Exhibit
10.28


 


	
   

  	
   

  	
  EXECUTION COPY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



[Published CUSIP Number: 94274CAA3]


 


 


AMENDED AND RESTATED

CREDIT AGREEMENT



Dated as of April 27, 2006



among



WATTS WATER TECHNOLOGIES, INC.



and



CERTAIN SUBSIDIARIES

as Borrowers,



BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and L/C Issuer,



JPMORGAN CHASE BANK, N.A.,

as Syndication Agent


 




KEYBANK NATIONAL ASSOCIATION

SUNTRUST BANK

and

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Documentation Agents



and



The Other Lenders Party Hereto




 


BANC OF AMERICA SECURITIES LLC

and

J.P. MORGAN SECURITIES INC.,

as

Joint Lead Arrangers and Joint Book Managers






 





 

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS AND
  ACCOUNTING TERMS

  	
  1

  
	
  1.01

  	
   

  	
  Defined Terms

  	
  1

  
	
  1.02

  	
   

  	
  Other Interpretive Provisions

  	
  26

  
	
  1.03

  	
   

  	
  Accounting Terms

  	
  27

  
	
  1.04

  	
   

  	
  Rounding

  	
  28

  
	
  1.05

  	
   

  	
  Exchange Rates; Currency Equivalents

  	
  28

  
	
  1.06

  	
   

  	
  Change of Currency

  	
  28

  
	
  1.07

  	
   

  	
  Times of Day

  	
  28

  
	
  1.08

  	
   

  	
  Letter of Credit Amounts

  	
  28

  
	
   

  	
   

  
	
  ARTICLE II. THE COMMITMENTS AND
  CREDIT EXTENSIONS

  	
  29

  
	
  2.01

  	
   

  	
  Committed Loans

  	
  29

  
	
  2.02

  	
   

  	
  Borrowings, Conversions and Continuations of Committed
  Loans

  	
  29

  
	
  2.03

  	
   

  	
  Letters of Credit

  	
  31

  
	
  2.04

  	
   

  	
  Swing Line Loans

  	
  40

  
	
  2.05

  	
   

  	
  Prepayments

  	
  43

  
	
  2.06

  	
   

  	
  Termination or Reduction of Commitments

  	
  44

  
	
  2.07

  	
   

  	
  Repayment of Loans

  	
  45

  
	
  2.08

  	
   

  	
  Interest

  	
  45

  
	
  2.09

  	
   

  	
  Fees

  	
  46

  
	
  2.10

  	
   

  	
  Computation of Interest and Fees

  	
  46

  
	
  2.11

  	
   

  	
  Evidence of Debt

  	
  46

  
	
  2.12

  	
   

  	
  Payments Generally; Administrative Agent’s Clawback

  	
  47

  
	
  2.13

  	
   

  	
  Sharing of Payments by Lenders

  	
  49

  
	
  2.14

  	
   

  	
  Designated Borrowers

  	
  49

  
	
  2.15

  	
   

  	
  Material Domestic Subsidiaries

  	
  51

  
	
  2.16

  	
   

  	
  Increase in Commitments

  	
  51

  
	
  2.17

  	
   

  	
  Lenders Representation Regarding Dutch Banking Act

  	
  52

  
	
   

  	
   

  
	
  ARTICLE III. TAXES, YIELD
  PROTECTION AND ILLEGALITY

  	
  53

  
	
  3.01

  	
   

  	
  Taxes

  	
  53

  
	
  3.02

  	
   

  	
  Illegality

  	
  55

  
	
  3.03

  	
   

  	
  Inability to Determine Rates

  	
  56

  
	
  3.04

  	
   

  	
  Increased Costs; Reserves on Eurocurrency Rate Loans

  	
  56

  
	
  3.05

  	
   

  	
  Compensation for Losses

  	
  58

  
	
  3.06

  	
   

  	
  Mitigation Obligations; Replacement of Lenders

  	
  59

  
	
  3.07

  	
   

  	
  Survival

  	
  59

  
	
   

  	
   

  
	
  ARTICLE IV. CONDITIONS PRECEDENT
  TO CREDIT EXTENSIONS

  	
  59

  
	
  4.01

  	
   

  	
  Conditions of Initial Credit Extension

  	
  59

  
	
  4.02

  	
   

  	
  Conditions
  to all Credit Extensions

  	
  61

  
					



 

















 


TABLE OF CONTENTS (continued)


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  62

  
	
  5.01

  	
   

  	
  Existence, Qualification and Power; Compliance with Laws

  	
   

  	
  62

  
	
  5.02

  	
   

  	
  Authorization; No Contravention

  	
   

  	
  62

  
	
  5.03

  	
   

  	
  Governmental Authorization; Other Consents

  	
   

  	
  62

  
	
  5.04

  	
   

  	
  Binding Effect

  	
   

  	
  62

  
	
  5.05

  	
   

  	
  Financial Statements; No Material Adverse Effect

  	
   

  	
  63

  
	
  5.06

  	
   

  	
  Litigation

  	
   

  	
  63

  
	
  5.07

  	
   

  	
  No Default

  	
   

  	
  63

  
	
  5.08

  	
   

  	
  Ownership of Property; Liens

  	
   

  	
  64

  
	
  5.09

  	
   

  	
  Environmental Compliance

  	
   

  	
  64

  
	
  5.10

  	
   

  	
  Insurance

  	
   

  	
  64

  
	
  5.11

  	
   

  	
  Taxes

  	
   

  	
  64

  
	
  5.12

  	
   

  	
  ERISA Compliance

  	
   

  	
  64

  
	
  5.13

  	
   

  	
  Subsidiaries; Equity Interests

  	
   

  	
  65

  
	
  5.14

  	
   

  	
  Margin Regulations; Investment Company Act

  	
   

  	
  65

  
	
  5.15

  	
   

  	
  Disclosure

  	
   

  	
  65

  
	
  5.16

  	
   

  	
  Compliance with Laws

  	
   

  	
  66

  
	
  5.17

  	
   

  	
  Intellectual Property; Licenses, Etc.

  	
   

  	
  66

  
	
  5.18

  	
   

  	
  Senior Note Documents

  	
   

  	
  66

  
	
  5.19

  	
   

  	
  Material Domestic Subsidiaries

  	
   

  	
  66

  
	
  5.20

  	
   

  	
  Representations as to Foreign Loan Parties

  	
   

  	
  67

  
	
  5.21

  	
   

  	
  Dutch Companies

  	
   

  	
  68

  
	
  5.22

  	
   

  	
  OFAC

  	
   

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. AFFIRMATIVE COVENANTS

  	
   

  	
  69

  
	
  6.01

  	
   

  	
  Financial Statements

  	
   

  	
  69

  
	
  6.02

  	
   

  	
  Certificates; Other Information

  	
   

  	
  70

  
	
  6.03

  	
   

  	
  Notices

  	
   

  	
  72

  
	
  6.04

  	
   

  	
  Payment of Obligations

  	
   

  	
  72

  
	
  6.05

  	
   

  	
  Preservation of Existence, Etc.

  	
   

  	
  72

  
	
  6.06

  	
   

  	
  Maintenance of Properties

  	
   

  	
  73

  
	
  6.07

  	
   

  	
  Maintenance of Insurance

  	
   

  	
  73

  
	
  6.08

  	
   

  	
  Compliance with Laws

  	
   

  	
  73

  
	
  6.09

  	
   

  	
  Books and Records

  	
   

  	
  73

  
	
  6.10

  	
   

  	
  Inspection Rights

  	
   

  	
  73

  
	
  6.11

  	
   

  	
  Use of Proceeds

  	
   

  	
  74

  
	
  6.12

  	
   

  	
  Approvals and Authorizations

  	
   

  	
  74

  
	
  6.13

  	
   

  	
  Amendments to Governing Documents

  	
   

  	
  74

  
	
  6.14

  	
   

  	
  Additional Domestic Guarantors

  	
   

  	
  74

  
	
  6.15

  	
   

  	
  Foreign Subsidiary Guarantors

  	
   

  	
  75

  
	
  6.16

  	
   

  	
  Further Assurances

  	
   

  	
  75

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. NEGATIVE COVENANTS

  	
   

  	
  75

  
	
  7.01

  	
   

  	
  Liens

  	
   

  	
  75

  
	
  7.02

  	
   

  	
  Investments

  	
   

  	
  76

  
	
  7.03

  	
   

  	
  Indebtedness

  	
   

  	
  77

  
	
  7.04

  	
   

  	
  Fundamental Changes; Permitted Acquisitions

  	
   

  	
  78

  



 


ii

















 


TABLE
OF CONTENTS (continued)


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.05

  	
   

  	
  Dispositions

  	
   

  	
  80

  
	
  7.06

  	
   

  	
  Restricted Payments

  	
   

  	
  81

  
	
  7.07

  	
   

  	
  Change in Nature of Business

  	
   

  	
  81

  
	
  7.08

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  81

  
	
  7.09

  	
   

  	
  Burdensome Agreements

  	
   

  	
  81

  
	
  7.10

  	
   

  	
  Use of Proceeds

  	
   

  	
  81

  
	
  7.11

  	
   

  	
  Modification of Organization Documents

  	
   

  	
  81

  
	
  7.12

  	
   

  	
  Senior Note Documents

  	
   

  	
  82

  
	
  7.13

  	
   

  	
  Financial Covenants

  	
   

  	
  82

  
	
  7.14

  	
   

  	
  Swap Contracts

  	
   

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. EVENTS OF DEFAULT
  AND REMEDIES

  	
   

  	
  82

  
	
  8.01

  	
   

  	
  Events of Default

  	
   

  	
  82

  
	
  8.02

  	
   

  	
  Remedies Upon Event of Default

  	
   

  	
  85

  
	
  8.03

  	
   

  	
  Application of Funds

  	
   

  	
  85

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. ADMINISTRATIVE AGENT

  	
   

  	
  87

  
	
  9.01

  	
   

  	
  Appointment and Authority

  	
   

  	
  87

  
	
  9.02

  	
   

  	
  Rights as a Lender

  	
   

  	
  87

  
	
  9.03

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  88

  
	
  9.04

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  88

  
	
  9.05

  	
   

  	
  Delegation of Duties

  	
   

  	
  89

  
	
  9.06

  	
   

  	
  Resignation of Administrative Agent

  	
   

  	
  89

  
	
  9.07

  	
   

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
   

  	
  90

  
	
  9.08

  	
   

  	
  No Other Duties, Etc.

  	
   

  	
  90

  
	
  9.09

  	
   

  	
  Administrative Agent May File Proofs of Claim

  	
   

  	
  90

  
	
  9.10

  	
   

  	
  Guaranty Matters

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. MISCELLANEOUS

  	
   

  	
  91

  
	
  10.01

  	
   

  	
  Amendments, Etc.

  	
   

  	
  91

  
	
  10.02

  	
   

  	
  Notices; Effectiveness; Electronic Communication

  	
   

  	
  93

  
	
  10.03

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  95

  
	
  10.04

  	
   

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  	
  95

  
	
  10.05

  	
   

  	
  Payments Set Aside

  	
   

  	
  97

  
	
  10.06

  	
   

  	
  Successors and Assigns

  	
   

  	
  97

  
	
  10.07

  	
   

  	
  Treatment of Certain Information; Confidentiality

  	
   

  	
  102

  
	
  10.08

  	
   

  	
  Right of Setoff

  	
   

  	
  102

  
	
  10.09

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  103

  
	
  10.10

  	
   

  	
  Counterparts; Integration; Effectiveness

  	
   

  	
  103

  
	
  10.11

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  103

  
	
  10.12

  	
   

  	
  Severability

  	
   

  	
  104

  
	
  10.13

  	
   

  	
  Replacement of Lenders

  	
   

  	
  104

  
	
  10.14

  	
   

  	
  Governing Law; Jurisdiction; Etc.

  	
   

  	
  104

  
	
  10.15

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  105

  
	
  10.16

  	
   

  	
  No Advisory or Fiduciary Responsibility

  	
   

  	
  106

  
	
  10.17

  	
   

  	
  USA PATRIOT Act Notice

  	
   

  	
  106

  
	
  10.18

  	
   

  	
  Judgment Currency

  	
   

  	
  107

  



 


iii

















 


TABLE
OF CONTENTS (continued)


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. NO NOVATION;
  REFERENCES TO THIS AGREEMENT IN LOAN DOCUMENTS

  	
   

  	
  107

  
	
  11.01

  	
   

  	
  No Novation

  	
   

  	
  107

  
	
  11.02

  	
   

  	
  References to This Agreement In Loan Documents

  	
   

  	
  108

  



 


iv

















 


SCHEDULES




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


10.06                     Processing and Recordation
Fees


 


EXHIBITS
                                 Form of


 


A                                      Committed Loan
Notice


B                                        Swing Line Loan
Notice


C                                        Note


D                                       Compliance
Certificate


E                                         Assignment and Assumption


F                                         Amended and
Restated Guaranty Agreement


G                                        Designated
Borrower Request and Assumption Agreement


H                                       Designated
Borrower Notice


 


v

















 


AMENDED AND RESTATED CREDIT AGREEMENT


 


This AMENDED AND RESTATED
CREDIT AGREEMENT (this “Agreement”) is
entered into as of April 27,  2006,  among WATTS WATER TECHNOLOGIES, INC., a
Delaware corporation (the “Company”),
certain Subsidiaries of the Company party hereto pursuant to Section 2.14 (each a “Designated
Borrower” and, together with the Company, the “Borrowers” and, each a “Borrower”),
each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”) and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.


 


PRELIMINARY STATEMENTS


 


WHEREAS, the Company, the
Initial Designated Borrower, certain Lenders and the Administrative Agent are
parties to that certain Credit Agreement, dated as of September 23, 2004
(as amended, restated, supplemented or otherwise modified prior to the date
hereof, the “Existing Credit Agreement”); and


 


WHEREAS, the Company, the
Initial Designated Borrower, the Lenders and the Administrative Agent have
agreed to amend and restate the Existing Credit Agreement in its entirety.


 


NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained, the
parties hereto agree that the Existing Credit Agreement is hereby amended and
restated in its entirety as of the date hereof 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:


 


“2003 Senior Note
Purchase Agreement” means that certain Note Purchase Agreement, dated as of
May 15, 2003, as amended pursuant to Amendment No. 1 thereto dated as
of the date hereof, pursuant to which the Company issued the 2003 Senior Notes,
together with any further permitted amendments, supplements or modifications
thereto.


 


“2003 Senior Notes”
means, 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.


 


“2006 Senior Note
Purchase Agreement” means that certain Note Purchase Agreement, dated as of
April 27, 2006, pursuant to which the Company issued the 2006 Senior
Notes, together with any permitted amendments, supplements or modifications
thereto.


 


“2006 Senior Notes”
means the Company’s 5.85% Senior Notes due April 30, 2016.


 


“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 


 


1

















 


business
or line of business) of any Person, whether such acquisition is direct or
indirect, including through the acquisition of the business of, or more than
50% of the outstanding Voting Stock of, such Person, and whether such
acquisition is effected in a single transaction or in a series of related
transactions, and the acquisition, by purchase, merger or otherwise, of
additional shares of the outstanding Voting Stock of any Subsidiary that is not
then a wholly-owned Subsidiary of the Company; provided, that an
Investment permitted under Section 7.02(g) shall not
constitute an Acquisition.


 


“Administrative
Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.


 


“Administrative Agent Fee
Letter” means the letter agreement, dated March 22, 2006, among the
Company, the Initial Designated Borrower and the 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.


 


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


 


“Applicable
Foreign Loan Party Documents” has the meaning specified in Section 5.20(a).


 


“Applicable
Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender’s Commitment at such time.  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:


 


2

















 


Applicable Rate


 


	
  Pricing

  Level

  	
   

  	
  Debt Ratings

  S&P/Moody’s

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  	
  Facility

  Fee

  	
   

  	
  Eurocurrency Rate

  and

  Letter of Credit Fee

  	
   

  
	
  1

  	
   

  	
  BBB+/Baa1 or better

  	
   

  	
  <1.75

  	
   

  	
  0.10%

  	
   

  	
  0.40%

  	
   

  
	
  2

  	
   

  	
  BBB/Baa2

  	
   

  	
  >1.75 and <2.25

  	
   

  	
  0.11%

  	
   

  	
  0.49%

  	
   

  
	
  3

  	
   

  	
  BBB-/Baa3

  	
   

  	
  >2.25 and <2.75

  	
   

  	
  0.125%

  	
   

  	
  0.625%

  	
   

  
	
  4

  	
   

  	
  BB+/Ba1

  	
   

  	
  >2.75 and <3.25

  	
   

  	
  0.175%

  	
   

  	
  0.70%

  	
   

  
	
  5

  	
   

  	
  BB/Ba2 or worse

  	
   

  	
  >3.25

  	
   

  	
  0.225%

  	
   

  	
  0.90%

  	
   

  



 


“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 (a) if the respective Debt
Ratings issued by the foregoing rating agencies differ by one level, 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), (b) if
there is a split in Debt Ratings of more than one level, the Pricing Level that
is one level higher than the Pricing Level of the lower Debt Rating shall apply
and (c) if the Company has only one Debt Rating, the Pricing Level for
such 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 any Debt Rating, “Applicable Rate”
shall mean, from time to time, the percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(a) or 7.04(c)(iv),
as set forth 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)(iv);
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.


 


3

















 


“Arrangers”
means, collectively, Banc of America Securities LLC and J.P. Morgan Securities
Inc., in each case in its capacity as joint lead arranger and joint book
manager.


 


“Arrangers Fee Letter”
means the letter agreement, dated March 22, 2006, among the Company, the
Initial Designated Borrower, Bank of America, JPMorgan Chase Bank, N.A. and the
Arrangers.


 


“Assignee Group”
means two or more Eligible Assignees that are Affiliates of one another or two
or more Approved Funds managed by the same investment advisor.


 


“Assignment
and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.06(b)),
and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the
Administrative Agent.


 


“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, 2005, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for such fiscal year of the Company and its Subsidiaries,
including the notes thereto.


 


“Availability
Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06(a),
(c) the date of the reduction of the Aggregate Commitments to zero
pursuant to Section 2.06(b) and (d) the date of
termination of the commitment of each Lender to make Loans and of the
obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.


 


“Bank
of America” means Bank of America, N.A. and its successors.


 


“Base
Rate” means for any day a fluctuating rate per annum equal to the
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.


 


4

















 


“Base
Rate Committed Loan” means a Committed Loan that is a Base Rate
Loan.


 


“Base
Rate Loan” means a Loan that bears interest based on the Base
Rate.  All Base Rate Loans shall be
denominated in Dollars.


 


“Borrower”
and “Borrowers” each has the meaning
specified in the introductory paragraph hereto.


 


“Borrower Materials”
has the meaning specified in Section 6.02.


 


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


 


“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.


 


“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 in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) by any Governmental Authority.


 


 “Change of Control”
means an event or series of events by which:


 


(a)           any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) (other than the Horne Parties) becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire 


 


5

















 


(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 35% or more of the aggregate voting power with
respect to elections of members of the board of directors or equivalent
governing body of the Company on a fully-diluted basis (and taking into account
all such securities that such person or group has the right to acquire pursuant
to any option right);


 


(b)           during any period of 12
consecutive months, a majority of the members of the board of directors or
other equivalent governing body of the Company cease to be composed of
individuals (i) who were members of that board or equivalent governing
body on the first day of such period, (ii) whose election or nomination to
that board or equivalent governing body was approved by individuals referred to
in clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body (excluding, in the case of both clause
(ii) and clause (iii), any individual whose initial nomination
for, or assumption of office as, a member of that board or equivalent governing
body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or


 


(c)           except for directors’ qualifying shares in jurisdictions
where such qualifying shares are required, the Company shall fail to own
directly or indirectly, one hundred percent (100%) of the Equity Interests of
each Designated Borrower and, unless such Person ceases to be a Subsidiary as a
result of a transaction permitted hereunder, 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.


 


“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.


 


6

















 


“Committed
Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type, in the same currency and, in the case of Eurocurrency
Rate Loans, having the same Interest Period made by each of the Lenders
pursuant to Section 2.01.


 


“Committed
Loan” has the meaning specified in Section 2.01.


 


“Committed
Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a
continuation of Eurocurrency Rate Loans, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A.


 


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


 


“Compliance
Certificate” means a certificate substantially in the form of Exhibit D.


 


“Consolidated EBITDA” means, for any period, for the Company and its Subsidiaries on a
consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the
following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Total Interest Expense for such period, (ii) the provision for Federal,
state, local and foreign income taxes payable by the Company and its
Subsidiaries for such period, (iii) depreciation and amortization expense,
(iv) other non-recurring expenses of the Company and its Subsidiaries
reducing such Consolidated Net Income which do not represent a cash item in
such period or any future period and (v) Losses from Discontinued
Operations and minus (b) the following to the
extent included in calculating such Consolidated Net Income: (i) Federal,
state, local and foreign income tax credits of the Company and its Subsidiaries
for such period and (ii) all non-cash items increasing Consolidated Net
Income for such period; provided, however,
when calculating Consolidated EBITDA for any period in which a Permitted
Acquisition has occurred, the calculation of Consolidated EBITDA shall be made
on a Pro Forma Basis.


