of Swing Line Loans, or obligations of
Lenders to fund participations in respect of either thereof (as the context may
require), cash or deposit account balances or, if the L/C Issuer or Swing Line
Lender benefitting from such collateral shall agree in its sole discretion,
other credit support, in each case pursuant to documentation in form and
substance satisfactory to (a) the Administrative Agent and (b) the L/C Issuer or
the Swing Line Lender (as applicable).  “Cash Collateral” shall have a meaning
correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support.
 
“Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or
directly, unconditionally and fully guaranteed or insured by the United States
or Canadian federal government or (ii) issued by any agency of the United States
or Canadian federal government the obligations of which are fully backed by the
full faith and credit of the United States or Canadian federal government, as
applicable, (b) any readily-marketable direct obligations issued by any other
agency of the United States or Canadian federal government, any state of the
United States, province of Canada, or any political subdivision of any such
state or province or any public instrumentality thereof, in each case having a
rating of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any
commercial paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by
any Person organized under the laws of any state of the United States or
province of Canada, (d) any Dollar-denominated time deposit, insured certificate
of deposit, overnight bank deposit or bankers’ acceptance issued or accepted by
(i) any Lender or (ii) any commercial bank that is (A) organized under the laws
of the United States, any state thereof or the District of Columbia, or Canada
or any province thereof, (B) “adequately capitalized” (as defined in the
regulations of its primary federal banking regulators) and (C) has Tier 1
capital (as defined in such regulations) in excess of $250,000,000 and
(e) shares of any United States or Canadian money market fund that (i) has
substantially all of its assets invested continuously in the types of
investments referred to in clause (a), (b), (c) or (d) above with maturities as
set forth in the proviso below, (ii) has net assets in excess of $500,000,000
and (iii) has obtained from either S&P or Moody’s the highest rating obtainable
for money market funds in the United States or Canada; provided, however, that
the maturities of all obligations specified in any of clauses (a), (b), (c) and
(d) above shall not exceed 365 days.
 

 
5

--------------------------------------------------------------------------------

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following:  (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
 
 “Change of Control” means an event or series of events by which:
 
(a)           any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any employee
benefit plan of such person or its subsidiaries, and any person or entity acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan) (other than the Horne Parties) becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
except that a person or group shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of equity securities of the Company
representing 35% or more of the aggregate voting power with respect to elections
of members of the board of directors or equivalent governing body of the Company
on a fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right);
 
(b)           during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Company cease to be composed of individuals (i) who were members of that board
or equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or
 
(c)           except for directors' qualifying shares in jurisdictions where
such qualifying shares are required, the Company shall fail to own directly or
indirectly, one hundred percent (100%) of the Equity Interests of each
Designated Borrower.
 

 
6

--------------------------------------------------------------------------------

 

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.
 
“Code” means the Internal Revenue Code of 1986.
 
“Commission” means the Securities and Exchange Commission of the United States
of America and any Person succeeding to the functions thereof.
 
“Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the Dollar
amount set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement.
 
“Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type, in the same currency and, in the case of Eurocurrency
Rate Loans, having the same Interest Period made by each of the Lenders pursuant
to Section 2.01.
 
“Committed Loan” has the meaning specified in Section 2.01.
 
“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurocurrency Rate Loans, pursuant to Section 2.02(a), which, if in writing,
shall be substantially in the form of Exhibit A.
 
“Company” has the meaning specified in the introductory paragraph hereto.
 
“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.
 
“Consolidated EBITDA” means, for any period, for the Company and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Total Interest Expense for such
period, (ii) the provision for Federal, state, local and foreign income taxes
payable by the Company and its Subsidiaries for such period, (iii) depreciation
and amortization expense, (iv) other non-recurring expenses of the Company and
its Subsidiaries reducing such Consolidated Net Income which do not represent a
cash item in such period or any future period and (v) Losses from Discontinued
Operations and minus (b) the following to the extent included in calculating
such Consolidated Net Income: (i) Federal, state, local and foreign income tax
credits of the Company and its Subsidiaries for such period and (ii) all
non-cash items increasing Consolidated Net Income for such period; provided,
however, when calculating Consolidated EBITDA for any period in which a
Permitted Acquisition has occurred, the calculation of Consolidated EBITDA shall
be made on a Pro Forma Basis; provided, further, that the calculation of
Consolidated EBITDA shall be adjusted to exclude the impact of non-cash goodwill
impairments.
 

 
7

--------------------------------------------------------------------------------

 

“Consolidated Funded Indebtedness” means, as of any date of determination, for
the Company and its Subsidiaries on a consolidated basis, the sum of (without
duplication) (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (excluding standby but including
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments, (d) all obligations in respect of the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business), (e) Attributable Indebtedness in respect of capital leases,
Synthetic Lease Obligations and Permitted Receivables Purchase Facilities, (f)
all Guarantees with respect to outstanding Indebtedness of the types specified
in clauses (a) through (e) above of Persons other than the Company or any
Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a)
through (f) above of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company or similar
entity) in which the Company or a Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the Company
or such Subsidiary.
 
“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDA for the period of the four fiscal quarters
most recently ended to (b) Consolidated Total Interest Expense for such period.
 
“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date minus cash and Cash
Equivalents in excess of $50,000,000 as of such date to (b) Consolidated EBITDA
for the period of the four fiscal quarters most recently ended; provided,
however, when calculating the Consolidated Leverage Ratio for any period in
which a Permitted Acquisition has occurred, the calculation of the Consolidated
Leverage Ratio shall be made on a Pro Forma Basis; provided, further, that if
the amount of clause (a) above is negative, such amount shall be deemed to be
zero for purposes of calculating the Consolidated Leverage Ratio.
 
“Consolidated Net Income” means, for any period, for the Company and its
Subsidiaries on a consolidated basis, the net income of the Company and its
Subsidiaries (excluding extraordinary gains and excluding non-cash extraordinary
losses) for that period.
 
“Consolidated Net Worth” means, as of any date of determination, for the Company
and its Subsidiaries on a consolidated basis, an amount equal to Shareholders’
Equity of the Company and its Subsidiaries on that date; provided, that the
calculation of Consolidated Net Worth shall be adjusted to exclude the impact of
non-cash goodwill impairments.
 
“Consolidated Total Assets” means the total assets of the Company and its
Subsidiaries on a consolidated basis, determined in accordance with GAAP.
 
“Consolidated Total Interest Expense” means, for any period, the aggregate
amount of interest required to be paid or accrued by the Company and its
Subsidiaries during such period on all Indebtedness of the Company and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
capitalized leases, Synthetic Lease Obligations and Permitted Receivables
Purchase Facilities, and including commitment fees, agency fees, facility fees,
utilization fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
 

 
8

--------------------------------------------------------------------------------

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.
 
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.
 
“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.
 
“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate applicable to Base Rate Loans plus (iii) 2% per annum; provided,
however, that with respect to a Eurocurrency Rate Loan, the Default Rate shall
be an interest rate equal to the interest rate (including any Applicable Rate
and any Mandatory Cost) otherwise applicable to such Loan plus 2% per annum, and
(b) when used with respect to Letter of Credit Fees, a rate equal to the
Applicable Rate plus 2% per annum.
 
“Defaulting Lender” means, subject to Section 2.19(b), any Lender that, as
determined by the Administrative Agent, (a) has failed to perform any of its
funding obligations hereunder,  including in respect of its Loans or
participations in respect of Letters of Credit or Swing Line Loans, within three
Business Days of the date required to be funded by it hereunder, (b) has
notified the Company or the Administrative Agent that it does not intend to
comply with its funding obligations or has made a public statement to that
effect with respect to its funding obligations hereunder or under other
agreements in which it commits to extend credit, (c) has failed, within three
Business Days after request by the Administrative Agent, to confirm in a manner
satisfactory to the Administrative Agent that it will comply with its funding
obligations, or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or a custodian appointed for it, or (iii) taken any action in
furtherance of, or indicated its consent to, approval of or acquiescence in any
such proceeding or appointment; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority.
 

 
9

--------------------------------------------------------------------------------

 

“Designated Borrower” has the meaning specified in the introductory paragraph
hereto.
 
“Designated Borrower Notice” has the meaning specified in Section 2.14.
 
“Designated Borrower Request and Assumption Agreement” has the meaning specified
in Section 2.14.
 
“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
 
“Dollar” and “$” mean lawful money of the United States.
 
“Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in Euros, the equivalent amount thereof in Dollars as determined by
the Administrative Agent or the L/C Issuer, as the case may be, at such time on
the basis of the Spot Rate (determined in respect of the most recent Revaluation
Date) for the purchase of Dollars with Euros.
 
“Domestic Designated Borrower” means any Designated Borrower that is a Domestic
Subsidiary of the Company.
 
“Domestic Loan Parties” means, collectively (i) the Company, (ii) each Domestic
Designated Borrower and (iii) each Domestic Subsidiary Guarantor.
 
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.
 
“Domestic Subsidiary Guarantor” means  (i) all of the Company’s Material
Domestic Subsidiaries party to the Guaranty Agreement and (ii) all other
Subsidiaries of the Company which become Domestic Subsidiary Guarantors in
accordance with Section 6.14(b).
 
“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii), (v) and (vii) (subject to such consents,
if any, as may be required under Sections 10.06(b)(iii) and (iv)).
 
“EMU” means the economic and monetary union in accordance with the Treaty of
Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of
1992 and the Amsterdam Treaty of 1998.
 
“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.
 

 
10

--------------------------------------------------------------------------------

 

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
 
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
 
“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
 
“ERISA” means the Employee Retirement Income Security Act of 1974.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
 
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b)
the withdrawal of the Company or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (g) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Company or any ERISA Affiliate.
 

 
11

--------------------------------------------------------------------------------

 

“Euro” and “EUR” mean the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.
 
“Eurocurrency Rate” means:
 
(a) for any Interest Period with respect to a Eurocurrency Rate Loan, the rate
per annum equal to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or such other commercially available source providing
quotations of BBA LIBOR as may be designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, two London Banking Days
prior to the commencement of such Interest Period, for deposits in the relevant
currency (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period or, (ii) if such rate is not available at
such time for any reason, the rate per annum determined by the Administrative
Agent to be the rate at which deposits in the relevant currency for delivery on
the first day of such Interest Period in Same Day Funds in the approximate
amount of the Eurocurrency Rate Loan being made, continued or converted and with
a term equivalent to such Interest Period would be offered by Bank of America’s
London Branch (or other Bank of America branch or Affiliate) to major banks in
the London or other offshore interbank market for such currency at their request
at approximately 11:00 a.m. (London time) two London Banking Days prior to the
commencement of such Interest Period; and
 
(b) for any interest calculation with respect to a Base Rate Loan on any date,
the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London
time determined two London Banking Days prior to such date for Dollar deposits
being delivered in the London interbank market for a term of one month
commencing that day or (ii) if such published rate is not available at such time
for any reason, the rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the date of determination
in same day funds in the approximate amount of the Base Rate Loan being made or
maintained and with a term equal to one month would be offered by Bank of
America’s London Branch to major banks in the London interbank Eurocurrency
market at their request at the date and time of determination.
 
“Eurocurrency Rate Loan” means a Committed Loan that bears interest at a rate
based on clause (a) of the definition of “Eurocurrency Rate”.  Eurocurrency Rate
Loans may be denominated in Dollars or in Euros.  All Committed Loans
denominated in Euros must be Eurocurrency Rate Loans.
 
“Euro Equivalent” means, at any time, with respect to any amount denominated in
Dollars, the equivalent amount thereof in Euros as determined by the
Administrative Agent or the L/C Issuer, as the case may be, at such time on the
basis of the Spot Rate (determined in respect of the most recent Revaluation
Date) for the purchase of Euros with Dollars.
 
“Event of Default” has the meaning specified in Section 8.01.
 

 
12

--------------------------------------------------------------------------------

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the L/C Issuer or any other recipient of any payment to be made by or on account
of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the Laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, or by any jurisdiction as a result of a
present or former connection between such recipient and the jurisdiction
imposing such tax (or any political subdivision thereof), other than any such
connection arising solely from such recipient having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
such Borrower is located, (c) any backup withholding tax that is required by the
Code to be withheld from amounts payable to a Lender that has failed to comply
with Section 3.01(e), and (d) except as provided in the following sentence, in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Company under Section 10.13), any United States withholding tax that (i) is
required to be imposed on amounts payable to such Foreign Lender pursuant to the
Laws in force at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office); (ii) is attributable to such Foreign Lender’s
failure or inability (other than as a result of a Change in Law) to comply with
Section 3.01(e), except to the extent that, in the case of clause (i) or (ii),
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the applicable Borrower with respect to such withholding tax
pursuant to Section 3.01(a)(ii) or (c); or (iii) is imposed by sections 1471
through 1474 of the Code and any regulations (whether final or temporary) that
are issued thereunder or official governmental interpretations
thereof.  Notwithstanding anything to the contrary contained in this definition,
“Excluded Taxes” shall not include any withholding tax imposed at any time on
payments made by or on behalf of a Foreign Loan Party to any Lender hereunder or
under any other Loan Document, provided that such Lender shall have complied
with Section 3.01(e)(i).
 
“Existing Credit Agreement” means that certain Credit Agreement dated as of
April 27, 2006, among the Borrowers, the lenders party thereto and Bank of
America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, as
amended, modified or supplemented from time to time.
 
“Existing Letters of Credit” means the letters of credit identified on Schedule
1.01.
 
“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
 
“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
 

 
13

--------------------------------------------------------------------------------

 

“Fee Letters” means, collectively, the Administrative Agent Fee Letter, the
JPMorgan Fee Letter and the Key Fee Letter.
 
“Foreign Designated Borrower” means any Designated Borrower that is a Foreign
Subsidiary of the Company.
 
“Foreign Lender” means, with respect to any Borrower, any Lender that is
organized under the Laws of a jurisdiction other than that in which such
Borrower is resident for tax purposes (including such a Lender when acting in
the capacity of the L/C Issuer).  For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
 
“Foreign Loan Parties” means, collectively, (i) the Foreign Designated Borrowers
and (ii) the Foreign Subsidiary Guarantors.
 
“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States, a State thereof or the District of
Columbia.
 
“Foreign Subsidiary Guarantor” means (i) any Subsidiary listed on Schedule 6.15
or (ii) any other Foreign Subsidiary party to one of the Guaranties, in each
case, unless such Person shall constitute a Domestic Subsidiary Guarantor.
 
“FRB” means the Board of Governors of the Federal Reserve System of the United
States.
 
“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the
outstanding L/C Obligations other than the L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with
respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage
of Swing Line Loans other than Swing Line Loans as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof.
 
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.
 
“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
 
“German Subsidiary” means any Subsidiary of the Company organized under the laws
of Germany or any political subdivision thereof.
 

 
14

--------------------------------------------------------------------------------

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).
 
“Granting Lender” has the meaning specified in Section 10.06(g).
 
“Guarantee” means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).  The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.
 
“Guaranteed Swap Contract” means any Swap Contract to which the Company or any
other Loan Party and any Lender (or any Affiliate of any Lender) is a party.
 
“Guaranties” means the Guaranty Agreement and any other guaranty executed by any
Designated Borrower or any Subsidiary Guarantor in favor of the Administrative
Agent, on behalf of itself and the Lenders, in respect of the Obligations or, in
the case of any Foreign Loan Party, the Obligations of each Foreign Designated
Borrower.
 
“Guaranty Agreement” means the Guaranty made by the Loan Parties in favor of the
Administrative Agent and the Lenders, substantially in the form of Exhibit F.
 
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 

 
15

--------------------------------------------------------------------------------

 

“Honor Date” shall have the meaning specified in Section 2.03(c)(i).
 
“Horne Parties” means (i) Timothy P. Horne, (ii) any individual related by
blood, marriage or adoption to Timothy P. Horne and (iii) the Horne Voting Trust
and any other trust that holds shares for the primary benefit of one or more of
the individuals described in the foregoing clauses (i) and (ii).
 
“Horne Voting Trust” means the trust established by the Amended and Restated
George B. Horne Voting Trust Agreement – 1997, dated as of September 14, 1999.
 
“Increase Effective Date” has the meaning specified in Section 2.16(d).
 
“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
 
(a)           all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
 
(b)           all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;
 
(c)           net obligations of such Person under any Swap Contract;
 
(d)           all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
 
(e)           indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;
 
(f)           Attributable Indebtedness in respect of capital leases (including
in connection with any sale and leaseback transaction), Synthetic Lease
Obligations and Permitted Receivables Purchase Facilities;
 
(g)           all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in such
Person or any other Person, valued, in the case of a redeemable preferred
interest, at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends; and
 
(h)           all Guarantees of such Person in respect of any of the foregoing.
 

 
16

--------------------------------------------------------------------------------

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company or similar legal
entity) in which such Person is a general partner or a joint venturer, unless
such Indebtedness is expressly made non-recourse to such Person.  The amount of
any net obligation under any Swap Contract on any date shall be deemed to be the
Swap Termination Value thereof as of such date.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.
 
“Indemnitees” has the meaning specified in Section 10.04(b).
 
“Information” has the meaning specified in Section 10.07.
 
“Initial Designated Borrower” means Watts Industries Europe B.V., a private
company with limited liability organized under the laws of The Netherlands.
 
“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurocurrency Rate
Loan exceeds three months, the respective dates that fall every three months
after the beginning of such Interest Period shall also be Interest Payment
Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last
Business Day of each March, June, September and December and the Maturity Date.
 
“Interest Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter, as selected by the applicable Borrower in its
Committed Loan Notice; provided that:
 
(i)           any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
 
(ii)           any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
 
(iii)           no Interest Period shall extend beyond the Maturity Date.
 
“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Company’s
internal controls over financial reporting, in each case as described in the
Securities Laws.
 
“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit.  For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
 

 
17

--------------------------------------------------------------------------------

 

“IP Rights” has the meaning specified in Section 5.17.
 
“IRS” means the United States Internal Revenue Service.
 
“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).
 
“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Company (or any Subsidiary) or in favor of the
L/C Issuer and relating to any such Letter of Credit.
 
“JPMorgan Fee Letter” means the letter agreement, dated May 20, 2010, between
the Company and JPMorgan Chase Bank, N.A.
 
“Key Fee Letter” means the letter agreement, dated May 20, 2010, between the
Company and KeyBank National Association.
 
“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
 
“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.
All L/C Advances shall be denominated in Dollars.
 
“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing. All L/C Borrowings shall be denominated in
Dollars.
 
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.
 
“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder or any successor issuer of Letters of Credit hereunder.
 
“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section
1.07.  For all purposes of this Agreement, if on any date of determination a
Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of
Credit shall be deemed to be “outstanding” in the amount so remaining available
to be drawn.
 

 
18

--------------------------------------------------------------------------------

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swing Line Lender.
 
“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Company and the
Administrative Agent.
 
“Letter of Credit” means any letter of credit issued hereunder and shall include
the Existing Letters of Credit.  Letters of Credit may be issued in Dollars or
in Euros.  A Letter of Credit may be a commercial letter of credit or a standby
letter of credit.
 
“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
 
“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).
 
“Letter of Credit Fee” has the meaning specified in Section 2.03(i).
 
“Letter of Credit Sublimit” means an amount equal to $75,000,000.  The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.
 
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing), but not
including the interest of a lessor under an operating lease or the interest of a
purchaser of Permitted Receivables under any Permitted Receivables Purchase
Facility.
 
“Loan” means an extension of credit by a Lender to a Borrower under Article II
in the form of a Committed Loan or a Swing Line Loan.
 
“Loan Documents” means this Agreement, each Designated Borrower Request and
Assumption Agreement, each Note, each Issuer Document, each Fee Letter, the
Guaranties and any agreement creating or perfecting rights in Cash Collateral
pursuant to the provisions of Section 2.18 of this Agreement.
 
“Loan Parties” means, collectively, each Domestic Loan Party and each Foreign
Loan Party.
 

 
19

--------------------------------------------------------------------------------

 

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.
 
“Losses from Discontinued Operations” means, for any period and without
duplication, operating losses and losses and expenses incurred or charges taken
in connection with the operations of James Jones Company and the discontinuance
thereof.
 
“Mandatory Cost” means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.02.
 
“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, liabilities (actual or
contingent) or condition (financial or otherwise) of the Company or the Company
and its Subsidiaries taken as a whole; (b) a material impairment of the ability
of any Loan Party to perform its obligations under any Loan Document to which it
is a party; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Loan Party of any Loan Document to
which it is a party.
 
“Maturity Date” means June 18, 2015.
 
“Material Domestic Subsidiary” means any Domestic Subsidiary of the Company
listed on Schedule 5.19 (as such Schedule may be revised pursuant to Section
2.15) or the most recent supplement thereto delivered in accordance with Section
6.02(f) or 7.04(c)(iv), as applicable.
 
“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.
 
“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including a Borrower or any ERISA Affiliate) at least two of whom are
not under common control, as such a plan is described in Section 4064 of ERISA.
 
“Net Disposition Proceeds” means, with respect to any Disposition of any assets
of the Company or any of its Subsidiaries, the excess of (a) the gross cash
proceeds received by such Person from any such Disposition and any cash payments
received in respect of promissory notes or other non-cash consideration
delivered to such Person in respect thereof over (b) the sum (without
duplication) of (i) all reasonable and customary legal, investment banking,
brokerage and accounting and other professional fees and disbursements actually
incurred in connection with such Disposition which have not been paid to
Affiliates of the Borrower in connection therewith, (ii) all taxes and other
governmental costs and expenses actually paid or estimated by such Person (in
good faith) to be payable in cash in connection with such Disposition, and (iii)
payments made by such Person to retire Indebtedness (other than the Credit
Extensions) of such Person where payment of such Indebtedness is required in
connection with such Disposition; provided, however, that if, after the payment
of all taxes with respect to such Disposition, the amount of estimated taxes, if
any, pursuant to clause (b)(ii) above exceeded the tax amount actually paid in
cash in respect of such Disposition, the aggregate amount of such excess shall,
at such time, constitute Net Disposition Proceeds.
 

 
20

--------------------------------------------------------------------------------

 

“Note” means a promissory note made by a Borrower in favor of a Lender
evidencing Loans made by such Lender to such Borrower, substantially in the form
of Exhibit C.
 
“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
Guaranteed Swap Contract or otherwise with respect to any Loan or Letter of
Credit, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Loan Party or any Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding.
 
“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Asset
Control.
 
“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
 
“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document, except for any Excluded Taxes.
 
“Outstanding Amount” means (i) with respect to Committed Loans on any date, the
Dollar Equivalent amount of the aggregate outstanding principal amount thereof
after giving effect to any borrowings and prepayments or repayments of such
Committed Loans occurring on such date; (ii) with respect to Swing Line Loans on
any date, the aggregate outstanding principal amount thereof after giving effect
to any borrowings and prepayments or repayments of such Swing Line Loans
occurring on such date; and (iii) with respect to any L/C Obligations on any
date, the Dollar Equivalent amount of the aggregate outstanding amount of such
L/C Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements by the
Company of Unreimbursed Amounts.
 
“Overnight Rate” means, for any day, (a) with respect to any amount denominated
in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate
determined by the Administrative Agent, the L/C Issuer, or the Swing Line
Lender, as the case may be, in accordance with banking industry rules on
interbank compensation, and (b) with respect to any amount denominated in Euros,
the rate of interest per annum at which overnight deposits in Euros, in an
amount approximately equal to the amount with respect to which such rate is
being determined, would be offered for such day by a branch or Affiliate of Bank
of America in the applicable offshore interbank market for Euros to major banks
in such interbank market.
 

 
21

--------------------------------------------------------------------------------

 

“Participant” has the meaning specified in Section 10.06(d).
 
“Participating Member State” means each state so described in any EMU
Legislation.
 
“PBGC” means the Pension Benefit Guaranty Corporation.
 
“PCAOB” means the Public Company Accounting Oversight Board.
 
“Pension Act” means the Pension Protection Act of 2006.
 
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
 
“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is (i) maintained or is contributed
to by the Company or any ERISA Affiliate and (ii) is either covered by Title IV
of ERISA or is subject to the minimum funding standards under Section 412 of the
Code.
 
“Permitted Acquisition” has the meaning specified in Section 7.04(c).
 
“Permitted Receivables” means all obligations of any obligor (whether now
existing or hereafter arising) under a contract for sale of goods or services by
any Loan Party or other Subsidiary of the Company, which shall include any
obligation of such obligor (whether now existing or hereafter arising) to pay
interest, finance charges or amounts with respect thereto, and, with respect to
any of the foregoing receivables or obligations, (a) all of the interest of the
Company or any of its Subsidiaries in the goods (including returned goods) the
sale of which gave rise to such receivable or obligation after the passage of
title thereto to any obligor, (b) all other Liens and property subject thereto
from time to time purporting to secure payment of such receivables or
obligations, and (c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of any such receivables or obligations.
 
“Permitted Receivables Purchase Facility” means any agreement of any Loan Party
or other Subsidiary of the Company providing for sales, transfers or conveyances
of Permitted Receivables purporting to be sales (and considered sales under
GAAP) that do not provide, directly or indirectly, for recourse against the
seller of such Permitted Receivables (or against any of such seller’s Affiliates
(other than the Receivables Subsidiary)) by way of a guaranty or any other
support arrangement, with respect to the amount of such Permitted Receivables
(based on the financial condition or circumstances of the obligor thereunder),
other than such limited recourse as is reasonable given market standards for
transactions of a similar type, taking into account such factors as historical
bad debt loss experience and obligor concentration levels.
 

 
22

--------------------------------------------------------------------------------

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Plan” means (i) any employee benefit plan within the meaning of Section 3(3) of
ERISA established or maintained by the Company or (ii) with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA (including
a Pension Plan), established or maintained for employees of the Company or any
ERISA Affiliate or any such Plan to which the Company is required to contribute
on behalf of any of its employees.
 
“Platform” has the meaning specified in Section 6.02.
 
“Pro Forma Basis”  means, with respect to any proposed Permitted Acquisition,
the Consolidated Funded Indebtedness and Consolidated EBITDA for each of the
four fiscal quarters immediately preceding such Permitted Acquisition being
calculated with reference to the audited historical financial statements of the
Person so acquired together with any interim financial statements of such Person
so acquired prepared since the date of the last audited financial statements and
prepared in a manner consistent with past practices (or, to the extent such
Person so acquired has no audited historical financial statements, the
management prepared financial statements of such Person so acquired, with such
statements to be in form and substance reasonably acceptable to the
Administrative Agent), and the Company and its Subsidiaries for the applicable
Test Period after giving effect on a pro forma basis to such Permitted
Acquisition (and assuming that such Permitted Acquisition had been consummated
at the beginning of such Test Period) in the manner described in clauses (i),
and (ii) below; provided, however, that, in each case, in the event that either
no historical financial statements are available with respect to the Person to
be acquired, the Person to be acquired is not a separate legal entity, the
Company or Subsidiary effecting the acquisition is acquiring only assets of
another Person or, in the Administrative Agent's reasonable discretion it
determines the historical financial statements do not adequately reflect the
financial statements of the Person or assets to be acquired, such calculations
shall be made with reference to reasonable estimates of such past performance
made by the Company based on existing data and other available information, such
estimates to be acceptable to the Administrative Agent:
 
(i)           all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition, if any, shall be deemed to have been
incurred or made on the first day of the Test Period, and all Indebtedness of
the Person to be acquired in such Permitted Acquisition which was repaid
concurrently with the consummation of the Permitted Acquisition, if any, shall
be deemed to have been repaid on the first day of the Test Period concurrently
with the deemed incurrence of the Indebtedness, if any, incurred in connection
with the Permitted Acquisition; and
 
(ii)           other reasonable cost savings, expenses and other income
statement or operating statement adjustments, including, without limitation,
those which are attributable to the change in ownership and/or management
resulting from such Permitted Acquisition, as in any case are (i) set forth in a
schedule delivered to the Administrative Agent concurrent with the consummation
of such Permitted Acquisition and (ii) approved by the Administrative Agent,
shall be deemed to have been realized on the first day of the Test Period;
provided, that the Administrative Agent shall be deemed to have provided such
consent if it shall not have objected to any such items within five Business
Days of its receipt of such schedule.
 

 
23

--------------------------------------------------------------------------------

 

“Public Company” means any Person that is required to file periodic reports with
the SEC pursuant to the Securities Laws (or any Person subject to similar
requirements under the laws of any other Governmental Authority).
 
“Public Lender” has the meaning specified in Section 6.02.
 
“Purchase Price” means, with respect to any Acquisition, the aggregate amount of
consideration for such Acquisition consisting of cash, Indebtedness directly or
indirectly incurred or assumed in connection therewith (including, without
limitation, Indebtedness of the Person subject to such Acquisition if effected
as an acquisition of such Person’s Equity Interests or merger of such Person
with and into the Company or any existing Subsidiary) and contingent obligations
to repurchase Equity Interests issued as part of the consideration for such
Acquisition.
 
“Receivables Subsidiary” means a special purpose, bankruptcy remote wholly-owned
Subsidiary of the Company which may be formed for the sole and exclusive purpose
of engaging in activities in connection with the purchase, sale and financing of
Permitted Receivables in connection with and pursuant to a Permitted Receivables
Purchase Facility.
 
“Register” has the meaning specified in Section 10.06(c).
 
“Registered Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Company as prescribed by the Securities
Laws.
 
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates.
 
“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
 
“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to
a Swing Line Loan, a Swing Line Loan Notice.
 
“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.
 

 
24

--------------------------------------------------------------------------------

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer, managing director or
authorized signatory of a Loan Party and solely for purposes of the delivery of
incumbency certificates pursuant to Section 4.01, the secretary or any assistant
secretary of a Loan Party and, solely for purposes of notices given pursuant to
Article II, any other officer or employee of the applicable Loan Party so
designated by any of the foregoing officers in a notice to the Administrative
Agent.  Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.
 
