exv4w1



 




Exhibit 4.1






THIRD AMENDED AND RESTATED CREDIT AGREEMENT



dated as of June 4, 2007

among




PENTAIR, INC.,




Various Subsidiaries of Pentair, Inc.,




Various Financial Institutions,




JPMORGAN CHASE BANK, N.A.,




as Syndication Agent,




THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CHICAGO BRANCH,

U.S. BANK NATIONAL ASSOCIATION

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents,




U.S. BANK NATIONAL ASSOCIATION,

as Swing Line Lender,




BANK OF AMERICA, N.A., CANADA BRANCH,

as Canadian Administrative Agent,




and




BANK OF AMERICA, N.A.,

as Administrative Agent and Issuing Bank




BANC OF AMERICA SECURITIES, LLC

and

J.P. MORGAN SECURITIES INC.,

Co-Lead Arrangers and Co-Book Managers









 









 











TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE I             DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	24	 
	1.03 Accounting Terms
	 	 	24	 
	1.04 Exchange Rates; Currency Equivalents
	 	 	25	 
	1.05 Change of Currency
	 	 	25	 
	1.06 Times of Day
	 	 	26	 
	1.07 Letter of Credit Amounts
	 	 	26	 
	1.08 Rounding
	 	 	26	 
	 
	 	 	 	 
	ARTICLE II            THE COMMITMENTS AND CREDIT EXTENSIONS
	 	 	26	 
	2.01 Committed Loans
	 	 	26	 
	2.02 Borrowings, Conversions and Continuations of Committed Loans
	 	 	26	 
	2.03 Swing Line Loans
	 	 	28	 
	2.04 Borrowing Subsidiary Commitments
	 	 	30	 
	2.05 Letters of Credit
	 	 	34	 
	2.06 Prepayments
	 	 	44	 
	2.07 Reduction or Termination of Commitments
	 	 	45	 
	2.08 Repayment of Loans
	 	 	46	 
	2.09 Interest
	 	 	46	 
	2.10 Fees
	 	 	47	 
	2.11 Computation of Interest and Fees
	 	 	47	 
	2.12 Evidence of Debt
	 	 	47	 
	2.13 Payments Generally
	 	 	48	 
	2.14 Sharing of Payments by Lenders
	 	 	50	 
	2.15 Borrowing Subsidiaries
	 	 	50	 
	2.16 Currency Exchange Fluctuations
	 	 	51	 
	2.17 Increase in Commitments
	 	 	51	 
	2.18 Designation of Borrowing Subsidiary Lenders; Increases and Reduction of
Borrowing Subsidiary Commitments
and Borrowing Subsidiary Sublimits; Additional Applicable Currencies
	 	 	52	 
	2.19 Procedures for Increases in Aggregate Commitments and Changes in Borrowing
Subsidiary Commitments
	 	 	53	 






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TABLE OF CONTENTS
(continued)




	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	2.20 Extension of Maturity Date
	 	 	53	 
	2.21 Bid Loans
	 	 	54	 
	2.22 Resignation or Remove of Issuing Bank or Swing Line Lender
	 	 	57	 
	 
	 	 	 	 
	ARTICLE III            TAXES, YIELD PROTECTION AND ILLEGALITY
	 	 	58	 
	3.01 Taxes
	 	 	58	 
	3.02 Illegality
	 	 	61	 
	3.03 Inability to Determine Rates
	 	 	61	 
	3.04 Increased Costs and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate Loans
	 	 	61	 
	3.05 Funding Losses
	 	 	63	 
	3.06 Matters Applicable to all Requests for Compensation
	 	 	64	 
	3.07 Economic and Monetary Union in the European Community
	 	 	64	 
	3.08 Discretion of Lenders as to Manner of Funding
	 	 	65	 
	3.09 Survival
	 	 	65	 
	 
	 	 	 	 
	ARTICLE IV            CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
	 	 	65	 
	4.01 Conditions of Amendment and Restatement and Initial Credit Extension
	 	 	65	 
	4.02 Conditions to all Credit Extensions
	 	 	66	 
	4.03 Condition to Borrowing Subsidiary Credit Extensions
	 	 	67	 
	 
	 	 	 	 
	ARTICLE V            REPRESENTATIONS AND WARRANTIES
	 	 	67	 
	5.01 Corporate Existence and Power
	 	 	67	 
	5.02 Corporate and Governmental Authorization; Contravention
	 	 	68	 
	5.03 Binding Effect
	 	 	68	 
	5.04 Financial Information
	 	 	69	 
	5.05 Litigation
	 	 	69	 
	5.06 Compliance with ERISA
	 	 	69	 
	5.07 Taxes
	 	 	70	 
	5.08 Subsidiaries
	 	 	70	 
	5.09 Not an Investment Company
	 	 	70	 
	5.10 Environmental Matters
	 	 	70	 
	5.11 Insurance
	 	 	70	 
	5.12 Default
	 	 	70	 






-ii-









 






TABLE OF CONTENTS
(continued)



	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	5.13 Use of Proceeds
	 	 	70	 
	5.14 Status of Pentair Germany
	 	 	70	 
	 
	 	 	 	 
	ARTICLE VI            COVENANTS
	 	 	71	 
	6.01 Information
	 	 	71	 
	6.02 Maximum Leverage Ratio
	 	 	72	 
	6.03 Minimum Interest Coverage Ratio
	 	 	73	 
	6.04 Negative Pledge
	 	 	73	 
	6.05 Consolidations, Mergers and Sales of Assets; Acquisitions
	 	 	75	 
	6.06 Subsidiary Debt
	 	 	75	 
	6.07 Use of Proceeds
	 	 	75	 
	6.08 Compliance with Contractual Obligations and Law
	 	 	75	 
	6.09 Securitization Transactions
	 	 	75	 
	6.10 Insurance
	 	 	76	 
	6.11 Ownership of Borrowers
	 	 	76	 
	6.12 Subsidiary Guaranty
	 	 	76	 
	 
	 	 	 	 
	ARTICLE VII            EVENTS OF DEFAULT AND REMEDIES
	 	 	76	 
	7.01 Events of Default
	 	 	76	 
	7.02 Notice of Default
	 	 	79	 
	7.03 Cash Collateral for Letters of Credit
	 	 	79	 
	 
	 	 	 	 
	ARTICLE VIII            ADMINISTRATIVE AGENT
	 	 	80	 
	8.01 Appointment and Authority
	 	 	80	 
	8.02 Rights as a Lender
	 	 	80	 
	8.03 Exculpatory Provisions
	 	 	80	 
	8.04 Reliance by Administrative Agent
	 	 	81	 
	8.05 Delegation of Duties
	 	 	81	 
	8.06 Resignation of Administrative Agent
	 	 	82	 
	8.07 Non-Reliance on Administrative Agent and Other Lenders
	 	 	82	 
	8.08 No Other Duties, Etc
	 	 	83	 
	8.09 Administrative Agent May File Proofs of Claim
	 	 	83	 
	8.10 Subsidiary Guaranty Matters
	 	 	84	 
	8.11 Indemnification of Administrative Agent
	 	 	84	 






-iii-









 






TABLE OF CONTENTS
(continued)




	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	8.12 Funding Reliance
	 	 	84	 
	8.13 Withholding Tax
	 	 	85	 
	 
	 	 	 	 
	ARTICLE IX            MISCELLANEOUS
	 	 	85	 
	9.01 Amendments, Etc
	 	 	85	 
	9.02 Notices and Other Communications; Facsimile Copies
	 	 	87	 
	9.03 No Waiver; Cumulative Remedies
	 	 	89	 
	9.04 Expenses; Indemnity; Damage Waiver
	 	 	89	 
	9.05 Payments Set Aside
	 	 	90	 
	9.06 Successors and Assigns
	 	 	91	 
	9.07 Confidentiality
	 	 	95	 
	9.08 Interest Rate Limitation
	 	 	95	 
	9.09 Counterparts
	 	 	96	 
	9.10 Integration
	 	 	96	 
	9.11 Severability
	 	 	96	 
	9.12 Replacement of Lenders
	 	 	96	 
	9.13 Judgment Currency
	 	 	97	 
	9.14 Borrowers’ Agent
	 	 	97	 
	9.15 Governing Law
	 	 	98	 
	9.16 Waiver of Right to Trial by Jury
	 	 	98	 
	9.17 USA PATRIOT Act Notice
	 	 	98	 
	9.18 No Fiduciary or Implied Duties
	 	 	99	 
	 
	 	 	 	 
	ARTICLE X            GUARANTY
	 	 	99	 
	10.01 Guaranty
	 	 	99	 
	10.02 Guaranty Unconditional
	 	 	99	 
	10.03 Discharge only upon Payment in Full; Reinstatement in Certain Circumstances
	 	 	100	 
	10.04 Waiver by Company
	 	 	100	 
	10.05 Subrogation
	 	 	100	 
	10.06 Stay of Acceleration
	 	 	100	 
	 
	 	 	 	 
	ARTICLE XI            AMENDMENT AND RESTATEMENT; EXISTING AGREEMENT
	 	 	100	 
	11.01 Amendment and Restatement
	 	 	100	 






-iv-









 







TABLE OF CONTENTS
(continued)



	 	 	 	 	 
	 	 	Page
	11.02 Existing Agreement
	 	 	101	 






	 	 	 
	Schedules
	 	 
	Schedule 1.01
	 	Pricing Schedule
	Schedule 1.02
	 	Mandatory Cost Formulae
	Schedule 2.01
	 	Commitments and Pro Rata Shares
	Schedule 2.04
	 	Canadian Banker's Acceptances
	Schedule 2.05
	 	Existing Letters of Credit
	Schedule 2.18
	 	Borrowing Subsidiary Commitments and Sublimits
	Schedule 4.03
	 	Opinions for Borrowing Subsidiary Credit Extensions
	Schedule 5.05
	 	Litigation
	Schedule 6.04
	 	Liens
	Schedule 6.06
	 	Subsidiary Debt
	Schedule 9.02(a)
	 	Certain Notice Addresses
	Schedule 9.02(b)
	 	Administrative Agent's Office






Exhibits




	 	 	 
	
	 	 
	Exhibit A
	 	Form of Note (Section 1.01)
	Exhibit B-1
	 	Form of Notice of Committed Borrowing (Section 1.01)
	Exhibit B-2
	 	Form of Notice of Borrowing Subsidiary Borrowing (Section 1.01)
	Exhibit C
	 	Form of Notice of Swing Line Borrowing (Section 1.01)
	Exhibit D
	 	Form of Bid Request (Section 2.21)
	Exhibit E
	 	Form of Confirmation of Subsidiary Guaranty (Section 4.01)
	Exhibit F
	 	Form of Competitive Bid (Section 2.21)
	Exhibit G-1
	 	Form of Request for Increase in Commitments (Section 2.17)
	Exhibit G-2
	 	Form of Request for Consent to Increase (Section 2.17)
	Exhibit G-3
	 	Form of Request for Additional Lender (Section 2.17)
	Exhibit H
	 	Form of Assignment and Acceptance (Section 1.01)
	Exhibit I
	 	Copy of Subsidiary Guaranty (Section 1.01)
	Exhibit J-1
	 	Form of Borrowing Subsidiary Agreement (Section 1.01)
	Exhibit J-2
	 	Form of Borrowing Subsidiary Termination (Section 1.01)







-v-









 








THIRD AMENDED AND RESTATED CREDIT AGREEMENT




     THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 4, 2007 is among PENTAIR,
INC. (the “Company”); PENTAIR UK GROUP LIMITED (“Pentair UK”); PENTAIR CANADA INC.
(“Pentair Canada”); PENTAIR GERMANY GmbH (“Pentair Germany”); PENTAIR GLOBAL SARL
(“Pentair Global”); PENTAIR JANUS HOLDINGS (“Pentair Bermuda”); any other
subsidiary of the Company designated as a Borrowing Subsidiary pursuant to the terms hereof (the
Company, Pentair UK, Pentair Canada, Pentair Germany, Pentair Global, Pentair Bermuda and each such
designated subsidiary are sometimes referred to collectively as the “Borrowers” or each
individually as a “Borrower”); the financial institutions which from time to time are
parties hereto as lenders (collectively the “Lenders” and each individually a
“Lender”); BANK OF AMERICA, N.A., as Issuing Bank; U.S. BANK NATIONAL ASSOCIATION, as Swing
Line Lender; JPMORGAN CHASE BANK, N.A., as Syndication Agent; THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD., CHICAGO BRANCH, U.S. BANK NATIONAL ASSOCIATION and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Co-Documentation Agents, BANK OF AMERICA, N.A., CANADA BRANCH, as Canadian Administrative Agent,
and BANK OF AMERICA, N.A., as Administrative Agent.



WITNESSETH:




     The Borrowers, certain of the Lenders and the Administrative Agent are parties to that certain
Second Amended and Restated Credit Agreement dated as of March 4, 2005 (the “Existing
Agreement”), pursuant to which such Lenders have made Credit Extensions (as defined in the
Existing Agreement) to certain of the Borrowers.



     The Borrowers, the Lenders and the Administrative Agent have agreed to amend and restate the
Existing Agreement in the form of this Agreement on the terms and conditions stated herein.



     NOW, THEREFORE, the parties hereto agree as follows:



ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS




     1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings
set forth below:



     “Absolute Rate” means a fixed rate of interest expressed in multiples of
1/100th of one basis point.



     “Absolute Rate Loan” means a Bid Loan that bears interest at a rate determined with
reference to an Absolute Rate.



     “Acquisition” means any transaction or series of related transactions that result,
directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a
Person, or of all or substantially all of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests, membership interests or equity of
any Person, or



1









 







otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a Subsidiary) provided that the
Company or the Subsidiary is the surviving entity.



     “Act” — see Section 9.17.



     “Additional Commitment Lender” — see Section 2.20.



     “Administrative Agent” means Bank of America in its capacity as administrative agent
under the Loan Documents, or any successor administrative agent; provided that when used
with reference to fundings, disbursements, settlements and payments in Canadian Dollars or any
other matter related to Canadian Dollars or to Pentair Canada, “Administrative Agent” means
the Canadian 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
9.02(b) 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, as to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with, such Person. A Person
shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or
indirectly, power (a) to vote 33% or more (or, in the case of an Affiliate of a Lender, 20% or
more) of the securities (on a fully diluted basis) having ordinary voting power for the election of
directors or managing general partners; or (b) to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.



     “Agent Parties” — see Section 9.02(d).



     “Aggregate Borrowing Subsidiary Sublimit” means the lesser of (a) US$500,000,000 and
(b) the Aggregate Commitments.



     “Aggregate Commitments” means US$800,000,000, as such amount may be reduced, increased
or adjusted from time to time in accordance with this Agreement.



     “Agreement” means this Third Amended and Restated Credit Agreement.



     “Amendment Effective Date” — see Article IV.



     “Anniversary Date” — see Section 2.20.



     “Applicable Currency” means (a) with respect to any Loan or other Obligation, the
currency in which such Loan or other Obligation is denominated; and (b) with respect to any
Borrower, the currency or currencies in which Credit Extensions are to be made to such Borrower
hereunder. As of the Amendment Effective Date, the Applicable Currencies are (i) for



2









 







the Company, any Available Currency; (ii) for Pentair Bermuda, US Dollars and Euros; (iii) for
Pentair UK, British Pounds Sterling; (iv) for Pentair Canada, Canadian Dollars; and (v) for Pentair
Germany and Pentair Global, Euros.



     “Applicable Margin” means a rate determined in accordance with Schedule 1.01.



     “Applicable Time” means, with respect to any borrowings and payments in any Foreign
Currency, the local time in the place of settlement for such Foreign Currency as may be determined
by the Administrative Agent or the Issuing Bank, as the case may be, to be necessary for timely
settlement on the relevant date in accordance with normal banking procedures in the place of
payment.



     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.



     “Arrangers” means, collectively, Banc of America Securities LLC and J.P. Morgan
Securities Inc., in their capacity as co-lead arranger and co-book managers.



     “Assignment and Assumption” means an Assignment and Assumption substantially in the
form of Exhibit H.



     “Attorney Costs” means and includes all reasonable fees and disbursements of any law
firm or other external counsel.



     “Auto-Extension Letter of Credit” — see Section 2.05(b)(iii).



     “Auto-Reinstatement Letter of Credit” — see Section 2.05(b)(iv).



     “Available Currency” means (i) US Dollars, (ii) Euro, (iii) British Pounds Sterling,
(iv) Canadian Dollars, and (v) any other currency that is requested by the Company and approved by
each Lender.



     “Available Foreign Currency” means an Available Currency (other than US Dollars).



     “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.



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



3









 





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



     “Bid Borrowing” means a borrowing consisting of simultaneous Bid Loans of the same
Type from each of the Lenders whose offer to make one or more Bid Loans as part of such borrowing
has been accepted under the auction bidding procedures described in Section 2.21.



     “Bid Loan” — see Section 2.21(a).



     “Bid Loan Lender” means, in respect of any Bid Loan, the Lender making such Bid Loan
to the Company.



     “Bid Loan Sublimit” means the lesser of (a) US$250,000,000 and (b) the Aggregate
Commitments.



     “Bid Request” means a written request for one or more Bid Loans substantially in the
form of Exhibit D.



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



     “Borrower” or “Borrowers” — see the preamble.



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



     “Borrowing Subsidiary” means any Foreign Subsidiary of the Company named as such on
the signature pages hereto or designated as a Borrowing Subsidiary by the Company pursuant to
Section 2.15.



     “Borrowing Subsidiary Agreement” means a Borrowing Subsidiary Agreement substantially
in the form of Exhibit J-1.



     “Borrowing Subsidiary Availability” means, with respect to any Borrowing Subsidiary,
the lesser of (a) the Borrowing Subsidiary Sublimit for such Borrowing Subsidiary and (b) the
aggregate amount of the Borrowing Subsidiary Commitments in effect for such Borrowing Subsidiary.



     “Borrowing Subsidiary Borrowing” means a borrowing by a Borrowing Subsidiary
consisting of simultaneous Borrowing Subsidiary Loans (or, in the case of Pentair Canada, a credit
extension consisting of Canadian Banker’s Acceptances simultaneously issued to) from the related
Borrowing Subsidiary Lenders pursuant to Article II.



     “Borrowing Subsidiary Borrowing Notice” means a notice of (a) a Borrowing Subsidiary
Borrowing or (b) a continuation of Borrowing Subsidiary Loans for a new Interest Period, pursuant
to Section 2.04, which, if in writing, shall be substantially in the form of Exhibit
B-2.



4









 





     “Borrowing Subsidiary Commitment” means, with respect to any Lender for any Borrowing
Subsidiary, the maximum aggregate Dollar Equivalent amount of Loans (and, with respect to Pentair
Canada, Canadian Banker’s Acceptances) that such Lender has agreed to make available to such
Borrowing Subsidiary. The Borrowing Subsidiary Commitments of the Lenders as of the Effective Date
are shown on Schedule 2.18. 



     “Borrowing Subsidiary Lender” means, as to any Borrowing Subsidiary, any Lender having
a Borrowing Subsidiary Commitment with respect to such Borrowing Subsidiary.



     “Borrowing Subsidiary Loan” — see Section 2.04(a).



     “Borrowing Subsidiary Note” means a promissory note made by a Borrowing Subsidiary in
favor of a Borrowing Subsidiary Lender evidencing Borrowing Subsidiary Loans made by such Lender,
substantially in the form of Exhibit A.



     “Borrowing Subsidiary Participation Funding Notice” means a written notice from a
Borrowing Subsidiary Lender informing the Administrative Agent that an Event of Default has
occurred and is continuing and directing the Administrative Agent to notify all Lenders to fund
their participations in the related Borrowing Subsidiary Credit Extensions as provided in
Section 2.04.



     “Borrowing Subsidiary Percentage” means, for any Lender with respect to any Borrowing
Subsidiary, the percentage (carried out to the ninth decimal place) that such Lender’s Borrowing
Subsidiary Commitment with respect to such Borrowing Subsidiary is of the aggregate amount of the
Borrowing Subsidiary Commitments of all Lenders with respect to such Borrowing Subsidiary.



     “Borrowing Subsidiary Sublimit” means, at any time for any Borrowing Subsidiary, the
amount set forth on Schedule 2.18 as the Borrowing Subsidiary Sublimit for such Borrowing
Subsidiary, as such amount is amended from time to time in accordance with Section 2.18.



     “Borrowing Subsidiary Termination” means a Borrowing Subsidiary Termination
substantially in the form of Exhibit J-2.



     “British Pounds Sterling” means the lawful currency of the United Kingdom.



     “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 US Dollars is
located and:




     (a) if such day relates to a Eurodollar Loan, means any such day on which dealings in
deposits in US Dollars are conducted by and between banks in the London interbank eurodollar
market;




     (b) if such day relates to a Loan denominated in Euro, means a TARGET Day;



5









 






     (c) if such day relates to an interest rate setting for a Loan denominated in a
currency other than US Dollars or Euro, means any such day on which dealings in deposits in
the relevant currency are conducted by and between banks in the London or other applicable
offshore interbank market for such currency; and




     (d) if such day relates to a Loan denominated in a currency other than US Dollars or
Euro (but not an interest rate setting), means any such day on which banks are open for
foreign exchange business in the principal financial center of the country of such currency.



     “Canadian Administrative Agent” means Bank of America, N.A., Canada Branch, in its
capacity as administrative agent with respect to all matters relating to Canadian Dollars and/or
Pentair Canada under the Loan Documents, or any successor administrative agent with respect to such
matters



     “Canadian BA Discount Proceeds” means, in respect of any Canadian Banker’s Acceptance,
an amount (rounded to the nearest full cent, with one half of one cent being rounded up) calculated
on the applicable funding date equal to the face amount of such Canadian Banker’s Acceptance
multiplied by the price, where the price is calculated by dividing one by the sum of one plus the
product of (a) the Canadian BA Discount Rate applicable thereto expressed as a decimal fraction
multiplied by (b) a fraction, the numerator of which is the term of such Canadian Banker’s
Acceptance and the denominator of which is 365, rounded to the nearest multiple of 0.001%.



     “Canadian BA Discount Rate” means, on the funding date for any Canadian Banker’s
Acceptance, the average of the “BA Discount Rates” for the Canadian Reference Lenders determined by
the Administrative Agent in accordance with the following procedures: (a) if a Canadian Reference
Lender is named on Schedule I to the Bank Act (Canada), its BA Discount Rate shall be the CDOR Rate
on the applicable funding date; and (b) if a Canadian Reference Lender is not so named, its BA
Discount Rate shall be the lesser of (i) the average of the rates advised by each Canadian
Reference Lender to the Administrative Agent as being the discount rate of such Canadian Reference
Lender, calculated on the basis of a year of 365 days and determined in accordance with normal
market practice, for banker’s acceptances of such Canadian Reference Lender having a comparable
face amount and identical maturity date to the face amount and maturity date of the Canadian
Banker’s Acceptance to be accepted by such Canadian Reference Lender on such funding date and (ii)
the rate determined pursuant to clause (a) above plus 0.07% per annum.



     “Canadian BA Equivalent Loan” — see Schedule 2.04.



     “Canadian Banker’s Acceptance” means a depository bill as defined in the Depository
Bills and Notes Act (Canada) in Canadian Dollars that is in the form of an order signed by Pentair
Canada and accepted by a Borrowing Subsidiary Lender pursuant to this Agreement or, for Borrowing
Subsidiary Lenders not participating in clearing services contemplated in that Act, a draft or bill
of exchange in Canadian Dollars that is drawn by Pentair Canada and accepted by a Borrowing
Subsidiary Lender pursuant to this Agreement. Orders or drafts that become



6









 







depository bills, drafts and bills of exchange are sometimes collectively referred to in this
Agreement as “orders”.



     “Canadian Banker’s Acceptance Fee” means, with respect to any Canadian Banker’s
Acceptance, the amount calculated by multiplying the face amount of such Canadian Banker’s
Acceptance by the then Applicable Margin applicable to Eurocurrency Rate Loans, and then
multiplying the result by a fraction, the numerator of which is the duration of its term on the
basis of the actual number of days to elapse from the date of acceptance of such Canadian Banker’s
Acceptance by the related Borrowing Subsidiary Lender to the maturity date of such Canadian
Banker’s Acceptance and the denominator of which is the number of days in the calendar year in
question.



     “Canadian Dollars” means lawful currency of Canada.



     “Canadian Prime Rate” means, on any day, with respect to any Loan in Canadian Dollars
by a Borrowing Subsidiary Lender, the greater of:




     (a) the annual rate of interest expressed as a percentage per annum on the basis of a
365 or 366 day year, as the case may be, announced by such Borrowing Subsidiary Lender on
that day as its reference rate for commercial loans made by it in Canada in Canadian
Dollars; and




     (b) the CDOR Rate for one month Canadian banker’s acceptances on that day plus 0.50%
per annum.



     “Canadian Reference Lender” means Bank of America, N.A., Canada Branch (or such other
or additional Lenders that have Borrowing Subsidiary Commitments to Pentair Canada as may be
designated by the Administrative Agent and reasonably acceptable to the Company).