 


“Consolidated Funded
Indebtedness” means, as of any date of determination, for the Company and
its Subsidiaries on a consolidated basis, the sum of (without duplication) (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including Obligations hereunder) and all obligations evidenced
by bonds, debentures, notes, loan agreements or other similar instruments, (b) all
purchase money Indebtedness, (c) all direct obligations arising under
letters of credit (excluding standby but including commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments, (d) all
obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), (e) Attributable
Indebtedness in respect of capital leases, Synthetic Lease Obligations and
Permitted Receivables Purchase Facilities, (f) all Guarantees with respect
to outstanding Indebtedness of the types specified in clauses (a) through
(e) above of Persons other than the Company or any Subsidiary, and (g) all
Indebtedness of the types referred to in clauses (a) through (f) above
of any partnership or joint venture (other than a joint venture that is itself
a corporation or limited liability company or similar entity) in which the
Company or a Subsidiary is a general partner or joint venturer, unless such
Indebtedness is expressly made non-recourse to the Company or such Subsidiary.


 


7














 


“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated
EBITDA for the period of the four fiscal quarters most recently ended to (b) Consolidated Total Interest
Expense for such period.


 


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


 


8

















 


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 unless such
failure has been cured prior to receipt by such Lender of notice from the
Company pursuant to Section 10.13, (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 when
due, unless the subject of a good faith dispute or unless such failure has been
cured prior to receipt by such Lender of notice from the Company pursuant to Section 10.13,
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
Designated Borrower” means any Designated Borrower that is a
Domestic Subsidiary of the Company.


 


9

















 


“Domestic Loan Parties”
means, collectively (i) the Company, (ii) each Domestic Designated
Borrower and (iii) each Domestic Subsidiary Guarantor.


 


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


 


“Domestic Subsidiary
Guarantor” means  (i) all of the
Company’s Material Domestic Subsidiaries party to the Guaranty Agreement and (ii) all
other Subsidiaries of the Company which become Domestic Subsidiary Guarantors
in accordance with Section 6.14(b).


 


“Dutch Banking Act”
means the Dutch Act on the Supervision of Credit Institutions 1992 (Wet toezicht kredietwezen 1992).


 


“Eligible Assignee”
means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii),
(v), (vi) and (vii) (subject to such consents, if any,
as may be required under Section 10.06(b)(iii)).


 


“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 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 


 


10

















 


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.


 


“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.


 


11

















 


“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 Loan Party 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).


 


“Exemption Regulation”
means the Exemption Regulation (Vrijstellingsregeling)
dated 26 June 2002, as amended from time to time, of the Ministry of
Finance of the Netherlands, as promulgated in the Dutch Banking Act.


 


“Existing
Credit Agreement” has the meaning specified in the Preliminary
Statements.


 


“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
Letters” means, collectively, the Administrative Agent Fee Letter
and the Arrangers Fee Letter.


 


12

















 


“Foreign Designated
Borrower” means any Designated Borrower that is a Foreign Subsidiary of the
Company.


 


“Foreign
Lender” means, with respect to any Borrower, any Lender that is
organized under the laws of a jurisdiction other than that in which such
Borrower is resident for tax purposes. 
For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.


 


“Foreign
Loan Parties” means, collectively, (i) the Foreign Designated
Borrowers and (ii) the Foreign Subsidiary Guarantors.


 


“Foreign
Subsidiary” means any Subsidiary that is organized under the laws of
a jurisdiction other than the United States, a State thereof or the District of
Columbia.


 


“Foreign Subsidiary
Guarantor” means (i) any Subsidiary listed on Schedule 6.15 or (ii) any
other Foreign Subsidiary party to one of the Guaranties, in each case, unless
such Person shall constitute a Domestic Subsidiary Guarantor.


 


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


 


“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.


 


“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 


 


13

















 


purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into
for the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed to
be an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.


 


“Guaranteed Swap Contract”
means any Swap Contract to which the Company or any other Loan Party and any
Lender (or any Affiliate of any Lender) is a party.


 


“Guaranties” means
the Guaranty Agreement and any other guaranty
executed by any Designated Borrower or any Subsidiary Guarantor in favor of the
Administrative Agent, on behalf of itself and the Lenders, in respect of the
Obligations or, in the case of any Foreign Loan Party, the Obligations of each
Foreign Designated Borrower.


 


“Guaranty Agreement” means the Amended and Restated 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.


 


“Horne Parties” means
(i) Timothy P. Horne, (ii) any individual related by blood, marriage
or adoption to Timothy P. Horne and (iii) the Horne Voting Trust and any
other trust that holds shares for the primary benefit of one or more of the
individuals described in the foregoing clauses (i) and (ii).


 


“Horne Voting Trust”
means the trust established by the Amended and Restated George B. Horne Voting
Trust Agreement — 1997, dated as of September 14, 1999.


 


“Increase
Effective Date” has the meaning specified in Section 2.16(d).


 


“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:


 


14

















 


(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.


 


“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 


 


15

















 


Payment
Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the
last Business Day of each March, June, September and
December and the Maturity Date.


 


“Interest
Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date one, two, three
or six months thereafter, as selected by the applicable Borrower in its
Committed Loan Notice; provided that:


 


(i)            any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;


 


(ii)           any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of the calendar month at the end of such Interest Period; and


 


(iii)          no Interest Period shall extend beyond the Maturity Date.


 


“Internal
Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Company’s
internal controls over financial reporting, in each case as described in the
Securities Laws.


 


“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance
or capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person and any arrangement pursuant to which the investor Guarantees Indebtedness
of such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit.  For purposes
of covenant compliance, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment.


 


“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.


 


16

















 


“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.


 


“L/C
Advance” means, with respect to each Lender, such Lender’s funding
of its participation in any L/C Borrowing in accordance with its Applicable
Percentage. All L/C Advances shall be denominated in Dollars.


 


“L/C
Borrowing” means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Committed Borrowing. All L/C Borrowings shall be denominated
in Dollars.


 


“L/C
Credit Extension” means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of
the amount thereof.


 


“L/C
Issuer” means Bank of America in its capacity as issuer of Letters
of Credit hereunder or any successor issuer of Letters of Credit hereunder.


 


“L/C
Obligations” means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts,
including all L/C Borrowings.  For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.07.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.


 


“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.  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.


 


“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).


 


17

















 


“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, each Fee Letter and the Guaranties.


 


“Loan
Parties” means, collectively, each Domestic Loan Party and each Foreign
Loan Party.


 


“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, assets, liabilities
(actual or contingent) or condition (financial or otherwise) of the Company or
the Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under
any Loan Document to which it is a party; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against any Loan
Party of any Loan Document to which it is a party.


 


“Maturity
Date” means April 27, 2011.


 


“Material
Domestic Subsidiary” means any Domestic Subsidiary of the Company
listed on Schedule 5.19 (as such Schedule
may be revised pursuant to Section 2.15) or the most recent
supplement thereto delivered in accordance with Section 6.02(f) or
7.04(c)(iv), as applicable.


 


“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
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 


 


18

















 


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 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 


 


19

















 


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.


 


“PCAOB”
means the Public Company Accounting Oversight Board.


 


“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 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 


 


20

















 


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.


 


“Platform” has the
meaning specified in Section 6.02.


 


“PMP” means a
“professional market party” (professionele
marktpartij) within the meaning of the Exemption Regulation.


 


“Pro Forma Basis”  means, with respect to any proposed Permitted
Acquisition, the Consolidated Funded Indebtedness and Consolidated EBITDA for
each of the four fiscal quarters immediately preceding such Permitted
Acquisition being calculated with reference to the audited historical financial
statements of the Person so acquired together with any interim financial
statements of such Person so acquired prepared since the date of the last
audited financial statements and prepared in a manner consistent with past
practices (or, to the extent such Person so acquired has no audited historical
financial statements, the management prepared financial statements of such
Person so acquired, with such statements to be in form and substance reasonably
acceptable to the Administrative Agent), and the Company and its Subsidiaries
for the applicable Test Period after giving effect on a pro forma basis to such
Permitted Acquisition (and assuming that such Permitted Acquisition had been
consummated at the beginning of such Test Period) in the manner described in clauses
(i), and (ii) below; provided, however, that, in
each case, in the event that either no historical financial statements are
available with respect to the Person to be acquired, the Person to be acquired
is not a separate legal entity, the Company or Subsidiary effecting the
acquisition is acquiring only assets of another Person or, in the
Administrative Agent’s reasonable discretion it determines the historical financial
statements do not adequately reflect the financial statements of the Person or
assets to be acquired, such calculations shall be made with reference to
reasonable estimates of such past performance made by the Company based on
existing data and other available information, such estimates to be acceptable
to the Administrative Agent:


 


(i)            all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition, if any, shall be deemed to have been
incurred or made on the first day of the Test Period, and all Indebtedness of
the Person to be acquired in such Permitted Acquisition which was repaid
concurrently with the consummation of the Permitted Acquisition, if any, shall
be deemed to have been repaid concurrently with the deemed 


 


21

















 


incurrence of the Indebtedness, if any,
incurred in connection with the Permitted Acquisition; and


 


(ii)           other reasonable cost savings, expenses and other income
statement or operating statement adjustments, including, without limitation,
those which are attributable to the change in ownership and/or management
resulting from such Permitted Acquisition, as in any case are (i) set forth
in a schedule delivered to the Administrative Agent concurrent with the
consummation of such Permitted Acquisition and (ii) approved by the
Administrative Agent, shall be deemed to have been realized on the first day of
the Test Period; provided, that the
Administrative Agent shall be deemed to have provided such consent if it shall
not have objected to any such items within five Business Days of its receipt of
such schedule.


 


“Public Company”
means any Person that is required to file periodic reports with the SEC
pursuant to the Securities Laws (or any Person subject to similar requirements
under the laws of any other Governmental Authority)


 


“Purchase Price”
means, with respect to any Acquisition, the aggregate amount of consideration
for such Acquisition consisting of cash, Indebtedness directly or indirectly
incurred or assumed in connection therewith (including, without limitation,
Indebtedness of the  Person subject to
such Acquisition if effected as an acquisition of such Person’s Equity
Interests or merger of such Person with and into the Company or any existing
Subsidiary) and contingent obligations to repurchase Equity Interests issued as
part of the consideration for such Acquisition.


 


“Receivables Subsidiary”
means a special purpose, bankruptcy remote wholly-owned Subsidiary of the
Company which may be formed for the sole and exclusive purpose of engaging in
activities in connection with the purchase, sale and financing of Permitted
Receivables in connection with and pursuant to a Permitted Receivables Purchase
Facility.


 


“Register”
has the meaning specified in Section 10.06(c).


 


“Registered
Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Company as prescribed by the Securities
Laws.


 


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


 


“Reportable
Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.


 


“Request
for Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.


 


22

















 


“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, treasurer or assistant 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 and  (iv) 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.


 


“Sarbanes-Oxley”
means the Sarbanes-Oxley Act of 2002.


 


23














 


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


 


“Securities
Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.


 


“Senior Note Documents”
means, collectively, the 2003 Senior Notes, the 2003 Note Purchase Agreement,
the 2006 Senior Notes, the 2006 Note Purchase Agreement, and, in each case, any
other documents executed in connection therewith, together with any permitted
amendments, supplements or modifications thereto.


 


“Senior Notes” means,
collectively, the 2003 Senior Notes and the 2006 Senior Notes.


 


“Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’
equity of the Company and its Subsidiaries as of that date determined in
accordance with GAAP.


 


“Specified
JV/Intercompany Asset Transfer” means the contribution or
Disposition of any property (other than cash) (i) by any Domestic Loan
Party to any Subsidiary that is not a Domestic Loan Party, (ii) by any
Foreign Loan Party to any Subsidiary that is not a Loan Party or (iii) by
the Company or any Subsidiary to any joint venture in accordance with Section 7.02(g).


 


“Spot
Rate” for a currency means the rate determined by the Administrative
Agent or the L/C Issuer, as applicable, to be the rate quoted by the Person
acting in such capacity as the spot rate for the purchase by such Person of
such currency with another currency through its principal foreign exchange
trading office at approximately 11:00 a.m. on the date two Business Days
prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the L/C
Issuer may obtain such spot rate from another financial institution designated
by the Administrative Agent or the L/C Issuer if the Person acting in such
capacity does not have as of the date of determination a spot buying rate for
any such currency; and provided further that the L/C Issuer
may use such spot rate quoted on the date as of which the foreign exchange
computation is made in the case of any Letter of Credit denominated in Euros.


 


“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership or other entity (“Other Person”) of which more than 50% of
the outstanding Voting Stock of such Other Person (irrespective of whether at
the time Equity Interests of any other class or classes of such Other Person
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned or controlled by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person. 
Unless otherwise specified, all references herein to a “Subsidiary” or
to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.


 


“Subsidiary Guarantors” means, collectively, the Domestic Subsidiary Guarantors and the
Foreign Subsidiary Guarantors.


 


24

















 


“Swap
Contract” means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.


 


“Swap
Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination value(s) determined
in accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based
upon one or more mid-market or other readily available quotations provided by
any recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).


 


“Swing
Line” 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).


 


25

















 


“Target” has the
meaning specified in Section 7.04(c).


 


“TARGET
Day” means any day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (TARGET) payment system (or, if such payment
system ceases to be operative, such other payment system (if any) determined by
the Administrative Agent to be a suitable replacement) is open for the
settlement of payments in Euro.


 


“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.


 


“Watts Germany” means
Watts Industries Deutschland GmbH, a company organized under the laws of
Germany.


 


“Watts Londa” means
Watts Londa S.p.a., a company organized under the laws of Italy.


 


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 


 


26





















 


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 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 


 


27





















 


between calculations of such
ratio or requirement made before and after giving effect to such change in
GAAP.


 


1.04        Rounding.  Any financial ratios required to be
maintained by the Borrowers pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).


 


1.05        Exchange Rates;
Currency Equivalents.  (a)  The Administrative Agent or the L/C
Issuer, as applicable, shall determine the Spot Rates as of each Revaluation
Date to be used for calculating Dollar Equivalent amounts of Credit Extensions
and Outstanding Amounts denominated in Euros. 
Such Spot Rates shall become effective as of such Revaluation Date and
shall be the Spot Rates employed in converting any amounts between the
applicable currencies until the next Revaluation Date to occur.  Except for purposes of financial statements
delivered by Loan Parties hereunder or calculating financial covenants
hereunder or except as otherwise provided herein, the applicable amount of any
currency (other than Dollars) for purposes of the Loan Documents shall be such
Dollar Equivalent amount as so determined by the Administrative Agent or the
L/C Issuer, as applicable.


 


(b)           Wherever in this Agreement in
connection with a Committed Borrowing, conversion, continuation or prepayment
of a Eurocurrency Rate Loan or the issuance, amendment or extension of a Letter
of Credit, an amount, such as a required minimum or multiple amount, is
expressed in Dollars, but such Committed Borrowing, Eurocurrency Rate Loan or
Letter of Credit is denominated in Euros, such amount shall be the Euro
Equivalent of such Dollar amount (rounded to the nearest Euro, with 0.5 of a Euro
being rounded upward), as determined by the Administrative Agent or the L/C
Issuer, as the case may be.


 


1.06        Change of
Currency.   Each provision of this
Agreement shall be subject to such reasonable changes of construction as the
Administrative Agent may from time to time specify to be appropriate to reflect
the adoption of the Euro by any member state of the European Union and any
relevant market conventions or practices relating to the Euro.


 


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


 


1.08        Letter of
Credit Amounts. 
Unless otherwise specified herein, the amount of a Letter of Credit at
any time shall be deemed to be the Dollar Equivalent of the stated amount of
such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of
Credit that, by its terms or the terms of any Issuer Document related thereto,
provides for one or more automatic increases in the stated amount thereof, the
amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.


 


28





















 


ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS


 


2.01        Committed
Loans.  Subject to
the terms and conditions set forth herein, each Lender severally agrees to make
loans (each such loan, a “Committed Loan”)
to the Borrowers in Dollars or in Euros from time to time, on any Business Day
during the Availability Period, in an aggregate amount not to exceed at any
time outstanding the amount of such Lender’s Commitment; provided,
however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment.  Within the
limits of each Lender’s Commitment, and subject to the other terms and conditions
hereof, the Borrowers may borrow under this Section 2.01,
prepay under Section 2.05, and
reborrow under this Section 2.01.  Committed Loans may be Base Rate Loans or
Eurocurrency Rate Loans, as further provided herein.


 


2.02        Borrowings,
Conversions and Continuations of Committed Loans.


 


(a)           Each Committed Borrowing, each
conversion of Committed Loans from one Type to the other, and each continuation
of Eurocurrency Rate Loans shall be made upon the applicable Borrower’s
irrevocable notice to the Administrative Agent, which may be given by
telephone.  Each such notice must be
received by the Administrative Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans denominated in Dollars or of any
conversion of Eurocurrency Rate Loans denominated in Dollars to Base Rate
Committed Loans, (ii) four Business Days prior to the requested date of
any Borrowing or continuation of Eurocurrency Rate Loans denominated in Euros,
and (iii) on the requested date of any Borrowing of Base Rate Committed
Loans.  Each telephonic notice by a
Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of such Borrower.  Each Borrowing
of, conversion to or continuation of Eurocurrency Rate Loans shall be in a
principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Sections
2.03(c) and 2.04(c),
each Committed Borrowing of or conversion to Base Rate Committed Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof.  Each Committed Loan Notice (whether
telephonic or written) shall specify (i) whether the applicable Borrower
is requesting a Committed Borrowing, a conversion of Committed Loans from one
Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) 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 


 


29





















 


Committed Loans shall be
made as, or converted to, Base Rate Loans; provided,
however, that in the case of a failure to
timely request a continuation of Committed Loans denominated in Euros, such
Loans shall be continued as Eurocurrency Rate Loans in Euros with an Interest
Period of one month.  Any automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurocurrency Rate
Loans.  If a Borrower requests a
Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any
such Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.  No Committed Loan may be converted into or
continued as a Committed Loan denominated in a different currency, but instead
must be prepaid in the original currency of such Committed Loan and reborrowed
in the other currency.


 


(b)           Following receipt of a Committed Loan
Notice, the Administrative Agent shall promptly notify each Lender of the
amount (and currency) of its Applicable Percentage of the applicable Committed
Loans, and if no timely notice of a conversion or continuation is provided by
the applicable Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans or continuation of
Committed Loans denominated in Euros, in each case as described in the preceding
subsection.  In the case of a Committed
Borrowing, each Lender shall make the amount of its Committed Loan available to
the Administrative Agent in Same Day Funds at the Administrative Agent’s Office
for the applicable currency not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable
conditions set forth in Section 4.02
(and, if such Borrowing is the initial Credit Extension, Section 4.01),
the Administrative Agent shall make all funds so received available to the
applicable Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of such Borrower on the books of Bank
of America with the amount of such funds or (ii) wire transfer of such
funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by such Borrower; provided, however,
that if, on the date the Committed Loan Notice with respect to such Borrowing
denominated in Dollars is given by such Borrower, there are L/C Borrowings
outstanding to any Borrower, then the proceeds of such Borrowing, first, shall be applied to the payment in full of
any such L/C Borrowings, and, second, shall
be made available to such Borrower as provided above.


 


(c)           Except as otherwise provided herein,
a Eurocurrency Rate Loan may be continued or converted only on the last day of
an Interest Period for such Eurocurrency Rate Loan.  During the existence of a Default, no Loans
may be requested as, converted to or continued as Eurocurrency Rate Loans
(whether in Dollars or Euros) without the consent of the Required Lenders, and
the Required Lenders may demand that any or all of the then outstanding
Eurocurrency Rate Loans denominated in Euros be prepaid, or redenominated into
Dollars in the amount of the Dollar Equivalent thereof, on the last day of the
then current Interest Period with respect thereto.


 


(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.


 


30





















 


(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 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.


 


(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:


 


31





















 


(A)          any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the L/C
Issuer any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the L/C Issuer in good faith deems material to it;


 


(B)           the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer applicable to letters of credit generally;


 


(C)           except as otherwise agreed by the Administrative Agent and
the L/C Issuer, such Letter of Credit is in an initial stated amount less than
$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.


 


32





















 


(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 Administrative Agent.  Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m.
at least two Business Days (or such later date and time as the Administrative
Agent and the L/C Issuer may agree in a particular instance in their sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount and currency thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; (G) the 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.


 


33





















 


(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 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 


 


34





















 


the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (expressed in Dollars in the amount of the Dollar
Equivalent thereof in the case of a Letter of Credit denominated in Euros) (the
“Unreimbursed Amount”), and the amount of
such Lender’s Applicable Percentage thereof. 
In such event, the applicable Borrower shall be deemed to have requested
a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in
an amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set forth in
Section 4.02 (other than the delivery
of a Committed Loan Notice).  Any notice
given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be
given by telephone if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.