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of the Company or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to the Company’s stockholders, partners or members (or the
equivalent Person thereof).
 
“Revaluation Date” means (a) with respect to any Loan, each of the
following:  (i) each date of a Borrowing of a Eurocurrency Rate Loan denominated
in Euros, (ii) each date of a continuation of a Eurocurrency Rate Loan
denominated in Euros pursuant to Section 2.02, and (iii) such additional dates
as the Administrative Agent shall determine or the Required Lenders shall
require; and (b) with respect to any Letter of Credit, each of the
following:  (i) each date of issuance of a Letter of Credit denominated in
Euros, (ii) each date of an amendment of any such Letter of Credit having the
effect of increasing the amount thereof (solely with respect to the increased
amount), (iii) each date of any payment by the L/C Issuer under any Letter of
Credit denominated in Euros, and (iv) such additional dates as the
Administrative Agent or the L/C Issuer shall determine or the Required Lenders
shall require.
 
“Same Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in Euros, same day or other funds as may be determined by the
Administrative Agent or the L/C Issuer, as the case may be, to be customary in
the place of disbursement or payment for the settlement of international banking
transactions in Euros.
 
“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.
 
“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
 
“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.
 

 
25

--------------------------------------------------------------------------------

 

“Senior Note Documents” means, collectively, the 2003 Senior Notes, the 2003
Senior Note Purchase Agreement, the 2006 Senior Notes, the 2006 Senior Note
Purchase Agreement, the 2010 Senior Notes, the 2010 Senior Note Purchase
Agreement and, in each case, any other documents executed in connection
therewith, together with any permitted amendments, supplements or modifications
thereto.
 
“Senior Notes” means, collectively, the 2003 Senior Notes, the 2006 Senior Notes
and the 2010 Senior Notes.
 
“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Company and its Subsidiaries as of that date
determined in accordance with GAAP.
 
“Specified JV/Intercompany Asset Transfer” means the contribution or Disposition
of any property (other than cash) (i) by any Domestic Loan Party to any
Subsidiary that is not a Domestic Loan Party, (ii) by any Foreign Loan Party to
any Subsidiary that is not a Loan Party or (iii) by the Company or any
Subsidiary to any joint venture in accordance with Section 7.02(g).
 
“Spot Rate” for a currency means the rate determined by the Administrative Agent
or the L/C Issuer, as applicable, to be the rate quoted by the Person acting in
such capacity as the spot rate for the purchase by such Person of such currency
with another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided that the Administrative
Agent or the L/C Issuer may obtain such spot rate from another financial
institution designated by the Administrative Agent or the L/C Issuer if the
Person acting in such capacity does not have as of the date of determination a
spot buying rate for any such currency; and provided further that the L/C Issuer
may use such spot rate quoted on the date as of which the foreign exchange
computation is made in the case of any Letter of Credit denominated in Euros.
 
“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership or other entity (“Other Person”) of which more
than 50% of the outstanding Voting Stock of such Other Person (irrespective of
whether at the time Equity Interests of any other class or classes of such Other
Person shall or might have voting power upon the occurrence of any contingency)
is at the time directly or indirectly owned or controlled by such Person, by
such Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.  Unless otherwise specified, all references
herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of the Company.
 
“Subsidiary Guarantors” means, collectively, the Domestic Subsidiary Guarantors
and the Foreign Subsidiary Guarantors.
 

 
26

--------------------------------------------------------------------------------

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
 
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
 
“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.
 
“Swing Line Lender” means Bank of America in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.
 
“Swing Line Loan” has the meaning specified in Section 2.04(a).
 
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.
 
“Swing Line Sublimit” means an amount equal to the lesser of (a) $10,000,000 and
(b) the Aggregate Commitments.  The Swing Line Sublimit is part of, and not in
addition to, the Aggregate Commitments.
 
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
 
“Target” has the meaning specified in Section 7.04(c).
 
“TARGET Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by the
Administrative Agent to be a suitable replacement) is open for the settlement of
payments in Euro.
 

 
27

--------------------------------------------------------------------------------

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
 
“Test Period” means, with respect to any Permitted Acquisition, the period of
four fiscal quarters included in any covenant calculation and occurring prior to
the date of such Permitted Acquisition as set forth in the definition of "Pro
Forma Basis".
 
“Threshold Amount” means $25,000,000.
 
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.
 
“Type” means, with respect to a Committed Loan, its character as a Base Rate
Loan or a Eurocurrency Rate Loan.
 
“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
 
“United States” and “U.S.” mean the United States of America.
 
“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).
 
“Voting Stock” means Equity Interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
 
“Watts Germany” means Watts Industries Deutschland GmbH, a company organized
under the laws of Germany.
 
1.02           Other Interpretive Provisions.  With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
 
(i)           The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include,” “includes” and “including” shall be deemed
to be followed by the phrase “without limitation.”  The word “will” shall be
construed to have the same meaning and effect as the word “shall.”  Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such
 

 
28

--------------------------------------------------------------------------------

 

Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof”
and “hereunder,” and words of similar import when used in any Loan Document,
shall be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
 
(ii)           In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”
 
(iii)           Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
 
1.03           Accounting Terms.  (a) Generally.  All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein.  Notwithstanding the foregoing, for purposes of determining compliance
with any covenant (including the computation of any financial covenant)
contained herein, Indebtedness of the Company and its Subsidiaries shall be
deemed to be carried at 100% of the outstanding principal amount thereof, and
the effects of FASB ASC 825 on financial liabilities shall be disregarded.
 
(b)           Changes in GAAP.
 
(i)           If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Company or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Company shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Company shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
 

 
29

--------------------------------------------------------------------------------

 

(ii)           If at any time any change in GAAP would require operating leases
to be capitalized, the GAAP treatment prior to such change therein shall
continue to apply for purposes of this Agreement, including without limitation
the definition of “Attributable Indebtedness” and the calculation of any
financial ratio or requirement set forth herein.
 
(c)           International Financial Reporting Standards.  If at any time a
change in Law, regulation or applicable accounting standards would require
adoption of the International Financial Reporting Standards and the computation
of any financial covenant set forth herein would be altered thereby, and either
the Company or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Company shall negotiate in good faith to amend this
Agreement accordingly, and the Lenders shall not assess an amendment fee for
such amendment.
 
1.04           Rounding.  Any financial ratios required to be maintained by the
Borrowers pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
 
1.05           Exchange Rates; Currency Equivalents.  (a) The Administrative
Agent or the L/C Issuer, as applicable, shall determine the Spot Rates as of
each Revaluation Date to be used for calculating Dollar Equivalent amounts of
Credit Extensions and Outstanding Amounts denominated in Euros.  Such Spot Rates
shall become effective as of such Revaluation Date and shall be the Spot Rates
employed in converting any amounts between the applicable currencies until the
next Revaluation Date to occur.  Except for purposes of financial statements
delivered by Loan Parties hereunder or calculating financial covenants hereunder
or except as otherwise provided herein, the applicable amount of any currency
(other than Dollars) for purposes of the Loan Documents shall be such Dollar
Equivalent amount as so determined by the Administrative Agent or the L/C
Issuer, as applicable.
 
(b)           Wherever in this Agreement in connection with a Committed
Borrowing, conversion, continuation or prepayment of a Eurocurrency Rate Loan or
the issuance, amendment or extension of a Letter of Credit, an amount, such as a
required minimum or multiple amount, is expressed in Dollars, but such Committed
Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in Euros,
such amount shall be the Euro Equivalent of such Dollar amount (rounded to the
nearest Euro, with 0.5 of a Euro being rounded upward), as determined by the
Administrative Agent or the L/C Issuer, as the case may be.
 
1.06           Change of Currency. Each provision of this Agreement shall be
subject to such reasonable changes of construction as the Administrative Agent
may from time to time specify to be appropriate to reflect the adoption of the
Euro by any member state of the European Union and any relevant market
conventions or practices relating to the Euro.
 
1.07           Times of Day.  Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
 

 
30

--------------------------------------------------------------------------------

 

1.08           Letter of Credit Amounts.  Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the Dollar
Equivalent of the stated amount of such Letter of Credit in effect at such time;
provided, however, that with respect to any Letter of Credit that, by its terms
or the terms of any Issuer Document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount
of such Letter of Credit after giving effect to all such increases, whether or
not such maximum stated amount is in effect at such time.
 
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
 
2.01           Committed Loans.  Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a “Committed
Loan”) to the Borrowers in Dollars or in Euros from time to time, on any
Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Commitment; provided,
however, that after giving effect to any Committed Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment.  Within the limits of each
Lender’s Commitment, and subject to the other terms and conditions hereof, the
Borrowers may borrow under this Section 2.01, prepay under Section 2.05, and
reborrow under this Section 2.01.  Committed Loans may be Base Rate Loans or
Eurocurrency Rate Loans, as further provided herein.
 
2.02           Borrowings, Conversions and Continuations of Committed Loans.
 
(a)           Each Committed Borrowing, each conversion of Committed Loans from
one Type to the other, and each continuation of Eurocurrency Rate Loans shall be
made upon the applicable Borrower’s irrevocable notice to the Administrative
Agent, which may be given by telephone.  Each such notice must be received by
the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior
to the requested date of any Borrowing of, conversion to or continuation of
Eurocurrency Rate Loans denominated in Dollars or of any conversion of
Eurocurrency Rate Loans denominated in Dollars to Base Rate Committed Loans,
(ii) four Business Days prior to the requested date of any Borrowing or
continuation of Eurocurrency Rate Loans denominated in Euros, and (iii) on the
requested date of any Borrowing of Base Rate Committed Loans.  Each telephonic
notice by a Borrower pursuant to this Section 2.02(a) must be confirmed promptly
by delivery to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of such
Borrower.  Each Borrowing of, conversion to or continuation of Eurocurrency Rate
Loans shall be in a principal amount of $2,000,000 or a whole multiple of
$1,000,000 in excess thereof.  Except as provided in Sections 2.03(c) and
2.04(c), each Committed Borrowing of or conversion to Base Rate Committed Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof.  Each Committed Loan Notice (whether telephonic or written)
shall specify (i) whether the applicable Borrower is requesting a Committed
Borrowing, a conversion of Committed Loans from one Type to the other, or a
continuation of Eurocurrency Rate Loans, (ii)
 

 
31

--------------------------------------------------------------------------------

 

the requested date of the Borrowing, conversion or continuation, as the case may
be (which shall be a Business Day), (iii) the principal amount of Committed
Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans
to be borrowed or to which existing Committed Loans are to be converted, (v) if
applicable, the duration of the Interest Period with respect thereto and (vi)
the currency of the Committed Loans to be borrowed.  If the applicable Borrower
fails to specify a currency in a Committed Loan Notice requesting a Borrowing,
then the Committed Loans so requested shall be made in Dollars.  If the
applicable Borrower fails to specify a Type of Committed Loan in a Committed
Loan Notice or if the applicable Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans
shall be made as, or converted to, Base Rate Loans; provided, however, that in
the case of a failure to timely request a continuation of Committed Loans
denominated in Euros, such Loans shall be continued as Eurocurrency Rate Loans
in Euros with an Interest Period of one month.  Any automatic conversion to Base
Rate Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurocurrency Rate Loans.  If a Borrower
requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate
Loans in any such Committed Loan Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month.  No
Committed Loan may be converted into or continued as a Committed Loan
denominated in a different currency, but instead must be prepaid in the original
currency of such Committed Loan and reborrowed in the other currency.
 
(b)           Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount (and currency) of its
Applicable Percentage of the applicable Committed Loans, and if no timely notice
of a conversion or continuation is provided by the applicable Borrower, the
Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans or continuation of Committed Loans denominated in
Euros, in each case as described in the preceding subsection.  In the case of a
Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to the Administrative Agent in Same Day Funds at the Administrative
Agent’s Office for the applicable currency not later than 1:00 p.m. on the
Business Day specified in the applicable Committed Loan Notice.  Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the
applicable Borrower in like funds as received by the Administrative Agent either
by (i) crediting the account of such Borrower on the books of Bank of America
with the amount of such funds or (ii) wire transfer of such funds, in each case
in accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by such Borrower; provided, however, that if, on the date
the Committed Loan Notice with respect to such Borrowing denominated in Dollars
is given by such Borrower, there are L/C Borrowings outstanding to any Borrower,
then the proceeds of such Borrowing, first, shall be applied to the payment in
full of any such L/C Borrowings, and, second, shall be made available to such
Borrower as provided above.
 
(c)           Except as otherwise provided herein, a Eurocurrency Rate Loan may
be continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan.  During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurocurrency Rate Loans (whether in
Dollars or Euros) without the consent of the Required Lenders, and the Required
Lenders may demand that any or all of the then outstanding Eurocurrency Rate
Loans denominated in Euros be prepaid, or redenominated into Dollars in the
amount of the Dollar Equivalent thereof, on the last day of the then current
Interest Period with respect thereto.
 

 
32

--------------------------------------------------------------------------------

 

(d)           The Administrative Agent shall promptly notify the Borrowers and
the Lenders of the interest rate applicable to any Interest Period for
Eurocurrency Rate Loans upon determination of such interest rate.  At any time
that Base Rate Loans are outstanding, the Administrative Agent shall notify the
Borrowers and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.
 
(e)           After giving effect to all Committed Borrowings, all conversions
of Committed Loans from one Type to the other, and all continuations of
Committed Loans as the same Type, there shall not be more than six Interest
Periods in effect with respect to Committed Loans.
 
(f)           Notwithstanding anything herein to the contrary and except as
otherwise provided in Section 10.06(f), the minimum first Borrowing by the
Initial Designated Borrower from any Lender shall be at least equal to €50,000
or the Dollar Equivalent of such amount.
 
2.03           Letters of Credit.
 
(a)           The Letter of Credit Commitment.
 
(i)           Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit denominated in Dollars or in Euros for the account of (i) in the case of
any Letter of Credit issued at the request of the Company, the Company or any of
its Subsidiaries or (ii) in the case of any Letter of Credit issued at the
request of a Designated Borrower, such Designated Borrower or any of its
Subsidiaries, and to amend or extend Letters of Credit previously issued by it,
in accordance with subsection (b) below, and (2) to honor drawings under the
Letters of Credit; and (B) the Lenders severally agree to participate in Letters
of Credit issued for the account of the Borrowers or their respective
Subsidiaries and any drawings thereunder; provided that after giving effect to
any L/C Credit Extension with respect to any Letter of Credit, (x) the Total
Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount
of the L/C Obligations shall not exceed the Letter of Credit Sublimit.  Each
request by a Borrower for the issuance or amendment of a Letter of Credit shall
be deemed to be a representation by such Borrower that the L/C Credit Extension
so requested complies with the conditions set forth in the proviso to the
preceding sentence.  Within the foregoing limits, and subject to the terms and
conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be
fully revolving, and accordingly the Borrowers may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed.  All Existing Letters of Credit shall be
deemed to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.
 

 
33

--------------------------------------------------------------------------------

 

(ii)           The L/C Issuer shall not issue any Letter of Credit, if:
 
(A)           subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance
or last extension, unless the Required Lenders have approved such expiry date;
or
 
(B)           the expiry date of such requested Letter of Credit would occur
after the Letter of Credit Expiration Date, unless all the Lenders have approved
such expiry date.
 
(iii)           The L/C Issuer shall not be under any obligation to issue any
Letter of Credit if:
 
(A)           any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from
issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the L/C Issuer in good faith deems material to it;
 
(B)           the issuance of such Letter of Credit would violate one or more
policies of the L/C Issuer applicable to letters of credit generally;
 
(C)           except as otherwise agreed by the Administrative Agent and the L/C
Issuer, such Letter of Credit is in an initial stated amount less than $100,000,
in the case of a commercial Letter of Credit, or $500,000, in the case of a
standby Letter of Credit;
 
(D)           the L/C Issuer does not as of the issuance date of such requested
Letter of Credit issue Letters of Credit in the requested currency;
 
(E)           such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder; or
 
(F)           any Lender is at that time a Defaulting Lender, unless the L/C
Issuer has entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or
such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure
(after giving effect to Section 2.19(a)(iv)) with respect to the Defaulting
Lender arising from either the Letter of Credit then proposed to be issued or
that Letter of Credit and all other L/C Obligations as to which the L/C Issuer
has actual or potential Fronting Exposure, as it may elect in its sole
discretion; or
 

 
34

--------------------------------------------------------------------------------

 

(G) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is to be denominated in a currency other than Dollars or
Euros.
 
(iv)           The L/C Issuer shall not amend any Letter of Credit if the L/C
Issuer would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof.
 
(v)           The L/C Issuer shall be under no obligation to amend any Letter of
Credit if (A) the L/C Issuer would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
 
(vi)           The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.
 
(b)           Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
 
(i)           Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of a Borrower delivered to the L/C Issuer (with a copy to
the Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of such
Borrower.  Such Letter of Credit Application must be received by the L/C Issuer
and the Administrative Agent not later than 11:00 a.m. at least two Business
Days (or such later date and time as the Administrative Agent and the L/C Issuer
may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be.  In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer: (A)
the proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount and currency thereof; (C) the expiry date thereof;
(D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; (G) the purpose and nature of the requested Letter of
Credit; and (H) such other matters as the L/C Issuer may require.  In the case
of a request for an amendment of any outstanding Letter of Credit, such Letter
of Credit Application shall specify in form and detail satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may
require.  Additionally, the applicable Borrower shall furnish to the L/C Issuer
and the Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.
 

 
35

--------------------------------------------------------------------------------

 

(ii)           Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the applicable Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has
received written notice from any Lender, the Administrative Agent or any Loan
Party, at least one Business Day prior to the requested date of issuance or
amendment of the applicable Letter of Credit, that one or more applicable
conditions contained in Article IV shall not then be satisfied, then, subject to
the terms and conditions hereof, the L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the applicable Borrower (or the
applicable Subsidiary thereof) or enter into the applicable amendment, as the
case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices.  Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Lender’s
Applicable Percentage times the amount of such Letter of Credit.
 
(iii)           If the applicable Borrower so requests in any applicable Letter
of Credit Application, the L/C Issuer may, in its sole discretion, agree to
issue a Letter of Credit that has automatic extension provisions (each, an
“Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the L/C Issuer to prevent any such extension at least once
in each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”) in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued.  Unless otherwise
directed by the L/C Issuer, the applicable Borrower shall not be required to
make a specific request to the L/C Issuer for any such extension.  Once an
Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer shall not permit
any such extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B)
it has received notice (which may be by telephone or in writing) on or before
the day that is seven Business Days before the Non-Extension Notice Date (1)
from the Administrative Agent that the Required Lenders have elected not to
permit such extension or (2) from the Administrative Agent, any Lender or the
applicable Borrower that one or more of the applicable conditions specified in
Section 4.02 is not then satisfied, and in each such case directing the L/C
Issuer not to permit such extension.
 

 
36

--------------------------------------------------------------------------------

 

(iv)           Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the L/C Issuer will also deliver to the applicable
Borrower and the Administrative Agent a true and complete copy of such Letter of
Credit or amendment.
 
(c)           Drawings and Reimbursements; Funding of Participations.
 
(i)           Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the
applicable Borrower and the Administrative Agent thereof.  In the case of a
Letter of Credit denominated in Euros, the Borrower that requested the issuance
of such Letter of Credit shall reimburse the L/C Issuer in Euros, unless (A) the
L/C Issuer, at its option, shall have specified in such notice that it will
require reimbursement in Dollars, which option shall not be available to the L/C
Issuer if the Borrower reimburses the L/C Issuer in Euros on the Honor Date (as
defined below), or (B) in the absence of any such requirement for reimbursement
in Dollars, such Borrower shall have notified the L/C Issuer promptly following
receipt of the notice of drawing that such Borrower will reimburse the L/C
Issuer in Dollars.  In the case of any such reimbursement in Dollars of a
drawing under a Letter of Credit denominated in Euros, the L/C Issuer shall
notify the applicable Borrower of the Dollar Equivalent of the amount of the
drawing promptly following the determination thereof.  Not later than 11:00 a.m.
on the date of any payment by the L/C Issuer under a Letter of Credit to be
reimbursed in Dollars, or the Applicable Time on the date of any payment by the
L/C Issuer under a Letter of Credit to be reimbursed in Euros (each such date,
an “Honor Date”), the Borrower that requested the issuance of such Letter of
Credit shall reimburse the L/C Issuer through the Administrative Agent in an
amount equal to the amount of such drawing and in the applicable currency.  If
the applicable Borrower fails to so reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (expressed in Dollars in the amount of the
Dollar Equivalent thereof in the case of a Letter of Credit denominated in
Euros) (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable
Percentage thereof.  In such event, the applicable Borrower shall be deemed to
have requested a Committed Borrowing of Base Rate Loans to be disbursed on the
Honor Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Committed Loan Notice).  Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
 
(ii)           Each Lender shall upon any notice pursuant to Section 2.03(c)(i)
make funds available (and the Administrative Agent may apply Cash Collateral
provided for this purpose) for the account of the L/C Issuer, in Dollars, at the
Administrative Agent’s Office for Dollar-denominated payments in an amount equal
to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m.
on the Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that
so makes funds available shall be deemed to have made a Base Rate Committed Loan
to the applicable Borrower in such amount.  The Administrative Agent shall remit
the funds so received to the L/C Issuer in Dollars.
 

 
37

--------------------------------------------------------------------------------

 

(iii)           With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the conditions
set forth in Section 4.02 cannot be satisfied or for any other reason, the
applicable Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate.  In such event, each Lender’s
payment to the Administrative Agent for the account of the L/C Issuer pursuant
to Section 2.03(c)(ii) shall be deemed payment in respect of its participation
in such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.
 
(iv)           Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender’s
Applicable Percentage of such amount shall be solely for the account of the L/C
Issuer.
 
(v)           Each Lender’s obligation to make Committed Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, any Borrower, any Subsidiary or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender’s obligation to make Committed
Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the applicable Borrower of a Committed Loan
Notice).  No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the applicable Borrower to reimburse the L/C Issuer for the amount
of any payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.
 
(vi)           If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), then, without limiting the other provisions of
this Agreement, the L/C Issuer shall be entitled to recover from such Lender
(acting through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a rate per
annum equal to the applicable Overnight Rate from time to time in effect, plus
any administrative, processing or similar fees customarily charged by the L/C
Issuer in connection with the foregoing.  If such Lender pays such amount (with
interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Committed Loan included in the relevant Committed Borrowing or L/C
Advance in respect of the relevant L/C Borrowing, as the case may be.  A
certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (vi)
shall be conclusive absent manifest error.
 

 
38

--------------------------------------------------------------------------------

 

(d)           Repayment of Participations.
 
(i)           At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender’s L/C Advance in
respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the applicable Borrower or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Applicable Percentage thereof in Dollars and in
the same funds as those received by the Administrative Agent.
 
(ii)           If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Lender shall pay to the Administrative Agent for the account of the L/C
Issuer its Applicable Percentage thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the applicable Overnight
Rate from time to time in effect.  The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination
of this Agreement.
 
(e)           Obligations Absolute.  The obligation of each Borrower to
reimburse the L/C Issuer for each drawing under each Letter of Credit requested
by such Borrower and to repay each L/C Borrowing in respect of such Letters of
Credit shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
 
(i)           any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
 
(ii)           the existence of any claim, counterclaim, setoff, defense or
other right that any Borrower or any Subsidiary thereof may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting), the
L/C Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
 
(iii)           any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit;
 

 
39

--------------------------------------------------------------------------------

 

(iv)           any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;
 
(v)           any adverse change in the relevant exchange rates or in the
availability of Euros to any Borrower or any Subsidiary thereof or in the
relevant currency markets generally; or
 
(vi)           any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Borrower or
any Subsidiary thereof.
 
Each Borrower shall promptly examine a copy of each Letter of Credit requested
by such Borrower and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with such Borrower’s instructions or other
irregularity, such Borrower will immediately notify the L/C Issuer.  Such
Borrower shall be conclusively deemed to have waived any such claim against the
L/C Issuer and its correspondents unless such notice is given as aforesaid.
 
(f)           Role of L/C Issuer.  Each Lender and each Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable; (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document.  Each Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter
of Credit; provided, however, that this assumption is not intended to, and shall
not, preclude such Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.  None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer shall
be liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, a Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to a Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by such Borrower which such Borrower proves were caused by the L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of
 

 
40

--------------------------------------------------------------------------------

 

Credit.  In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
 
(g)           Cash Collateral.  (a)  Upon the request of the Administrative
Agent, (A) if the L/C Issuer has honored any full or partial drawing request
under any Letter of Credit and such drawing has resulted in an L/C Borrowing
which is not repaid by the Borrower on the date of the drawing giving rise to
such L/C Borrowing, or (B) if, as of the Letter of Credit Expiration Date, any
L/C Obligation for any reason remains outstanding, the Borrowers shall, in each
case, immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations; provided, that, in the case of the foregoing clause (A), such Cash
Collateral shall be released to the Borrower upon repayment of such L/C
Borrowing or the refinancing of such L/C Borrowing pursuant to a Committed
Borrowing.
 
(ii)           In addition, if the Administrative Agent notifies the Company at
any time that the Outstanding Amount of all L/C Obligations at such time exceeds
105% of the Letter of Credit Sublimit then in effect, then, within two Business
Days after receipt of such notice, the Borrowers shall Cash Collateralize the
L/C Obligations in an amount equal to the amount by which the Outstanding Amount
of all L/C Obligations exceeds the Letter of Credit Sublimit.
 
(iii)           The Administrative Agent may from time to time after the initial
deposit of Cash Collateral, at any time that the Outstanding Amount of all L/C
Obligations exceeds 100% of the Letter of Credit Sublimit then in effect,
request that additional Cash Collateral be provided in order to protect against
the results of further exchange rate fluctuations.
 
(h)           Applicability of ISP and UCP.  Unless otherwise expressly agreed
by the L/C Issuer and the Company when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the ISP shall apply to each standby Letter of Credit and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance shall apply to
each commercial Letter of Credit.
 
(i)           Letter of Credit Fees.  Each Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, in Dollars, a Letter of Credit fee (the “Letter of Credit
Fee”) (i) for each commercial Letter of Credit issued at the request of such
Borrower equal to the Applicable Rate times the Dollar Equivalent of the daily
amount available to be drawn under such Letter of Credit, and (ii) for each
standby Letter of Credit equal to the Applicable Rate times the Dollar
Equivalent of the daily amount available to be drawn under such Letter of
Credit; provided, however, any Letter of Credit Fees otherwise payable for the
account of a Defaulting Lender with respect to any Letter of Credit as to which
such Defaulting Lender has not provided Cash Collateral satisfactory to the L/C
Issuer pursuant to this Section 2.03 shall be payable, to the maximum extent
permitted by applicable Law, to the
 

 
41

--------------------------------------------------------------------------------

 

other Lenders in accordance with the upward adjustments in their respective
Applicable Percentages allocable to such Letter of Credit pursuant to Section
2.19(a)(iv), with the balance of such fee, if any, payable to the L/C Issuer for
its own account.  For purposes of computing the daily amount available to be
drawn under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.08.  Letter of Credit Fees shall be (i)
computed on a quarterly basis in arrears and (ii) due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand.  If
there is any change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.  Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all Letter of Credit Fees shall accrue at the Default
Rate.
 
(j)           Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer.  Each Borrower shall pay directly to the L/C Issuer for its own account,
in Dollars, a fronting fee (i) with respect to each commercial Letter of Credit
issued at the request of such Borrower, at the rate specified in the Fee Letter,
computed on the amount of such Letter of Credit, and payable upon the issuance
thereof, (ii) with respect to any amendment of a commercial Letter of Credit
increasing the amount of such Letter of Credit, at a rate separately agreed
between such Borrower and the L/C Issuer, computed on the amount of such
increase, and payable upon the effectiveness of such amendment, and (iii) with
respect to each standby Letter of Credit issued at the request of such Borrower,
at the rate per annum specified in the Administrative Agent Fee Letter, computed
on the Dollar Equivalent of the daily amount available to be drawn under such
Letter of Credit on a quarterly basis in arrears.  Such fronting fee shall be
due and payable on the tenth Business Day after the end of each March, June,
September and December in respect of the most recently-ended quarterly period
(or portion thereof, in the case of the first payment), commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand.  For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section
1.08.  In addition, each Borrower shall pay directly to the L/C Issuer for its
own account, in Dollars, with respect to each Letter of Credit issued at the
request of such Borrower, the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect.  Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
 
(k)           Conflict with Issuer Documents.  In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms hereof
shall control.
 
(l)           Letters of Credit Issued for Subsidiaries.  Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary thereof, the applicable
Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and
all drawings under such Letter of Credit.  Each Borrower hereby acknowledges
that the issuance of Letters of Credit for the account of its Subsidiaries
inures to the benefit of such Borrower, and that such Borrower’s business
derives substantial benefits from the businesses of such Subsidiaries.
 

 
42

--------------------------------------------------------------------------------

 

2.04           Swing Line Loans.
 
(a)           The Swing Line.  Subject to the terms and conditions set forth
herein, the Swing Line Lender, in reliance upon the agreements of the other
Lenders set forth in this Section 2.04, may in its sole discretion make loans in
Dollars (each such loan, a “Swing Line Loan”) to the Company from time to time
on any Business Day during the Availability Period in an aggregate amount not to
exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Applicable Percentage of the Outstanding Amount of Committed Loans and L/C
Obligations of the Lender acting as Swing Line Lender, may exceed the amount of
such Lender’s Commitment; provided, however, that after giving effect to any
Swing Line Loan, (i) the Total Outstandings shall not exceed the Aggregate
Commitments and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment, and provided, further, that the Company shall not use the proceeds
of any Swing Line Loan to refinance any outstanding Swing Line Loan.  Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Company may borrow under this Section 2.04, prepay under Section 2.05, and
reborrow under this Section 2.04.  Each Swing Line Loan shall be a Base Rate
Loan.  Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender’s Applicable Percentage times the amount of
such Swing Line Loan.
 