     “Cash Collateralize”, with respect to Letters of Credit, has the meaning specified in
Section 2.05(g), and, with respect to Canadian Banker’s Acceptances, has the meaning
specified in Schedule 2.04.



     “CDOR Rate” means, for any day with respect to any Canadian Banker’s Acceptance, (a)
the simple average of the rates shown on the display referred to as the “CDOR Page” (or any display
substituted therefor) on Reuters Domestic Money Service (or any successor source from time to time)
with respect to the banks and other financial institutions named in such display at or about 10:00
a.m. (Toronto time) on such day (or, if such day is not a Business Day, the immediately preceding
Business Day) for banker’s acceptances having an identical maturity date to the maturity date of
such Canadian Banker’s Acceptance, as determined by the Administrative Agent; or (b) if the rates
specified in clause (a) are not available, then the simple average of the rates notified to
the Administrative Agent by each Canadian Reference Lender as the average of the bid rates (rounded
upwards to the nearest 1/16th of 1%) quoted by such Canadian Reference Lender for its own bankers’
acceptances for the applicable period as of 10:00 a.m. (Toronto time) on such day (or, if such day
is not a Business Day, the immediately preceding Business Day), as determined by the Administrative
Agent .



7









 





     “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.



     “Code” means the Internal Revenue Code of 1986.



     “Commitment” means, as to each Lender, its obligation to (a) make Committed Loans to
the Company pursuant to Section 2.01, (b) issue Letters of Credit or purchase
participations in L/C Obligations, (c) make or purchase participations in Swing Line Loans and (d)
make or purchase participations in Borrowing Subsidiary Loans and Canadian Banker’s Acceptances, in
an aggregate principal Dollar Equivalent amount not to exceed the US Dollar amount of the
Commitment 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 modified from time to time in accordance with this Agreement.



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



     “Committed Loan” — see Section 2.01.



     “Committed Loan Note” means a promissory note made by the Company in favor of a Lender
evidencing Committed Loans made by such Lender, substantially in the form of Exhibit A.



     “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 Committed Loans as the same
Type, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form
of Exhibit B-1.



     “Company” — see the preamble.



     “Compensation Period” — see Section 2.13(d)(ii).



     “Competitive Bid” means a written offer by a Lender to make one or more Bid Loans,
substantially in the form of Exhibit F, duly completed and signed by a Lender.



     “Consolidated Shareholders’ Equity” means, at any date, the consolidated shareholders’
equity of the Company and the Consolidated Subsidiaries.



     “Consolidated Subsidiary” means, as of any date, any Subsidiary or other entity the
accounts of which would be consolidated with those of the Company in its consolidated financial
statements as of such date.



     “Credit Exposure” means, with respect to any Lender, the aggregate Outstanding Amount
of the Committed Loans of such Lender, plus such Lender’s Pro Rata Share of the Outstanding



8









 







Amount of all Bid Loans, Borrowing Subsidiary Loans, Canadian Bankers Acceptances, L/C
Obligations and Swing Line Loans.



     “Credit Extension” means each of the following: a Committed Borrowing, a Swing Line
Loan, a Bid Loan, a Borrowing Subsidiary Borrowing and an L/C Credit Extension.



     “Debt of any Person” means at any date, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under capital leases, (v) all
Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed
by such Person, (vi) the aggregate outstanding investment or claim held by purchasers, assignees or
transferees of (or of interests in) receivables of such Person in connection with any
Securitization Transaction, (vii) all non-contingent reimbursement obligations of such Person under
letters of credit, and (viii) all Debt (as defined above) of others Guaranteed by such Person.



     “Debt Rating” — see the definition of “Applicable Margin.”




     “Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws
of the United States of America or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.



     “Default” means any event which if it continues uncured will, with lapse of time or
notice or both, constitute an Event of Default.



     “Default Rate” means (a) when used with respect to Obligations other than letter of
credit fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin,
if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided that (A)
with respect to a Eurocurrency Rate Loan during any Interest Period therefor, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable Margin and Mandatory
Cost) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest
extent permitted by applicable Laws, (B) with respect to a Eurocurrency Rate Loan following the end
of the relevant Interest Period therefor and any other amount denominated in an Available Foreign
Currency, the Default Rate shall be an interest rate equal to (i) the applicable Overnight Rate
plus (ii) 2% per annum and (C) with respect to amounts denominated in Canadian Dollars, the
Default Rate shall be an interest rate equal to (i) the Canadian Prime Rate plus (ii) 2%
per annum; and (b) when used with respect to letter of credit fees, a rate equal to (i) the
Applicable Margin plus (ii) 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, participations in Swing Line Loans, Borrowing
Subsidiary Loans or Canadian Banker’s Acceptances required to be funded by it hereunder within one
Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due, unless the



9









 







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



     “Dollar Equivalent” means, with respect to a specified amount of any currency, the
amount of US Dollars into which such amount of such currency would be converted, as determined by
the Administrative Agent or the Issuing Bank based on the applicable Spot Rate.



     “EBITDA” means, for any period, the sum of the consolidated net income of the Company
for such period excluding the effect of (a) any extraordinary or non-recurring gains, (b)
extraordinary or non-recurring non-cash losses and (c) the first US$425,000,000 of cash or non-cash
charges incurred after the Amendment Effective Date resulting from the Horizon Litigation
plus, to the extent deducted in determining such consolidated net income, but without
duplication, Interest Expense, income tax expense, depreciation, amortization and non-cash
compensation expense for such period; provided that the financial results of the Company’s
tools segment which was classified as a “discontinued operation” on the Company’s financial
statements for such period shall be excluded in calculating EBITDA except to the extent that the
negative contribution to EBITDA for such tools segment for the period beginning on October 3, 2004
and ending on any date of determination of EBITDA would exceed $25,000,000.



     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative
Agent, the Issuing Bank and the Swing Line Lender, and (ii) unless a Default exists at such time,
the Company (which approval shall not be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the Company or any of
the Company’s Affiliates or Subsidiaries.



     “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 Claims” means all claims, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for violation of any
Environmental Law, or for release or injury to the environment.



     “Environmental Laws” means all federal, state and local laws, statutes, common law
duties, rules, regulations, ordinances and codes, together with all administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with, any judicial,
regulating or other governmental authority, in each case relating to environmental, health, safety
and land use matters.



     “ERISA” means the Employee Retirement Income Security Act of 1974.



     “ERISA Affiliate”, as applied to the Company, means any Person or trade or business
which is a member of a group which is under common control with the Company, who, together



10









 







with the Company, is treated as a single employer within the meaning of Section 414(b) or (c)
of the Code or, for purposes of Section 412 of the Code, Section 414(m) or (o) of the Code.



     “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,



     (a) in the case of a Eurodollar Loan, the rate of interest per annum (carried to five decimal
places) determined by the Administrative Agent as the rate at which deposits in US Dollars in the
approximate amount of the Eurodollar Loan of Bank of America included in the applicable Borrowing,
and having a maturity comparable to such Interest Period, are offered by Bank of America’s Grand
Cayman Branch, Grand Cayman, B.W.I. (or such other office as may be designated by Bank of America
from time to time) to major banks in the offshore interbank market at approximately 10:00 a.m. two
Business Days prior to the commencement of such Interest Period; and



     (b) in the case of any other 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 Bid Loan” means a Bid Loan that bears interest at a rate based upon
the Eurocurrency Rate.



     “Eurocurrency Rate Bid Margin” means the margin above or below the Eurocurrency Rate
to be added to or subtracted from the Eurocurrency Rate, which margin shall be expressed in
multiples of 1/100th of one basis point.



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



     “Eurocurrency Rate Loan” means a Eurocurrency Rate Committed Loan, a Eurocurrency Rate
Bid Loan or a Loan in a Foreign Currency that bears interest at a rate based on the Eurocurrency
Rate.



11









 





     “Eurodollar Loan” means a Committed Loan that is a Eurocurrency Rate Loan and is
denominated in US Dollars.



     “Event of Default” — see Section 7.01.



     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
any Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (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 9.12), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability
(other than as a result of a Change in Law) to comply with Section 3.01(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation
of a new Lending Office (or assignment), to receive additional amounts from the applicable Borrower
with respect to such withholding tax pursuant to Section 3.01(a). Notwithstanding anything
to the contrary contained in this definition, “Excluded Taxes” shall not include any
withholding tax imposed at any time on payments made by or on behalf of a Foreign Obligor to any
Lender hereunder or under any other Loan Document, provided that such Lender shall have
complied with the last paragraph of Section 3.01(e).



     “Existing Agreement” — see the recitals.



     “Existing Letter of Credit” means a letter of credit listed on Schedule 2.05.



     “Extending Lender” — see Section 2.20.



     “Facility Fee Rate” means a rate determined in accordance with Schedule 1.01.



     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by the Administrative
Agent.



     “Financial Officer” means, with respect to any Person, any of the chief financial
officer, controller or treasurer of such Person.



12









 





     “Foreign Currency” means a currency other than US Dollars.



     “Foreign Currency Equivalent” means, at any time, with respect to any amount
denominated in US Dollars, the equivalent amount thereof in the applicable Foreign Currency as
determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in
respect of the most recent Revaluation Date) for the purchase of such Foreign Currency with US
Dollars.



     “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, collectively, to constitute a single jurisdiction.



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



     “Foreign Subsidiary” means any Subsidiary (i) organized under the laws of a
jurisdiction other than the United States or a state thereof and (ii) which conducts substantially
all of its business and operations in a jurisdiction other than the United States.



     “FRB” means the Board of Governors of the Federal Reserve System (or any successor).



     “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 set forth in pronouncements of
the Financial Accounting Standards Board, the Accounting Principles Board or the American Institute
of Certified Public Accountants or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report, as such principles are from time to
time supplemented and amended.



     “Governmental Authority” means any federal, state, municipal, national or other
governmental department, commission, board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any government or any court, in each
case whether associated with a state of the United States, the United States, or a foreign entity
or government.



     “Granting Lender” — see Section 9.06(h).



     “Guarantee” means, with respect to any Person, any obligation of such Person,
contingent or otherwise, directly or indirectly guaranteeing any Debt of any other Person or in any
manner providing for the payment of any Debt of any other Person or otherwise protecting the holder
of such Debt against loss (whether by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay or otherwise); provided that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary course of business. The term
“Guarantee” used as a verb has a correlative meaning.



13









 





     “Honor Date” — see Section 2.05(c)(i).



     “Horizon Litigation” means the proceeding captioned Celebrity Cruises, Inc., et al. v.
Essef Corporation, et al., 96 CV 3135, in the U.S. District Court for the Southern District of New
York, in which a jury verdict was rendered on June 28, 2006.



     “Indemnified Liabilities” — see Section 9.04(b).



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Indemnitees” — see Section 9.04(b).



     “Information” — see Section 9.07.



     “Interest Coverage Ratio” means, for any period, the ratio of (i) EBITDA for such
period to (ii) Interest Expense of the Company and its Subsidiaries for such period.



     “Interest Expense” means the sum, without duplication, of consolidated interest
expense (including the interest component of capital leases, the interest component of Synthetic
Lease Obligations, facility, commitment and usage fees, and fees for standby letters of credit, but
excluding any pre-judgment interest required to be paid or accrued by the Company or any Subsidiary
in connection with a final judgment on or settlement of the Horizon Litigation), plus
consolidated yield or discount accrued on the aggregate outstanding investment or claim held by
purchasers, assignees or other transferees of (or of interests in) receivables of the Company and
its Subsidiaries in connection with any Securitization Transaction (regardless of the accounting
treatment of such Securitization Transaction).



     “Interest Payment Date” means (a) as to any Base Rate Loan or Canadian Prime Rate
Loan, the last Business Day of each calendar quarter; (b) as to any Swing Line Loan, each Business
Day (or, so long as the Committed Lenders have not become obligated to purchase participations in
Swing Line Loans pursuant to Section 2.03(f), as otherwise agreed by the Company and the
Swing Line Lender), and (c) as to any other Loan, the last day of each Interest Period applicable
to such Loan and, in the case of any such Loan other than a Bid Loan which has an Interest Period
exceeding three months, the three-month anniversary of the first day of such Interest Period.



     “Interest Period” means (a) for any Eurocurrency Rate Loan, a period commencing on the
date such Eurocurrency Rate Loan is made as or converted to a Eurocurrency Rate Loan or on the last
day of the immediately preceding Interest Period for such Eurocurrency Rate Loan and ending on the
date one, two, three or six months thereafter (or such other periods as may be agreed to by the
applicable Borrower, the Administrative Agent and each applicable Lender), as selected by the
applicable Borrower in its Committed Loan Notice, Bid Request or Borrowing Subsidiary Borrowing
Notice, as the case may be; and (b) for any Absolute Rate Loan, a period of not less than 7 nor
more than 183 days; provided that:




     (i) if an Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended to the next Business Day (unless, in the case of a Eurocurrency
Loan, such extension would cause such Interest Period to end in the



14









 




succeeding 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 scheduled Maturity Date.



     “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).



     “Issue” means, with respect to any Letter of Credit, to issue or to extend the expiry
of, or to renew or increase the amount of, such Letter of Credit; and the terms “Issued,” “Issuing”
and “Issuance” have corresponding meanings.



     “Issuing Bank” means Bank of America in its capacity as issuer of one or more Letters
of Credit hereunder, together with any replacement therefor in such capacity.



     “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 each Lender’s participation in any L/C Borrowing in accordance
with its Pro Rata Share.



     “L/C 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 Issuing Bank.



     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which shall not have been reimbursed on the date when made nor converted into a Base Rate
Loan under Section 2.05(c).



     “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 Fee Rate” means a rate per annum determined in accordance with Schedule
1.01.



     “L/C Obligations” means at any time the sum of (a) the aggregate undrawn Dollar
Equivalent amount of all Letters of Credit then outstanding, plus (b) the Dollar Equivalent



15









 







amount of all Unreimbursed Amounts, including all outstanding L/C Borrowings. 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.



     “L/C-Related Documents” means the Letters of Credit, the L/C Applications and any
other document relating to any Letter of Credit, including any of the Issuing Bank’s standard form
documents for letter of credit issuances.



     “Lender” — see the introductory paragraph hereto. Unless the context requires, the
term “Lender” includes the Swing Line Lender and the Issuing Bank.



     “Lending Office” means, as to any Lender, the office or offices of such Lender
described in its Administrative Questionnaire or such other office or offices as such Lender may
from time to time notify the Company and the Administrative Agent.



     “Letter of Credit” means any standby letter of credit issued hereunder and any
Existing Letter of Credit.



     “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” — see Section 2.05(i).



     “Letter of Credit Sublimit” means the lesser of (a) US$300,000,000 and (b) the
Aggregate Commitments.



     “Leverage Ratio” means, as of any date, the ratio of (a) the sum (without duplication)
of (i) all Debt of the Company and its Consolidated Subsidiaries plus (ii) all Synthetic
Lease Obligations of the Company and its Consolidated Subsidiaries, all determined on a
consolidated basis, to (b) EBITDA for the period of four consecutive fiscal quarters most recently
ended on or before such date for which financial statements have been delivered pursuant to
subsection 6.01(a) or (b); provided that for purposes of calculating EBITDA
pursuant to this clause (b), the consolidated net income of any Person or business unit
acquired (or divested or liquidated, if the sales revenue generated by such Person or business unit
in the 12 months prior to such divestiture or liquidation was $25,000,000 or more) by the Company
or any Subsidiary during such period (plus, to the extent deducted in determining such
consolidated net income, Interest Expense, income tax expense, depreciation and amortization and
non-cash compensation expenses of such Person or business unit) shall be included (or, in the case
of a divestiture or liquidation, excluded) on a pro forma basis for such period
(assuming the consummation of each such acquisition and the incurrence or assumption of any Debt in
connection therewith (or the consummation of such divestiture or liquidation) occurred on the first
day of such period) in accordance with Article 11 of Regulation S-X of the SEC.



     “Lien” means any interest in property securing any obligation owed to, or a claim by,
a Person other than the owner of the property, whether such interest is based on the common law,
statute or contract, including any lien or security interest arising from a mortgage, encumbrance,



16









 







pledge, security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes.



     “Loan” means an extension of credit by a Lender to a Borrower under Article II
in the form of a Committed Loan, Swing Line Loan, Bid Loan or Borrowing Subsidiary Loan.



     “Loan Documents” means this Agreement, each Note, the Subsidiary Guaranty, each
Request for Credit Extension, each L/C-Related Document and each Canadian Banker’s Acceptance and
each other agreement, instrument or document executed in connection herewith or therewith.



     “Loan Parties” means, collectively, the Borrowers and the Subsidiary Guarantors.



     “Mandatory Cost” means, with respect to any period, the percentage rate per annum
determined in accordance with Schedule 1.02.



     “Material Adverse Effect” means a material adverse effect on (i) the business, assets,
operations or condition of the Company and its Subsidiaries taken as a whole or (ii) the ability of
any Borrower to perform its obligations hereunder.



     “Material Financial Obligations” means Debt or Synthetic Lease Obligations of the
Company or any Subsidiary in an aggregate amount (for all applicable Debt and Synthetic Lease
Obligations, but without duplication) equal to or greater than the lesser of (i) a Dollar
Equivalent amount of US$50,000,000 or (ii) at any time the Company or any Subsidiary has Debt
outstanding, obtained through one or more public or private placements thereof to institutional
investors, with a Dollar Equivalent principal amount of US$50,000,000 or more outstanding, which
has a threshold for cross-default (similar to Section 7.01(e)) lower than a Dollar
Equivalent amount of US$50,000,000, the lowest threshold amount under any such financing.



     “Material Subsidiary” means (a) each Borrower other than the Company and (b) each
other Subsidiary of the Company that at the time of determination constitutes a “significant
subsidiary” (as such term is defined in Regulation S-X of the SEC as in effect on the date of this
Agreement).



     “Maturity Date” means the earlier of (a) the Scheduled Maturity Date, or (b) such
earlier date upon which the Commitments may be terminated in accordance with the terms hereof.



     “Maximum Rate” — see Section 9.09.



     “Minimum Tranche” means (a) in the case of US Dollars, US$5,000,000 or a higher
integral multiple of US$1,000,000; (b) in the case of British Pounds Sterling, £1,000,000 or a
higher integral multiple of £100,000; (c) in the case of Canadian Dollars, CAN$3,000,000 or a
higher integral multiple of CAN$100,000; and (d) in the case of any other currency, the Foreign
Currency Equivalent of US$1,000,000 or a higher integral multiple of 500,000 units of such
currency.



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



17









 





     “Non-Extending Lender” — see Section 2.20.



     “Non-Extension Notice Date” — see Section 2.05(b)(iii).



     “Non-Reinstatement Deadline” — see Section 2.05(b)(iv).



     “Notes” means, collectively, the Committed Loan Notes and the Borrowing Subsidiary
Notes.



     “Notice Date” — see Section 3.06.



     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document with respect to any Loan, Canadian
Banker’s Acceptance 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 that accrues after the commencement by or against any Loan Party of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding.



     “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, but excluding in any event any Excluded
Taxes.



     “Outstanding Amount” means (a) with respect to Committed Loans, Swing Line Loans, Bid
Loans and Borrowing Subsidiary Loans on any date, the aggregate outstanding principal Dollar
Equivalent amount thereof after giving effect to any borrowings and prepayments or repayments of
Committed Loans, Swing Line Loans and Borrowing Subsidiary Loans, as the case may be, occurring on
such date, (b) 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, and (c) with respect to any Canadian Banker’s Acceptance, the Dollar
Equivalent amount of the unpaid portion of the face amount thereof.



18









 





     “Overnight Rate” means, for any day, (a) with respect to any amount denominated in US
Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the
Administrative Agent, the Issuing Bank 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 a Foreign Currency, the rate of interest per annum at which overnight deposits in
the applicable Foreign Currency, 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 such currency to major banks in such
interbank market.



     “Participant” — see Section 9.06(d).



     “Participating Member State” means each state so described in any EMU Legislation.



     “PBGC” means the Pension Benefit Guaranty Corporation and any successor thereto.



     “Pentair Bermuda” has the meaning given such term in the preamble.



     “Pentair Canada” has the meaning given such term in the preamble.



     “Pentair Germany” has the meaning given such term in the preamble.



     “Pentair Global” has the meaning given such term in the preamble.



     “Pentair UK” has the meaning given such term in the preamble.



     “Permitted Acquisition” means any Acquisition by the Company or a Subsidiary which
satisfies each of the following requirements: (i) no Event of Default or Default has occurred and
is continuing at the time of, or will result from, such Acquisition; and (ii) in the case of the
Acquisition of any Person, the Board of Directors (or equivalent governing body) of the Person
being acquired (or all of the equity holders thereof) shall have approved such Acquisition.



     “Person” means an individual, limited liability company, partnership, corporation,
trust, unincorporated organization, association, joint venture or other entity or a government or
agency or political subdivision thereof.



     “Plan” means at any time an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either
(i) maintained by the Company or any ERISA Affiliate for employees of the Company or such ERISA
Affiliate or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which the Company or any ERISA
Affiliate is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.



     “Pro Rata Share” means, with respect to each Lender, the percentage (carried out to
the ninth decimal place) that such Lender’s Commitment comprises of the Aggregate Commitments, as
such share may be adjusted as contemplated herein.




19









 





     “Register” has the meaning set forth in Section 9.06(c).



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



     “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 a Swing Line Loan, a
Swing Line Loan Notice, (c) with respect to a Bid Loan, a Bid Request, (d) with respect to a
Borrowing Subsidiary Borrowing or continuation of Borrowing Subsidiary Loans, a Borrowing
Subsidiary Borrowing Notice, and (e) with respect to an L/C Credit Extension, an L/C Application.



     “Required Lenders” means, as of any date of determination, Lenders whose Voting
Percentages aggregate more than 50%.



     “Requirement of Law” means, as to any Person, any Law or determination of an
arbitrator or a Governmental Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is subject.



     “Responsible Officer” means the president, chief financial officer, treasurer or
assistant treasurer (or equivalent managing officers) of a Loan Party or such other Person
designated as such by any of the foregoing officers of such 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.



     “Revaluation Date” means (a) with respect to any Loan, each of the following: (i)
each date of a Borrowing of a Loan denominated in a Foreign Currency, (ii) each date of a
continuation of a Eurocurrency Rate Loan denominated in a Foreign Currency pursuant to Article
II, and (iii) such additional dates as the Administrative Agent shall determine or the Required
Lenders shall require; (b) with respect to any Letter of Credit, each of the following: (i) each
date of issuance of a Letter of Credit denominated in a Foreign Currency, (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 Issuing Bank under any
Letter of Credit denominated in a Foreign Currency, and (iv) such additional dates as the
Administrative Agent or the Issuing Bank shall determine or the Required Lenders shall require; and
(c) with respect to any Canadian Banker’s Acceptance, each of the following: (i) each date of the
funding of such Canadian Banker’s Acceptance and (ii) such additional dates as the Administrative
Agent shall determine or the related Borrowing Subsidiary Lender shall require.



     “Same Day Funds” means (i) with respect to disbursements and payments in US Dollars,
immediately available funds, and (ii) with respect to disbursements and payments in any other
currency, same day or other funds as may be determined by the Administrative Agent to be



20









 







customary in the place of disbursement or payment for the settlement of international banking
transactions in such currency.



     “SEC” means the Securities and Exchange Commission.



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



     “Scheduled Maturity Date” means June 4, 2012, as such date may be extended pursuant to
Section 2.20.



     “Securitization Transaction” means any sale, assignment or other transfer by the
Company or any Subsidiary of accounts receivable, lease receivables or other payment obligations
owing to the Company or such Subsidiary or any interest in any of the foregoing (other than sales
of defaulted receivables, foreign receivables or similar items in the ordinary course of business
consistent with past practice), together in each case with any collections and other proceeds
thereof, any collection or deposit accounts related thereto, and any collateral, guaranties or
other property or claims in favor of the Company or such Subsidiary supporting or securing payment
by the obligor thereon of, or otherwise related to, any such receivables.



     “Senior Debt” means Debt of the Company or any Subsidiary which is not junior or
subordinate to any other Debt of the Company or any Subsidiary.



     “Senior Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Company.



     “SPC” — see Section 9.06(h).



     “Spot Rate” for a currency means the rate determined by the Administrative Agent or
the Issuing Bank, 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. (local time of such office)
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 Issuing Bank may obtain such spot rate
from another financial institution designated by the Administrative Agent or the Issuing Bank 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 Issuing Bank 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 a Foreign Currency.



     “Sublimits” means, collectively, the Bid Loan Sublimit, each Borrowing Subsidiary
Sublimit, the Aggregate Borrowing Subsidiary Sublimit, the Letter of Credit Sublimit and the Swing
Line Sublimit. Each Sublimit is part of, and not in addition to, the Aggregate Commitments.



     “Subsequent Participant” means a member state that adopts the Euro as its lawful
currency after the Amendment Effective Date.



21









 





     “Subsidiary” means any Person in which more than 50% of its outstanding voting stock
or rights or more than 50% of all equity interest is owned directly or indirectly by the Company.



     “Subsidiary Guarantor” means Subsidiary that has executed a counterpart of the
Subsidiary Guaranty (and has not been released from its obligations thereunder in accordance with
the terms hereof).



