Exhibit 10.1


 




 





CREDIT AGREEMENT


 


Dated as of September 23,
2004


 


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

and

WACHOVIA BANK, NATIONAL
ASSOCIATION,

as Syndication Agents


 


KEYBANK NATIONAL ASSOCIATION,

and

SUNTRUST BANK


 


as Documentation Agents


 


and


 


The Other Lenders Party
Hereto


 


BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager




 





 





















 


TABLE OF
CONTENTS


 


	
  Section

  	
   

  	
   

  
	
   

  	
   

  
	
  ARTICLE I.
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
  1.01

  	
  Defined Terms

  	
   

  
	
  1.02

  	
  Other Interpretive
  Provisions

  	
   

  
	
  1.03

  	
  Accounting Terms

  	
   

  
	
  1.04

  	
  Exchange Rates;
  Currency Equivalents

  	
   

  
	
  1.05

  	
  Change of Currency

  	
   

  
	
  1.06

  	
  Times of Day

  	
   

  
	
  1.07

  	
  Letter of Credit Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II. THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  
	
  2.01

  	
  Committed Loans

  	
   

  
	
  2.02

  	
  Borrowings, Conversions and Continuations of
  Committed Loans.

  	
   

  
	
  2.03

  	
  Letters of Credit.

  	
   

  
	
  2.04

  	
  Swing Line Loans.

  	
   

  
	
  2.05

  	
  Prepayments

  	
   

  
	
  2.06

  	
  Termination or
  Reduction of Commitments.

  	
   

  
	
  2.07

  	
  Repayment of Loans

  	
   

  
	
  2.08

  	
  Interest

  	
   

  
	
  2.09

  	
  Fees

  	
   

  
	
  2.10

  	
  Computation of
  Interest and Fees

  	
   

  
	
  2.11

  	
  Evidence of Debt

  	
   

  
	
  2.12

  	
  Payments
  Generally; Administrative Agent’s Clawback

  	
   

  
	
  2.13

  	
  Sharing of Payments by
  Lenders

  	
   

  
	
  2.14

  	
  Designated Borrowers

  	
   

  
	
  2.15

  	
  Increase in Commitments.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. TAXES, YIELD PROTECTION AND
  ILLEGALITY

  	
   

  
	
  3.01

  	
  Taxes.

  	
   

  
	
  3.02

  	
  Illegality

  	
   

  
	
  3.03

  	
  Inability to Determine
  Rates

  	
   

  
	
  3.04

  	
  Increased
  Costs; Reserves on Eurocurrency Rate Loans.

  	
   

  
	
  3.05

  	
  Compensation for Losses

  	
   

  
	
  3.06

  	
  Mitigation
  Obligations; Replacement of Lenders.

  	
   

  
	
  3.07

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  
	
  4.01

  	
  Conditions of
  Initial Credit Extension

  	
   

  
	
  4.02

  	
  Conditions to all
  Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V. REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  5.01

  	
  Existence, Qualification and Power;
  Compliance with Laws

  	
   

  
	
  5.02

  	
  Authorization; No
  Contravention

  	
   

  
	
  5.03

  	
  Governmental
  Authorization; Other Consents

  	
   

  
				



 





















 


	
  Section

  	
   

  	
   

  
	
   

  	
   

  
	
  5.04

  	
  Binding Effect

  	
   

  
	
  5.05

  	
  Financial
  Statements; No Material Adverse Effect.

  	
   

  
	
  5.06

  	
  Litigation

  	
   

  
	
  5.07

  	
  No Default

  	
   

  
	
  5.08

  	
  Ownership of Property;
  Liens

  	
   

  
	
  5.09

  	
  Environmental Compliance

  	
   

  
	
  5.10

  	
  Insurance

  	
   

  
	
  5.11

  	
  Taxes

  	
   

  
	
  5.12

  	
  ERISA Compliance.

  	
   

  
	
  5.13

  	
  Subsidiaries; Equity
  Interests

  	
   

  
	
  5.14

  	
  Margin
  Regulations; Investment Company Act; Public Utility Holding Company Act.

  	
   

  
	
  5.15

  	
  Disclosure

  	
   

  
	
  5.16

  	
  Compliance with Laws

  	
   

  
	
  5.17

  	
  Intellectual Property;
  Licenses, Etc

  	
   

  
	
  5.18

  	
  Senior Note Documents

  	
   

  
	
  5.19

  	
  Material Domestic
  Subsidiaries

  	
   

  
	
  5.20

  	
  Representations
  as to Foreign Obligors

  	
   

  
	
  5.21

  	
  Dutch Companies.

  	
   

  
	
  5.22

  	
  OFAC

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI. AFFIRMATIVE COVENANTS

  	
   

  
	
  6.01

  	
  Financial Statements

  	
   

  
	
  6.02

  	
  Certificates; Other
  Information

  	
   

  
	
  6.03

  	
  Notices

  	
   

  
	
  6.04

  	
  Payment of Obligations

  	
   

  
	
  6.05

  	
  Preservation of Existence,
  Etc

  	
   

  
	
  6.06

  	
  Maintenance of Properties

  	
   

  
	
  6.07

  	
  Maintenance of Insurance

  	
   

  
	
  6.08

  	
  Compliance with Laws

  	
   

  
	
  6.09

  	
  Books and Records

  	
   

  
	
  6.10

  	
  Inspection Rights

  	
   

  
	
  6.11

  	
  Use of Proceeds

  	
   

  
	
  6.12

  	
  Approvals and Authorizations

  	
   

  
	
  6.13

  	
  Amendments to
  Governing Documents

  	
   

  
	
  6.14

  	
  Additional Subsidiary
  Guarantors

  	
   

  
	
  6.15

  	
  Foreign Subsidiary
  Guarantors

  	
   

  
	
  6.16

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. NEGATIVE COVENANTS

  	
   

  
	
  7.01

  	
  Liens

  	
   

  
	
  7.02

  	
  Investments

  	
   

  
	
  7.03

  	
  Indebtedness

  	
   

  
	
  7.04

  	
  Fundamental
  Changes; Permitted Acquisitions

  	
   

  
	
  7.05

  	
  Dispositions

  	
   

  
	
  7.06

  	
  Restricted Payments

  	
   

  
	
  7.07

  	
  Change in Nature of
  Business

  	
   

  
				



 


ii





















 


	
  Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.08

  	
  Transactions with
  Affiliates

  	
   

  
	
  7.09

  	
  Burdensome Agreements

  	
   

  
	
  7.10

  	
  Use of Proceeds

  	
   

  
	
  7.11

  	
  Modification of
  Organization Documents

  	
   

  
	
  7.12

  	
  Senior Note Documents

  	
   

  
	
  7.13

  	
  Financial Covenants.

  	
   

  
	
  7.14

  	
  Swap Contracts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. EVENTS OF DEFAULT AND
  REMEDIES

  	
   

  
	
  8.01

  	
  Events of Default

  	
   

  
	
  8.02

  	
  Remedies Upon Event of
  Default

  	
   

  
	
  8.03

  	
  Application of Funds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX. ADMINISTRATIVE AGENT

  	
   

  
	
  9.01

  	
  Appointment and Authority.

  	
   

  
	
  9.02

  	
  Rights as a Lender

  	
   

  
	
  9.03

  	
  Exculpatory Provisions

  	
   

  
	
  9.04

  	
  Reliance by
  Administrative Agent.

  	
   

  
	
  9.05

  	
  Delegation of Duties

  	
   

  
	
  9.06

  	
  Resignation of
  Administrative Agent

  	
   

  
	
  9.07

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
   

  
	
  9.08

  	
  No Other Duties, Etc

  	
   

  
	
  9.09

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  
	
  9.10

  	
  Guaranty Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X. MISCELLANEOUS

  	
   

  
	
  10.01

  	
  Amendments, Etc

  	
   

  
	
  10.02

  	
  Notices; Effectiveness; Electronic
  Communication.

  	
   

  
	
  10.03

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  10.04

  	
  Expenses; Indemnity; Damage Waiver.

  	
   

  
	
  10.05

  	
  Payments Set Aside

  	
   

  
	
  10.06

  	
  Successors and Assigns.

  	
   

  
	
  10.07

  	
  Treatment of Certain
  Information; Confidentiality

  	
   

  
	
  10.08

  	
  Right of Setoff

  	
   

  
	
  10.09

  	
  Interest Rate Limitation

  	
   

  
	
  10.10

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
  10.11

  	
  Survival of
  Representations and Warranties

  	
   

  
	
  10.12

  	
  Severability

  	
   

  
	
  10.13

  	
  Replacement of Lenders

  	
   

  
	
  10.14

  	
  Governing Law; Jurisdiction; Etc.

  	
   

  
	
  10.15

  	
  Waiver of Jury Trial

  	
   

  
	
  10.16

  	
  USA PATRIOT Act Notice

  	
   

  
	
  10.17

  	
  Judgment Currency

  	
   

  
				



 


iii





















 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.01

  	
  Existing
  Letters of Credit

  	
   

  
	
  2.01

  	
  Commitments
  and Applicable Percentages

  	
   

  
	
  5.06

  	
  Litigation

  	
   

  
	
  5.09

  	
  Environmental
  Matters

  	
   

  
	
  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

  	
   

  
	
  I-1

  	
  Opinion
  of U.S. Counsel

  	
   

  
	
  I-2

  	
  Opinion
  of Dutch Counsel

  	
   

  



 


iv





















 


CREDIT AGREEMENT


 


This CREDIT AGREEMENT (this “Agreement”)
is entered into as of September 23,  2004,  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.


 


The Company has 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 as follows:


 


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:


 


“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.


 


“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’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.


 


1





















 


“Agreement” has the meaning
specified in the introductory paragraph hereto.