(b)           Borrowing Procedures.  Each Swing Line Borrowing shall be made
upon the Company’s irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day.  Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Company.  Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof.  Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of
the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to
make such Swing Line Loan as a result of the limitations set forth in the first
proviso to the first sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Article IV is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Company at its
office by crediting the account of the Company on the books of the Swing Line
Lender in immediately available funds.
 

 
43

--------------------------------------------------------------------------------

 

(c)           Refinancing of Swing Line Loans.
 
(i)           The Swing Line Lender at any time in its sole discretion may
request, on behalf of the Company (which hereby irrevocably authorizes the Swing
Line Lender to so request on its behalf), that each Lender make a Base Rate
Committed Loan in an amount equal to such Lender’s Applicable Percentage of the
amount of Swing Line Loans then outstanding.  Such request shall be made in
writing (which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02.  The Swing
Line Lender shall furnish the Company with a copy of the applicable Committed
Loan Notice promptly after delivering such notice to the Administrative
Agent.  Each Lender shall make an amount equal to its Applicable Percentage of
the amount specified in such Committed Loan Notice available to the
Administrative Agent in Same Day Funds (and the Administrative Agent may apply
Cash Collateral available with respect to the applicable Swing Line Loan) for
the account of the Swing Line Lender at the Administrative Agent’s Office for
Dollar-denominated payments not later than 1:00 p.m. on the day specified in
such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Committed Loan to the Company in such amount.  The Administrative Agent shall
remit the funds so received to the Swing Line Lender.
 
(ii)           If for any reason any Swing Line Loan cannot be refinanced by
such a Committed Borrowing in accordance with Section 2.04(c)(i), the request
for Base Rate Committed Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line Loan and each
Lender’s payment to the Administrative Agent for the account of the Swing Line
Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such
participation.
 
(iii)           If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be paid by
such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the
time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the applicable Overnight Rate from time
to time in effect, plus any administrative, processing or similar fees
customarily charged by the Swing Line Lender in connection with the
foregoing.  If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Committed Loan
included in the relevant Committed Borrowing or funded participation in the
relevant Swing Line Loan, as the case may be.  A certificate of the Swing Line
Lender submitted to any Lender (through the Administrative Agent) with respect
to any amounts owing under this clause (iii) shall be conclusive absent manifest
error.
 

 
44

--------------------------------------------------------------------------------

 

(iv)           Each Lender’s obligation to make Committed Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this Section
2.04(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Company or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is
subject to the conditions set forth in Section 4.02.  No such funding of risk
participations shall relieve or otherwise impair the obligation of the Company
to repay Swing Line Loans, together with interest as provided herein.
 
(d)           Repayment of Participations.
 
(i)           At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Applicable Percentage thereof in the same funds as
those received by the Swing Line Lender.
 
(ii)           If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by the
Swing Line Lender under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the applicable Overnight Rate.  The Administrative Agent will
make such demand upon the request of the Swing Line Lender.  The obligations of
the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.
 
(e)           Interest for Account of Swing Line Lender.  The Swing Line Lender
shall be responsible for invoicing the Company for interest on the Swing Line
Loans.  Until each Lender funds its Base Rate Committed Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender’s
Applicable Percentage of any Swing Line Loan, interest in respect of such
Applicable Percentage shall be solely for the account of the Swing Line Lender.
 
(f)           Payments Directly to Swing Line Lender.  The Company shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
 
2.05           Prepayments.  ii)  Each Borrower may, upon notice from such
Borrower to the Administrative Agent, at any time or from time to time
voluntarily prepay Committed Loans in whole or in part without premium or
penalty; provided that (i) such notice must be received by the Administrative
Agent not later than 11:00 a.m. (A) three Business Days prior to any date of
prepayment of Eurocurrency Rate Loans denominated in Dollars, (B) four Business
Days prior to
 

 
45

--------------------------------------------------------------------------------

 

any date of prepayment of Eurocurrency Rate Loans denominated in Euros, and (C)
on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of
Eurocurrency Rate Loans denominated in Dollars shall be in a principal amount of
$2,000,000 or a whole multiple of $1,000,000 in excess thereof; (iii) any
prepayment of Eurocurrency Rate Loans denominated in Euros shall be in a minimum
principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess
thereof; and (iv) any prepayment of Base Rate Committed Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then
outstanding.  Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Committed Loans to be prepaid and, if Eurocurrency
Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender’s Applicable Percentage of such
prepayment.  If such notice is given by a Borrower, such Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.  Any prepayment of a Eurocurrency Rate
Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05.  Each
such prepayment shall be applied to the Committed Loans of the Lenders in
accordance with their respective Applicable Percentages.
 
(b)           The Company may, upon notice to the Swing Line Lender (with a copy
to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty; provided
that (i) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and
(ii) any such prepayment shall be in a minimum principal amount of
$100,000.  Each such notice shall specify the date and amount of such
prepayment.  If such notice is given by the Company, the Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.
 
(c)           If the Administrative Agent notifies the Company at any time that
the Total Outstandings at such time exceed an amount equal to 105% of the
Aggregate Commitments then in effect, then, within two Business Days after
receipt of such notice, the Borrowers shall prepay Loans and/or the Company
shall Cash Collateralize the L/C Obligations in an aggregate amount sufficient
to reduce the Total Outstandings as of such date of payment to an amount not to
exceed 100% of the Aggregate Commitments then in effect; provided, however,
that, subject to the provisions of Section 2.03(g)(ii), the Company shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section
2.05(c) unless after the prepayment in full of the Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.  The Administrative Agent may
from time to time after the initial deposit of such Cash Collateral, at any time
that the Total Outstandings exceed 100% of the Aggregate Commitments then in
effect, request that additional Cash Collateral be provided in order to protect
against the results of further exchange rate fluctuations.
 

 
46

--------------------------------------------------------------------------------

 

2.06           Termination or Reduction of Commitments.
 
(a)           Optional Commitment Reductions.  The Company may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments, or from time to
time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof and (iii) the Company shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments.  The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Aggregate
Commitments.  Subject to subsection (c) of this Section 2.06, the amount of any
such Aggregate Commitment reduction shall not be applied to the Letter of Credit
Sublimit unless otherwise specified by the Company.  Any reduction of the
Aggregate Commitments pursuant to this Section 2.06(a) shall be applied to the
Commitment of each Lender according to its Applicable Percentage.  All fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.
 
(b)           Mandatory Commitment Reduction.  Upon the consummation of any
Disposition (other than any Disposition permitted under clauses (a) through (i)
of Section 7.05) by the Company or any Subsidiary, the Aggregate Commitments
shall be reduced by an amount equal to the Net Disposition Proceeds of such
Disposition; provided, that the following shall not be subject to a reduction of
the Aggregate Commitments pursuant to this clause (b): (x) Net Disposition
Proceeds that are reinvested in equipment or other assets within ninety (90)
days following receipt thereof and (y) Net Disposition Proceeds of such
Dispositions not reinvested as described in the foregoing clause (x) of less
than $50,000,000 in the aggregate in any fiscal year.  In connection with any
such reduction of the Aggregate Commitments, the Borrowers shall prepay Loans
and/or the Company shall Cash Collateralize the L/C Obligations in an aggregate
amount sufficient to reduce the Total Outstanding as of the date of such
reduction to an amount not to exceed the Aggregate Commitments after giving
effect to such reduction; provided, however, that, subject to the provisions of
Section 2.03(g)(ii), the Borrowers shall not be required to Cash Collateralize
the L/C Obligations pursuant to this Section 2.06(b) unless after the prepayment
in full of the Loans the Total Outstandings exceed the Aggregate Commitments
after giving effect to such reduction.
 
(c)           Effect on Commitments and Sublimits.  Any reduction of the
Aggregate Commitments pursuant to this Section 2.06 shall be applied to the
Commitment of each Lender according to its Applicable Percentage.  If, after
giving effect to any such reduction of the Aggregate Commitments, the Letter of
Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate
Commitments, such sublimit shall be automatically reduced by the amount of such
excess.
 
2.07           Repayment of Loans.  iii)  Each Borrower shall repay to the
Lenders on the Maturity Date the aggregate principal amount of Committed Loans
made to such Borrower outstanding on such date.
 
(b)           The Company shall repay each Swing Line Loan on the Maturity Date.
 

 
47

--------------------------------------------------------------------------------

 

2.08           Interest.  iv)  Subject to the provisions of subsection (b)
below, (i) each Eurocurrency Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurocurrency Rate for such Interest Period plus the Applicable Rate for
Eurocurrency Rate Loans plus (in the case of a Eurocurrency Rate Loan of any
Lender which is lent from a Lending Office in the United Kingdom or a
Participating Member State) the Mandatory Cost; (ii) each Base Rate Committed
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate for Base Rate Loans; and (iii) each Swing Line Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate for Base Rate Loans.
 
(b)           (a)  If any amount of principal of any Loan is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
 
(ii)           If any amount (other than principal of any Loan) payable by any
Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Required Lenders, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
 
(iii)           Upon the request of the Required Lenders, while any Event of
Default exists, the Borrowers shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
 
(iv)           Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
 
(c)           Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein.  Interest hereunder shall be due and payable in accordance
with the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
 
2.09           Fees.  In addition to certain fees described in subsections (i)
and (j) of Section 2.03:
 
(a)           Facility Fee.  The Company shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage, a
facility fee in Dollars equal to the Applicable Rate for Facility Fees times the
actual daily amount of the Aggregate Commitments regardless of usage (or, if the
Aggregate Commitments have terminated, on the Total Outstandings), subject to
adjustment as provided in Section 2.19.  The facility fee shall accrue at all
times during the Availability Period (and thereafter so long as any Committed
Loans, Swing Line Loans or L/C Obligations remain outstanding), including at any
time during which one or more of the conditions in Article IV is not met, and
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing with the
 

 
48

--------------------------------------------------------------------------------

 

first such date to occur after the Closing Date, and on the last day of the
Availability Period (and, if applicable, thereafter on demand).  The facility
fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.
 
(b)           Other Fees.  (i)  The Company shall pay to the Arrangers and the
Administrative Agent for their own respective accounts, in Dollars, fees in the
amounts and at the times specified in the Fee Letters.  Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.
 
(ii)           The Company shall pay to the Lenders, in Dollars, such fees as
shall have been separately agreed upon in writing in the amounts and at the
times so specified.  Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
 
2.10           Computation of Interest and Fees.
 
(a)           All computations of interest for Base Rate Loans (including Base
Rate Loans determined by reference to the Eurocurrency Rate) shall be made on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed.  All other computations of fees and interest shall be made on the basis
of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year).  Interest shall accrue on each Loan for the day on which the Loan is
made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.12(a), bear
interest for one day.  Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
 
(b)           If, as a result of any restatement of or other adjustment to the
financial statements of the Company or for any other reason (other than a
restatement of or adjustment to such financial statements by reason of a
required change in GAAP), the Company or the Lenders determine that (i) the
Consolidated Leverage Ratio as calculated by the Company as of any applicable
date was inaccurate and (ii) a proper calculation of the Consolidated Leverage
Ratio would have resulted in higher pricing for such period, the Borrowers shall
immediately and retroactively be obligated to pay to the Administrative Agent
for the account of the applicable Lenders or the L/C Issuer, as the case may be,
promptly on demand by the Administrative Agent (or, after the occurrence of an
actual or deemed entry of an order for relief with respect to the Company under
the Bankruptcy Code of the United States, automatically and without further
action by the Administrative Agent, any Lender or the L/C Issuer), an amount
equal to the excess of the amount of interest and fees that should have been
paid for such period over the amount of interest and fees actually paid for such
period.  This paragraph shall not limit the rights of the Administrative Agent,
any Lender or the L/C Issuer, as the case may be, under Section 2.03(c)(iii),
2.03(h) or 2.08(b) or under Article VIII.  The Borrowers’ obligations under this
paragraph shall survive the termination of the Aggregate Commitments and the
repayment of all other Obligations hereunder.
 

 
49

--------------------------------------------------------------------------------

 

2.11           Evidence of Debt.  (a) The Credit Extensions made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business.  The
accounts or records maintained by the Administrative Agent and each Lender shall
be conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrowers and the interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrowers hereunder to pay any amount
owing with respect to the Obligations.  In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error.  Upon
the request of any Lender to a Borrower made through the Administrative Agent,
such Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans to such
Borrower in addition to such accounts or records.  Each Lender may attach
schedules to a Note and endorse thereon the date, Type (if applicable), amount,
currency and maturity of its Loans and payments with respect thereto.
 
(b)           In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit and Swing Line Loans.  In the
event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
 
2.12           Payments Generally; Administrative Agent’s Clawback.  (a)
General.  All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or
setoff.  Except as otherwise expressly provided herein and except with respect
to principal of and interest on Loans denominated in Euros, all payments by the
Borrowers hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the applicable
Administrative Agent’s Office in Dollars and in Same Day Funds not later than
2:00 p.m. on the date specified herein.  Except as otherwise expressly provided
herein, all payments by the Borrowers hereunder with respect to principal and
interest on Loans denominated in Euros shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
at the applicable Administrative Agent’s Office in Euros and in Same Day Funds
not later than 2:00 p.m. on the date specified herein. Without limiting the
generality of the foregoing, the Administrative Agent may require that any
payments due under this Agreement be made in the United States.  If, for any
reason, any Borrower is prohibited by any Law from making any required payment
hereunder in Euros, such Borrower shall make such payment in Dollars in the
Dollar Equivalent of the Euro payment amount.  The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office.  All payments received by the
Administrative Agent (i) after 2:00 p.m., in the case of payments in Dollars, or
(ii) after 2:00 p.m. in the case of payments in Euros, shall in each case be
deemed received on the next succeeding Business Day and any applicable interest
or fee shall continue to accrue.  If any payment to be made by any Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.
 

 
50

--------------------------------------------------------------------------------

 

(b)           (ii)  Funding by Lenders; Presumption by Administrative
Agent.  Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Committed Borrowing of Eurocurrency Rate Loans
(or, in the case of any Committed Borrowing of Base Rate Loans, prior to 12:00
noon on the date of such Committed Borrowing) that such Lender will not make
available to the Administrative Agent such Lender’s share of such Committed
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 (or, in the case of
a Committed Borrowing of Base Rate Loans, that such Lender has made such share
available in accordance with and at the time required by Section 2.02) and may,
in reliance upon such assumption, make available to the applicable Borrower a
corresponding amount.  In such event, if a Lender has not in fact made its share
of the applicable Committed Borrowing available to the Administrative Agent,
then the applicable Lender and the applicable Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount in Same
Day Funds with interest thereon, for each day from and including the date such
amount is made available to such Borrower to but excluding the date of payment
to the Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the Overnight Rate, plus any administrative, processing or similar fees
customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by such Borrower, the
interest rate applicable to Base Rate Loans.  If such Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to such
Borrower the amount of such interest paid by such Borrower for such period.  If
such Lender pays its share of the applicable Committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Committed Loan included in such Committed Borrowing.  Any payment by such
Borrower shall be without prejudice to any claim such Borrower may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.
 
(ii)           Payments by Borrowers; Presumptions by Administrative
Agent.  Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the L/C Issuer hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the L/C Issuer,
as the case may be, the amount due.  In such event, if such Borrower has not in
fact made such payment, then each of the Lenders or the L/C Issuer, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or the L/C Issuer, in Same Day
Funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Overnight Rate.
 
A notice of the Administrative Agent to any Lender or Borrower with respect to
any amount owing under this subsection (b) shall be conclusive, absent manifest
error.
 

 
51

--------------------------------------------------------------------------------

 

(c)           Failure to Satisfy Conditions Precedent.  If any Lender makes
available to the Administrative Agent funds for any Loan to be made by such
Lender to any Borrower as provided in the foregoing provisions of this Article
II, and such funds are not made available to such Borrower by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in
Article IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.
 
(d)           Obligations of Lenders Several.  The obligations of the Lenders
hereunder to make Committed Loans, to fund participations in Letters of Credit
and Swing Line Loans (in each case subject to Section 2.19(a)(iv)) and to make
payments pursuant to Section 10.04(c) are several and not joint.  The failure of
any Lender to make any Committed Loan, to fund any such participation (in each
case subject to Section 2.19(a)(iv)) or to make any payment under Section
10.04(c) on any date required hereunder shall not relieve any other Lender of
its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Committed Loan,
to purchase its participation (in each case subject to Section 2.19(a)(iv)) or
to make its payment under Section 10.04(c).
 
(e)           Funding Source.  Nothing herein shall be deemed to obligate any
Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
 
2.13           Sharing of Payments by Lenders.  If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of the Committed Loans made by
it, or the participations in L/C Obligations or in Swing Line Loans held by it
resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of such Committed Loans or participations and accrued interest thereon
greater than its pro rata share thereof as provided herein, then the Lender
receiving such greater proportion shall (a) notify the Administrative Agent of
such fact, and (b) purchase (for cash at face value) participations in the
Committed Loans and subparticipations in L/C Obligations and Swing Line Loans of
the other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Committed Loans and other amounts owing them, provided that:
 
(i)           if any such participations or subparticipations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations or subparticipations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest; and
 
(ii)           the provisions of this Section 2.13 shall not be construed to
apply to (x) any payment made by or on behalf of a Borrower pursuant to and in
accordance with the express terms of this Agreement (including the application
of funds arising from the existence of a Defaulting Lender), (y) the application
of Cash Collateral provided for in Section 2.18, or (z) any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Committed Loans or subparticipations in L/C Obligations or Swing Line
Loans to any assignee or participant, other than an assignment to the Company or
any Subsidiary thereof (as to which the provisions of this Section 2.13 shall
apply).
 

 
52

--------------------------------------------------------------------------------

 

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.
 
2.14           Designated Borrowers.
 
(a)           The Initial Designated Borrower is a “Designated Borrower”
hereunder and may receive Loans for its account and request that Letters of
Credit be issued for the account of itself or its Subsidiaries, in each case on
the terms and conditions set forth in this Agreement.
 
(b)           The Company may at any time, upon not less than 15 Business Days’
notice from the Company to the Administrative Agent (or such shorter period as
may be agreed by the Administrative Agent in its sole discretion), designate any
additional Subsidiary of the Company (an “Applicant Borrower”) as a Designated
Borrower to receive Loans and request the issuance of Letters of Credit
hereunder by delivering to the Administrative Agent (which shall promptly
deliver counterparts thereof to each Lender) a duly executed notice and
agreement in substantially the form of Exhibit G (a “Designated Borrower Request
and Assumption Agreement”).  The parties hereto acknowledge and agree that prior
to any Applicant Borrower becoming entitled to utilize the credit facilities
provided for herein the Administrative Agent and the Lenders shall have received
such supporting resolutions, incumbency certificates, opinions of counsel and
other documents or information, in form, content and scope reasonably
satisfactory to the Administrative Agent, as may be required by the
Administrative Agent or the Required Lenders in their sole discretion, and Notes
signed by such new Borrowers to the extent any Lenders so require.  If the
Administrative Agent and the Required Lenders agree that an Applicant Borrower
shall be entitled to receive Loans and request the issuance of Letters of Credit
hereunder, then promptly following receipt of all such requested resolutions,
incumbency certificates, opinions of counsel and other documents or information,
the Administrative Agent shall send a notice in substantially the form of
Exhibit H (a “Designated Borrower Notice”) to the Company and the Lenders
specifying the effective date upon which the Applicant Borrower shall constitute
a Designated Borrower for purposes hereof, whereupon each of the Lenders agrees
to permit such Designated Borrower to receive Loans and request the issuance of
Letters of Credit hereunder, on the terms and conditions set forth herein, and
each of the parties agrees that such Designated Borrower otherwise shall be a
Borrower for all purposes of this Agreement; provided that no Committed Loan
Notice or Letter of Credit Application may be submitted by such Designated
Borrower until the date five Business Days after such effective date.
 
(c)           Concurrently with the delivery of each Designated Borrower Request
and Assumption Agreement, the related Applicant Borrower shall execute and
deliver to the Administrative Agent a counterpart of the Guaranty Agreement or
such other document as the Administrative Agent shall deem appropriate in order
for such Subsidiary to provide an unconditional guaranty of the Obligations of
each other Borrower (in the case of any Domestic Designated Borrower) or each
other Foreign Designated Borrower (in the case of any Foreign Designated
Borrower), in form, content and scope reasonably satisfactory to the
Administrative Agent.
 

 
53

--------------------------------------------------------------------------------

 

(d)           Each Subsidiary of the Company that is or becomes a “Designated
Borrower” pursuant to this Section 2.14 hereby irrevocably appoints the Company
as its agent for all purposes relevant to this Agreement and each of the other
Loan Documents, including (i) the giving and receipt of notices, (ii) the
execution and delivery of all documents, instruments and certificates
contemplated herein and all modifications hereto, (iii) the receipt of the
proceeds of any Loans made by the Lenders to any such Designated Borrower
hereunder and (iv) the receipt and examination of a copy any Letter of Credit
issued by the L/C Issuer at the request of such Designated Borrower
hereunder.  Any acknowledgment, consent, direction, certification or other
action which might otherwise be valid or effective only if given or taken by all
Borrowers, or by each Borrower acting singly, shall be valid and effective if
given or taken only by the Company, whether or not any such other Borrower joins
therein.  Any notice, demand, consent, acknowledgement, direction, certification
or other communication delivered to the Company in accordance with the terms of
this Agreement shall be deemed to have been delivered to each Designated
Borrower.
 
(e)           The Company may from time to time, upon not less than 15 Business
Days’ notice from the Company to the Administrative Agent (or such shorter
period as may be agreed by the Administrative Agent in its sole discretion),
terminate a Designated Borrower’s status as such, provided that (i) there are no
outstanding Loans payable by such Designated Borrower and (ii) there are not
outstanding Letters of Credit that were issued at the request of such Designated
Borrower, or other amounts payable by such Designated Borrower on account of any
Loans made to it or Letters of Credit issued at its request, as of the effective
date of such termination. The Administrative Agent will promptly notify the
Lenders of any such termination of a Designated Borrower’s status.
 
2.15           Domestic Subsidiary Guarantors.  The Company may at any time
deliver to the Administrative Agent a revised Schedule 5.19 setting forth
Domestic Subsidiaries of the Company sufficient to cause the representation and
warranty set forth in Section 5.19 to be true and correct as of the date of
delivery of such revised Schedule.  On the date of delivery by the Company of a
revised Schedule 5.19 pursuant to this Section 2.15, which revised Schedule
indicates that any Domestic Subsidiary has become a Material Domestic
Subsidiary, the Company shall cause such Domestic Subsidiary to (x) become a
Domestic Subsidiary Guarantor by executing and delivering to the Administrative
Agent a counterpart of the Guaranty Agreement or such other document as the
Administrative Agent shall deem appropriate in order for such Domestic
Subsidiary to provide an unconditional guaranty of the Obligations of the
Borrowers and (y) deliver to the Administrative Agent documents of the types
referred to in clauses (iii), (iv) and (vii) of Section 4.01(a) and, if
requested by the Administrative Agent, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to in clause (x)), all
in form, content and scope reasonably satisfactory to the Administrative
Agent.  Promptly following (i) delivery by the Company of a revised Schedule
5.19 pursuant to this Section 2.15, which revised Schedule indicates that any
Domestic Subsidiary has ceased to constitute a Material Domestic Subsidiary and
(ii) delivery by the Company of any documentation required pursuant to the
foregoing sentence with respect to such revised Schedule, the Administrative
Agent shall be authorized to, and shall promptly, execute and deliver to the
Company such documentation as the Company may reasonably request in order to
release such Domestic Subsidiary from the Guaranty Agreement.
 

 
54

--------------------------------------------------------------------------------

 

2.16           Increase in Commitments.
 
(a)           Request for Increase.  Provided there exists no Default, upon
notice to the Administrative Agent (which shall promptly notify the Lenders),
the Company may from time to time, request an increase in the Aggregate
Commitments by an amount (for all such requests in the aggregate) not exceeding
$150,000,000; provided that any such request for an increase shall be in a
minimum amount of $5,000,000.  At the time of sending such notice, the Company
(in consultation with the Administrative Agent) shall specify the time period
within which each Lender is requested to respond (which shall in no event be
less than ten Business Days from the date of delivery of such notice to the
Lenders).
 
(b)           Lender Elections to Increase.  Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase.  Any Lender
not responding within such time period shall be deemed to have declined to
increase its Commitment.
 
(c)           Notification by Administrative Agent; Additional Lenders.  The
Administrative Agent shall notify the Company and each Lender of the Lenders’
responses to each request made hereunder.  To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent, the
L/C Issuer and the Swing Line Lender (which approvals shall not be unreasonably
withheld), the Company may also invite additional Eligible Assignees to become
Lenders pursuant to a joinder agreement in form and substance satisfactory to
the Administrative Agent and its counsel.
 
(d)           Effective Date and Allocations.  If the Aggregate Commitments are
increased in accordance with this Section 2.16, the Administrative Agent and the
Company shall determine the effective date (the “Increase Effective Date”) and
the final allocation of such increase.  The Administrative Agent shall promptly
notify the Company and the Lenders of the final allocation of such increase and
the Increase Effective Date.
 
(e)           Conditions to Effectiveness of Increase.  As a condition precedent
to such increase, the Company shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of such Loan
Party (I) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (II) in the case of the Company,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article V and the other Loan
Documents are (i) with respect to any representations or warranties that contain
a materiality qualifier, true and correct in all respects and (ii) with respect
to any representations or warranties that do not contain a materiality
qualifier, true and correct in all material respects, on and as of the Increase
Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date,
 

 
55

--------------------------------------------------------------------------------

 

in which case they are true and correct in such respects as of such earlier
date, and except that for purposes of this Section 2.16, the representations and
warranties contained in subsection (a) of Section 5.05 shall be deemed to refer
to the most recent statements furnished pursuant to clauses (a) and (b) of
Section 6.01 (subject, in the case of any unaudited statements furnished
pursuant to clause (b) of Section 6.01, to the absence of footnotes and to
normal year-end audit adjustments), and (B) no Default exists.  The Borrowers
shall prepay any Committed Loans outstanding on the Increase Effective Date (and
pay any additional amounts required pursuant to Section 3.05) on a non-ratable
basis to the extent necessary to keep the outstanding Committed Loans ratable
with any revised Applicable Percentages arising from any non-ratable increase in
the Commitments under this Section 2.16.
 
(f)           Conflicting Provisions.  This Section 2.16 shall supersede any
provisions in Sections 2.13 or 10.01 to the contrary.
 
2.17           [intentionally omitted].
 
2.18           Cash Collateral.
 
(a)           Certain Credit Support Events.  At any time that there shall exist
a Defaulting Lender, within thirty (30) days of any the request therefor from
the Administrative Agent, the L/C Issuer or the Swing Line Lender, the
applicable Borrower shall deliver to the Administrative Agent Cash Collateral in
an amount sufficient to cover all Fronting Exposure (after giving effect to
Section 2.19(a)(iv) and any Cash Collateral provided by the Defaulting Lender).
 
(b)           Grant of Security Interest.  All Cash Collateral (other than
credit support not constituting funds subject to deposit) shall be maintained in
blocked, non-interest bearing deposit accounts at the Administrative
Agent.  Each Borrower, and to the extent provided by any Lender, such Lender,
shall grant to (and subjects to the control of) the Administrative Agent, for
the benefit of the Administrative Agent, the L/C Issuer and the Lenders
(including the Swing Line Lender), and will agree to maintain, a first priority
security interest in all such cash, deposit accounts and all balances therein,
and all other property so provided as collateral pursuant hereto, and in all
proceeds of the foregoing, all as security for the obligations to which such
Cash Collateral may be applied pursuant to Section 2.18(c).  If at any time the
Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent as herein provided, or
that the total amount of such Cash Collateral is less than the applicable
Fronting Exposure and other obligations secured thereby, the Borrowers or the
relevant Defaulting Lender will, promptly upon demand by the Administrative
Agent, pay or provide to the Administrative Agent additional Cash Collateral in
an amount sufficient to eliminate such deficiency.
 
(c)           Application.  Cash Collateral provided under any of this Section
2.18 or Sections 2.03, 2.04, 2.05, 2.19 or 8.02 in respect of Letters of Credit
or Swing Line Loans shall be held and applied to the satisfaction of the
specific L/C Obligations, Swing Line Loans, obligations to fund participations
therein (including, as to Cash Collateral provided by a Defaulting Lender, any
interest accrued on such obligation) and other obligations for which the Cash
Collateral was so provided, prior to any other application of such property as
may be provided for herein.
 

 
56

--------------------------------------------------------------------------------

 

(d)           Release.  Cash Collateral (or the appropriate portion thereof)
provided to reduce Fronting Exposure or other obligations shall be released
promptly following (i) the elimination of the applicable Fronting Exposure or
other obligations giving rise thereto (including by the termination of
Defaulting Lender status of the applicable Lender (or, as appropriate, its
assignee following compliance with Section 10.06(b)(vi))) or (ii) the
Administrative Agent’s good faith determination that there exists excess Cash
Collateral; provided, however, (x) that Cash Collateral furnished by or on
behalf of a Loan Party shall not be released during the continuance of a Default
or Event of Default (and following application as provided in this Section 2.18
may be otherwise applied in accordance with Section 8.03), and (y) the Person
providing Cash Collateral and the L/C Issuer or Swing Line Lender, as
applicable, may agree that Cash Collateral shall not be released but instead
held to support future anticipated Fronting Exposure or other obligations.
 
2.19           Defaulting Lenders.
 
(a)           Adjustments.  Notwithstanding anything to the contrary contained
in this Agreement, if any Lender becomes a Defaulting Lender, then, until such
time as that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:
 
(i)           Waivers and Amendments.  That Defaulting Lender’s right to approve
or disapprove any amendment, waiver or consent with respect to this Agreement
shall be restricted as set forth in Section 10.01.
 