 


(ii)           Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds
available 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, 


 


35





















 


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 from time to time in effect, plus any administrative,
processing or similar fees customarily charged by the L/C Issuer in connection
with the foregoing.  If such Lender pays
such amount (with interest and fees as aforesaid), the amount so paid shall
constitute such Lender’s Committed Loan included in the relevant Committed
Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case
may be.  A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall
be conclusive absent manifest error.


 


(d)           Repayment of Participations.


 


(i)            At any time after the L/C Issuer has
made a payment under any Letter of Credit and has received from any Lender such
Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly from the
applicable Borrower or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent will distribute
to such Lender its Applicable Percentage thereof in Dollars and in the same
funds as those received by the Administrative Agent.


 


(ii)           If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its
Applicable Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the applicable Overnight
Rate from time to time in effect.  The
obligations of the Lenders under this clause shall survive the payment in full
of the Obligations and the termination of this Agreement.


 


(e)           Obligations
Absolute.  The obligation of
each Borrower to reimburse the L/C Issuer for each drawing under each Letter of
Credit requested by such Borrower and to repay 


 


36





















 


each L/C Borrowing in
respect of such Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:


 


(i)            any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other Loan Document;


 


(ii)           the existence of any claim, counterclaim, setoff, defense
or other right that any Borrower or any Subsidiary thereof may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting), the
L/C Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement
or instrument relating thereto, or any unrelated transaction;


 


(iii)          any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; or any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under such Letter of Credit;


 


(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 


 


37





















 


Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of the L/C Issuer shall be liable to any Lender for (i) any action taken
or omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Issuer Document.  Each Borrower hereby assumes all risks of the
acts or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude such Borrower’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement.  None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable or
responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however,
that anything in such clauses to the contrary notwithstanding, a Borrower may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to a
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by such Borrower which such
Borrower proves were caused by the L/C Issuer’s willful misconduct or gross
negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a
Letter of 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.


 


38





















 


(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.  Upon
any such pledge, deposit or delivery, the Company shall be deemed to have
granted 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 and shall execute such
additional documentation with respect to such grant of security as the
Administrative Agent shall reasonably request. 
Cash Collateral shall be maintained in a blocked interest-bearing
deposit account at Bank of America.


 


(h)           Applicability
of ISP.  Unless otherwise
expressly agreed by the L/C Issuer and the Company when a Letter of Credit is
issued, the rules of the ISP shall apply to each Letter of Credit.


 


(i)            Letter of
Credit Fees.  Each Borrower
shall pay to the Administrative Agent for the account of each Lender in
accordance with its Applicable Percentage, in Dollars, a Letter of Credit fee
(the “Letter of Credit Fee”) for each Letter of Credit issued at the
request of such Borrower equal to the Applicable Rate times the Dollar
Equivalent of the daily amount available to be drawn under such Letter of
Credit.  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.  Each Borrower shall pay directly to the L/C
Issuer for its own account, in Dollars, a fronting fee with respect to each
Letter of Credit issued at the request of such Borrower at the rate per annum
specified in the Administrative Agent Fee Letter, computed on the Dollar
Equivalent of the daily amount available to be drawn under such Letter of
Credit on a quarterly basis in arrears, and due and payable on the last
Business Day 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, each Borrower shall pay directly
to the L/C Issuer for its own account, in Dollars, with respect to each Letter
of Credit issued at the request of such Borrower, the customary issuance,
presentation, amendment and 


 


39





















 


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.


 


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 


 


40

















 


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.


 


(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.


 


41














 


(iii)          If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be paid
by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the
time specified in Section 2.04(c)(i),
the Swing Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per annum
equal to the applicable Overnight Rate from time to time in effect, plus any
administrative, processing or similar fees customarily charged by the Swing
Line Lender in connection with the foregoing. 
If such Lender pays such amount (with interest and fees as aforesaid),
the amount so paid shall constitute such Lender’s Committed Loan included in
the relevant Committed Borrowing or funded participation in the relevant Swing
Line Loan, as the case may be.  A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.


 


(iv)          Each Lender’s obligation to make Committed Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, the Company or any
other Person for any reason whatsoever, (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided,
however, that each Lender’s obligation to
make Committed Loans pursuant to this Section 2.04(c) is
subject to the conditions set forth in Section 4.02.  No such funding of risk participations shall
relieve or otherwise impair the obligation of the Company to repay Swing Line
Loans, together with interest as provided herein.


 


(d)           Repayment of Participations.


 


(i)            At any time after any Lender has
purchased and funded a risk participation in a Swing Line Loan, if the Swing
Line Lender receives any payment on account of such Swing Line Loan, the Swing
Line Lender will distribute to such Lender its Applicable Percentage thereof in
the same funds as those received by the Swing Line Lender.


 


(ii)           If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required to be
returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the Swing Line Lender in its discretion), each
Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to the
applicable Overnight Rate.  The
Administrative Agent will make such demand upon the request of the Swing Line
Lender.  The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.


 


42

















 


(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 amount of such prepayment and the Type(s) of
Committed Loans to be prepaid and, if Eurocurrency Rate Loans are to be
prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s Applicable Percentage of such prepayment.  If such notice is given by a Borrower, such
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any prepayment of a Eurocurrency Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the
Committed Loans of the Lenders in accordance with their respective Applicable
Percentages.


 


(b)           The Company may, upon notice to the
Swing Line Lender (with a copy to the Administrative Agent), at any time or
from time to time, voluntarily prepay Swing Line Loans in whole or in part
without premium or penalty; provided that (i) such
notice must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the date of the prepayment, and (ii) any
such prepayment shall be in a minimum principal amount of $100,000.  Each such notice shall specify the date and
amount of such prepayment.  If such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.


 


(c)           If the Administrative Agent notifies
the Company at any time that the Total Outstandings at such time exceed an
amount equal to 105% of the Aggregate Commitments then in effect, then, within
two Business Days after receipt of such notice, the Borrowers shall prepay
Loans and/or the Company shall Cash Collateralize the L/C Obligations in an
aggregate amount sufficient to reduce the Total Outstandings as of such date of
payment to an amount not to 


 


43





















 


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 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 


 


44





















 


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.


 


(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.


 


45





















 


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 last day of the Availability Period (and, if
applicable, thereafter on demand).  The
facility fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.


 


(b)           Other Fees.  (i)  The Company shall pay to the
Arrangers and the Administrative Agent for their own respective accounts, in
Dollars, fees in the amounts and at the times specified in the Fee
Letters.  Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.


 


(ii)           The Company shall pay to the Lenders,
in Dollars, such fees as shall have been separately agreed upon in writing in
the amounts and at the times so specified. 
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.


 


2.10        Computation of
Interest and Fees.  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, 


 


46

















 


the accounts and records of
the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender to a Borrower
made through the Administrative Agent, such Borrower shall execute and deliver
to such Lender (through the Administrative Agent) a Note, which shall evidence
such Lender’s Loans to such Borrower in addition to such accounts or
records.  Each Lender may attach
schedules to a Note and endorse thereon the date, Type (if applicable), amount,
currency and maturity of its Loans and payments with respect thereto.


 


(b)           In addition to the accounts and
records referred to in subsection (a), each Lender and the
Administrative Agent shall maintain in accordance with its usual practice
accounts or records evidencing the purchases and sales by such Lender of
participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts
and records of any Lender in respect of such matters, the accounts and records
of the Administrative Agent shall control in the absence of manifest error.


 


2.12        Payments
Generally; Administrative Agent’s Clawback.  (a)  General.  All payments to be made by the Borrowers
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except as
otherwise expressly provided herein and except with respect to principal of and
interest on Loans denominated in Euros, all payments by the Borrowers hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the applicable Administrative Agent’s
Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the
date specified herein.  Except as
otherwise expressly provided herein, all payments by the Borrowers hereunder
with respect to principal and interest on Loans denominated in Euros shall be
made to the Administrative Agent, for the account of the respective Lenders to
which such payment is owed, at the applicable Administrative Agent’s Office in
Euros and in Same Day Funds not later than 2:00 p.m. on the date specified
herein. Without limiting the generality of the foregoing, the Administrative
Agent may require that any payments due under this Agreement be made in the
United States.  If, for any reason, any
Borrower is prohibited by any Law from making any required payment hereunder in
Euros, such Borrower shall make such payment in Dollars in the Dollar
Equivalent of the Euro payment amount. 
The Administrative Agent will promptly distribute to each Lender its
Applicable Percentage (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender’s Lending
Office.  All payments received by the
Administrative Agent (i) after 2:00 p.m., in the case of payments in
Dollars, or (ii) after 2:00 p.m. in the case of payments in Euros,
shall in each case be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue.  If any payment to be made by any Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.


 


(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 of Eurocurrency Rate Loans (or, in the case of any Committed
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Committed
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Committed Borrowing, the Administrative Agent may
assume that such Lender has made such share available on such date in
accordance with Section 2.02 (or, in
the case of a Committed 


 


47

















 


Borrowing of Base Rate
Loans, that such Lender has made such share available in accordance with and at
the time required by Section 2.02) and
may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Committed
Borrowing available to the Administrative Agent, then the applicable Lender and
the applicable Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in Same Day Funds with interest
thereon, for each day from and including the date such amount is made available
to such Borrower to but excluding the date of payment to the Administrative
Agent, at (A) in the case of a payment to be made by such Lender, the
Overnight Rate, plus any administrative, processing or similar fees customarily
charged by the Administrative Agent in connection with the foregoing, and (B) in
the case of a payment to be made by such Borrower, the interest rate applicable
to Base Rate Loans.  If such Borrower and
such Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to such
Borrower the amount of such interest paid by such Borrower for such
period.  If such Lender pays its share of
the applicable Committed Borrowing to the Administrative Agent, then the amount
so paid shall constitute such Lender’s Committed Loan included in such
Committed Borrowing.  Any payment by such
Borrower shall be without prejudice to any claim such Borrower may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.


 


(ii)           Payments by
Borrowers; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have
received notice from a Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders or the L/C Issuer
hereunder that such Borrower will not make such payment, the Administrative
Agent may assume that such Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the L/C Issuer, as the case may be, the amount due.  In such event, if such Borrower has not in
fact made such payment, then each of the Lenders or the L/C Issuer, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or the L/C Issuer, in Same Day
Funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Overnight Rate.


 


A notice of the
Administrative Agent to any Lender or Borrower with respect to any amount owing
under this subsection (b) shall be conclusive, absent manifest
error.


 


(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 


 


48

















 


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 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) 
The Initial Designated Borrower is a “Designated Borrower” hereunder and may
receive Loans for its account and request that Letters of Credit be issued for
the account of itself or its Subsidiaries, in each case on the terms and
conditions set forth in this Agreement.


 


49





















 


(b)           The Company may at any time, upon not
less than 15 Business Days’ notice from the Company to the Administrative Agent
(or such shorter period as may be agreed by the Administrative Agent in its
sole discretion), designate any additional Subsidiary of the Company (an “Applicant Borrower”) as a Designated Borrower to
receive Loans and request the issuance of Letters of Credit hereunder by delivering
to the Administrative Agent (which shall promptly deliver counterparts thereof
to each Lender) a duly executed notice and agreement in substantially the form
of Exhibit G (a “Designated Borrower Request and Assumption Agreement”).  The parties hereto acknowledge and agree that
prior to any Applicant Borrower becoming entitled to utilize the credit
facilities provided for herein the Administrative Agent and the Lenders shall
have received such supporting resolutions, incumbency certificates, opinions of
counsel and other documents or information, in form, content and scope
reasonably satisfactory to the Administrative Agent, as may be required by the
Administrative Agent or the Required Lenders in their sole discretion, and
Notes signed by such new Borrowers to the extent any Lenders so require.  If the Administrative Agent and the Required
Lenders agree that an Applicant Borrower shall be entitled to receive Loans and
request the issuance of Letters of Credit hereunder, then promptly following
receipt of all such requested resolutions, incumbency certificates, opinions of
counsel and other documents or information, the Administrative Agent shall send
a notice in substantially the form of Exhibit H
(a “Designated Borrower Notice”) to the
Company and the Lenders specifying the effective date upon which the Applicant
Borrower shall constitute a Designated Borrower for purposes hereof, whereupon
each of the Lenders agrees to permit such Designated Borrower to receive Loans
and request the issuance of Letters of Credit hereunder, on the terms and
conditions set forth herein, and each of the parties agrees that such
Designated Borrower otherwise shall be a Borrower for all purposes of this
Agreement; provided that no Committed Loan
Notice or Letter of Credit Application may be submitted by such Designated
Borrower until the date five Business Days after such effective date.


 


(c)           Concurrently with the delivery of
each Designated Borrower Request and Assumption Agreement, the related
Applicant Borrower shall execute and deliver to the Administrative Agent a
counterpart of the Guaranty Agreement or such other document as the
Administrative Agent shall deem appropriate in order for such Subsidiary to
provide an unconditional guaranty of the Obligations of each other Borrower (in
the case of any Domestic Designated Borrower) or each other Foreign Designated
Borrower (in the case of any Foreign Designated Borrower), in form, content and
scope reasonably satisfactory to the Administrative Agent.


 


(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 


 


50





















 


accordance with the terms of
this Agreement shall be deemed to have been delivered to each Designated
Borrower.


 


(e)           The Company may from time to time,
upon not less than 15 Business Days’ notice from the Company to the
Administrative Agent (or such shorter period as may be agreed by the
Administrative Agent in its sole discretion), terminate a Designated Borrower’s
status as such, provided that (i) there
are no outstanding Loans payable by such Designated Borrower and (ii) there
are not outstanding Letters of Credit that were issued at the request of such
Designated Borrower, or other amounts payable by such Designated Borrower on
account of any Loans made to it or Letters of Credit issued at its request, as
of the effective date of such termination. The Administrative Agent will
promptly notify the Lenders of any such termination of a Designated Borrower’s
status.


 


2.15        Domestic Subsidiary
Guarantors.  The Company
may at any time deliver to the Administrative Agent a revised Schedule 5.19
setting forth Domestic Subsidiaries of the Company sufficient to cause the
representation and warranty set forth in Section 5.19 to be true
and correct as of the date of delivery of such revised Schedule.  On the date of delivery by the Company of a
revised Schedule 5.19 pursuant to this Section 2.15, which
revised Schedule indicates that any Domestic Subsidiary has become a Material
Domestic Subsidiary, the Company shall cause such Domestic Subsidiary to (x) become
a Domestic Subsidiary Guarantor by executing and delivering to the
Administrative Agent a counterpart of the Guaranty Agreement or such other
document as the Administrative Agent shall deem appropriate in order for such
Domestic Subsidiary to provide an unconditional guaranty of the Obligations of
the Borrowers and (y) deliver to the Administrative Agent documents of the
types referred to in clauses (iii), (iv) and (vii) of
Section 4.01(a) and, if requested by the Administrative Agent,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (x)), all in form, content and scope
reasonably satisfactory to the Administrative Agent.  Promptly following (i) delivery by the
Company of a revised Schedule 5.19 pursuant to this Section 2.15,
which revised Schedule indicates that any Domestic Subsidiary has ceased to
constitute a Material Domestic Subsidiary and (ii) delivery by the Company
of any documentation required pursuant to the foregoing sentence with respect
to such revised Schedule, the Administrative Agent shall be authorized to, and
shall promptly, execute and deliver to the Company such documentation as the
Company may reasonably request in order to release such Domestic Subsidiary
from the Guaranty Agreement.


 


2.16        Increase in
Commitments.


 


(a)           Request for
Increase.  Provided there
exists no Default, upon notice to the Administrative Agent (which shall
promptly notify the Lenders), the Company may from time to time, request an
increase in the Aggregate Commitments by an amount (for all such requests in
the aggregate) not exceeding $150,000,000; provided
that any such request for an increase shall be in a minimum amount of
$5,000,000.  At the time of sending such
notice, the Company (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders).


 


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(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 2.16,
the Administrative Agent and the Company shall determine the effective date
(the “Increase Effective Date”) and the
final allocation of such increase.  The
Administrative Agent shall promptly notify the Company and the Lenders of the
final allocation of such increase and the Increase Effective Date.


 


(e)           Conditions
to Effectiveness of Increase. 
As a condition precedent to such increase, the Company shall deliver to
the Administrative Agent a certificate of each Loan Party dated as of the
Increase Effective Date (in sufficient copies for each Lender) signed by a
Responsible Officer of such Loan Party (I) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to such
increase, and (II) in the case of the Company, certifying that, before and
after giving effect to such increase, (A) the representations and
warranties contained in Article V and
the other Loan Documents are (i) with respect to any representations or
warranties that contain a materiality qualifier, true and correct in all
respects and (ii) with respect to any representations or warranties that
do not contain a materiality qualifier, true and correct in all material
respects, on and as of the Increase Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct in such respects as of such earlier date,
and except that for purposes of this Section 2.16,
the representations and warranties contained in subsection (a) of Section 5.05 shall be deemed to refer to the
most recent statements furnished pursuant to clauses (a) and (b) of
Section 6.01 (subject, in the case of any
unaudited statements furnished pursuant to clause (b) of
Section 6.01, to the absence of footnotes and to normal year-end
audit adjustments), and (B) no Default exists.  The Borrowers shall prepay any Committed
Loans outstanding on the Increase Effective Date (and pay any additional
amounts required pursuant to Section 3.05)
on a non-ratable basis to the extent necessary to keep the outstanding
Committed Loans ratable with any revised Applicable Percentages arising from
any nonratable increase in the Commitments under this Section 2.16.


 


(f)            Conflicting
Provisions.  This Section 2.16
shall supersede any provisions in Sections 2.13
or 10.01 to the contrary.


 


2.17        Lenders Representation
Regarding Dutch Banking Act. Each Lender which is a
party to this Agreement on the date hereof represents and warrants to the
Initial Designated 


 


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Borrower on the date hereof
that (i) it is a PMP, (ii) it is aware that it does not benefit from
the protection offered by the Dutch Banking Act to Lenders which are not PMPs,
and (iii) it has made its own independent appraisal of risks arising under
or in connection with any Loan Documents. Each Lender acknowledges that the
Initial Designated Borrower has relied upon such representation and warranty.


 


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 


 


53





















 


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 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 


 


54

















 


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 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 


 


55





















 


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 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 Rate Loan made by it,
or change the basis of taxation of payments to such Lender or the L/C Issuer in
respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender or the L/C
Issuer); 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 Rate Loans made by such Lender or any Letter of Credit or
participation therein;


 


and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
any Eurocurrency Rate 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 


 


56

















 


maintaining any Letter of
Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or the L/C Issuer hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender or the L/C Issuer, the Company
will pay (or cause the applicable Designated Borrower to pay) to such Lender or
the L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.


 


(b)           Capital
Requirements.  If any Lender
or the L/C Issuer determines that any Change in Law affecting such Lender or
the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C
Issuer’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the L/C
Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding
company, if any, as a consequence of this Agreement, the Commitments of such
Lender or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the L/C Issuer, to a level
below that which such Lender or the L/C Issuer or such Lender’s or the L/C
Issuer’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the L/C Issuer’s policies and the policies
of such Lender’s or the L/C Issuer’s holding company with respect to capital
adequacy), then from time to time the Company will pay (or cause the applicable
Designated Borrower to pay) to such Lender or the L/C Issuer, as the case may
be, such additional amount or amounts as will compensate such Lender or the L/C
Issuer or such Lender’s or the L/C Issuer’s holding company for any such
reduction suffered.


 


(c)           Certificates
for Reimbursement.  A
certificate of a Lender or the L/C Issuer setting forth the amount or amounts
necessary to compensate such Lender or the L/C Issuer or its holding company,
as the case may be, as specified in subsection (a) or (b) of
this Section 3.04 and delivered to the Company shall be conclusive
absent manifest error.  The Company shall
pay (or cause the applicable Designated Borrower to pay) such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.


 


(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 


 


57





















 


of such reserves allocated
to such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), and (ii) as long as such Lender shall
be required to comply with any reserve ratio requirement or analogous
requirement of any other central banking or financial regulatory authority
imposed in respect of the maintenance of the Commitments or the funding of the
Eurocurrency Rate Loans, such additional costs (expressed as a percentage per
annum and rounded upwards, if necessary, to the nearest five decimal places)
equal to the actual costs allocated to such Commitment or Loan by such Lender
(as determined by such Lender in good faith, which determination shall be
conclusive), which in each case shall be due and payable on each date on which
interest is payable on such Loan, provided
the Company shall have received at least 10 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest or costs from such
Lender.  If a Lender fails to give notice
10 days prior to the relevant Interest Payment Date, such additional interest
or costs shall be due and payable 10 days from receipt of such notice.


 


3.05        Compensation
for Losses.  Upon demand
of any Lender (with a copy to the Administrative Agent) from time to time, the
Company shall promptly compensate (or cause the applicable Designated Borrower
to compensate) such Lender for and hold such Lender harmless from any loss,
cost or expense incurred by it as a result of:


 


(a)           any continuation, conversion, payment
or prepayment of any Loan other than a Base Rate Loan on a day other than the
last day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);


 


(b)           any failure by any Borrower (for a
reason other than the failure of such Lender to make a Loan) to (i) prepay
or borrow any Loan other than a Base Rate Loan or (ii) continue or convert
any Loan as or into a Eurocurrency Rate Loan, in each case on the date or in
the amount notified by the Company or the applicable Designated Borrower;


 


(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.