 


“Applicable Foreign Obligor 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.  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 Debt Rating as set
forth below:


 


Applicable Rate


 


	
  Pricing

  Level

  	
   

  	
  Debt Ratings

  S&P/Moody’s

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  	
  Facility

  Fee

  	
   

  	
  Eurocurrency Rate

  and

  Letter of Credit Fee

  	
   

  	
  Utilization

  Fee

  	
   

  
	
  1

  	
   

  	
  A-/A3 or better

  	
   

  	
   

  	
   

  	
  0.10

  	
  %

  	
  0.45

  	
  %

  	
  0.10

  	
  %

  
	
  2

  	
   

  	
  BBB+/Baa1

  	
   

  	
  <1.25

  	
   

  	
  0.125

  	
  %

  	
  0.50

  	
  %

  	
  0.10

  	
  %

  
	
  3

  	
   

  	
  BBB/Baa2

  	
   

  	
  >1.25 and <1.75

  	
   

  	
  0.15

  	
  %

  	
  0.60

  	
  %

  	
  0.125

  	
  %

  
	
  4

  	
   

  	
  BBB-/Baa3

  	
   

  	
  >1.75
  and <2.25

  	
   

  	
  0.20

  	
  %

  	
  0.80

  	
  %

  	
  0.15

  	
  %

  
	
  5

  	
   

  	
  BB+/Ba1 or worse

  	
   

  	
  >2.25

  	
   

  	
  0.25

  	
  %

  	
  1.00

  	
  %

  	
  0.20

  	
  %

  



 


“Debt Rating” means, as of any date
of determination, the rating as determined by either S&P or Moody’s
(collectively, the “Debt Ratings”) of the Company’s non-credit-enhanced,
senior unsecured long-term debt; provided
that if a Debt Rating is issued by each of the foregoing rating agencies, then
the higher of such Debt Ratings shall apply (with the Debt Rating for Pricing
Level 1 being the highest and the Debt Rating for Pricing Level 5 being the
lowest), unless there is a split in Debt Ratings of more than one level, in
which case the Pricing Level that is one level higher than the Pricing Level of
the lower Debt Rating shall apply. 
Initially, the Applicable Rate shall be determined based upon a Debt
Rating of BBB/Baa2.  After the Closing
Date, each change in the Applicable Rate resulting from a publicly announced
change in the Debt Rating shall be effective, in the case of an upgrade, during
the period commencing on the date of delivery by the Company to the
Administrative Agent of notice thereof pursuant to Section
6.03(e) and ending on the date immediately preceding the effective
date of the next such change and, in the case of a downgrade, during the period
commencing on the date of the public announcement thereof and ending on the
date immediately preceding the effective date of the next such change.


 


If at any time the Company shall not carry a Debt
Rating from either of S&P or Moody’s, “Applicable
Rate” shall mean, from time to time, the percentages per annum,
based upon the


 


2





















 


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)(iii),
as set forth above. 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)(iii);
provided, however,
that if a Compliance Certificate is not delivered when due in accordance with
either such Section, then Pricing Level 5 shall apply as of the first Business
Day after the date on which such Compliance Certificate was required to have
been delivered.


 


“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.


 


“Arranger” means Banc of America
Securities LLC, in its capacity as sole lead arranger and sole book manager.


 


“Assignment and Assumption” means
an assignment and assumption entered into by a Lender and an Eligible 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.


 


“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, 2003,
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.


 


3





















 


“Base Rate” means for any day a
fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate
plus 1/2 of 1% and (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.”  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
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.


 


“Borrowing” means a Committed
Borrowing or a Swing Line Borrowing, as the context may require.


 


“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 on which dealings in deposits in
Dollars are conducted by and between banks in the London interbank eurodollar
market; 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.


 


“Capital Expenditures” means, for any period and with respect to
any Person, the aggregate of all expenditures by such Person for the
acquisition or leasing of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and improvements during such
period) which should be capitalized under GAAP on a consolidated balance sheet
of such Person.


 


“Cash Collateralize” has the
meaning specified in Section 2.03(g)(iv).


 


“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


 


4





















 


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) 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 (such
right, an “option right”), whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of equity securities
of the Company representing 25% 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 and each
Subsidiary Guarantor.


 


“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.


 


5





















 


“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.


 


“Consolidated Fixed Charge Coverage
Ratio” means, as
of any date of determination, the ratio of (a) Consolidated Operating Cash Flow
for the period of the four fiscal quarters most recently ended to (b) Consolidated Total Debt Service for such period; provided,
however, when calculating the Consolidated Fixed Charge Coverage Ratio
for any period in which a Permitted Acquisition has occurred, the calculation
of the Consolidated Fixed Charge Coverage Ratio shall be made on a Pro Forma
Basis.


 


“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


 


6





















 


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 Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness 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.


 


“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 Operating Cash Flow” means, for any period, an
amount equal to (a) the sum of (i) Consolidated EBITDA for such period, minus (b) to the extent not already deducted in the
determination of Consolidated EBITDA, Capital Expenditures made during such
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.


 


“Consolidated Total Assets” means the total assets of the
Company and its Subsidiaries on a consolidated basis, determined in accordance
with GAAP.


 


“Consolidated Total Debt Service” means, with respect to the
Company and its Subsidiaries and for any period, the sum, without duplication,
of (a) Consolidated Total Interest Expense for such period plus (b) any and all
scheduled repayments of principal during such period in respect of Indebtedness
that becomes due and payable or that are to become due and payable during such
period pursuant to any agreement or instrument to which the Company or any of
its Subsidiaries is a party relating to (i) the borrowing of money or the
obtaining of credit, including the issuance of notes or bonds, (ii) the
deferred purchase price of assets (other than trade payables incurred in the
ordinary course of business and reimbursement obligations in respect of
commercial letters of credit or bankers acceptances incurred in the ordinary
course of business), (iii) in respect of any Synthetic Lease Obligations,
capital leases or Permitted Receivables Purchase Facilities, and (iv)
Indebtedness of the type referred to above of another Person guaranteed by the
Company or any of its Subsidiaries. 
Demand obligations shall be


 


7





















 


deemed to be due and payable during any fiscal period
during which such obligations are outstanding.


 


“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.


 


“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.


 


“Debt Rating” has the meaning specified in the definition of “Applicable
Rate.”


 


“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) 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)
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 any
Lender that (a) has failed to fund any portion of the Committed Loans,
participations in L/C Obligations or participations in Swing Line Loans
required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date


 


8





















 


when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.


 


“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 Subsidiary” means any
Subsidiary that is organized under the laws of any political subdivision of the
United States.


 


“Eligible Assignee” means (a) a
Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other
Person (other than a natural person) approved by (i) the Administrative Agent,
the L/C Issuer and the Swing Line Lender, and (ii) unless an Event of Default
has occurred and is continuing, the Company (each such approval not to be
unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include the
Company or any of the Company’s Affiliates or Subsidiaries; and provided
further, however, that an Eligible Assignee shall include only a
Lender, an Affiliate of a Lender or another Person, which, 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.


 


“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.


 


“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


 


9





















 


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) a withdrawal by the
Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it 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 Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an 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 Multiemployer Plan; or (f) 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.


 


“Euro” and “EUR”
mean the lawful currency of the Participating Member States introduced in
accordance with the EMU Legislation.


 


10





















 


“Eurocurrency Rate” means, for any
Interest Period with respect to a Eurocurrency Rate Loan, the rate per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two Business 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.  If such rate is
not available at such time for any reason, then the “Eurocurrency Rate” for
such Interest Period shall be 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 by Bank of America 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 Business Days prior to the commencement of such Interest Period.


 


“Eurocurrency Rate Loan” means a
Committed Loan that bears interest at a rate based on the 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.


 


“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 which it has a branch office or carries on a trade or business,
(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 and (c)
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 withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new Lending Office) or 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 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). 
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 Obligor to any Lender hereunder or under any other
Loan Document, provided that such Lender
shall have complied with the last paragraph of Section
3.01(e).


 


11





















 


“Existing Credit Agreement” means
that certain Revolving Credit Agreement, dated as of February 28, 2002, among
the Company, the Initial Designated Borrower, Watts Regulator Co., a
Massachusetts corporation, the financial institutions parties thereto from time
to time as lenders, and Fleet National Bank, as administrative agent, as
amended, restated, supplemented or otherwise modified from time to time prior
to the date hereof.


 


“Existing Letters of Credit” means, collectively, those letters of credit
issued by Fleet National Bank in favor of the Company or a Subsidiary prior to
the Closing Date and listed on Schedule 1.01.


 


“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.


 


“Fee Letter” means the letter
agreement, dated July 15, 2004, among the Company, the Administrative Agent and
the Arranger.


 


“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.  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 Obligor” means a Loan
Party that is a Foreign Subsidiary.


 


“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.


 


“FRB” means the Board of Governors
of the Federal Reserve System of the United States.


 


“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 business.


 


“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.


 


12





















 


“German Subsidiary” means any
Subsidiary of the Company organized under the laws of Germany or any political
subdivision thereof.


 


“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).


 


“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.


 


“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.


 


13





















 


“Increase Effective Date” has the
meaning specified in Section 2.15(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.


 


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.


 


“Indemnitees” has the meaning
specified in Section 10.04(b).


 


“Initial Designated Borrower” means
Watts Industries Europe B.V., a private company with limited liability
organized under the laws of The Netherlands.


 


14





















 


“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 Company 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.


 


“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.


 


“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 the L/C Issuer and relating to any such
Letter of Credit.


 


15





















 


“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 (i) with respect
to the Existing Letters of Credit, Fleet National Bank and (ii) with respect to
each other Letter of Credit, Bank of America in its capacity as issuer of
Letters of Credit hereunder or any successor issuer of Letters of Credit
hereunder.  All references contained in
this Agreement and the other Loan Documents to the “L/C Issuer” shall be deemed
to apply equally to each of the institutions referred to in clauses (i)
and (ii) of this definition in their respective capacities as issuers of
any and all Letters of Credit issued by each such institution.


 


“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.


 


“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
standby letter of credit issued hereunder and shall
include the Existing Letters of Credit.  Letters of Credit may be issued in Dollars or
in Euros.


 


“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.


 


16





















 


“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 $50,000,000.  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, the Fee Letter and the Guaranties.


 


“Loan Parties” means, collectively,
the Company, each Subsidiary Guarantor
and each Designated Borrower.


 


“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.


 


“Material Adverse Effect” means (a)
a material adverse change in, or a material adverse effect upon, the
operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects 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 September 23,
2009.


 


“Material Domestic Subsidiary”
means any Domestic Subsidiary of the Company listed on Schedule
5.19 or the most recent supplement thereto delivered in accordance
with Section 6.02(f) or 7.04(c)(iv),
as applicable.


 


“Moody’s” means Moody’s Investors Service, Inc. and any
successor thereto.


 


“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


 


17





















 


make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.


 


“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.


 


“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


 


18





















 


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.


 


“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.


 


“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.


 


“Pension Plan” means any “employee
pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other
than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by the Company or any ERISA Affiliate or to which the
Company or any ERISA Affiliate contributes or has an obligation to contribute,
or in the case of a multiple employer or other plan described in Section
4064(a) of ERISA, has made contributions at any time during the immediately
preceding five plan years.


 


“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


 


19





















 


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) 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.


 


“Person” means any natural person,
corporation, limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.


 


“Plan” means any “employee benefit
plan” (as such term is defined in Section 3(3) of ERISA) established by the
Company or, with respect to any such plan that is subject to Section 412 of the
Code or Title IV of ERISA, any ERISA Affiliate.