(ii)           Reallocation of Payments.  Any payment of principal, interest,
fees or other amounts received by the Administrative Agent for the account of
that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise, and including any amounts made available to the
Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall
be applied at such time or times as may be determined by the Administrative
Agent as follows: first, to the payment of any amounts owing by that Defaulting
Lender to the Administrative Agent hereunder; second, to the payment on a pro
rata basis of any amounts owing by that Defaulting Lender to the L/C Issuer or
Swing Line Lender hereunder; third, if so determined by the Administrative Agent
or requested by the L/C Issuer or Swing Line Lender, to be held as Cash
Collateral for future funding obligations of that Defaulting Lender of any
participation in any Swing Line Loan or Letter of Credit; fourth, as the
Borrowers may request (so long as no Default or Event of Default exists), to the
funding of any Loan in respect of which that Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrowers, to be held in a non-interest bearing deposit account and released
in order to satisfy obligations of that Defaulting Lender to fund Loans under
this Agreement; sixth, to the payment of any amounts owing to the Lenders, the
L/C Issuer or Swing Line Lender as a result of any judgment of a court of
competent jurisdiction obtained by any Lender, the L/C Issuer or Swing Line
Lender against that Defaulting Lender as a result of that Defaulting Lender’s
breach of its obligations under this Agreement; seventh, to the payment of any
amounts owing to a Borrower as a result of any judgment of a court of competent
jurisdiction obtained by such Borrower against that Defaulting Lender as a
result of that Defaulting Lender’s breach of its obligations under this
Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (x) such payment is a payment
of the principal
 

 
57

--------------------------------------------------------------------------------

 

amount of any Loans or L/C Borrowings in respect of which that Defaulting Lender
has not fully funded its appropriate share and (y) such Loans or L/C Borrowings
were made at a time when the conditions set forth in Section 4.02 were satisfied
or waived, such payment shall be applied solely to pay the Loans of, and L/C
Borrowings owed to, all non-Defaulting Lenders on a pro rata basis prior to
being applied to the payment of any Loans of, or L/C Borrowings owed to, that
Defaulting Lender.  Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post Cash Collateral pursuant to this Section
2.19(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender,
and each Lender irrevocably consents hereto.
 
(iii)           Certain Fees.  That Defaulting Lender (x) shall be entitled to
receive any facility fee pursuant to Section 2.09(a) for any period during which
that Lender is a Defaulting Lender only to extent allocable to the sum of (1)
the Outstanding Amount of the Committed Loans funded by it and (2) its
Applicable Percentage of the stated amount of Letters of Credit and Swing Line
Loans for which it has provided Cash Collateral pursuant to Section 2.03,
Section 2.04, Section 2.18, or Section 2.19(a)(ii), as applicable (and the
Borrowers shall (A) be required to pay to each of the L/C Issuer and the Swing
Line Lender, as applicable, the amount of such fee allocable to its Fronting
Exposure arising from that Lender becoming a Defaulting Lender and (B) not be
required to pay the remaining amount of such fee that otherwise would have been
required to have been paid to that Defaulting Lender) and (y) shall be limited
in its right to receive Letter of Credit Fees as provided in Section 2.03(h).
 
(iv)           Reallocation of Applicable Percentages to Reduce Fronting
Exposure.  During any period in which there is a Defaulting Lender, for purposes
of computing the amount of the obligation of each non-Defaulting Lender to
acquire, refinance or fund participations in Letters of Credit or Swing Line
Loans pursuant to Sections 2.03 and 2.04, the “Applicable Percentage” of each
non-Defaulting Lender shall be computed without giving effect to the Commitment
of that Defaulting Lender; provided, that, (i) each such reallocation shall be
given effect only if, at the date the applicable Lender becomes a Defaulting
Lender, no Default or Event of Default exists; and (ii) the aggregate obligation
of each non-Defaulting Lender to acquire, refinance or fund participations in
Letters of Credit and Swing Line Loans shall not exceed the positive difference,
if any, of (1) the Commitment of that non-Defaulting Lender minus (2) the
aggregate Outstanding Amount of the Committed Loans of that Lender.
 
(b)           Defaulting Lender Cure.  If the Borrowers, the Administrative
Agent, Swing Line Lender and the L/C Issuer agree in writing in their sole
discretion that a Defaulting Lender should no longer be deemed to be a
Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
Cash Collateral), that Lender will, to the extent applicable, purchase that
portion of outstanding Loans of the other Lenders or take such other actions as
the Administrative Agent may determine to be necessary to cause the Committed
Loans and funded and unfunded participations in Letters of Credit and Swing Line
Loans to be held on a pro rata basis by the Lenders in accordance with their
Applicable Percentages (without giving effect to Section 2.19(a)(iv)), whereupon
that
 

 
58

--------------------------------------------------------------------------------

 

Lender will cease to be a Defaulting Lender; provided that no adjustments will
be made retroactively with respect to fees accrued or payments made by or on
behalf of the Borrower while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender.
 
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
 
3.01           Taxes.
 
(a)           Payments Free of Taxes; Obligation to Withhold; Payments on
Account of Taxes.
 
(i)           Any and all payments by or on account of any obligation of the
respective Borrowers hereunder or under any other Loan Document shall to the
extent permitted by applicable Laws be made free and clear of and without
reduction or withholding for any Taxes.  If, however, applicable Laws require
any Borrower or the Administrative Agent to withhold or deduct any Tax, such Tax
shall be withheld or deducted in accordance with such Laws as determined by such
Borrower or the Administrative Agent, as the case may be, upon the basis of the
information and documentation to be delivered pursuant to subsection (e) below.
 
(ii)           If any Borrower or the Administrative Agent shall be required by
the Code to withhold or deduct any Taxes, including both United States Federal
backup withholding and withholding taxes, from any payment, then (A) the
Administrative Agent shall withhold or make such deductions as are determined by
the Administrative Agent to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) the
Administrative Agent shall timely pay the full amount withheld or deducted to
the relevant Governmental Authority in accordance with the Code, and (C) to the
extent that the withholding or deduction is made on account of Indemnified Taxes
or Other Taxes, the sum payable by such Borrower shall be increased as necessary
so that after any required withholding or the making of all required deductions
(including deductions applicable to additional sums payable under this Section
3.01) the Administrative Agent, Lender or L/C Issuer, as the case may be,
receives an amount equal to the sum it would have received had no such
withholding or deduction been made.
 
(iii)           If any Borrower or the Administrative Agent shall be required by
any applicable Laws other than the Code to withhold or deduct any Taxes from any
payment, then (A) such Borrower or the Administrative Agent, as required by such
Laws, shall withhold or make such deductions as are determined by it to be
required based upon the information and documentation it has received pursuant
to subsection (e) below, (B) such Borrower or the Administrative Agent, to the
extent required by such Laws, shall timely pay the full amount so withheld or
deducted by it to the relevant Governmental Authority in accordance with such
Laws, and (C) to the extent that the withholding or deduction is made on account
of Indemnified Taxes or Other Taxes, the sum payable by such
 

 
59

--------------------------------------------------------------------------------

 

Borrower shall be increased as necessary so that after any required withholding
or the making of all required deductions (including deductions applicable to
additional sums payable under this Section 3.01) the Administrative Agent,
Lender or L/C Issuer, as the case may be, receives an amount equal to the sum it
would have received had no such withholding or deduction been made.
 
(b)           Payment of Other Taxes by the Borrowers.  Without limiting the
provisions of subsection (a) above, each Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable Laws.
 
(c)           Tax Indemnifications.
 
(i)           Without limiting the provisions of subsection (a) or (b) above,
each Borrower shall, and does hereby, indemnify the Administrative Agent, each
Lender and the L/C Issuer, and shall make payment in respect thereof within 10
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section 3.01) withheld or deducted
by such Borrower or the Administrative Agent or paid by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  Each Borrower shall
also, and does hereby, indemnify the Administrative Agent, and shall make
payment in respect thereof within 10 days after demand therefor, for any amount
which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the
Administrative Agent as required by clause (ii) of this subsection.  A
reasonably detailed certificate as to the amount of any such payment or
liability delivered to a Borrower by a Lender or the L/C Issuer (with a copy to
the Administrative Agent), or by the Administrative Agent on its own behalf or
on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest
error.  Any such claim against a Borrower must be made within 180 days of the
payment to which such claim relates.
 
(ii)           Without limiting the provisions of subsection (a) or (b) above,
each Lender and the L/C Issuer shall, and does hereby, indemnify each Borrower
and the Administrative Agent, and shall make payment in respect thereof within
10 days after demand therefor, against any and all Taxes and any and all related
losses, claims, liabilities, penalties, interest and expenses (including the
fees, charges and disbursements of any counsel for such Borrower or the
Administrative Agent) incurred by or asserted against such Borrower or the
Administrative Agent by any Governmental Authority as a result of the failure by
such Lender or the L/C Issuer, as the case may be, to deliver, or as a result of
the inaccuracy, inadequacy or deficiency of, any documentation required to be
delivered by such Lender or the L/C Issuer, as the case may be, to such Borrower
or the Administrative Agent pursuant to subsection (e).  Each Lender and the L/C
Issuer hereby authorizes the Administrative Agent to set off and apply any and
all amounts at any time owing to such Lender or the L/C Issuer, as the case may
be, under this Agreement or any other Loan Document against any amount due to
the Administrative Agent under this clause (ii).  The agreements in this clause
(ii) shall survive the resignation and/or replacement of the Administrative
Agent, any assignment of rights by, or the replacement of, a Lender or the L/C
Issuer, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all other Obligations.
 

 
60

--------------------------------------------------------------------------------

 

(d)           Evidence of Payments.  Upon request by a Borrower or the
Administrative Agent, as the case may be, after any payment of Taxes by such
Borrower or by the Administrative Agent to a Governmental Authority as provided
in this Section 3.01, such Borrower shall deliver to the Administrative Agent or
the Administrative Agent shall deliver to such Borrower, as the case may be, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of any return required by Laws to report such
payment or other evidence of such payment reasonably satisfactory to such
Borrower or the Administrative Agent, as the case may be.
 
(e)           Status of Lenders; Tax Documentation.
 
(i)           Each Lender shall deliver to the Company and to the Administrative
Agent, at the time or times prescribed by applicable Laws or when reasonably
requested by the Company or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable Laws or by the taxing
authorities of any jurisdiction and such other reasonably requested information
as will permit the Company or the Administrative Agent, as the case may be, to
determine (A) whether or not payments made by the respective Borrowers hereunder
or under any other Loan Document are subject to Taxes, (B) if applicable, the
required rate of withholding or deduction, and (C) such Lender’s entitlement to
any available exemption from, or reduction of, applicable Taxes in respect of
all payments to be made to such Lender by the respective Borrowers pursuant to
this Agreement or otherwise to establish such Lender’s status for withholding
tax purposes in the applicable jurisdictions.
 
(ii)           Without limiting the generality of the foregoing, if a Borrower
is resident for tax purposes in the United States,
 
(A)           any Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Company and the
Administrative Agent executed originals of Internal Revenue Service Form W-9 or
such other documentation or information prescribed by applicable Laws or
reasonably requested by the Company on behalf of such Borrower or the
Administrative Agent as will enable such Borrower or the Administrative Agent,
as the case may be, to determine whether or not such Lender is subject to backup
withholding or information reporting requirements; and
 
(B)           each Foreign Lender that is entitled under the Code or any
applicable treaty to an exemption from or reduction of withholding tax with
respect to payments hereunder or under any other Loan Document shall deliver to
the Company and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
request of the Company on behalf of such Borrower or the Administrative Agent,
but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:
 

 
61

--------------------------------------------------------------------------------

 

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

(II)           executed originals of Internal Revenue Service Form W-8ECI,

(III)           executed originals of Internal Revenue Service Form W-8IMY and
all required supporting documentation,

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

(V)           executed originals of any other form prescribed by applicable Laws
as a basis for claiming exemption from or a reduction in United States Federal
withholding tax, including, without limitation, withholding imposed by section
1471 through 1474 of the Code, together with such supplementary documentation as
may be prescribed by applicable Laws to permit such Borrower or the
Administrative Agent to determine the withholding or deduction required to be
made.

 
(iii)           Each Lender shall promptly (A) notify the Company and the
Administrative Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (B) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable Laws of any jurisdiction that any
Borrower or the Administrative Agent make any withholding or deduction for taxes
from amounts payable to such Lender.
 
(iv)           Each of the Borrowers shall promptly deliver to the
Administrative Agent or any Lender, as the Administrative Agent or such Lender
shall reasonably request, on or prior to the Closing Date (or such later date on
which it first becomes a Borrower), and in a timely fashion thereafter, such
documents and forms required by any relevant taxing authorities under the Laws
of any jurisdiction, duly executed and completed by such Borrower, as are
required to be furnished by such Lender or the Administrative Agent under such
Laws in connection with any payment by the Administrative Agent or any Lender of
Taxes or Other Taxes, or otherwise in connection with the Loan Documents, with
respect to such jurisdiction.
 

 
62

--------------------------------------------------------------------------------

 

(f)           Treatment of Certain Refunds.  Unless required by applicable Laws,
at no time shall the Administrative Agent have any obligation to file for or
otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation
to pay to any Lender or the L/C Issuer, any refund of Taxes withheld or deducted
from funds paid for the account of such Lender or the L/C Issuer, as the case
may be.  If the Administrative Agent, any Lender or the L/C Issuer determines,
in its sole discretion, that it has received a refund or credit of any Taxes or
Other Taxes as to which it has been indemnified by any Borrower or with respect
to which any Borrower has paid additional amounts pursuant to this Section 3.01,
it shall pay to such Borrower an amount equal to such refund or credit (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 3.01 with respect to the Taxes or Other Taxes giving
rise to such refund or credit), net of all out-of-pocket expenses and net of any
loss or gain realized in the conversion of such funds from or to another
currency incurred by the Administrative Agent, such Lender or the L/C Issuer, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund or credit), provided
that each Borrower, upon the request of the Administrative Agent, such Lender or
the L/C Issuer, agrees to repay the amount paid over to such Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the L/C Issuer in the
event the Administrative Agent, such Lender or the L/C Issuer is required to
repay such refund or credit to such Governmental Authority.  This subsection
shall not be construed to require the Administrative Agent, any Lender or the
L/C Issuer to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to any Borrower or any other Person.
 
3.02           Illegality.  If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund Loans
whose interest is determined by reference to the Eurocurrency Rate (whether
denominated in Dollars or Euros), or to determine or charge interest rates based
upon the Eurocurrency Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars or Euros in the applicable interbank market, then, on
notice thereof by such Lender to the Company through the Administrative Agent,
(i) any obligation of such Lender to make or continue Eurocurrency Rate Loans in
the affected currency or currencies or, in the case of Eurocurrency Rate Loans
in Dollars, to convert Base Rate Committed Loans to Eurocurrency Rate Loans,
shall be suspended, and (ii) if such notice asserts the illegality of such
Lender making or maintaining Base Rate Loans the interest rate on which is
determined by reference to the Eurocurrency Rate component of the Base Rate, the
interest rate on which Base Rate Loans of such Lender shall, if necessary to
avoid such illegality, be determined by the Administrative Agent without
reference to the Eurocurrency Rate component of the Base Rate, in each case
until such Lender notifies the Administrative Agent and the Company that the
circumstances giving rise to such determination no longer exist.  Upon receipt
of such notice, (x) the Borrowers shall, upon demand from such Lender (with a
copy to the Administrative Agent), prepay or, if applicable and such Loans are
denominated in Dollars, convert all such Eurocurrency Rate Loans of such Lender
to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender
shall, if necessary to avoid
 

 
63

--------------------------------------------------------------------------------

 

such illegality, be determined by the Administrative Agent without reference to
the Eurocurrency Rate component of the Base Rate), either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such
Eurocurrency Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurocurrency Rate Loans and (y) if such
notice asserts the illegality of such Lender determining or charging interest
rates based upon the Eurocurrency Rate, the Administrative Agent shall during
the period of such suspension compute the Base Rate applicable to such Lender
without reference to the Eurocurrency Rate component thereof until the
Administrative Agent is advised in writing by such Lender that it is no longer
illegal for such Lender to determine or charge interest rates based upon the
Eurocurrency Rate.  Upon any such prepayment or conversion, the Borrowers shall
also pay accrued interest on the amount so prepaid or converted.
 
3.03           Inability to Determine Rates.  If the Required Lenders determine
that for any reason in connection with any request for a Eurocurrency Rate Loan
or a conversion to or continuation thereof that (a) deposits (whether in Dollars
or Euros) are not being offered to banks in the applicable offshore interbank
market for such currency for the applicable amount and Interest Period of such
Eurocurrency Rate Loan or the Eurocurrency Rate component of Base Rate, (b)
adequate and reasonable means do not exist for determining the Eurocurrency Rate
for any requested Interest Period with respect to a proposed Eurocurrency Rate
Loan (whether denominated in Dollars or Euros) or with respect to the
Eurocurrency Rate component of an existing or proposed Base Rate Loan, or (c)
the Eurocurrency Rate for any requested Interest Period with respect to a
proposed Eurocurrency Rate Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Eurocurrency Rate Loan or Base Rate Loan, the
Administrative Agent will promptly so notify the Company and each
Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain
Eurocurrency Rate Loans in the affected currency or currencies shall be
suspended, and (y) in the event of a determination described in the preceding
sentence with respect to the Eurocurrency Rate component of the Base Rate, the
utilization of the Eurocurrency Rate component in determining the Base Rate
shall be suspended, in each case until the Administrative Agent (upon the
instruction of the Required Lenders) revokes such notice.  Upon receipt of such
notice, the Company may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurocurrency Rate Loans in the affected
currency or currencies or, failing that, will be deemed to have converted such
request into a request for a Committed Borrowing of Base Rate Loans in the
amount specified therein.
 
3.04           Increased Costs; Reserves on Eurocurrency Rate Loans.
 
(a)           Increased Costs Generally.  If any Change in Law shall:
 
(i)           impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except (A) any reserve requirement contemplated by Section 3.04(e)
and (B) the requirements of the Bank of England and the Financial Services
Authority or the European Central Bank reflected in the Mandatory Cost, other
than as set forth below) or the L/C Issuer;
 

 
64

--------------------------------------------------------------------------------

 

(ii)           subject any Lender or the L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurocurrency Rate Loan made by it, or
change the basis of taxation of payments to such Lender or the L/C Issuer in
respect thereof (except for Indemnified Taxes or Other Taxes covered by Section
3.01 and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender or the L/C Issuer);
 
(iii)           result in the failure of the Mandatory Cost, as calculated
hereunder, to represent the cost to any Lender of complying with the
requirements of the Bank of England and/or the Financial Services Authority or
the European Central Bank in relation to its making, funding or maintaining
Eurocurrency Rate Loans; or
 
(iv)           impose on any Lender or the L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurocurrency Rate Loans made by such Lender or any Letter of Credit or
participation therein;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan the interest on which is determined by
reference to the Eurocurrency Rate (or of maintaining its obligation to make any
such Loan), or to increase the cost to such Lender or the L/C Issuer of
participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such Lender or the L/C Issuer
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or the L/C Issuer, the Company will pay (or cause the
applicable Designated Borrower to pay) to such Lender or the L/C Issuer, as the
case may be, such additional amount or amounts as will compensate such Lender or
the L/C Issuer, as the case may be, for such additional costs incurred or
reduction suffered.
 
(b)           Capital Requirements.  If any Lender or the L/C Issuer determines
that any Change in Law affecting such Lender or the L/C Issuer or any Lending
Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if
any, regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of
such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of
this Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s
holding company with respect to capital adequacy), then from time to time the
Company will pay (or cause the applicable Designated Borrower to pay) to such
Lender or the L/C Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C
Issuer’s holding company for any such reduction suffered.
 
(c)           Certificates for Reimbursement.  A certificate of a Lender or the
L/C Issuer setting forth the amount or amounts necessary to compensate such
Lender or the L/C Issuer or its holding company, as the case may be, as
specified in subsection (a) or (b) of this Section 3.04 and delivered to the
Company shall be conclusive absent manifest error.  The Company shall pay (or
cause the applicable Designated Borrower to pay) such Lender or the L/C Issuer,
as the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.
 

 
65

--------------------------------------------------------------------------------

 

(d)           Delay in Requests.  Failure or delay on the part of any Lender or
the L/C Issuer to demand compensation pursuant to the foregoing provisions of
this Section 3.04 shall not constitute a waiver of such Lender’s or the L/C
Issuer’s right to demand such compensation, provided that no Borrower shall be
required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section 3.04 for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender or the L/C
Issuer, as the case may be, notifies the Company of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s or the L/C
Issuer’s intention to claim compensation therefor (except that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).
 
(e)           Additional Reserve Requirements.  The Company shall pay (or cause
the applicable Designated Borrower to pay) to each Lender (without duplication
of any amounts otherwise paid to such Lender and attributable to Mandatory
Costs), (i) as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as “Eurocurrency liabilities”), additional interest
on the unpaid principal amount of each Eurocurrency Rate Loan equal to the
actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be
conclusive), and (ii) as long as such Lender shall be required to comply with
any reserve ratio requirement or analogous requirement of any other central
banking or financial regulatory authority imposed in respect of the maintenance
of the Commitments or the funding of the Eurocurrency Rate Loans, such
additional costs (expressed as a percentage per annum and rounded upwards, if
necessary, to the nearest five decimal places) equal to the actual costs
allocated to such Commitment or Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which in each
case shall be due and payable on each date on which interest is payable on such
Loan, provided the Company shall have received at least 10 days’ prior notice
(with a copy to the Administrative Agent) of such additional interest or costs
from such Lender.  If a Lender fails to give notice 10 days prior to the
relevant Interest Payment Date, such additional interest or costs shall be due
and payable 10 days from receipt of such notice.
 
3.05           Compensation for Losses.  Upon demand of any Lender (with a copy
to the Administrative Agent) from time to time, the Company shall promptly
compensate (or cause the applicable Designated Borrower to compensate) such
Lender for and hold such Lender harmless from any loss, cost or expense incurred
by it as a result of:
 
(a)           any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
 
(b)           any failure by any Borrower (for a reason other than the failure
of such Lender to make a Loan) to (i) prepay or borrow any Loan other than a
Base Rate Loan or (ii) continue or convert any Loan as or into a Eurocurrency
Rate Loan, in each case on the date or in the amount notified by the Company or
the applicable Designated Borrower;
 

 
66

--------------------------------------------------------------------------------

 

(c)           any failure by any Borrower to make payment of any Loan or drawing
under any Letter of Credit (or interest due thereon) denominated in Euros on its
scheduled due date or any payment thereof in a different currency; or
 
(d)           any assignment of a Eurocurrency Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the Company
pursuant to Section 10.13;
 
including any foreign exchange losses and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan, from
fees payable to terminate the deposits from which such funds were obtained or
from the performance of any foreign exchange contract.  The Company shall also
pay (or cause the applicable Designated Borrower to pay) any customary
administrative fees charged by such Lender in connection with the foregoing.
 
For purposes of calculating amounts payable by the Company (or the applicable
Designated Borrower) to the Lenders under this Section 3.05, each Lender shall
be deemed to have funded each Eurocurrency Rate Loan made by it at the
Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the
offshore interbank market for such currency for a comparable amount and for a
comparable period, whether or not such Eurocurrency Rate Loan was in fact so
funded.
 
3.06           Mitigation Obligations; Replacement of Lenders.
 
(a)           Designation of a Different Lending Office.  If any Lender requests
compensation under Section 3.04, charges a Borrower for Mandatory Costs
hereunder, or any Borrower is required to pay any additional amount to any
Lender, the L/C Issuer or any Governmental Authority for the account of any
Lender or the L/C Issuer pursuant to Section 3.01, or if any Lender gives a
notice pursuant to Section 3.02, then such Lender or the L/C Issuer shall, as
applicable, use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender or the L/C Issuer, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the
case may be, in the future, or eliminate the need for the notice pursuant to
Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or the L/C
Issuer, as the case may be.  The Company hereby agrees to pay (or to cause the
applicable Designated Borrower to pay) all reasonable costs and expenses
incurred by any Lender or the L/C Issuer in connection with any such designation
or assignment.
 
(b)           Replacement of Lenders.  If any Lender requests compensation under
Section 3.04 or provides notice under Section 3.02, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, the Company
may replace such Lender in accordance with Section 10.13.
 
3.07           Survival.  All of the Borrowers’ obligations under this Article
III shall survive termination of the Aggregate Commitments, repayment of all
other Obligations hereunder and resignation of the Administrative Agent.
 

 
67

--------------------------------------------------------------------------------

 

ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
 
4.01           Conditions of Initial Credit Extension.  The obligation of the
L/C Issuer and each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:
 
(a)           The Administrative Agent’s receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party (or, in the case of the Initial Designated Borrower, an
officer of the Initial Designated Borrower authorized to represent the Initial
Designated Borrower, as evidenced by a recent extract from the Dutch Trade
Register or otherwise), each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Administrative Agent and each
of the Lenders:
 
(i)           counterparts of (i) this Agreement executed by each Borrower and
(ii) the Guaranty Agreement executed by each Borrower and each Material Domestic
Subsidiary as of the Closing Date (other than Watts Radiant, Inc.), sufficient
in number for distribution to the Administrative Agent, each Lender and the
Company;
 
(ii)           Notes executed by the Borrowers in favor of each Lender
requesting Notes;
 
(iii)           such certificates or resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;
 
(iv)           such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each Loan Party is validly existing, in good standing and qualified to
engage in business in its jurisdiction of organization;
 
(v)           a favorable opinion of (i) Wilmer Cutler Pickering Hale and Dorr
LLP, U.S. counsel to the Loan Parties, and (ii) Kenneth R. Lepage, General
Counsel of the Company, in each case addressed to the Administrative Agent and
each Lender, in form and substance acceptable to the Administrative Agent and
each Lender;
 
(vi)           a favorable opinion of NautaDutilh, Dutch counsel to the
Administrative Agent, addressed to the Administrative Agent and each Lender, in
form and substance acceptable to the Administrative Agent and each Lender;
 
(vii)           a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;
 

 
68

--------------------------------------------------------------------------------

 

(viii)           a certificate signed by a Responsible Officer of the Company
certifying (A) that the conditions specified in Sections 4.02(a) and (b) have
been satisfied and (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that (i) has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect or (ii) has resulted in a “Default” or “Event of Default” under and as
defined in the Existing Credit Agreement;
 
(ix)           a copy of the 2010 Senior Note Purchase Agreement, duly executed
by each party thereto and in form and substance satisfactory to the
Administrative Agent and each Lender;
 
(x)           such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or
the Required Lenders reasonably may require; and
 
(xi)           A payoff letter with respect to the Existing Credit Agreement,
executed by the parties thereto.
 
(b)           Any fees required to be paid on or before the Closing Date shall
have been paid.
 
(c)           Unless waived by the Administrative Agent, the Company shall have
paid all fees, charges and disbursements of counsel to the Administrative Agent
to the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Company
and the Administrative Agent).
 
Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received written notice from such Lender prior to the proposed
Closing Date specifying its objection thereto.
 
4.02           Conditions to all Credit Extensions.  The obligation of each
Lender and the L/C Issuer to honor any Request for Credit Extension (other than
a Committed Loan Notice requesting only a conversion of Committed Loans to the
other Type, or a continuation of Eurocurrency Rate Loans) is subject to the
following conditions precedent:
 
(a)           The representations and warranties of (i) the Borrowers contained
in Article V (other than, in the case of any Credit Extension after the initial
Credit Extension hereunder, the representation and warranty set forth in Section
5.05(c)) and (ii) each Loan Party contained in each other Loan Document or in
any document furnished at any time under or in connection herewith or therewith,
shall be (x) with respect to any representations or warranties that contain a
 

 
69

--------------------------------------------------------------------------------

 

materiality qualifier, true and correct in all respects and (y) with respect to
any representations or warranties that do not contain a materiality qualifier,
true and correct in all material respects, on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in such respects as of such earlier date, and except that for purposes
of this Section 4.02, the representations and warranties contained in subsection
(a) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b) of Section 6.01 (subject, in the case
of any unaudited statements furnished pursuant to clause (b) of Section 6.01, to
the absence of footnotes and to normal year-end audit adjustments).
 
(b)           No Default shall exist, or would result from such proposed Credit
Extension or the application of the proceeds thereof.
 
(c)           The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
 
(d)           If the applicable Borrower is a Designated Borrower (other than
the Initial Designated Borrower), then the conditions of Section 2.14(b) to the
designation of such Borrower as a Designated Borrower shall have been met to the
satisfaction of the Administrative Agent.
 
(e)           In the case of a Credit Extension to be denominated in Euros,
there shall not have occurred any change in national or international financial,
political or economic conditions or currency exchange rates or exchange controls
which in the reasonable opinion of the Administrative Agent, the Required
Lenders (in the case of any Loans to be denominated in Euros) or the L/C Issuer
(in the case of any Letter of Credit to be denominated in Euros) would make it
impracticable for such Credit Extension to be denominated in Euros.
 
Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type or a continuation of
Eurocurrency Rate Loans) submitted by a Borrower shall be deemed to be a
representation and warranty by such Borrower that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.
 
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
 
Except as otherwise provided in Section 5.20, each Borrower represents and
warrants to the Administrative Agent and the Lenders that:
 
5.01           Existence, Qualification and Power.  Each Loan Party and each
Subsidiary thereof (a)(i) is duly organized or formed and validly existing and
(ii) is in good standing (to the extent such concept is applicable to such
entity), in each case under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own or
lease its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party and (c) is duly
qualified and is licensed and, as applicable, in
 

 
70

--------------------------------------------------------------------------------

 

good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (a)(ii),
(b)(i) or (c), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.
 