     “Subsidiary Guaranty” means the Subsidiary Guaranty issued by various Subsidiaries of
the Company, a copy of which is attached as Exhibit I.



     “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section
2.03.



     “Swing Line Borrowing Date” means, with respect to any Swing Line Loan, the date on
which such Swing Line Loan is to be made.



     “Swing Line Lender” means U.S. Bank National Association, in its capacity as Swing
Line Lender hereunder, together with any replacement therefor in such capacity.



     “Swing Line Loan” and “Swing Line Loans” has the meaning given to such term in
Section 2.03(a).



     “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.03(b), which, if in writing, shall be substantially in the form of Exhibit
C.



     “Swing Line Rate” means, for any day, a rate per annum (rounded upward, if necessary,
to the nearest 1/16 of 1%) equal to the LIBO Rate divided by 1.0 minus Reserve Requirement, which
rate shall continue in effect until the next succeeding Business Day: For purposes of this
definition,




     “LIBO Rate” means , for any Business Day, the offered rate for deposits in US
Dollars (rounded upward, if necessary, to the nearest 1/100 of 1%), for delivery of such
deposits on such day, for a period of one month, which appears on the Reuters Screen LIBO
page as of the time selected by the Swing Line Lender on such day. If at least two rates
appear on the Reuters Screen LIBO Page, the rate shall be the arithmetic mean of such rates
(rounded as provided above). If fewer than two rates appear, the rate may be determined by
the Swing Line Lender based on other services selected for such purpose by the Swing Line
Lender or based on rates offered to the Swing Line Lender for US Dollar deposits in the
interbank Eurodollar market; and




     “Reserve Requirement” means , for any day for any Swing Line Loan, the maximum
reserve percentage (expressed as a decimal, rounded upward, if necessary, to an integral
multiple of 1/100th of 1%) in effect on such day (whether or not applicable to any Lender)
under regulations issued from time to time by the FRB for determining the maximum reserve
requirement (including any emergency, special, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities” in Regulation D of the FRB).



22









 





     “Swing Line Sublimit” means the lesser of (a) US$75,000,000 and (b) the Aggregate
Commitments.



     “Syndication Agent” means JPMorgan Chase Bank, N.A., in its capacity as Syndication
Agent.



     “Synthetic Lease Obligations” means obligations under operating leases (as determined
pursuant to Statement of Financial Accounting Standards No. 13) of properties which are reported
for United States income tax purposes as owned by the Company or a Consolidated Subsidiary. The
amount of Synthetic Lease Obligations under any such lease shall be determined in accordance with
GAAP as if such operating lease were a capital lease.



     “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.



     “Total Outstandings” means at any time the aggregate principal amount (or Dollar
Equivalent principal amount, as applicable) of all Loans and all L/C Obligations and the Dollar
Equivalent amount of the unpaid portion of the face amount of all Canadian Banker’s Acceptances.



     “Type” means (a) with respect to a Committed Loan, its character as a Base Rate Loan
or a Eurocurrency Rate Loan, and as a Loan in US Dollars, Euros or another Available Currency, (b)
with respect to a Bid Loan, its character as an Absolute Rate Loan or a Eurocurrency Rate Bid Loan,
and (c) with respect to a Borrowing Subsidiary Loan, its character as a Loan in a particular
currency bearing interest at a rate based on the Eurocurrency Rate, the Canadian Prime Rate, the
applicable Overnight Rate or other applicable interest rate.



     “Unfunded Vested Liabilities” means, with respect to any Plan at any time, the amount
(if any) by which (i) the current liability as defined in Section 412(l)(7) of the Code under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all as
determined as of the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of the Company or any ERISA Affiliate to the PBGC or
such Plan under Title IV of ERISA.



     “Unreimbursed Amount” — see Section 2.05(c)(i).



     “US Dollars” or “US$” means dollars constituting legal tender for the payment
of public and private debts in the United States of America.



     “Voting Percentage” means, as to any Lender, (a) at any time when the Commitments are
in effect, such Lender’s Pro Rata Share and (b) at any time after the termination of the
Commitments, the percentage (carried out to the ninth decimal place) which (i) the sum of



23









 







(A) the Outstanding Amount of such Lender’s Committed Loans and Bid Loans, plus (B) such Lender’s
Pro Rata Share of the Outstanding Amount of Swing Line Loans, Borrowing Subsidiary Loans, Canadian
Banker’s Acceptances and L/C Obligations, then constitutes of (ii) the Total Outstandings;
provided that if any Lender has failed to fund any portion of the Committed Loans, or
participations in Swing Line Loans, Borrowing Subsidiary Loans, Canadian Banker’s Acceptances or
L/C Obligations required to be funded by it hereunder, such Lender’s Voting Percentage shall be
deemed to be zero, and the respective Pro Rata Shares and Voting Percentages of the other Lenders
shall be recomputed for purposes of this definition and the definition of “Required
Lenders” without regard to such Lender’s Commitment or the outstanding amount of its Committed
Loans, as the case may be.



     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:



          (a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation.” 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) 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, and (iii) 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.




          (b) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including” and the words “to” and
“until” mean “to but excluding.”




          (c) 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.




          (d) If, pursuant to the terms hereof, an action is to be performed on a day that is not a
Business Day, such action shall be performed on the next succeeding Business Day.




     1.03 Accounting Terms. All accounting terms not specifically defined herein shall have the
meanings assigned to such terms and shall be interpreted in accordance with GAAP applied on a
consistent basis; provided that if the Company notifies the Administrative Agent that the
Company desires to amend any covenant in Article VI (or any related definition) to



24









 







eliminate the effect of any change in GAAP on the operation of such covenant (or such definition),
or the Administrative Agent notifies the Company that the Required Lenders desire to amend any such
covenant (or any such definition) for such purpose, then the Company’s compliance with such
covenant shall be determined (or such definition shall be interpreted) on the basis of GAAP as in
effect immediately before such change became effective, until either such notice is withdrawn or
such covenant (or such definition) is amended in a manner satisfactory to the Company and the
Required Lenders.



     1.04 Exchange Rates; Currency Equivalents. (a) The Administrative Agent or the Issuing Bank,
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
Available Foreign Currencies. 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
the Company hereunder or calculating financial covenants hereunder or except as otherwise provided
herein, the applicable amount of any currency (other than US Dollars) for purposes of the Loan
Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or
the Issuing Bank, 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 US
Dollars, but such Committed Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in
an Available Foreign Currency, such amount shall be the relevant Foreign Currency Equivalent of
such Dollar amount (rounded to the nearest unit of such Available Foreign Currency, with 0.5 of a
unit being rounded upward), as determined by the Administrative Agent or the Issuing Bank, as the
case may be.



     1.05 Change of Currency. (a) Each obligation of the Borrowers to make a payment denominated
in the national currency unit of any member state of the European Union that adopts the Euro as its
lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption
(in accordance with the EMU Legislation). If, in relation to the currency of any such member
state, the basis of accrual of interest expressed in this Agreement in respect of that currency
shall be inconsistent with any convention or practice in the London interbank market for the basis
of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such
convention or practice with effect from the date on which such member state adopts the Euro as its
lawful currency; provided that if any Eurocurrency Rate Loan in the currency of such member
state is outstanding immediately prior to such date, such replacement shall take effect, with
respect to such Eurocurrency Rate Loan, at the end of the then current Interest Period.



          (b) 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.




25









 









          (c) Each provision of this Agreement also shall be subject to such reasonable changes of
construction as the Administrative Agent may from time to time specify to be appropriate to reflect
a change in currency of any other country and any relevant market conventions or practices relating
to the change in currency.




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



     1.07 Letter of Credit Amounts. Unless otherwise specified, all references herein to the
amount of a Letter of Credit at any time shall be deemed to mean the Dollar Equivalent of the
maximum face amount of such Letter of Credit after giving effect to all increases thereof
contemplated by such Letter of Credit or the L/C-Related Documents related thereto, whether or not
such maximum face amount is in effect at such time.



     1.08 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).



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”) in Applicable Currencies to the Company from
time to time on any Business Day during the period from the Amendment Effective Date to the
Maturity Date in amounts equal to such Lender’s Pro Rata Share of the aggregate amounts requested
by the Company; provided that after giving effect to any Committed Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments and (ii) such Lender’s Credit Exposure
shall not exceed such Lender’s Commitment. Within the limits of each Lender’s Commitment, the
Borrowers may borrow under this Section 2.01, prepay under Section 2.06 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 Committed Loans as the same Type shall be made upon the Company’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, (i)
10:00 a.m. two Business Days prior to the requested date of the Committed Borrowing of or
conversion to or continuations of Eurodollar Loans or in the case of any conversion of Base Rate
Loans to Eurodollar Loans; (ii) 11:00 a.m. four Business Days prior to the requested date of any
Committed Borrowing of, conversion to or continuation of other Eurocurrency Rate Loans and (iii)
11:00 a.m. on the requested date of any Committed Borrowing of Base Rate Loans. Each such
telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a


26









 







written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Company.
Each Committed Borrowing of, conversion to or continuation of Eurocurrency Rate Loans shall be in a
principal Dollar Equivalent amount of US$5,000,000 or a higher integral multiple of US$1,000,000.
Each Committed Borrowing of or conversion to Base Rate Loans shall be in a principal amount of
US$5,000,000 or a higher integral multiple of US$1,000,000. Each Committed Loan Notice (whether
telephonic or written) shall specify (i) whether the Company is requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of Committed Loans as
the same Type, (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 (including currency) of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto. If the Company fails to specify a Type of
Committed Loan in a Committed Loan Notice or if the Company fails to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans, if in US Dollars,
shall be made or continued as, or converted to, Base Rate Loans. Any such 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 the Company 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.




          (b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly
notify each Lender of its Pro Rata Share of the applicable Committed Loans, and if no timely notice
of a conversion or continuation is provided by the Company, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans 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 in the applicable
currency at the Administrative Agent’s Office 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 the Administrative Agent with the amount of such funds
or (ii) wire transfer of such funds, in each case in accordance with instructions provided to the
Administrative Agent by such Borrower.




          (c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be continued or
converted only on the last day of the Interest Period for such Eurocurrency Rate Loan. During the
existence of a Default, no Committed Loans in US Dollars may be requested as, converted to or
continued as Eurocurrency Rate Loans without the consent of the Required
Lenders, and the Required Lenders may demand that any or all of the then outstanding
Eurodollar Loans be converted immediately to Base Rate Loans.




          (d) The Administrative Agent shall promptly notify the Company and the Lenders of the interest
rate applicable to any Eurocurrency Rate Committed Loan upon determination of such interest rate.
The determination of the Eurocurrency Rate by the Administrative Agent shall be conclusive in the
absence of manifest error. The Administrative


27









 







Agent shall notify the Company and the Lenders of
any change in Bank of America’s prime rate used in determining the Base Rate promptly following the
public announcement of such change.




          (e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from
one Type to the other, and all continuations of Committed Loans as the same Type, there shall not
be more than 20 Interest Periods in effect with respect to Committed Loans.




     2.03 Swing Line Loans.



          (a) Subject to the terms and conditions of this Agreement, the Swing Line Lender agrees to
make Loans to the Company (each a “Swing Line Loan” and collectively the “Swing Line
Loans”) in US Dollars from time to time on any Business Day during the period from the
Amendment Effective Date to the Maturity Date in an aggregate principal amount at any time
outstanding not to exceed the Swing Line Sublimit; provided that after giving effect to any
Swingline Loan (i) the Total Outstandings shall not exceed the Aggregate Commitment and (ii) no
Lender’s Credit Exposure shall exceed the amount of such Lender’s Commitment. Subject to the terms
and conditions hereof, the Company may borrow under this Section 2.03(a), prepay under
Section 2.03(d) and reborrow under this Section 2.03(a) from time to time.




          (b) Procedure for Swing Line Borrowings.





          (i) Each Swing Line Loan shall be made upon irrevocable written notice from the Company
to the Swing Line Lender and the Administrative Agent, which notice must be received not
later than noon on the requested Swing Line Borrowing Date (or such later time as the Swing
Line Lender may approve in its sole discretion). Each such notice shall specify (i) the
amount of such Swing Line Loan, which shall be an integral multiple of US$100,000 and (ii)
the requested Swing Line Borrowing Date, which shall be a Business Day.




          (ii) Unless the Swing Line Lender has received (i) written notice from the
Administrative Agent prior to 8:00 A.M. on the proposed Swing Line Borrowing Date of any
Swing Line Loan directing the Swing Line Lender not to make such Swing Line Loan because
such Swing Line Loan is not permitted under Section 2.03(a) or (ii) written
notice of the type and by the time described in Section 2.06(e)(iii) from any
Lender, the Swing Line Lender may make any requested Swing Line Loan on the proposed Swing
Line Borrowing Date.



          (c) The Company shall pay interest on the unpaid principal amount of each Swing Line Loan,
from the date such Swing Line Loan is made to the date such Swing Line
Loan is paid in full, at a rate per annum equal to the Swing Line Rate from time to time in
effect plus the Applicable Margin; provided that (a) at any time that the Lenders
have funded their participations in Swing Line Loans, the interest rate applicable to Swing Line
Loans shall not be less than the Base Rate; and (b) upon the request of the Swing Line Lender (or,
if the Lenders have funded their participations in Swing Line Loans, the Required Lenders) at any
time (and for so long as) an Event of Default exists, the interest rate applicable to each Swing
Line Loan shall be increased by 2% per annum.




28









 








          (d) The Company may from time to time prepay Swing Line Loans in whole or in part, in a
principal amount equal to US$100,000 or a higher integral multiple of US$100,000. The Company will
deliver a notice of prepayment to be received by the Swing Line Lender and the Administrative Agent
not later than noon on the Business Days of such prepayment, specifying the Swing Line Loans to be
prepaid and the date and amount of such prepayment.




          (e) The Swing Line Lender may, at any time in its sole and absolute discretion, on behalf of
the Company (which hereby irrevocably directs the Swing Line Lender to act on its behalf), request
each Lender through the Administrative Agent to make a Committed Loan in an amount equal to such
Lender’s Pro Rata Share of the principal amount of all Swing Line Loans outstanding on the date
such notice is given. Unless any of the events described in Section 7.01(f) or (g)
shall have occurred and be continuing (in which event the procedures of Section 2.03(f)
shall apply), and regardless of whether the conditions precedent set forth in this Agreement to the
making of a Committed Loan are then satisfied or the aggregate amount of Swing Line Loans is not in
the minimum or integral amount otherwise required hereunder, each Lender shall make the proceeds of
its Committed Loan available to the Administrative Agent for the account of the Swing Line Lender
at its Lending Office, as directed by the Swing Line Lender, prior to noon in Same Day Funds on the
Business Day next succeeding the date such notice is given. The proceeds of such Committed Loans
shall be immediately applied to repay the outstanding Swing Line Loans. All Loans made pursuant to
this Section 2.03(e) shall be Base Rate Loans (but, subject to the other provisions of this
Agreement, may be converted to Eurocurrency Rate Loans).




          (f) Funding Participations in Swing Line Loans.





          (i) If an event described in Section 7.01(f) or (g) exists (or for any
reason the Lenders may not make Committed Loans pursuant to Article II), each Lender
will, upon notice from the Administrative Agent, purchase from the Swing Line Lender (and
the Swing Line Lender will sell to each Lender) an undivided participation interest in all
outstanding Swing Line Loans in an amount equal to its Pro Rata Share of the outstanding
principal amount of the Swing Line Loans (and each Lender will immediately transfer to the
Administrative Agent, for the account of the Swing Line Lender, in Same Day Funds, the
amount of its participation).




          (ii) If the Administrative Agent or the Swing Line Lender is required at any time to
return to the Company, or to a trustee, receiver, liquidator or custodian, or any official
in any bankruptcy or insolvency proceeding, any portion of any payment
made by the Company to the Administrative Agent or the Swing Line Lender in respect of
any Swing Line Loan or any interest or fee thereon, each Lender shall, on demand of the
Administrative Agent, forthwith return to the Administrative Agent for the account of the
Swing Line Lender the amount of its Pro Rata Share of the amount so returned by the
Administrative Agent or the Swing Line Lender plus interest thereon from the date such
demand is made to the date such amount is returned by such Lender to the Administrative
Agent, at a rate per annum equal to the Federal Funds Rate from time to time in effect.



          (g) Participations in Swing Line Loans.




29









 









          (i) Each Lender agrees that it shall at all times have a participation in, and
acknowledges that it is irrevocably and unconditionally obligated, as more fully set forth
in Section 2.03(f), to fund its participation in, each outstanding Swing Line Loan
in an amount equal to its Pro Rata Share of the amount of such Swing Line Loan.




          (ii) Each Lender’s obligation to refund Swing Line Loans and/or to purchase
participation interests in Swing Line Loans, in each case pursuant to this Section
2.03, shall be absolute and unconditional and shall not be affected by any circumstance
whatsoever, including (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against any other Lender, any Borrower or any other Person for
any reason whatsoever; (ii) the occurrence or continuance of an Event of Default, a Default
or a Material Adverse Effect; (iii) any breach of this Agreement by any Borrower or any
other Lender; (iv) any inability of any Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which any Swing Line Loan is to be
refunded or any participation interest in any Loan is to be purchased; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.




          (iii) Notwithstanding the provisions of Section 2.03(g)(ii), no Lender shall be
required to refund Swing Line Loans and/or to purchase a participation interest in a Swing
Line Loan, in each case pursuant to this Section 2.03, if, at least two Business
Days prior to the making of such Swing Line Loan, the Administrative Agent and the Swing
Line Lenders received written notice from such Lender specifying that such Lender believed
in good faith that one or more of the conditions precedent to the making of such Loan were
not satisfied (and detailing its basis for such good faith belief) and, in fact, such
conditions precedent to the making of such Loan were not satisfied at the time of the making
of such Loan; provided that the obligation of such Lender to make such Loan and/or
to purchase such participation interest shall be reinstated upon the earlier of (i) the date
on which such Lender notifies the Swing Line Lender that its prior notice has been withdrawn
or (ii) the date on which all conditions precedent to the making of such Swing Line Loan
have been satisfied (or waived by the Required Lenders or all Lenders, as applicable).



     2.04 Borrowing Subsidiary Commitments.



          (a) Subject to the terms and conditions of this Agreement, each Borrowing Subsidiary Lender
with respect to a Borrowing Subsidiary severally agrees to make loans (each a
“Borrowing Subsidiary Loan” and collectively the “Borrowing Subsidiary Loans”)
in Applicable Currencies to such Borrowing Subsidiary (and, in the case of Pentair Canada, to make
available Canadian Banker’s Acceptances for Pentair Canada in accordance with the terms of
Schedule 2.04) from time to time on any Business Day during the period from the Amendment
Effective Date to the Maturity Date in amounts equal to such Lender’s applicable Borrowing
Subsidiary Percentage of the aggregate amounts requested by such Borrowing Subsidiary;
provided that after giving effect to any Borrowing Subsidiary Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, (ii) the aggregate Outstanding Amount of
all Borrowing Subsidiary Loans (and, in the case of Pentair Canada, Canadian Banker’s Acceptances)
of any Borrowing Subsidiary Lender to such Borrowing Subsidiary shall not exceed such Borrowing


30









 







Subsidiary Lender’s Borrowing Subsidiary Commitment to such Borrowing Subsidiary and (iii) the
aggregate Outstanding Amount of all Borrowing Subsidiary Loans (and, in the case of Pentair Canada,
Canadian Banker’s Acceptances) to such Borrowing Subsidiary shall not exceed the Borrowing
Subsidiary Availability for such Borrowing Subsidiary. Subject to the terms and conditions hereof,
each Borrowing Subsidiary may borrow under this Section 2.04, prepay under Section
2.06 and reborrow under this Section 2.04 from time to time.




          (b) Procedure for Borrowing Subsidiary Borrowings.





          (i) Each Borrowing Subsidiary Borrowing and each continuation of Borrowing Subsidiary
Loans for a new Interest Period 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 (A) in the case of a Borrowing of
Canadian Prime Rate Loans, 10:00 a.m. (Toronto time) on the date of such Borrowing, (B) in
the case of a Borrowing of Canadian Banker’s Acceptances, 10:00 a.m. (Toronto time) one
Business Day prior to the date of such Borrowing, (C) in the case of a Borrowing or
continuation of Eurocurrency Loans denominated in Canadian Dollars, two Business Days prior
to the requested date of such Borrowing or continuation, and (D) in the case of a Borrowing
or continuation of Loans in any other Applicable Currency, four Business Days prior to the
requested date of such Borrowing or continuation. Each such telephonic notice must be
confirmed promptly by delivery to the Administrative Agent of a written Borrowing Subsidiary
Borrowing Notice, appropriately completed and signed by a Responsible Officer of such
Borrower. Each such Borrowing or continuation of such Loans shall be in a principal amount
of the applicable Minimum Tranche. Each Borrowing Subsidiary Borrowing Notice (whether
telephonic or written) shall specify (A) whether such Borrower is requesting a Borrowing or
a continuation of Loans for a new Interest Period, (B) the requested date of the Borrowing
or continuation, as the case may be (which shall be a Business Day), (C) the principal
amount of Loans to be borrowed or continued (or the aggregate face amount of Canadian
Banker’s Acceptances to be accepted, if applicable), and (D) the duration of the Interest
Period with respect thereto (or the maturity of the Canadian Banker’s Acceptances, if
applicable). If such Borrower fails to specify a new Interest Period in a Borrowing
Subsidiary Borrowing Notice, then the applicable Loans shall be continued for a new Interest
Period of one month’s duration.




          (ii) Following receipt of a Borrowing Subsidiary Borrowing Notice, the Administrative
Agent shall promptly notify each related Borrowing Subsidiary Lender of its Borrowing
Subsidiary Percentage of the applicable Loans or Canadian Banker’s Acceptance. Upon
satisfaction of the applicable conditions set forth in Section 4.02, each related
Borrowing Subsidiary Lender shall make the amount of its Borrowing Subsidiary Loan or
Canadian BA Discount Proceeds available (x) to the Administrative Agent in Same Day Funds at
the applicable Lending Office of the Administrative Agent not later than 1:00 p.m., local
time of such office, on the Business Day specified in the applicable Borrowing Subsidiary
Borrowing Notice or (y) directly to the applicable Borrower, with notice to the
Administrative Agent, in accordance with other funding procedures that may be agreed to from
time to time among the Company, the Administrative Agent and the related Borrowing
Subsidiary Lenders (or, in the case



31









 







of Canadian Banker’s Acceptances, in accordance with
Schedule 2.04). The Administrative Agent shall make all funds so received by the
Administrative Agent available to the applicable Borrower in like funds as received by the
Administrative Agent either by (A) crediting the account of such Borrower on the books of
the Administrative Agent with the amount of such funds or (B) wire transfer of such funds,
in each case in accordance with instructions provided to the Administrative Agent by such
Borrower.




     (iii) The Administrative Agent shall promptly notify the Company and the Lenders of the
interest rate applicable to any Borrowing Subsidiary Loan upon determination of such
interest rate. The determination of the Eurocurrency Rate and Overnight Rate by the
Administrative Agent shall be conclusive in the absence of manifest error.




     (iv) No Borrowing Subsidiary shall at any time have Loans outstanding with more than
ten different Interest Periods.



          (c) Participations in Borrowing Subsidiary Loans and Canadian Banker’s Acceptances.





          (i) Each Lender agrees that it shall at all times have a participation in, and
acknowledges that it is irrevocably and unconditionally obligated, upon receipt of notice
that the Administrative Agent has received a Borrowing Subsidiary Participation Funding
Notice, to fund (or to cause an Affiliate to fund) its participation in, each outstanding
Borrowing Subsidiary Loan and Canadian Banker’s Acceptance in an amount equal to its Pro
Rata Share of the amount of such Borrowing Subsidiary Loan (or its Pro Rata Share of the
Canadian BA Discount Proceeds in respect of such Canadian Banker’s Acceptance, as the case
may be).




          (ii) The Administrative Agent shall promptly notify each Lender of its receipt of a
Borrowing Subsidiary Participation Funding Notice. Promptly (and in any event within three
Business Days) upon receipt of such Notice, each Lender shall (or shall cause an Affiliate
to) make available to the Administrative Agent for the account of the applicable Borrowing
Subsidiary Lenders an amount in the applicable currencies and
in Same Day Funds equal to its Pro Rata Share of all outstanding Borrowing Subsidiary
Loans (and with respect to participations in Canadian Banker’s Acceptances, its Pro Rata
Share of the Canadian BA Discount Proceeds of all outstanding Canadian Banker’s
Acceptances). If any Lender so notified fails to make available to the Administrative Agent
for the account of the Borrowing Subsidiary Lenders the full amount of such Lender’s
participations in all Borrowing Subsidiary Loans and Canadian Banker’s Acceptances by the
date which is three Business Days after its receipt of such notice from the Administrative
Agent, then interest shall accrue on such Lender’s obligations to fund such participations,
from such date to the date such Lender pays such obligations in full, at a rate per annum
equal to the applicable Overnight Rate in effect from time to time during such period.