 


“Pro Forma Basis”  means,
with respect to any proposed Permitted Acquisition, the Consolidated Total Debt
Service, Consolidated Funded Indebtedness (or, in the case of Consolidated
Total Interest Expense, all Indebtedness), Consolidated EBITDA and Capital
Expenditures 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), (ii) and (iii) 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


 


20





















 


Acquisition which
was repaid concurrently with the consummation of the Permitted Acquisition, if
any, shall be deemed to have been repaid concurrently with the deemed
incurrence of the Indebtedness, if any, incurred in connection with the
Permitted Acquisition;


 


(ii)           all Indebtedness
assumed to have been incurred pursuant to the preceding clause (i), if
any, shall be deemed to have borne interest at the sum of (a) the arithmetic
mean of (x) the Eurocurrency Rate for Eurocurrency Rate Loans denominated in
Dollars having an Interest Period of one month in effect on the first day of
the Test Period and (y) the Eurocurrency Rate for Eurocurrency Rate Loans
denominated in Dollars having an Interest Period of one month in effect on the
last day of the Test Period plus (b) the Applicable Rate (after giving effect
to the Permitted Acquisition on a Pro Forma Basis); and


 


(iii)          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.


 


“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).


 


“Related Parties” means, with
respect to any Person, such Person’s Affiliates and the partners, directors,
officers, employees, agents 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


 


21





















 


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.


 


“Responsible Officer” means the
chief executive officer, president, chief financial officer or treasurer of a
Loan Party.  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, (iv) in the case of the Existing
Letters of Credit, the Closing Date and  (v)  such
additional dates as the Administrative Agent or the L/C Issuer shall determine
or the Required Lenders shall require.


 


“S&P” means Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc. and any successor thereto.


 


“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.


 


22





















 


“SEC” means the Securities and
Exchange Commission, or any Governmental Authority succeeding to any of its
principal functions.


 


“Senior Note Documents” means, collectively, the Senior Notes,
that certain Note Purchase Agreement, dated as of May 15, 2003, pursuant to
which the Company issued the Senior Notes and any other documents executed in
connection therewith, together with any permitted amendments, supplements or
modifications thereto.


 


“Senior Notes” mean, collectively, (i) the Company’s $50,000,000
4.87% Senior Notes, Series A, due May 15, 2010 and (ii) the Company’s
$75,000,000 5.47% Senior Notes, Series B, due May 15, 2013.


 


“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.


 


“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, (i) all of
the Company’s Material Domestic Subsidiaries as of the Closing Date, (ii) all
new Material Domestic Subsidiaries which become Subsidiary Guarantors in
accordance with Section 6.14 and (iii) all Foreign Subsidiaries of the
Company which become Subsidiary Guarantors in accordance with Section 6.15,
in each case, together with their respective successors and assigns.


 


“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


 


23





















 


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” means the revolving
credit facility made available by the Swing Line Lender pursuant to Section 2.04.


 


“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 Day” means any day on which
the Trans-European Automated Real-time Gross Settlement Express Transfer
(TARGET) payment system (or, if such payment system


 


24





















 


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.


 


“Taxes” means all present or future
taxes, levies, imposts, duties, deductions, withholdings, 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.


 


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


 


25





















 


Person’s
successors and assigns, (iii) the words “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.


 


(b)           Changes in GAAP. 
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.


 


1.04        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


 


26





















 


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.


 


1.05        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.


 


1.06        Times
of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).


 


1.07        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.


 


27





















 


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)
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


 


28





















 


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.


 


(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.


 


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


 


29





















 


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 at the request of the Company, and from and
after the Closing Date shall be subject to and governed by the terms and
conditions hereof.


 


(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;


 


30





















 


(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 $500,000;


 


(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)           a
default of any Lender’s obligations to fund under Section
2.03(c) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory arrangements
with the Company or such Lender to eliminate the L/C Issuer’s risk with respect
to such Lender.


 


(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 or
a person designated by a Responsible Officer thereof whose identity is notified
in writing to the Administration Agent. 
Such Letter of Credit Application must be received by the L/C Issuer and
the Administrative Agent (A) not later than 11:00 a.m. at least two Business
Days prior to the proposed issuance date or date of amendment, as the case may
be, of any Letter of Credit denominated in Dollars, and (B) not later than
11:00 a.m. at least ten Business Days prior to the proposed issuance date or
date of amendment, as the case may be, of any Letter of Credit denominated in
Euros; or in each case such later date and time as the Administrative Agent and
the L/C Issuer may agree in a particular instance in their sole discretion.  In the case of a request for an initial
issuance of a Letter of Credit, such Letter


 


31





















 


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 name of the applicant therefor 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.


 


(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 and
absolute 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


 


32





















 


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 five 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.


 


(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, 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 (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.


 


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(ii)           Each
Lender shall upon any notice pursuant to Section
2.03(c)(i) make funds available to the Administrative Agent 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.


 


(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),
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


 


34





















 


from time to time
in effect.  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.


 


(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
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s L/C Advance was outstanding) 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


 


35





















 


transmission or
otherwise of any document required in order to make a drawing under such Letter
of Credit;


 


(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


 


36





















 


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 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. 
(i)  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, 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.


 


(iv)          Sections 2.05, 2.06(b) and 8.02(c) set forth certain additional requirements
to deliver Cash Collateral hereunder. 
For purposes of this Section 2.03, Section 2.05, Section 2.06(b) and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the
Lenders).  Derivatives of such term have
corresponding meanings.  The Company hereby
grants to the Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in a
blocked interest-bearing deposit account at Bank of America.


 


37





















 


(h)           Applicability of ISP.  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), the rules of the ISP
shall apply to each Letter of Credit.


 


(i)            Letter of Credit Fees.  The Borrowers shall, jointly and severally,
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”) for each 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.  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 1.07. 
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.  The Borrowers
shall, jointly and severally, pay directly to the L/C Issuer for its own
account, in Dollars, a fronting fee with respect to each Letter of Credit at
the rate per annum specified in the 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, and 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.  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 1.07. 
In addition, the Borrowers shall, jointly and severally, pay directly to
the L/C Issuer for its own account, in Dollars, 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.


 


38





















 


2.04        Swing Line Loans.


 


(a)           The Swing Line. 
Subject to the terms and conditions set forth herein, the Swing Line
Lender agrees, in reliance upon the agreements of the other Lenders set forth
in this Section 2.04, to 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 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 either by (i)  crediting the account of the Company on the
books of the Swing Line Lender in Same Day Funds or (ii) wire transferring such
funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Swing Line Lender by the Company.


 


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(c)           Refinancing of Swing Line Loans.


 


(i)            The
Swing Line Lender at any time in its sole and absolute discretion may (and
shall no less than twice per calendar month) 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 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.  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.


 


(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,


 


40





















 


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 of such payment (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) 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. 
(a)  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 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


 


41





















 


amount
of such prepayment and the Type(s) of Committed Loans to be prepaid and, if
Eurocurrency 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.


 


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


 


42





















 


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 (h)
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.  (a) 
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.


 


2.08        Interest.  (a) 
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; (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; 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.


 


(b)           (i)  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.


 


43





















 


(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 times
the actual daily amount of the Aggregate Commitments regardless of usage (or,
if the Aggregate Commitments have terminated, on the Total Outstandings).  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 first such date to occur after the Closing Date, and on the Maturity
Date (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)           Utilization Fee. 
The Company shall pay to the Administrative Agent for the account of
each Lender in accordance with its Applicable Percentage, a utilization fee in
Dollars equal to the Applicable Rate times
the Total Outstandings on each day that the Total Outstandings exceed 50% of
the actual daily amount of the Aggregate Commitments then in effect (or, if
terminated, in effect immediately prior to such termination).  The utilization fee shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September
and December, commencing with the first such date to occur after the Closing
Date, and on the Maturity Date  (and, if
applicable, thereafter on demand).  The
utilization fee shall be calculated quarterly in arrears and if there is any
change in the Applicable Rate during any


 


44





















 


quarter,
the daily amount shall be computed and multiplied by the Applicable Rate for
each period during which such Applicable Rate was in effect.  The utilization fee shall accrue at all
times, including at any time during which one or more of the conditions in Article IV is not met.


 


(c)           Other Fees. 
(i)  The Company shall pay to the
Arranger and the Administrative Agent for their own respective accounts, in Dollars,
fees in the amounts and at the times specified in the Fee Letter.  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.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime 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.


 


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


 


45





















 


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.


 


(b)           (i)  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 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 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 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


 


46





















 


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.


 


(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 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 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 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


 


47





















 


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 a Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) 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 to the Company or any Subsidiary
thereof (as to which the provisions of this Section 2.13 shall apply).


 


Each Borrower 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
Borrower rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the
amount of such participation.


 


2.14        Designated
Borrowers.  (a) 
Effective as of the date hereof, the Initial Designated Borrower shall
be 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


 


48





















 


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)           The
Obligations of the Company and each Designated Borrower shall be joint and
several in nature.  Concurrently with the
delivery of each Designated Borrower Request and Assumption Agreement, the
related Applicable 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
form, content and scope reasonably satisfactory to the Administrative Agent.


 


(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        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


 


49





















 


time,
request an increase in the Aggregate Commitments by an amount (for all such
requests in the aggregate) not exceeding $75,000,000; 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
and the L/C Issuer (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 2.15, 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, in which
case they are true and correct in such respects as of such earlier date, and
except that for purposes of this Section 2.15,
the representations and warranties contained in subsections (a) and (b)
of Section 5.05 shall be deemed to refer to
the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01, 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 nonratable increase in the Commitments under this Section
2.15.


 


50





















 


(f)            Conflicting Provisions.  This Section 2.15 shall supersede any
provisions in Sections 2.13 or 10.01 to the contrary.


 


ARTICLE III.


TAXES,
YIELD PROTECTION AND ILLEGALITY


 


3.01        Taxes.


 


(a)           Payments Free of Taxes.  Any and all payments by or on account of any
obligation of the respective Borrowers hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided
that if the applicable Borrower shall be required by applicable law to deduct
any Indemnified Taxes (including any Other Taxes) from such payments, then (i)
the sum payable shall be increased as necessary so that after making 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 deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.


 


(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 law.


 


(c)           Indemnification by the Borrowers.  Each Borrower shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, 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) 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.  A certificate as to the
amount of 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.


 


(d)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority,
such Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.


 


(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which a Borrower is resident for tax purposes, or any treaty to
which such jurisdiction is a party, with respect to payments hereunder or under
any other Loan Document shall deliver to the Company (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested


 


51





















 


by
the Company or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the
Company or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Company or the
Administrative Agent as will enable the Company or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.