 


58

















 


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 provides notice under Section
3.02, or if any Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, the Company may
replace such Lender in accordance with Section 10.13.


 


3.07        Survival.  All of the Borrowers’ obligations under this Article III shall survive termination of the
Aggregate Commitments 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) the Guaranty Agreement 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;


 


59














 


(iii)          such certificates or resolutions or other action,
incumbency certificates and/or other certificates of Responsible Officers of
each Loan Party as the Administrative Agent may require evidencing the
identity, authority and capacity of each Responsible Officer thereof authorized
to act as a Responsible Officer in connection with this Agreement and the other
Loan Documents to which such Loan Party is a party;


 


(iv)          such documents and certifications as the Administrative
Agent may reasonably require to evidence that each Loan Party is duly organized
or formed, and that each Loan Party is validly existing, in good standing and
qualified to engage in business in its jurisdiction of organization;


 


(v)           a favorable opinion of (i) Wilmer Cutler Pickering
Hale and Dorr LLP, U.S. counsel to the Loan Parties, and (ii) Kenneth R.
Lepage, Assistant General Counsel of the Company, in each case addressed to the
Administrative Agent and each Lender, in form and substance acceptable to the
Administrative Agent and each Lender;


 


(vi)          a favorable opinion of NautaDutilh, Dutch counsel to the
Administrative Agent, addressed to the Administrative Agent and each Lender, in
form and substance acceptable to the Administrative Agent and each Lender;


 


(vii)         a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by such
Loan Party and the validity against such Loan Party of the Loan Documents to which
it is a party, and such consents, licenses and approvals shall be in full force
and effect, or (B) stating that no such consents, licenses or approvals
are so required;


 


(viii)        a certificate signed by a
Responsible Officer of the Company certifying (A) that the conditions
specified in Sections 4.02(a) and
(b) have been
satisfied and (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect;


 


(ix)           a copy of each of (i) the
2006 Note Purchase Agreement and (ii) Amendment No. 1 to the 2003
Note Purchase Agreement, in each case duly executed by each party thereto and
in form and substance satisfactory to the Administrative Agent and each Lender;
and


 


(x)            such other assurances, certificates, documents, consents
or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender
or the Required Lenders reasonably may require.


 


(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 


 


60

















 


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 signed
this Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received written notice from such Lender
prior to the proposed Closing Date specifying its objection thereto.


 


4.02        Conditions to all
Credit Extensions.  The
obligation of each Lender and the L/C Issuer to honor any Request for Credit
Extension (other than a Committed Loan Notice requesting only a conversion of
Committed Loans to the other Type, or a continuation of Eurocurrency Rate
Loans) is subject to the following conditions precedent:


 


(a)           The representations and warranties of
(i) the Borrowers contained in Article V
(other than, in the case of any Credit Extension after the initial Credit
Extension hereunder, the representation and warranty set forth in Section 5.05(c)) and (ii) each Loan
Party contained in each other Loan Document or in any document furnished at any
time under or in connection herewith or therewith, shall be (x) with
respect to any representations or warranties that contain a materiality
qualifier, true and correct in all respects and (y) with respect to any
representations or warranties that do not contain a materiality qualifier, true
and correct in all material respects, on and as of the date of such Credit Extension,
except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they shall be true and correct in such
respects as of such earlier date, and except that for purposes of this Section 4.02, the representations and
warranties contained in subsection (a) of Section 5.05
shall be deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b) of Section 6.01 (subject, in
the case of any unaudited statements furnished pursuant to clause (b) of Section
6.01, to the absence of footnotes and to normal year-end audit
adjustments).


 


(b)           No Default shall exist, or would
result from such proposed Credit Extension or the application of the proceeds
thereof.


 


(c)           The Administrative Agent and, if
applicable, the L/C Issuer or the Swing Line Lender shall have received a
Request for Credit Extension in accordance with the requirements hereof.


 


(d)           If the applicable Borrower is a
Designated Borrower (other than the Initial Designated Borrower), then the
conditions of Section 2.14(b) to
the designation of such Borrower as a Designated Borrower shall have been met
to the satisfaction of the Administrative Agent.


 


(e)           In the case of a Credit Extension to
be denominated in Euros, there shall not have occurred any change in national
or international financial, political or economic conditions or currency
exchange rates or exchange controls which in the reasonable opinion of the
Administrative Agent, the Required Lenders (in the case of any Loans to be denominated
in 


 


61





















 


Euros) or the L/C Issuer (in
the case of any Letter of Credit to be denominated in Euros) would make it
impracticable for such Credit Extension to be denominated in Euros.


 


Each Request for Credit
Extension (other than a Committed Loan Notice requesting only a conversion of
Committed Loans to the other Type or a continuation of Eurocurrency Rate Loans)
submitted by a Borrower shall be deemed to be a representation and warranty by
such Borrower that the conditions specified in Sections
4.02(a) and (b) have
been satisfied on and as of the date of the applicable Credit Extension.


 


ARTICLE V.

REPRESENTATIONS AND WARRANTIES


 


Except as otherwise provided
in Section 5.20, each Borrower
represents and warrants to the Administrative Agent and the Lenders that:


 


5.01        Existence,
Qualification and Power.  Each Loan Party and each Subsidiary thereof
(a)(i) is duly organized or formed and validly existing and (ii) is
in good standing (to the extent such concept is applicable to such entity), in
each case under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own
or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party and
(c) is duly qualified and is licensed and, as applicable, in good standing
under the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license; except in each case referred to in clause (a)(ii), (b)(i) or
(c), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.


 


5.02        Authorization;
No Contravention.  The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is party, have been duly authorized by all necessary
corporate or other organizational action, and do not and will not (a) contravene
the terms of any of such Person’s Organization Documents; (b) 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 


 


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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
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)           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 2006 to 2011 fiscal years. 
The Company has disclosed all material assumptions made with respect to
general economic, financial and market conditions used in formulating such
projections and such projections.  The
projections reflect the reasonable estimates of the Company and its
Subsidiaries of the results of operations and other information projected therein.


 


(c)           Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.


 


(d)           To the best knowledge of the Company,
(i) no Internal Control Event involving fraud exists or has occurred since
the date of the Audited Financial Statements and (ii) no Internal Control
Event resulting from a material weakness in the Company’s internal controls
over financial reporting that could reasonably be expected to have a Material
Adverse Effect exists or has occurred since the date of the Audited Financial
Statements.


 


5.06        Litigation.  There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of the Company, threatened at
law, in equity, in arbitration or before any Governmental Authority, by or
against the Company or any of its Subsidiaries or against any of their
properties or revenues that (a) purport to affect or pertain to the
Existing Credit Agreement, this Agreement or any other Loan Document, or any of
the transactions contemplated thereby or hereby, or (b) except as
specifically disclosed in Schedule 5.06,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.


 


5.07        No Default.  Neither the Company nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  No Default has occurred
and is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.


 


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5.08        Ownership of
Property; Liens.  Each
of the Company and each Subsidiary has good record and marketable title in fee
simple to, or valid leasehold interests in, all real property necessary or used
in the ordinary conduct of its business, except for such defects in title as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  The property of
the Company and its Subsidiaries is subject to no Liens, other than Liens
permitted by Section 7.01.


 


5.09        Environmental
Compliance.  The Company
and its Subsidiaries conduct in the ordinary course of business a review of the
effect of existing Environmental Laws and claims alleging potential liability
or responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof the Company has
reasonably concluded that, 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 


 


64





















 


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 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.


 


(a)           No Borrower is engaged or will
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock.  Following the application
of the proceeds of each Borrowing or drawing under each Letter of Credit, not
more than 25% of the value of the assets (either of the applicable Borrower
only or of the Company and its Subsidiaries on a consolidated basis) subject to
the provisions of Section 7.01 or Section 7.05 or subject to any restriction
contained in any agreement or instrument between any Borrower and any Lender or
any Affiliate of any Lender relating to Indebtedness and within the scope of Section 8.01(e) will be
margin stock.


 


(b)           None of the Company, any Person
Controlling the Company, or any Subsidiary is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.


 


5.15        Disclosure.  No report, financial statement, certificate
or other information furnished (in writing) by or on behalf of any Loan Party
to the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered
hereunder or under any other Loan Document (in each case, as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact (known to the Company
or any of its Subsidiaries in the case of any document or information not
furnished by one of its Subsidiaries) necessary to make the 


 


65





















 


statements therein, in the
light of the circumstances under which they were made, not misleading; provided that, with respect to projected
financial information, the Company represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.


 


5.16        Compliance with
Laws.  Each of the
Company and each Subsidiary is in compliance in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted or (b) the
failure to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.


 


5.17        Intellectual
Property; Licenses, Etc.  The Company and its Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”)
that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person, except as could not
reasonably be expected to have a Material Adverse Effect.  To the best knowledge of the Company, no
slogan or other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed, by the
Company or any Subsidiary infringes upon any rights held by any other Person,
except as could not reasonably be expected to have a Material Adverse
Effect.  No claim or litigation regarding
any of the foregoing is pending or, to the best knowledge of the Company,
threatened, which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.


 


5.18        Senior Note
Documents.  The Company
has heretofore furnished to the Administrative Agent true, complete and correct
copies of the Senior Note Documents (including schedules, exhibits and annexes
thereto).  The Senior Note Documents have
not been amended, supplemented or modified since the Closing Date (except as
otherwise 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) either the 2003 Note Purchase Agreement
or the 2006 Note Purchase Agreement has occurred and is continuing.


 


5.19        Material
Domestic Subsidiaries.  As of
the Closing Date Schedule 5.19, or as of
the date thereof the most recent supplement to Schedule 5.19 delivered
by the Company pursuant to Section 6.02(f) or Section 7.04(c)(iv) or
the most recent revised Schedule 5.19 delivered by the Company pursuant
to Section 2.15, sets forth Domestic Subsidiaries of the Company
(on a Pro Forma Basis, in the case of any supplement delivered pursuant to Section 7.04(c)(iv))
(i) the total assets of which (not including Equity Interests of its
Subsidiaries), in the aggregate together with the total assets of the Company
(not including Equity Interests of its Subsidiaries), exceed eighty-five
percent (85.0%) of the total assets of the Company and its Domestic
Subsidiaries in the aggregate (not including Equity Interests of their
respective Subsidiaries) and (ii) the EBITDA of which for the most
recently ended fiscal quarter, in the aggregate together with the EBITDA of the
Company for such fiscal quarter, exceeds eighty-five percent (85.0%) of the
EBITDA of the Company and its Domestic Subsidiaries in the aggregate for such
fiscal quarter.  


 


66





















 


As of the Closing Date, no
Subsidiary of the Company (other than any Material Domestic Subsidiary)
provides any Guarantee with respect to any Indebtedness of the Company (other
than the Obligations).


 


5.20        Representations
as to Foreign Loan Parties.  Each of the Company and each Foreign Loan
Party represents and warrants to the Administrative Agent and the Lenders that:


 


(a)           Such Foreign Loan Party is subject to
civil, commercial and common Laws with respect to its obligations under this
Agreement and the other Loan Documents to which it is a party (collectively as
to such Foreign Loan Party, the “Applicable Foreign
Loan Party Documents”), and the execution, delivery and performance
by such Foreign Loan Party of the Applicable Foreign Loan Party Documents
constitute and will constitute private and commercial acts and not public or
governmental acts.  Neither such Foreign
Loan Party nor any of its property has any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise)
under the laws of the jurisdiction in which such Foreign Loan Party is
organized and existing in respect of its obligations under the Applicable
Foreign Loan Party Documents.


 


(b)           The Applicable Foreign Loan Party
Documents are in proper legal form under the Laws of the jurisdiction in which
such Foreign Loan Party is organized and existing for the enforcement thereof
against such Foreign Loan Party under the Laws of such jurisdiction (or such
other law as shall be specified in such documents), and to ensure the legality,
validity, enforceability (except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally), priority and admissibility in evidence of the Applicable
Foreign Loan Party Documents.  It is not
necessary to ensure the legality, validity, enforceability, priority or
admissibility in evidence of the Applicable Foreign Loan Party Documents that
the Applicable Foreign Loan Party Documents be filed, registered or recorded
with, or executed or notarized before, any court or other authority in the
jurisdiction in which such Foreign Loan Party is organized and existing or that
any registration charge or stamp or similar tax be paid on or in respect of the
Applicable Foreign Loan Party Documents or any other document, except for (i) any
such filing, registration, recording, execution or notarization as has been
made or is not required to be made until the Applicable Foreign Loan Party
Document or any other document is sought to be enforced and (ii) any
charge or tax as has been timely paid.


 


(c)           There is no tax, levy, impost, duty,
fee, assessment or other governmental charge, or any deduction or withholding,
imposed by any Governmental Authority in or of the jurisdiction in which such
Foreign Loan Party is organized and existing either (i) on or by virtue of
the execution or delivery of the Applicable Foreign Loan Party Documents or (ii) on
any payment to be made by such Foreign Loan Party pursuant to the Applicable
Foreign Loan Party Documents, except as has been disclosed to the
Administrative Agent.


 


(d)           The execution, delivery and
performance of the Applicable Foreign Loan Party Documents executed by such Foreign
Loan Party are, under applicable foreign exchange control regulations of the
jurisdiction in which such Foreign Loan Party is organized and existing, not
subject to any notification or authorization except (i) such as have been
made or obtained or (ii) 


 


67





















 


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)           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 Dutch Banking Act because the Initial
Designated Borrower is and has always been the holding company of a group of
European industrial Subsidiaries and is and has always been actively involved
and concerned with the management and the business of its Subsidiaries and
Affiliates. The Initial Designated Borrower does not passively invest in any of
its Subsidiaries or Affiliates, 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 the Initial Designated Borrower and its Subsidiaries and
Affiliates.  All funds extended by the
Initial Designated Borrower have been extended to its Subsidiaries and
Affiliates only.


 


(b)           As of the Closing Date, no works
council (ondernemingsraad) has
been established or is in the process of being established with respect to the
business of the Initial Designated Borrower.


 


(c)           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.


 


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ARTICLE VI.

AFFIRMATIVE COVENANTS


 


So
long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Company shall, and shall (except in the
case of the covenants set forth in Sections 6.01,
6.02, and 6.03)
cause each Subsidiary to:


 


6.01        Financial
Statements.  Deliver to
the Administrative Agent and each Lender, in form and detail satisfactory to
the Administrative Agent and the Required Lenders:


 


(a)           as soon as practicable, but in any
event on or prior to the date 90 days after the end of each fiscal year (or, if
earlier, the date five days after the date by which the Company shall be
required to submit its Form 10-K (or any successor form) to the Commission
with respect to such fiscal year), (i) a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, such consolidated statements to be audited and
accompanied by (i) a report and opinion of a Registered Public Accounting
Firm of nationally recognized standing reasonably acceptable to the Required
Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and applicable Securities Laws and shall
not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit and 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 and cash flows for such
fiscal quarter and for the portion of the Company’s fiscal year then ended,
setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, such
consolidated statements to be certified by a Responsible Officer of the Company
as fairly presenting the financial condition, results of operations and cash
flows of the Company and its Subsidiaries in accordance with GAAP, subject only
to normal year-end audit adjustments and the absence of footnotes and (y) consolidating
statements of income or operations for the Company and its Subsidiaries to the
extent that such financial statements are prepared and distributed to the
senior management of the Company with respect to such fiscal quarter, such
consolidating statements to be certified by a Responsible Officer of the
Company to the effect that such statements are fairly 


 


69





















 


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;


 


(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 Domestic Subsidiary Guarantors (x) the total
assets of which, in the aggregate, exceed fifteen percent (15.0%) of the total
assets of the Company and its Domestic Subsidiaries in the aggregate or (y) the
EBITDA of which, in the aggregate for the most recent fiscal quarter, exceeds
fifteen percent (15.0%) of the EBITDA of the Company and its Domestic
Subsidiaries in the aggregate for such fiscal quarter, the Company shall,
promptly and in any 


 


70

















 


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 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.


 


Each Borrower hereby
acknowledges that (a) the Administrative Agent and/or the Arrangers will
make available to the Lenders and the L/C Issuer materials and/or information
provided by or on behalf of such Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to any Borrower or its securities)
(each, a “Public Lender”).  Each
Borrower hereby agrees that (w) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative
Agent, the Arrangers, the L/C Issuer and the Lenders to treat such Borrower
Materials as not containing any material non-public information with respect to
the Borrowers or their respective securities for purposes of United States
Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as
set forth in Section 10.07); (y) all Borrower Materials marked
“PUBLIC” are permitted to be made available through a portion 


 


71

















 


of
the Platform designated “Public Investor;” and (z) the Administrative
Agent and the Arrangers shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated “Public Investor.”


 


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


 


(a)           of the occurrence of any Default;


 


(b)           of any matter 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;


 


(e)           of the determination by the
Registered Public Accounting Firm providing the opinion required under Section 6.01(a)(ii) (in
connection with its preparation of such 
opinion) or the Company’s determination at any time of the occurrence or
existence of any Internal Control Event; and


 


(f)            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 the following: (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 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 


 


72





















 


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.  (i) 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 and (ii) in
the event the Initial Designated Borrower changes any of the characteristics of
its business described in Section 5.21(a), comply with all applicable
regulatory requirements (if any).


 


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 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.


 


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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 Loan Party is organized and existing, and all approvals
and consents of each other Person in such jurisdiction, in each case that are
required in connection with the execution, delivery and performance by such
Foreign Loan Party of the Loan Documents to which it is a party.


 


6.13                        Amendments
to Governing Documents. 
Promptly furnish to the Administrative Agent any material amendment,
supplement or modification to any of such Person’s Organization Documents
permitted by Section 7.11.


 


6.14                        Additional
Domestic Subsidiary Guarantors.


 


(a)                                  In
addition to causing each Material Domestic Subsidiary as of the Closing Date to
execute and deliver a Guaranty, each as required by Section 4.01(a),
cause each Subsidiary that becomes a Material Domestic Subsidiary after the
Closing Date, as promptly as possible, but in any event within ninety (90) days
after submission to the Administrative Agent by the Company of a supplement to Schedule
5.19 as required by Section 6.02(f) or Section 7.04(c)(iv) which
supplement indicates that such Domestic Subsidiary has become a Material
Domestic Subsidiary, to (x) become a Domestic Subsidiary Guarantor by
executing and delivering to the Administrative Agent a counterpart of the
Guaranty Agreement or such other document as the Administrative Agent shall
deem appropriate in order for such Subsidiary to provide an unconditional
guaranty of the Obligations of the Borrowers and (y) deliver to the
Administrative Agent documents of the types referred to in clauses (iii),
(iv) and (vii) of Section 4.01(a) and, if
requested by the Administrative Agent, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to in clause (x)),
all in form, content and scope reasonably satisfactory to the Administrative Agent.


 


(b)                                 If at
any time any Subsidiary of the Company (including any Foreign Subsidiary) that
is not a Domestic Subsidiary Guarantor provides any Guarantee with respect to
any Indebtedness of the Company or any Domestic Designated Borrower other than
the Obligations, cause such Subsidiary, as promptly as possible but in any
event within sixty (60) days after the date upon which such Subsidiary shall
have guaranteed such Indebtedness, to (x) become a Domestic Subsidiary
Guarantor by executing and delivering to the Administrative Agent a counterpart
of the Guaranty Agreement or such other document as the Administrative Agent
shall deem appropriate in order for such Subsidiary to provide an unconditional
guaranty of the Obligations of the Borrowers and (y) deliver to the
Administrative Agent documents of the types referred to in clauses (iii),
(iv) and (vii) of Section 4.01(a) and, if
requested by the Administrative Agent, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to in clause (x)),
all in form, content and scope reasonably satisfactory to the Administrative
Agent.


 


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6.15                        Foreign Subsidiary Guarantors.  Cause each Foreign Subsidiary listed on Schedule
6.15, on or before the date sixty (60) days after the Closing Date or such
later date as may be agreed to in writing by the Administrative Agent in its
sole discretion, to (x) execute and deliver to the Administrative Agent a
counterpart of the Guaranty Agreement or such other document as the
Administrative Agent shall deem appropriate in order for such Subsidiary to
provide an unconditional guaranty of the Obligations of each Foreign Designated
Borrower and (y) deliver to the Administrative Agent documents of the
types referred to in clauses (iii) and (iv) of Section 4.01(a) and  favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to in clause (x)), all
in form, content and scope reasonably satisfactory to the Administrative Agent.