5.02           Authorization; No Contravention.  The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) result in the creation of any Lien
under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
(c) conflict with or result in any breach or contravention of, or require any
payment to be made under (i) any material Contractual Obligation to which such
Person is a party or affecting such Person or the properties of such Person or
any of its Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (d) violate any Law.  Each Loan Party and each
Subsidiary thereof is in compliance with all Contractual Obligations referred to
in clause (b)(i), except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.
 
5.03           Governmental Authorization; Other Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person (other than those already
obtained) by any Loan Party is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party of
this Agreement or any other Loan Document.
 
5.04           Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto.  This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy or other similar laws and general principles
of equity.
 
5.05           Financial Statements; No Material Adverse Effect.
 
(a)           The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the financial condition of the Company and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Company and its
Subsidiaries as of the date thereof, including material liabilities for taxes,
material commitments and Indebtedness.
 

 
71

--------------------------------------------------------------------------------

 

(b)           There has been furnished to each Lender a copy of the projections
of the annual operating budgets of the Company and its Subsidiaries on a
consolidated basis, balance sheets and cash flow statements for the 2010 to 2014
fiscal years.  The Company has disclosed all material assumptions made with
respect to general economic, financial and market conditions used in formulating
such projections and such projections.  The projections reflect the reasonable
estimates of the Company and its Subsidiaries of the results of operations and
other information projected therein.
 
(c)           Since the date of the Audited Financial Statements, there has been
no event or circumstance, either individually or in the aggregate, that has had
or could reasonably be expected to have a Material Adverse Effect.
 
(d)           To the best knowledge of the Company, (i) no Internal Control
Event involving fraud exists or has occurred since the date of the Audited
Financial Statements and (ii) no Internal Control Event resulting from a
material weakness in the Company’s internal controls over financial reporting
that could reasonably be expected to have a Material Adverse Effect exists or
has occurred since the date of the Audited Financial Statements.
 
5.06           Litigation.  There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Company, threatened at law, in
equity, in arbitration or before any Governmental Authority, by or against the
Company or any of its Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated thereby or hereby, or (b)
except as disclosed in Schedule 5.06, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
 
5.07           No Default.  Neither the Company nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
 
5.08           Ownership of Property; Liens.  Each of the Company and each
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  The property of the Company and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 7.01.
 
5.09           Environmental Compliance.  The Company and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Company has reasonably concluded
that, such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
 
5.10           Insurance.  The properties of the Company and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Company, in such amounts (after giving effect to any
self-insurance compatible with the following standards), with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the Company
or the applicable Subsidiary operates.
 

 
72

--------------------------------------------------------------------------------

 

5.11           Taxes.  The Company and its Subsidiaries have filed all Federal,
state and other tax returns and reports required to be filed, and have paid all
Federal, state and other taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except (a) those which are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP, or (b) to the extent the failure to
do so could not reasonably be expected to have a Material Adverse Effect and
does not result in a Lien which is not permitted hereunder.  There is no
proposed tax assessment against the Company or any Subsidiary that would, if
made, have a Material Adverse Effect.  As of the date hereof, neither any Loan
Party nor any Subsidiary thereof is party to any tax sharing agreement.
 
5.12           ERISA Compliance.
 
(a)           Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws.  Each
Plan that is intended to be a qualified plan under Section 401(a) of the Code
has received a favorable determination letter from the Internal Revenue Service
to the effect that the form of such Plan is qualified under Section 401(a) of
the Code and the trust related thereto has been determined by the Internal
Revenue Services to be exempt from federal income tax under Section 501(a) of
the Code, or an application for such a letter is currently being processed by
the Internal Revenue Service.  To the best knowledge of the Company, nothing has
occurred that would prevent or cause the loss of such tax-qualified status.
 
(b)           There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect.  There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
 
(c)           (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) the Company and each ERISA Affiliate has met all applicable
requirements under the Pension Funding Rules in respect of each Pension Plan,
and no waiver of the minimum funding standards under the Pension Funding Rules
has been applied for or obtained; (iii) as of the most recent valuation date for
any Pension Plan, the funding target attainment percentage (as defined in
Section 430(d)(2) of the Code) is 60% or higher and neither the Company nor any
ERISA Affiliate knows of any facts or circumstances that could reasonably be
expected to cause the funding target attainment percentage for any such plan to
drop below 60% as of the most recent valuation date; (iv) neither the Company
nor any ERISA Affiliate has incurred any liability to the PBGC other than for
the payment of premiums, and there are no premium payments which have become due
that are unpaid; (v) neither the Company nor any ERISA Affiliate has engaged in
a transaction that could be subject to Section 4069 of ERISA; (vi) in the last
five years, no Pension Plan has been terminated by the plan administrator
thereof nor by PBGC, and to the knowledge of the Company, no event or
circumstance has occurred or exists that could reasonably be expected to cause
the PBGC to institute proceedings under Title IV of ERISA to terminate any
Pension Plan; and (vii) no Pension Plan has any Unfunded Pension Liability in
excess of the Threshold Amount.
 

 
73

--------------------------------------------------------------------------------

 

(d)           Neither the Company nor any ERISA Affiliate maintains or
contributes to, or has any unsatisfied obligation to contribute to, or liability
under, any active or terminated Pension Plan other than (A) on the Closing Date,
those listed on Schedule 5.12(d) hereto or (B) as of the date thereof the most
recent supplement to Schedule 5.12(d) delivered by the Company pursuant to
Section 6.02(h).
 
5.13           Subsidiaries; Equity Interests.  As of the Closing Date, the
Company has no Subsidiaries other than those specifically disclosed in Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by a Subsidiary
in the amounts specified on Schedule 5.13 free and clear of all Liens.  All of
the outstanding Equity Interests in the Company have been validly issued and are
fully paid and nonassessable.
 
5.14           Margin Regulations; Investment Company Act.
 
(a)           No Borrower is engaged or will engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.  Following the application
of the proceeds of each Borrowing or drawing under each Letter of Credit, not
more than 25% of the value of the assets (either of the applicable Borrower only
or of the Company and its Subsidiaries on a consolidated basis) subject to the
provisions of Section 7.01 or Section 7.05 or subject to any restriction
contained in any agreement or instrument between any Borrower and any Lender or
any Affiliate of any Lender relating to Indebtedness and within the scope of
Section 8.01(e) will be margin stock.
 
(b)           None of the Company, any Person Controlling the Company, or any
Subsidiary is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.
 
5.15           Disclosure.  No report, financial statement, certificate or other
information furnished (in writing) by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Loan Document (in each case, as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact (known to the Company or any of its
Subsidiaries in the case of any document or information not furnished by the
Company or one of its Subsidiaries) necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, the Company
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
 
5.16           Compliance with Laws.  Each of the Company and each Subsidiary is
in compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
 

 
74

--------------------------------------------------------------------------------

 

5.17           Intellectual Property; Licenses, Etc.  The Company and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, except as could not reasonably be
expected to have a Material Adverse Effect.  To the best knowledge of the
Company, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Company or any Subsidiary infringes upon any rights held by any
other Person, except as could not reasonably be expected to have a Material
Adverse Effect.  No claim or litigation regarding any of the foregoing is
pending or, to the best knowledge of the Company, threatened, which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
 
5.18           Senior Note Documents.  The Company has heretofore furnished to
the Administrative Agent true, complete and correct copies of the Senior Note
Documents (including schedules, exhibits and annexes thereto).  The Senior Note
Documents have not been amended, supplemented or modified since the Closing Date
(except as otherwise permitted hereunder) and constitute the complete
understanding among the parties thereto in respect of the matters and
transactions covered thereby.  No “Event of Default” under (and as defined in)
either the 2003 Senior Note Purchase Agreement, the 2006 Senior Note Purchase
Agreement or the 2010 Senior Note Purchase Agreement has occurred and is
continuing.
 
5.19           Material Domestic Subsidiaries. As of the Closing Date, Schedule
5.19, or as of the date thereof the most recent supplement to Schedule 5.19
delivered by the Company pursuant to Section 6.02(f) or Section 7.04(c)(iv) or
the most recent revised Schedule 5.19 delivered by the Company pursuant to
Section 2.15, sets forth Domestic Subsidiaries of the Company (on a Pro Forma
Basis, in the case of any supplement delivered pursuant to Section 7.04(c)(iv))
(i) the total assets of which (not including Equity Interests of its
Subsidiaries), in the aggregate together with the total assets of the Company
(not including Equity Interests of its Subsidiaries), exceed eighty-five percent
(85.0%) of the total assets of the Company and its Domestic Subsidiaries in the
aggregate (not including Equity Interests of their respective Subsidiaries) and
(ii) the EBITDA of which for the most recently ended fiscal quarter, in the
aggregate together with the EBITDA of the Company for such fiscal quarter,
exceeds eighty-five percent (85.0%) of the EBITDA of the Company and its
Domestic Subsidiaries in the aggregate for such fiscal quarter.  As of the
Closing Date, no Subsidiary of the Company (other than any Material Domestic
Subsidiary) provides any Guarantee with respect to any Indebtedness of the
Company (other than the Obligations).
 
5.20           Representations as to Foreign Loan Parties.  Each of the Company
and each Foreign Loan Party represents and warrants to the Administrative Agent
and the Lenders that:
 

 
75

--------------------------------------------------------------------------------

 

(a)           Such Foreign Loan Party is subject to civil, commercial and common
Laws with respect to its obligations under this Agreement and the other Loan
Documents to which it is a party (collectively as to such Foreign Loan Party,
the “Applicable Foreign Loan Party Documents”), and the execution, delivery and
performance by such Foreign Loan Party of the Applicable Foreign Loan Party
Documents constitute and will constitute private and commercial acts and not
public or governmental acts.  Neither such Foreign Loan Party nor any of its
property has any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) under the laws of the
jurisdiction in which such Foreign Loan Party is organized and existing in
respect of its obligations under the Applicable Foreign Loan Party Documents.
 
(b)           The Applicable Foreign Loan Party Documents are in proper legal
form under the Laws of the jurisdiction in which such Foreign Loan Party is
organized and existing for the enforcement thereof against such Foreign Loan
Party under the Laws of such jurisdiction (or such other law as shall be
specified in such documents), and to ensure the legality, validity,
enforceability (except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally), priority and admissibility in evidence of the Applicable Foreign
Loan Party Documents.  It is not necessary to ensure the legality, validity,
enforceability, priority or admissibility in evidence of the Applicable Foreign
Loan Party Documents that the Applicable Foreign Loan Party Documents be filed,
registered or recorded with, or executed or notarized before, any court or other
authority in the jurisdiction in which such Foreign Loan Party is organized and
existing or that any registration charge or stamp or similar tax be paid on or
in respect of the Applicable Foreign Loan Party Documents or any other document,
except for (i) any such filing, registration, recording, execution or
notarization as has been made or is not required to be made until the Applicable
Foreign Loan Party Document or any other document is sought to be enforced and
(ii) any charge or tax as has been timely paid.
 
(c)           There is no tax, levy, impost, duty, fee, assessment or other
governmental charge, or any deduction or withholding, imposed by any
Governmental Authority in or of the jurisdiction in which such Foreign Loan
Party is organized and existing either (i) on or by virtue of the execution or
delivery of the Applicable Foreign Loan Party Documents or (ii) on any payment
to be made by such Foreign Loan Party pursuant to the Applicable Foreign Loan
Party Documents, except as has been disclosed to the Administrative Agent.
 
(d)           The execution, delivery and performance of the Applicable Foreign
Loan Party Documents executed by such Foreign Loan Party are, under applicable
foreign exchange control regulations of the jurisdiction in which such Foreign
Loan Party is organized and existing, not subject to any notification or
authorization except (i) such as have been made or obtained or (ii) such as
cannot be made or obtained until a later date (provided that any notification or
authorization described in clause (ii) shall be made or obtained as soon as is
reasonably practicable).
 

 
76

--------------------------------------------------------------------------------

 

5.21           Dutch Companies.
 
(a)           As of the Closing Date, no works council (ondernemingsraad) has
been established or is in the process of being established with respect to the
business of the Initial Designated Borrower.
 
(b)           To the best of the Company's and its Subsidiaries' knowledge, none
of the assets owned by the Initial Designated Borrower have a public utility
function, such that seizure of these assets is prohibited by virtue of sections
436 and 703 of the Dutch Code of Civil Procedure.
 
5.22           OFAC. None of the Loan Parties, any Subsidiary of any Loan Party
or any Affiliate of any Loan Party (a) is a person named on the list of
Specially Designated Nationals or Blocked Persons maintained by OFAC or as
otherwise published from time to time; (b) is (i) an agency of the government of
a country, (ii) an organization controlled by a country, or (iii) a Person
resident in a country that is subject to a sanctions program identified on the
list maintained by OFAC or as otherwise published from time to time, as such
program may be applicable to such agency, organization or Person; (c) derives
more than 15% of its assets or operating income from investments in or
transactions with any such country, agency, organization or Person; or (d) will
use the proceeds of any Loan to finance any operations, investments or
activities in, or make any payments to, any such country, agency, organization,
or Person.
 
ARTICLE VI.
AFFIRMATIVE COVENANTS
 
So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Company shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Subsidiary
to:
 
6.01           Financial Statements.  Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
 
(a)           as soon as practicable, but in any event on or prior to the date
90 days after the end of each fiscal year (or, if earlier, the date five days
after the date by which the Company shall be required to submit its Form 10-K
(or any successor form) to the Commission with respect to such fiscal year), (i)
a consolidated balance sheet of the Company and its Subsidiaries as at the end
of such fiscal year, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by (i) a report and opinion of a
Registered Public Accounting Firm of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and applicable
Securities Laws and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit and any consolidating statements provided pursuant to clause (ii)
below to be certified by a Responsible Officer of the Company to the effect that
such
 

 
77

--------------------------------------------------------------------------------

 

statements are fairly stated in all material respects when considered in
relation to the consolidated financial statements of the Company and its
Subsidiaries and (ii) consolidating statements of income or operations for the
Company and its Subsidiaries to the extent that such financial statements are
prepared and distributed to the senior management of the Company with respect to
such fiscal year; and
 
(b)           as soon as practicable, but in any event on or prior to the date
45 days after the end of each of the first three fiscal quarters of each fiscal
year of the Company (or, if earlier, the date five days after the date by which
the Company shall be required to submit its Form 10-Q (or any successor form) to
the Commission with respect to such fiscal quarter), (x) a consolidated balance
sheet of the Company and its Subsidiaries as at the end of such fiscal quarter,
and the related consolidated statements of income or operations and cash flows
for such fiscal quarter and for the portion of the Company’s fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, such consolidated
statements to be certified by a Responsible Officer of the Company as fairly
presenting the financial condition, results of operations and cash flows of the
Company and its Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes and (y) consolidating
statements of income or operations for the Company and its Subsidiaries to the
extent that such financial statements are prepared and distributed to the senior
management of the Company with respect to such fiscal quarter, such
consolidating statements to be certified by a Responsible Officer of the Company
to the effect that such statements are fairly stated in all material respects
when considered in relation to the consolidated financial statements of the
Company and its Subsidiaries.
 
As to any information contained in materials furnished pursuant to Section
6.02(d), the Company shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Company to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
 
6.02           Certificates; Other Information.  Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
 
(a)           concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate
signed by a Responsible Officer of the Company (which delivery may, unless the
Administrative Agent or a Lender requests executed originals, be by electronic
communication including fax or e-mail and shall be deemed to be an original
authentic counterpart thereof for all purposes);
 
(b)           promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Company by independent accountants in connection
with the accounts or books of the Company or any Subsidiary, or any audit of any
of them;
 

 
78

--------------------------------------------------------------------------------

 

(c)           promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Company, and copies of all annual, regular, periodic and
special reports and registration statements which the Company may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
 
(d)           promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of debt securities of any Loan Party or any
Subsidiary thereof pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the Lenders
pursuant to Section 6.01 or any other clause of this Section 6.02;
 
(e)           promptly, and in any event within five Business Days after receipt
thereof by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any Subsidiary thereof;
 
(f)           in the event the Company or any Domestic Subsidiary shall (i)
engage in any corporate reorganization, (ii) contribute to the capital of or
otherwise make an Investment in any Subsidiary or (iii) consummate any
Disposition of property described in Section 7.05(e), in each case other than in
the ordinary course of business, which transaction shall result in Domestic
Subsidiaries that are not Domestic Subsidiary Guarantors (x) the total assets of
which, in the aggregate, exceed fifteen percent (15.0%) of the total assets of
the Company and its Domestic Subsidiaries in the aggregate or (y) the EBITDA of
which, in the aggregate for the most recent fiscal quarter, exceeds fifteen
percent (15.0%) of the EBITDA of the Company and its Domestic Subsidiaries in
the aggregate for such fiscal quarter, the Company shall, promptly and in any
event within thirty days of the consummation of such transaction, deliver to the
Administrative Agent a supplement to Schedule 5.19 necessary to make the
representation set forth in Section 5.19 true and correct as of the date of such
supplement;
 
(g)           promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary, or compliance
with the terms of the Loan Documents, as the Administrative Agent or any Lender
may from time to time reasonably request; and
 
(h)           concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a supplement to Schedule 5.12(d)
necessary to make the representation set forth in Section 5.12(d) true and
correct as of the date of such supplement;
 
Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section
6.02(c) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Company posts such
documents, or provides a link thereto on the Company’s website on the Internet
at the website address listed on Schedule 10.02; or (ii) on which such documents
are posted on the Company’s behalf on an Internet or intranet website, if any,
to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Company shall deliver paper copies of such
documents to the Administrative Agent or any
 

 
79

--------------------------------------------------------------------------------

 

Lender that requests the Company to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent or
such Lender and (ii) the Company shall notify the Administrative Agent and each
Lender (by telecopier or electronic mail) of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents.  Notwithstanding anything contained
herein, in every instance the Company shall be required to provide paper copies
of the Compliance Certificates required by Section 6.02(a) to the Administrative
Agent.  Except for such Compliance Certificates, the Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Company with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.
 
Each Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders and the L/C Issuer materials and/or
information provided by or on behalf of such Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to any Borrower or its securities) (each, a
“Public Lender”).  Each Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized
the Administrative Agent, the Arrangers, the L/C Issuer and the Lenders to treat
such Borrower Materials as not containing any material non-public information
with respect to the Borrowers or their respective securities for purposes of
United States Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as
set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated
“Public Investor;” and (z) the Administrative Agent and the Arrangers shall be
entitled to treat any Borrower Materials that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not designated “Public
Investor.”
 
6.03           Notices.  Promptly notify the Administrative Agent and each
Lender:
 
(a)           of the occurrence of any Default;
 
(b)           of any matter (including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Company or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between the
Company or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary, including pursuant to any applicable
Environmental Laws) that has resulted or could reasonably be expected to result
in a Material Adverse Effect;
 
(c)           of the occurrence of any ERISA Event;
 

 
80

--------------------------------------------------------------------------------

 

(d)           of any material change in accounting policies of, or financial
reporting practices by, the Company or any Subsidiary; and
 
(e)           of the determination by the Registered Public Accounting Firm
providing the opinion required under Section 6.01(a)(ii) (in connection with its
preparation of such  opinion) or the Company’s determination at any time of the
occurrence or existence of any Internal Control Event.
 
Each notice pursuant to this Section 6.03 shall be accompanied by a statement of
a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and, if appropriate, stating what action the Company has
taken and proposes to take with respect thereto.  Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
 
6.04           Payment of Obligations.  Pay and discharge as the same shall
become due and payable the following: (a) all material tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets; and (b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; unless, in the case of any matter described in clauses (a)
and (b) above, the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Company or such Subsidiary.
 
6.05           Preservation of Existence, Etc.  (a) Preserve, renew and maintain
in full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
 
6.06           Maintenance of Properties.  (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
and (b) make all necessary repairs thereto and renewals and replacements thereof
except in each case where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
 
6.07           Maintenance of Insurance.  Maintain with financially sound and
reputable insurance companies not Affiliates of the Company, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business
and geographic area, of such types and in such amounts (after giving effect to
any self-insurance compatible with the following standards) as are customarily
carried under similar circumstances by such other Persons.
 
6.08           Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (i) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (ii)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
 

 
81

--------------------------------------------------------------------------------

 

6.09           Books and Records.  Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Company or such Subsidiary, as the case may be.
 
6.10           Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Company;
provided, the Company shall pay all costs and expenses of only one such
inspection per year (measured beginning with the Closing Date and each
anniversary thereof) by the Administrative Agent and its representatives and
independent contractors (and any representatives and independent contractors of
the Lenders participating in such inspection); provided further, however, that
when an Event of Default exists the Administrative Agent or any Lender (or any
of their respective representatives or independent contractors) may do any of
the foregoing at the expense of the Company at any time during normal business
hours and without advance notice.
 
6.11           Use of Proceeds.  Use the proceeds of the Credit Extensions for
general corporate purposes, working capital, capital expenditures, Permitted
Acquisitions and to refinance the Existing Credit Agreement, in each case not in
contravention of any Law or of any Loan Document.
 
6.12           Approvals and Authorizations.  Maintain all authorizations,
consents, approvals and licenses from, exemptions of, and filings and
registrations with, each Governmental Authority of the jurisdiction in which
each Foreign Loan Party is organized and existing, and all approvals and
consents of each other Person in such jurisdiction, in each case that are
required in connection with the execution, delivery and performance by such
Foreign Loan Party of the Loan Documents to which it is a party.
 
6.13            Amendments to Governing Documents.  Promptly furnish to the
Administrative Agent any material amendment, supplement or modification to any
of such Person's Organization Documents permitted by Section 7.11.
 
6.14           Additional Domestic Subsidiary Guarantors.
 
(a)           In addition to causing each Material Domestic Subsidiary as of the
Closing Date (other than Watts Radiant, Inc.) to execute and deliver a Guaranty,
each as required by Section 4.01(a), cause each Subsidiary that becomes a
Material Domestic Subsidiary after the Closing Date, as promptly as possible,
but in any event within ninety (90) days after submission to the Administrative
Agent by the Company of a supplement to Schedule 5.19 as required by Section
6.02(f) or Section 7.04(c)(iv) which supplement indicates that such Domestic
Subsidiary has
 

 
82

--------------------------------------------------------------------------------

 

become a Material Domestic Subsidiary, to (x) become a Domestic Subsidiary
Guarantor by executing and delivering to the Administrative Agent a counterpart
of the Guaranty Agreement or such other document as the Administrative Agent
shall deem appropriate in order for such Subsidiary to provide an unconditional
guaranty of the Obligations of the Borrowers and (y) deliver to the
Administrative Agent documents of the types referred to in clauses (iii), (iv)
and (vii) of Section 4.01(a) and, if requested by the Administrative Agent,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (x)), all in form, content and scope
reasonably satisfactory to the Administrative Agent.
 
(b)           If at any time any Subsidiary of the Company (including any
Foreign Subsidiary) that is not a Domestic Subsidiary Guarantor provides any
Guarantee with respect to any Indebtedness of the Company (including, without
limitation, the Senior Notes) or any Domestic Designated Borrower other than the
Obligations, cause such Subsidiary, as promptly as possible but in any event
within sixty (60) days after the date upon which such Subsidiary shall have
guaranteed such Indebtedness, to (x) become a Domestic Subsidiary Guarantor by
executing and delivering to the Administrative Agent a counterpart of the
Guaranty Agreement or such other document as the Administrative Agent shall deem
appropriate in order for such Subsidiary to provide an unconditional guaranty of
the Obligations of the Borrowers and (y) deliver to the Administrative Agent
documents of the types referred to in clauses (iii), (iv) and (vii) of Section
4.01(a) and, if requested by the Administrative Agent, favorable opinions of
counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to in
clause (x)), all in form, content and scope reasonably satisfactory to the
Administrative Agent.
 
6.15           Foreign Subsidiary Guarantors.  Cause each Foreign Subsidiary
listed on Schedule 6.15, on or before the date sixty (60) days after the Closing
Date or such later date as may be agreed to in writing by the Administrative
Agent in its sole discretion, to (x) execute and deliver to the Administrative
Agent a counterpart of the Guaranty Agreement or such other document as the
Administrative Agent shall deem appropriate in order for such Subsidiary to
provide an unconditional guaranty (or if such unconditional guaranty is not
legally permissible, a limited guaranty) of the Obligations of each Foreign
Designated Borrower and (y) deliver to the Administrative Agent documents of the
types referred to in clauses (iii) and (iv) of Section 4.01(a) and  favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to in clause (x)), all in form, content and scope reasonably
satisfactory to the Administrative Agent; provided, that, solely with respect to
BLÜCHER Metal A/S, no guaranty or other documents shall be required if the entry
into any such guaranty agreement would not be legally permissible or would
impose potential personal liability on its officers or directors.
 
6.16           Watts Radiant, Inc.  Cause Watts Radiant, Inc., which is listed
on Schedule 5.19 as a Material Domestic Subsidiary, on or before the date
forty-five (45) days after the Closing Date or such later date as may be agreed
to in writing by the Administrative Agent in its sole discretion, to (x) become
a Domestic Subsidiary Guarantor by executing and delivering to the
Administrative Agent a counterpart of the Guaranty Agreement or such other
document as the Administrative Agent shall deem appropriate in order for such
Domestic Subsidiary to provide an unconditional guaranty of the Obligations of
the Borrowers and (y) deliver to the
 

 
83

--------------------------------------------------------------------------------

 

Administrative Agent documents of the types referred to in clauses (iii), (iv)
and (vii) of Section 4.01(a) and, if requested by the Administrative Agent,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (x)), all in form, content and scope
reasonably satisfactory to the Administrative Agent. 
 
6.17           Further Assurances. Cooperate with the Lenders and the
Administrative Agent and execute such further instruments and documents as the
Lenders or the Administrative Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Agreement and the other
Loan Documents.
 
ARTICLE VII.
NEGATIVE COVENANTS
 
So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Company shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
 
7.01           Liens.  Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:
 
(a)           Liens pursuant to any Loan Document;
 
(b)           Liens existing on the date hereof and listed on Schedule 7.01 and
any renewals or extensions thereof, provided that (i) the property covered
thereby is not changed in any material respect, (ii) the amount secured or
benefited thereby is not increased except as contemplated by Section 7.03(b),
and (iii) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.03;
 
(c)           Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
 
(d)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
 
(e)           pledges or deposits in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;
 
(f)           deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
 

 
84

--------------------------------------------------------------------------------

 

(g)           easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
 
(h)           Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.01(h) (including due to any such judgment
having been stayed pending appeal) or securing appeal or other surety bonds
related to such judgments;
 
(i)           Liens securing Indebtedness permitted under Sections 7.03(f) and
7.03(g);
 
(j)           Liens on any property owned by Watts Germany, any Subsidiary
thereof or any German Subsidiary of which Watts Germany is a Subsidiary, in each
case securing Indebtedness permitted by Section 7.03(e)(ii);
 
(k)           Liens securing Indebtedness permitted under Section 7.03(h);
provided, that (i) if the grantor of such Liens is a Domestic Loan Party, the
grantee of such Liens must be a Domestic Loan Party and (ii) if the grantor of
such Liens is a Foreign Loan Party, the grantee of such Liens must be a Loan
Party;
 
(l)           Liens on equipment or real estate, or both, and proceeds thereof,
securing Indebtedness permitted under Section 7.03(j); and
 
(m)           Liens granted to or for the benefit of holders of Senior Notes
pursuant to the terms of the Senior Note Documents (or noteholders with respect
to substantially similar senior note purchase agreements having restrictive
covenants which are not more onerous to the Company than the 2010 Senior Note
Purchase Agreement as it may be amended in accordance with this Agreement) to
the extent, and only to the extent, (i) such Liens were required to be granted
as a result of Cash Collateral being required to be pledged hereunder upon any
Lender becoming a Defaulting Lender and (ii) the proportion of the value of the
collateral securing such obligations relative to the outstanding principal
balance of such notes is equal to the proportion that such Cash Collateral bears
to the Obligations (including L/C Obligations), or the value of the collateral
securing such obligations is equal to the amount of such Cash Collateral.
 
7.02           Investments.  Make any Investments, except:
 
(a)           existing Investments in Subsidiaries and other Investments in
existence on the Closing Date and described in Schedule 7.02 and any renewal or
extension of any such Investments that does not increase the amount of the
Investment being renewed or extended as determined as of such date of renewal or
extension;
 
(b)           Investments held by the Company or such Subsidiary in the form of
cash equivalents or short-term marketable debt securities;
 
(c)           subject to the limitations set forth in Sarbanes-Oxley and all
rules and regulations related thereto, (i) advances to officers, directors and
employees of the Company and Subsidiaries for travel, entertainment, relocation
and analogous ordinary business purposes and (ii) loans to employees of the
Company pursuant to the terms of the Company’s non-qualified stock option plan,
secured by pledges of the Equity Interests of the Company owned by such
employee; provided that the aggregate outstanding amount of such Investments
permitted pursuant to this Section 7.02(c) shall not exceed $3,000,000 at any
time;
 

 
85

--------------------------------------------------------------------------------

 

(d)           Investments from the Company to any Subsidiary or from any
Subsidiary to the Company or any other Subsidiary;
 
(e)           Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
 
(f)           Guarantees permitted by Section 7.03;
 
(g)           Investments (other than Investments permitted pursuant to Section
7.02(a)) in or to joint ventures in lines of business that are the same or
similar to the line of business in which the Company and its Subsidiaries are
then engaged prior to such Investment; provided, that such Investments
consisting of loans, advances, Guarantees or cash capital contributions shall
not exceed $50,000,000 in the aggregate at any time outstanding; and
 
(h)           Investments in Permitted Acquisitions;
 
provided, that the aggregate book value of all property subject to Specified
JV/Intercompany Asset Transfers in any fiscal year, together with the book value
of all property Disposed of in reliance on Section 7.05(i) during such fiscal
year, shall not exceed 12.5% of Consolidated Total Assets as of the end of the
preceding fiscal year.
 