 


Without limiting the generality of the foregoing, in the event that a
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to 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 or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:


 


(i)            duly completed copies 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)           duly completed copies of Internal
Revenue Service Form W-8ECI,


 


(iii)          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 the applicable 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) duly completed copies of Internal
Revenue Service Form W-8BEN, or


 


(iv)          any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in United
States Federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the Company to
determine the withholding or deduction required to be made.


 


Without limiting the obligations of the Lenders set forth above
regarding delivery of certain forms and documents to establish each Lender’s
status for U.S. withholding tax purposes, each Lender agrees promptly to
deliver to the Administrative Agent or the Company, as the Administrative Agent
or the Company shall reasonably request, on or prior to the Closing Date, and
in a timely fashion thereafter, such other documents and forms required by any
relevant taxing authorities under the Laws of any other jurisdiction, duly
executed and completed by such Lender, as are required under such Laws to
confirm such Lender’s entitlement to any available exemption from, or reduction
of, applicable withholding taxes in respect of all payments to be made to such
Lender outside of the U.S. by the Borrowers pursuant to this Agreement or
otherwise to establish such Lender’s status for withholding tax purposes in
such other jurisdiction.  Each Lender
shall promptly (i) notify the Administrative Agent of any change in
circumstances which would modify or render invalid any such  claimed exemption or reduction, and (ii) take
such steps as shall not be materially disadvantageous to it, in the reasonable


 


52





















 


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 such jurisdiction that any Borrower make
any deduction or withholding for taxes from amounts payable to such
Lender.  Additionally, 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, 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.


 


(f)            Treatment of Certain Refunds.  If the Administrative Agent, any Lender or
the L/C Issuer determines, in its sole discretion, that it has received a
refund 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 (but only to the extent of indemnity payments made, or
additional amounts paid, by such Borrower under this Section 3.01 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of 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), 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 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 Eurocurrency Rate Loans (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, 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 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, 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, 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


 


53





















 


lawfully
continue to maintain such Eurocurrency Rate Loans.  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, (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 (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, the
Administrative Agent will promptly so notify the Company and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurocurrency Rate Loans in the affected currency or currencies
shall be suspended 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 any reserve requirement
contemplated by Section 3.04(e), other than
as set forth below) or the L/C Issuer;


 


(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 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); or


 


(iii)          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 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 Eurocurrency Loan
(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


 


54





















 


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.


 


(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, (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


 


55





















 


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;


 


(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.


 


56





















 


3.06        Mitigation Obligations; Replacement of
Lenders.


 


(a)           Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04, or 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 gives a notice pursuant to Section
3.02, then such Lender shall 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, 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 to any unreimbursed cost
or expense and would not otherwise be disadvantageous to such Lender.  The Company hereby agrees to pay (or to cause
the applicable Designated Borrower to pay) all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.


 


(b)           Replacement of Lenders.  If any Lender requests compensation under Section 3.04, 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 and repayment of all other Obligations hereunder.


 


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) a Guaranty executed by each Borrower and
each Material Domestic Subsidiary as of the Closing Date, 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


 


57





















 


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) Goodwin
Procter LLP, U.S. counsel to the Loan Parties, in the form attached hereto as Exhibit
I-1, and (ii) CMS Derks Star Busmann, Dutch counsel to the Initial
Designated Borrower, in the form attached hereto as Exhibit I-2, 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 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;


 


(vii)         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 has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;


 


(viii)        evidence that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and all Liens, if any,
securing obligations under the Existing Credit Agreement have been or
concurrently with the Closing Date are being released; and


 


(ix)           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.


 


(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 Section 9.04, for purposes of determining
compliance with the conditions specified in this Section
4.01, each Lender that has


 


58





















 


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 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 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 subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.


 


(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.


 


59





















 


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;
Compliance with Laws.  Each Loan Party and each Subsidiary thereof
(a) is duly organized or formed, validly existing and in good standing (to the
extent such concept is applicable to such entity) 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 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, (c) is duly qualified and is licensed and in 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, and (d)
is in compliance with all Laws; except in each case referred to in clause
(b)(i), (c) or (d), 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) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made 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; or (c) 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)
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.


 


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 the financial condition of the
Company and its Subsidiaries as of the


 


60





















 


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 liabilities for
taxes, material commitments and Indebtedness.


 


(b)           The
unaudited consolidated and consolidating
balance sheet of the Company and its Subsidiaries dated June 27, 2004, and the
related consolidated and consolidating statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended on that date
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, (ii)
fairly present the financial condition of the Company and its Subsidiaries as
of the date thereof and their results of operations for the period covered
thereby and (iii) show all material indebtedness and other liabilities, direct
or contingent, of the Company and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness,
subject, in the case of clauses (i), (ii) and (iii), to the
absence of footnotes and to normal year-end audit adjustments.


 


(c)           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 2004 to 2009 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.


 


(d)           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.


 


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 hereby, or
(b) except as specifically disclosed in Schedule 5.06,
either individually or in the aggregate, if determined adversely, 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.


 


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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, except as specifically disclosed in Schedule
5.09, 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.


 


5.11        Taxes.  The Company and its Subsidiaries have filed
all Federal, state and other material tax returns and reports required to be
filed, and have paid all Federal, state and other material taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except 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.  There is no proposed tax assessment against
the Company or any Subsidiary that would, if made, have a Material Adverse
Effect.  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 qualify under
Section 401(a) of the Code has received a favorable determination letter from
the IRS or an application for such a letter is currently being processed by the
IRS with respect thereto and, to the best knowledge of the Company, nothing has
occurred which could reasonably be expected to prevent, or cause the loss of,
such qualification.  The Company and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.


 


(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)(x)
No ERISA Event has occurred or is reasonably expected to occur; (y) neither the
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any


 


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liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); and (z) neither the
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan, that, in the case of the
foregoing clauses (x), (y) and (z) in the aggregate, 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 the Threshold Amount; (ii) no Pension Plan has
any Unfunded Pension Liability in excess of the Threshold Amount; and (iii)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA.


 


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; Public Utility Holding 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 (i) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, or (ii)
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 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


 


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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.


 


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.  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.  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
consented to by the Required Lenders) 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) the Senior Note Indenture 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), 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.


 


5.20        Representations as to Foreign Obligors.  Each of the Company and each Foreign Obligor
represents and warrants to the Administrative Agent and the Lenders that:


 


(a)           Such
Foreign Obligor is subject to civil and commercial Laws with respect to its
obligations under this Agreement and the other Loan Documents to which it is a
party


 


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(collectively
as to such Foreign Obligor, the “Applicable Foreign
Obligor Documents”), and the execution, delivery and performance by
such Foreign Obligor of the Applicable Foreign Obligor Documents constitute and
will constitute private and commercial acts and not public or governmental
acts.  Neither such Foreign Obligor 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 Obligor is organized and existing in respect
of its obligations under the Applicable Foreign Obligor Documents.


 


(b)           The
Applicable Foreign Obligor Documents are in proper legal form under the Laws of
the jurisdiction in which such Foreign Obligor is organized and existing for
the enforcement thereof against such Foreign Obligor under the Laws of such
jurisdiction, and to ensure the legality, validity, enforceability, priority or
admissibility in evidence of the Applicable Foreign Obligor Documents.  It is not necessary to ensure the legality,
validity, enforceability, priority or admissibility in evidence of the
Applicable Foreign Obligor Documents that the Applicable Foreign Obligor
Documents be filed, registered or recorded with, or executed or notarized
before, any court or other authority in the jurisdiction in which such Foreign
Obligor is organized and existing or that any registration charge or stamp or
similar tax be paid on or in respect of the Applicable Foreign Obligor
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 Obligor 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 Obligor is organized and existing either
(i) on or by virtue of the execution or delivery of the Applicable Foreign
Obligor Documents or (ii) on any payment to be made by such Foreign Obligor
pursuant to the Applicable Foreign Obligor Documents, except as has been
disclosed to the Administrative Agent.


 


(d)           The
execution, delivery and performance of the Applicable Foreign Obligor Documents
executed by such Foreign Obligor are, under applicable foreign exchange control
regulations of the jurisdiction in which such Foreign Obligor 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).


 


5.21        Dutch Companies.


 


(a)           Either
(i) none of the activities of the Initial Designated Borrower not related to
this Agreement or any of the Loan Documents has brought or will bring it within
the definition of a “credit institution” (kredientinstelling)
as defined in Section 1 of the Act on the Supervision of the Credit System 1992
(Wet Toezicht Kredietwezen 1992) (the “ASCI”)
or (ii) the Initial Designated Borrower has the benefit of either (x) an
appropriate individual dispensation given by the Dutch Central Bank (De Nederlandsche Bank N.V.) on the basis of Section 6
Sub-paragraph 3 of the ASCI or (y) an exemption on the basis of Section 6
Sub-paragraph 2 of the ASCI and, in


 


65





















 


either
case, the Company at all times has complied with all requirements applicable to
it under the ASCI and the regulations based on the ASCI.


 


(b)          
Entering into this Agreement and the other Loan Document and performing its
obligations hereunder and thereunder does not and will not bring the Initial
Designated Borrower within the definition of a “credit institution” (kredietinstelling) as defined in Section 1 of the ASCI
because the Initial Designated Borrower is and has always been the holding
company of a group of European industrial Subsidiaries and has always been
actively involved and concerned with the management and the business of its
Subsidiaries. The Initial Designated Borrower does not passively invest in any
of its Subsidiaries, nor has it done so in the past. The Loans and each previous
loan provided to the Initial Designated Borrower serve and have always served
solely and will only be used solely to support the activities and/or business
of its Subsidiaries. In the event the Initial Designated Borrower would change
any of the above characteristics of its business, it will always comply with
all applicable regulatory requirements (if any).


 


(c)           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.


 


(d)           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
available at http://www.treas.gov/offices/eotffc/ofac/sdn/ index.html, 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 and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, 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


 


66





















 


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 a report and opinion of an independent certified public
accountant 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 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 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 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, shareholders’
equity 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, shareholders’ equity 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;


 


67





















 


(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;


 


(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 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; and


 


(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.


 


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


 


68





















 


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 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.


 


6.03        Notices.  Promptly notify the Administrative Agent and
each Lender:


 


(a)           of
the occurrence of any Default;


 


(b)           of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, 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;


 


(c)           of
the occurrence of any ERISA Event;


 


(d)           of
any material change in accounting policies of, or financial reporting practices
by, the Company or any Subsidiary; and


 


(e)           of
any announcement by Moody’s or S&P of any change or, to the extent a
Responsible Officer of the Company has actual knowledge thereof, any possible
change in a Debt Rating.