 


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 except as contemplated by Section 7.03(b),
and (iii) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.03;


 


(c)                                  Liens
for taxes not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;


 


(d)                                 carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;


 


(e)                                  pledges
or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA;


 


75

















 


(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;


 


(h)                                 Liens
securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h) (including due to any such judgment
having been stayed pending appeal) or securing appeal or other surety bonds
related to such judgments;


 


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


 


(j)                                     Liens
on any property owned by Watts Germany, any Subsidiary thereof or any German
Subsidiary of which Watts Germany is a Subsidiary, in each case securing
Indebtedness permitted by Section 7.03(e)(ii); and


 


(k)                                  Liens
securing Indebtedness permitted under Section 7.03(h); provided,
that (i) if the grantor of such Liens is a Domestic Loan Party, the
grantee of such Liens must be a Domestic Loan Party and (ii) if the
grantor of such Liens is a Foreign Loan Party, the grantee of such Liens must
be a Loan Party.


 


7.02                        Investments.  Make any Investments, except:


 


(a)                                  existing
Investments in Subsidiaries and other Investments in existence on the Closing
Date and described in Schedule 7.02 and any renewal or extension of any
such Investments that does not increase the amount of the Investment being
renewed or extended as determined as of such date of renewal or extension;


 


(b)                                 Investments
held by the Company or such Subsidiary in the form of cash equivalents or
short-term marketable debt securities;


 


(c)                                  subject
to the limitations set forth in Sarbanes-Oxley and all rules and
regulations related thereto, (i) advances to officers, directors and
employees of the Company and Subsidiaries for travel, entertainment, relocation
and analogous ordinary business purposes and (ii) loans to employees of the
Company pursuant to the terms of the Company’s non-qualified stock option plan,
secured by pledges of the Equity Interests of the Company owned by such
employee; provided that the aggregate outstanding amount of such
Investments permitted pursuant to this Section 7.02(c) shall
not exceed $3,000,000 at any time;


 


(d)                                 Investments
from the Company to any Subsidiary or from any Subsidiary to the Company or any
other Subsidiary;


 


(e)                                  Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and 


 


76

















 


Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;


 


(f)                                    Guarantees
permitted by Section 7.03;


 


(g)                                 Investments
(other than Investments permitted pursuant to Section 7.02(a)) in
or to joint ventures in lines of business that are the same or similar to the
line of business in which the Company and its Subsidiaries are then engaged
prior to such Investment; provided, that such Investments consisting of
loans, advances, Guarantees or cash capital contributions shall not exceed
$50,000,000 in the aggregate at any time outstanding; and


 


(h)                                 Investments
in Permitted Acquisitions;


 


provided, that the aggregate book value of all
property subject to Specified JV/Intercompany Asset Transfers in any fiscal
year, together with the book value of all property Disposed of in reliance on Section 7.05(i) during
such fiscal year, shall not exceed 12.5% of Consolidated Total Assets as of the
end of the preceding fiscal year.


 


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


 


(a)                                  Indebtedness
under the Loan Documents;


 


(b)                                 Indebtedness
outstanding on the date hereof and listed on Schedule 7.03, and any
refinancings, refundings, renewals or extensions thereof; provided that
(i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder  and
(ii) the terms relating to principal amount, amortization, maturity,
collateral (if any) and subordination (if any), and other material terms taken
as a whole, of any such refinancing, refunding, renewing or extending
Indebtedness, and of any agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material respect to the Loan
Parties or the Lenders than the terms of any agreement or instrument governing
the Indebtedness being refinanced, refunded, renewed or extended and the
interest rate applicable to any such refinancing, refunding, renewing or
extending Indebtedness does not exceed the then applicable market interest
rate;


 


(c)                                  obligations
(contingent or otherwise) of the Company or any Subsidiary existing or arising
under any Swap Contract, provided that (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);


 


77

















 


(e)                                  (i) unsecured
Indebtedness of any Subsidiary of the Company and (ii) secured
Indebtedness (including Attributable Indebtedness in respect of capital leases,
Synthetic Lease Obligations and Permitted Receivables Purchase Facilities and
Indebtedness in respect of purchase money obligations for fixed or capital
assets) of Watts Germany and its Subsidiaries, in an aggregate outstanding
principal amount not to exceed at any time 12.5% of Consolidated Total Assets
as of the end of the preceding fiscal year;


 


(f)                                    secured
Indebtedness (including Attributable Indebtedness in respect of capital leases,
Synthetic Lease Obligations and Permitted Receivables Purchase Facilities and
Indebtedness in respect of purchase money obligations for fixed or capital
assets) of the Company or any of its Subsidiaries (other than Watts
Germany and its Subsidiaries) in an aggregate principal amount not to exceed
$50,000,000 at any time outstanding;


 


(g)                                 Attributable
Indebtedness in respect of Permitted Receivables Purchase Facilities in an
aggregate principal amount not to exceed $100,000,000 at any time outstanding;


 


(h)                                 Indebtedness
of (i) the Company owing to any Subsidiary thereof or (ii) any
Subsidiary owing to the Company or any other Subsidiary; and


 


(i)                                     Guarantees
of (i) the Company in respect of Indebtedness otherwise permitted
hereunder of any Subsidiary and (ii) subject to Section 6.14(b),
any Subsidiary in respect of Indebtedness otherwise permitted hereunder of the
Company or any other Subsidiary.


 


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 (w) when any Domestic Designated
Borrower is liquidating or dissolving into, or merging with and into, another
Subsidiary, a Domestic Designated Borrower shall be the continuing or surviving
Person, (x) when any Domestic Subsidiary Guarantor  is
liquidating or dissolving into, or merging with and into, another Subsidiary
other than any Domestic Designated Borrower, a Domestic Subsidiary Guarantor
shall be the continuing or surviving Person, (y) when any Foreign
Designated Borrower is liquidating or dissolving into, or merging with and
into, another Subsidiary other than any Domestic Loan Party, a Foreign
Designated Borrower shall be the continuing or surviving Person and
(z) when any Foreign Subsidiary Guarantor  is
liquidating or dissolving into, or merging with and into, another Subsidiary
other than any Foreign Designated Borrower or any Domestic Loan Party, a
Foreign Subsidiary Guarantor shall be the continuing or surviving Person;


 


(b)                                 any
Subsidiary (other than any Designated Borrower) may Dispose of all or
substantially all of its assets (upon voluntary liquidation or otherwise) to
the Company or to another Subsidiary; provided that (i) if the
transferor in such a transaction is a Domestic 


 


78

















 


Subsidiary Guarantor, then
the transferee must be a Domestic Loan Party and (ii) if the transferor in
such a transaction is a Foreign Subsidiary Guarantor, then the transferee must
be a Loan Party;


 


(c)                                  the
Company or any Subsidiary may consummate any Acquisition with respect to which
the following conditions are satisfied (a “Permitted Acquisition”):


 


(i)                                     the Person to be acquired (the “Target”) is not engaged in any
material line of business substantially different from those lines of business
conducted by the Company and its Subsidiaries on the date hereof or any
business substantially related or incidental thereto;


 


(ii)                                  the board of directors and (if required by applicable law) the
shareholders, or the equivalent thereof, of each of the Company or the
applicable Subsidiary and of the Target has approved such Acquisition; provided,
that, in the case of any Target that is a Public Company, such approval of the
board of directors of the Target shall have been obtained prior to any tender
offer or similar solicitation of the holders of voting securities of the Target
and shall not have been withdrawn;


 


(iii)                               any Indebtedness directly or indirectly incurred or assumed in connection
with such Acquisition shall have been permitted to be incurred or assumed
pursuant to Section 7.03;


 


(iv)                              if the Purchase Price for such Acquisition is greater than or equal to
$75,000,000, then concurrent with the consummation of such Acquisition, the
Company shall have delivered to the Administrative Agent (A) a Compliance
Certificate prepared on a Pro Forma Basis demonstrating that the Consolidated
Leverage Ratio as of the end of the most recent fiscal quarter is not greater
than 0.25x less than the maximum permitted Consolidated Leverage Ratio as of
the end of such fiscal quarter pursuant to Section 7.13(c),
(B) a supplement to Schedule 5.19 setting forth Domestic
Subsidiaries of the Company necessary to make the representation and warranty
set forth in Section 5.19 true and correct after giving effect to
such Permitted Acquisition and (C) a certificate from the chief financial
officer of the Company to the effect that (1) the Company and its
Subsidiaries, on a consolidated and consolidating basis, will be solvent both
before and after consummating such Acquisition and (2) no Default or Event
of Default then exists or would result after giving effect to such Acquisition;


 


(v)                                 in the case of an Acquisition by the Company or such Subsidiary of
(i) Equity Interests of any Target organized under the laws of the United
States or any State thereof, the Target shall become a direct or indirect
wholly owned Subsidiary of the Company or (ii) any business or line of
business of any Target, such business or line of business shall be acquired by
a direct or indirect wholly owned subsidiary of the Company;


 


(vi)                              the business to be acquired would not subject the Administrative Agent or
any Lender to regulatory or third party approvals in connection with the
exercise of any of its rights and remedies under this Agreement or any other
Loan Document;


 


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(vii)                           no contingent obligations or liabilities will be incurred or assumed in
connection with such acquisition which (x) are required to be described in
the footnotes of the Company’s financial statements in accordance with GAAP and
(y) could reasonably be expected to have a Material Adverse Effect; and


 


(viii)                        the Consolidated Leverage Ratio immediately after giving effect to such
Acquisition on a Pro Forma Basis shall not be greater than 0.25x less than the
maximum permitted Consolidated Leverage Ratio as of the end of the most recent
fiscal quarter pursuant to Section 7.13(c).


 


7.05                        Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except:


 


(a)                                  Dispositions
of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business;


 


(b)                                 Dispositions
of inventory in the ordinary course of business;


 


(c)                                  Dispositions
of Permitted Receivables pursuant to Permitted Receivables Purchase Facilities;


 


(d)                                 Dispositions
of equipment or real property to the extent that (i) such property is exchanged
for credit against the purchase price of similar replacement property or
(ii) the proceeds of such Disposition are reasonably promptly applied to
the purchase price of such replacement property;


 


(e)                                  Dispositions
of property by (i) the Company to any Subsidiary or (ii) any
Subsidiary to the Company or any other Subsidiary; provided, that the
aggregate book value of all property subject to Specified JV/Intercompany Asset
Transfers in any fiscal year, together with the book value of all property
Disposed of in reliance on Section 7.05(i) during such fiscal
year, shall not exceed 12.5% of Consolidated Total Assets as of the end of the
preceding fiscal year;


 


(f)                                    Dispositions
permitted by Section 7.04;


 


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


 


(h)                                 licenses
of IP Rights, 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, together with the book value of all property 


 


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subject to Specified
JV/Intercompany Asset Transfers during such fiscal year, shall not exceed 12.5%
of Consolidated Total Assets as of the end of the preceding fiscal year;


 


provided, however, that any Disposition
pursuant to clauses (a) through (i) shall be for fair
market value.


 


7.06                        Restricted
Payments.  Declare or
make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so unless no Default shall have occurred and be
continuing at the date of declaration or payment thereof or would result
therefrom.


 


7.07                        Change
in Nature of Business. 
Engage in any material line of business substantially different from
those lines of business conducted by the Company and its Subsidiaries on the
date hereof or any business substantially related or incidental thereto.


 


7.08                        Transactions
with Affiliates.  Enter into
any transaction of any kind with any Affiliate of the Company, whether or not
in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Company or such Subsidiary as would be
obtainable by the Company or such Subsidiary at the time in a comparable arm’s
length transaction with a Person other than an Affiliate; provided that
any Loan Party may enter into transactions relating to any Permitted
Receivables Purchase Facility.


 


7.09                        Burdensome Agreements. 
Enter into or be subject to any Contractual Obligation (other than this
Agreement or any other Loan Document 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 Domestic Loan Party
to Guarantee the Indebtedness of the Company or any Designated Borrower,
(iii) of any Foreign Loan Party to Guarantee the Indebtedness of any
Foreign Designated Borrower or (iv) of the Company or any Subsidiary to
create, incur, assume or suffer to exist Liens on property of such Person; provided,
however, that this clause (iv) shall not prohibit any
negative pledge incurred or provided in favor of any holder of Indebtedness in respect
of capital leases, Synthetic Lease Obligations and purchase money obligations
for fixed or capital assets, in each case solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation
of such Person if a Lien is granted to secure another obligation of such
Person; provided, that this Section 7.09 shall not apply to
any Contractual Obligation binding solely on Watts Germany or any Subsidiary
thereof.


 


7.10                        Use of
Proceeds.  Use the
proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.


 


7.11                        Modification
of Organization Documents.  Consent to or agree to any amendment,
supplement or other modification to the Organization Documents without the
prior 


 


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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) $415,580,000,
(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 April 2, 2006 (with no
deduction for a net loss in any such fiscal quarter) and (iii) an amount
equal to 100% of the aggregate increases in Shareholders’ Equity of the Company
and its Subsidiaries after the date hereof by reason of the issuance and sale
of Equity Interests of the Company or any Subsidiary (other than issuances to
the Company or a wholly-owned Subsidiary), including upon any conversion of
debt securities of the Company into such Equity Interests.


 


(b)                                 Consolidated Interest
Coverage Ratio.   Permit the Consolidated Interest Coverage Ratio
as of the end of any fiscal quarter of the Company to be less than 3.50:1:00.


 


(c)                                  Consolidated Leverage
Ratio.  Permit
the Consolidated Leverage Ratio at the end of any fiscal quarter of the Company
to be greater than (i) with respect to each fiscal quarter of the Company
ending on or prior to December 31, 2006, 3.50:1.00 and (ii) with
respect to each other fiscal quarter of the Company, 3.25:1:00.


 


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 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


 


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(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 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


 


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(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) any one or more final judgments or orders for the payment
of money in an aggregate amount exceeding the Threshold Amount (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of 60 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or


 


(i)                                     ERISA.  (i) An ERISA Event occurs with respect
to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Company under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of 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 thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or


 


(k)                                  Change
of Control.  There occurs any Change of Control.


 


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8.02                        Remedies
Upon Event of Default.  If
any Event of Default occurs and is continuing, the Administrative Agent shall,
at the request of, or may, with the consent of, the Required Lenders, take any
or all of the following actions:


 


(a)                                  declare
the commitment of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;


 


(b)                                 declare
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrowers;


 


(c)                                  require
that the Borrowers Cash Collateralize the L/C Obligations (in an amount equal
to the then Outstanding Amount thereof); and


 


(d)                                 exercise
on behalf of itself, the Lenders and the L/C Issuer all rights and remedies
available to it, the Lenders and the L/C Issuer under the Loan Documents;


 


provided, however, that upon the
occurrence of an actual or deemed entry of an order for relief with respect to
any Borrower under the Bankruptcy Code of the United States, the obligation of
each Lender to make Loans and any obligation of the L/C Issuer to make L/C
Credit Extensions shall automatically terminate, the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the Borrowers to
Cash Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent or any
Lender.


 


8.03                        Application
of Funds.


 


(a)                                  After
the exercise of remedies provided for in Section 8.02 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 8.02):


 


(i)                                     Any amounts received on account of the
Obligations (other than amounts received solely on account of the Obligations
of the Foreign Loan Parties) shall 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, interest and Letter of Credit Fees) payable to the Lenders and the
L/C Issuer (including fees, charges and disbursements of counsel to the
respective Lenders and the L/C Issuer (including
fees and time charges for attorneys who may be employees of any Lender or the
L/C Issuer) and amounts payable 


 


85

















 


under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;


 


Third, to payment of that portion of the
Obligations constituting accrued and unpaid Letter of Credit Fees and interest
on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders
and the L/C Issuer in proportion to the respective amounts described in this
clause Third payable to them;


 


Fourth, to payment of (i) that portion of
the Obligations constituting unpaid principal of the Loans and L/C Borrowings
and (ii) that portion of the Obligations 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; and


 


Last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full, to the Company or as otherwise
required by Law;


 


provided, that the Administrative Agent may, in
its sole discretion, apply such amounts solely to the Obligations of the
Domestic Loan Parties or the Foreign Loan Parties, as applicable in the order
and manner described in subclauses First through Fifth of this clause
(i) prior to application of any such amounts to any Obligations of the
other Loan Parties; and


 


(ii)                                  Any amounts received solely on account of
the Obligations of the Foreign Loan Parties shall be applied by the
Administrative Agent in the following order:


 


First, to payment of that portion of the
Obligations of the Foreign Loan Parties constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article III)
payable to the Administrative Agent in its capacity as such;


 


Second, to payment of that portion of the
Obligations of the Foreign Loan Parties constituting fees, indemnities and
other amounts (other than principal, interest and Letter of Credit Fees)
payable to the Lenders and the L/C Issuer (including fees, charges and disbursements
of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for attorneys who may be
employees of any Lender or the L/C Issuer) and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;


 


Third, to payment of that portion of the
Obligations of the Foreign Loan Parties constituting accrued and unpaid Letter
of Credit Fees and interest on the Loans made to Foreign Designated Borrowers,
L/C Borrowings of Foreign Designated Borrowers and other Obligations of the
Foreign Loan Parties, ratably among the Lenders and the L/C Issuer in
proportion to the respective amounts described in this clause Third
payable to them;


 


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Fourth, to payment of (i) that portion of
the Obligations of the Foreign Loan Parties constituting unpaid principal of
the Loans made to Foreign Designated Borrowers and L/C Borrowings of Foreign
Designated Borrowers and (ii) that portion of the Obligations constituting
Guaranteed Swap Obligations of the Foreign Loan Parties, ratably among the
Lenders (and Affiliates thereof) and the L/C Issuer in proportion to the
respective amounts described in this clause Fourth held by them;


 


Fifth, to the Administrative Agent for the
account of the L/C Issuer, to Cash Collateralize that portion of L/C
Obligations of the Foreign Designated Borrowers comprised of the aggregate
undrawn amount of Letters of Credit issued at the request of the Foreign
Designated Borrowers; and


 


Last, the balance, if any, after all of the
Obligations of the Foreign Loan Parties have been indefeasibly paid in full, to
the applicable Foreign Loan Party or as otherwise required by Law.


 


(b)                                 Subject
to Section 2.03(c), amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to subclause Fifth
of either clause (i) or (ii) of Section 8.03(a) shall
be applied to satisfy drawings under the applicable Letters of Credit as they
occur.  If any amount remains on deposit
as Cash Collateral after all such Letters of Credit have either been fully
drawn or expired, such remaining amount shall be applied to the other
Obligations, if any, in accordance with Section 8.03(a).


 


ARTICLE IX.

ADMINISTRATIVE AGENT


 


9.01                        Appointment
and Authority.  Each of the
Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act
on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.  The provisions
of this Article are solely for the benefit of the Administrative Agent, the
Lenders and the L/C Issuer, and no Borrower shall have rights as a third party
beneficiary of any of such provisions.


 


9.02                        Rights
as a Lender.  The Person
serving as the Administrative Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Administrative Agent and the term “Lender” or
“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 


 


88

















 


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 arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect
to such Letters of Credit.


 


9.07                        Non-Reliance on Administrative Agent
and Other Lenders.  Each Lender and the L/C Issuer acknowledges
that it has, independently and without reliance upon the Administrative Agent
or any other Lender or any of their Related Parties and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each
Lender and the L/C Issuer also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.


 


9.08                        No Other Duties, Etc. 
Anything herein to the contrary notwithstanding, none of the Book
Managers, Arrangers, Syndication Agent or Documentation Agents listed on the
cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.


 


9.09                        Administrative Agent May File
Proofs of Claim.  In case of the pendency of any proceeding
under any Debtor Relief law or any other judicial proceeding relative to any
Loan Party, the Administrative Agent (irrespective of whether the principal of
any Loan or L/C Obligation shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on any Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise:


 


(a)                                  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders, the L/C Issuer and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the L/C Issuer and the
Administrative Agent and their 


 


90

















 


respective
agents and counsel and all other amounts due the Lenders, the L/C Issuer and
the Administrative Agent under Sections 2.03(i) and (j), 2.09
and 10.04) allowed in such judicial proceeding; and


 


(b)                                 to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;


 


and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C
Issuer to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders and the L/C Issuer, to pay to the Administrative Agent any
amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other
amounts due the Administrative Agent under Sections 2.09 and 10.04.


 


Nothing contained herein
shall be deemed to authorize the Administrative Agent to authorize or consent
to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or the L/C Issuer to authorize the
Administrative Agent to vote in respect of the claim of any Lender or the L/C
Issuer in any such proceeding.