32









 







          (iii) From and after the date on which a Borrowing Subsidiary Lender has delivered to
the Administrative Agent a Borrowing Subsidiary Participation Funding Notice, all funds
received by the Borrowing Subsidiary Lenders in payment of the Borrowing Subsidiary Loans
and Canadian Banker’s Acceptances, interest accrued thereon and other amounts payable in
respect thereof shall be delivered by each Borrowing Subsidiary Lender to the Administrative
Agent, in the same funds as those received by such Borrowing Subsidiary Lender, to be
distributed to all Lenders in accordance with their Pro Rata Shares (i.e., giving effect to
the funding of participations pursuant to this Section 2.04), except that (A) the
Pro Rata Share of such funds of any Lender that has not funded its participations as
provided herein shall be retained by such Borrowing Subsidiary Lender, and (B) interest
accrued on any portion of any Borrowing Subsidiary Loan prior to the Lenders’ funding of
their respective participations therein shall be retained by such Borrowing Subsidiary
Lender.




          (iv) If the Administrative Agent or any Borrowing Subsidiary Lender is required at any
time to return to a Loan Party, or to a trustee, receiver, liquidator or custodian, or any
official in any bankruptcy or insolvency proceeding, any portion of any payment made by such
Loan Party to the Administrative Agent or such Borrowing Subsidiary Lender in respect of any
Borrowing Subsidiary Loan, any Canadian Banker’s Acceptance or any interest or fee thereon,
each Lender shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent for the account of such Borrowing Subsidiary Lender the amount of its
Pro Rata Share of the amount so returned by the Administrative Agent or such Borrowing
Subsidiary Lender plus interest thereon from the date such demand is made to the date such
amount is returned by such Lender to the Administrative Agent, at a rate per annum equal to
the applicable Overnight Rate from time to time in effect.




          (v) The Required Lenders, the Borrowing Subsidiary Lenders and the Administrative Agent
may agree on any other reasonable method (such as making assignments of Borrowing Subsidiary
Loans or Canadian Banker’s Acceptances) for sharing the risks of Borrowing Subsidiary Loans
and Canadian Banker’s Acceptances ratably among all Lenders according to their Pro Rata
Shares so long as such method does not materially disadvantage any Lender.




          (vi) References to participations in Borrowing Subsidiary Loans to Pentair Canada in
this Agreement (including in the definitions of “Commitment”, “Defaulting Lender”, “Canadian
Participation Funding Notice” and “Voting Percentage”, Section 2.12(b) and
Section 9.06) shall be deemed to include participations in Canadian Banker’s
Acceptances.



          (d) Each Lender’s obligation to purchase participation interests in Borrowing Subsidiary
Loans and Canadian Banker’s Acceptances pursuant to this Section 2.04 shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have against any other
Lender, any Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of an Event of Default, a Default or a Material Adverse Effect; (iii) any breach of
this Agreement by any Borrower or any other Lender; (iv) any inability of any


33









 







Borrower to satisfy
the conditions precedent to borrowing set forth in this Agreement on the date upon which any
Borrowing Subsidiary Loan or Canadian Banker’s Acceptance is to be refunded or any participation
interest in any Loan is to be purchased; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.




          (e) Notwithstanding the provisions of Section 2.04(d) above, no Lender shall be
required to purchase a participation interest in a Borrowing Subsidiary Loan or Canadian Banker’s
Acceptance pursuant to this Section 2.04 if, at least two Business Days prior to the making
of such Borrowing Subsidiary Loan or Canadian Banker’s Acceptance, the Administrative Agent and the
Borrowing Subsidiary Lenders received written notice from such Lender specifying that such Lender
believed in good faith that one or more of the conditions precedent to the making of such Loan or
Canadian Banker’s Acceptance were not satisfied (and detailing its basis for such good faith
belief) and, in fact, such conditions precedent to the making of such Loan were not satisfied at
the time of the making of such Loan or Canadian Banker’s Acceptance; provided that the
obligation of such Lender to make such Loan or Canadian Banker’s Acceptance and/or to purchase such
participation interest shall be reinstated upon the earlier of (i) the date on which such Lender
notifies the Administrative Agent that its prior notice has been withdrawn or (ii) the date on
which all conditions precedent to the making of such Borrowing Subsidiary Loan or Canadian Banker’s
Acceptance have been satisfied (or waived by the Required Lenders or all Lenders, as applicable).




          (f) If at any time that the Outstanding Amount of all Borrowing Subsidiary Loans of any
Borrowing Subsidiary (and in the case of Pentair Canada, Canadian Banker’s Acceptances) at such
time exceeds an amount equal to 105% of the Borrowing Subsidiary Commitments then in effect for
such Borrowing Subsidiary, the Administrative Agent may (or, at the request of an applicable
Borrowing Subsidiary Lender, shall) notify the Company of such excess and, then, within two
Business Days after receipt of such notice, the applicable Borrowing Subsidiary shall prepay
Borrowing Subsidiary Loans (and/or, in the case of Pentair Canada, Cash Collateralize Canadian
Banker’s Acceptances) in an aggregate amount sufficient to reduce such Outstanding Amount to an
amount not exceeding 100% of the related Borrowing Subsidiary Commitments.




          (g) Interest Act (Canada). For the purposes of the Interest Act (Canada), with
respect to Pentair Canada, (i) whenever a rate of interest or fee rate hereunder is calculated on
the basis of a year (the “deemed year”) that contains fewer days than the actual number of
days in the calendar year of calculation, such rate of interest or fee rate shall be expressed as a
yearly rate by multiplying such rate of interest or fee rate by the actual number of days in the
calendar year of calculation and dividing it by the number of days in the deemed year, (ii) the
principle of deemed reinvestment of interest shall not apply to any interest calculation hereunder
and (iii) the rates of interest stipulated herein are intended to be nominal rates and not
effective rates or yields.




     2.05 Letters of Credit.



          (a) The Letter of Credit Commitment.




34









 









          (i) Subject to the terms and conditions set forth herein, (A) the Issuing Bank agrees,
in reliance upon the agreements of the Lenders set forth in this Section 2.05, (1)
from time to time on any Business Day during the period from the Amendment Effective Date to
the Letter of Credit Expiration Date, to issue Letters of Credit denominated in U.S. Dollars
or in one or more other Available Currencies for the account of the Company (or jointly for
the account of the Company and any Subsidiary), and to amend or extend Letters of Credit
previously issued by it, in accordance with Section 2.05(b), 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 Company or its 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) no Lender’s Credit Exposure shall exceed the amount of 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 the Company for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by the Company 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 Company’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Company 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 Issuing Bank shall not issue any Letter of Credit, if:




          (A) subject to Section 2.05(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 Issuing Bank shall not be under any obligation to issue any Letter of Credit
if:




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



35









 








applicable on the Amendment Effective Date and which the
Issuing Bank in good faith deems material to it;




     (B) the issuance of such Letter of Credit would violate one or more policies of
the Issuing Bank;




     (C) except as otherwise agreed by the Administrative Agent and the Issuing
Bank, such Letter of Credit is in an initial face amount less than $100,000;




     (D) except as otherwise agreed by the Administrative Agent and the Issuing
Bank, such Letter of Credit is to be denominated in a currency other than US Dollars
or another Available Currency;




     (E) the Issuing Bank does not as of the issuance date of such requested Letter
of Credit issue Letters of Credit in the requested currency; or




     (F) a default of any Lender’s obligations to fund under Section 2.05(c)
exists or any Lender is at such time a Defaulting Lender hereunder, unless the
Issuing Bank has entered into satisfactory arrangements with the Company or such
Lender to eliminate the Issuing Bank’s risk with respect to such Lender.




       (iv) The Issuing Bank shall not amend any Letter of Credit if the Issuing Bank would
not be permitted at such time to issue such Letter of Credit in its amended form under the
terms hereof.




       (v) The Issuing Bank shall be under no obligation to amend any Letter of Credit if (A)
the Issuing Bank 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 Issuing Bank shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the Issuing Bank shall have
all of the benefits and immunities (A) provided to the Administrative Agent in Article
VIII with respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by it and
L/C-Related Documents pertaining to such Letters of Credit as fully as if the term
“Administrative Agent” as used in Article VIII included the Issuing Bank
with respect to such acts or omissions, and (B) as additionally provided herein with respect
to the Issuing Bank.



          (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 the Company delivered to the Issuing Bank (with a copy to the Administrative
Agent) in the form of a L/C Application, appropriately completed and



36









 







signed by a Responsible
Officer of the Company. Such L/C Application must be received by the Issuing Bank and the
Administrative Agent (A) not later than 10:00 a.m. at least two Business Days prior to the
proposed issuance date or date of amendment, as the case may be, of any Letter of Credit
denominated in US Dollars, and (B) not later than 10:00 a.m. at least ten Business Days
prior to the proposed issuance date or date of amendment, as the case may be, of any Letter
of Credit denominated in an Available Foreign Currency; or in each case such later date and
time as the Administrative Agent and the Issuing Bank may agree in a particular instance in
their sole discretion. In the case of a request for an initial Issuance of a Letter of
Credit, such L/C Application shall specify in form and detail satisfactory to the Issuing
Bank: (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; and (G) such other matters
as the Issuing Bank may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such L/C Application shall specify in form and detail
satisfactory to the Issuing Bank (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 Issuing Bank may require. Additionally, the
Company shall furnish to the Issuing Bank and the Administrative Agent such other documents
and information pertaining to such requested Letter of Credit issuance or amendment,
including any L/C-Related Documents, as the Issuing Bank or the Administrative Agent may
require.




     (ii) Promptly after receipt of any L/C Application, the Issuing Bank will confirm with
the Administrative Agent (by telephone or in writing) that the Administrative Agent has
received a copy of such L/C Application from the Company and, if not, the Issuing Bank will
provide the Administrative Agent with a copy thereof. Unless the Issuing Bank 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 Issuing Bank shall, on the requested date, issue a Letter
of Credit for the account of the Company (or the applicable Subsidiary) or enter into the
applicable amendment, as the case may be, in each case in accordance with the Issuing Bank’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 Issuing Bank a risk participation in such Letter of Credit in an
amount equal to the product of such Lender’s Pro Rata Share times the amount of such Letter
of Credit.




     (iii) If the Company so requests in any applicable L/C Application, the Issuing Bank
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 Issuing Bank
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



37









 








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 Issuing Bank, the Company shall not be required to make a specific request
to the Issuing Bank 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
Issuing Bank 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 that the Issuing Bank
shall not permit any such extension if (A) the Issuing Bank 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
clauses (ii) or (iii) of Section 2.05(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 Company that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, and in each such case
directing the Issuing Bank not to permit such extension.




        (iv) If the Company so requests in any applicable L/C Application, the Issuing Bank
may, in its sole and absolute discretion, agree to issue a Letter of Credit that permits the
automatic reinstatement of all or a portion of the stated amount thereof after any drawing
thereunder (each, an “Auto-Reinstatement Letter of Credit”). Unless otherwise
directed by the Issuing Bank, the Company shall not be required to make a specific request
to the Issuing Bank to permit such reinstatement. Once an Auto-Reinstatement Letter of
Credit has been issued, except as provided in the following sentence, the Lenders shall be
deemed to have authorized (but may not require) the Issuing Bank to reinstate all or a
portion of the stated amount thereof in accordance with the provisions of such Letter of
Credit. Notwithstanding the foregoing, if such Auto-Reinstatement Letter of Credit permits
the Issuing Bank to decline to reinstate all or any
portion of the stated amount thereof after a drawing thereunder by giving notice of
such non-reinstatement within a specified number of days after such drawing (the
“Non-Reinstatement Deadline”), the Issuing Bank shall not permit such reinstatement
if it has received a notice (which may be by telephone or in writing) on or before the day
that is five Business Days before the Non-Reinstatement Deadline (A) from the Administrative
Agent that the Required Lenders have elected not to permit such reinstatement or (B) from
the Administrative Agent, any Lender or the Company that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied (treating such
reinstatement as an L/C Credit Extension for purposes of this clause iv) and, in
each case, directing the Issuing Bank not to permit such reinstatement.




        (v) 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 Issuing
Bank will also deliver to the Company and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment.



          (c) Drawings and Reimbursements; Funding of Participations.




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     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the Issuing Bank shall notify the Company and the
Administrative Agent thereof. In the case of a Letter of Credit denominated in a currency
other than US Dollars, the Company shall reimburse the Issuing Bank in such currency, unless
(A) the Issuing Bank (at its option) shall have specified in such notice that it will
require reimbursement in US Dollars, or (B) in the absence of any such requirement for
reimbursement in US Dollars, the Company shall have notified the Issuing Bank promptly
following receipt of the notice of drawing that the Company will reimburse the Issuing Bank
in US Dollars. In the case of any such reimbursement in US Dollars of a drawing under a
Letter of Credit denominated in another currency, the Issuing Bank shall notify the Company
of the Dollar Equivalent of the amount of the drawing promptly following the determination
thereof. Not later than 10:00 a.m. on the date of any payment by the Issuing Bank under a
Letter of Credit to be reimbursed in US Dollars, or the Applicable Time on the date of any
payment by the Issuing Bank under a Letter of Credit to be reimbursed in a Foreign Currency
(each such date, an “Honor Date”), the Company shall reimburse the Issuing Bank
through the Administrative Agent in an amount equal to the amount of such drawing and in the
applicable currency. If the Company fails to so reimburse the Issuing Bank by such time,
the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of
the unreimbursed drawing (expressed in US Dollars in the amount of the Dollar Equivalent
thereof in the case of a Letter of Credit denominated in a Foreign Currency) (the
“Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Share thereof. In
such event, the Company 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 Issuing Bank or the Administrative Agent pursuant to this
Section 2.05(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 2.05(c)(i) make
funds available to the Administrative Agent for the account of the Issuing Bank, in US
Dollars, at the Administrative Agent’s Office for Dollar-denominated payments in an amount
equal to its Pro Rata Share of the Unreimbursed Amount not later than noon on the Business
Day specified in such notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.05(c)(iii), 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 Issuing Bank in US Dollars, or
if requested by the Issuing Bank, the equivalent amount thereof in another Available
Currency as determined by the Administrative Agent at such time on the basis of the Spot
Rate (determined as of such funding date) for the purchase of such Available Currency with
US Dollars.



39









 






          (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 Company shall be deemed to have
incurred from the Issuing Bank 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 Issuing Bank pursuant to
Section 2.05(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 2.05.




          (iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this
Section 2.05(c) to reimburse the Issuing Bank for any amount drawn under any Letter
of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be
solely for the account of the Issuing Bank.




          (v) Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the
Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this Section
2.05(c), shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Issuing Bank, the Company, any Subsidiary or any
other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not similar to any of the
foregoing; provided that each Lender’s obligation to make Committed Loans pursuant
to this Section 2.05(c) is subject to the conditions set forth in Section
4.02 (other than delivery by the Company of a Committed Loan Notice). No such making of
an L/C Advance shall relieve or otherwise impair the obligation of the
Company to reimburse the Issuing Bank for the amount of any payment made by the Issuing
Bank 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 Issuing Bank any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.05(c) by the time specified in Section
2.05(c)(ii), the Issuing Bank 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 Issuing Bank at a rate per annum equal to the applicable
Overnight Rate from time to time in effect. A certificate of the Issuing Bank 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 Issuing Bank 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 2.05(c), if the Administrative Agent receives for the
account of the Issuing Bank any payment in respect of the related Unreimbursed



40









 







Amount or
interest thereon (whether directly from the Company or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s L/C Advance was
outstanding) in Dollars and in the same funds as those received by the Administrative Agent.




          (ii) If any payment received by the Administrative Agent for the account of the Issuing
Bank pursuant to Section 2.05(c)(i) is required to be returned under any of the
circumstances described in Section 9.05 (including pursuant to any settlement
entered into by the Issuing Bank in its discretion), each Lender shall pay to the
Administrative Agent for the account of the Issuing Bank its Pro Rata Share 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 (ii) shall survive the payment in full of the Obligations and the termination
of this Agreement.



          (e) Obligations Absolute. The obligation of the Company to reimburse the Issuing Bank
for each drawing under each Letter of Credit and to repay each L/C Borrowing 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, set-off, defense or other right that the
Company or any Subsidiary 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 Issuing Bank 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 Issuing Bank 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 Issuing Bank 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;



41









 






          (v) any adverse change in the relevant exchange rates or in the availability of the
relevant Available Foreign Currency to the Company or any Subsidiary 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, the Company or any Subsidiary.



     The Company shall promptly examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it and, in the event of any claim of noncompliance with the Company’s
instructions or other irregularity, the Company will immediately notify the Issuing Bank. The
Company shall be conclusively deemed to have waived any such claim against the Issuing Bank and its
correspondents unless such notice is given as aforesaid.



          (f) Role of Issuing Bank. Each Lender and the Company agree that, in paying any
drawing under a Letter of Credit, the Issuing Bank 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 Issuing Bank, the
Administrative Agent, any of their respective Related Parties nor any correspondent, participant or
assignee of the Issuing Bank 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 L/C-Related Document. The Company 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 that this
assumption is not intended to, and shall not, preclude the Company’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 Issuing Bank, the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the Issuing Bank shall be liable or responsible for any
of the matters described in clauses (i) through (v) of Section 2.05(e);
provided that anything in such clauses to the contrary notwithstanding, the Company may
have a claim against the Issuing Bank, and the Issuing Bank may be liable to the Company, to the
extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Company which the Company proves were caused by the Issuing Bank’s willful
misconduct or gross negligence or the Issuing Bank’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 Issuing Bank 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 Issuing Bank 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.




42









 









               (i) Upon the request of the Administrative Agent, (A) if the Issuing Bank 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 Company shall, in each case, immediately
Cash Collateralize the then Outstanding Amount of all L/C Obligations.




               (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
Company 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, at any time and from time to time after the initial
deposit of Cash Collateral, request that additional Cash Collateral be provided in order to
protect against the results of exchange rate fluctuations.




               (iv) Section 7.03 sets forth certain additional requirements to deliver Cash
Collateral hereunder. For purposes of this Section 2.05 and Section 7.03,
“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Bank 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 Issuing Bank (which documents are
hereby consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Company hereby grants to the Administrative Agent, for the benefit of the
Issuing Bank and the Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.



          (h) Applicability of ISP. Unless otherwise expressly agreed by the Issuing Bank 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. The Company shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share, in US Dollars, a Letter of Credit fee
(the “Letter of Credit Fee”) for each Letter of Credit equal to the L/C Fee Rate
times the Dollar Equivalent of the actual daily maximum amount available to be drawn under
such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of
Credit). 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 L/C Fee
Rate during any quarter, the daily maximum amount of each Letter of Credit shall be computed and
multiplied by the L/C Fee Rate separately for each period during such quarter that such L/C Fee
Rate was in effect. Notwithstanding anything to the contrary contained



43









 







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 Issuing Bank. The
Company shall pay directly to the Issuing Bank for its own account, in US Dollars, a fronting fee
with respect to each Letter of Credit, at the rate per annum separately agreed to by the Company
and the Issuing Bank, computed on the Dollar Equivalent of the actual daily maximum amount
available to be drawn under such Letter of Credit (whether or not such maximum amount is then in
effect under such Letter of Credit). In addition, the Company shall pay directly to the Issuing
Bank for its own account, in Dollars, the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the Issuing Bank 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 L/C-Related Documents. In the event of any conflict between the
terms hereof and the terms of any L/C-Related 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, the Company shall be obligated to reimburse the Issuing Bank hereunder for any
and all drawings under such Letter of Credit. The Company hereby acknowledges that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the Company,
and that the Company’s business derives substantial benefits from the businesses of such
Subsidiaries.



     2.06 Prepayments.



          (a) The Company may, upon notice to the Administrative Agent, 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 10:00 a.m., (A) in the case of Eurodollar
Loans, two Business Days prior to the date of prepayment, (B) in the case of other Eurocurrency
Rate Loans, three Business Days prior to the date of prepayment, and (C) in the case of Base Rate
Committed Loans, on the date of prepayment; (ii) any prepayment of Eurocurrency Rate Committed
Loans shall be in a Dollar Equivalent principal amount of US$5,000,000 or a higher integral
multiple of US$1,000,000; and (iii) any prepayment of Base Rate Committed Loans shall be in a
principal amount of US$5,000,000 or a higher integral multiple of US$1,000,000. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to be
prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such
notice, and of such Lender’s Pro Rata Share of such prepayment. If such notice is given by the
Company, the Company shall make such prepayment on the date specified in such notice, with the
payment amount specified in such notice being due and payable on such specified date. Any
prepayment of a Eurocurrency Rate Committed Loan shall be accompanied by all accrued interest
thereon, 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 Pro Rata Shares.




44









 








          (b) No Bid Loan may be prepaid without the prior consent of the applicable Bid Loan Lender.




          (c) The Company may, upon notice to the Administrative Agent and the Swing Line Lender,
voluntarily prepay Swing Line Loans in whole or in part without premium or penalty;
provided that (i) such notice must be received by the Administrative Agent and the Swing
Line Lender not later than noon, on the date of prepayment of Swing Line Loans; and (ii) any
prepayment of Swing Line Loans shall be in a Dollar Equivalent principal amount of at least
US$100,000.




          (d) Any Borrowing Subsidiary may, upon notice to the Administrative Agent, voluntarily prepay
its Borrowing Subsidiary 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 (A) in the case of
Canadian Prime Rate Loans, 10:00 a.m. (Toronto time) on the date of prepayment, (B) in the case of
Eurocurrency Loans denominated in British Pounds Sterling or Canadian Dollars, two Business Days
prior to the prepayment, and (C) in the case of Eurocurrency Loans denominated in any other
currency, four Business Days prior to the date of prepayment; and (ii) any prepayment of such Loans
shall be in a principal amount of the applicable Minimum Tranche. Each such notice shall specify
the date and amount of such prepayment and the Borrowing Subsidiary Loans to be prepaid. The
Administrative Agent will promptly notify each applicable Borrowing Subsidiary Lender of its
receipt of each such notice, and of such Borrowing Subsidiary Lender’s Borrowing Subsidiary
Percentage of such
prepayment. If such notice is given by a Borrowing Subsidiary, such Borrowing Subsidiary
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 Borrowing Subsidiary Loan shall be accompanied
by all accrued interest thereon, together with any additional amounts required pursuant to
Section 3.05. Each such prepayment shall be applied to the Borrowing Subsidiary Loans of
the related Borrowing Subsidiary Lenders in accordance with their respective Borrowing Subsidiary
Percentages.




          (e) If for any reason the Total Outstandings at any time exceeds the Aggregate Commitments
then in effect, the Borrowers shall immediately prepay Loans in an aggregate amount equal to such
excess.




     2.07 Reduction or Termination of Commitments. The Company may, upon notice to the
Administrative Agent, terminate the Aggregate Commitments, or permanently reduce the Aggregate
Commitments to an amount not less than the then Total Outstandings; provided that (i) any
such notice shall be received by the Administrative Agent not later than 10:00 a.m., two Business
Days prior to the date of termination or reduction and (ii) any such partial reduction shall be in
an aggregate amount of US$5,000,000 or a higher integral multiple of US$1,000,000. The
Administrative Agent shall promptly notify the Lenders of any such notice of reduction or
termination of the Aggregate Commitments. Once reduced in accordance with this Section
2.07, the Commitments may not be increased (except pursuant to Section 2.17). Any
reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according
to its Pro Rata Share. All facility fees accrued until the effective date of any termination of
the Aggregate Commitments shall be paid on the effective date of such termination.




45










 





     2.08 Repayment of Loans.



          (a) The Company shall repay to the Lenders on the Maturity Date the aggregate principal amount
of each Committed Loan of such Borrower outstanding on such date.




          (b) The Company shall repay each Bid Loan on the earlier of (i) last day of the Interest
Period in respect thereof and (ii) the Maturity Date.




          (c) The Company shall repay each Swing Line Loan in full on the earlier of (i) demand of the
Swing Line Lender and (ii) the Maturity Date.




          (d) Each Borrowing Subsidiary shall repay to the related Borrowing Subsidiary Lenders on the
Maturity Date the aggregate principal amount of the Borrowing Subsidiary Loans of such Borrowing
Subsidiary outstanding on such date.




     2.09 Interest.



          (a) Subject to the provisions of subsection (b) below, (i) each Eurocurrency
Rate Committed Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the sum of (A) the Eurocurrency Rate for such Interest
Period plus (B) the Applicable Margin plus (C) (if such Loan is made from a
Lending Office located in a Participating Member State or the United Kingdom) the Mandatory Cost;
(ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Margin; (iii) each Swing Line Loan shall bear interest as provided in Section
2.03, (iv) each Bid Loan shall bear interest on the outstanding principal amount thereof for
the Interest Period therefor at a rate per annum equal to the Eurocurrency Rate for such Interest
Period plus (or minus) the Eurocurrency Rate Bid Margin, or at the Absolute Rate for such
Interest Period, as the case may be; (v) each Eurocurrency Rate Loan made to a Borrowing Subsidiary
shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate
per annum equal to the sum of (A) the Eurocurrency Rate for such Interest Period plus (B)
the Applicable Margin plus (C) (if such Loan is made from a Lending Office located
in a Participating Member State or the United Kingdom) the Mandatory Cost, and (vi) each Borrowing
Subsidiary Loan in Canadian Dollars shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Canadian Prime Rate.