 


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, all its
obligations and liabilities, including (a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when


 


69





















 


due
and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness; unless, in the case of
any matter described in clauses (a), (b), and (c) 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
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 (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 could
not reasonably be expected to have a Material Adverse Effect.


 


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 one such inspection per year (measured
beginning with the


 


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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, Capital Expenditures and Permitted Acquisitions, 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 Obligor
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 Obligor 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 Subsidiary Guarantors.  In
addition to causing each Material Domestic Subsidiary as of the Closing Date 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)(iii) which supplement indicates that such Subsidiary has become a
Material Domestic Subsidiary, to (x) become a
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) and (iv) of Section
4.01(a) and, if
requested by the Administration 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) become a 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) 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


 


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the
documentation referred to in clause (x)), all in form, content and scope
reasonably satisfactory to the Administrative Agent.


 


6.16        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, 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;


 


(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;


 


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(h)           Liens
securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h) or securing
appeal or other surety bonds related to such judgments;


 


(i)            Liens
securing Indebtedness permitted under Sections 7.03(f)
and 7.03(j); and


 


(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(g).


 


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 the Sarbanes-Oxley Act of 2002 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;


 


(d)           Investments
of any Loan Party in any other Loan Party;


 


(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 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, not to exceed $25,000,000 in the aggregate at any time
outstanding; and


 


(h)           Investments
in Permitted Acquisitions.


 


7.03        Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:


 


(a)           Indebtedness
under the Loan Documents;


 


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(b)           Indebtedness
outstanding on the date hereof and listed on Schedule
7.03 and not otherwise permitted under this Section 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 (i)
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;” and
(ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;


 


(d)           unsecured
Indebtedness of the Company (including, without limitation, the Senior Notes);


 


(e)           unsecured
Indebtedness of any Subsidiary of the Company (other than Watts Germany or any
Subsidiary thereof) in an aggregate principal amount not to exceed $30,000,000
at any time outstanding;


 


(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) in an aggregate principal amount not to exceed $50,000,000 at
any time outstanding;


 


(g)           Indebtedness
of Watts Germany or any Subsidiary thereof in an aggregate principal amount not
to exceed $50,000,000 at any time outstanding; provided
that no Loan Party shall provide a Guarantee of such Indebtedness other than
(i) any Subsidiary of Watts Germany or (ii) any German Subsidiary of which
Watts Germany is a Subsidiary;


 


(h)           except as set forth in Section 7.03(g), Guarantees
of any Loan Party in respect of Indebtedness otherwise permitted hereunder of
any Loan Party;


 


(i)            unsecured
Indebtedness of any Loan Party to any other Loan Party; and


 


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(j)            Indebtedness
of any Subsidiary of the Company that is not a Loan Party to any Loan Party in
an aggregate principal amount not to exceed $20,000,000 at any time
outstanding.


 


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 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 (x) when
any Designated Borrower is liquidating or dissolving into, or merging with and
into, another Subsidiary, a Designated Borrower shall be the continuing or
surviving Person and (y) when any Subsidiary
Guarantor  is liquidating
or dissolving into, or merging with and into, another Subsidiary other than any
Designated Borrower, a 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 if the transferor in such a transaction is a 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 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 Person to be acquired has approved such Acquisition;


 


(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 $50,000,000, 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 (1) demonstrating that the Consolidated Leverage Ratio as of
the end of the most recent fiscal quarter does not exceed 2.75:1.00 and (2)
demonstrating compliance with the financial covenants set forth in Section
7.13(a) and (b) as of the end of the most recently completed fiscal
quarter, (B) a supplement to Schedule 5.19 setting forth 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) 


 


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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;


 


(v)           in the case of an
Acquisition of Equity Interests by the Company or such Subsidiary, the issuer
of such Equity Interests shall become a 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;


 


(viii)        the aggregate
Purchase Price for such Acquisition (or any series of related Acquisitions)
shall not exceed $100,000,000; and


 


(ix)           the Consolidated
Leverage Ratio immediately after giving effect to such Acquisition on a Pro
Forma Basis shall not exceed 2.75:1.00.


 


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 any Subsidiary to the Company or to a wholly-owned Subsidiary; provided that if the transferor of such property
is a Loan Party, the transferee thereof must be a Loan Party;


 


(f)            Dispositions
permitted by Section 7.04;


 


(g)           Dispositions
by the Company and its Subsidiaries of property pursuant to sale-leaseback
transactions, provided that the book value of all property so Disposed of
shall not exceed $25,000,000 from and after the Closing Date;


 


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(h)           licenses
of IP Rights, which licenses shall not, in the case of any license resulting in
annual payments to the Company or any Subsidiary in excess of 1% of total consolidated
sales of the Company during any such year, have a term exceeding fifteen years;
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 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 or the Senior
Note Documents) 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 Subsidiary
Guarantor to Guarantee the Indebtedness of the Company or (iii) 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 (iii) 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.


 


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


 


77





















 


purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.


 


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) $ 350,000,000, (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 June 27, 2004  (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
Fixed Charge Coverage Ratio.  Permit the Consolidated Fixed Charge Coverage
Ratio as of the end of any fiscal quarter of the Company to be less than
3.00:1:00.


 


(c)           Consolidated
Leverage Ratio.  Permit the Consolidated Leverage Ratio at the end of
any fiscal quarter of the Company to be greater than 3.00:1.00.


 


7.14        Swap Contracts.  Enter into any Swap
Contract except for Swap Contracts that are (or were) entered into in the
ordinary course of the Company’s or such Subsidiary’s business for the purpose
of mitigating risks associated with liabilities, commitments, investments,
assets, earnings or properties held or reasonably anticipated by the Company or
such Subsidiary, as applicable, and not for purposes of speculation.


 


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


 


78





















 


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


 


 (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 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


 


79





















 


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


 


(f)            Insolvency Proceedings, Etc.  Any Loan Party or any of its Subsidiaries
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 Loan Party or any of its Subsidiaries
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
Loan Party or any of its Subsidiaries fails to contest in good faith any such
appointment or proceeding); or


 


(g)           Inability to Pay Debts; Attachment.  (i) The Company or any Subsidiary 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 Company or any Subsidiary (i) a final
judgment or order 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 the Threshold Amount, 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 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


 


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obligation under any Loan Document, or purports to revoke, terminate or
rescind any provision of any
Loan Document; or


 


(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 and the Lenders all rights and remedies available to it and
the Lenders 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.  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), any amounts
received on account of the Obligations shall 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;


 


Second, to payment of that
portion of the Obligations constituting fees, indemnities and other amounts
(other than principal and interest) 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


 


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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 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 constituting Guaranteed
Swap Obligations, 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;


 


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.


 


Subject to Section 2.03(c), amounts
used to Cash Collateralize the aggregate undrawn amount of Letters of Credit
pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash
Collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the
order set forth above.


 


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 “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.


 


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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 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.


 


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 


 


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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 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


 


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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
arrangement 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
Bookrunners, 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 receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or 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:


 


(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


 


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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 to authorize the Administrative
Agent to vote in respect of the claim of any Lender 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.  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:


 


(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 (or reinstate any Commitment
terminated pursuant to Section 8.02) or
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, in any case without the written consent of such Lender;


 


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(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
any Borrower from the Guaranties or all or
substantially all of the Subsidiary Guarantors from the Guaranties
without the written consent of each Lender;


 


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 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)
the 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, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.


 


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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.


 


Notices sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices 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
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.


 


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)           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


 


88





















 


communications hereunder by notice to the Company, the Administrative
Agent, the L/C Issuer and the Swing Line Lender.


 


(d)           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.  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.


 


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”)


 


89





















 


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 or the consummation of the transactions contemplated hereby or
thereby, (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, contributory or sole 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 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


 


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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 by it 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.


 


(e)           Payments. 
All amounts due under this Section 10.04 shall be payable not
later than fifteen Business Days after demand therefor.


 


(f)            Survival. 
The agreements in this Section 10.04 shall survive the
resignation of the Administrative Agent and the
L/C Issuer, 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 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


 


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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 Eligible 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


 


(i)            except 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 or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, 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);


 


(ii)           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
rights in respect of Swing Line Loans;


 


(iii)          any assignment of a Commitment must be
approved by the Administrative Agent, the L/C Issuer (as described in clause
(ii) of the definition thereof), the Swing Line Lender and, so long as no
Event of Default has occurred and is continuing, the Company and the Initial
Designated Borrower, unless the Person that is the proposed assignee is itself
a Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); provided, that such consents shall not be
unreasonably withheld; and


 


(iv)          the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500, and the Eligible
Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire


 


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 Eligible 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 


 


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obligations under 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, acting solely for this purpose as an agent of
the Borrowers, 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”).  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. 
The Register shall be available for inspection by each of the Borrowers
and the L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice.  In addition, at any time
that a request for a consent for a material or substantive change to the Loan
Documents is pending, any Lender wishing to consult with other Lenders in
connection therewith may request and receive from the Administrative Agent a
copy of the Register.


 


(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 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.


 


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(e)           Limitation 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 that would be a Foreign Lender if it were a Lender 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)           Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption 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.


 


(h)           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 and obligations 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).


 


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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,
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.


 


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 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.  The
rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section 10.08 are in addition to


 


95





















 


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 shall be
effective as delivery of a manually executed counterpart of this Agreement.


 


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


 


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invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.


 


10.13      Replacement of Lenders.  If any Lender requests compensation under Section 3.04, 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 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


 


(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.


 


(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


 


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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.


 


(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      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


 


98





















 


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.


 


10.17      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 the Lenders 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 of any sum adjudged to be so due in the Judgment
Currency, the Administrative Agent 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 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 the Person to whom such obligation was owing against
such loss.  If the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent in such currency, the Administrative Agent agrees to
return the amount of any excess to such Borrower (or to any other Person who
may be entitled thereto under applicable law).