 


9.10                        Guaranty Matters. 
The Lenders and the L/C Issuer irrevocably authorize the Administrative
Agent, at its option and in its discretion, to release any Subsidiary Guarantor
from its obligations under the Guaranty Agreement if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder or ceases to
constitute a Material Domestic Subsidiary pursuant to Section 2.15.  The Lenders and the L/C Issuer hereby
irrevocably authorize the Administrative Agent to, and the Administrative Agent
shall, release Watts Premier, Inc., an Arizona corporation, Watts
Radiant, Inc., a Delaware corporation, and each Foreign Subsidiary party
thereto from their respective obligations under the Guaranty Agreement on the
Closing Date.  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;


 


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(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;


 


(c)           postpone any date fixed by this
Agreement or any other Loan Document for any payment or mandatory prepayment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
or under any other Loan Document without the written consent of each Lender
directly affected thereby;


 


(d)           reduce the principal of, or the rate
of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause
(iv) of the second proviso to
this Section 10.01) any fees or other
amounts payable hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby; provided,
however, that only the consent of the
Required Lenders shall be necessary (i) to amend the definition of
“Default Rate” or to waive any obligation of any Borrower to pay interest or
Letter of Credit Fees at the Default Rate or (ii) to
amend any financial covenant hereunder (or any defined term used therein) even
if the effect of such amendment would be to reduce the rate of interest on any
Loan or L/C Borrowing or to reduce any fee payable hereunder;


 


(e)           change Section 2.13
or Section 8.03 in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender;


 


(f)            change any provision of Article II
or the definition of “Applicable Percentage” or any other provision hereof in
manner that would cause any Lender to be obligated to make any Committed Loan
or participate in any Letter of Credit or Swing Line Loan, in any case other
than in accordance with its pro rata share of the Aggregate Commitment, without
the written consent of such Lender;


 


(g)           change any provision of this Section 10.01
or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender; or


 


(h)           release (i) any Borrower from
the Guaranties or (ii) all
or substantially all of the value of the Guaranties of the Subsidiary
Guarantors, in each case without the written consent of each
Lender;


 


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) any
Fee Letter may be amended, or rights or privileges 


 


92

















 


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.


 


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 


 


93

















 


its
e-mail address as described in the foregoing clause (i) of notification
that such notice or communication is available and identifying the website
address therefor.


 


(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to any
Borrower, any Lender, the L/C Issuer or any other Person for losses, claims,
damages, liabilities or expenses of any kind (whether in tort, contract or
otherwise) arising out of any Borrower’s or the Administrative Agent’s
transmission of Borrower Materials through the Internet, except to the extent
that such losses, claims, damages, liabilities or expenses are determined by a
court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any
Agent Party have any liability to any Borrower, any Lender, the L/C Issuer or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).


 


(d)           Change of
Address, Etc.  Each of the
Borrowers, the Administrative Agent, the L/C Issuer and the Swing Line Lender
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the Company, the Administrative Agent, the L/C Issuer and the Swing Line
Lender.  In addition, each Lender agrees
to notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which
notices and other communications may be sent and (ii) accurate wire
instructions for such Lender.


 


(e)           Reliance by
Administrative Agent, L/C Issuer and Lenders.  The Administrative Agent, the L/C Issuer and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly
given by or on behalf of any Borrower even if (i) such notices were not
made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation
thereof.  The Company shall indemnify the
Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
any Borrower.  All telephonic notices to
and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby consents
to such recording.


 


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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”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities, settlement costs and related expenses (including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all reasonable fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by any
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby
or, in the case of the Administrative Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other Loan Documents,
(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, 


 


95





















 


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 other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed to such unintended recipients
by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.


 


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


 


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(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 subsection (d) of
this Section 10.06 and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.


 


(b)           Assignments
by Lenders.  Any Lender may at
any time assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to
it); provided that any such assignment
shall be subject to the following conditions:


 


97





















 


(i)            Minimum Amounts.


 


(A)          in the case of an assignment of the entire remaining amount
of the assigning Lender’s Commitment and the Loans at the time owing to it or
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, no minimum amount need be assigned; and


 


(B)           in any case not described in subsection (b)(i)(A) of
this Section 10.06, the aggregate amount of the Commitment (which
for this purpose includes Loans outstanding thereunder) or, if the Commitment
is not then in effect, the principal outstanding balance of the Loans of the
assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000  unless each of the Administrative Agent and,
so long as no Event of Default has occurred and is continuing, the Company
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to
a single assignee (or to an assignee and members of its Assignee Group) will be
treated as a single assignment for purposes of determining whether such minimum
amount has been met.


 


(ii)           Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans.


 


(iii)          Required Consents. 
No consent shall be required for any assignment except to the extent
required by subsection (b)(i)(B) of this Section 10.06
and, in addition:


 


(A)          the consent of the Company (such consent not to be
unreasonably withheld or delayed) shall be required unless (1) an Event of
Default has occurred and is continuing at the time of such assignment or (2) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;


 


(B)           the consent of the Administrative Agent (such consent not
to be unreasonably withheld or delayed) shall be required if such assignment is
to a Person that is not a Lender, an Affiliate of such Lender or an Approved
Fund with respect to such Lender;


 


(C)           the consent of the L/C Issuer (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under one
or more Letters of Credit (whether or not then outstanding); and


 


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(D)          the consent of the Swing Line Lender (such consent not to
be unreasonably withheld or delayed) shall be required for any assignment.


 


(iv)          Assignment and Assumption.  The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount, if any, required as set
forth in Schedule 10.06; provided, however, that the
Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment.  The assignee, if it is not a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire.


 


(v)           No Assignment to Company.  No such assignment shall be made to the
Company or any of the Company’s Affiliates or Subsidiaries.


 


(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural
person.


 


(vii)         Euro Loans. 
The assignee shall be a Lender, an Affiliate of a Lender or another
Person that, through its Lending Offices, is capable of lending Euros to the
relevant Borrowers without the imposition of any Taxes or additional Taxes, as
the case may be.


 


(viii)        Representation By New Lender. If
on the date of any such assignment it is a requirement of Dutch law that each
Lender must be a PMP, then (A) the assignee Lender must represent and
warrant to the Initial Designated Borrower on the effective date of its
purchase of a Commitment that (1) it is a PMP, (2) it is aware that
it does not benefit from the protection offered by the Dutch Banking Act to
Lenders which are not PMPs, and (3) it has made its own independent
appraisal of risks arising under or in connection with this Agreement and the
other Loan Documents and (B) the consent of the Initial Designated
Borrower (not to be unreasonably withheld or delayed) shall be required for any
such sale, assignment or transfer; provided, that if (x) an Event
of Default has occurred and is continuing at the time of such assignment or (y) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund, then (I) the
Initial Designated Borrower’s consent can only be withheld or delayed if the
proposed assignee Lender is not a PMP or the Initial Designated Borrower has
reasonable grounds to believe that it is not a PMP and (II) the Initial
Designated Borrower will be deemed to have given its consent five (5) Business
Days after the receipt by the Initial Designated Borrower and the Company of a
written request by a Lender for such consent, unless such consent is expressly
refused in writing by the Initial Designated Borrower in accordance with the
terms of this Agreement within that time. Each Lender acknowledges that the
Initial Designated Borrower has relied upon such representation and warranty.


 


Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection (c) of
this Section 10.06, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a 


 


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Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under 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 the Borrowers and any Lender at any reasonable time and from time
to time upon reasonable prior notice.


 


(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, any Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person 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).  Upon the appointment of a successor L/C
Issuer and/or Swing Line Lender, (a) such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the
successor L/C Issuer shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory 


 


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to Bank of America to
effectively assume the obligations of Bank of America with respect to such
Letters of Credit.


 


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.


 


Each of the Administrative
Agent, the Lenders and the L/C Issuer acknowledges that (a) the
Information may include material non-public information concerning the Company
or a Subsidiary, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it
will handle such material non-public information in accordance with applicable
Law, including Federal and state securities Laws.


 


10.08      Right of
Setoff.  If an Event
of Default shall have occurred and be continuing, each Lender, the L/C Issuer
and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever 


 


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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 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 


 


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any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.


 


10.12      Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


 


10.13      Replacement of
Lenders.  If any
Lender requests compensation under Section 3.04 or
provides notice under Section 3.02, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01,
or  if any Lender is
a Defaulting Lender, then the Company may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 10.06),
all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided that:


 


(a)           the Company shall have paid (or
caused a Designated Subsidiary to pay) to the Administrative Agent the
assignment fee specified in Section 10.06(b);


 


(b)           such Lender shall have received
payment of an amount equal to 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.


 


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(b)           SUBMISSION
TO JURISDICTION.  EACH
BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING
IN NEW YORK, NEW YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IN SUCH FEDERAL COURT.  EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER
OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.


 


(c)           WAIVER OF
VENUE.  EACH BORROWER
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF
THIS SECTION 10.14.  EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.


 


(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 


 


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LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.15.


 


10.16      No Advisory or
Fiduciary Responsibility.  In connection with all aspects of each
transaction contemplated hereby, each Borrower acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (i) the credit facility
provided for hereunder and any related arranging or other services in
connection therewith (including in connection with any amendment, waiver or
other modification hereof or of any other Loan Document) is an arm’s-length
commercial transaction between the Borrowers and their respective Affiliates,
on the one hand, and the Administrative Agent and the Arrangers, on the other
hand, and the Borrowers are capable of evaluating and understanding and
understand and accept the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with
the process leading to such transaction, the Administrative Agent and each
Arranger is and has been acting solely as a principal and is not the financial
advisor, agent or fiduciary, for any of the Borrowers or any of their
respective Affiliates, stockholders, creditors or employees or any other Person;
(iii) neither the Administrative Agent nor any Arranger has assumed or
will assume an advisory, agency or fiduciary responsibility in favor of any
Borrower with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of
whether the Administrative Agent or any Arranger has advised or is currently
advising any of the Borrowers or their respective Affiliates on other matters)
and neither the Administrative Agent nor any Arranger has any obligation to any
of the Borrowers or their respective Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; (iv) the Administrative Agent and
the Arrangers and their respective Affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of the Borrowers
and their respective Affiliates, and neither the Administrative Agent nor any
Arranger has any obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) the Administrative
Agent and the Arrangers have not provided and will not provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each Borrower has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate.  Each Borrower hereby waives
and releases, to the fullest extent permitted by law, any claims that it may
have against the Administrative Agent and the Arrangers with respect to any breach
or alleged breach of agency or fiduciary duty. 
Nothing in this Section 10.16 shall modify any obligation of
any Person under Section 10.07.


 


10.17      USA PATRIOT Act
Notice.  Each Lender
that is subject to the Act (as hereinafter defined) and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the
Borrowers that pursuant to the requirements of the USA PATRIOT Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Borrowers, which information includes
the name 


 


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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.


 


10.18      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).


 


ARTICLE XI.

NO NOVATION; REFERENCES TO THIS AGREEMENT

IN LOAN DOCUMENTS


 


11.01      No Novation.   It is the express intent of the parties
hereto that this Agreement (i) shall re-evidence the Borrowers’
indebtedness under the Existing Credit Agreement, (ii) is entered into in
substitution for, and not in payment of, the obligations of the Borrowers under
the Existing Credit Agreement, and (iii) is in no way intended to
constitute a novation of any of the Borrowers’ indebtedness which was evidenced
by the Existing Credit Agreement or any of the other Loan Documents.  All Loans made and Obligations incurred under
the Existing Credit Agreement which are outstanding on the Closing Date shall
continue as Loans and Obligations under (and shall be governed by the terms of)
this Agreement. Without limiting the foregoing, upon the effectiveness hereof: (a) all
letters of credit issued (or deemed issued) under the Existing Credit Agreement
which remain outstanding on the Closing Date shall continue as Letters of
Credit issued under (and shall be governed by the terms of) this Agreement, (b) all
Obligations constituting Guaranteed Swap Obligations with any Lender or any
Affiliate of any Lender which are outstanding on the Closing Date shall
continue as Obligations under this Agreement and the other Loan Documents and (c) the
Agent shall make such reallocations of each Lender’s share of the outstanding
Loans under the Existing Credit Agreement as are necessary in order that each
such Lender’s share of the outstanding Loans hereunder reflects such Lender’s
ratable share of the Aggregate Commitments hereunder.  On the Closing Date, the Borrowers shall pay
to the Agent for the ratable account of the Lenders then party to the Existing
Credit Agreement, (i) accrued and unpaid facility and utilization fees
under the Existing Credit 


 


107





















 


Agreement through the
Closing Date, (ii) accrued and unpaid interest on Base Rate Loans under
(and as defined in) the Existing Credit Agreement through the Closing Date and (iii) any
amounts due to such Lenders on the Closing Date pursuant to Section 3.05
of the Existing Credit Agreement.


 


11.02      References
to This Agreement In Loan Documents.  Upon the effectiveness of this Agreement, on
and after the date hereof, each reference in any other Loan Document to the
Existing Credit Agreement (including any reference therein to “the Credit
Agreement,” “thereunder,” “thereof,” “therein” or words of like import referring
thereto) shall mean and be a reference to this Agreement.


 


Remainder
of page intentionally left blank.


 


108

















 


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:

  	
  J.
  van Kouterik

  
	
   

  	
  Title:

  	
  CFO
  Vice President

  



 


Signature Page to


Amended and Restated Credit Agreement


 














 


	
   

  	
  BANK OF AMERICA, N.A.,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David A. Johnson

  
	
   

  	
  Name:

  	
  David
  A. Johnson

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  BANK OF AMERICA, N.A.,

  as a Lender, an L/C Issuer and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan M. Phillips

  
	
   

  	
  Name:

  	
  Jonathan
  M. Phillips

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  as Syndication Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter M. Killea

  
	
   

  	
  Name:

  	
  Peter
  M. Killea

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  as a Documentation Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas J. Purcell

  
	
   

  	
  Name:

  	
  Thomas
  J. Purcell

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  SUNTRUST BANK,

  as a Documentation Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert W. Maddox

  
	
   

  	
  Name:

  	
  Robert
  W. Maddox

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION,

  as a Documentation Agent and a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick D. Finn

  
	
   

  	
  Name:

  	
  Patrick
  D. Finn

  
	
   

  	
  Title:

  	
  Managing
  Director

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  CALYON NEW YORK BRANCH,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James Gibson

  
	
   

  	
  Name:

  	
  James
  Gibson

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Philip Schubert

  
	
   

  	
  Name:

  	
  Philip
  Schubert

  
	
   

  	
  Title:

  	
  Director

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  CITIZENS BANK OF MASSACHUSETTS,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel Bernard

  
	
   

  	
  Name:

  	
  Daniel
  Bernard

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  LASALLE BANK NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gary A. Pirini

  
	
   

  	
  Name:

  	
  Gary
  A. Pirini

  
	
   

  	
  Title:

  	
  S.V.P.

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Manuel Burgueno

  
	
   

  	
  Name:

  	
  Manuel
  Burgueno

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


Signature Page to


Amended and Restated Credit Agreement


 

















 


	
   

  	
  BROWN BROTHERS HARRIMAN & CO.,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John D. Rogers

  
	
   

  	
  Name:

  	
  John D. Rogers

  
	
   

  	
  Title:

  	
  Senior Vice President

  



 


Signature Page to


Amended and Restated
Credit Agreement


 

















 


	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Derek D. Brust

  
	
   

  	
  Name:

  	
  Derek
  D. Brust

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 


Signature Page to


Amended and Restated Credit Agreement


 














 


SCHEDULE 2.01


 


COMMITMENTS

AND APPLICABLE PERCENTAGES


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Applicable Percentage

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  40,000,000.00000000

  	
   

  	
  11.428571429

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  40,000,000.00000000

  	
   

  	
  11.428571429

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KeyBank National Association

  	
   

  	
  $

  	
  36,666,666.66666660

  	
   

  	
  10.476190476

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SunTrust Bank

  	
   

  	
  $

  	
  36,666,666.66666660

  	
   

  	
  10.476190476

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  36,666,666.66666660

  	
   

  	
  10.476190476

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Calyon New York Branch

  	
   

  	
  $

  	
  35,000,000.00000000

  	
   

  	
  10.000000000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Citizens Bank of Massachusetts

  	
   

  	
  $

  	
  35,000,000.00000000

  	
   

  	
  10.000000000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LaSalle Bank National Association

  	
   

  	
  $

  	
  35,000,000.00000000

  	
   

  	
  10.000000000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HSBC Bank USA, N.A.

  	
   

  	
  $

  	
  30,000,000.00000000

  	
   

  	
  8.571428571

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Brown Brothers Harriman & Co.

  	
   

  	
  $

  	
  15,000,000.00000000

  	
   

  	
  4.285714286

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wells Fargo Bank, National Association

  	
   

  	
  $

  	
  10,000,000.00000000

  	
   

  	
  2.857142857

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  350,000,000

  	
   

  	
  100.000000000

  	
  %

  



 

















 


Schedule 5.06


 


Litigation


 


James
Jones Litigation




 


On
June 25, 1997, Nora Armenta (the “Relator”) filed a civil action in the
California  Superior Court for Los
Angeles County (the “Armenta case”) against James Jones Company (“James
Jones”), Mueller Co., Tyco International (U.S.), and the Company. We formerly
owned James Jones. The Relator filed under the qui tam provision of the
California state False Claims Act, Cal. Govt. Code § 12650 et seq. (the
“California False Claims Act”) and generally alleged that James Jones and the
other defendants violated this statute by delivering some “defective” or
“non-conforming” waterworks parts to thirty-four municipal water systems in the
State of California. The Relator filed a First Amended Complaint in November 1998
and a Second Amended Complaint in December 2000, which brought the total
number of plaintiffs to 161. In June, 2002, the trial court excluded 47 cities
from this total of 161, and the Relator was not able to obtain appellate
modification of this order, which can still be appealed at the end of the case.
To date, 11 of the named cities have intervened, and attempts by four other
named cities to intervene have been denied.


 


One
of the allegations in the Second Amended Complaint and the
Complaints-in-Intervention is that purchased non-conforming James Jones waterworks
parts may leach into public drinking water elevated amounts of lead that may
create a public health risk because they were made out of ‘81 bronze alloy
(UNS No. C8440) and contain more lead than the specified and
advertised ‘85 bronze alloy (UNS No. C83600). This contention is
based on the average difference of about 2% lead content between ‘81 bronze (6%
to 8% lead) and ‘85 bronze (4% to 6% lead) and the assumption that this would
mean increased consumable lead in public drinking water that could cause a
public health concern. We believe the evidence and discovery available to date
indicates that this is not the case.


 


In
addition, ‘81 bronze is used extensively in municipal and home plumbing systems
and is approved by municipal, local and national codes. The Federal
Environmental Protection Agency also defines metal for pipe fittings with no
more than 8% lead as “lead free” under Section 1417 of the Federal Safe
Drinking Water Act.


 


In
this case, the Relator seeks three times an unspecified amount of actual
damages and alleges that the municipalities have suffered hundreds of millions
of dollars in damages. She also seeks civil penalties of $10,000 for each false
claim and alleges that defendants are responsible for tens of thousands of
false claims. Finally, the Relator requests an award of costs of this action,
including attorneys’ fees.


 


In
December 1998, the Los Angeles Department of Water and Power intervened in
this case and filed a complaint. We settled with the city of Los Angeles, by
far the most significant city, for $7.3 million plus attorneys’ fees.
Co-defendants contributed $2.0 million toward this settlement.


 

















 


In
August 2003, an additional settlement payment was made for $13 million
($11 million from us and $2 million from James Jones), which settled the claims
of the three Phase I cities (Santa Monica, San Francisco and East Bay Municipal
Utility District) chosen by the Relator as having the strongest claims to be
tried first. This settlement payment included the Relator’s statutory share,
and the claims of these three cities have been dismissed. In addition to this
$13 million payment, we are obligated to pay the Relator’s attorney’s fees.


 


After
the Phase I settlement, the court permitted the defendants to select five
additional cities to serve as the plaintiffs in a second trial phase of the
case. Contra Costa, Corona, Santa Ana, Santa Cruz and Vallejo were chosen. The
Company and James Jones then reached an agreement to settle the claims of the
City of Santa Ana for a total of $45,000, an amount which approximates Santa
Ana’s purchases of James Jones products during the relevant period. The Santa
Ana settlement was approved by the Court and then completed.


 


On
June 22, 2005, the court dismissed the claims of the remaining Phase II cities
(Contra Costa, Corona, Santa Cruz and Vallejo). The court ruled that the
Relator and these cities were required to show that the cities had received out
of spec parts which were related to specific invoices and that this showing had
not been made. Although each city’s claim is unique, this ruling is significant
for the claims of the remaining cities, and the Relator has appealed.
Litigation is inherently uncertain, and we are unable to predict the outcome of
this appeal.


 


On
September 15, 2004, the Relator’s attorneys filed a new common law fraud
lawsuit in the California Superior Court for the City of Banning and forty-five
other cities and water districts against James Jones, the Company and Mueller
Co. based on the same transactions alleged in the Armenta case. About
thirty-four of the plaintiffs in this new lawsuit are also plaintiffs in the
Armenta case. On January 4, 2006, the court denied much of the defendants’
demurrer, which had been filed on claim-splitting and statute of limitations
grounds. Litigation is inherently uncertain, and we are unable to predict the
outcome of this new lawsuit.


 


We
have a reserve of approximately $21.0 million with respect to the James Jones
Litigation in our consolidated balance sheet as of December 31, 2005. We
believe, on the basis of all available information, that this reserve is
adequate to cover the probable and reasonably estimable losses resulting from
the Armenta case and the insurance coverage litigation with Zurich American
Insurance Company (“Zurich”) discussed below. We are currently unable to make
an estimate of the range of any additional losses.