          (b) While any Event of Default exists or after acceleration, upon the request of the Required
Lenders at any time (and for so long as) such Event of Default exists, the Borrowers shall pay
interest on the principal amount of all outstanding Obligations at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law.
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.




46









 








     2.10 Fees.



          (a) Facility Fee. The Company shall pay to the Administrative Agent for the account
of each Lender in accordance with its Pro Rata Share, a facility fee equal to the Facility Fee Rate
times the actual daily amount of the Aggregate Commitments, regardless of usage. The facility fee
shall accrue at all times from the Amendment Effective Date to the Maturity Date 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 Amendment Effective Date, and on
the Maturity Date. The facility fee shall be calculated quarterly in arrears, and if there is any
change in the Facility Fee Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Facility Fee Rate separately for each period during such quarter that such
Facility Fee Rate was in effect. The facility fee shall accrue at all times, including at any time
during which one or more of the conditions in Article IV is not met.




          (b) Arrangement and Agency Fees. The Company shall pay arrangement fees to each
Arranger for their own account, and shall pay an agency fee to the Administrative Agent for the
Administrative Agent’s own account, in the amounts and at the times agreed to by such parties.




          (c) Upfront Fee. The Company shall pay to the Administrative Agent for the account of
each Lender on the Amendment Effective Date an upfront fee in the amount previously agreed to by
such parties.




     2.11 Computation of Interest and Fees. Computation of interest on Base Rate Loans computed
based on Bank of America’s “prime rate” shall be calculated on the basis of a year of 365 or 366
days, as the case may be, and the actual number of days elapsed. Computation of all other types of
interest and all fees shall be calculated on the basis of a year of 360 days and the actual number
of days elapsed, which results in a higher yield to the payee thereof than a method based on a year
of 365 or 366 days. 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
bear interest for one day.



     2.12 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 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 Loans. In the event of any conflict between the accounts and
records maintained by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of such Lender shall control. Upon the request
of any Lender made through the Administrative Agent, such Lender’s Loans may be evidenced by a
Committed Loan Note in addition to such accounts




47









 







or records. Each Lender may attach schedules to its Note(s) and endorse thereon the date,
Type (if applicable), amount and maturity of the applicable 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,
Swing Line Loans and Borrowing Subsidiary 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.




     2.13 Payments Generally.



          (a) All payments to be made by the Borrowers shall be made without condition or deduction for
any counterclaim, defense, recoupment or set-off. Except as otherwise expressly provided herein,
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 Administrative Agent’s Office in
U.S. Dollars (or, in the case of Borrowing Subsidiary Loans and interest thereon, in the currency
in which such Loans were made) and in Same Day Funds not later than 12:00 noon, on the date
specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata
Share (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
after 12:00 noon shall be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.




          (b) Subject to the definition of “Interest Period,” if any payment to be made by a
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.




          (c) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall
be applied (i) first, toward costs and expenses (including Attorney Costs and amounts payable under
Article III) incurred by the Administrative Agent and each Lender, (ii) second, toward
repayment of interest and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and (iii) third, toward
repayment of principal then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of principal then due to such parties.




          (d) Unless any Borrower or any Lender has notified the Administrative Agent prior to the date
any payment is required to be made by it to the Administrative Agent hereunder, that such Borrower
or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume
that such Borrower or such Lender, as the case may be, has timely made such payment and may (but
shall not be so required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact made to the
Administrative Agent in Same Day Funds, then:




48









 









          (i) if such Borrower failed to make such payment, each Lender shall forthwith on demand
repay to the Administrative Agent the portion of such assumed payment that was made
available to such Lender in Same Day Funds, together with interest thereon in respect of
each day from the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative Agent in Same Day Funds, at
the Overnight Rate from time to time in effect; and




          (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand
pay to the Administrative Agent the amount thereof in Same Day Funds, together with interest
thereon for the period from the date such amount was made available by the Administrative
Agent to the applicable Borrower to the date such amount is recovered by the Administrative
Agent (the “Compensation Period”) at a rate per annum equal to the Overnight Rate
from time to time in effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender’s Committed Loan or Borrowing Subsidiary Loan,
as the case may be, included in the applicable Borrowing. If such Lender does not pay such
amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent
may make a demand therefor upon such Borrower, and such Borrower shall pay such amount to
the Administrative Agent, together with interest thereon for the Compensation Period at a
rate per annum equal to the rate of interest applicable to the applicable Borrowing.
Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or any Borrower may
have against any Lender as a result of any default by such Lender hereunder.



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



     Upon any Lender failing to make such payment required to be made by such Lender under this
Agreement, the Company may remove or replace such Lender in accordance with Section 9.12.



          (e) If any Lender makes available to the Administrative Agent funds for any Loan to be made by
such Lender as provided in the foregoing provisions of this Article II, and 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 promptly return such funds (in
like funds as received from such Lender) to such Lender, without interest.




          (f) The obligations of the Lenders hereunder to make Committed Loans and to fund
participations in Swing Line Loans, Letters of Credit, Borrowing Subsidiary Loans and Canadian
Banker’s Acceptances are several and not joint. The failure of any Lender to make any Committed
Loan or to fund any such participation 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 or purchase its participation.




49









 








          (g) 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.




     2.14 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of set-off
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, Borrowing Subsidiary
Loans, Canadian Banker’s Acceptances 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, Borrowing Subsidiary Loans, Canadian Banker’s Acceptances 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 2.14 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, Borrowing Subsidiary Loans, Canadian Banker’s Acceptances 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 2.14 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 set-off 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.



     2.15 Borrowing Subsidiaries.



          (a) The Company may designate any Foreign Subsidiary as an additional Borrowing Subsidiary
with the ability to borrow under Section 2.04 in one or more specified Applicable
Currencies within the limits of a specified Borrowing Subsidiary Sublimit; provided that
the Administrative Agent shall consent to any such designation (which consent shall not be
unreasonably withheld or delayed). Upon the receipt and execution by the Administrative Agent of a
Borrowing Subsidiary Agreement executed by such Subsidiary and the Company and




50









 







establishment of the related Borrowing Subsidiary Sublimit and Borrowing Subsidiary
Commitment(s), such Subsidiary shall be a Borrowing Subsidiary and a party to this Agreement.




          (b) Any Subsidiary shall cease to be a Borrowing Subsidiary hereunder at such time as no
Credit Extensions shall be outstanding to such Subsidiary and such Subsidiary and the Company shall
have executed and delivered to the Administrative Agent a Borrowing Subsidiary Termination. If a
Borrowing Subsidiary liquidates, dissolves or ceases to be a Subsidiary, all Credit Extensions
outstanding to such any Borrowing Subsidiary shall be due and payable and such Subsidiary shall no
longer be entitled to obtain any Credit Extensions hereunder.




     2.16 Currency Exchange Fluctuations. If on any Revaluation Date the Administrative Agent
shall have determined that the then outstanding Dollar Equivalent principal amount of the Total
Outstandings exceeds the Aggregate Commitments due to a change in applicable rates of exchange
between US Dollars, on the one hand, and any Applicable Currency, on the other hand, then the
Administrative Agent may (or, at the request of the Required Lenders, shall) give notice to the
Company that a prepayment is required under this Section 2.16, and the Borrowers agree
thereupon to make prepayments of Loans such that, after giving effect to such prepayment, the Total
Outstandings will not exceed the Aggregate Commitments.



     2.17 Increase in Commitments.




          (i) The Company may, no more than once a year, by written notice to the Administrative
Agent substantially in the form of Exhibit G-1, request the Lenders to increase the
Aggregate Commitments, which notice shall be accompanied by the resolutions of the board of
directors of the Company approving such increase certified by the Secretary or an Assistant
Secretary of the Company; provided that in no event shall the Aggregate Commitments
be increased by more than US$300,000,000 in the aggregate (for all increases pursuant to
this Section 2.17) without the written consent of all Lenders.




          (ii) Any optional increase shall be permitted only if (i) no Default or Event of
Default has occurred and is continuing and (ii) the Aggregate Commitments following such
increase is a multiple of US$5,000,000.




          (iii) The Administrative Agent shall transmit any increase request to the Arrangers
within one Business Day after its receipt thereof, who shall relay such increase request to
each Lender within one Business Day after their receipt thereof. Each Lender will have the
option, in its sole discretion, to subscribe for its Pro Rata Share of such requested
increase. The Lenders shall respond in writing to the Company’s request through the
Arrangers within 15 Business Days by submitting a letter in the form of Attachment I to
Exhibit G-1. Any Lender not responding within 15 Business Days shall be deemed to have
declined to participate in the increase request. At the option of the Company, any part of
the increase not so subscribed may be assumed, within 20 Business Days of the Lenders’
response, by one or more existing Lenders or assumed by other financial institutions
designated by the Company and acceptable to each Lender, the Issuing Bank and the
Administrative Agent, which consents shall not be unreasonably



51









 







withheld, upon submission of a letter in the form of Exhibit G-2, in the case
of an existing Lender, or Exhibit G-3, in the case of a new party to this Agreement.




          (iv) Conflicting Provisions. This Section 2.17 shall supersede any
provisions in Sections 2.14 or 9.01 to the contrary.



     2.18 Designation of Borrowing Subsidiary Lenders; Increases and Reduction of Borrowing
Subsidiary Commitments and Borrowing Subsidiary Sublimits; Additional Applicable Currencies.



          (a) The Company may from time to time, (i) with the acceptance of the applicable Lender (in
its sole discretion) and the approval of the Administrative Agent (which approval shall not to be
unreasonably withheld), (A) designate a Lender as a Borrowing Subsidiary Lender with respect to a
Borrowing Subsidiary (which designation shall specify the initial amount of the Borrowing
Subsidiary Commitment of such Lender to such Borrowing Subsidiary and (B) increase the amount of
the Borrowing Subsidiary Commitment of any Borrowing Subsidiary Lender to a Borrowing Subsidiary;
and (ii) upon not less than three Business Days’ notice to the Administrative Agent and the
applicable Lender, reduce the Borrowing Subsidiary Commitment of any Borrowing Subsidiary Lender to
a Borrowing Subsidiary to an amount that is not less than the then Outstanding Amount of all Credit
Extensions by such Borrowing Subsidiary Lender to such Borrowing Subsidiary; provided that
after giving effect to any such designation, increase or reduction, the amount of the Borrowing
Subsidiary Commitment of any Borrowing Subsidiary Lender to any Borrowing Subsidiary shall be
US$5,000,000 or a higher integral multiple of US$1,000,000.




          (b) The Company may from time to time, upon not less than three Business Days’ notice to the
Administrative Agent (which shall promptly advise each Lender), change the Borrowing Subsidiary
Sublimit for any Borrowing Subsidiary; provided that (i) the total amount of the Borrowing
Subsidiary Sublimits for all Borrowing Subsidiaries shall at all times be equal to the Aggregate
Borrowing Subsidiary Sublimit; and (ii) the Borrowing Subsidiary Sublimit for each Borrowing
Subsidiary shall at all times be US$10,000,000 or an integral multiple thereof.




          (c) Notwithstanding that the Borrowing Subsidiary Sublimit for any Borrowing Subsidiary may
exceed the aggregate amount of the Borrowing Subsidiary Commitments to such Borrowing Subsidiary,
or vice versa, the aggregate amount of the Credit Extensions to such Borrowing Subsidiary
shall not exceed the Borrowing Subsidiary Availability for such Borrowing Subsidiary.




          (d) The Administrative Agent shall promptly notify the Lenders of any designation of a
Borrowing Subsidiary Lender, and of any increase or decrease in a Borrowing Subsidiary Commitment
or a Borrowing Subsidiary Sublimit, by delivering to the Lenders a revised Schedule 2.18
reflecting such designation, increase or decrease.




          (e) The Company may from time to time, with the approval of each applicable Lender and the
Administrative Agent, request that Borrowing Subsidiary Loans be made available to any Borrowing
Subsidiary in one or more additional currencies. If all Lenders that have Borrowing Subsidiary
Commitments to such Borrowing Subsidiary Lender approve any




52









 







such additional currency, then such currency shall become an “Applicable Currency” for such
Borrowing Subsidiary. If an applicable Lender does not approve any additional currency, then the
Company may (i) require such Lender to assign its applicable Borrowing Subsidiary Commitment to one
or more other Lenders that are willing to assume such Borrowing Subsidiary Commitment, (ii)
terminate the applicable Borrowing Subsidiary Commitment of such Lender or (iii) take a combination
of the foregoing actions.




          (f) Unless the Administrative Agent otherwise consents, the Company may not effect more than
three adjustments of Borrowing Subsidiary Commitments and Borrowing Subsidiary Sublimits in any
twelve month period pursuant to this Section 2.18 (it being understood that a single
adjustment may involve the concurrent addition, termination, increase or decrease of more than one
Borrowing Subsidiary Commitment and/or Borrowing Subsidiary Sublimit).




     2.19 Procedures for Increases in Aggregate Commitments and Changes in Borrowing Subsidiary
Commitments. Notwithstanding any other provision of this Agreement, the Administrative Agent, the
applicable Borrower and the applicable Lenders may make arrangements reasonably satisfactory to
such parties so that one or more applicable Lenders temporarily hold risk participations in Credit
Extensions of other applicable Lenders (rather than requiring that all outstanding Credit
Extensions to the applicable Borrower immediately be held by the applicable Lenders in accordance
with their Pro Rata Shares or applicable Borrowing Subsidiary Percentages, as the case may be) with
a view toward minimizing breakage costs and transfers of funds in connection with any increase in
the Aggregate Commitments pursuant to Section 2.17 or any change in the Borrowing
Subsidiary Commitment of any Borrowing Subsidiary Lender pursuant to Section 2.18. If
(despite any arrangements established pursuant to the foregoing sentence), as a result of a
non-pro-rata increase in the Aggregate Commitments or any increase or decrease in the Borrowing
Subsidiary Commitments to any Borrowing Subsidiary, any applicable Lender incurs any cost or
expense of the type described in Section 3.05, then the applicable Borrower shall pay such
cost or expense in accordance with such Section.



     2.20 Extension of Maturity Date.



          (a) The Company may, by notice to the Administrative Agent (which shall promptly notify the
Lenders) not earlier than 60 days and not later than 30 days prior to each of the first and/or
second anniversary of the Amendment Effective Date (each, an “Anniversary Date”), request
that each Lender extend such Lender’s Scheduled Maturity Date for an additional one year.




          (b) Each Lender, acting in its sole and individual discretion, shall, by notice to the
Administrative Agent given at least 20 days prior to the applicable Anniversary Date, advise the
Administrative Agent whether or not such Lender agrees to such extension, and each Lender that
elects not to so extend its Scheduled Maturity Date (or fails to so advise the Administration
within the period specified above) shall be a “Non-Extending Lender”. The election of any
Lender to agree to such extension shall not obligate any other Lender to so agree.




53









 








          (c) The Administrative Agent shall notify the Company of each Lender’s determination under
this Section 2.20 no later than 15 days prior to the applicable Anniversary Date.




          (d) The Company, after notice to the Administrative Agent and the applicable Non-Extending
Lender, shall have the right, at its sole expense and effort, to replace each Non-Extending Lender
with, and add as “Lenders” under this Agreement in place thereof, one or more Eligible Assignees
(each, an “Additional Commitment Lender”) as provided in Section 9.12;
provided that each of such Additional Commitment Lenders shall enter into an Assignment and
Assumption pursuant to which such Additional Commitment Lender shall, effective as of the
applicable Anniversary Date, undertake a Commitment (and, if any such Additional Commitment Lender
is already a Lender, its Commitment shall be in addition to such Lender’s Commitment hereunder on
such date).




          (e) If (and only if) the total of the Commitments of the Lenders that have agreed so to extend
their Scheduled Maturity Date (each, an “Extending Lender”) and the additional Commitments
of the Additional Commitment Lenders shall be more than 50% of the aggregate amount of the
Commitments in effect immediately prior to the applicable Anniversary Date, then, effective as of
the applicable Anniversary Date, the Scheduled Maturity Date of each Extending Lender and of each
Additional Commitment Lender shall be extended for an additional one year, and each Additional
Commitment Lender shall thereupon become a “Lender” for all purposes of this Agreement.




          (f) As a condition precedent to such extension, the Company shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the applicable Anniversary Date
(in sufficient copies for each Extending Lender and each Additional Commitment 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 extension and (ii) in the case of the Company,
certifying that, before and after giving effect to such extension, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and correct on and
as of the applicable Anniversary Date, 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 (B) no Default or Event of Default exists.




          (g) On the Scheduled Maturity Date for each Non-Extending Lender, the Borrowers shall pay all
outstanding obligations owed to such Non-Extending Lender hereunder.




          (h) This Section 2.20 shall supersede any provisions in Section 2.14 or
9.01 to the contrary.




     2.21 Bid Loans.



          (a) Subject to the terms and conditions set forth herein, each Lender agrees that the Company
may from time to time request the Lenders to submit offers to make loans denominated in US Dollars
(each such loan, a “Bid Loan”) to the Company prior to the Maturity Date pursuant to this
Section 2.21; provided that after giving effect to any Bid Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate




54









 







Outstanding Amount of all Bid Loans shall not exceed the Bid Loan Sublimit. There shall not
be more than ten different Interest Periods in effect with respect to Bid Loans at any time.




          (b) The Company may request the submission of Competitive Bids by delivering a Bid Request to
the Administrative Agent not later than 11:00 a.m. (i) one Business Day prior to the requested date
of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) four Business Days prior to
the requested date of any Bid Borrowing that is to consist of Eurocurrency Rate Bid Loans. Each
Bid Request shall specify (i) the requested date of the Bid Borrowing (which shall be a Business
Day), (ii) the aggregate principal amount of Bid Loans requested (which must be $5,000,000 or a
higher integral multiple of $1,000,000), (iii) the Type of Bid Loans requested, and (iv) the
duration of the Interest Period with respect thereto, and shall be signed by a Responsible Officer
of the Company. No Bid Request shall contain a request for (i) more than one Type of Bid Loan or
(ii) Bid Loans having more than three different Interest Periods. Unless the Administrative Agent
otherwise agrees in its sole and absolute discretion, the Company may not submit a Bid Request if
it has submitted another Bid Request within the prior five Business Days.




          (c) Submitting Competitive Bids.





          (i) The Administrative Agent shall promptly notify each Lender of each Bid Request
received by it from the Company and the contents of such Bid Request.




          (ii) Each Lender may (but shall have no obligation to) submit a Competitive Bid
containing an offer to make one or more Bid Loans in response to such Bid Request. Such
Competitive Bid must be delivered to the Administrative Agent not later than 9:30 a.m. (A)
on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, and
(B) three Business Days prior to the requested date of any Bid Borrowing that is to consist
of Eurocurrency Rate Bid Loans; provided that any Competitive Bid submitted by Bank
of America in its capacity as a Lender in response to any Bid Request must be submitted to
the Administrative Agent not later than 9:15 a.m. on the date on which Competitive Bids are
required to be delivered by the other Lenders in response to such Bid Request. Each
Competitive Bid shall specify (1) the proposed date of the Bid Borrowing; (2) the principal
amount of each Bid Loan for which such Competitive Bid is being made, which principal amount
(x) may be equal to, greater than or less than the Commitment of the bidding Lender, (y)
must be $5,000,000 or a higher integral multiple of $1,000,000, and (z) may not exceed the
principal amount of Bid Loans for which Competitive Bids were requested; (3) if the proposed
Bid Borrowing is to consist of Absolute Rate Bid Loans, the Absolute Rate offered for each
such Bid Loan and the Interest Period applicable thereto; (4) if the proposed Bid Borrowing
is to consist of Eurocurrency Rate Bid Loans, the Eurocurrency Rate Bid Margin with respect
to each such Eurocurrency Rate Bid Loan and the Interest Period applicable thereto; and (E)
the identity of the bidding Lender.




          (iii) Any Competitive Bid shall be disregarded if it (A) is received after the
applicable time specified in clause (ii) above, (B) is not substantially in the form
of a Competitive Bid as specified herein, (C) contains qualifying, conditional or similar
language, (D) proposes terms other than or in addition to those set forth in the applicable



55









 







Bid Request, or (E) is otherwise not responsive to such Bid Request. Any Lender may
correct a Competitive Bid containing a manifest error by submitting a corrected Competitive
Bid (identified as such) not later than the applicable time required for submission of
Competitive Bids. Any such submission of a corrected Competitive Bid shall constitute a
revocation of the Competitive Bid that contained the manifest error. The Administrative
Agent may, but shall not be required to, notify any Lender of any manifest error it detects
in such Lender’s Competitive Bid.




          (iv) Subject only to the provisions of Sections 3.02, 3.03 and
4.02 and clause (iii) above, each Competitive Bid shall be irrevocable.



          (d) Not later than 10:00 a.m. (i) on the requested date of any Bid Borrowing that is to
consist of Absolute Rate Loans, or (ii) three Business Days prior to the requested date of any Bid
Borrowing that is to consist of Eurodollar Margin Bid Loans, the Administrative Agent shall notify
the Company of the identity of each Lender that has submitted a Competitive Bid that complies with
Section 2.21(c) and of the terms of the offers contained in each such Competitive Bid.




          (e) Not later than 10:30 a.m. (i) on the requested date of any Bid Borrowing that is to
consist of Absolute Rate Loans, and (ii) three Business Days prior to the requested date of any Bid
Borrowing that is to consist of Eurocurrency Rate Bid Loans, the Company shall notify the
Administrative Agent of its acceptance or rejection of the offers notified to it pursuant to
Section 2.21(d). The Company shall be under no obligation to accept any Competitive Bid
and may choose to reject all Competitive Bids. In the case of acceptance, such notice shall
specify the aggregate principal amount of Competitive Bids for each Interest Period that is
accepted. The Company may accept any Competitive Bid in whole or in part; provided that:





          (i) the aggregate principal amount of each Bid Borrowing may not exceed the applicable
amount set forth in the related Bid Request;




          (ii) the principal amount of each Bid Loan must be $5,000,000 or a higher integral
multiple of $1,000,000;




          (iii) the acceptance of offers may be made only on the basis of ascending Absolute
Rates or Eurocurrency Rate Bid Margins within each Interest Period; and




          (iv) the Company may not accept any offer that is described in Section
2.21(c)(iii) or that otherwise fails to comply with the requirements hereof.



          (f) If two or more Lenders have submitted Competitive Bids at the same Absolute Rate or
Eurocurrency Bid Margin, as the case may be, for the same Interest Period, and the result of
accepting all of such Competitive Bids in whole (together with any other Competitive Bids at lower
Absolute Rates or Eurocurrency Bid Margins, as the case may be, accepted for such Interest Period
in conformity with the requirements of Section 2.21(e)(iii)) would be to cause the
aggregate outstanding principal amount of the applicable Bid Borrowing to exceed the amount
specified therefor in the related Bid Request, then, unless otherwise agreed by the Company, the
Administrative Agent and such Lenders, such Competitive Bids shall be




56









 







accepted as nearly as possible in proportion to the amount offered by each such Lender in
respect of such Interest Period, with such accepted amounts being rounded to the nearest whole
multiple of $1,000,000.




          (g) The Administrative Agent shall promptly notify each Lender having submitted a Competitive
Bid whether or not its offer has been accepted and, if its offer has been accepted, of the amount
of the Bid Loan or Bid Loans to be made by it on the date of the applicable Bid Borrowing. Any
Competitive Bid or portion thereof that is not accepted by the Company by the applicable time
specified in Section 2.21(e) shall be deemed rejected.




          (h) If any Bid Borrowing is to consist of Eurocurrency Rate Bid Loans, the Administrative
Agent shall determine the Eurocurrency Rate for the relevant Interest Period, and promptly after
making such determination, shall notify the Company and the Lenders that will be participating in
such Bid Borrowing of such Eurocurrency Rate.




          (i) Each Lender that has received notice pursuant to Section 2.21(g) that all or a
portion of its Competitive Bid has been accepted by the Company shall make the amount of its Bid
Loan(s) available to the Administrative Agent in Same Day Funds at the Administrative Agent’s
Office not later than noon on the date of the requested Bid Borrowing. Upon satisfaction of the
applicable conditions set forth in Section 4.02, the Administrative Agent shall make all
funds so received available to the Company in like funds as received by the Administrative Agent.




          (j) After each Competitive Bid auction pursuant to this Section 2.21, the
Administrative Agent shall notify each Lender that submitted a Competitive Bid in such auction of
the ranges of bids submitted (without the bidder’s name) and accepted for each Bid Loan and the
aggregate amount of each Bid Borrowing.