7.03           Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:
 
(a)           Indebtedness under the Loan Documents;
 
(b)           Indebtedness outstanding on the date hereof and listed on Schedule
7.03, and any refinancings, refundings, renewals or extensions thereof; provided
that (i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Loan Parties or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then
applicable market interest rate;
 
(c)           obligations (contingent or otherwise) of the Company or any
Subsidiary existing or arising under any Swap Contract, provided that such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a “market view;”
 

 
86

--------------------------------------------------------------------------------

 

(d)           unsecured Indebtedness of the Company (including, without
limitation, the Senior Notes);
 
(e)           (i) unsecured Indebtedness of any Subsidiary of the Company and
(ii) secured Indebtedness (including Attributable Indebtedness in respect of
capital leases, Synthetic Lease Obligations and Permitted Receivables Purchase
Facilities and Indebtedness in respect of purchase money obligations for fixed
or capital assets) of Watts Germany and its Subsidiaries, in an aggregate
outstanding principal amount not to exceed at any time 12.5% of Consolidated
Total Assets as of the end of the preceding fiscal year;
 
(f)           secured Indebtedness (including Attributable Indebtedness in
respect of capital leases, Synthetic Lease Obligations and Permitted Receivables
Purchase Facilities and Indebtedness in respect of purchase money obligations
for fixed or capital assets) of the Company or any of its Subsidiaries (other
than Watts Germany and its Subsidiaries) in an aggregate principal amount not to
exceed $62,500,000 at any time outstanding;
 
(g)           Attributable Indebtedness in respect of Permitted Receivables
Purchase Facilities in an aggregate principal amount not to exceed $100,000,000
at any time outstanding;
 
(h)           Indebtedness of (i) the Company owing to any Subsidiary thereof or
(ii) any Subsidiary owing to the Company or any other Subsidiary;
 
(i)           Guarantees of (i) the Company in respect of Indebtedness otherwise
permitted hereunder of any Subsidiary and (ii) subject to Section 6.14(b), any
Subsidiary in respect of Indebtedness otherwise permitted hereunder of the
Company or any other Subsidiary; and
 
(j)           Indebtedness secured by equipment or real estate, or both, and
proceeds thereof, which is assumed or continued in connection with Permitted
Acquisitions under Section 7.04(c), but not incurred in anticipation or as a
result thereof.
 
7.04           Fundamental Changes; Permitted Acquisitions.  Merge, dissolve,
liquidate, consolidate with or into another Person, Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
or agree to or effect any Acquisition except that, so long as no Default exists
or would result therefrom:
 
(a)           any Subsidiary may liquidate, dissolve, or dissolve voluntarily
into, and may merge with and into (i) the Company, provided that the Company
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that (w) when any Domestic Designated Borrower is
liquidating or dissolving into, or merging with and into, another Subsidiary, a
Domestic Designated Borrower shall be the continuing or surviving Person, (x)
when any Domestic Subsidiary Guarantor is liquidating or dissolving into, or
merging with and into, another Subsidiary other than any Domestic Designated
Borrower, a Domestic Subsidiary Guarantor shall be the continuing or surviving
Person, (y) when any
 

 
87

--------------------------------------------------------------------------------

 

Foreign Designated Borrower is liquidating or dissolving into, or merging with
and into, another Subsidiary other than any Domestic Loan Party, a Foreign
Designated Borrower shall be the continuing or surviving Person and (z) when any
Foreign Subsidiary Guarantor is liquidating or dissolving into, or merging with
and into, another Subsidiary other than any Foreign Designated Borrower or any
Domestic Loan Party, a Foreign Subsidiary Guarantor shall be the continuing or
surviving Person;
 
(b)           any Subsidiary (other than any Designated Borrower) may Dispose of
all or substantially all of its assets (upon voluntary liquidation or otherwise)
to the Company or to another Subsidiary; provided that (i) if the transferor in
such a transaction is a Domestic Subsidiary Guarantor, then the transferee must
be a Domestic Loan Party and (ii) if the transferor in such a transaction is a
Foreign Subsidiary Guarantor, then the transferee must be a Loan Party;
 
(c)           the Company or any Subsidiary may consummate any Acquisition with
respect to which the following conditions are satisfied (a "Permitted
Acquisition"):
 
(i)           the Person to be acquired (the “Target”) is not engaged in any
material line of business substantially different from those lines of business
conducted by the Company and its Subsidiaries on the date hereof or any business
substantially related or incidental thereto;
 
(ii)           the board of directors and (if required by applicable law) the
shareholders, or the equivalent thereof, of each of the Company or the
applicable Subsidiary and of the Target has approved such Acquisition; provided,
that, in the case of any Target that is a Public Company, such approval of the
board of directors of the Target shall have been obtained prior to any tender
offer or similar solicitation of the holders of voting securities of the Target
and shall not have been withdrawn;
 
(iii)           any Indebtedness directly or indirectly incurred or assumed in
connection with such Acquisition shall have been permitted to be incurred or
assumed pursuant to Section 7.03;
 
(iv)           if the Purchase Price for such Acquisition is greater than or
equal to $75,000,000, then concurrent with the consummation of such Acquisition,
the Company shall have delivered to the Administrative Agent (A) a Compliance
Certificate prepared on a Pro Forma Basis demonstrating that the Consolidated
Leverage Ratio as of the end of the most recent fiscal quarter immediately after
giving effect to such Acquisition shall not be greater than 0.25x less than the
maximum permitted Consolidated Leverage Ratio as of the end of the most recent
fiscal quarter pursuant to Section 7.13(c), (B) a supplement to Schedule 5.19
setting forth Domestic Subsidiaries of the Company necessary to make the
representation and warranty set forth in Section 5.19 true and correct after
giving effect to such Permitted Acquisition and (C) a certificate from the chief
financial officer of the Company to the effect that (1) the Company and its
Subsidiaries, on a consolidated and consolidating basis, will be solvent both
before and after consummating such Acquisition and (2) no Default or Event of
Default then exists or would result after giving effect to such Acquisition;
 

 
88

--------------------------------------------------------------------------------

 

(v)           in the case of an Acquisition by the Company or such Subsidiary of
(i) Equity Interests of any Target organized under the laws of the United States
or any State thereof, the Target shall become a direct or indirect wholly owned
Subsidiary of the Company or (ii) any business or line of business of any
Target, such business or line of business shall be acquired by a direct or
indirect wholly owned subsidiary of the Company;
 
(vi)           the business to be acquired would not subject the Administrative
Agent or any Lender to regulatory or third party approvals in connection with
the exercise of any of its rights and remedies under this Agreement or any other
Loan Document;
 
(vii)           no contingent obligations or liabilities will be incurred or
assumed in connection with such acquisition which (x) are required to be
described in the footnotes of the Company’s financial statements in accordance
with GAAP and (y) could reasonably be expected to have a Material Adverse
Effect; and
 
(viii)           the Consolidated Leverage Ratio immediately after giving effect
to such Acquisition on a Pro Forma Basis shall not be greater than 0.25x less
than the maximum permitted Consolidated Leverage Ratio as of the end of the most
recent fiscal quarter pursuant to Section 7.13(c).
 
7.05           Dispositions.  Make any Disposition or enter into any agreement
to make any Disposition, except:
 
(a)           Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business;
 
(b)           Dispositions of inventory in the ordinary course of business;
 
(c)           Dispositions of Permitted Receivables pursuant to Permitted
Receivables Purchase Facilities;
 
(d)           Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
 
(e)           Dispositions of property by (i) the Company to any Subsidiary or
(ii) any Subsidiary to the Company or any other Subsidiary; provided, that the
aggregate book value of all property subject to Specified JV/Intercompany Asset
Transfers in any fiscal year, together with the book value of all property
Disposed of in reliance on Section 7.05(i) during such fiscal year, shall not
exceed 12.5% of Consolidated Total Assets as of the end of the preceding fiscal
year;
 
(f)           Dispositions permitted by Section 7.04;
 

 
89

--------------------------------------------------------------------------------

 

(g)           Dispositions by the Company and its Subsidiaries of property
pursuant to sale-leaseback transactions; provided, that the book value of all
property Disposed of in connection with such transactions from and after the
Closing Date shall not exceed $25,000,000;
 
(h)           licenses of IP Rights; and
 
(i)           Dispositions by the Company and its Subsidiaries not otherwise
permitted under this Section 7.05; provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition and
(ii) the aggregate book value of all property Disposed of in reliance on this
clause (i) in any fiscal year, together with the book value of all property
subject to Specified JV/Intercompany Asset Transfers during such fiscal year,
shall not exceed 12.5% of Consolidated Total Assets as of the end of the
preceding fiscal year;
 
provided, however, that any Disposition pursuant to clauses (a) through (i)
shall be for fair market value.
 
7.06           Restricted Payments.  Declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so unless no Default shall have occurred and be continuing at the date of
declaration or payment thereof or would result therefrom.
 
7.07           Change in Nature of Business.  Engage in any material line of
business substantially different from those lines of business conducted by the
Company and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.
 
7.08           Transactions with Affiliates.  Enter into any transaction of any
kind with any Affiliate of the Company, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Company or such Subsidiary as would be obtainable by the Company or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate; provided that any Loan Party may enter into
transactions relating to any Permitted Receivables Purchase Facility.
 
7.09           Burdensome Agreements.  Enter into or be subject to any
Contractual Obligation (other than this Agreement or any other Loan Document,
the Senior Note Documents, or other agreements governing Indebtedness otherwise
permitted hereunder and having restrictive covenants which are not more onerous
to the Company than the 2010 Senior Note Purchase Agreement as it may be amended
in accordance with this Agreement) that (a) limits the ability (i) of any
Subsidiary to make Restricted Payments to any Loan Party or to otherwise
transfer property to any Loan Party, (ii) of any Material Domestic Subsidiary or
any other Domestic Loan Party to Guarantee the Indebtedness of the Company or
any Designated Borrower, (iii) of any Foreign Loan Party to Guarantee the
Indebtedness of any Foreign Designated Borrower or (iv) of the Company or any
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person; provided, however, that this clause (iv) shall not prohibit any negative
pledge incurred or provided in favor of any holder of Indebtedness in respect of
capital leases, Synthetic Lease Obligations and purchase money obligations for
fixed or capital assets, in each case solely to the extent any such negative
pledge relates to the property financed by or the subject of such Indebtedness;
or (b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person; provided, that this
Section 7.09 shall not apply to any Contractual Obligation binding solely on
Watts Germany or any Subsidiary thereof.
 

 
90

--------------------------------------------------------------------------------

 

7.10           Use of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose, unless, in each case, the representations and warranties in Section
5.14(a) would be true and correct after giving effect to such purchase, carrying
or extension of credit as if such representations and warranties were remade on
the date thereof.
 
7.11           Modification of Organization Documents. Consent to or agree to
any amendment, supplement or other modification to the Organization Documents
without the prior written consent of the Administrative Agent unless such
amendment, supplement or modification could not reasonably be expected to have a
Material Adverse Effect.
 
7.12           Senior Note Documents. Amend, supplement or otherwise modify the
terms of any of the Senior Note Documents unless such amendment, supplement or
modification could not reasonably be expected to (i) have a Material Adverse
Effect or (ii) have a material adverse effect on the rights and interests of the
Administrative Agent and the Lenders under the Loan Documents.
 
7.13           Financial Covenants.
 
(a)           Consolidated Net Worth.  Permit Consolidated Net Worth at any time
to be less than the sum of (i) $690,480,000, (ii) an amount equal to 50% of the
Consolidated Net Income (excluding the impact of foreign currency translation
adjustments) earned in each fiscal quarter beginning with the fiscal quarter
ending July 4, 2010 (with no deduction for a net loss in any such fiscal
quarter) and (iii) an amount equal to 100% of the aggregate increases in
Shareholders’ Equity of the Company and its Subsidiaries after the date hereof
by reason of the issuance and sale of Equity Interests of the Company or any
Subsidiary (other than issuances to the Company or a wholly-owned Subsidiary),
including upon any conversion of debt securities of the Company into such Equity
Interests.
 
(b)           Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio as of the end of any fiscal quarter of the Company to be
less than 3.50:1:00.
 
(c)           Consolidated Leverage Ratio.  Permit the Consolidated Leverage
Ratio at the end of any fiscal quarter of the Company to be greater than
3.25:1:00.
 
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
 
8.01           Events of Default.  Any of the following shall constitute an
Event of Default:
 
(a)           Non-Payment.  Any Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, and in the currency required
hereunder, any amount of principal of any Loan or any L/C Obligation or (ii)
within five days after the same becomes due, any interest on any Loan or on any
L/C Obligation, any fee due hereunder or any other amount payable hereunder or
under any other Loan Document; or
 

 
91

--------------------------------------------------------------------------------

 

(b)           Specific Covenants.  The Company fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05,
6.10, 6.11, 6.14 or 6.15 or Article VII; or
 
(c)           Other Defaults.  Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or
 
(d)           Representations and Warranties.  Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Company or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith (i) with respect to any
representations, warranties, certifications or statements that contain a
materiality qualifier, shall be incorrect or misleading in any respect when made
or deemed made and (ii) with respect to any representations, warranties,
certifications or statements that do not contain a materiality qualifier, shall
be incorrect or misleading in any material respect when made or deemed made; or
 
(e)           Cross-Default.  (i) The Company or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; (ii) there
occurs under any Swap Contract an Early Termination Date (as defined in such
Swap Contract) resulting from (A) any Event of Default (under and as defined in
such Swap Contract) as to which the Company or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Company or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Company or such Subsidiary as a result thereof is greater than
the Threshold Amount; or (iii) there occurs any termination, liquidation, unwind
or similar event or circumstance under any Permitted Receivables Purchase
Facility, which permits any purchaser of receivables thereunder to cease
purchasing such receivables or to apply all collections on previously purchased
receivables thereunder to the repayment of such purchaser’s interest in such
previously purchased receivables (other than any such event or circumstance that
arises solely as a result of a down-grading of the credit rating of any bank or
financial institution not affiliated with the Company that provides liquidity,
credit or other support in connection with such facility) and the Attributable
Indebtedness in respect of such Permitted Receivables Purchase Facility is
greater than the Threshold Amount; or
 

 
92

--------------------------------------------------------------------------------

 

(f)           Insolvency Proceedings, Etc.  Any Borrower, Material Domestic
Subsidiary or Foreign Subsidiary Guarantor institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property (or any Borrower, Material Domestic Subsidiary or Foreign Subsidiary
Guarantor takes any corporate action to authorize or effect any of the foregoing
actions); or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 45
calendar days, or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 45 calendar
days, or an order for relief is entered in any such proceeding (or any Borrower,
Material Domestic Subsidiary or Foreign Subsidiary Guarantor fails to contest in
good faith any such appointment or proceeding); or
 
(g)           Inability to Pay Debts; Attachment.  (i) Any Borrower, Material
Domestic Subsidiary or Foreign Subsidiary Guarantor becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due, or
(ii) any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the property of any such Person
and is not released, vacated or fully bonded within 30 days after its issue or
levy; or
 
(h)           Judgments.  There is entered against the Borrower, Material
Domestic Subsidiary or Foreign Subsidiary Guarantor (i) any one or more final
judgments or orders for the payment of money in an aggregate amount exceeding
the Threshold Amount (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either
case, (A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of 60 consecutive days during which
a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or
 
(i)           ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $40,000,000,
or (ii) the Company or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of the Threshold Amount; or
 
(j)           Invalidity of Loan Documents.  Any provision of any Loan Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or
 

 
93

--------------------------------------------------------------------------------

 

(k)           Change of Control.  There occurs any Change of Control.
 
8.02           Remedies Upon Event of Default.  If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
 
(a)           declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
 
(b)           declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrowers;
 
(c)           require that the Borrowers Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
 
(d)           exercise on behalf of itself, the Lenders and the L/C Issuer all
rights and remedies available to it, the Lenders and the L/C Issuer under the
Loan Documents;
 
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrowers to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
 
8.03           Application of Funds.
 
(a)           After the exercise of remedies provided for in Section 8.02 (or
after the Loans have automatically become immediately due and payable and the
L/C Obligations have automatically been required to be Cash Collateralized as
set forth in the proviso to Section 8.02):
 
(i)           Any amounts received on account of the Obligations (other than
amounts received solely on account of the Obligations of the Foreign Loan
Parties) shall, subject to the provisions of Sections 2.18 and 2.19, be applied
by the Administrative Agent in the following order:
 
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;
 

 
94

--------------------------------------------------------------------------------

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges
and disbursements of counsel to the respective Lenders and the L/C
Issuer (including fees and time charges for attorneys who may be employees of
any Lender or the L/C Issuer) and amounts payable under Article III), ratably
among them in proportion to the amounts described in this clause Second payable
to them;
 
Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;
 
Fourth, to payment of (i) that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings and (ii) that portion of the
Obligations associated with Guaranteed Swap Contracts, ratably among the Lenders
(and Affiliates thereof) and the L/C Issuer in proportion to the respective
amounts described in this clause Fourth held by them;
 
Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit; and
 
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Company or as otherwise required by Law;
 
provided, that the Administrative Agent may, in its sole discretion, apply such
amounts solely to the Obligations of the Domestic Loan Parties or the Foreign
Loan Parties, as applicable in the order and manner described in subclauses
First through Fifth of this clause (i) prior to application of any such amounts
to any Obligations of the other Loan Parties; and
 
(ii)           Any amounts received solely on account of the Obligations of the
Foreign Loan Parties shall, subject to the provisions of Sections 2.18 and 2.19,
be applied by the Administrative Agent in the following order:
 
First, to payment of that portion of the Obligations of the Foreign Loan Parties
constituting fees, indemnities, expenses and other amounts (including fees,
charges and disbursements of counsel to the Administrative Agent and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
 
Second, to payment of that portion of the Obligations of the Foreign Loan
Parties constituting fees, indemnities and other amounts (other than principal,
interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer
(including fees, charges and disbursements of counsel to the respective Lenders
and the L/C Issuer (including fees and time charges for attorneys who may be
employees of any Lender or the L/C Issuer) and amounts payable under Article
III), ratably among them in proportion to the amounts described in this clause
Second payable to them;
 

 
95

--------------------------------------------------------------------------------

 

Third, to payment of that portion of the Obligations of the Foreign Loan Parties
constituting accrued and unpaid Letter of Credit Fees and interest on the Loans
made to Foreign Designated Borrowers, L/C Borrowings of Foreign Designated
Borrowers and other Obligations of the Foreign Loan Parties, ratably among the
Lenders and the L/C Issuer in proportion to the respective amounts described in
this clause Third payable to them;
 
Fourth, to payment of (i) that portion of the Obligations of the Foreign Loan
Parties constituting unpaid principal of the Loans made to Foreign Designated
Borrowers and L/C Borrowings of Foreign Designated Borrowers and (ii) that
portion of the Obligations associated with Guaranteed Swap Contracts of the
Foreign Loan Parties, ratably among the Lenders (and Affiliates thereof) and the
L/C Issuer in proportion to the respective amounts described in this clause
Fourth held by them;
 
Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations of the Foreign Designated
Borrowers comprised of the aggregate undrawn amount of Letters of Credit issued
at the request of the Foreign Designated Borrowers; and
 
Last, the balance, if any, after all of the Obligations of the Foreign Loan
Parties have been indefeasibly paid in full, to the applicable Foreign Loan
Party or as otherwise required by Law.
 
(b)           Subject to Sections 2.03(c) and 2.18, amounts used to Cash
Collateralize the aggregate undrawn amount of Letters of Credit pursuant to
subclause Fifth of either clause (i) or (ii) of Section 8.03(a) shall be applied
to satisfy drawings under the applicable Letters of Credit as they occur.  If
any amount remains on deposit as Cash Collateral after all such Letters of
Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Obligations, if any, in accordance with Section 8.03(a).
 
ARTICLE IX.
ADMINISTRATIVE AGENT
 
9.01           Appointment and Authority.  Each of the Lenders and the L/C
Issuer hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and no Borrower shall have
rights as a third party beneficiary of any of such provisions.
 
9.02           Rights as a Lender.  The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or
 

 
96

--------------------------------------------------------------------------------

 

“Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as the Administrative Agent
hereunder in its individual capacity.  Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Borrowers or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.
 
9.03           Exculpatory Provisions.  The Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents.  Without limiting the generality of the foregoing, the
Administrative Agent:
 
(a)           shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
 
(b)           shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and
 
(c)           shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any of the Borrowers or any of
their respective Affiliates that is communicated to or obtained by the Person
serving as the Administrative Agent or any of its Affiliates in any capacity.
 
The Administrative Agent shall not be liable to the Lenders for any action taken
or not taken by it (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or
(ii) in the absence of its own gross negligence or willful misconduct.  The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given to the Administrative Agent by
the Company, a Lender or the L/C Issuer.
 
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
 

 
97

--------------------------------------------------------------------------------

 

9.04           Reliance by Administrative Agent.
 
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Loan or the issuance of such
Letter of Credit.  The Administrative Agent may consult with legal counsel (who
may be counsel for the Company), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
 
9.05           Delegation of Duties.  The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties.  The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
 
9.06           Resignation of Administrative Agent.  The Administrative Agent
may at any time give notice of its resignation to the Lenders, the L/C Issuer
and the Company.  Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Company, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States.  If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the L/C Issuer, appoint a successor Administrative
Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Company and the Lenders that no qualifying
Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the L/C Issuer under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section 9.06.  Upon the
acceptance of a successor’s appointment as
 

 
98

--------------------------------------------------------------------------------

 

Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
Section 9.06).  The fees payable by the Company to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Company and such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article and Section 10.04 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.
 
Any resignation by Bank of America as Administrative Agent pursuant to this
Section 9.06 shall also constitute its resignation as L/C Issuer and Swing Line
Lender.  Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, (a) such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring L/C Issuer and
Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be
discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (c) the successor L/C Issuer shall issue
letters of credit in substitution for the Letters of Credit, if any, outstanding
at the time of such succession or make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C
Issuer with respect to such Letters of Credit.
 
9.07           Non-Reliance on Administrative Agent and Other Lenders.  Each
Lender and the L/C Issuer acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
 
9.08           No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, none of the Book Managers, Arrangers, Syndication Agents or
Documentation Agent listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or the L/C Issuer hereunder.
 
9.09           Administrative Agent May File Proofs of Claim. In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on any Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
 

 
99

--------------------------------------------------------------------------------

 

(a)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
L/C Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and
 
(b)           to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.
 
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the L/C Issuer to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the L/C Issuer in any such proceeding.
 
9.10           Guaranty Matters.  The Lenders and the L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion, to
release any Subsidiary Guarantor from its obligations under the Guaranty
Agreement if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder or ceases to constitute a Material Domestic Subsidiary
pursuant to Section 2.15.  Upon request by the Administrative Agent at any time,
the Required Lenders will confirm in writing the Administrative Agent’s
authority to release any Subsidiary Guarantor from its obligations under a
Guaranty pursuant to this Section 9.10.
 
ARTICLE X.
MISCELLANEOUS
 
10.01           Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Company or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Company or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:
 

 
100

--------------------------------------------------------------------------------

 

(a)           waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;
 
(b)           extend or increase the Commitment of any Lender (including
pursuant to Section 2.19), reinstate any Commitment terminated pursuant to
Section 8.02, reduce the Commitment of any Lender pursuant to Section 2.06 other
than in accordance with its pro rata share of the related reduction of the
Aggregate Commitment, or increase the Applicable Percentage of any Lender other
than in accordance with Section 2.19, in any case without the written consent of
such Lender;
 
(c)           postpone any date fixed by this Agreement or any other Loan
Document for any payment or mandatory prepayment of principal, interest, fees or
other amounts due to the Lenders (or any of them) or under any other Loan
Document without the written consent of each Lender directly affected thereby;
 
(d)           reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso
to this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of any Borrower to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any defined
term used therein) even if the effect of such amendment would be to reduce the
rate of interest on any Loan or L/C Borrowing or to reduce any fee payable
hereunder;
 
(e)           change Section 2.13 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
 
(f)           change any provision of Article II or the definition of
“Applicable Percentage” or any other provision hereof in manner that would cause
any Lender to be obligated to make any Committed Loan or participate in any
Letter of Credit or Swing Line Loan, in any case other than in accordance with
its pro rata share of the Aggregate Commitment, without the written consent of
such Lender;
 
(g)           change any provision of this Section 10.01 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender; or
 
(h)           release (i) any Borrower from the Guaranties or (ii) all or
substantially all of the value of the Guaranties of the Subsidiary Guarantors,
in each case without the written consent of each Lender, except to the extent
the release of any Guarantor is permitted pursuant to Section 9.10 (in which
case such release may be made by the Administrative Agent acting alone);
 
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and
 

 
101

--------------------------------------------------------------------------------

 

signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement; (iii)
no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) any Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties
thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that the
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such Lender.
 
10.02           Notices; Effectiveness; Electronic Communication.
 
(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
 
(i)           if to the Borrowers, the Administrative Agent, the L/C Issuer or
the Swing Line Lender, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 10.02; and
 
(ii)           if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire (including as appropriate, notices delivered solely to the Person
designated by a Lender on its Administrative Questionnaire then in effect for
the delivery of notices that may contain material non-public information
relating to the Borrowers).
 
Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient).  Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
 
(b)           Electronic Communications.  Notices and other communications to
the Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to
Article II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication.  The Administrative Agent or the Company
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
 

 
102

--------------------------------------------------------------------------------

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
 
(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR
COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER
MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR
THE PLATFORM.  In no event shall the Administrative Agent or any of its Related
Parties (collectively, the “Agent Parties”) have any liability to any Borrower,
any Lender, the L/C Issuer or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise)
arising out of any Borrower’s or the Administrative Agent’s transmission of
Borrower Materials through the Internet, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to any Borrower, any
Lender, the L/C Issuer or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).
 
(d)           Change of Address, Etc.  Each of the Borrowers, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the Company, the Administrative Agent, the L/C Issuer and the Swing
Line Lender.  In addition, each Lender agrees to notify the Administrative Agent
from time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.  Furthermore, each Public
Lender agrees to cause at least one individual at or on behalf of such Public
Lender to at all times have selected the “Private Side Information” or similar
designation on the content declaration screen of the Platform in order to enable
such Public Lender or its delegate, in accordance with such Public Lender’s
compliance procedures and applicable Law, including United States Federal and
state securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that
may contain material non-public information with respect to the Borrower or its
securities for purposes of United States Federal or state securities Laws.
 

 
103

--------------------------------------------------------------------------------

 

(e)           Reliance by Administrative Agent, L/C Issuer and Lenders.  The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notices and Swing
Line Loan Notices) purportedly given by or on behalf of any Borrower even if (i)
such notices were not made in a manner specified herein, were incomplete or were
not preceded or followed by any other form of notice specified herein, or (ii)
the terms thereof, as understood by the recipient, varied from any confirmation
thereof.  The Company shall indemnify the Administrative Agent, the L/C Issuer,
each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of any Borrower.  All telephonic
notices to and other telephonic communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
 
10.03           No Waiver; Cumulative Remedies; Enforcement.  No failure by any
Lender or the Administrative Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
 
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders and the L/C Issuer; provided, however, that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf the
rights and remedies that inure to its benefit (solely in its capacity as
Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C
Issuer or the Swing Line Lender from exercising the rights and remedies that
inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender,
as the case may be) hereunder and under the other Loan Documents, (c) any Lender
from exercising setoff rights in accordance with Section 10.08 (subject to the
terms of Section 2.13), or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Loan Party under any Debtor Relief Law; and provided,
further, that if at any time there is no Person acting as Administrative Agent
hereunder and under the other Loan Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c)
and (d) of the preceding proviso and subject to Section 2.13, any Lender may,
with the consent of the Required Lenders, enforce any rights and remedies
available to it and as authorized by the Required Lenders.
 

 
104

--------------------------------------------------------------------------------

 

10.04           Expenses; Indemnity; Damage Waiver.
 
(a)           Costs and Expenses.  The Company shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
L/C Issuer (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or the L/C Issuer), and shall pay all fees and
time charges for attorneys who may be employees of the Administrative Agent, any
Lender or the L/C Issuer, in connection with the enforcement or protection of
its rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section 10.04, or (B) in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
 
(b)           Indemnification by the Company.  The Company shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the reasonable fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all
reasonable fees and time charges and disbursements for attorneys who may be
employees of any Indemnitee, incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by any Borrower or any other Loan Party arising
out of, in connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder, the consummation of the
transactions contemplated hereby or thereby, or, in the case of the
Administrative Agent (and any sub-agent thereof) and its Related Parties only,
the administration of this Agreement and the other Loan Documents (including in
respect of any matters addressed in Section 3.01), (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
any Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to any Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Company or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto, in all cases, whether
or not caused by or arising in whole or in part, out of the comparative or
contributory negligence of the Indemnitee; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related
 

 
105

--------------------------------------------------------------------------------

 

expenses (x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by the Company
or any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Company or such other Loan Party has obtained a final and nonappealable judgment
in its favor on such claim as determined by a court of competent jurisdiction.
 
(c)           Reimbursement by Lenders.  To the extent that the Company for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section 10.04 to be paid by it to the Administrative Agent (or any
sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing,
each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or the L/C Issuer in
its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity.  The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).
 
(d)           Waiver of Consequential Damages, Etc.  To the fullest extent
permitted by applicable law, no Borrower shall assert, and hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed to such unintended recipients by
such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.
 
(e)           Payments.  All amounts due under this Section 10.04 shall be
payable not later than ten Business Days after demand therefor.
 
(f)           Survival.  The agreements in this Section 10.04 shall survive the
resignation of the Administrative Agent, the L/C Issuer and the Swing Line
Lender, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.
 