 


99





















 


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/ Johan van Kouterik

  	
   

  
	
   

  	
  Name: Johan van Kouterik

  
	
   

  	
  Title: CFO Europe & Vice President

  
						



 


Signature Page to

Credit Agreement


 





















 


	
   

  	
  BANK
  OF AMERICA, N.A., as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A Johanson

  	
   

  
	
   

  	
  Name: David A. Johanson

  
	
   

  	
  Title: Vice President

  



 





















 


	
   

  	
  BANK
  OF AMERICA, N.A., as a Lender, an

  L/C Issuer and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer L. Gerdes

  	
   

  
	
   

  	
  Name: Jennifer L. Gerdes

  
	
   

  	
  Title: Senior Vice President

  



 





















 


	
   

  	
  JPMORGAN CHASE
  BANK, as a

  Syndication Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  A. Neil Sweeny

  	
   

  
	
   

  	
  Name: A. Neil Sweeny

  
	
   

  	
  Title: Vice President

  



 





















 


	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION, as a Syndication
  Agent

  and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sarah T. Warren

  	
   

  
	
   

  	
  Name: Sarah T. Warren

  
	
   

  	
  Title: Director

  



 





















 


	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  as a Documentation Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. Purcell

  	
   

  
	
   

  	
  Name: Thomas J. Purcell

  
	
   

  	
  Title: Senior Vice President

  



 





















 


	
   

  	
  SUNTRUST
  BANK, as a Documentation

  Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian M. Davis

  	
   

  
	
   

  	
  Name: Brian M. Davis

  
	
   

  	
  Title: Director

  



 





















 


	
   

  	
  HSBC BANK USA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick Doulin

  	
   

  
	
   

  	
  Name: Patrick Doulin

  
	
   

  	
  Title: Senior Vice President

  



 





















 


	
   

  	
  LASALLE BANK NATIONAL

  ASSOCIATION, as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary A. Pirri

  	
   

  
	
   

  	
  Name: Gary A. Pirri

  
	
   

  	
  Title: S.V.P.

  



 





















 


	
   

  	
  CITIZENS
  BANK OF MASSACHUSETTS,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephanie Epkins

  	
   

  
	
   

  	
  Name: Stephanie Epkins

  
	
   

  	
  Title: VP

  



 





















 


	
   

  	
  CALYON NEW YORK BRANCH,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott R. Chappelka

  	
   

  
	
   

  	
  Name: Scott R. Chappelka

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rod Hurst

  	
   

  
	
   

  	
  Name: Rod Hurst

  
	
   

  	
  Title: Director

  
						



 





















 


	
   

  	
  BROWN BROTHERS HARRIMAN & CO.,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John D. Rogers

  	
   

  
	
   

  	
  Name: John D. Rogers

  
	
   

  	
  Title: Senior Vice President

  



 





















 


	
   

  	
  FLEET
  NATIONAL BANK, as an L/C Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Johanson

  	
   

  
	
   

  	
  Name: David A. Johanson

  
	
   

  	
  Title: Vice President

  



 





















 


SCHEDULE 1.01


 


EXISTING LETTERS OF CREDIT


 


	
  Issuer

  	
   

  	
  L/C

  Number

  	
   

  	
  Face Amount

  	
   

  	
  Expiry

  Date

  	
   

  	
  Beneficiary

  	
   

  
	
  Fleet National
  Bank

  	
   

  	
  1S50087912

  	
   

  	
  $

  	
  11,946,007.00

  	
   

  	
  6/30/2005

  	
   

  	
  Zurich-American Insurance Company

  	
   

  
	
  Fleet National
  Bank

  	
   

  	
  1S1305680

  	
   

  	
  $

  	
  20,195,267.00

  	
   

  	
  12/31/2004

  	
   

  	
  Ace Property and Casualty Insurance Company and
  Pacific Employers’ Insurance Company

  	
   

  



 


1





















 


SCHEDULE 2.01


COMMITMENTS

AND APPLICABLE PERCENTAGES


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Applicable

  Percentage

  	
   

  
	
  Bank of America,
  N.A.

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  13.333333333

  	
  %

  
	
  JPMorgan Chase
  Bank

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  11.666666667

  	
  %

  
	
  Wachovia Bank,
  National Association

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  11.666666667

  	
  %

  
	
  KeyBank National
  Association

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  11.666666667

  	
  %

  
	
  SunTrust Bank

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  11.666666667

  	
  %

  
	
  HSBC Bank USA,
  N.A.

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  10.000000000

  	
  %

  
	
  LaSalle Bank
  National Association

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  8.333333333

  	
  %

  
	
  Citizens Bank of
  Massachusetts

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  8.333333333

  	
  %

  
	
  Calyon New York
  Branch

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  8.333333333

  	
  %

  
	
  Brown Brothers
  Harriman & Co.

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  5.000000000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  300,000,000

  	
   

  	
  100.000000000

  	
  %

  



 


A-1





















 


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
September 23, 2004 (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):


 


o    A
Borrowing of Committed Loans            o     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-2





















 


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
September 23, 2004 (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





















 


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 September 23, 2004
(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.


 


	
   

  	
  WATTS
  WATER TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
  OR

  



 


C-1





















 


	
   

  	
  [APPLICABLE
  DESIGNATED BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


C-2





















 


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





















 


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
September 23, 2004 (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





















 


[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—


 


[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 subsections
(a) and (b) of Section 5.05 of
the Agreement shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the
statements in connection with which this Compliance Certificate is delivered.


 


5.             The financial
covenant analyses and information set forth on Schedule
2 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





















 


SCHEDULE 1

to the Compliance Certificate


 


FINANCIAL
STATEMENTS


 


See attached.


 


D-3





















 


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.


 


	
  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 June 27, 2004 (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
  $350,000,000):

  	
  $                    

  
	
   

  	
   

  	
   

  
	
  E.

  	
  Excess
  (deficiency) for covenant compliance (Line I.A — I.D):

  	
  $                    

  



 


II.            Section
7.13(b) – Consolidated Fixed Charge Coverage Ratio.


 


	
  A.

  	
  Consolidated
  Operating Cash Flow for four consecutive fiscal quarters ending on above date
  (“Subject Period”):

  
	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated
  EBITDA for Subject Period (Schedule 3):

  	
  $                    

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Capital
  Expenditures for Subject Period:

  	
  $                    

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Consolidated
  Operating Cash Flow (Lines II.A.1 — 2):

  	
  $                    

  
	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Consolidated
  Total Debt Service for Subject Period:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated
  Total Interest Expense for Subject Period

  	
  $                    

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Scheduled
  repayments of principal during Subject Period

  	
  $                    

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Consolidated
  Total Debt Service (Lines II.B.1 + 2):

  	
  $                    

  
	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
  Consolidated
  Fixed Charge Coverage Ratio (Line II.A.3  ̧
  Line II.B.3):

  	
                  
  to 1

  
	
   

  	
   

  	
   

  
	
  D.

  	
  Minimum required
  Fixed Charge Coverage Ratio:

  	
  3.00 to 1

  



 


D-4





















 


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


 


	
  A.

  	
  Consolidated Funded Indebtedness at Statement
  Date:

  	
  $                    

  
	
   

  	
   

  	
   

  
	
  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

  	
  3.00 to 1

  



 


D-5





















 


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


 


SCHEDULE 3

to the Compliance Certificate

($ in 000’s)


 


Consolidated EBITDA

(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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


D-6





















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 [Insert
name of Assignor] (the “Assignor”)
and [Insert name of Assignee] (the “Assignee”).  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, and the 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 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 pursuant to clauses (i)
and (ii) above being referred to herein collectively as, the “Assigned Interest”).  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:
                                                            [and
is an Affiliate/Approved Fund of [identify
Lender]]


 


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


 


4.             Credit Agreement:    Credit
Agreement, dated as of September 23, 2004, 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


 


5.             Assigned Interest:


 


E-1





















 


	
  Facility Assigned

  	
   

  	
  Aggregate

  Amount of

  Commitment

  for all Lenders*

  	
   

  	
  Amount of

  Commitment

  Assigned*

  	
   

  	
  Percentage Assigned

  of

  Commitment(1)

  	
   

  	
  CUSIP Number

  	
   

  
	
  Revolving Credit
  Commitment

  	
   

  	
  $

  	
   

  	
  $

  	
  %

  	
   

  	
   

  	
   

  	
   

  



 


[6.            Trade
Date:                             ](2)


 


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:


 


 


	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Consented to and Accepted:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A., as

  	
   

  
	
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
							



 










*  Amount to be adjusted by
the counterparties to take into account any payments or prepayments made
between the Trade Date and the Effective Date.


 


(1)  Set forth,
to at Least 9 decimals, as a percentage of the Commitment/Loans of all Lenders
thereunder.


 


(2)  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





















 


	
  Consented to:

  
	
   

  
	
  BANK OF AMERICA, N.A., as

  
	
  Swing Line Lender and L/C Issuer

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  
	
   

  
	
  [WATTS WATER TECHNOLOGIES, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:]

  



 


E-3





















 


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 Assigned Interest, (ii) the
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 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 requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
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 Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
6.01 thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) 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 Assignee; and (b) agrees that (i) it will, independently and
without reliance on 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 Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the


 


E-4





















 


Effective Date and to the 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-5





















 


EXHIBIT F


 


FORM OF GUARANTY
AGREEMENT


 


See attached.


 


F-1





















 


EXECUTION COPY


 


GUARANTY


 


This GUARANTY (this “Guaranty”), dated as of
September 23, 2004, is made by Watts Water Technologies, Inc., a Delaware
corporation (the “Company”), the Subsidiaries of the Company set forth
on the signature pages hereto (the “Initial Subsidiary Guarantors”),
Watts Industries Europe B.V., a private company with limited liability
organized under the laws of The Netherlands (“Watts Europe” and,
together with the Company, the Initial Subsidiary Guarantors and any additional
Subsidiaries of the Company that become parties to this Guaranty by executing a
Supplement hereto in the form attached hereto as Annex I, the “Guarantors”),
in favor of Bank of America, N.A., as Administrative Agent (in such capacity, “Administrative
Agent”) for the Lenders pursuant to the Credit Agreement hereinafter
defined.


 


PRELIMINARY STATEMENTS


 


WHEREAS, pursuant to that certain Credit Agreement
dated as of the date hereof by and among the Company, certain Subsidiaries of
the Company party thereto pursuant to Section 2.14 thereof (the “Designated
Borrowers” and, collectively with the Company, the “Borrowers”), the
Lenders, the L/C Issuer and the Administrative Agent (as from time to time
amended, restated, supplemented or otherwise modified, the “Credit Agreement”),
Lenders have agreed to make Loans and provide other financial accommodations to
the Borrowers;


 


WHEREAS, the Company is the parent of each Designated
Borrower, and as such will derive direct and indirect economic benefits from
the making of the Loans and other financial accommodations provided to the Designated
Borrowers pursuant to the Credit Agreement;


 


WHEREAS, each Designated Borrower is, with respect to
the Company and each other Designated Borrower, a direct or indirect Subsidiary
thereof and/or commonly owned and controlled by the Company, and as such will
derive direct and indirect economic benefits from the making of the Loans and
other financial accommodations provided to such other Borrowers pursuant to the
Credit Agreement; and


 


WHEREAS, each Guarantor is, with respect to each
Borrower, a direct or indirect Subsidiary thereof and/or commonly owned and
controlled by the Company, and as such will derive direct and indirect economic
benefits from the making of the Loans and other financial accommodations
provided to the Borrowers pursuant to the Credit Agreement; and


 


WHEREAS, in order to induce Administrative Agent and
Lenders to enter into the Credit Agreement and other Loan Documents and to
induce Lenders to make the Loans and other financial accommodations as provided
for in the Credit Agreement, (i) each Borrower has agreed to become jointly and
severally liable for the Obligations of all of the Borrowers pursuant to an
unconditional guaranty of the payment of the Obligations of each other Borrower
and (ii) the Guarantors have agreed to guarantee payment of the Obligations of
all of the Borrowers.