 


On
February 14, 2001, after our insurers had denied coverage for the claims
in the Armenta case, we filed a complaint for coverage against our insurers in
the California Superior Court (the “coverage case”). James Jones filed a
similar complaint, the cases were consolidated, and the trial court made
summary adjudication rulings that Zurich must pay all reasonable defense costs
incurred by us and James Jones in the Armenta case since April 23, 1998 as
well as such future defense costs until the end of the Armenta case. In July 2004,
the California Court of Appeal affirmed these rulings, and, on December 1,
2004, the California Supreme Court denied Zurich’s appeal of this decision.
This denial permanently established Zurich’s obligation to pay Armenta defense
costs for both us (approximately $16.9 million plus future costs) and James
Jones (which we estimate to be $17.3 million plus future costs), and Zurich is
currently making 


 

















 


payments
of incurred Armenta defense costs. However, as noted below, Zurich asserts that
the defense costs paid by it are subject to reimbursement.


 


In
2002, the trial court made a summary adjudication ruling that Zurich must
indemnify and pay us and James Jones for amounts paid to settle with the City
of Los Angeles. Zurich’s attempt to obtain appellate review of this order was
denied, but Zurich will still be able to appeal this order at the end of the
coverage case. In 2004, the trial court made another summary adjudication
ruling that Zurich must indemnify and pay us and James Jones for the $13
million paid to settle the claims of the Phase I cities described above.
Zurich’s attempt to obtain appellate review of this ruling was denied on December 3,
2004 by the California Court of Appeal, but Zurich will still be able to appeal
this order at the end of the coverage case. Although Zurich has now made most
of the payments required by these indemnity orders, we are currently unable to
predict the finality of these orders since Zurich can appeal them at the end of
the coverage case. We have recorded reimbursed indemnity settlement amounts
(but not reimbursed defense costs) as a liability pending court resolution of
the indemnification matter as it relates to Zurich.


 


Zurich
has asserted that all amounts (which we estimate to be $51 million for both
defense costs and indemnity amounts paid for settlements) paid by it to us and
James Jones are subject to reimbursement under Deductible Agreements related to
the insurance policies between Zurich and the Company. If Zurich were to
prevail on this argument, James Jones would have a possible indemnity claim
against us for its exposure from the Armenta case. We believe the Armenta case
should be viewed as one occurrence and the deductible amount should be $0.5
million per occurrence.


 


These
reimbursement claims are subject to arbitration under the Deductible Agreements
between the Company and Zurich. Zurich claims its reimbursement right for
defense costs paid arises under six Deductible Agreements, and we contend that
only two Deductible Agreements apply. We further contend that a final
decision in California supports our position on the number of Deductible
Agreements that should apply to defense costs. On January 31, 2006, the
federal district court in Chicago, Illinois determined that there are disputes
under all Deductible Agreements in effect during the period in which Zurich
issued primary policies and that the arbitrator could decide which agreements
would control reimbursement claims. We have appealed this ruling.


 


Asbestos
Litigation


 


We
are defending approximately 121 cases filed primarily, but not exclusively, in
Mississippi and New Jersey state courts alleging injury or death as a
result of exposure to asbestos. These filings typically name multiple
defendants and are filed on behalf of many plaintiffs. They do not identify any
particular products of the Company as a source of asbestos exposure. To date,
we have been dismissed from each case when the scheduled trial date comes near
or when discovery fails to yield any evidence of exposure to any of the
Company’s products.


 

















 


Schedule 5.09


 


ARTICLE XII.Environmental Compliance


 


Jameco Industries, Wyandanch, NY


 


The
Company is subject to potential environmental liability with respect to a site
in Wyandanch, NY formerly used by Jameco Industries, Inc. (“Jameco”).  The site was first developed by Jamaica
Manufacturing Company, Inc. (the predecessor to Jameco) in 1964.  Jameco used the site to manufacture plumbing
fixtures, which involved plating parts with chrome and nickel. Prior to 1975,
plating waste was treated and discharged to two unlined seepage lagoons
located in the rear of the facility. The lagoons were periodically allowed to
dry, followed by off-site sludge removal. A third lagoon was used for overflow.
After 1975, plating waste was dewatered and the effluent discharged into a set
of 48 leaching pools, located in the rear yard, and the sludge was disposed of
off-site. The original sludge lagoons were closed (backfilled with on-site
soil) sometime after 1975.  The
wastewater treatment system was removed from the site when Jameco vacated the
property in 1998. The wastes generated from these processes contained heavy
metals, cyanide, VOC’s, sulfates, and other materials.


 


The
site was purchased by the Company on July 7, 1994. Plating operations were
moved to another facility in 1998, and the facility was sold to Linzer Products, Inc.
(“Linzer”), in 1999.


 


Soil
and groundwater contamination currently exist at the site.  At least four releases have contributed to
the site contamination.


 


As
a result of the negotiations for the development of the final version of the
Proposed Remedial Action Plan (“PRAP”), imposed by New York State Department of
Environmental Conservation’s (“NYSDEC”) March 2003 Record of Decision
(“ROD”), an additional study was added to conduct a feasibility investigation
and assessment.  The purpose of the
additional feasibility investigation and assessment was to collect more current
data, regarding soil and groundwater conditions.  NYSDEC now believes that the required
remediation is more than we proposed, but less than what NYSDEC initially
planned to require.  The results of the
feasibility assessment will now be used as a basis to propose for public
approval modifications to the PRAP that will reduce the cost of remediation.


 


NYSDEC’s
initial cost estimate for implementing the remediation described in the PRAP
was $843,000 for excavation and disposal of contaminated soil and $91,000 per
year over 5 years for extraction, treatment, and monitoring of groundwater, for
a total cost of $1.3 million.  A
significant portion of the soil removal outlined in the initial PRAP involved
excavation beneath and within the footprint of the building, which could
interrupt the business of the building’s occupants (Linzer).  The NYSDEC’s initial cost estimate did not
include costs associated with business interruption for the current occupants.


 


The
feasibility and investigation study has been completed, and the data indicates
that contamination levels have decreased since the initial studies, due to
natural attenuation.  The 


 

















 


feasibility
and investigation report  submitted to
NYSDEC in May 2004 recommends a reduction of the remedial activities
outlined in the ROD.


 


Linzer
has stated that it wants more cleanup work done than the Company has
proposed in the report, and it has raised the issue of receiving reimbursement
for costs, including lost property value.  The Purchase and Sales
Agreement and the Site Access Agreement between the Company and
Linzer were reviewed to determine the scope of Linzer’s
potential claims.  In the Agreements, Linzer accepted the property
“as is,” agreed not to communicate with NYSDEC about increasing the scope
of the remediation, and released the Company to some extent from business
interruption and property damage claims.  However, Linzer may be able to
claim that the remediation work and deed restrictions the Company will
need to place on the property exceed the scope provided in the
Agreements.  The strength of Linzer’s
claims cannot be measured well until we determine what will be required of the
Company.


 


The
Company has received a written decision from NYSDEC concerning the results of
the additional feasibility and investigation study, and NYSDEC agrees that less
remediation is required.  NYSDEC
considers the changes fundamental, requiring the ROD to be amended to address
the alternative remedies.  Because of
this, a second public hearing will be required. 
The alternative remedies eliminate the requirement to excavate soil
under the building’s foundation and adjacent to the building, in favor of
in-situ treatment.  In-situ treatment
involves drilling holes in the building’s foundation and adjacent soil,
followed by injecting chemicals that will fix or destroy contaminants.  This approach will reduce remediation costs
and limit business interruption.


 


An
environmental consulting firm has completed a remedial design plan for the
project. Final remediation costs will not be determined until after contractors
have been selected through the bidding process. 
Project costs could be affected if Linzer continues to make demands for
reimbursement of its costs or payment for the deed restrictions.


 


To
date, NYSDEC still has not issued the amended ROD. At this pace, remedial
activity likely will not begin until the second quarter of 2006 at the earliest
and the project may not be completed in 2006.


 


Babylon
Landfill Site, NY


 


The
New York Attorney General (“NYAG”) has threatened for several years to bring
suit against 16 potentially responsible parties (“PRPs”) including the Company
as successor to Jameco for incurred remediation costs, and for operation and
maintenance costs to be incurred associated with the cleanup of a landfill site
in Babylon, Long Island.  The NYAG has
identified recovery numbers between $19 million and $24 million.


 


Members
of the Babylon Landfill Joint Defense Group (of which the Company is a
member) have conducted a preliminary review of the Town of Babylon’s
landfill records for the purpose of identifying additional PRPs.  The
town’s records include information regarding volumes of waste sent to the
landfill and identify entities sending waste to the landfill.  Based on 


 

















 


this
information, the Babylon Landfill Joint Defense Group hopes to
identify and persuade additional PRPs to join the Babylon Landfill Joint
Defense Group.


 


The
members of the Babylon Landfill Joint Defense Group plan to initiate an
Alternative Dispute Resolution (“ADR”) process involving the current members of
the Babylon Landfill Joint Defense Group and those other PRPs that can be
persuaded to participate in such a process. 
The goal of the ADR process would be to raise sufficient funds to
settle the State’s claims against the participating parties, and to
allocate the resulting settlement equitably among the PRP group members.


 


As
of April 1, 2005, the Babylon Landfill Joint Defense Group has been
unable to obtain commitments to participate in an allocation process from any
additional PRPs.  NYAG has sent formal information requests to
approximately 50 of those PRPs identified in the Babylon Landfill Joint
Defense Group’s review of the Town of Babylon’s landfill records in order to
provide the PRPs with an impetus to participate in an allocation process. 
NYAG reports that it has received several responses, but some PRPs have raised
objections to the requests, and one has filed a petition challenging NYAG’s
authority to issue the requests.  The Babylon Landfill Joint Defense
Group has rejected an offer from 10 to 12 new PRPs to settle
their liability for $5,000 each.


 


On
August 15, 2005, the Company executed the Eighth Further Extended Tolling
Agreement with the State of New York. The purpose of the tolling period is to
allow the Babylon Landfill Joint Defense Group additional time to obtain
commitments from additional PRPs to conduct an allocation process. 
To date, the Babylon Landfill Joint Defense Group has been unable to obtain
such commitments.  NYAG has committed to conducting research regarding
state law claims against recalcitrant PRPs that may serve as motivation
for those parties to commit to an allocation process.  Although many
variables have yet to be determined including the final number of PRPs and
final allocation of costs, the Company will be a participating PRP at this
site.


 

















 


Schedule 5.13


 


ARTICLE XIII.Subsidiaries; Equity Interests


 


(a)           North America


 


	
  Name
  of Subsidiary

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Direct Parent(s)

  	
   

  	
  Percentage

  Ownership

  
	
  Watts
  Regulator Co.

  	
   

  	
  MA

  	
   

  	
  Watts Water Technologies, Inc.

  	
   

  	
  100%

  
	
  Watts
  Drainage Products, Inc.

  	
   

  	
  DE

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Anderson-Barrows
  Metals Corporation

  	
   

  	
  CA

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Webster
  Valve, Inc.

  	
   

  	
  NH

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Spacemaker, Inc.

  	
   

  	
  CA

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Radiant, Inc.

  	
   

  	
  DE

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Distribution Company, Inc.

  	
   

  	
  DE

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Premier, Inc.

  	
   

  	
  AZ

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Hunter
  Innovations, Inc.

  	
   

  	
  CA

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Flowmatic
  Systems, Inc.

  	
   

  	
  DE

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Orion
  Enterprises, Inc.

  	
   

  	
  KS

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Sea Tech, Inc. (d.b.a Sea Tech, Inc.)

  	
   

  	
  DE

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  HF
  Scientific, Inc.

  	
   

  	
  FL

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Core
  Industries Inc. (d.b.a. FEBCO, Mueller Steam Specialty & POLYJET
  Valves)

  	
   

  	
  NV

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Dormont
  Manufacturing Company

  	
   

  	
  PA

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Industries (Canada) Inc.

  	
   

  	
  Canada

  	
   

  	
  Watts Water Technologies, Inc.

  	
   

  	
  100%

  



 

















 


(b)           Europe & Africa


 


	
  Name
  of Subsidiary

  	
   

  	
  Jurisdiction of Organization

  	
   

  	
  Direct Parent(s)

  	
   

  	
  Percentage Ownership(1)

  
	
  Watts
  Industries Europe BV

  	
   

  	
  Netherlands

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Intermes GmbH

  	
   

  	
  Austria

  	
   

  	
  Watts Industries Netherlands BV

  

  Watts Intermes AG

  	
   

  	
  99%

  

  1%

  
	
  Watts
  Industries Belgium Bvba (formerly Watts Ocean NV)

  	
   

  	
  Belgium

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Belgium Holding Bvba

  	
   

  	
  Belgium

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  MTB EAD

  	
   

  	
  Bulgaria

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Industries France SAS (formerly Watts Eurotherm SAS)

  	
   

  	
  France

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Electronics SAS

  	
   

  	
  France

  	
   

  	
  Watts Industries France SAS

  	
   

  	
  100%

  
	
  Watts
  Industries Deutschland GmbH

  	
   

  	
  Germany

  	
   

  	
  Watts Germany Holding GmbH

  	
   

  	
  100%

  
	
  Watts
  Germany Holding GmbH

  	
   

  	
  Germany

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Instrumentation GmbH

  	
   

  	
  Germany

  	
   

  	
  Watts Germany Holding GmbH

  	
   

  	
  100%

  
	
  Watts
  Italy Holding S.r.l.

  	
   

  	
  Italy

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Londa SpA

  	
   

  	
  Italy

  	
   

  	
  Watts Italy Holding S.r.l.

  	
   

  	
  100%

  
	
  Watts
  Intermes S.r.l.

  	
   

  	
  Italy

  	
   

  	
  Watts Italy Holding S.r.l.

  	
   

  	
  100%

  
	
  Watts
  Industries Italia S.r.l. (formerly Watts Cazzaniga S.p.A.)

  	
   

  	
  Italy

  	
   

  	
  Watts Italy Holding S.r.l.

  	
   

  	
  100%

  
	
  Stern
  Rubinetti S.r.l.

  	
   

  	
  Italy

  	
   

  	
  Watts Italy Holding S.r.l.

  

  Mario Boifava

  

  Rosalina Aiardi

  

  Paola Boifava

  	
   

  	
  85%

  

  10%

  

  3%

  

  2%

  
	
  Philabel
  BV

  	
   

  	
  Netherlands

  	
   

  	
  Watts Europe Services BV

  	
   

  	
  100%

  



 

















 


	
  Watts
  Industries Netherlands BV (formerly Watts Ocean BV)

  	
   

  	
  Netherlands

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Anderson-Barrows
  Benelux BV

  	
   

  	
  Netherlands

  	
   

  	
  Watts Industries Netherlands BV

  	
   

  	
  100%

  
	
  Watts
  Europe Services BV

  	
   

  	
  Netherlands

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Industries, Sp. Z.o.o

  	
   

  	
  Poland

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Ind. Iberica SA

  	
   

  	
  Spain

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Sweden Holding AB

  	
   

  	
  Sweden

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Industries Nordic AB

  	
   

  	
  Sweden

  	
   

  	
  Watts Sweden Holding AB

  	
   

  	
  100%

  
	
  Watts
  Intermes AG

  	
   

  	
  Switzerland

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Industries Tunisia SAS

  	
   

  	
  Tunisia

  	
   

  	
  Watts Electronics SAS

  	
   

  	
  100%

  
	
  Watts
  Industries U.K. Ltd.

  	
   

  	
  United Kingdom

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  TEAM
  Precision Pipework, Ltd.

  	
   

  	
  United Kingdom

  	
   

  	
  Watts Industries Europe BV Tony Salini

  	
   

  	
  90% 10%

  
	
  Giuliani
  Anello S.r.l.

  	
   

  	
  Italy

  	
   

  	
  Watts Italy Holding S.r.l.

  	
   

  	
  100%

  
	
  Electro
  Controls Ltd.

  	
   

  	
  United Kingdom

  	
   

  	
  Hosta Investments Ltd.

  	
   

  	
  100%

  
	
  Hosta
  Investments Ltd.

  	
   

  	
  United Kingdom

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
  Watts
  Microflex NV

  	
   

  	
  Belgium

  	
   

  	
  Watts Belgium Holding BvbA

  	
   

  	
  100%

  
	
  Watts
  U.K. Ltd.

  	
   

  	
  United Kingdom

  	
   

  	
  Watts Industries Europe BV

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)           China

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name
  of Subsidiary

  	
   

  	
  Jurisdiction

  of

  Organization

  	
   

  	
  Direct Parent(s)

  	
   

  	
  Percentage

  Ownership(1)

  
	
  Tianjin
  Tanggu Watts Valve Co., Ltd.

  	
   

  	
  China

  	
   

  	
  Watts Regulator Co.

  

  Tianjin Mechanical Electronical Holding Co., Ltd.

  	
   

  	
  60%

  

  

  35%

  



 

















 


	
   

  	
   

  	
   

  	
   

  	
  Tianjin Tanggu Valve Co., Ltd.

  	
   

  	
  5%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Watts
  Plumbing Technologies (Taizhou) Co. Ltd. (f/k/a Taizhou Shida Plumbing
  Manufacturing Co. Ltd.)

  	
   

  	
  China

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Tianjin
  Watts Valve Company

  	
   

  	
  China

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Valve (Taizhou) Co., Ltd.

  	
   

  	
  China

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  
	
  Watts
  Valve (Changsha) Co., Ltd.

  	
   

  	
  China

  	
   

  	
  Watts Regulator Co.

  	
   

  	
  100%

  



 






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


 

















 


Schedule 5.17


 


Intellectual Property; Licenses, Etc.


 


                On March 29, 2002, Magrl, LLC and Lawler
Manufacturing Co. Inc. filed a patent infringement claim against the Company
and Crane Company in U.S. District Court for the Southern District of Indiana,
Indianapolis Division, related to products manufactured by the Powers Process
Controls business acquired by the Company from Crane Co. in September 2001
(Magrl, LLC and Lawler Manufacturing Co. Inc. v. Crane Co. and Mark Controls
Corporation, both d/b/a Powers Process Controls and Watts Industries, Inc.
(Civ. Act. IP02-0478C-T/K)).  The
complaint also alleges breach of contract, misappropriation of trade secrets
and state and federal unfair competition. 
The Company believes that it has strong defenses to all asserted
claims.  In addition, based upon the
level of/lack of sales of the accused products and the plaintiff’s products,
the Company believes the amount of any damages would not be substantial and, in
any event, the Company does not expect the outcome to be material to the
Company.  Further, Crane has agreed to
indemnify the Company and to satisfy any judgment arising from the litigation.


 














 


Schedule 5.19


 


Material Domestic Subsidiaries


 


Watts Regulator Co.


 


Dormont Manufacturing
Company


 


Core Industries Inc.


 


Flowmatic Systems, Inc.


 


Anderson-Barrows Metals
Corporation


 


Webster Valve, Inc.


 


Watts Distribution
Company, Inc.


 


Hunter Innovations, Inc.


 

















 


SCHEDULE 6.15


 


FOREIGN SUBSIDIARY GUARANTORS


 


	
  Name

  	
   

  	
  Jurisdiction of Organization

  
	
   

  	
   

  	
   

  
	
  Guiliani
  Anello S.r.l.

  	
   

  	
  Italy

  
	
   

  	
   

  	
   

  
	
  TEAM
  Precision Pipework, Ltd.

  	
   

  	
  United
  Kingdom

  
	
   

  	
   

  	
   

  
	
  Watts
  Industries Italia S.r.l.

  	
   

  	
  Italy

  
	
   

  	
   

  	
   

  
	
  Watts
  Intermes S.r.l.

  	
   

  	
  Italy

  
	
   

  	
   

  	
   

  
	
  Watts Londa S.p.a.

  	
   

  	
  Italy

  



 

















 


WATTS WATER TECHNOLOGIES, INC.


REVOLVING CREDIT AGREEMENT


SCHEDULE 7.01


LIENS


December 31, 2005


 


	
  COMPANY

  	
   

  	
  DESCRIPTION

  	
   

  	
  RATE

  	
   

  	
  BALANCE

  12/31/05

  	
   

  
	
  Dormont Manufacturing Company

  	
   

  	
  Variable Rate Demand Bonds

  	
   

  	
  Variable — 4.3% at 12/31/05

  	
   

  	
  $

  	
  8,900,000

  	
   

  
	
  Watts Industries Deutchland GmbH

  	
   

  	
  Mortgage Loan

  	
   

  	
  6.10%

  	
   

  	
  606,378

  	
   

  
	
  Watts Industries Deutchland GmbH

  	
   

  	
  Mortgage Loan

  	
   

  	
  4.95%

  	
   

  	
  191,855

  	
   

  
	
  Watts Instrumention GmbH

  	
   

  	
  KFW Loan

  	
   

  	
  4.50%

  	
   

  	
  172,105

  	
   

  
	
  TEAM Precision Pipework, Ltd.