10.05           Payments Set Aside.  To the extent that any payment by or on
behalf of any Borrower is made to the Administrative Agent, the L/C Issuer or
any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises
its right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared
 

 
106

--------------------------------------------------------------------------------

 

to be fraudulent or preferential, set aside or required (including pursuant to
any settlement entered into by the Administrative Agent, the L/C Issuer or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to
the Administrative Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the applicable Overnight Rate from time to time in
effect, in the applicable currency of such recovery or payment.  The obligations
of the Lenders and the L/C Issuer under clause (b) of the preceding sentence
shall survive the payment in full of the Obligations and the termination of this
Agreement.
 
10.06           Successors and Assigns.
 
(a)           Successors and Assigns Generally.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section 10.06, (ii) by way of participation
in accordance with the provisions of subsection (d) of this Section 10.06, or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of subsection (f) of this Section 10.06 (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section 10.06 and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
 
(b)           Assignments by Lenders.  Any Lender may at any time assign to one
or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this subsection (b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that any such assignment
shall be subject to the following conditions:
 
(i)           Minimum Amounts.
 
(A)           in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
no minimum amount need be assigned; and
 

 
107

--------------------------------------------------------------------------------

 

(B)           in any case not described in subsection (b)(i)(A) of this Section
10.06, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000  unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Company
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met.
 
(ii)           Proportionate Amounts.  Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans.
 
(iii)           Required Consents.  No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this Section
10.06 and, in addition:
 
(A)           the consent of the Company (such consent not to be unreasonably
withheld or delayed) shall be required unless (1) an Event of Default has
occurred and is continuing at the time of such assignment or (2) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund;
 
(B)           the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender, an Affiliate of such Lender or an Approved Fund
with respect to such Lender;
 
(C)           the consent of the L/C Issuer (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding); and
 
(D)           the consent of the Swing Line Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment.
 
(iv)           Assignment and Assumption.  The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee in the amount of $3,500;
provided, however, that the Administrative Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any
assignment.  The assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
 

 
108

--------------------------------------------------------------------------------

 

(v)           No Assignment to Certain Persons.  No such assignment shall be
made (A) to the Company or any of the Company’s Affiliates or Subsidiaries or
(B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (B) or (C) to a natural person.
 
(vi)           Certain Additional Payments.  In connection with any assignment
of rights and obligations of any Defaulting Lender hereunder, no such assignment
shall be effective unless and until, in addition to the other conditions thereto
set forth herein, the parties to the assignment shall make such additional
payments to the Administrative Agent in an aggregate amount sufficient, upon
distribution thereof as appropriate (which may be outright payment, purchases by
the assignee of participations or subparticipations, or other compensating
actions, including funding, with the consent of the Borrowers and the
Administrative Agent, the applicable pro rata share of Loans previously
requested but not funded by the Defaulting Lender, to each of which the
applicable assignees and assignor hereby irrevocably consent), to (x) pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to
the Administrative Agent or any Lender hereunder (and interest accrued thereon)
and (y) acquire (and fund as appropriate) its full pro rata share of all Loans
and participations in Letters of Credit and Swing Line Loans in accordance with
its Applicable Percentage.  Notwithstanding the foregoing, in the event that any
assignment of rights and obligations of any Defaulting Lender hereunder shall
become effective under applicable Law without compliance with the provisions of
this paragraph, then the assignee of such interest shall be deemed to be a
Defaulting Lender for all purposes of this Agreement until such compliance
occurs.
 
(vii)           Euro Loans.  The assignee shall be a Lender, an Affiliate of a
Lender or another Person that, through its Lending Offices, is capable of
lending Euros to the relevant Borrowers without the imposition of any Taxes or
additional Taxes, as the case may be.
 
(viii)           Representation By New Lender.  In the event that the Loans,
participation interests in Letters of Credit and Commitments subject to such
assignment are less than €50,000 (or the Dollar Equivalent thereof) and the
assignee Lender is not an existing Lender, the assignee Lender must represent
and warrant to the Initial Designated Borrower on the effective date of such
assignment that it is a professional market party within the meaning of the
Dutch Financial Supervision Act.
 
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section 10.06, from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under
 

 
109

--------------------------------------------------------------------------------

 

this Agreement (and, in the case of an Assignment and Assumption covering all of
the assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment.  Upon
request, each Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (d)
of this Section 10.06.
 
(c)           Register.  The Administrative Agent shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”).  In carrying out its obligations under this Section 10.06(c),
the Administrative Agent shall act as the agent of the Borrower (in addition to
its role as Administrative Agent for the Lenders), but such agency for the
Borrower shall be solely for purposes of this Section 10.06(c) and solely for
tax purposes. The entries in the Register shall be conclusive, and the
Borrowers, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  In addition, the Administrative Agent shall maintain on the Register
information regarding the designation and revocation of designation, of any
Lender as a Defaulting Lender.  The Register shall be available for inspection
by the Borrowers and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
 
(d)           Participations.  Any Lender may at any time, without the consent
of, or notice to, any Borrower or the Administrative Agent, sell participations
to any Person (other than a natural person, a Defaulting Lender or the Company
or any of the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrowers,
the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.
 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any  provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant.  Subject to subsection (e) of this
Section 10.06, each Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section 10.06.  To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 10.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.13 as though it were
a Lender.
 

 
110

--------------------------------------------------------------------------------

 

(e)           Limitations upon Participant Rights.  A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Company’s prior written consent.  A
Participant shall not be entitled to the benefits of Section 3.01 unless the
Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
3.01(e) as though it were a Lender.
 
(f)           Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note(s), if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
 
(g)           Resignation as L/C Issuer or Swing Line Lender after
Assignment.  Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 30 days’ notice to the
Company and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice
to the Company, resign as Swing Line Lender.  In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Company shall be entitled to
appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; provided, however, that no failure by the Company to appoint any such
successor shall affect the resignation of Bank of America as L/C Issuer or Swing
Line Lender, as the case may be.  If Bank of America resigns as L/C Issuer, it
shall retain all the rights, powers, privileges and duties of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Committed
Loans or fund risk participations in Unreimbursed Amounts pursuant to Section
2.03(c)).  If Bank of America resigns as Swing Line Lender, it shall retain all
the rights of the Swing Line Lender provided for hereunder with respect to Swing
Line Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate
Committed Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c).  Upon the appointment of a successor L/C Issuer
and/or Swing Line Lender, (a) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring L/C Issuer
or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank of
America with respect to such Letters of Credit.
 
(h)           Notwithstanding anything to the contrary contained in this
Agreement and other than in the case of an assignment to an existing Lender, any
transfer or assignment of any rights and obligations against a Dutch Borrower
under the Loan Documents shall be in a minimum amount of €50,000 (or the Dollar
equivalent thereof), unless the transfer or assignment is to an entity that
otherwise qualifies as a professional market party within the meaning of the
Dutch Financial Supervision Act.
 

 
111

--------------------------------------------------------------------------------

 

10.07           Treatment of Certain Information; Confidentiality.  Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, trustees, advisors and
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority purporting to have jurisdiction over it (including
any self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section 10.07, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to a Borrower and its obligations,
(g) with the consent of the Company or (h) to the extent such Information (x)
becomes publicly available other than as a result of a breach of this Section
10.07 or (y) becomes available to the Administrative Agent, any Lender, the L/C
Issuer or any of their respective Affiliates on a nonconfidential basis from a
source other than the Company.  For purposes of this Section 10.07,
“Information” means all information received from the Company or any Subsidiary
relating to the Company or any Subsidiary or any of their respective businesses,
other than any such information that is available to the Administrative Agent,
any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by
the Company or any Subsidiary, provided that, in the case of information
received from the Company or any Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential.  Any
Person required to maintain the confidentiality of Information as provided in
this Section 10.07 shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
 
Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non-public information concerning
the Company or a Subsidiary, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with applicable Law,
including United States Federal and state securities Laws.
 
10.08           Right of Setoff.  If an Event of Default shall have occurred and
be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or for the
credit or the account of any
 

 
112

--------------------------------------------------------------------------------

 

Borrower against any and all of the obligations of such Borrower now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C
Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of such Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender or the L/C Issuer
different from the branch or office holding such deposit or obligated on such
indebtedness; provided, that in the event that any Defaulting Lender shall
exercise any such right of setoff, (x) all amounts so set off shall be paid over
immediately to the Administrative Agent for further application in accordance
with the provisions of Section 2.19 and, pending such payment, shall be
segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent and the Lenders, and (y) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the Obligations owing to such Defaulting Lender
as to which it exercised such right of setoff.  The rights of each Lender, the
L/C Issuer and their respective Affiliates under this Section 10.08 are in
addition to other rights and remedies (including other rights of setoff) that
such Lender, the L/C Issuer or their respective Affiliates may have.  Each
Lender and the L/C Issuer agrees to notify the Company and the Administrative
Agent promptly after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and
application.
 
10.09           Interest Rate Limitation.  Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”).  If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the
Company.  In determining whether the interest contracted for, charged, or
received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.
 
10.10           Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or other
electronic imaging means shall be effective as delivery of a manually executed
counterpart of this Agreement.
 

 
113

--------------------------------------------------------------------------------

 

10.11           Survival of Representations and Warranties.  All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
 
10.12           Severability.  If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  Without limiting the foregoing provisions of this Section
10.12, if and to the extent that the enforceability of any provision in this
Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws,
as determined in good faith by the Administrative Agent, the L/C Issuer or the
Swing Line Lender, as applicable, then such provision shall be deemed to be in
effect only to the extent not so limited.
 
10.13           Replacement of Lenders.  If any Lender requests compensation
under Section 3.04 or provides notice under Section 3.02, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender is a Defaulting Lender, then the Company may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06), all
of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment), provided that:
 
(a)           the Company shall have paid (or caused a Designated Subsidiary to
pay) to the Administrative Agent the assignment fee specified in Section
10.06(b);
 
(b)           such Lender shall have received payment of an amount equal to 100%
of the outstanding principal of its Loans and L/C Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company or applicable Designated Subsidiary (in the case of all
other amounts);
 
(c)           in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
 

 
114

--------------------------------------------------------------------------------

 

(d)           such assignment does not conflict with applicable Laws.
 
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.
 
10.14           Governing Law; Jurisdiction; Etc.
 
(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
 
(b)           SUBMISSION TO JURISDICTION.  EACH BORROWER IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK, NEW
YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW
YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
 
(c)           WAIVER OF VENUE.  EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION 10.14.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
 

 
115

--------------------------------------------------------------------------------

 

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
 
10.15           Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.15.
 
10.16           No Advisory or Fiduciary Responsibility.  In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each Borrower acknowledges and agrees, and acknowledges its
Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arrangers
are arm’s-length commercial transactions between the Borrowers and their
respective Affiliates, on the one hand, and the Administrative Agent and the
Arrangers, on the other hand, (B) each of the Borrowers has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate, and (C) each Borrower is capable of evaluating, and understands and
accepts, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; (ii) (A) the Administrative Agent and each
Arranger is and has been acting solely as a principal and, except as expressly
agreed in writing by the relevant parties, has not been, is not, and will not be
acting as an advisor, agent or fiduciary for any Borrower or any of their
respective Affiliates, or any other Person and (B) neither the Administrative
Agent nor the any Arranger has any obligation to any Borrower or any of their
respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent and the Arrangers and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrowers and their respective
Affiliates, and neither the Administrative Agent nor any Arranger has any
obligation to disclose any of such interests to any Borrower or any of their
respective Affiliates.  To the fullest extent permitted by law, each of the
Borrowers hereby waives and releases any claims that it may have against the
Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.
 

 
116

--------------------------------------------------------------------------------

 

10.17           Electronic Execution of Assignments and Certain Other
Documents.  The words “execution,” “signed,” “signature,” and words of like
import in any Assignment and Assumption or in any amendment or other
modification hereof (including waivers and consents) shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.
 
10.18           USA PATRIOT Act Notice.  Each Lender that is subject to the Act
(as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrowers that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of each Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify such Borrower in
accordance with the Act.  The Borrowers shall, promptly following a request by
the Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Act.
 
10.19           Judgment Currency.  If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding that on which final judgment is given.  The obligation of each
Borrower in respect of any such sum due from it to the Administrative Agent or
any Lender hereunder or under the other Loan Documents shall, notwithstanding
any judgment in a currency (the “Judgment Currency”) other than that in which
such sum is denominated in accordance with the applicable provisions of this
Agreement (the “Agreement Currency”), be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent or such Lender,
as the case may be, of any sum adjudged to be so due in the Judgment Currency,
the Administrative Agent or such Lender, as the case may be, may in accordance
with normal banking procedures purchase the Agreement Currency with the Judgment
Currency.  If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Administrative Agent or any Lender from any Borrower
in the Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or such
Lender, as the case may be, against such loss.  If the amount of the Agreement
Currency so purchased is greater than the sum originally due to the
Administrative Agent or any Lender in such currency, the Administrative Agent or
such Lender, as the case may be, agrees to return the amount of any excess to
such Borrower (or to any other Person who may be entitled thereto under
applicable law).
 
[Remainder of page intentionally left blank.]
 

 
117

--------------------------------------------------------------------------------

 

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

 
WATTS WATER TECHNOLOGIES, INC.
         
By:  /s/ William C. McCartney   
 
Name: William C. McCartney
 
Title: Chief Financial Officer
         
WATTS INDUSTRIES EUROPE B.V.
         
By: /s/ William C. McCartney   
 
Name: William C. McCartney
 
Title: Attorney-in-Fact

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
BANK OF AMERICA, N.A., as Administrative Agent
         
By:  /s/ Bozena Janociak____________
 
Name: Bozena Janociak
 
Title:  Assistant Vice President

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
BANK OF AMERICA, N.A., as a Lender, an L/C Issuer and Swing Line Lender
         
By:  /s/ Jonathan M. Phillips_________
 
Name:  Joanathan M. Phillips
 
Title: Senior Vice President

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
JPMORGAN CHASE BANK, N.A.,
as Syndication Agent and a Lender
         
By:  /s/ Peter M. Killea­­­­___________
 
Name:  Peter M. Killea
 
Title:  Vice President

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
KEYBANK NATIONAL ASSOCIATION,
as a Syndication Agent and a Lender
         
By:  /s/ Marcel Fournier_____________
 
Name:  Marcek Fournier
 
Title:  Vice President

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
WELLS FARGO BANK, N.A.,
as Documentation Agent and a Lender
         
By:  /s/ Robert Krasnow__________________
 
Name: Robert Krasnow
 
Title:  Sr. V.P.               

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
RBS CITIZENS, N.A.,
as a Lender
         
By:  /s/ Daniel Bernard         
 
Name:  Daniel Bernard
 
Title:  Senior Vice President

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
SOVEREIGN BANK, N.A.,
as a Lender
         
By:  /s/ Angela Pecjo_____________________
 
Name:  Angela Pecjo
 
Title:  Vice President

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
HSBC BANK USA, NATIONAL ASSOCIATION,
as a Lender
         
By:  /s/ Elise M Russo_________   
 
Name:  Elisa M Russo
 
Title:  Global Relations Manager

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

 
BROWN BROTHERS HARRIMAN & CO.,
as a Lender
         
By:  /s/Daniel G. Head, Jr.________________
 
Name:  Daniel G. Head Jr.
 
Title:  SVP

Signature Page to Credit Agreement
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 1.01
 

 
EXISTING LETTERS OF CREDIT
 

 

 
LC Number
Beneficiary
Available Amount as of June 17, 2010
Expiry Date
1305680
ACE PROPERTY AND CASUALTY INSURANCE COMPANY
$22,110,030.00
12/31/2010
50087912
ZURICH-AMERICAN INSURANCE COMPANY
$11,946,007.00
6/30/2010
68032188
ROYAL BANK OF CANADA
$611,161.00
11/21/2010

Schedule 1.01
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 1.02
 
MANDATORY COST FORMULAE
 
1.
The Mandatory Cost (to the extent applicable) is an addition to the interest
rate to compensate Lenders for the cost of compliance with:

 
 
(a)
the requirements of the Bank of England and/or the Financial Services Authority
(or, in either case, any other authority which replaces all or any of its
functions); or

 
 
(b)
the requirements of the European Central Bank.

 
2.
On the first day of each Interest Period (or as soon as possible thereafter) the
Administrative Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”) for each Lender, in accordance with the paragraphs set
out below.  The Mandatory Cost will be calculated by the Administrative Agent as
a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion
to the percentage participation of each Lender in the relevant Loan) and will be
expressed as a percentage rate per annum.  The Administrative Agent will, at the
request of the Company or any Lender, deliver to the Company or such Lender as
the case may be, a statement setting forth the calculation of any Mandatory
Cost.

 
3.
The Additional Cost Rate for any Lender lending from a Lending Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent.  This percentage will be certified by such Lender in its
notice to the Administrative Agent to be its reasonable determination of the
cost (expressed as a percentage of such Lender’s participation in all Loans made
from such Lending Office) of complying with the minimum reserve requirements of
the European Central Bank in respect of Loans made from that Lending Office.

 
4.
The Additional Cost Rate for any Lender lending from a Lending Office in the
United Kingdom will be calculated by the Administrative Agent as follows:

 
 
(a)
in relation to any Loan in Sterling:

 

 
AB+C(B-D)+E x 0.01
 per cent per annum
 
100 - (A+C)

 
 
(b)
in relation to any Loan in any currency other than Sterling:

 

 
E x 0.01
 per cent per annum
 
300

 
Where:
 
 
“A”
is the percentage of Eligible Liabilities (assuming these to be in excess of any
stated minimum) which that Lender is from time to time required to maintain as
an interest free cash ratio deposit with the Bank of England to comply with cash
ratio requirements.

 

Schedule 1.02
Page 1
 
 

--------------------------------------------------------------------------------

 

 
“B”
is the percentage rate of interest (excluding the Applicable Rate, the Mandatory
Cost and any interest charged on overdue amounts pursuant to the first sentence
of Section 2.08(b) and, in the case of interest (other than on overdue amounts)
charged at the Default Rate, without counting any increase in interest rate
effected by the charging of the Default Rate) payable for the relevant Interest
Period of such Loan.

 
 
“C”
is the percentage (if any) of Eligible Liabilities which that Lender is required
from time to time to maintain as interest bearing Special Deposits with the Bank
of England.

 
 
“D”
is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.

 
 
“E”
is designed to compensate Lenders for amounts payable under the Fees Rules and
is calculated by the Administrative Agent as being the average of the most
recent rates of charge supplied by the Lenders to the Administrative Agent
pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

 
5.
For the purposes of this Schedule:

 
 
(a)
“Eligible Liabilities” and “Special Deposits” have the meanings given to them
from time to time under or pursuant to the Bank of England Act 1998 or (as may
be appropriate) by the Bank of England;

 
 
(b)
“Fees Rules” means the rules on periodic fees contained in the FSA Supervision
Manual or such other law or regulation as may be in force from time to time in
respect of the payment of fees for the acceptance of deposits;

 
 
(c)
“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable
discount rate); and

 
 
(d)
“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

 
6.
In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5% will be included in the formula as 5 and not as
0.05).  A negative result obtained by subtracting D from B shall be taken as
zero.  The resulting figures shall be rounded to four decimal places.

 

Schedule 1.02
Page 2
 
 

--------------------------------------------------------------------------------

 

7.
If requested by the Administrative Agent or the Company, each Lender with a
Lending Office in the United Kingdom or a Participating Member State shall, as
soon as practicable after publication by the Financial Services Authority,
supply to the Administrative Agent and the Company, the rate of charge payable
by such Lender to the Financial Services Authority pursuant to the Fees Rules in
respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by such Lender as being the average of the Fee
Tariffs applicable to such Lender for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of such Lender.

 
8.
Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Additional Cost Rate.  In particular, but
without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:

 
 
(a)
the jurisdiction of the Lending Office out of which it is making available its
participation in the relevant Loan; and

 
 
(b)
any other information that the Administrative Agent may reasonably require for
such purpose.

 
 
Each Lender shall promptly notify the Administrative Agent in writing of any
change to the information provided by it pursuant to this paragraph.
 
9.
The percentages of each Lender for the purpose of A and C above and the rates of
charge of each Lender for the purpose of E above shall be determined by the
Administrative Agent based upon the information supplied to it pursuant to
paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a lending office in the same
jurisdiction as its Lending Office.

 
10.
The Administrative Agent shall have no liability to any Person if such
determination results in an Additional Cost Rate which over- or
under-compensates any Lender and shall be entitled to assume that the
information provided by any Lender pursuant to paragraphs 3, 7 and 8 above is
true and correct in all respects.

 
11.
The Administrative Agent shall distribute the additional amounts received as a
result of the Mandatory Cost to the Lenders on the basis of the Additional Cost
Rate for each Lender based on the information provided by each Lender pursuant
to paragraphs 3, 7 and 8 above.

 
12.
Any determination by the Administrative Agent pursuant to this Schedule in
relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable to a Lender shall, in the absence of manifest error, be conclusive and
binding on all parties hereto.

 

Schedule 1.02
Page 3
 
 

--------------------------------------------------------------------------------

 

13.
The Administrative Agent may from time to time, after consultation with the
Company and the Lenders, determine and notify to all parties any amendments
which are required to be made to this Schedule in order to comply with any
change in law, regulation or any requirements from time to time imposed by the
Bank of England, the Financial Services Authority or the European Central Bank
(or, in any case, any other authority which replaces all or any of its
functions) and any such determination shall, in the absence of manifest error,
be conclusive and binding on all parties hereto.

 

Schedule 1.02
Page 4
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 2.01
 
COMMITMENTS
AND APPLICABLE PERCENTAGES
 
Lender
 
Commitment
 
Applicable Percentage
 
 
Bank of America, N.A.
 
$55,000,000
18.33%
 
JPMorgan Chase Bank, N.A.
 
$55,000,000
18.33%
 
KeyBank National Association
 
$55,000,000
18.33%
 
Wells Fargo Bank, N.A.
 
$40,000,000
13.33%
 
RBS Citizens, N.A.
 
$35,000,000
11.67%
 
Sovereign Bank, N.A.
 
$30,000,000
10.00%
 
HSBC Bank USA, National Association
 
$20,000,000
6.67%
 
Brown Brothers Harriman & Co.
 
$10,000,000
3.33%
 
Total
 
$300,000,000
 
100.000000000%
                 

Schedule 2.01
Page 1
 
 

--------------------------------------------------------------------------------

 

Schedule 5.06
 

Litigation
 

During 2009, we conducted an investigation into payments made by employees of
Watts Valve (Changsha) Co., Ltd. (“CWV”) to individuals associated with
state-owned agencies that may violate the United States Foreign Corrupt
Practices Act (FCPA).  We voluntarily disclosed this matter to the Securities
and Exchange Commission (SEC) and the Department of Justice (DOJ).  We have
engaged in negotiations with the staff of the SEC and DOJ to resolve potential
violations of the FCPA relating to these payments.  Those negotiations have
reached a stage at which we were able to estimate a probable pre-tax charge in
connection with these matters of approximately $5.3 million, which amount
includes estimated disgorgement of profits and interest. This has been reflected
in our results for the first quarter ended April 4, 2010. We have recorded this
charge, net of tax, in discontinued operations as these potential violations
pertained to CWV, which had been classified as discontinued operations in 2009.
There is currently no definitive agreement with the SEC staff or DOJ for the
resolution of this matter, including with respect to any disgorgement of profits
or interest payment, and any agreement will be subject to the approval by the
Commissioners of the SEC and senior DOJ personnel. Therefore, there can be no
assurance that our negotiations with the SEC staff and DOJ will result in a
final resolution, and the amount of the loss upon final disposition of these
matters may exceed our current estimate.

Schedule 5.06
Page 1
 
 

--------------------------------------------------------------------------------

 

Schedule 5.12(d)

ERISA Compliance

Watts Water Technologies, Inc. Pension Plan, as amended and restated

Schedule 5.12(d)
Page 1
 
 

--------------------------------------------------------------------------------

 

Schedule 5.13

ARTICLE XI.Subsidiaries; Equity Interests
 

North America
 
Name of Subsidiary
 
Jurisdiction of Organization
 
Direct Parent(s)
 
Percentage
Ownership
 
Watts Regulator Co.
 
MA
 
Watts Water Technologies, Inc.
 
100%
 
Watts Drainage Products, Inc.
 
DE
 
Watts Regulator Co.
100%
Webster Valve, Inc.
 
NH
 
Watts Regulator Co.
100%
Watts Radiant, Inc.
 
DE
 
Watts Regulator Co.
100%
Watts Premier, Inc.
 
AZ
 
Watts Regulator Co.
100%
Orion Enterprises, Inc.
 
KS
Watts Regulator Co.
100%
HF Scientific, Inc.
 
FL
Watts Regulator Co.
100%
Dormont Manufacturing Company
 
PA
Watts Regulator Co.
100%
Watts Water Quality and Conditioning Products, Inc.
 
DE
 
Watts Regulator Co.
100%
Blue Ridge Atlantic, Inc.
 
NC
 
Orion Enterprises, Inc.
100%
Watts Industries (Canada), Inc.
 
 
Ontario
 
Watts Water Technologies, Inc.
100%

Europe & Africa
 
Name of Subsidiary
 
Jurisdiction of Organization
 
Direct Parent(s)
 
Percentage Ownership1
 
Watts Industries Europe BV
 
Netherlands
 
Watts Regulator Co.
 
100%
 
Watts Intermes GmbH
 
Austria
 
Watts Industries Netherlands BV
Watts Intermes AG
 
99%
1%
Watts Industries Belgium Bvba (formerly Watts Ocean NV)
 
Belgium
 
Watts Industries Europe BV
100%
Watts Belgium Holding Bvba
 
Belgium
 
Watts Industries Europe BV
100%
Watts Microflex NV
 
Belgium
 
Watts Belgium Holding Bvba
100%
Watts Industries Bulgaria EAD
 
Bulgaria
 
Watts Industries Europe BV
100%
BLÜCHER Metal A/S
 
Denmark
 
Watts Denmark Holding ApS
100%

Schedule 5.13
Page 1
 
 

--------------------------------------------------------------------------------

 

Watts Denmark Holding ApS
 
Denmark
 
Watts Italy Holding S.r.l.
 
Watts Industries Europe BV
35%
 
65%
 
BLÜCHER France SARL
 
France
 
BLÜCHER Metal A/S
100%
 
Gripp S.A.S.
 
France
 
Watts France Holding S.A.S.
100%
 
Porquet S.A.S.
 
France
 
Watts France Holding S.A.S.
100%
 
Watts Electronics S.A.S.
 
France
 
Watts France Holding S.A.S.
100%
 
Watts France Holding S.A.S.
 
France
 
Watts Industries Europe BV
100%
Watts Industries France S.A.S.
 
(formerly Watts Eurotherm SAS)
France
 
Watts France Holding S.A.S.
100%
 
BLÜCHER Beteiligungs GmbH
 
Germany
 
BLÜCHER Metal A/S
100%
 
BLÜCHER Germany GmbH
 
Germany
 
BLÜCHER Metal A/S
100%
 
Watts Germany Holding GmbH
 
Germany
 
Watts Industries Europe BV
100%
 
Watts Industries Deutschland GmbH
 
Germany
 
Watts Germany Holding GmbH
100%
Watts Instrumentation GmbH
 
 
Germany
Watts Germany Holding GmbH
100%
Giuliani Anello S.r.l.
 
Italy
Watts Italy Holding S.r.l.
100%
Watts Italy Holding S.r.l.
Italy
 
Watts Industries Europe BV
100%
Watts Industries Italia S.r.l. (formerly Watts Cazzaniga S.p.A.)
 
Italy
Watts Italy Holding S.r.l.
100%
Watts Industries Luxembourg
 
Luxembourg
 
Watts Industries Belgium Bvba
100%
Watts Industries Netherlands BV (formerly Watts Ocean BV)
 
Netherlands
 
Watts Industries Europe BV
100%
 
BLÜCHER Norway AS
 
Norway
 
BLÜCHER Metal A/S
100%
Watts Industries, Sp. Z.o.o
 
Poland
 
Watts Industries Europe BV
100%
Watts Industries Iberica SA
 
Spain
 
Watts Industries Europe BV
100%
 
BLÜCHER Sweden AB
 
Sweden
 
BLÜCHER Metal A/S
100%
 
Kim Olofsson Safe Corporation AB
 
Sweden
 
Watts Holding Sweden AB
100%
 
Watts Holding Sweden AB
 
Sweden
 
Watts Industries Europe BV
100%
Watts Industries Nordic AB
 
 
Sweden
 
Watts Holding Sweden AB
100%
Watts Intermes AG
 
Switzerland
 
Watts Industries Europe BV
100%
Watts Industries Tunisia S.A.S.
 
Tunisia
 
Watts Electronics S.A.S.
100%
 
Actuated Controls Ltd.
 
United Kingdom
 
Black Teknigas Limited
100%

Schedule 5.13
Page 2
 
 

--------------------------------------------------------------------------------

 

 
Black Automatic Controls Ltd.
 
United Kingdom
 
Black Teknigas Limited
100%
 
Black Teknigas Limited
 
United Kingdom
 
Watts Industries U.K. Ltd.
100%
 
BLÜCHER UK LTD
 
United Kingdom
 
BLÜCHER Metal A/S
100%
 
BM Stainles Steel Drains Limited
 
United Kingdom
 
BLÜCHER UK LTD
100%
 
Electro Controls Ltd.
 
United Kingdom
 
Watts Industries U.K. Ltd.
100%
 
Teknigas Ltd.
 
United Kingdom
 
Black Teknigas Limited
100%
 
W125
 
United Kingdom
 
Watts Industries Europe BV
100%
Watts Industries U.K. Ltd.
 
 
United Kingdom
 
Watts Industries Europe BV
100%
Watts U.K. Ltd.
 
 
United Kingdom
 
Watts Industries Europe BV
100%

China
 
Name of Subsidiary
 
Jurisdiction of Organization
 
Direct Parent(s)
 
Percentage Ownership1
 
Tianjin Watts Valve Co. Ltd.
 
China
 
Watts Regulator Co.
 
100%
 
Watts (Ningbo) International Trading Co., Ltd.
 
China
 
Watts Regulator Co.
 
100%
 
Watts (Shanghai) Management Company Limited
 
China
 
Watts Regulator Co.
 
100%
 
Watts Plumbing Technologies (Taizhou) Co. Ltd. (f/k/a Taizhou Shida Plumbing
Manufacturing Co. Ltd.)
 
China
 
Watts Regulator Co.
 
100%
 
Watts Valve (Ningbo) Co., Ltd.
 
China
 
Watts Regulator Co.
 
100%
 
Watts Valve (Taizhou) Co., Ltd.
 
China
 
Watts Regulator Co.
 
100%
 

 

--------------------------------------------------------------------------------

1 Certain non-U.S. subsidiaries may have outstanding director qualifying shares
as required by local law.

Schedule 5.13
Page 3
 
 

--------------------------------------------------------------------------------

 

Schedule 5.19

Material Domestic Subsidiaries

Watts Regulator Co.

Dormont Manufacturing Company

Watts Water Quality and Conditioning Products, Inc.

Webster Valve, Inc.

Watts Radiant, Inc.

Schedule 5.19
Page 1
 
 

--------------------------------------------------------------------------------

 

Schedule 6.15

Foreign Subsidiary Guarantors

Giuliani Anello S.r.l.

Watts Industries Italia S.r.l.

BLÜCHER Metal A/S

Schedule 6.15
Page 1
 
 

--------------------------------------------------------------------------------

 

Schedule 7.01

Existing Liens

Company
Description
Rate
Balance (as of
April 4, 2010)
BLÜCHER Metal A/S
 
Mortgage loan
2.27%
$4,278,704
Watts Electronics S.A.S.
 
Building and related property
Euribor 3M +1.8%
$1,408,323
Extension building and related property – Rosieres
Euribor 3M +1.6%
Machinery and equipment and related property
3.6%
Gripp S.A.S.
 
Machinery and equipment and related property
12.1%
$199,519
Watts Industries Italia S.r.l.
 
Building and related property
Euribor 3M
$10,916,543
Watts Water Technologies, Inc.
Liens on file with the State of Delaware in favor of Marmon/Keystone Corporation
on inventory and related property of Marmon/Keystone Corporation on consignment
at Watts.
Dormont Manufacturing Company
Liens on file with the State of Pennsylvania in favor of PNC Bank NA and/or
JPMorgan Trust Company National Association on assets of Dormont Manufacturing
Company.  The indebtedness secured by such liens has been repaid.
Watts Water Technologies, Inc. and subsidiaries
Various UCC filings made for protective purposes with respect to operating
leases.
Blue Ridge Atlantic, Inc.
Lien in favor of Ford Credit on van and related property of Blue Ridge Atlantic,
Inc.

Schedule 7.01
Page 1
 
 

--------------------------------------------------------------------------------

 

Schedule 7.02

Existing Investments

Dormont Manufacturing Company owns an 11.1% equity interest in a U.S. company
named Mechline, Inc. and an 11.1% equity interest in a U.K. company named
Mechline Developments Limited.

Watts Radiant, Inc. holds a Convertible Demand Note from K and M Technologies
LLC, a Vermont limited liability company, for $50,000.

Black Teknigas Limited owns a 49.9% equity interest in Black Teknigas (Far East)
Limited, a company organized under the laws of Hong Kong.

Schedule 7.02
Page 1
 
 

--------------------------------------------------------------------------------

 

Schedule 7.03

Existing Indebtedness

Company
Description
Rate
Balance (as of April 4, 2010 unless otherwise indicated)
Watts Water Technologies, Inc. and:
(1) Watts Regulator Co.,
(2) Webster Valve, Inc.,
(3) Dormont Manufacturing Company, and
(4) Watts Water Quality and Conditioning Products, Inc.
(“U.S. Guarantors”)
 
Senior Notes due 2020
5.05%
$75,000,000
(as of June 18, 2010)
Watts Water Technologies, Inc. and U.S. Guarantors
 
Senior Notes due 2016
5.85%
$225,000,000
Watts Water Technologies, Inc. and U.S. Guarantors
 
Senior Notes due 2013
5.47%
$75,000,000
Watts Water Technologies, Inc. and U.S. Guarantors
 
Senior Notes due 2010
(repaid in May 2010)
4.87%
$50,000,000
Watts Industries Italia S.r.l.
 
Ministry of Industry, Commerce
8.49%
$199,394
BLÜCHER Metal A/S
 
Mortgage loan
2.27%
$4,278,704
Blue Ridge Atlantic, Inc.
Debt secured by lien on van and related property of Blue Ridge Atlantic, Inc. in
favor of Ford Credit
       
Capital Leases
 
Watts Electronics S.A.S.
 
Building and related property
Euribor 3M +1.8%
$1,408,323
Extension building and related property - Rosieres
Euribor 3M +1.6%
Machinery and equipment and related property
3.6%
Gripp S.A.S.
 
Machinery and equipment and related property
12.1%
$199,519
Watts Industries Italia S.r.l.
 
Building and related property
Euribor 3M
$10,916,543
       
Letters of Credit/Banker’s Acceptances
Watts Regulator Co.
Commercial letter of credit issued at the request of Watts Regulator Co. for the
benefit of Fortune Manufacturing Limited in the face amount of $459,645.38 (as
of 6/15/2010).
Watts Water Technologies, Inc.
Letter of credit issued for the benefit of Fortune Mfg. Co. Ltd. in the face
amount of $378,155.94 (as of 6/14/2010)
Watts Water Technologies, Inc.
Banker’s acceptance in favor of Fortune Mfg. Co. Ltd. in the face amount of
$30,857.06 (as of 6/15/2010)

Schedule 7.03
Page 1
 
 

--------------------------------------------------------------------------------

 

Watts Water Technologies, Inc.
Banker’s acceptance in favor of Fortune Mfg. Co. Ltd. in the face amount of
$8,964.40 (as of 6/15/2010)
Watts Water Technologies, Inc.
Banker’s acceptance in favor of Fortune Mfg. Co. Ltd. in the face amount of
$8,750.10 (as of 6/15/2010)
Watts Water Technologies, Inc.
Banker’s acceptance in favor of Fortune Mfg. Co. Ltd. in the face amount of
$11,294.40 (as of 6/15/2010)
Watts Water Technologies, Inc.
Banker’s acceptance in favor of Fortune Mfg. Co. Ltd. in the face amount of
$21,623.48 (as of 6/15/2010)

Schedule 7.03
Page 2
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 10.02
 
ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES
 

 
BORROWERS:

Watts Water Technologies, Inc.
 
Watts Water Technologies, Inc.
815 Chestnut Street
North Andover, MA  08145
Attn:  William C. McCartney, CFO
Telephone:  978-689-6207
Facsimile:  978-688-2976
Email:  mccartwc@watts.com
Website Address:   www.wattswater.com
 
Watts Industries Europe B.V.
 
Watts Industries Europe B.V.
Kollergang 14
6961 LZ Eerbeek
The Netherlands
Attn:  John Dennis Cawte
Telephone:  011-31-31-367-3720
Facsimile:  011-31-31-365-4192
Email:  cawte.j.d@wattsindustries.com
Website Address:   www.wattsindustries.com
 
with a copy to:
 
c/o Watts Water Technologies, Inc.
815 Chestnut Street
North Andover, MA  08145
Attn:  William C. McCartney, CFO
Telephone:  978-689-6207
Facsimile:  978-688-2976
Email:  mccartwc@watts.com

Schedule 10.02
Page 1
 
 

--------------------------------------------------------------------------------

 

 
ADMINISTRATIVE AGENT:

Administrative Agent’s Office
(for payments and Requests for Credit Extensions):
Bank of America, N.A.
Street Address 901 Main St.
MailCode:TX-492-14-14
City, State ZIP Code: Dallas, TX 75202-3714
Attention: Keli Torres
Telephone: 214-209-1864
Telecopier: 214-290-8375
Electronic Mail: Keli.Torres@baml.com
Account No.:  1292-000-883
Ref:   Watts Water Technologies
ABA# 026-009-593

Other Notices as Administrative Agent:
(Financial Statements, Compliance Certificate and other Notices to the Bank
Group)
BankofAmerica,N.A.
AgencyManagement
Street Address: 231 S. LaSalle St.
MailCode:IL1-231-10-41
City, State ZIP Code:  Chicago, IL 60604
Attention:  Bozena Janociak
Telephone:  312-828-3597
Telecopier:  877-207-0732
Electronic Mail:  bozena.janociak@baml.com

 
L/C ISSUER:

Bank of America, N.A.
Trade Operations
Street Address: 1 Fleet Way
Mail Code: PA6-580-02-30
City, State ZIP Code: Scranton, PA 18507
Attention: Alfonso (Al) Malave
Telephone: 570-330-4212
Telecopier: 570-330-4186
Electronic Mail:  alfonzo.malave@baml.com

Schedule 10.02
Page 2
 
 

--------------------------------------------------------------------------------

 

 
SWING LINE LENDER:
Bank of America, N.A.
Street Address 901 Main St.
MailCode:TX-492-14-14
City, State ZIP Code: Dallas, TX 75202-3714
Attention: Arlene Minor
Telephone: 214-209-1864
Telecopier: 214-290-8375
Electronic Mail: Keli.Torres@baml.com
Account No.:  1292-000-883
Ref:   Watts Water Technologies
ABA# 026-009-593

Schedule 10.02
Page 3
 
 

--------------------------------------------------------------------------------

 

EXHIBIT A
 
FORM OF COMMITTED LOAN NOTICE
 
Date:  ___________, _____
 
To:       Bank of America, N.A., as Administrative Agent
 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement, dated as of June 18, 2010
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among Watts Water Technologies, Inc., a Delaware
corporation [, Name of Applicable Designated Borrower] (the “Requesting
Borrower”), the [other] Designated Borrowers from time to time party thereto,
the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent, L/C Issuer and Swing Line Lender.
 
The Requesting Borrower hereby requests, on behalf of itself (select one):
 
¨  A Borrowing of Committed Loans              ¨  A conversion or continuation
of Loans
 
1.           On _________________________________ (a Business Day).
 
2.           In the amount of ______________________.
 
3.           Comprised of ________________________.
[Type of Committed Loan requested]
 
4.           In the following currency: ________________________
 
5.           For Eurocurrency Rate Loans:  with an Interest Period of __ months.
 
The Committed Borrowing, if any, requested herein complies with the provisos to
the first sentence of Section 2.01 of the Agreement.
 

 
[APPLICABLE BORROWER]
       
By:
 
       
Name:
         
Title:
 

A-1
Form of Committed Loan Notice
 
 

--------------------------------------------------------------------------------

 

EXHIBIT B
 
FORM OF SWING LINE LOAN NOTICE
 
Date:  ___________, _____
 
To:       Bank of America, N.A., as Swing Line Lender
Bank of America, N.A., as Administrative Agent
 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement, dated as of June 18, 2010
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among Watts Water Technologies, Inc., a Delaware
corporation (the “Company”), the Designated Borrowers from time to time party
thereto, the Lenders from time to time party thereto, and Bank of America, N.A.,
as Administrative Agent, L/C Issuer and Swing Line Lender.
 
The undersigned hereby requests a Swing Line Loan:
 
1.           On _________________________________ (a Business Day).
 
2.           In the amount of $_____________________.
 
The Swing Line Borrowing requested herein complies with the requirements of the
provisos to the first sentence of Section 2.04(a) of the Agreement.
 

 
WATTS WATER TECHNOLOGIES, INC.
       
By:
 
       
Name:
         
Title:
 

B - 1
Form of Swing Line Loan Notice
 
 

--------------------------------------------------------------------------------

 

EXHIBIT C
 
FORM OF NOTE
 
_____________________
 
FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to
_____________________ or registered assigns (the “Lender”), in accordance with
the provisions of the Agreement (as hereinafter defined), the principal amount
of each Loan from time to time made by the Lender to the Borrower under that
certain Credit Agreement, dated as of June 18, 2010 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among Watts Water Technologies, Inc., a Delaware corporation, the Designated
Borrowers from time to time party thereto, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender.
 
The Borrower promises to pay interest on the unpaid principal amount of each
Loan from the date of such Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Agreement. Except as
otherwise provided in Section 2.04(f) of the Agreement with respect to Swing
Line Loans, all payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in the currency in which such
Committed Loan was denominated and in Same Day Funds at the Administrative
Agent’s Office for such currency.  If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
 
This Note is one of the Notes referred to in the Agreement, is entitled to the
benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein.  This Note is also entitled to the benefits of each
Guaranty.  Upon the occurrence and continuation of one or more of the Events of
Default specified in the Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided in the Agreement.  Loans made by the Lender shall be evidenced by one
or more loan accounts or records maintained by the Lender in the ordinary course
of business. The Lender may also attach schedules to this Note and endorse
thereon the date, amount, currency and maturity of its Loans and payments with
respect thereto.
 
The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
 

C - 1
Form of Note
 
 

--------------------------------------------------------------------------------

 

 

 
WATTS WATER TECHNOLOGIES, INC.
     
OR
     
[APPLICABLE DESIGNATED BORROWER]
       
By:
 
       
Name:
         
Title:
 

C - 2
Form of Note
 
 

--------------------------------------------------------------------------------

 

LOANS AND PAYMENTS WITH RESPECT THERETO
 
Date
 
 
Type of Loan Made
 
 
Currency and Amount of Loan Made
 
 
End of Interest Period
 
 
Amount of Principal or Interest Paid This Date
 
 
Outstanding Principal Balance This Date
 
 
Notation Made By
 
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                       

C - 3
Form of Note
 
 

--------------------------------------------------------------------------------

 

EXHIBIT D
 
FORM OF COMPLIANCE CERTIFICATE
 
Financial Statement Date: ______,
 
To:        Bank of America, N.A., as Administrative Agent
 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement, dated as of June 18, 2010
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among Watts Water Technologies, Inc., a Delaware
corporation (the “Company”), the Designated Borrowers from time to time party
thereto, the Lenders from time to time party thereto, and Bank of America, N.A.,
as Administrative Agent, L/C Issuer and Swing Line Lender.
 
The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the ________________________________ of the Company, and that, as
such, he/she is authorized to execute and deliver this Certificate to the
Administrative Agent on the behalf of the Company, and that:
 
[Use following paragraph 1 for fiscal year-end financial statements]
 
1.           Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
the Company ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
 
[Use following paragraph 1 for fiscal quarter-end financial statements]
 
1.           Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the fiscal quarter
of the Company ended as of the above date.  Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Company and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.
 
2.           The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Company during the accounting period covered by the attached financial
statements.
 
3.           A review of the activities of the Company during such fiscal period
has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Company performed and observed
all its Obligations under the Loan Documents, and
 
[select one:]
 

D - 1
Form of Compliance Certificate
 
 

--------------------------------------------------------------------------------

 

[to the best knowledge of the undersigned during such fiscal period, each Loan
Party performed and observed each covenant and condition of the Loan Documents
applicable to it.]
 
--or--
 
[to the best knowledge of the undersigned, during such fiscal period the
following covenants or conditions have not been performed or observed and the
following is a list of each such Default and its nature and status:]
 
4.           The representations and warranties of (i) the Borrowers contained
in Article V of the Agreement and (ii) each Loan Party contained in each other
Loan Document or in any document furnished at any time under or in connection
with the Loan Documents, are (i) with respect to any representations or
warranties that contain a materiality qualifier, true and correct in all
respects and (ii) with respect to any representations or warranties that do not
contain a materiality qualifier, true and correct in all material respects, on
and as of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Compliance Certificate, the representations and warranties contained in
subsection (a) of Section 5.05 of the Agreement shall be deemed to refer to the
most recent statements furnished pursuant to clauses (a) and (b) of Section 6.01
of the Agreement (subject, in the case of any unaudited statements furnished
pursuant to clause (b) of Section 6.01 of the Agreement, to the absence of
footnotes and to normal year-end audit adjustments), including the statements in
connection with which this Compliance Certificate is delivered.
 
5.           The financial covenant analyses and information set forth on
Schedules 2 and 3 attached hereto are true and accurate in all material respects
on and as of the date of this Certificate.
 
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_________, _______.
 

 
WATTS WATER TECHNOLOGIES, INC.
       
By:
 
       
Name:
         
Title:
 

D - 2
Form of Compliance Certificate
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 1
to the Compliance Certificate
 
FINANCIAL STATEMENTS
 
See attached.
 

D - 3
Form of Compliance Certificate
 
 

--------------------------------------------------------------------------------

 

For the Quarter/Year ended ___________________(“Statement Date”)
 

 
SCHEDULE 2
to the Compliance Certificate
 
FINANCIAL COVENANT ANALYSIS
($ in 000’s)
 
I.           Section 7.13(a) – Consolidated Net Worth.1
 

 
A.
 
Consolidated Net Worth at Statement Date:
 
 
$__________
 
 
B.
 
50% of Consolidated Net Income (excluding impact of foreign currency translation
adjustments) for each full fiscal quarter beginning with the fiscal quarter
ending July 4, 2010 (no reduction for losses):
 
 
$__________
 
 
C.
 
100% of increases in Shareholders’ Equity after date of
Agreement from issuance and sale of Equity Interests
(including from conversion of debt securities):
 
 
$__________
 
 
D.
 
Minimum required Consolidated Net Worth
(Lines I.B + I.C plus $690,480,000):
 
 
$__________
 
 
E.
 
Excess (deficiency) for covenant compliance (Line I.A – I.D):
 
 
$__________
 

 
II.           Section 7.13(b) – Consolidated Interest Coverage Ratio.
 

 
A.
 
Consolidated EBITDA for four consecutive fiscal quarters ending on above date
(“Subject Period”) (Schedule 3):
 
 
 
$__________
 
 
B.
 
Consolidated Total Interest Expense for Subject Period:
 
 
$__________
 
 
C.
 
Consolidated Interest Coverage Ratio (Line II.A ¸ Line II.B):
 
 
________to 1
 
 
D.
 
Minimum required Consolidated Interest Coverage Ratio:
 
 
3.50 to 1
 

III.           Section 7.13(c) – Consolidated Leverage Ratio.
 

 
A.
 
Consolidated Funded Indebtedness minus cash and Cash Equivalents in excess of
$50,000,000 at Statement Date2:
 
 
$__________
 
 
B.
 
Consolidated EBITDA for Subject Period (Schedule 3):
 
 
$__________
 
 
C.
 
Consolidated Leverage Ratio (Line III.A ¸ Line III.B):
 
 
________ to 1
 
 
D.
 
Maximum permitted Consolidated Leverage Ratio:
 
 
 
3.25 to 1
 

--------------------------------------------------------------------------------

1 The calculation of Consolidated Net Worth should be adjusted to exclude the
impact of non-cash goodwill impairments.
 
2 Provided, that if the amount of Line III-A is negative, such amount shall be
deemed to be zero for purposes of calculating the Consolidated Leverage Ratio.

D - 4
Form of Compliance Certificate
 
 

--------------------------------------------------------------------------------

 

For the Quarter/Year ended ___________________(“Statement Date”)
 

 
SCHEDULE 3
to the Compliance Certificate
($ in 000’s)
 

 
Consolidated EBITDA3
(in accordance with the definition of Consolidated EBITDA as set forth in the
Agreement)
 
Consolidated EBITDA
 
Quarter
Ended
__________
 
Quarter
Ended
__________
 
Quarter
Ended __________
 
Quarter
Ended __________
 
Twelve
Months
Ended
__________
 
Consolidated Net Income
 
         
+ Consolidated Total Interest Expense
 
         
+ income taxes
 
         
+ depreciation expense
 
         
+ amortization expense
 
         
+ non-recurring non-cash expenses
 
         
+ Losses from Discontinued Operations
 
         
- income tax credits
 
         
- non-cash income
 
         
= Consolidated EBITDA
 
         
+/-  Effect of Pro Forma adjustments related to Permitted Acquisitions
 
         
= Consolidated EBITDA on a Pro Forma Basis
 
         

--------------------------------------------------------------------------------

3 The calculation of Consolidated EBITDA should be adjusted to exclude the
impact of non-cash goodwill impairments.
 

D - 6
Form of Compliance Certificate
 
 

--------------------------------------------------------------------------------

 

EXHIBIT E
 
ASSIGNMENT AND ASSUMPTION
 
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between the
Assignor identified in item 1 below (the “Assignor”) and [the][each]1 Assignee
identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and
agreed that the rights and obligations of [the Assignor][the Assignees]2
hereunder are several and not joint.]3  Capitalized terms used but not defined
herein shall have the meanings given to them in the Credit Agreement identified
below (the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee.  The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to [the Assignee][the respective Assignees], and [the][each] Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated below
(i) all of the Assignor’s rights and obligations in its capacity as a Lender
under the Credit Agreement and any other documents or instruments delivered
pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including, without
limitation, the Letters of Credit and the Swing Line Loans included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned by the Assignor to [the][any] Assignee pursuant to clauses (i) and
(ii) above being referred to herein collectively as the “Assigned
Interest”).  Each such sale and assignment is without recourse to the Assignor
and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.

1.
Assignor:
______________________________

 

 

 
2.
Assignee:
______________________________

 
 
______________________________

 
 
[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

--------------------------------------------------------------------------------

1 For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language.  If the assignment is to multiple Assignees, choose the
second bracketed language.
 
2 Select as appropriate.
 
3 Include bracketed language if there are multiple Assignees.
 

E - 1
Form of Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

3.
Borrower(s):
______________________________

 
4.
Administrative Agent:  Bank of America, N.A., as the administrative agent under
the Credit Agreement

 
5.
Credit Agreement: Credit Agreement, dated as of June 18, 2010, among Watts Water
Technologies, Inc., a Delaware corporation, the Designated Borrowers from time
to time party thereto, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender
 

 
6.
Assigned Interest:

 
Assignor
Assignee[s]4
Facility
Assigned
Aggregate
Amount of
Commitment
for all Lenders5
Amount of
Commitment Assigned
Percentage
Assigned of
Commitment6
CUSIP
Number
                 
Revolving Credit Commitment
$________________
$_________
____________%
 

 
[7.
Trade Date:
__________________]7

 
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
 
The terms set forth in this Assignment and Assumption are hereby agreed to:
 

--------------------------------------------------------------------------------

4 List each Assignee, as appropriate.
 
5 Amounts in this column and in the column immediately to the right to be
adjusted by the counterparties to take into account any payments or prepayments
made between the Trade Date and the Effective Date.
 
6 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.
 
7 To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.
 

E - 2
Form of Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

 
ASSIGNOR
[NAME OF ASSIGNOR]
 
 
By: _____________________________
Title:
 
 
ASSIGNEE
[NAME OF ASSIGNEE]
 
 
By: _____________________________
Title:
 
[Consented to]8 and Accepted:
 
[BANK OF AMERICA, N.A., as
Administrative Agent

 
By: _________________________________
Title:]
 
 
Consented to:

 
BANK OF AMERICA, N.A., as
Swing Line Lender and L/C Issuer

 
By: _________________________________
Title:
 
 
[Consented to]9
 
[WATTS WATER TECHNOLOGIES, INC.
 

By: _________________________________
Title:]

 
 

--------------------------------------------------------------------------------

8 To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.
 
9 To be added only if the consent of the Borrowers is required by the terms of
the Credit Agreement.
 

E - 3
Form of Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

 
[WATTS INDUSTRIES EUROPE B.V.

 
By: _________________________________
Title:]
 

 

E - 4
Form of Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
 
STANDARD TERMS AND CONDITIONS FOR

 
ASSIGNMENT AND ASSUMPTION
 
1.         Representations and Warranties.

1.1.         Assignor.  The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii)
[the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Company, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Company, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

1.2.         Assignee.  [The][Each] Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all the requirements to be an assignee under Section
10.06(b)(iii), (v) and (vii) of the Credit Agreement (subject to such consents,
if any, as may be required under Section 10.06(b)(iii) and (iv) of the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
[the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire assets
of the type represented by [the][such] Assigned Interest and either it, or the
Person exercising discretion in making its decision to acquire [the][such]
Assigned Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Credit Agreement, and has received or has been accorded
the opportunity to receive copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vi) it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vii) it is a Lender, an Affiliate of a
Lender or another Person that, through its Lending Offices, is capable of
lending Euros to the relevant Borrowers without the imposition of any Taxes or
additional Taxes, as the case may be, and (viii) if it is a Foreign Lender,
attached hereto is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by [the][such]
Assignee, and (ix) in the event that (A) [the][such] Assigned Interest does not
amount to a minimum of €50,000 (or the Dollar Equivalent thereof) and (B)
[the][such]

E - 5
Form of Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

Assignee is not an existing Lender, [the][such] Assignee represents and warrants
to the Initial Designated Borrower that it is a professional market party within
the meaning of the Dutch Financial Supervision Act; and (b) agrees that (i) it
will, independently and without reliance upon the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2.         Payments.  From and after the Effective Date, the Administrative
Agent shall make all payments in respect of [the][each] Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date.

3.           General Provisions.  This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the laws of the State of New York.
 

E - 6
Form of Assignment and Assumption
 
 

--------------------------------------------------------------------------------

 

EXHIBIT F
 
FORM OF
GUARANTY AGREEMENT
 
See attached.
 

 

F - 1
Form of Guaranty Agreement
 
 

--------------------------------------------------------------------------------

 

EXHIBIT G
 
FORM OF DESIGNATED BORROWER
REQUEST AND ASSUMPTION AGREEMENT
 
Date:  ___________, _____
 
To:       Bank of America, N.A., as Administrative Agent
 
Ladies and Gentlemen:
 
This Designated Borrower Request and Assumption Agreement is made and delivered
pursuant to Section 2.14 of that certain Credit Agreement, dated as of June 18,
2010 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Credit Agreement”), among Watts Water
Technologies, Inc., a Delaware corporation (the “Company”), the Designated
Borrowers from time to time party thereto, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender, and reference is made thereto for full particulars of the
matters described therein.  All capitalized terms used in this Designated
Borrower Request and Assumption Agreement and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement.
 
Each of ______________________ (the “Designated Borrower”) and the Company
hereby confirms, represents and warrants to the Administrative Agent and the
Lenders that the Designated Borrower is a Subsidiary of the Company and shall be
deemed a [Domestic] [Foreign] Designated Borrower under the Credit Agreement.
 
The documents required to be delivered to the Administrative Agent under Section
2.14 of the Credit Agreement will be furnished to the Administrative Agent in
accordance with the requirements of the Credit Agreement.
 
The parties hereto hereby confirm that with effect from the date of the
Designated Borrower Notice for the Designated Borrower, the Designated Borrower
shall have obligations, duties and liabilities toward each of the other parties
to the Credit Agreement identical to those which the Designated Borrower would
have had if the Designated Borrower had been an original party to the Credit
Agreement as a [Domestic][Foreign] Designated Borrower.  Effective as of the
date of the Designated Borrower Notice for the Designated Borrower, the
Designated Borrower confirms its acceptance of, and consents to, all
representations and warranties, covenants, and other terms and provisions of the
Credit Agreement.
 
The parties hereto hereby request that the Designated Borrower be entitled to
receive Loans under the Credit Agreement, and understand, acknowledge and agree
that neither the Designated Borrower nor the Company on its behalf shall have
any right to request any Loans for its account unless and until the date five
Business Days after the effective date designated by the Administrative Agent in
a Designated Borrower Notice delivered to the Company and the Lenders pursuant
to Section 2.14 of the Credit Agreement.
 

G - 1
Form of Designated Borrower Request and Assumption Agreement
 
 

--------------------------------------------------------------------------------

 

This Designated Borrower Request and Assumption Agreement shall constitute a
Loan Document under the Credit Agreement.
 
THIS DESIGNATED BORROWER REQUEST AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
IN WITNESS WHEREOF, the parties hereto have caused this Designated Borrower
Request and Assumption Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first above written.
 
 
[DESIGNATED BORROWER]
 
 
By:  _________________________________
Title: ________________________________
 
 
 
WATTS WATER TECHNOLOGIES, INC.
 
 
By:  _________________________________
Title: ________________________________
 
 
 

G - 2
Form of Designated Borrower Request and Assumption Agreement
 
 

--------------------------------------------------------------------------------

 

EXHIBIT H
 
FORM OF DESIGNATED BORROWER NOTICE
 
Date:  ___________, _____
 
To:       [Company]
 
The Lenders party to the Credit Agreement referred to below
 
Ladies and Gentlemen:
 
This Designated Borrower Notice is made and delivered pursuant to Section 2.14
of that certain Credit Agreement, dated as of June 18, 2010 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Credit Agreement”), among Watts Water Technologies, Inc., a Delaware
corporation (the “Company”), the Designated Borrowers from time to time party
thereto, the Lenders from time to time party thereto, and Bank of America, N.A.,
as Administrative Agent, L/C Issuer and Swing Line Lender, and reference is made
thereto for full particulars of the matters described therein.  All capitalized
terms used in this Designated Borrower Notice and not otherwise defined herein
shall have the meanings assigned to them in the Credit Agreement.
 
The Administrative Agent hereby notifies Company and the Lenders that effective
as of the date hereof [_________________________] shall be a Designated Borrower
and may receive Loans for its account on the terms and conditions set forth in
the Credit Agreement.
 
This Designated Borrower Notice shall constitute a Loan Document under the
Credit Agreement.
 
 
BANK OF AMERICA, N.A.,
as Administrative Agent

 
 
By: _________________________________
Title:________________________________
 

Exhibit H
Form of Designated Borrower Notice
 
 

--------------------------------------------------------------------------------