 


1





















 


NOW, THEREFORE, in consideration of the premises and
the covenants hereinafter contained, and to induce Lenders to provide the Loans
and other financial accommodations under the Credit Agreement, it is agreed as
follows:


 


1.             Guaranty.  Each Guarantor hereby, jointly and severally,
absolutely and unconditionally guarantees, as a guarantee of payment and not
merely as a guarantee of collection, prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of any
and all existing and future Obligations of the all of the Borrowers to the
Administrative Agent, the Lenders, the L/C Issuer and the Affiliates of the
foregoing to whom Obligations are owed, and the respective successors,
endorsees, transferees and assigns of each of the foregoing (each a “Holder
of Obligations” and collectively the “Holders of Obligations”)
(including all renewals, extensions and modifications thereof and all costs,
reasonable attorneys’ fees and expenses incurred by the Holders of Obligations
in connection with the collection or enforcement thereof) (collectively, the “Guaranteed
Obligations”).  This Guaranty shall
not be affected by the genuineness, validity, regularity or enforceability of
the Guaranteed Obligations or any instrument or agreement evidencing any
Guaranteed Obligations, or by the existence, validity, enforceability,
perfection, or extent of any collateral therefor, or by any fact or
circumstance relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of any Guarantor under this
Guaranty.  Notwithstanding any provision
herein contained to the contrary, each Guarantor’s liability hereunder shall be
limited to an amount not to exceed as of any date of determination the greater
of: (a) the net amount of all Loans and other extensions of credit (including
Letters of Credit) advanced to another Loan Party under the Credit Agreement
and directly or indirectly re-loaned or otherwise transferred to, or incurred
for the benefit of, such Guarantor, plus interest thereon at the applicable
rate specified in the Credit Agreement; or (b) the amount which could be
claimed by the Administrative Agent and the Holders of Obligations from such
Guarantor under this Guaranty without rendering such claim voidable or
avoidable under Section 548 of the Bankruptcy Code of the United States or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.


 


2.             No Setoff or Deductions; Taxes. The
Guarantors hereby represent, warrant and jointly and severally agree that, as
of the date of this Guaranty, their obligations under this Guaranty are not
subject to any offsets or defenses against the Administrative Agent or the
Holders of Obligations or any other guarantor of the Guaranteed Obligations of
any kind. The Guarantors further jointly and severally agree that their
obligations under this Guaranty shall not be subject to any counterclaims,
offsets or defenses against the Administrative Agent or any Holder of
Obligation or any other guarantor of the Guaranteed Obligations of any kind
which may arise in the future.  All
payments required to be made by each Guarantor hereunder shall be made to the
Holders of Obligations free and clear of, and without deduction for, any and
all present and future taxes.  If any
Guarantor shall be required by law to deduct any taxes from or in respect of any
sum payable hereunder, (a) the sum payable shall be increased as much as shall
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2) the Holders
of Obligations receive an amount equal to the sum they would have received had
no such deductions been made, (b) such Guarantor shall make such deductions,
and (c) such Guarantor shall pay the full amount deducted to the relevant
taxing or other authority in accordance with applicable law.  Within thirty (30) days after the date of any
payment of such taxes, each applicable Guarantor shall 


 


2





















 


furnish to the Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof.
Each Guarantor shall jointly and severally indemnify and, within ten business
(10) days of written demand therefor, pay each Holder of Obligations for the
full amount of taxes paid by any Holder of Obligations in respect of any sum payable
hereunder (including any taxes imposed on any Holder of Obligations by any
jurisdiction on amounts payable under this Section 2) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such taxes were correctly or legally asserted.


 


3.             No Termination.  This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed Obligations and any other
amounts payable under this Guaranty are indefeasibly paid and performed in full
and any commitments of the Lenders or facilities provided by the Lenders with
respect to the Guaranteed Obligations are terminated.  Payment by Guarantors shall be made to the
Administrative Agent in immediately available funds in Dollars or, as
applicable, such other currency in which the related Guaranteed Obligations are
required to be paid pursuant to the Credit Agreement, and shall be credited and
applied to the Guaranteed Obligations.


 


4.             Waiver of Notices.  Each Guarantor waives notice of the
acceptance of this Guaranty and of the extension or continuation of the
Guaranteed Obligations or any part thereof. Each Guarantor further waives
presentment, protest, notice, dishonor or default, demand for payment and any
other notices to which such Guarantor might otherwise be entitled.


 


5.             Subrogation.  No Guarantor shall exercise any right of
subrogation, contribution or similar rights with respect to any payments it makes
under this Guaranty until all of the Guaranteed Obligations and any amounts
payable under this Guaranty are indefeasibly paid and performed in full and any
commitments of the Lenders or facilities provided by the Lenders with respect
to the Guaranteed Obligations are terminated. 
If any amounts are paid to any Guarantor in violation of the foregoing
limitation, then such amounts shall be held in trust for the benefit of the
Holders of Obligations and shall promptly be paid to the Administrative Agent and
shall be credited and applied to the Guaranteed Obligations, whether matured or
unmatured.


 


6.             Indemnification.  To the extent that any Guarantor shall make a
payment under this Guaranty (any such payment, a “Guarantor Payment”)
that, taking into account all other Guarantor Payments then previously or
concurrently made by any other Guarantor, exceeds the amount that such
Guarantor would otherwise have paid if each Guarantor had paid the aggregate
Guaranteed Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor’s “Allocable Amount” (as defined below) (as
determined immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of each of the Guarantors as determined immediately prior to
the making of such Guarantor Payment, then, following the indefeasible payment
in full of all Guaranteed Obligations and any other amounts payable under this
Guaranty and the termination of any commitments of the Lenders or facilities
provided by the Lenders with respect to the Guaranteed Obligations, such
Guarantor shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Guarantor for the amount of
such excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment. 
As of any date of determination, the “Allocable Amount” of any Guarantor
shall be equal to the maximum amount of the claim that could then be recovered
from such Guarantor under this Guaranty without.


 


3





















 


rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code of the United
States, under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law. This Section 6
is intended only to define the relative rights of the Guarantors and nothing
set forth in this Section 6 is intended to or shall impair the
obligations of the Guarantors, jointly and severally, to pay any amounts as and
when the same shall become due and payable in accordance with the terms of this
Guaranty.  The rights of the parties
under this Section 6 shall be exercisable upon the full and indefeasible
payment of all Guaranteed Obligations and any other amounts payable under this
Guaranty and the termination of any commitments of the Lenders or facilities
provided by the Lenders with respect to the Guaranteed Obligations.  The parties hereto acknowledge that the
rights of contribution and indemnification hereunder shall constitute assets of
the Guarantor or Guarantors to which such contribution and indemnification is owing.


 


7.             Waiver of Suretyship Defenses.  Each Guarantor agrees that the Holders of
Obligations may, at any time and from time to time, and without notice to the
Guarantor, make any agreement with any Borrower or with any other person or
entity liable on any of the Guaranteed Obligations or providing collateral as
security for the Guaranteed Obligations, for the extension, renewal, payment,
compromise, discharge or release of the Guaranteed Obligations, any other
guarantor or any collateral (in whole or in part), or for any modification or
amendment of the terms thereof or of any instrument or agreement evidencing the
Guaranteed Obligations or the provision of collateral, all without in any way
impairing, releasing, discharging or otherwise affecting the obligations of
such Guarantor under this Guaranty.  Each
Guarantor waives any defense arising by reason of any disability or other defense
of any Borrower or any other guarantor, or the cessation from any cause
whatsoever of the liability of any Borrower, or any claim that such Guarantor’s
obligations exceed or are more burdensome than those of any Borrower and waives
the benefit of any statute of limitations affecting the liability of such
Guarantor hereunder.  Each Guarantor
waives any right to enforce any remedy which any Holder of Obligations now has
or may hereafter have against any Borrower and waives any benefit of and any
right to participate in any security now or hereafter held by any Holder of
Obligations.


 


8.             Exhaustion of Other Remedies Not Required.  The obligations of each Guarantor hereunder
are those of primary obligor, and not merely as surety, and are independent of
the Guaranteed Obligations.  Each
Guarantor waives diligence by the Holders of Obligations and action on
delinquency in respect of the Guaranteed Obligations or any part thereof,
including, without limitation any provisions of law requiring any Holder of Obligations
to exhaust any right or remedy or to take any action against any Borrower, any
other guarantor or any other person, entity or property before enforcing this
Guaranty against such Guarantor.


 


9.             Reinstatement.  Notwithstanding anything in this Guaranty to
the contrary, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any portion of the Guaranteed
Obligations is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Borrower or any other person or entity or otherwise, as if such payment had not
been made and whether or not the Administrative Agent or any other Holder of
Obligations is in possession of or has released this Guaranty and regardless of
any prior revocation, rescission, termination or reduction.


 


4





















 


10.          Subordination.  Each Guarantor hereby subordinates the
payment of all obligations and indebtedness of any Loan Party owing to such
Guarantor, whether now existing or hereafter arising, including but not limited
to any obligation of any Loan Party to such Guarantor as subrogee of the
Holders of Obligations or resulting from such Guarantor’s performance under
this Guaranty, to the indefeasible payment in full of all Guaranteed
Obligations. If the Administrative Agent, on behalf of the Holders of
Obligations, so requests, any such obligation or indebtedness of any Loan Party
to such Guarantor shall be enforced and performance received by such Guarantor
as trustee for the Holders of Obligations and the proceeds thereof shall be
paid over to the Administrative Agent on account of the Guaranteed Obligations
and shall be credited and applied to the Guaranteed Obligations, whether
matured or unmatured, but without reducing or affecting in any manner the
liability of any Guarantor under this Guaranty.


 


11.          Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Guaranteed Obligations is stayed, upon the
insolvency, bankruptcy or reorganization of any Borrower or any other person or
entity, or otherwise, all such amounts shall nonetheless be payable by each
Guarantor immediately upon demand by the Administrative Agent.