  	
   

  	
  Lloyds TSB

  	
   

  	
  5.20%

  	
   

  	
  254,894

  	
   

  
	
  Giuliani Anello S.r.l.

  	
   

  	
  Capital lease-machinery & equipment

  	
   

  	
  Variable — 2.69% as 12/31/05

  	
   

  	
  44,646

  	
   

  
	
  TEAM Precision Pipework, Ltd.

  	
   

  	
  Capital lease-machinery & equipment

  	
   

  	
  5.35%

  	
   

  	
  33,233

  	
   

  
	
  Stern Rubinetti S.r.l.

  	
   

  	
  Capital lease-machinery & equipment

  	
   

  	
  Variable — 2.69% as 12/31/05

  	
   

  	
  253,159

  	
   

  
	
  Watts Electronics SAS

  	
   

  	
  Capital lease — building

  	
   

  	
  Variable — 2.94% as 12/31/05

  	
   

  	
  613,169

  	
   

  
	
  Watts Regulator Company

  	
   

  	
  Capital lease — machinery & equipment

  	
   

  	
  9.20%

  	
   

  	
  244,571

  	
   

  
	
  Dormont Manufacturing Company

  	
   

  	
  Capital lease — machinery & equipment

  	
   

  	
  0.00%

  	
   

  	
  85,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Total:

  	
   

  	
  $

  	
  11,399,010

  	
   

  



 

















 


Liens
in connection with the Specified Sale-Leaseback.  “Specified Sale-Leaseback” means,
collectively, (i) the sales by Watts Londa of a certain building and
related real property to Agenzia per lo Sviluppo, (ii) the sale by Watts
Londa of certain real property located in Spini di Gardola (purchased from
Agenzia per lo Sviluppo) to Sanpaolo Geasint Spa and (iii) the related
leasing of such properties by Watts Londa from such purchasers immediately
after such sales.


 

















 


Schedule 7.02


 


Joint Ventures


 


Investments
by Watts U.K. Ltd. In connection with its 20% ownership interest in
www.plumbworld.co.uk Ltd., a company organized under the laws of the United
Kingdom, in the aggregate principal amount of $500.00.


 


Investments
by Dormont Manufacturing Company in connection with its 11.1% equity interest
in Mechline, Inc., a U.S. company, in the aggregate principal amount of
$111.00


 


Investments
by Dormont Manufacturing Company in connection with its 11.1% equity interest
in Mechline Developments Limited, a company organized under the laws of the
United Kingdom, in the aggregate principal amount of $167,000.00.


 

















 


WATTS WATER TECHNOLOGIES, INC.


REVOLVING CREDIT AGREEMENT


SCHEDULE 7.03


INDEBTEDNESS


December 31, 2005


 


	
  COMPANY

  	
   

  	
  DESCRIPTION

  	
   

  	
  RATE

  	
   

  	
  BALANCE

  12/31/05

  	
   

  
	
  Watts Water Technologies, Inc.

  	
   

  	
  Senior Notes

  	
   

  	
  4.87%

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  Watts Water Technologies, Inc.

  	
   

  	
  Senior Notes

  	
   

  	
  5.47%

  	
   

  	
  75,000,000

  	
   

  
	
  Watts Regulator Company

  	
   

  	
  Hunter Shareholders Note Payable

  	
   

  	
  Variable — 5% at 12/31/05

  	
   

  	
  3,750,000

  	
   

  
	
  Dormont Manufacturing Company

  	
   

  	
  Variable Rate Demand Bonds

  	
   

  	
  Variable — 4.3% at 12/31/05

  	
   

  	
  8,900,000

  	
   

  
	
  Watts Industries Europe BV

  	
   

  	
  Swap Fair Value

  	
   

  	
  Variable

  	
   

  	
  (484,338

  	
  )

  
	
  Watts Industries Italia S.r.l.

  	
   

  	
  Ministry of Industry, Commerce

  	
   

  	
  8.49%

  	
   

  	
  769,117

  	
   

  
	
  Watts Industries Italia S.r.l.

  	
   

  	
  Fimet Loans

  	
   

  	
  11.28%

  	
   

  	
  33,977

  	
   

  
	
  Watts Industries Deutchland GmbH

  	
   

  	
  Mortgage Loan

  	
   

  	
  6.10%

  	
   

  	
  606,378

  	
   

  
	
  Watts Industries Deutchland GmbH

  	
   

  	
  Mortgage Loan

  	
   

  	
  4.95%

  	
   

  	
  191,855

  	
   

  
	
  Watts Instrumention GmbH

  	
   

  	
  KFW Loan

  	
   

  	
  4.50%

  	
   

  	
  172,105

  	
   

  
	
  Watt Industires Europe BV

  	
   

  	
  Revolving Credit Facility

  	
   

  	
  Variable — 2.7% at 12/31/05

  	
   

  	
  40,262,800

  	
   

  
	
  Watts Industries Italia S.r.l.

  	
   

  	
  Overdraft Facility

  	
   

  	
  2.70%

  	
   

  	
  510,774

  	
   

  
	
  TEAM Precision Pipework, Ltd.

  	
   

  	
  Lloyds TSB

  	
   

  	
  5.20%

  	
   

  	
  254,894

  	
   

  
	
  TEAM Precisio Pipework, Ltd.

  	
   

  	
  Government Grants

  	
   

  	
  5.67%

  	
   

  	
  11,172

  	
   

  
	
  Watts Electronics SAS

  	
   

  	
  Government Grants

  	
   

  	
  0.00%

  	
   

  	
  4,275

  	
   

  
	
  Watts Microflex NV

  	
   

  	
  Dexia Bank

  	
   

  	
  3.50%

  	
   

  	
  1,768

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CAPITAL LEASES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Giuliani Anello S.r.l.

  	
   

  	
  Machinery & Equipment

  	
   

  	
  Variable — 2.69% at 12/31/05

  	
   

  	
  $

  	
  44,646

  	
   

  
	
  TEAM Precision Pipework, Ltd.

  	
   

  	
  Machinery & Equipment

  	
   

  	
  5.35%

  	
   

  	
  33,233

  	
   

  
	
  Stern Rubinetti S.r.l.

  	
   

  	
  Machinery & Equipment

  	
   

  	
  Variable — 2.69% at 12/31/05

  	
   

  	
  253,159

  	
   

  
	
  Watts Electronics SAS

  	
   

  	
  Building

  	
   

  	
  Variable — 2.94% at 12/31/05

  	
   

  	
  613,169

  	
   

  
	
  Watts Regulator Company

  	
   

  	
  Machinery & Equipment

  	
   

  	
  9.20%

  	
   

  	
  244,571

  	
   

  
	
  Dormont Manufacturing Company

  	
   

  	
  Machinery & Equipment

  	
   

  	
  0.00%

  	
   

  	
  85,000

  	
   

  
	
   

  	
   

  	
  Total Capital Leases

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WATTS REGULATOR

  	
   

  	
  Letters of Credit — Commercial

  	
   

  	
   

  	
   

  	
  16,010,134

  	
   

  



 














 


Indebtedness
not to exceed 13,000,000 euros in connection with the Specified Sale-Leaseback
(as defined above).


 

















 


Schedule 10.02


Administrative Agent’s Office


Addresses for Notices


 


Watts
Water Technologies, Inc.


 


Watts
Water Technologies, Inc.


815
Chestnut Street


North
Andover, MA 01845


Attn:  William McCarthy, CFO


Phone:  978-689-6207


Facsimile:  978-688-2976


Email:  mccartwc@wattsind.com


 


Watts
Industries Europe B.V.


 


Watts
Industries Europe B.V.


Kollergang
14


6961
LZ Eerbeek


The
Netherlands


Attn:  Johan Van Kouterik


Phone:  011-31-31-367-3723


Facsimile:  011-31-313-652-073


Email:  kouterik.van.j@wattsindustries.com


 


with a copy to:


 


c/o
Watts Water Technologies, Inc.


815
Chestnut Street


North
Andover, MA 01845


Attn:  William McCarthy, CFO


Phone:  978-689-6207


Facsimile:  978-688-2976


Email:  mccartwc@wattsind.com


 


Bank
of America, N.A.


 


Bank
of America, N.A.


Mail
Code:  IL1-231-08-30


231
S. LaSalle Street


Chicago,
IL 60697


Attn:  Bozena Janociak


Phone:  312-828-3597


Facsimile:  877-207-0732


Email:bozena.janociak@bankofamerica.com


 

















 


SCHEDULE 10.06


 


PROCESSING AND RECORDATION FEES


 


The Administrative Agent
will charge a processing and recordation fee (an “Assignment Fee”) in
the amount of $2,500 for each assignment; provided, however, that
in the event of two or more concurrent assignments to members of the same
Assignee Group (which may be effected by a suballocation of an assigned amount
among members of such Assignee Group) or two or more concurrent assignments by
members of the same Assignee Group to a single Eligible Assignee (or to an
Eligible Assignee and members of its Assignee Group), the Assignment Fee will
be $2,500 plus the amount set forth below:


 


	
  Transaction

  	
   

  	
  Assignment Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First four concurrent assignments or
  suballocations to members of an Assignee Group (or from members of an
  Assignee Group, as applicable)

  	
   

  	
  -0-

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each additional concurrent assignment or
  suballocation to a member of such Assignee Group (or from a member of such
  Assignee Group, as applicable)

  	
   

  	
  $

  	
  500

  	
   

  
					



 

















 


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 Amended and Restated Credit Agreement, dated as of April 27, 2006
(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:

  	
   

  



 

















 


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 Amended and Restated Credit Agreement, dated as of April 27, 2006
(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 Amended and Restated Credit Agreement, dated as of April 27,
2006 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among Watts
Water Technologies, Inc., a Delaware corporation, the Designated Borrowers
from time to time party thereto, the Lenders from time to time party thereto,
and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line
Lender.


 


The Borrower promises to pay
interest on the unpaid principal amount of each Loan from the date of such Loan
until such principal amount is paid in full, at such interest rates and at such
times as provided in the Agreement.  Except as otherwise provided in Section 2.04(f) of the Agreement with respect to Swing Line Loans, all  payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in the currency in which
such Committed Loan was denominated and in Same Day Funds at the Administrative
Agent’s Office for such currency.  If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.


 


This Note is one of the
Notes referred to in the Agreement, is entitled to the benefits thereof and may
be prepaid in whole or in part subject to the terms and conditions provided
therein.  This Note is also entitled to
the benefits of each Guaranty.  Upon the
occurrence and continuation of one or more of the Events of Default specified
in the Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable all as provided in the
Agreement.  Loans made by the Lender
shall be evidenced by one or more loan accounts or records maintained by the
Lender in the ordinary course of business. The Lender may also attach schedules
to this Note and endorse thereon the date, amount, currency and maturity of its
Loans and payments with respect thereto.


 


The Borrower, for itself,
its successors and assigns, hereby waives diligence, presentment, protest and
demand and notice of protest, demand, dishonor and non-payment of this Note.


 


THIS NOTE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


C-1

















 


	
   

  	
  WATTS WATER TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
  OR

  
	
   

  	
   

  
	
   

  	
  [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 Amended and Restated Credit Agreement, dated as of April 27, 2006
(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


 


D-1

















 


[select one:]


 


[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 subsection (a) of Section 5.05
of the Agreement shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b) of Section 6.01 of the Agreement (subject, in the case of any unaudited statements furnished
pursuant to clause (b) of Section 6.01 of the Agreement, to the
absence of footnotes and to normal year-end audit adjustments),
including the statements in connection with which this Compliance Certificate
is delivered.


 


5.             The financial covenant analyses and information set
forth on Schedules 2 and 3 attached
hereto are true and accurate in all material respects on and as of the date of
this Certificate.


 


IN WITNESS WHEREOF, the
undersigned has executed this Certificate as of
                  ,
              .


 


	
   

  	
  WATTS WATER TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


D-2

















 


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 April 2, 2006 (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
  $415,580,000):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

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

  	
   

  	
  $

  



 


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


 


	
  A.

  	
   

  	
  Consolidated
  EBITDA for four consecutive fiscal quarters ending on above date (“Subject Period”) (Schedule 3):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Consolidated
  Total Interest Expense for Subject Period:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Consolidated
  Interest Coverage Ratio (Line II.A  ̧ Line II.B):

  	
   

  	
  to 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Minimum
  required Consolidated Interest Coverage Ratio:

  	
   

  	
  3.50
  to 1

  



 


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


 


	
  A.

  	
   

  	
  Consolidated
  Funded Indebtedness 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: (Each fiscal quarter ending on or
  prior to December 31, 2006: 3.50:1.00; each other fiscal quarter:
  3.25:1.00)

  	
   

  	
  [3.50]
  to 1

  



 


D-4

















 


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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  +/-
  Effect of Pro Forma Adjustments related to Permitted Acquisitions

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  =
  Consolidated EBITDA on a Pro Forma Basis

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


D-5

















 


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:                Amended and Restated Credit Agreement, dated as of April 27,
2006, 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


 


E-1

















 


5.                                       Assigned Interest:


 


	
  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








 


*      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

















 


	
  By:

  	
   

  	
   

  
	
   

  	
  Title:]

  	
   

  
	
   

  	
   

  	
   

  
	
  Consented to:

  	
   

  
	
   

  	
   

  	
   

  
	
  BANK OF AMERICA, N.A., as

  	
   

  
	
  Swing Line Lender and L/C Issuer 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  [WATTS WATER TECHNOLOGIES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:]

  	
   

  
	
   

  	
   

  	
   

  
	
  [WATTS INDUSTRIES EUROPE B.V.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  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, (v) is a Lender, an Affiliate of a Lender or another
Person that, through its Lending Offices, is capable of lending Euros to the
relevant Borrowers without the imposition of any Taxes or additional Taxes, as
the case may be, and (vi) 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; (b) represents
and warrants to the Initial Designated Borrower that (i) it is a PMP, (ii) it
is aware of that it does not benefit from the protection offered by the Dutch
Banking Act to Lenders which are not PMPs, and (iii) it has made its own
independent appraisal of risks arising under or in connection with any Loan
Documents; and (c) 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


 


E-4

















 


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 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

















 


 


EXECUTION COPY


 


EXHIBIT F


 


FORM OF AMENDED AND
RESTATED 

GUARANTY AGREEMENT


 


See attached.


 

















 


AMENDED AND RESTATED GUARANTY


 


This AMENDED AND RESTATED
GUARANTY (this “Guaranty”), dated as of April 27, 2006, 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 (the “Initial Designated Borrower” 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, the Company, the
Initial Designated Borrower and certain of the Initial Subsidiary Guarantors
are parties to that certain Guaranty, dated as of September 23, 2004 (as
amended, restated, supplemented or otherwise modified prior to the date hereof,
the “Existing Guaranty”), in favor of the Administrative Agent, which
Existing Guaranty was entered into in connection with that certain Credit
Agreement, dated as September 23, 2004 (as amended, restated, supplemented
or otherwise modified prior to the date hereof, the “Existing Credit
Agreement”), by and among the Company, certain Subsidiaries of the Company
party thereto, the lenders party thereto and the Administrative Agent;


 


WHEREAS, the Existing Credit
Agreement has been amended and restated in its entirety pursuant to that
certain Amended and Restated Credit Agreement, dated as of the date hereof (as
amended, restated, supplemented or otherwise modified, the “Credit Agreement”),
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 and the
Administrative Agent;


 


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, (i) each
Domestic 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 (ii) each Foreign Designated Borrower is, with respect to
each other Foreign 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 Foreign Designated Borrowers
pursuant to the Credit Agreement;


 


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WHEREAS, (i) each
Domestic Subsidiary 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 (ii) each Foreign
Subsidiary Guarantor is, with respect to each Foreign 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 the
Foreign Designated Borrowers pursuant to the Credit Agreement;


 


WHEREAS, the Domestic
Subsidiaries of the Company party hereto as of the date hereof constitute the
Material Domestic Subsidiaries of the Company as of the date hereof and shall
be Domestic Subsidiary Guarantors hereunder; 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) the Company,
each Domestic Designated Borrower and each Domestic Subsidiary Guarantor
(collectively, the “Domestic Guarantors”) have agreed to guarantee
payment of the Obligations of all of the Borrowers and (ii) each Foreign
Designated Borrower and each Foreign Subsidiary Guarantor (collectively, the “Foreign
Guarantors”) have agreed to guarantee payment of the Obligations of all of
the Foreign Designated Borrowers.


 


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:


 


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ARTICLE XIV.Guaranty.  Each Domestic 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
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”).   Each Foreign 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 all of the
Foreign Designated Borrowers to 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
Foreign Obligations”; it being understood that all references to the “Guaranteed
Obligations” herein (except in the first sentence of Section 10, in
which instance the reference to “Guaranteed Obligations” shall refer to all
existing and future Obligations of all of the Borrowers to the Holders of
Obligations) shall, in the case of any Foreign Guarantor, refer only to the
Guaranteed Foreign 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.


 


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ARTICLE XV.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 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; provided, that no
Foreign Guarantor shall be liable for any indemnity for (or otherwise with
respect to) any taxes paid by a Holder of Obligations in respect of a payment
received from any Domestic Guarantor.


 


ARTICLE XVI.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.


 


ARTICLE XVII.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.


 


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ARTICLE
XVIII.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.


 


ARTICLE XIX.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 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.


 


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ARTICLE XX.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.


 


ARTICLE XXI.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.


 


ARTICLE XXII.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.


 


ARTICLE
XXIII.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.


 


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ARTICLE XXIV.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.


 


ARTICLE XXV.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; provided, that no Foreign Guarantor shall be liable for any
expenses in any way related to the enforcement or protection of the rights of
the Holders of Obligations hereunder against any Domestic Guarantor.  The obligations of each Guarantor under the
preceding sentence shall survive termination of this Guaranty.


 


ARTICLE
XXVI.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.


 


ARTICLE XXVII.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.


 


ARTICLE XXVIII.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 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.


 


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ARTICLE XXIX.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.


 


ARTICLE XXX.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.


 


ARTICLE XXXI.Representations
and Warranties.  Each Guarantor represents and warrants that:


 


ARTICLE XXXII.(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;


 


ARTICLE XXXIII.(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


 


ARTICLE XXXIV.(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.


 


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ARTICLE XXXV.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.


 


ARTICLE XXXVI.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.


 


ARTICLE XXXVII.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.


 


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


 


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ARTICLE XXXIX.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.


 


ARTICLE XL.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.


 


11

















 


ARTICLE XLI.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 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.


 


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


 


ARTICLE XLIII.Additional
Guarantors.  Certain Subsidiaries of the Company shall be 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 (which
supplement shall indicate whether such Subsidiary shall constitute a Domestic
Subsidiary Guarantor or Foreign Subsidiary Guarantor) 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.


 


ARTICLE XLIV.No Novation;
References to This Guaranty In Loan Documents.


 


ARTICLE XLV.(a)  It
is the express intent of the parties hereto that this Guaranty (i) shall
re-evidence the Guarantors’ obligations under the Existing Guaranty, (ii) is
entered into in substitution for, and not in payment of, the obligations of the
Guarantors under the Guaranty, and (iii) is in no way intended to
constitute a novation of any of the Guarantors’ obligations that were evidenced
by the Existing Guaranty or any of the other Loan Documents.


 


ARTICLE XLVI.(b)  Upon the effectiveness of this Guaranty, on and after
the date hereof, each reference in any other Loan Document to the Existing
Guaranty (including any reference therein to “the Guaranty,” “thereunder,” “thereof,”
“therein” or words of like import referring thereto) shall mean and be a
reference to this Guaranty.


 


12

















 


ARTICLE XLVII.Counterparts.  This Guaranty 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.  Delivery
of an executed counterpart of a signature page of this Guaranty by
telecopy shall be effective as delivery of a manually executed counterpart of
this Guaranty.


 


[Remainder of page intentionally left
blank.]


 


13

















 


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


Amended
and Restated 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:

  



 


Signature
Page to


Amended
and Restated Guaranty


 

















 


	
   

  	
  CORE
  INDUSTRIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  DORMONT
  MANUFACTURING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  FLOWMATIC
  SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Signature
Page to


Amended
and Restated Guaranty


 

















 


	
  ACKNOWLEDGED
  AND AGREED:

  	
   

  
	
  BANK
  OF AMERICA, N.A., as

  	
   

  
	
  Administrative
  Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
			



 


Signature
Page to


Amended
and Restated Guaranty


 

















 


ANNEX I TO

AMENDED AND RESTATED GUARANTY


 


Reference
is hereby made to the Amended and Restated Guaranty (as from time to time
amended, restated, supplemented or otherwise modified, the “Guaranty”),
dated as of April 27, 2006, made by Watts Water Technologies, Inc., a
Delaware corporation (the “Company”), certain 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. 
The undersigned shall constitute a [Domestic
Subsidiary Guarantor]  [Foreign Subsidiary Guarantor] for all
purposes under the Guaranty and the other Loan Documents.


 


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:

  



 


F-1

















 


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 Amended and
Restated Credit Agreement, dated as of April 27, 2006 (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 Amended and Restated Credit Agreement, dated as of April 27,
2006 (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: