Exhibit 10.3


 


March 11, 2004


 


Watts Water Technologies, Inc.

Watts Regulator Co.

Watts Industries Europe B.V.

c/o Watts Water Technologies, Inc.

815 Chestnut Street

North Andover, Massachusetts  01845


 


Attention:                                         Chief
Financial Officer


 


Re:                             Limited
Waiver


 


Ladies and Gentlemen:


 


Reference is hereby made to that certain
Revolving Credit Agreement, dated as of February 28, 2002 (as amended and in
effect from time to time, the “Credit Agreement”), by and among (a)
Watts Water Technologies, Inc. (f/k/a Watts Industries, Inc.), a Delaware
corporation (the “Parent”), (b) Watts Regulator Co., a Massachusetts
corporation (the “Domestic Borrower”), (c) Watts Industries Europe B.V.,
a private company with limited liability organized under the laws of The
Netherlands (the “Foreign Borrower” and, collectively with the Domestic
Borrower, the “Borrowers”, and each individually, a “Borrower”),
(d) Fleet National Bank and the other lending institutions set forth on Schedule
1 to the Credit Agreement (the “Lenders”), and (e) Fleet National
Bank, as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).  Capitalized terms used
herein and which are not otherwise defined shall have the respective meanings
ascribed thereto in the Credit Agreement.


 


The Parent and the
Borrowers have informed the Lenders and the Administrative Agent that (a)
Taizhou Shida Plumbing Manufacturing Co. Ltd. (“Shida”), a Subsidiary of
the Parent, currently has approximately $6,000,000 of Indebtedness owing to the
Bank of China, which Indebtedness is secured by a Lien on the assets of Shida
(the “Shida Secured Debt”); and (b) Tianjin Tanggu Watts Valve Co. Ltd.
(“TWT”), a Subsidiary of the Parent, currently has approximately
$1,200,000 of Indebtedness owing to the Bank of China, which Indebtedness is
secured by a Lien on the assets of TWT (the “TWT Secured Debt”).  As you are aware, §8.1 of the Credit
Agreement does not permit either the Shida Secured Debt or the TWT Secured
Debt, and §8.2.1. of the Credit Agreement does not permit the Lien on the
assets of either Shida or TWT to secure the Shida Secured Debt or the TWT
Secured Debt, as the case may be.  As
such, the Parent and its Subsidiaries are not in compliance with the covenants
contained in §§8.1 and 8.2.1 of the Credit Agreement.


 


The Parent and the
Borrowers have requested that the Lenders and the Administrative Agent waive,
to the limited extent necessary to permit the above-


 

















 


referenced non-compliance, the provisions of §§8.1 and 8.2.1 of the
Credit Agreement from the date each of the Shida Secured Debt and TWT Secured
Debt was incurred through April 30, 2004, but solely to permit the Shida
Secured Debt and the TWT Secured Debt (including the Liens on the assets of
each of Shida and TWT in favor of Bank of China to secure such Shida Secured
Debt and TWT Secured Debt, as the case may be) to remain outstanding until (but
not after) April 30, 2004.


 


In response to
your request, upon the effectiveness of this letter as described in the
paragraph below, the Lenders and the Administrative Agent hereby waive the
provision of §§8.1 and 8.2.1 of the Credit Agreement solely to the extent
necessary to permit the above-referenced non-compliance, only from the date
each of the Shida Secured Debt and the TWT Secured Debt was incurred until
April 30, 2004.  The failure by the
Parent and the Borrowers to repay all the Shida Secured Debt and the TWT
Secured Debt (including terminating all commitments thereunder) and to
demonstrate to the satisfaction of the Administrative Agent that all Liens on
the assets of each of Shida and TWT securing such Indebtedness have been
released by not later than April 30, 2004 shall constitute an immediate Event
of Default under the Credit Agreement. 
The Parent and the Borrowers hereby represent and warrant that, on and
as of the date hereof, (a) except as expressly set forth above, no Default or
Event of Default has occurred and is continuing under the Credit Agreement and
each of the other Loan Documents; and (b) each of the representations and
warranties made by it in §6 of the Credit Agreement remain true as of the date
hereof (except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and the other Loan Documents,
and to the extent that such representations and warranties relate expressly to
an earlier date).


 


This waiver letter
shall not become effective until the Administrative Agent receives an original
counterpart of this letter, duly executed by the Parent, the Borrowers, the
Guarantors, the Required Lenders and the Administrative Agent.


 


Nothing contained
in this waiver letter shall be construed to imply a willingness on the part of
the Administrative Agent and the Lenders to grant any similar or other future
waivers of any of the terms and conditions of the Credit Agreement or the other
Loan Documents.


 


Except as
specifically waived hereby, each of the terms and conditions of the Credit
Agreement and the other Loan Documents are hereby ratified and confirmed and
shall remain in full force and effect. 
Nothing contained herein shall in any way prejudice, impair or effect
any rights or remedies of the Administrative Agent and the Lenders under the
Credit Agreement and the other Loan Documents.


 


This waiver letter
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.


 


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THIS WAIVER LETTER SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICTS OF LAW).


 


3

















 


Please acknowledge the foregoing by executing
and returning five (5) copies of this letter to Alicia Szendiuch, Managing
Director, Fleet National Bank, 100 Federal Street, Boston, MA  02110.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Christopher
  J. Wickles

  	
   

  
	
   

  	
   

  	
  Name:  Christopher J. Wickles

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Jonathan
  M. Phillips

  	
   

  
	
   

  	
   

  	
  Name:  Jonathan M. Phillips

  
	
   

  	
   

  	
  Title:  VP

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIZENS BANK OF MASSACHUSETTS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Stephanie
  Epkins

  	
   

  
	
   

  	
   

  	
  Name:  Stephanie Epkins

  
	
   

  	
   

  	
  Title:  VP

  
	
   

  	
   

  	
   

  
	
   

  	
  MELLON
  BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NA successor to

  FIRST UNION NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Sarah T.
  Warren

  	
   

  
	
   

  	
   

  	
  Name:  Sarah T. Warren

  
	
   

  	
   

  	
  Title:  Director

  
									



 


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  BROWN BROTHERS HARRIMAN & CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  John D.
  Rogers

  	
   

  
	
   

  	
   

  	
  Name:  John D. Rogers

  
	
   

  	
   

  	
  Title:  SVP

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  A. Neil
  Sweeny

  	
   

  
	
   

  	
   

  	
  Name:  A. Neil Sweeny

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Thomas J. Purcell

  	
   

  
	
   

  	
   

  	
  Name:  Thomas J. Purcell

  
	
   

  	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND
  AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS REGULATOR CO.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS INDUSTRIES EUROPE B.V.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  C.F.O. Europe

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS WATER TECHNOLOGIES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
													



 


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  WATTS PREMIER, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS SPACEMAKER, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS RADIANT, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ANDERSON-BARROWS METALS CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS DRAINAGE PRODUCTS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WEBSTER VALVE, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
								



 


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  WATTS DISTRIBUTION COMPANY, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JAMECO INDUSTRIES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS OCEAN B.V.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS CAZZANIGA SPA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WATTS INTERMES SRL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  J. van Kouterik

  	
   

  
	
  Title:  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HUNTER INNOVATIONS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  William C. McCartney

  	
   

  
	
  Title:

  	
   

  	
   

  
													



 


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