 


12.          Expenses. 
Each Guarantor shall pay on demand all out-of-pocket expenses (including
reasonable attorneys’ fees and expenses and the allocated cost and
disbursements of internal legal counsel) in any way relating to the enforcement
or protection of the Holders’ of Obligations rights under this Guaranty,
including any incurred in the preservation, protection or enforcement of any
rights of the Holders of Obligations in any case commenced by or against such
Guarantor under Chapter 11 of the Bankruptcy Code of the United States or any
similar or successor statute.  The
obligations of each Guarantor under the preceding sentence shall survive
termination of this Guaranty.


 


13.          Amendments.  No provision of this Guaranty may be waived,
amended, supplemented or modified, except by a written instrument executed by
the Administrative Agent and each Guarantor.


 


14.          No Waiver; Enforceability.  No failure by the Holders of Obligations to
exercise, and no delay in exercising, any right, remedy or power hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy or power hereunder preclude any other or further exercise
thereof or the exercise of any other right. 
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law or in equity.  The
unenforceability or invalidity of any provision of this Guaranty shall not
affect the enforceability or validity of any other provision herein. The
obligations hereunder shall not be affected, limited or impaired by any acts of
any legislative body or governmental authority affecting any Borrower,
including but not limited to, any restrictions on or regarding the conversion
of currency or repatriation or control of funds or any total or partial
expropriation of any Borrower’s property, or by any economic, political,
regulatory or other events in the countries where such Borrower is located.


 


15.          Binding Effect; Assignment.  This Guaranty shall (a) bind each Guarantor
and its successors and assigns; provided, that no Guarantor may assign
its rights or obligations under this Guaranty without the prior written consent
of each Lender (and any attempted assignment 


 


5





















 


without such consent shall be void) and (b) inure to the benefit of the
Administrative Agent and the Holders of Obligations and their respective
successors and assigns and any Holder of Obligations may, subject to the terms
and conditions of the Credit Agreement, without notice to the Guarantor and
without affecting the Guarantor’s obligations hereunder, assign or sell
participations in the Guaranteed Obligations and this Guaranty, in whole or in
part.  Each Guarantor agrees that the
Administrative Agent or any Holder of Obligations may, subject to the terms and
conditions of the Credit Agreement, disclose to any prospective purchaser of
all or part of the Guaranteed Obligations any and all information in such
Person’s possession concerning such Guarantor, this Guaranty and any security
for this Guaranty.


 


16.          Condition of the Borrowers.  Each Guarantor acknowledges and agrees that
it has the sole responsibility for, and has adequate means of, obtaining from
each Borrower such information concerning the financial condition, business and
operations of such Borrower as such Guarantor requires, and that neither the
Administrative Agent nor any Holder of Obligations has any duty, and such
Guarantor is not relying on any Holder of Obligations at any time, to disclose
to such Guarantor any information relating to the business, operations or
financial condition of any Borrower.


 


17.          Setoff. 
If and to the extent any payment is not made when due hereunder, each
Holder of Obligations 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 Holder of Obligation or any such Affiliate to or for the credit or the
account of any Guarantor against any and all of the obligations of such
Guarantor now or hereafter existing under this Guaranty or any other Loan
Document to such Holder of Obligations, irrespective of whether or not such
Holder of Obligations shall have made any demand under this Guaranty or any
other Loan Document and although such obligations of such Guarantor may be
contingent or unmatured or are owed to a branch or office of such Holder of
Obligations different from the branch or office holding such deposit or
obligated on such indebtedness.  The
rights of each Holder of Obligations and their respective Affiliates under this
Section 17 are in addition to other rights and remedies (including other
rights of setoff) that such Holder of Obligations or its respective Affiliates
may have.  Each Holder of Obligations
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.


 


18.          Representations and Warranties.  Each Guarantor represents and warrants that:


 


(a)           Such Guarantor is duly organized and
formed, validly existing and in good standing (to the extent such concept is
applicable to such entity) under the Laws of the jurisdiction of its
incorporation or organization;


 


(b)           Such Guarantor has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own its assets and carry on its business and (ii)
execute, deliver and perform its obligations under this Guaranty; and


 


6





















 


(c)           The making and performance of this
Guaranty by such Guarantor have been duly authorized by all necessary corporate
or other organizational action, and do not and will not (i) contravene the
terms of any of such Guarantor’s Organization Documents; (ii) conflict with or
result in any breach or contravention of, or the creation of any Lien under, or
require any payment to be made under (x) any Contractual Obligation to which
such Guarantor is a party or affecting such Guarantor or the properties of such
Guarantor or any of its Subsidiaries or (y) any order, injunction, writ or
decree of any Governmental Authority or any arbitral award to which such
Guarantor or its property is subject; or (iii) violate any Law.


 


19.          Foreign Currency.  If any claim arising under or related to this
Guaranty is reduced to judgment denominated in a currency (the “Judgment
Currency”) other than the 
currencies in which the applicable Guaranteed Obligations are
denominated (collectively the “Obligations Currency”), the judgment
shall be for the equivalent in the Judgment Currency of the amount of the claim
denominated in the Obligations Currency included in the judgment, determined as
of the date of judgment.  The equivalent
of any Obligations Currency amount in any Judgment Currency shall be calculated
at the spot rate for the purchase of the Obligations Currency with the Judgment
Currency quoted by the Administrative Agent in the place of the Administrative
Agent’s choice at or about 8:00 a.m. on the date for determination specified
above. Each Guarantor shall indemnify the Holders of Obligations and hold the
Holders of Obligations harmless from and against all loss or damage resulting
from any change in exchange rates between the date any claim is reduced to
judgment and the date of payment thereof by any Guarantor. If the Administrative
Agent so notifies the Guarantors in writing, at the Administrative Agent’s sole
and absolute discretion, payments under this Guaranty shall be the Dollar
Equivalent of the Guaranteed Obligations or any portion thereof, determined as
of the date payment is made.


 


20.          Further Assurances.  Each Guarantor agrees, upon the written
request of the Administrative Agent, to execute and deliver to the
Administrative Agent, from time to time, any additional instruments or
documents reasonably considered necessary by Administrative Agent to cause this
Guaranty to be, become or remain valid and effective in accordance with its
terms.


 


21.          Notices. 
Except as otherwise provided herein, whenever it is provided herein that
any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other party, or whenever any of the parties desires to give and serve upon any
other party any communication with respect to this Guaranty, each such notice,
demand, request, consent, approval, declaration or other communication shall be
in writing and shall be given in the manner, and deemed received, as provided
for in the Credit Agreement, with respect to the Administrative Agent at its
notice address therein and with respect to any Guarantor at the address set
forth for the Company in the Credit Agreement or such other address or telecopy
number as such party may hereafter specify for such purpose by notice to the
Administrative Agent as provided for in the Credit Agreement.


 


22.          GOVERNING LAW.  THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


7





















 


23.          SUBMISSION TO JURISDICTION.  EACH GUARANTOR 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 GUARANTY 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
GUARANTY OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT OR ANY HOLDER OF OBLIGATIONS MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT
AGAINST ANY GUARANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.


 


24.          WAIVER OF VENUE; SERVICE OF PROCESS.  EACH GUARANTOR 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 GUARANTY OR ANY OTHER
LOAN DOCUMENT IN ANY COURT REFERRED TO IN SECTION 23.  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.  EACH PARTY HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 21. 
NOTHING IN THIS GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.


 


25.          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 GUARANTY 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 


 


8





















 


BEEN INDUCED TO ENTER INTO THIS GUARANTY AND THE OTHER
LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 25.


 


26.          Headings. 
Section headings in this Guaranty are for convenience of reference only
and shall not govern the interpretation of any provision of this Guaranty.


 


27.          Additional Guarantors.  Each Person that becomes a Designated
Borrower or Material Subsidiary of the Company after the Closing Date is
required to become, and the Company will promptly cause such Subsidiary to become,
in accordance with the Credit Agreement, a Guarantor and be made a party to
this Guaranty pursuant to this Section by the execution and delivery by the
Administrative Agent and such Subsidiary of a supplement in the form of Annex
I hereto and such additional documentation and legal opinions as the
Administrative Agent may reasonably request. 
The execution and delivery of any such instrument shall not require the
consent of any Guarantor hereunder.  The
rights and obligations of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor as a party to this
Guaranty.


 


 


[Remainder of page
intentionally left blank.]


 


9





















 


IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Guaranty as of the date first above written.


 


	
   

  	
  WATTS WATER TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WATTS INDUSTRIES EUROPE B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  



 


Signature Page to

Guaranty


 





















 


	
   

  	
  INITIAL SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  WATTS REGULATOR CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ANDERSON-BARROWS METALS

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  WEBSTER VALVE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  HUNTER INNOVATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  WATTS DISTRIBUTION COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  WATTS RADIANT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					



 





















 


	
   

  	
  WATTS PREMIER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 





















 


ANNEX I TO GUARANTY


 


Reference is hereby made to the Guaranty (as from time
to time amended, restated, supplemented or otherwise modified, the “Guaranty”),
dated as of September [     ], 2004, made by Watts
Water Technologies, Inc., a Delaware corporation (the “Company”),
certain Domestic Subsidiaries of the Company (collectively, the “Initial
Subsidiary Guarantors”), Watts Industries Europe B.V., a private company
with limited liability organized under the laws of The Netherlands (“Watts
Europe” and, together with the Company, the Initial Subsidiary Guarantors
and any additional Subsidiaries of the Company that become parties to the
Guaranty by executing a Supplement thereto in the form attached thereto as Annex
I, the “Guarantors”), in favor of Bank of America, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”).  Each capitalized term used herein and not
defined herein shall have the meaning given to it in the Guaranty.


 


By its execution below, the undersigned,  [NAME OF NEW
GUARANTOR], a [                           ],
agrees to become, and does hereby become, a Guarantor under the Guaranty and
agrees to be bound by such Guaranty as if originally a party thereto.  By its execution below, the undersigned
represents and warrants that all of the representations and warranties
contained in Section 18 of the Guaranty are true and correct in all
respects as of the date hereof.


 


IN WITNESS WHEREOF,[ NAME OF
NEW GUARANTOR], a  [                            ]  has executed and delivered this Annex I
counterpart to the Guaranty as of this                 
day of                 ,
        .


 


	
   

  	
  [NAME OF NEW GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  



 


10





















 


 


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 September 23, 2004 (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.


 


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
hereof, 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 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.


 


This Designated Borrower Request and Assumption Agreement shall
constitute a Loan Document under the Credit Agreement.


 


G-1





















 


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





















 


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 September 23, 2004 (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:

  	
   

  	
   

  
					



 


H-1





















 


EXHIBIT I-1


 


FORM OF OPINION OF U.S.
COUNSEL


 


I-1-1





















 


EXHIBIT I-2


 


FORM OF OPINION OF DUTCH
COUNSEL


 


1