     2.22 Resignation or Remove of Issuing Bank or Swing Line Lender. Notwithstanding anything to
the contrary contained herein, (a) if at any time the Issuing Bank or the Swing Line Lender assigns
all of its Commitment and Loans pursuant to Section 9.06(b), then it may, upon 30 days’
notice to the Company, the Lenders and the Administrative Agent, resign as Issuing Bank or Swing
Line Lender, as applicable; and (b) the Company may from time to time, upon 30 days’ notice to the
Lenders and the Administrative Agent, remove the Issuing Bank or the Swing Lender from such
capacity. In the event of any such resignation or removal, the Company shall be entitled to
appoint from among the Lenders a successor Issuing Bank or Swing Line Lender; provided that
(i) the Lender so appointed has agreed to act in such capacity and has been approved by the
Administrative Agent (which approval will not be unreasonably withheld); and (ii) no failure by the
Company to appoint any such successor shall affect the resignation or removal of the existing
Issuing Bank or Swing Line Lender, as the case may be. Upon any resignation or removal of the
Issuing Bank, (x) the retiring Issuing Bank shall retain all rights and obligations available to
the Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation or removal 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) and (y) the Company shall, upon request, provide cash collateral satisfactory
to the retiring Issuing Bank to secure its obligations with respect to such Letters of Credit and
L/C Obligations. Upon the acceptance of a successor’s



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appointment as the Issuing Bank, (x) such successor shall succeed to and become vested with
all of the rights, powers, privileges and such duties of the retiring Issuing Bank, (y) the
retiring Issuing Bank shall be discharged from all of its duties and obligations as the Issuing
Bank hereunder and under the other Loan Documents, and (z) the successor Issuing Bank shall issue
letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of
such succession (in which case the retiring Issuing Bank shall release any cash collateral provided
by the Company pursuant to the preceding sentence) or make other arrangements satisfactory to the
retiring Issuing Bank to effectively assume the obligations of the retiring Issuing Bank with
respect to such Letters of Credit. Upon the resignation or removal of the Swing Line Lender, the
retiring Swing Line Lender 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 or removal, 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 2.03.
Upon the acceptance of a successor’s appointment as the Swing Line Lender, (x) such successor
shall succeed to and become vested with all of the rights, powers, privileges and such duties of
the retiring Swing Line Lender, (y) the retiring Swing Line Lender shall be discharged from all of
its duties and obligations as the Swing Line Lender hereunder and under the other Loan Documents
and (z) the successor Swing Line Lender shall make arrangements satisfactory to the retiring Swing
Line Lender to effectively assume the obligations of the retiring Swing Line Lender with respect to
Swing Line Loans outstanding at the time of such succession.



ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01 Taxes.



          (a) 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 Issuing Bank, 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) 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) Each Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within 30 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
Issuing Bank, as the case may be, and any penalties,




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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 Issuing Bank (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.




          (d) 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) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which a Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan
Document shall deliver to the Company (with a copy to the Administrative Agent), at the time or
times prescribed by applicable Law or reasonably requested 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 the Company and the
Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the request of the Company 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



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          (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 Amendment Effective Date, and in
a timely fashion thereafter, such other documents and forms required by any relevant taxing
authorities under the Laws of any other jurisdiction, duly executed and completed by such Lender,
as are required under such Laws to confirm such Lender’s entitlement to any available exemption
from, or reduction of, applicable withholding taxes in respect of all payments to be made to such
Lender outside of the U.S. by the Borrowers pursuant to this Agreement or otherwise to establish
such Lender’s status for withholding tax purposes in such other jurisdiction. Each Lender shall
promptly (i) notify the Administrative Agent of any change in circumstances which would modify or
render invalid any such claimed exemption or reduction, and (ii) take such steps as shall not be
materially disadvantageous to it, in the reasonable 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 Amendment Effective 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) If the Administrative Agent, any Lender or the Issuing Bank 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 Issuing
Bank, 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 Issuing Bank, 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 Issuing Bank in the event
the Administrative Agent, such Lender or the Issuing Bank 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 Issuing Bank to make available its tax returns (or




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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 US Dollars or
another currency), or materially restricts the authority of such Lender to purchase or sell, or to
take deposits of, US Dollars or any other applicable currency in the applicable interbank market,
or to determine or charge interest rates based upon the Eurocurrency Rate, 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 or to convert Base Rate Committed Loans to Eurocurrency
Rate Committed 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 US Dollars, convert all
Eurocurrency Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period thereof, 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 interest on the
amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.



     3.03 Inability to Determine Rates. If the Administrative Agent determines (or in the case of
clause (c) below, the Required Lenders determine) in connection with any request for a
Eurocurrency Rate Loan or a conversion to or continuation thereof that (a) deposits in the
applicable currency are not being offered to banks in the applicable interbank market 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 such Eurocurrency Rate Loan, or (c)
the Eurocurrency Rate for such Eurocurrency Rate Loan does not adequately and fairly reflect the
cost to the Required Lenders of funding such Eurocurrency Rate Loan, the Administrative Agent will
promptly notify the Company and all Lenders. 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 revokes such notice. Upon receipt of such notice, any Borrower may revoke
any pending request for a Committed Borrowing, conversion to or continuation of Eurocurrency Rate
Loans 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 and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate
Loans.



          (a) 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



61









 







or for the account of, or credit extended or participated in by, any Lender (except (A)
any reserve requirement contemplated by Section 3.04(e) and (B) the requirements of
the Bank of England and the Financial Services Authority or the European Central Bank
reflected in the Mandatory Cost, other than as set forth below);




          (ii) subject any Lender 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 Eurodollar
Loan made by it, or change the basis of taxation of payments to such Lender 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);




          (iii) result in the Mandatory Cost, as calculated hereunder, not representing the cost
to any Lender of complying with the requirements of the Bank of England and/or the Financial
Services Authority or the European Central Bank in relation to its making, funding or
maintaining Eurocurrency Rate Loans; or




          (iv) impose on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or Eurodollar 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 Eurodollar Loan (or of maintaining its obligation to make any such Loan) or of
participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to
participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender, the Company will pay (or cause the applicable Borrower to pay) to such
Lender such additional amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.




          (b) Capital Requirements. If any Lender determines that any Change in Law affecting
such Lender, any Lending Office of such Lender or such Lender’s holding company, if any, regarding
capital requirements has or would have the effect of reducing the rate of return on the capital of
such Lender or its holding company, if any, as a consequence of this Agreement, the Commitments or
Loans of such Lender, the participations of such Lender in, or the issuance or maintenance of such
Lender of, any Letter of Credit (or the maintenance of its obligation to participate in or issue
any Letter of Credit), to a level below that which such Lender or its holding company could have
achieved but for such Change in Law (taking into consideration the policies of such Lender or its
holding company with respect to capital adequacy), then from time to time the Company will pay (or
cause the applicable Borrower to pay) to such Lender such additional amount or amounts as will
compensate such Lender or such holding company for any such reduction suffered.




          (c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as the case may be,
as specified in Section 3.04(a) or (b) and delivered to the Company shall be
conclusive




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absent manifest error. The Company shall pay (or cause the applicable Borrower to pay) such
Lender the amount shown as due on any such certificate within 10 days after receipt thereof.




          (d) Delay in Requests. Subject to Section 3.06, failure or delay on the part
of any Lender to demand compensation pursuant to the foregoing provisions of this Section
3.04 shall not constitute a waiver of such Lender’s right to demand such compensation.




          (e) Reserves on Eurocurrency Rate Loans. The Company shall pay (or cause the
applicable Borrower to pay) to each Lender, as long as such Lender shall be required to maintain
reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or
deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurocurrency Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date on which interest
is payable on such Loan; provided that the Company shall have received at least 10 days’
prior notice (with a copy to the Administrative Agent) of such additional interest from such
Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 10 days from receipt of such notice.




     3.05 Funding Losses. Upon written demand of any Lender (with a copy to the Administrative
Agent) from time to time, each Borrower shall promptly 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 of such Borrower 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 such Borrower (for a reason other than the failure of such Lender to make a
Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in
the amount notified by such 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 a Foreign Currency 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 such Borrower pursuant to Section 9.12



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 (but excluding any loss of anticipated profits).



The Borrowers shall pay each Lender the amount shown as due on any certificate delivered by such
Lender claiming such compensation within 10 Business Days after the Borrowers’ receipt of the same.
Such Borrower shall also pay any customary administrative fees charged by such Lender in
connection with the foregoing.




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For purposes of calculating amounts payable by any 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 applicable
interbank market for such currency for a comparable amount and for a comparable period, whether or
not such Eurocurrency Rate Loan was in fact so funded.




     3.06 Matters Applicable to all Requests for Compensation.



          (a) A certificate of the Administrative Agent or any Lender claiming compensation under this
Article III and setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. Such certificate shall provide in reasonable
detail the amount payable and the calculations used to determine such amount. In determining such
amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution
methods.




          (b) Upon any Lender’s making a claim for compensation under Section 3.01 or
Section 3.04, the Company may remove or replace such Lender in accordance with Section
9.12.




          (c) Any Lender claiming any additional amounts payable pursuant to Section 3.01 or
Section 3.04, or exercising its rights under Section 3.02, shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any certificate or document
reasonably requested by the Company or to change the jurisdiction of its Lending Office if the
making of such a filing or change would avoid the need for or reduce the amount of any such
additional amounts which may thereafter accrue or avoid the circumstances giving rise to such
exercise and would not, in the sole determination of such Lender, be otherwise disadvantageous to
such Lender.




          (d) If any Lender fails to notify the Company and the Administrative Agent within 120 days
after it obtains actual knowledge of any such additional amount payable by a Borrower pursuant to
Section 3.01 or 3.04(a) or (b) (such 120th day, the “Notice
Date”), the Borrowers shall not be obligated to pay such additional amounts accruing during the
period from the Notice Date to the date of delivery of such notice, provided that the
failure to give such notice shall not affect any Borrower’s obligation to pay such additional
amounts accrued prior to the Notice Date or after delivery of such notice.




     3.07 Economic and Monetary Union in the European Community.




          (i) Without prejudice and in addition to any method of conversion or rounding
prescribed by the EMU Legislation and without prejudice to the liabilities for indebtedness
of the Borrowers to the Lenders under or pursuant to this Agreement, each reference in this
Agreement to a fixed amount or fixed amounts (or an integral multiple thereof) in a national
currency of a Subsequent Participant to be paid to or by the Administrative Agent shall be
replaced by a reference to such reasonably comparable and convenient fixed amount or fixed
amounts (or an integral multiple thereof) in Euro as the Administrative Agent may from time
to time specify.



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          (ii) Without prejudice to the respective liabilities of the Borrowers to the Lenders
and the Lenders to the Borrowers under or pursuant to this Agreement each provision of this
Agreement shall be subject to such reasonable changes of construction as the Administrative
Agent in consultation with the Company may from time to time specify to be necessary or
appropriate to reflect the introduction of or changeover to the Euro in Participating Member
States.



     3.08 Discretion of Lenders as to Manner of Funding. Subject to Section 3.06(c), any
Lender may cause a branch or affiliate of such Lender to fund or maintain any Loan made or to be
made by such Lender hereunder or any Canadian Banker’s Acceptance to be made available by such
Lender hereunder.



     3.09 Survival. All of the Borrowers’ obligations under this Article III shall survive
termination of the Commitments and payment in full of all the other Obligations.



ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS




     4.01 Conditions of Amendment and Restatement and Initial Credit Extension. The effectiveness
of this Agreement (the date of such effectiveness, the “Amendment Effective Date”) and the
obligation of each Lender to make its initial Credit Extension hereunder are subject to
satisfaction of the following conditions precedent:



          (a) Unless waived by all the Lenders, the Administrative Agent’s receipt of the following,
each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated
the Amendment Effective Date (or such earlier date as shall be satisfactory to the Administrative
Agent) and each in form and substance satisfactory to the Administrative Agent and its legal
counsel:





          (i) executed counterparts of this Agreement, sufficient in number for distribution to
the Administrative Agent, each Lender and the Borrowers;




          (ii) a confirmation in the form of Exhibit E hereto executed by each Subsidiary
that is a party to the Subsidiary Guaranty;




          (iii) a Note signed by each Borrower that will have Loans outstanding on the Amendment
Effective Date in favor of each Lender that has requested Notes;




          (iv) certified copies of resolutions of the Board of Directors of the Company
authorizing or ratifying the execution, delivery and performance by the Company of this
Agreement and any other Loan Document to which the Company is a party; and a certificate of
the Secretary or an Assistant Secretary of the Company certifying the names of the officer
or officers of the Company authorized to sign this Agreement and any other Loan Document to
which the Company is a party, together with a sample of the true signature of each such
officer;



65









 






          (v) a certificate of a Financial Officer of the Company certifying that, except as
disclosed in the Company’s Form 10-Q filed on May 4, 2007, since December 31, 2006, no
material adverse change has occurred in the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole;




          (vi) the opinions of (A) Louis L. Ainsworth, Senior Vice President and General Counsel
of the Company, and (B) Mayer, Brown, Rowe & Maw LLP, special Illinois counsel to the
Administrative Agent; and




          (vii) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent or the Required Lenders reasonably may require.



          (b) Evidence reasonably satisfactory to the Administrative Agent that all amounts due and
payable by the Company or any of its Subsidiaries in respect of the Existing Agreement on or prior
to the Amendment Effective Date have been (or concurrently with the effectiveness hereof will be)
paid in full.




     The certificate and opinions referred to in subsections (iv) and (vi) above
shall be dated no more than ten Business Days before the date of the first Borrowing or the
issuance of the first Letter of Credit. whichever is earlier. Without limiting the generality of
the provisions or the last paragraph of Section 8.03, for purposes of determining
compliance with the conditions specified in this Section 4.01, each Lender that has signed
this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received notice from such
Lender prior to the proposed Amendment Effective Date specifying its objection thereto.



     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request
for Credit Extension (including the initial Credit Extension) is subject to the following
conditions precedent:



          (a) The Administrative Agent shall have received a Request for Credit Extension in accordance
with the requirements hereof.




          (b) No Default shall exist, or would result from, such proposed Credit Extension.




          (c) The representations and warranties of the Borrowers contained in Article V shall
be true and correct 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 as of such earlier date (excluding in the case of any Credit Extension the
proceeds of which will be used for the sole purpose of repaying maturing commercial paper issued by
the applicable borrower, the representation and warranty made in Section 5.04(c)).




66









 








          (d) After giving effect to such Credit Extension, (i) the Total Outstandings will not exceed
the Aggregate Commitments and (ii) no applicable Sublimit or other limitation on Credit Extensions
hereunder shall have been exceeded.




          (e) The Administrative Agent shall have received, in form and substance satisfactory to it,
such other assurances, certificates, documents or consents related to the foregoing as the
Administrative Agent or the Required Lenders reasonably may require.




     Each Request for Credit Extension submitted by a Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a), (b),
(c) and (d) have been satisfied on and as of the date of the applicable Credit
Extension.



     4.03 Condition to Borrowing Subsidiary Credit Extensions. Except as provided in Section
6.13 hereof with respect to Pentair Global, the obligation of any related Borrowing Subsidiary
Lender to make a Borrowing Subsidiary Loan on the occasion of the first Borrowing by a Borrowing
Subsidiary is subject to the satisfaction of the condition that the Administrative Agent shall have
received the following:



          (a) a Note in the applicable form payable to such Lender signed by such Borrowing Subsidiary,
if required by a related Borrowing Subsidiary Lender;




          (b) subject to Section 6.13 in the case of Pentair Global, all documents as shall
reasonably demonstrate the existence of such Borrowing Subsidiary, the organizational power and
authority of such Borrowing Subsidiary to enter into and the validity with respect to such
Borrowing Subsidiary of this Agreement and the other Loan Documents and any other matters relevant
hereto (including opinion(s) of counsel as to the matters set forth on Schedule 4.03), all
in form and substance satisfactory to the Administrative Agent and dated not more than ten Business
Days before the date of the first Borrowing by such Borrowing Subsidiary; and




          (c) any Governmental Authority and third party approvals necessary or advisable in connection
with the execution, delivery and performance of this Agreement by such Borrowing Subsidiary.




ARTICLE V

REPRESENTATIONS AND WARRANTIES




     The Company and, to the extent applicable thereto, the other Borrowers represent and warrant
to the Lenders and the Administrative Agent that:



     5.01 Corporate Existence and Power.



          (a) The Company is a corporation duly incorporated, validly existing and in good standing
under the laws of Minnesota and has all corporate powers and all material Governmental Authority
licenses, authorizations, consents and approvals required to carry on its business as now
conducted.




          (b) Pentair Germany, for so long as it is a Borrower hereunder, is a limited liability company
duly organized and validly existing under the laws of Germany, with its seat in




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Straubenhardt, Germany and registered in the Handelsregister in the Amtsgericht Mannheim under
file number HRB-701425, and has all organizational powers and all material Governmental Authority
licenses, authorizations, consents and approvals required to carry on its business as now
conducted.




          (c) Pentair Global, for so long as it is a Borrower hereunder, is a limited liability company
duly organized and validly existing under the laws of Luxembourg and has all organizational powers
and all material Governmental Authority licenses, authorizations, consents and approvals required
to carry on its business as now conducted.




          (d) Pentair Canada, for so long as it is a Borrower hereunder, is a corporation duly
incorporated, validly existing and in good standing under the laws of Ontario, Canada and has all
corporate powers and all material Governmental Authority licenses, authorizations, consents and
approvals required to carry on its business as now conducted.




          (e) Pentair UK, for so long as it is a Borrower hereunder, is a limited company duly
incorporated under the laws of England and Wales, has been in continuous and unbroken existence
since the date of its incorporation, and no action is currently being taken by the Registrar of
Companies for striking Pentair UK off the register and dissolving it as defunct, and Pentair UK has
all corporate powers and all material Governmental Authority licenses, authorizations, consents and
approvals required to carry on its business as now conducted.




          (f) Pentair Bermuda, for so long as it is a Borrower hereunder, is an exempted partnership
duly organized and validly existing under the laws of Bermuda and has all organizational powers and
all material Governmental Authority licenses, authorizations, consents and approvals required to
carry on its business as now conducted.




          (g) Each Borrowing Subsidiary that becomes such after the date hereof is a Person duly
organized and validly existing under the laws of its jurisdiction of organization and has all
organizational powers and all material Governmental Authority licenses, authorizations, consents
and approvals required to carry on its business as now conducted.




     5.02 Corporate and Governmental Authorization; Contravention. The execution, delivery and
performance by the Borrowers of this Agreement and the Notes are within their respective corporate
or other powers, have been duly authorized by all necessary corporate or other organizational
action, require no action by or in respect of, or filing with, any Governmental Authority and do
not contravene, or constitute a default under, any provision of applicable law or regulation or of
the Organizational Documents of any Borrower or of any agreement, judgment, injunction, order,
decree or other instrument binding upon any Borrower or result in the creation or imposition of any
Lien on any asset of the Company or any of its Subsidiaries (including any Borrower).



     5.03 Binding Effect. This Agreement constitutes a valid and binding agreement of each of the
Borrowers, and the Notes, when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the respective Borrowers enforceable against the
Borrowers in accordance with their respective terms, except to the extent that the enforceability
thereof may be limited by the effect of any applicable bankruptcy, insolvency,



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reorganization, moratorium or similar laws now or hereafter affecting creditors’ rights
generally and general principles of equity.




     5.04 Financial Information.



          (a) The audited consolidated balance sheet of the Company and its Consolidated Subsidiaries at
December 31, 2006, and the related consolidated statements of income and cash flows for the fiscal
year then ended, reported on by Deloitte & Touche LLP and set forth in the Company’s annual report
for the year ended December 31, 2006, as filed with the SEC on Form 10-K, a copy of which has been
delivered to each Lender, fairly present, in conformity with GAAP, the consolidated financial
position of the Company and its Consolidated Subsidiaries at such date and their consolidated
results of operations and cash flows for such fiscal year.




          (b) The unaudited consolidated balance sheet of the Company and its Consolidated Subsidiaries
at March 31, 2007 and the related unaudited consolidated statements of income and cash flows for
the three months then ended, set forth in the Company’s quarterly report for the fiscal quarter
ended March 31, 2007 as filed with the SEC on Form 10-Q, a copy of which has been delivered to each
Lender, fairly present, in conformity with GAAP applied on a basis consistent with the financial
statements referred to in Section 5.04(a), the consolidated financial position of the
Company and its Consolidated Subsidiaries at such date and their consolidated results of operations
and cash flows for such three-month period (subject to normal year-end adjustments and the absence
of footnotes).




          (c) Except as disclosed in the Company’s Form 10-Q filed on May 4, 2007, since December 31,
2006, there has been no material adverse change in the business, financial position, results of
operations or prospects of the Company and its Consolidated Subsidiaries, considered as a whole.




     5.05 Litigation. Except as disclosed on Schedule 5.05, there is no action, suit or
proceeding pending, or to the knowledge of any of the Borrowers threatened, against or affecting
any of the Borrowers or any of their respective Subsidiaries before any Governmental Authority or
arbitrator in which there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated results of
operations of the Company and its Consolidated Subsidiaries, taken as a whole, or which in any
manner questions the validity of this Agreement or the Notes.



     5.06 Compliance with ERISA. Each of the Company and each ERISA Affiliate has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with respect to each
applicable Plan and is in compliance with the presently applicable provisions of ERISA and the
Code, and has not incurred any liability to the PBGC or a Plan under Title IV of ERISA (other than
premiums which have been timely paid or for which an extension of the time for payment has been
granted), other than failures to fund or comply or the incurrence of liabilities to the PBGC or any
Plan that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.



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     5.07 Taxes. The Borrowers and their respective Subsidiaries have filed all United States
federal income tax returns, and all other material federal, foreign, state and local income, excise
and other tax returns, which are required to be filed by them and have paid or made provision for
the payment of all United States federal and material foreign, state and other taxes which have
become due pursuant to such returns or pursuant to any assessment in respect thereof received by
any Borrower or any of its Subsidiaries, except (a) taxes which are not overdue by more than thirty
(30) days and (b) taxes, if any, that are being contested in good faith and for which adequate
reserves have been provided. The federal income tax liability, if any, of the Borrowers and their
respective Subsidiaries has been examined by the IRS (or the IRS has expressly informed the Company
that no such examination is anticipated) and paid for all years prior to and including the fiscal
year ended December 31, 2004.



     5.08 Subsidiaries. Each of the Borrowers’ respective Subsidiaries is a Person duly organized,
validly existing and, to the extent such concept is applicable in the jurisdiction of organization
of such Subsidiary, in good standing under the laws of its jurisdiction of organization and has all
requisite powers and all material Governmental Authority licenses, authorizations, consents and
approvals required to carry on its business as now conducted except, with respect to any of the
foregoing matters other than the organization and existence of a Borrower, where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.



     5.09 Not an Investment Company. None of the Borrowers is an “investment company” within the
meaning of the Investment Company Act of 1940.



     5.10 Environmental Matters. The Company conducts in the ordinary course of business a review
of the effect of existing Environmental Laws and existing Environmental Claims on business,
operations and properties of the Company and its Subsidiaries, and as a result thereof the Company
has reasonably concluded that such Environmental Laws and Environmental Claims could not,
individually or in the aggregate, reasonably be expected to have a material adverse effect on the
business, consolidated financial position or consolidated results of operations of the Company and
its Subsidiaries taken as a whole.



     5.11 Insurance. The properties of the Company and its Subsidiaries are insured with
financially sound and reputable insurance companies (and/or pursuant to a self-insurance program)
in such amounts, 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.



     5.12 Default. No Event of Default or Default has occurred and is continuing.



     5.13 Use of Proceeds. The Borrowers will use the proceeds of the Credit Extensions solely for
the purposes described in Section 6.07.



     5.14 Status of Pentair Germany. At the time of any Borrowing Subsidiary Loan to Pentair
Germany, such Borrowing Subsidiary Loan will be borrowed solely for Pentair Germany’s sole account
and, accordingly, Pentair Germany will qualify as economic beneficiary



70









 




(wirtschaftlich Berechtigter) under §8 of the German Money Laundering Act (Geldwäschegesetz).




ARTICLE VI

COVENANTS




     The Borrowers agree that so long as any Lender has any Commitment hereunder or any amount
payable by any Borrower hereunder remains unpaid:



     6.01 Information. The Company will deliver to the Administrative Agent and each of the
Lenders:



          (a) within five Business Days after the date on which the Company files such documents with
the SEC, but in no event later than 90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries at the end of such
fiscal year and the related consolidated statements of income and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous fiscal year, all
reported on in accordance with the rules and regulations of the SEC and audited by Deloitte &
Touche LLP or other independent public accountants of nationally recognized standing;




          (b) within five Business Days after the date on which the Company files such documents with
the SEC, but in no event later than 45 days after the end of each of the first three quarters of
each fiscal year of the Company, a consolidated balance sheet of the Company and its Consolidated
Subsidiaries at the end of such quarter and the related consolidated statements of income and cash
flows for such quarter and for the portion of the Company’s fiscal year ended at the end of such
quarter, setting forth in each case in comparative form the figures for the corresponding quarter
and the corresponding portion of the Company’s previous fiscal year, all certified (subject to
normal year-end adjustments and the absence of footnotes) as to fairness of presentation, GAAP and
consistency by a Senior Financial Officer;




          (c) simultaneously with the delivery of each set of financial statements referred to in
subsections (a) and (b) above, a certificate of a Senior Financial Officer (i)
setting forth in reasonable detail the calculations required to establish whether the Company was
in compliance with the requirements of Sections 6.02 and 6.03 on the date of such
financial statements and (ii) stating whether there exists on the date of such certificate any
Event of Default or Default and, if any such event then exists, setting forth the details thereof
and the action which the Company is taking or proposes to take with respect thereto;




          (d) forthwith upon the occurrence of any Event of Default or Default, a certificate of the
chief financial officer, the chief accounting officer or the vice president-treasurer of the
Company setting forth the details thereof and the action which the Company is taking or proposes to
take with respect thereto;




          (e) promptly upon the mailing thereof to the shareholders of the Company generally, copies of
all financial statements, reports and proxy statements so mailed;




71









 








          (f) promptly upon the filing thereof, copies of all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Company shall have filed with the SEC;




          (g) if and when the Company or ERISA Affiliate or is required to give notice to the PBGC of
any “reportable event” (as defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a distress or PBGC-initiated termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given or required to be
given to the PBGC;




          (h) promptly upon obtaining knowledge thereof, notice of the commencement of any litigation or
Governmental Authority proceeding affecting the Company or any Subsidiary (including pursuant to
any applicable Environmental Law) in which there is a reasonable possibility of an adverse decision
which could reasonably be expected to have a Material Adverse Effect;




          (i) promptly upon the occurrence thereof, notice of any change in the Company’s credit rating
by Moody’s or S&P;




          (j) from time to time such additional information regarding the financial position or business
of the Borrowers as the Administrative Agent, at the request of any Lender, may reasonably request;
and




          (k) documents required to be delivered pursuant to Sections 5.04 or 6.01(a),
(b), (e) or (f) (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 such documents are posted on the Company’s behalf on
IntraLinks/IntraAgency, on EDGAR (the Electronic Data Gathering, Analysis and Retrieval system of
the SEC), or another relevant 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 (which may be by facsimile or electronic mail) the
Administrative Agent and each Lender 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 certificates required by Section 6.01(c) to the
Administrative Agent and each of the Lenders. Except for such certificates, the Administrative
Agent shall have no obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor compliance by the
Company with any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.




     6.02 Maximum Leverage Ratio. The Company shall not at any time permit the Leverage Ratio to
exceed 3.50 to 1.00.



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     6.03 Minimum Interest Coverage Ratio. The Company shall not permit the Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Company ending on the last day of a
fiscal quarter of the Company to be less than 3.00 to 1.00.



     6.04 Negative Pledge. Neither the Company nor any Subsidiary will create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired by any of them, except:



          (a) any Lien existing on the date of this Agreement and disclosed in the financial statements
referred to in Section 5.04 or set forth in Schedule 6.04, and any extension,
renewal or replacement of any such Lien so long as the principal amount secured thereby is not
increased and the scope of the property subject to such Lien is not extended;




          (b) Liens imposed by Law for taxes, assessments or charges of any Governmental Authority for
claims which are not overdue for a period of more than 30 days, or to the extent that such Lien is
being contested in good faith by appropriate proceedings and adequate reserves in accordance with
GAAP are being maintained therefor, provided that no notice of Lien has been filed or recorded
under the Code;




          (c) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by Law or created in the ordinary course of business which are not
delinquent or remain payable without penalty or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of
the property subject thereto;




          (d) Liens (other than any Lien imposed under ERISA) consisting of pledges or deposits in the
ordinary course of business (i) required in connection with workers’ compensation, unemployment
insurance and other social security legislation and (ii) securing liability for reimbursement or
indemnification obligations of (including obligations in respect of letters of credit or bank
guarantees for the benefit of) insurance carriers to secure obligations with respect to casualty or
liability insurance maintained by the Company or any of its Subsidiaries;




          (e) Liens on property of the Company or any Subsidiary securing (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money), leases or statutory
obligations, (ii) surety bonds (excluding appeal bonds and other bonds posted in connection with
court proceedings or judgments) and (iii) other non-delinquent obligations of a like nature
(including those to secure health, safety and environmental obligations) in each case incurred in
the ordinary course of business;




          (f) Liens (i) consisting of judgment or judicial attachment liens and Liens securing
contingent obligations on appeal bonds and other bonds posted in connection with court proceedings
or judgments, provided that (x) in the case of judgment and judicial attachment liens, the
enforcement of such Liens is effectively stayed, and (y) the aggregate amount secured by all such
Liens (excluding any Lien related to the Horizon Litigation) does not at any time exceed
US$10,000,000; and (ii) securing appeal bonds posted in connection with the Horizon Litigation to
the extent that the sum of (x) the aggregate amount of such appeal bonds and (y) the aggregate
amount of all letters of credit (including any Letter of Credit) issued for the benefit of




73









 







the court (or any instrumentality thereof) having jurisdiction over the Horizon Litigation
does not exceed US$200,000,000;




          (g) easements, rights-of-way, restrictions, encroachments, protrusions and other similar
encumbrances on real property which in the aggregate do not materially detract from the value of
such property or materially interfere with the ordinary conduct of the businesses of the Company
and its Subsidiaries;




          (h) Liens securing obligations in respect of capital leases on assets subject to such leases,
provided that such capital leases are otherwise permitted hereunder;




          (i) Liens arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution; provided that (i) such deposit account is
not a dedicated cash collateral account and is not subject to restrictions against access by the
Company or the applicable Subsidiary in excess of those set forth by regulations promulgated by the
FRB and (ii) such deposit account is not intended by the Company or any Subsidiary to provide
collateral to the depository institution;




          (j) Liens arising in connection with Securitization Transactions; provided that the
aggregate investment or claim held at any time by all purchasers, assignees or other transferees of
(or of interests in) receivables and other rights to payment in all Securitization Transactions
shall not at any time exceed in the aggregate US$250,000,000;




          (k) Liens on property of any Foreign Subsidiary securing Debt of such Foreign Subsidiary that
is permitted under Section 6.06;




          (l) any Lien existing on property at the time of its acquisition or existing on the property
of any Person at the time such Person becomes a Subsidiary, in each case after the date hereof
(other than any Lien on the equity interests of any Person that becomes a Subsidiary);
provided that (i) such Lien was not created in contemplation of such acquisition or such
Person becoming a Subsidiary; and (ii) the Debt secured thereby is permitted under Section
6.06;




          (m) Liens arising out of the conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company or any of its Subsidiaries in the
ordinary course of business;




          (n) Liens solely on cash earnest money deposits made by the Company or any Subsidiary in
connection with any letter of intent or purchase agreement permitted hereunder; and




          (o) in addition to Liens permitted by subsections (a) through (n) above, other
Liens securing Debt in a Dollar Equivalent amount not exceeding 12.5% of Consolidated Shareholders’
Equity.




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     6.05 Consolidations, Mergers and Sales of Assets; Acquisitions.



          (a) No Borrower will merge or consolidate with any other non-affiliated Person or sell, lease,
transfer or otherwise dispose of all or substantially all of its assets as an entirety to any other
Person unless:





          (i) in the case of a merger or consolidation, the Person surviving such transaction is
the applicable Borrower; and




          (ii) immediately after giving effect to any such action, no Event of Default or Default
shall have occurred and be continuing.



          (b) The Company will not, and will not permit any Subsidiary to, make any Acquisition other
than Permitted Acquisitions.




     6.06 Subsidiary Debt. The Company will not at any time permit the aggregate amount of all
outstanding Debt of its Subsidiaries, excluding:



          (a) Debt arising under Securitization Transactions in an aggregate amount not exceeding
US$250,000,000;




          (b) Debt under this Agreement;




          (c) Debt of Subsidiaries existing as of the Amendment Effective Date and identified on
Schedule 6.06;




          (d) Debt under the Subsidiary Guaranty;




          (e) so long as the Subsidiary Guaranty is in effect, Debt arising under unsecured guaranties
of other Senior Debt of the Company; and




          (f) Debt of a Subsidiary owed to the Company or another Subsidiary; to exceed 20% of
Consolidated Shareholders’ Equity.




     6.07 Use of Proceeds. The proceeds of the Loans will be used by the Borrowers to refinance
indebtedness, for commercial paper back-up, for working capital and for all other general corporate
purposes (including Permitted Acquisitions). None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any “margin stock” in violation of Regulation U of the FRB.



     6.08 Compliance with Contractual Obligations and Law. The Company shall, and shall cause each
Subsidiary to, comply with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business the non-compliance with which might have a Material Adverse
Effect.



     6.09 Securitization Transactions. The Company shall not, and shall not permit any Subsidiary
to, permit the aggregate outstanding investment or claim held by purchasers, assignees or
transferees of (or of interests in) receivables of the Company and its Subsidiaries in



75









 




connection with Securitization Transactions to exceed a Dollar Equivalent amount of
US$250,000,000.




     6.10 Insurance. The Company shall, and shall cause each Subsidiary to, maintain, with
financially sound and reputable insurers (and/or pursuant to a self-insurance program), 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 businesses, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons.



     6.11 Ownership of Borrowers. The Company shall at all times own and control, directly or
indirectly, all of the equity interests (other than directors’ qualifying shares) of each of the
other Borrowers (unless, in the case of any such Borrower, such Borrower has paid all of its
obligations hereunder and notified the Administrative Agent that it shall no longer be a “Borrower”
hereunder and shall cease to be a party hereto).



     6.12 Subsidiary Guaranty. The Company will take, and will cause its Subsidiaries to take,
such actions as are reasonably necessary or as the Administrative Agent may reasonably request
(including delivery of authorization documents and customary opinions of counsel) so that (subject
to the proviso below) all of the Company’s obligations hereunder are guaranteed by Subsidiaries
(other than Foreign Subsidiaries) that, in the aggregate together with the Company, own 90% or more
of the consolidated assets of the Company and its Subsidiaries (excluding Foreign Subsidiaries) and
earned 90% or more of the consolidated revenue of the Company and its Subsidiaries (excluding
Foreign Subsidiaries) during the most recent period of four consecutive fiscal quarters (excluding
the revenues of any Subsidiary or business unit which has been divested or liquidated on or prior
to any date of determination), in each case pursuant to the Subsidiary Guaranty; provided
that the provisions of this Section 6.12 shall cease to be effective (and thereafter no
Subsidiary shall be obligated to guarantee the Company’s obligations hereunder) on the first date
after the date hereof on which the Company’s long term senior unsecured non-credit-enhanced public
Debt is rated BBB or better by S&P and Baa2 or better by Moody’s (or, if no such Debt is
then outstanding, the first date after the date hereof on which the Company’s corporate rating is
BBB or better by S&P and Baa2 or better by Moody’s).



     6.13 Pentair Global Documents. The Company shall, not later than 14 days after the Amendment
Effective Date, cause Pentair Global to deliver to the Administrative Agent an opinion of counsel
from Luxembourg counsel to Pentair Global as to the matters set forth in Section 5.01(c)
and 5.02 with respect to Pentair Global.



ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES




     7.01 Events of Default. If one or more of the following events (each, an “Event of
Default”) shall have occurred and be continuing:



          (a) any of the Borrowers shall fail to pay within two Business Days of the date due any
principal of any Loan; or any of the Borrowers shall fail to pay within five days of the date due
any interest on any Loan, any fee or any other amount payable hereunder;




76









 








          (b) any of the Borrowers shall fail to observe or perform any covenant contained in
Sections 6.02 to 6.07, inclusive, or Section 6.09;




          (c) any of the Borrowers shall fail to observe or perform any other covenant or agreement
contained in this Agreement for 30 days after the earlier of (i) the date on which written notice
thereof has been given to the Company by the Administrative Agent at the request of any Lender or
(ii) if the Company fails to promptly notify the Administrative Agent and the Lenders of such
failure as required by Section 6.01(d), the date on which the chief executive officer, the
chief financial officer, the chief accounting officer or the vice president-treasurer of the
Company had actual knowledge of such failure;




          (d) any representation, warranty, certification or statement made by any of the Borrowers in
this Agreement or in any certificate, financial statement or other document delivered pursuant to
this Agreement shall prove to have been incorrect in any material respect when made;




          (e) the Company or any Subsidiary (i) fails to make any payment of Material Financial
Obligations when due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise, but after giving effect to any applicable grace or cure period); or (ii) fails to
perform or observe any other condition or covenant, or any other event shall occur or condition
exist, under one or more agreements or instruments relating to Material Financial Obligations, if
the effect of such failure, event or condition is to cause (or require), or to permit the holder or
holders of such Material Financial Obligations (or the beneficiary or beneficiaries of such
Material Financial Obligations (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries)) to cause (or require), such Material Financial Obligations to become
due and payable (or to be purchased, repurchased, defeased or cash collateralized) prior to the
stated maturity thereof; provided that any such failure relating to a Material Financial
Obligation that was the Debt of a Person acquired by the Company or any of its Subsidiaries and
which was assumed by the Company or such Subsidiary as part of such acquisition shall not
constitute an Event of Default or Default pursuant to this clause (e) so long as such
Material Financial Obligation is repaid in full or such failure is cured within 30 days of such
acquisition;




          (f) the Company or any Material Subsidiary shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial
part of its property or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding commenced against it or
shall make a general assignment for the benefit of creditors or shall commence or consent to a
proceeding for approval of a plan of arrangement with respect to its debts or shall fail generally
to pay its debts as they become due or shall take any corporate action to authorize any of the
foregoing;




          (g) an involuntary case or other proceeding shall be commenced against the Company or any
Material Subsidiary seeking liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other similar




77









 







official of it or any substantial part of its property and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against the Company or any Material Subsidiary under the federal bankruptcy laws
or similar bankruptcy or insolvency laws of any other applicable jurisdiction as now or hereafter
in effect;




          (h) the Company or any ERISA Affiliate shall fail to pay when due an amount or amounts
aggregating in excess of US$15,000,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or the Company or ERISA Affiliate shall file a distress termination
notice with the PBGC and the amount of the Unfunded Vested Liabilities under that filing exceeds
US$10,000,000; or the PBGC shall institute judicial proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such Plan or Plans which have
Unfunded Vested Liabilities in an aggregate amount exceeding US$10,000,000; or a judicial
proceeding shall be instituted by a fiduciary of any such Plan or Plans to enforce Section 515 of
ERISA, the aggregate amount of delinquent contributions claimed to be owed pursuant to such Section
515 in such proceeding shall exceed US$10,000,000, and such proceeding shall not have been
dismissed within 30 days;




          (i) (x) a judgment or order (other than, so long as enforcement proceedings have not been
commenced in connection therewith, any judgment or order in connection with the Horizon Litigation)
for the payment of money in excess of a Dollar Equivalent amount of US$50,000,000 shall be rendered
against any Borrower or any of its respective Subsidiaries (net of insurance proceeds in the event
a solvent insurer with an investment grade long term bond rating has acknowledged in writing its
obligation to satisfy such judgment) and such judgment or order is not within 60 days of the entry
thereof bonded, discharged or stayed; (y) a final, non-appealable judgment or order for the payment
of money (including any pre-judgment interest) shall be rendered against the Company or any
Subsidiary in connection with the Horizon Litigation in excess of US$425,000,000 or (z) any
settlement shall be reached in the Horizon Litigation requiring the Company or any Subsidiary to
pay an amount in excess of US$425,000,000;




          (j) any Person or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934)
of 30% or more of the outstanding shares of voting stock of the Company;




          (k) a majority of the members of the Board of Directors of the Company ceases to be
individuals who (i) were members of the Board of Directors of the Company as of the Amendment
Effective Date or (ii) were nominated or appointed to be members of such Board by a majority of the
members of such Board who, at the time of such nomination or appointment, were individuals
described in the foregoing clause (i) or this clause (ii);




          (l) this Agreement, the Notes or any other document executed in connection herewith, at any
time after its execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the obligations hereunder, ceases to be in full force and
effect; or any Borrower or any other Person contests in any manner the validity or enforceability
of any such document; or any Borrower or any other Person denies that it has any




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or further liability or obligation under any such document, or purports to revoke, terminate
or rescind any such document; or




          (m) at any time during which the Subsidiary Guaranty is required to be in effect pursuant to
Section 6.12, the Subsidiary Guaranty shall cease to be in full force and effect with
respect to any Subsidiary Guarantor (other than as a result of such Subsidiary Guarantor ceasing to
be a Subsidiary pursuant to a transaction permitted hereunder), any Subsidiary Guarantor shall fail
(subject to any applicable grace period) to comply with or to perform any applicable provision of
the Subsidiary Guaranty, or any Subsidiary Guarantor (or any Person by, through or on behalf of
such Subsidiary Guarantor) shall contest in any manner the validity, binding nature or
enforceability of the Subsidiary Guaranty with respect to such Subsidiary Guarantor;



then, and in any such event,





          (i) in the case of any Event of Default specified in subsection (f) or
(g) above, without any notice to the Borrowers or any other act by the
Administrative Agent or any Lender, the Commitments shall immediately terminate and the
Loans and all other obligations of the Borrowers hereunder shall become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; and




          (ii) in the case of any other Event of Default, the Administrative Agent shall (i) if
requested by the Required Lenders, by notice to the Borrowers (with a copy to all Lenders),
terminate the Commitments, which shall thereupon immediately terminate, and/or (ii) if
requested by the Required Lenders, by notice to the Borrowers (with a copy to all Lenders),
declare the Loans and all other obligations of the Borrowers hereunder to be, and the Loans
and such obligations shall thereupon become, immediately due and payable, in each case
without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Borrowers.



     7.02 Notice of Default. The Administrative Agent shall give notice to the Borrowers under
Section 7.01(c) promptly upon being requested to do so by any Lender and shall thereupon
notify all the Lenders thereof.



     7.03 Cash Collateral for Letters of Credit. In addition to the remedies specified above, if
any Event of Default described in Section 7.01(f) or (g) shall have occurred, or if
any other Event of Default described in Section 7.01 shall have occurred and be continuing
and the Administrative Agent shall (at the request of the Required Lenders) have demanded that the
Borrowers provide cash collateral for the L/C Obligations and the Canadian Bankers’ Acceptances,
the Company shall pay to the Administrative Agent an amount equal to the then outstanding L/C
Obligations and Canadian Bankers’ Acceptances. Such payment shall be in Same Day Funds which shall
be held by the Administrative Agent in a cash collateral account until all outstanding Letters of
Credit are terminated without payment or are paid and all Canadian Bankers’ Acceptances are paid.
In the event the Company defaults in the payment of any L/C Obligations or Canadian Bankers’
Acceptances, the proceeds of the cash collateral account shall be applied to the payment thereof.
The Company acknowledges and agrees that the



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Lenders would not have an adequate remedy at law for failure by the Company to pay immediately
to the Administrative Agent the amount provided under this Section 7.03, and that the
Administrative Agent and the Lenders shall have the right to require the Company to perform
specifically such undertaking whether or not any of the L/C Obligations or Canadian Bankers’
Acceptances are due and payable.




ARTICLE VIII

ADMINISTRATIVE AGENT




     8.01 Appointment and Authority.



     Each Lender 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 VIII are solely for the benefit of the
Administrative Agent and the Lenders, and no Borrower shall have any rights as a third party
beneficiary of any of such provisions.



     8.02 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.



     8.03 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




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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 7.01 and 9.01) 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 Issuing Bank.



     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.



     8.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other distribution) believed by it to be genuine and to
have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank,
the Administrative Agent may presume that such condition is satisfactory to such Lender or the
Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such
Lender or the Issuing Bank 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.



     8.05 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 VIII 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



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syndication of the credit facilities provided for herein as well as activities as
Administrative Agent.




     8.06 Resignation of Administrative Agent. The Administrative Agent may at any time give
notice of its resignation to the Lenders, the Issuing Bank and the Company. If the Administrative
Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders which successor administrative agent shall be
consented to by the Company at all times other than during the existence of an Event of Default
(which consent of the Company shall not be unreasonably withheld or delayed). 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 Issuing Bank, 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 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 Issuing Bank directly, until such time as the Required Lenders appoint
a successor Administrative Agent as provided for above in this Section 8.06. 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 8.06). The fees payable by the
Company to a successor Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the provisions of this
Article VIII and Section 9.04 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
8.06 may also, at Bank of America’s option, constitute its resignation as the Issuing Bank. In
that case, 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
such duties of the retiring Issuing Bank, (b) the retiring Issuing Bank shall be discharged from
all of their respective duties and obligations hereunder or under the other Loan Documents, and (c)
the successor Issuing Bank 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 Issuing Bank to effectively assume the obligations of the retiring Issuing Bank with
respect to such Letters of Credit.



     8.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Bank
acknowledges that it has, independently and without reliance upon the



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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 Issuing Bank 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.




     8.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, neither the
Syndication Agent nor any Arranger nor any Co-Documentation Agent listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or Issuing
Bank hereunder.



     8.09 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 Issuing Bank and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the Issuing Bank and the
Administrative Agent and their respective agents and counsel and all other amounts due the Lenders,
the Issuing Lender and the Administrative Agent under Sections 2.05, 2.10 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 Issuing Bank 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 Issuing Bank, 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 2.10 and 9.04.




     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 Issuing Bank any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of
any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.



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     8.10 Subsidiary Guaranty Matters. The Lenders and the Issuing Bank irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Subsidiary that is a
Subsidiary Guarantor from its obligations under the Subsidiary Guaranty if such Person ceases to be
a Subsidiary as a result of a transaction permitted hereunder. Upon request by the Administrative
Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s
authority to release any such Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty pursuant to this Section 8.10. The Administrative Agent agrees to promptly
execute and deliver to the Company all documents reasonably required to evidence any release
permitted under this Agreement; provided that the Company certifies that such release also
is permitted under any other agreement governing indebtedness for borrowed money of the Company
which is entitled to the benefits of the Subsidiary Guaranty.



     8.11 Indemnification of Administrative Agent. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the Administrative Agent and its
Related Parties (to the extent not reimbursed by or on behalf of the Borrowers and without limiting
the obligation of the Borrowers to do so), in accordance with their Pro Rata Shares, from and
against any and all Indemnified Liabilities; provided that no Lender shall be liable for
the payment to any such Person of any portion of the Indemnified Liabilities to the extent
resulting from such Person’s gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for its Pro Rata Share
of any costs or out-of-pocket expenses (including the reasonable fees and changes of counsel for
the Administrative Agent) incurred by the Administrative Agent in connection with the preparation,
due diligence, execution, delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is entitled to be, and is not, reimbursed for such
expenses by or on behalf of the Borrowers. The undertakings in this Section 8.11 shall
survive the termination hereof and the resignation or replacement of the Administrative Agent.



     8.12 Funding Reliance.



          (a) Unless the Administrative Agent receives notice from a Lender by noon on the day of a
proposed Committed Borrowing that such Lender will not make available to the Administrative Agent
an amount equal to its Pro Rata Share of such Committed Borrowing, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative Agent and, in reliance
upon such assumption, make a corresponding amount available to the Company. If and to the extent
such Lender has not made such amount available to the Administrative Agent, such Lender and the
Company jointly and severally agree to repay such amount to the Administrative Agent forthwith on
demand, together with interest thereon at the interest rate applicable to Loans included in such
Committed Borrowing or, in the case of any Lender which repays such amount within three Business
Days, (i) in the case of a Loan in US Dollars, the Federal Funds Rate, or (ii) in the case of a
Loan in any other currency, the Overnight Rate (together with, in each case, such other
compensatory amounts as may be required to be paid by such Lender to the Administrative Agent
pursuant to the Rules for Interbank Compensation of the Council on International Banking or the
Clearinghouse Compensation




84









 







Committee, as applicable, as in effect from time to time). Nothing set forth in this
clause (a) shall relieve any Lender of any obligation it may have to make any Loan
hereunder.




          (b) Unless the Administrative Agent receives notice from any Borrower prior to the due date
for any payment hereunder payable by such Borrower to the Administrative Agent for the account of
the Lenders that such Borrower does not intend to make such payment, the Administrative Agent may
assume that such Borrower has made such payment and, in reliance upon such assumption, make
available to each Lender its share of such payment. If and to the extent that such Borrower has
not made any such payment to the Administrative Agent, each Lender which received a share of such
payment shall repay such share (or the relevant portion thereof) to the Administrative Agent
forthwith on demand, together with interest thereon at (i) in the case of any amount denominated in
US Dollars, the Federal Funds Rate, or (ii) in the case of any amount denominated in any other
currency, the Overnight Rate. Nothing set forth in this clause (b) shall relieve any
Borrower of any obligation it may have to make any payment hereunder.




     8.13 Withholding Tax.



          (a) If any Lender claims exemption from, or reduction of, withholding tax under a United
States tax treaty by providing IRS Form W-8BEN (or any applicable successor form) to the
Administrative Agent and such Lender sells, assigns, grants a participation in or otherwise
transfers all or part of the obligations of the Company to such Lender, such Lender agrees to
notify the Administrative Agent of the percentage amount in which it is no longer the beneficial
owner of the obligations of the Company to such Lender. To the extent of such percentage amount,
the Administrative Agent will treat such Lender’s IRS Form W-8BEN (or such successor form) as no
longer valid, and such Lender agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.




          (b) If any Lender claiming exemption from United States withholding tax by filing IRS Form
W-8ECI (or any applicable successor form) with the Administrative Agent sells, assigns, grants a
participation in or otherwise transfers all or part of the obligations of the Company to such
Lender, such Lender agrees to undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.




          (c) If any Lender is entitled to a reduction in the applicable withholding tax, the
Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to
the applicable withholding tax after taking into account such reduction. If any forms or other
documentation required by Section 3.01(e) are not delivered to the Administrative Agent by
any Lender, then the Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax.




ARTICLE IX

MISCELLANEOUS




     9.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement shall be
effective unless in writing signed by the Required Lenders and the Company and



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acknowledged by the Administrative Agent, and any such waiver shall be effective only in the
specific instance and for the specific purpose for which given; provided that no such
amendment or waiver shall:





          (i) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 7.01) or subject any Lender to any additional
obligations without the written consent of such Lender;




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




          (iii) reduce the principal of, or the rate of interest specified herein on, any Loan or
L/C Borrowing, or (subject to clause (ii) of the second proviso below) any fees or other
amounts payable hereunder or under any other Loan Document without the written consent of
each Lender directly affected thereby; provided that only the consent of the
Required Lenders shall be necessary to amend the definition of “Default Rate” or to
waive any obligation of a Borrower to pay interest or letter of credit fees at the Default
Rate;




          (iv) change Section 2.14 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;




          (v) amend the definition of “Available Currency” without the written consent of
each Lender;




          (vi) change any provision of this Section 9.01 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




          (vii) release the guaranty set forth in Article XI, or release any Subsidiary
Guarantor from its obligations under the Subsidiary Guaranty (other than with respect to a
Person which ceases to be a Subsidiary Guarantor pursuant to a transaction that does not
result in a default of any provision hereof, including Section 6.12), without the
written consent of each Lender;


and, provided, further, that (i) no amendment or waiver shall, unless in writing
and signed by the Issuing Bank in addition to the Lenders required above, affect the rights or
duties of the Issuing Bank under this Agreement or any L/C-Related Document relating to any Letter
of Credit issued or to be issued by it; (ii) no amendment or waiver 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 or waiver 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;




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and (iv) Section 9.06(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender that has any Loan that is funded by an SPC at the time of such
amendment or waiver. Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment or waiver hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent of such Lender.




     9.02 Notices and Other Communications; Facsimile Copies.



          (a) Unless otherwise expressly provided herein, all notices and other communications provided
for hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or
delivered to the address, facsimile number or (subject to Section 9.02(c) below) electronic
mail address specified for notices on Schedule 9.02(a) or (i) in the case of a Lender, its
Administrative Questionnaire; (ii) in the case of any Loan Party, to such other address as shall be
designated by such Loan Party in a notice to the Administrative Agent and the Lenders; (iii) in the
case of the Administrative Agent, to such other address as shall be designated by such party in a
notice to the other parties; or (iv) in the case of any other party, to such other address as shall
be designated by such party in a notice to the Company and the Administrative Agent. All such
notices and other communications shall be deemed to be given or made upon the earlier to occur of
(i) actual receipt by the intended recipient and (ii) (A) if delivered by hand or by courier, when
signed for by the intended recipient; (B) if delivered by mail, four Business Days after deposit in
the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the
provisions of Section 9.02(c) below), as provided in Section 9.02(c) below;
provided that notices and other communications to the Administrative Agent pursuant to
Article II shall not be effective until actually received by such Person. Any notice or
other communication permitted to be given, made or confirmed by telephone hereunder shall be given,
made or confirmed by means of a telephone call to the intended recipient at the number specified on
Schedule 9.02(a), it being understood and agreed that a voicemail message shall in no event
be effective as a notice, communication or confirmation hereunder.




          (b) Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any
such documents and signatures shall, subject to applicable Law, have the same force and effect as
manually-signed originals and shall be binding on all Loan Parties, the Administrative Agent and
the Lenders. The Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile document or signature.




          (c) Notices and other communications to the Lenders and the Issuing Bank 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 Issuing Bank pursuant to Article
II if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article II by electronic
communication. The Administrative Agent or the Company may, in its discretion, agree to accept
notices and




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other communications to it hereunder by electronic communications pursuant to procedures
approved by it, provided that approval of such procedures may be limited to particular
notices or communications.




     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.



          (d) 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 Issuing Bank 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
non-appealable judgment to have resulted from the gross negligence or willful misconduct of such
Agent Party; provided that in no event shall any Agent Party have any liability to any
Borrower, any Lender, the Issuing Bank or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).




          (e) Each of the Borrowers, the Administrative Agent, the Issuing Bank and the Swing Line
Lender may change its address, facsimile number or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other Lender may change its
address, facsimile number or telephone number for notices and other communications hereunder by
notice to the Company, the Administrative Agent, the Issuing Bank 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,
facsimile number and electronic mail address to which notices and other communications may be sent
to such Lender and (ii) accurate wire instructions for such Lender.




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          (f) The Administrative Agent, the Issuing Bank and the Lenders shall be entitled to rely and
act upon any notices (including telephonic Committed Loan Notices, Bid Requests 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 Issuing Bank, 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 communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby consents to such
recording.




     9.03 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.



     9.04 Expenses; Indemnity; Damage Waiver.



          (a) The Borrowers shall pay upon demand (i) all reasonable expenses of the Administrative
Agent, the Syndication Agent and the Arrangers, including the reasonable fees and charges of a
single joint counsel for the Administrative Agent, the Syndication Agent and the Arrangers in
connection with the preparation, execution and delivery of this Agreement, any waiver or consent
hereunder or any amendment hereof and any Default or Event of Default by any Borrower hereunder and
(ii) if an Event of Default occurs, all reasonable out-of-pocket expenses incurred by the
Administrative Agent, each Lender and the Issuing Bank, including fees and disbursements of counsel
for the Administrative Agent, each Lender and the Issuing Bank (who may be employees of the
Administrative Agent or such Lender or the Issuing Bank), in connection with such Default or Event
of Default and collection and other enforcement proceedings resulting therefrom. The respective
Borrower shall indemnify each Lender against any transfer taxes, documentary taxes, assessments or
charges made by any Governmental Authority by reason of the execution and delivery of this
Agreement or any Note.




          (b) The Company shall indemnify the Administrative Agent (and any sub-agent thereof), the
Syndication Agent, each Arranger, each Lender and the Issuing Bank, 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 liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including reasonable
attorney’s fees and charges) of any kind or nature whatsoever which may at any time (including at
any time following repayment of the Loans and the resignation or replacement of the Administrative
Agent or the replacement of any Lender) arise out of or result from an action, suit, proceeding
(including any insolvency or appellate proceeding) or claim asserted against any such Indemnitee
directly relating to this Agreement or any document contemplated by or referred to herein, the
transactions contemplated hereby or the




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use of the proceeds of any Credit Extension, whether or not any Indemnitee is a party thereto
(all the foregoing, collectively, the “Indemnified Liabilities”); provided that the
Company shall not be liable to any Indemnitee for any portion of such Indemnified Liabilities
resulting from such Indemnitee’s gross negligence or willful misconduct. In the event this
indemnity is unenforceable as a matter of law as to a particular matter or consequence referred to
herein, it shall be enforceable to the full extent permitted by law.




          (c) To the extent that the Borrowers or the Company (as applicable) for any reason fails to
indefeasibly pay any amount required under Section 9.04(a) or (b) to be paid by it
to the Administrative Agent (or any sub-agent thereof), the Issuing Bank 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 Issuing Bank or such Related Party, as the case may be, such Lender’s Pro Rata
Share (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 Issuing Bank 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 the Issuing Bank in connection with such capacity. The obligations of the
Lenders under this Section 9.04(c) are subject to the provisions of Section
2.13(d).




          (d) 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 Section 9.04(b)
shall be liable for any damages arising from the use by others of information or other materials
obtained through the online digital workspace owned by Intralinks, Inc.




          (e) All amounts due under this Section 9.04 shall be payable not later than ten
Business Days after demand therefor.




          (f) The agreements in this Section 9.04 shall survive the resignation of the
Administrative Agent and the Issuing Bank, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.




     9.05 Payments Set Aside. To the extent that a Borrower makes a payment to the Administrative
Agent, the Issuing Bank or any Lender, or the Administrative Agent, the Issuing Bank or any Lender
exercises its right of set-off, and such payment or the proceeds of such set-off 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
Issuing Bank 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



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be revived and continued in full force and effect as if such payment had not been made or such
set-off had not occurred, and (b) each Lender and the Issuing Bank severally agrees to pay to the
Administrative Agent upon demand its applicable share (based on the portion of the applicable
payment or proceeds it received) 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 Issuing
Bank under clause (b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.




     9.06 Successors and Assigns.



          (a) 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 Section 9.06(b), (ii) by way of participation in
accordance with the provisions of Section 9.06(d), (iii) by way of pledge or assignment of
a security interest subject to the restrictions of Section 9.06(f), or (iv) to an SPC in
accordance with the provisions of Section 9.06(h) (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
Section 9.06(d) and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.




          (b) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of its Commitment and
the Loans (including for purposes of this Section 9.06(b), participations in L/C
Obligations, in Borrowing Subsidiary Loans, in Canadian Banker’s Acceptances and in Swing Line
Loans) at the time owing to it); provided that





          (i) except in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to
a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the Commitment is not then in effect, the principal outstanding balance
of the Loans of the assigning Lender subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as
of the Trade Date, shall not be less than $5,000,000, unless each of the Administrative
Agent and, so long as no Default exists at such time, the Company otherwise consents (which
consent shall not be unreasonably withheld or delayed);



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




          (iii) any assignment of a Commitment must be approved by the Administrative Agent, the
Issuing Bank and the Swing Line Lender unless the Person that is the proposed assignee is
itself a Lender, an Affiliate of a Lender or an Approved Fund (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee);




          (iv) no Lender that has a Borrowing Subsidiary Commitment may assign all of its rights
and obligations hereunder unless (x) the assignee assumes such Borrowing Subsidiary
Commitment, or (y) such Lender has made arrangements acceptable to the Company and the
Administrative Agent to cause one or more other Lenders to assume the entire amount of such
Borrowing Subsidiary Commitment or (z) the Company, in its sole discretion, consents to such
assignment; and




          (v) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee of
$3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; provided that (x) such fee
shall be waived in the case of an assignment to an Affiliate of the assigning Lender and (y)
the Administrative Agent may, in its sole and complete discretion, waive such fee in any
other instance.



     Subject to acceptance and recording thereof by the Administrative Agent pursuant to
Section 9.06(c), from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its 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 9.04 with respect to facts and circumstances occurring prior to the effective date of
such assignment. Upon request, each Borrower shall execute and deliver each applicable Note to the
assignee Lender at such assignee Lender’s expense. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 9.06(b)
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 Section 9.06(d).



          (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




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“Register”). The entries in the Register shall be conclusive, absent manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be available for
inspection by each of the Borrowers and the Issuing Bank at any reasonable time and from time to
time upon reasonable prior notice. In addition, at any time that a request for a consent for a
material or substantive change to the Loan Documents is pending, any Lender wishing to consult with
other Lenders in connection therewith may request and receive from the Administrative Agent a copy
of the Register.




          (d) Participations. Any Lender may at any time, without the consent of, or notice to,
any Borrower or the Administrative Agent, sell participations to any Person (other than a natural
person or the Company or any of the Company’s Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations, Borrowing Subsidiary Loans, Canadian Banker’s Acceptances 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 Issuing Bank 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 9.01 that affects such Participant. Subject to Section 9.06(e), 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 Section 9.06(b). To the extent permitted by Law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.14 as though it
were a Lender.



          (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 (and agrees to) 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




93









 







such Lender from any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto. Such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted by applicable Law; provided that any foreclosure or
similar action to such holders, trustee or representative shall be subject to the provisions of
this Section 9.06 concerning assignments.




          (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) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding
vehicle identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Company (an “SPC”) the option to provide all or any part of
any Committed Loan that such Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to
fund any Committed Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails
to make all or any part of such Committed Loan, the Granting Lender shall be obligated to make such
Committed Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the
Administrative Agent as is required under Section 2.13(d)(ii). Each party hereto hereby
agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall
increase the costs or expenses or otherwise increase or change the obligations of the Borrowers
under this Agreement (including its obligations under Sections 3.01 and 3.04), (ii)
no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for
which a Lender would be liable (all such liabilities being the obligation of the Granting Lender),
and (iii) the Granting Lender shall for all purposes, including the approval of any amendment,
waiver or other modification of any provision of any Loan Document, remain the lender of record
hereunder. The making of a Committed Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Committed Loan were made by such Granting
Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall
survive the termination of this Agreement) that, prior to the date that is one year and one day
after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it
will not institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the Laws of
the United States or any State thereof. Notwithstanding anything to the contrary contained herein,
any SPC may (i) with notice to, but without prior consent of the Company and the Administrative
Agent if the SPC is a Lender or an Affiliate of a Lender or an Approved Fund, and with the payment
of a processing fee of $3,500 assign all or any portion of its right to receive payment with
respect to any Committed Loan to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Committed Loans to any rating agency, commercial
paper dealer or provider of any surety or guarantee or credit or




94









 







liquidity enhancement to such SPC; provided that the processing fee shall be waived if
the SPC is an Affiliate of the assigning Lender.




     9.07 Confidentiality. Each Lender agrees to take, and to cause its Affiliates to take, normal
and reasonable precautions and exercise due care to maintain the confidentiality of all non-public
information provided to it by the Company or any Subsidiary, or by the Administrative Agent on the
Company’s or such Subsidiary’s behalf, under this Agreement, and neither such Lender nor any of its
Affiliates shall use any such information other than in connection with or in enforcement of this
Agreement or in connection with other business now or hereafter existing or contemplated with the
Company or any Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by such Lender or (ii) was or becomes
available on a non-confidential basis from a source other than the Company and its Subsidiaries,
provided that such source is not bound by a confidentiality agreement with the Company or any
Subsidiary known to such Lender; provided that any Lender may disclose such information (A)
at the request or pursuant to any requirement of any Governmental Authority to which such Lender is
subject or in connection with an examination of such Lender by any such authority; (B) pursuant to
subpoena or other court process; (C) when required to do so in accordance with the provisions of
any applicable Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Administrative Agent or any Lender or any of their respective
Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of
any remedy hereunder; (F) to such Lender’s independent auditors and other professional advisors;
(G) to any Participant or Eligible Assignee, actual or potential (or their respective professional
advisors), or to any counterparty (or its professional advisors) to any swap, securitization or
derivative transaction referencing or involving any of its rights or obligations as a Lender under
this Agreement, actual or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of the Lenders hereunder; (H) as expressly
permitted under the terms of any other document or agreement to which the Company or any Subsidiary
is party with such Lender or such Affiliate; and (I) to its Affiliates. Each of the Administrative
Agent and each Lender acknowledges that (a) the information provided hereunder may include material
non-public information concerning the Company or a Subsidiary, (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.



     9.08 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 applicable Borrower. 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.



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     9.09 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.



     9.10 Integration. This Agreement, together with the other Loan Documents and any related fee
letter, comprises the complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the
event of any conflict between the provisions of this Agreement and those of any other Loan
Document, the provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other
Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair meaning thereof.



     9.11 Severability. Any provision of this Agreement and the other Loan Documents to which any
Borrower is a party that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
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.



     9.12 Replacement of Lenders. If any Lender requests compensation under Section 3.04,
or if any Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is a
Defaulting Lender or if any other circumstance exists hereunder that gives the Company the right to
replace a Lender as a party hereto, then the Company may, at its sole expense and effort, upon
notice (a “Replacement 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 9.06), 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 to be paid) to the Administrative Agent, if
applicable, the assignment fee specified in Section 9.06(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 applicable Borrower (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




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          (d) such assignment does not conflict with applicable Laws.




     A Lender shall not be required to make any such assignment or delegation if, prior to receipt
by such Lender of the applicable Replacement Notice, 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.



     9.13 Judgment Currency. If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due from a Borrower hereunder in the currency expressed to be payable
herein (the “specified currency”) into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent could purchase the
specified currency with such other currency at the Administrative Agent’s applicable office on the
Business Day preceding that on which final judgment is given. The obligation of any Borrower in
respect of any sum due to any Lender or the Administrative Agent hereunder shall, notwithstanding
any judgment in a currency other than the specified currency, be discharged only to the extent that
on the Business Day following receipt by such Lender or the Administrative Agent, as the case may
be, of any sum adjudged to be so due in such other currency, such Lender or the Administrative
Agent, as the case may be, may in accordance with normal banking procedures purchase the specified
currency with such other currency. If the amount of the specified currency so purchased is less
than the sum originally due to such Lender or the Administrative Agent, as the case may be, in the
specified currency, the applicable Borrower shall, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, indemnify such Lender or the
Administrative Agent, as the case may be, against such loss, and if the amount of the specified
currency so purchased exceeds the total of (a) the sum originally due to such Lender or the
Administrative Agent, as the case may be, in the specified currency and (b) any amount shared with
other Lenders as a result of allocations of such excess as a disproportionate payment to such
Lender under Section 2.14, such Lender or the Administrative Agent, as the case may be,
agrees to remit such excess to the applicable Borrower.



     9.14 Borrowers’ Agent. Each Borrower hereby irrevocably appoints and authorizes the Company
to take such action and deliver and receive notices hereunder as agent on its behalf and to
exercise such powers under this Agreement as delegated to it by the terms hereof, together with all
such powers as are reasonably incidental thereto. In furtherance of and not in limitation of the
foregoing, for administrative convenience of the parties hereto, the Administrative Agent and the
Lenders shall send all notices and communications to be sent to any Borrower solely to the Company
and may rely solely upon the Company to receive all such notices and other communications for and
on behalf of each Borrower. Neither the Company nor any of its respective directors, officers,
agents or employees shall be liable to any other Borrower for any action taken or not taken by it
in connection herewith (i) with the consent or at the request of such Borrower or (ii) in the
absence of its own gross negligence or willful misconduct. No Person other than the Company (and
its authorized directors, officers, agents and employees) may act as agent for the Borrowers
hereunder without the written consent of the Administrative Agent.



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     9.15 Governing Law.




          (i) THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF ILLINOIS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED, THAT THE ADMINISTRATIVE AGENT AND EACH LENDER
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.




          (ii) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS SITTING IN COOK COUNTY,
ILLINOIS, OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
THERETO. EACH BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.



     9.16 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 9.16 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.



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



98









 




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.




     9.18 No Fiduciary or Implied Duties. The Company acknowledges and agrees, and acknowledges
its Affiliates’ understanding, that in acting as Administrative Agent, Bank of America (or any
successor thereto) will not have responsibility except as set forth in this Agreement and shall in
no event be subject to any fiduciary or other implied duties. Each Borrower waives and releases,
to the fullest extent permitted by law, any claims that it may have against the Administrative
Agent with respect to any breach or alleged breach of agency or fiduciary duty.



ARTICLE X

GUARANTY




     10.01 Guaranty. The Company hereby unconditionally and irrevocably guarantees the full and
punctual payment (whether at stated maturity, upon acceleration or otherwise) of the principal of
and interest on each Loan made to each other Borrower pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by each other Borrower hereunder. Upon failure by
any such Borrower to pay punctually any such amount, the Company shall forthwith on demand pay the
amount not so paid at the place and in the manner specified in this Agreement.



     10.02 Guaranty Unconditional. The obligations of the Company under this Article X
shall be irrevocable, unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:




          (i) any extension, renewal, settlement, compromise, waiver or release in respect of any
obligation of any Borrower (other than the Company) under this Agreement or any Note, by
operation of law or otherwise;




          (ii) any modification or amendment of or supplement to this Agreement or any Note;




          (iii) any release, impairment, non-perfection or invalidity of any direct or indirect
security for any obligation of any Borrower (other than the Company) under this Agreement or
any Note;




          (iv) any change in the corporate existence, structure or ownership of any Borrower, or
any insolvency, bankruptcy, reorganization or other similar proceeding affecting any
Borrower or such Borrower’s assets or any resulting release or discharge of any obligation
of any Borrower (other than the Company) contained in this Agreement or any Note;




          (v) the existence of any claim, set-off or other rights which the Company may have at
any time against any other Borrower, the Administrative Agent, any Lender or any other
Person, whether in connection herewith or any unrelated transaction, provided that
nothing herein shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim;



99









 






          (vi) any invalidity or unenforceability relating to or against any Borrower (other than
the Company) for any reason of this Agreement or any Note, or any provision of applicable
Law or regulation purporting to prohibit the payment by any Borrower (other than the
Company) of the principal of or interest on any Loan or any other amount payable by any
other Borrower under this Agreement; or




          (vii) any other act or omission to act or delay of any kind by any other Borrower, the
Administrative Agent, any Lender or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of the Company’s obligations as guarantor hereunder.



     10.03 Discharge only upon Payment in Full; Reinstatement in Certain Circumstances. The
Company’s obligations as guarantor hereunder shall remain in full force and effect until the
Commitments shall have terminated and the principal of and interest on the Loans and all other
amounts payable by the Borrowers under this Agreement shall have been paid in full. If at any time
any payment of the principal of or interest on any Loan or any other amount payable by any Borrower
(other than the Company) under this Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of such Borrower or otherwise, the
Company’s obligations hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.



     10.04 Waiver by Company. The Company irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against any Borrower or any other Person.



     10.05 Subrogation. Notwithstanding any payment made by or for the account of any other
Borrower pursuant to this Article X, the Company shall not be subrogated to any right of
the Administrative Agent or any Lender until such time as the Administrative Agent and the Lenders
shall have received final payment in cash of the full amount of all principal of and interest on
the Loans, all fees, all L/C Obligations and all other Obligations and other amounts payable
hereunder.



     10.06 Stay of Acceleration. If acceleration of the time for payment of any amount payable by
any Borrower (other than the Company) under this Agreement or any Note is stayed upon the
insolvency, bankruptcy or reorganization of such Borrower, all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by the Company
hereunder forthwith on demand by the Administrative Agent made at the request of the Required
Lenders.



ARTICLE XI

AMENDMENT AND RESTATEMENT; EXISTING AGREEMENT




     11.01 Amendment and Restatement. This Agreement amends, restates and replaces in its entirety
the Existing Agreement. All rights, benefits, indebtedness, interest, liabilities and obligations
of the parties to the Existing Agreement are hereby amended, restated, replaced and superseded in
their entirety according to the terms and provisions set forth herein (except that any provision of
the Existing Agreement that by its terms survives termination of the Existing



100









 




Agreement shall continue in full force and effect for the benefit of the applicable parties to
the Existing Agreement). All indebtedness, liabilities and obligations under the Existing
Agreement, including all promissory notes, if any, executed by the Borrowers pursuant thereto, are
hereby renewed by this Agreement, the Notes and the other documents executed by the Borrowers
pursuant to this Agreement and shall, from and after the Amendment Effective Date, be governed by
this Agreement and such other documents. The Borrowers represent and warrant that as of the date
hereof there are no claims or offsets against, or defenses or counterclaims to, its obligations
under this Agreement, the Existing Agreement or any of the other agreements, documents or
instruments executed in connection herewith or therewith. To induce the Administrative Agent and
the Lenders to enter into this Agreement, the Borrowers waive any and all such claims, offsets,
defenses and counterclaims, whether known or unknown, arising prior to the Amendment Effective Date
and relating to the Existing Agreement or this Agreement.




     11.02 Existing Agreement. Lenders which are parties to the Existing Agreement (and which
constitute “Required Lenders” under and as defined in the Existing Agreement) hereby waive
the three business days’ notice requirement set forth in Section 2.06 of the Existing Agreement for
terminating the commitments under the Existing Agreement, and such Lenders and the Company agree
that, subject to the Company’s payment of all amounts then payable under the Existing Agreement
(whether or not then due), the commitments under the Existing Agreement shall be terminated on the
Amendment Effective Date and replaced by the Commitments hereunder.



[Remainder of page intentionally left blank]





101










 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above written.



	 	 	 	 	 
	 	 	PENTAIR, INC.
	 
	 	 	 	 
	 

	 	By
	 	/s/ John L. Stauch
	 

	 	Name
	 	John L. Stauch
	 

	 	Title
	 	Executive Vice President and Chief Financial
Officer






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	PENTAIR UK GROUP LIMITED,

as a Borrowing Subsidiary
	 
	 	 	 	 
	 

	 	By
	 	/s/ Louis L. Ainsworth
	 

	 	Name
	 	Louis L. Ainsworth
	 

	 	Title
	 	Secretary






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	PENTAIR CANADA INC.,

as a Borrowing Subsidiary
	 
	 	 	 	 
	 

	 	By
	 	/s/ John L. Stauch
	 

	 	Name
	 	John L. Stauch
	 

	 	Title
	 	President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	PENTAIR GERMANY GMBH,

as a Borrowing Subsidiary
	 
	 	 	 	 
	 

	 	By
	 	/s/ Louis L. Ainsworth
	 

	 	Name
	 	Louis L. Ainsworth
	 

	 	Title
	 	Gerschaftsfuhrer






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	PENTAIR GLOBAL SARL,

as a Borrowing Subsidiary
	 
	 	 	 	 
	 

	 	By
	 	/s/ Louis L. Ainsworth
	 

	 	Name
	 	Louis L. Ainsworth
	 

	 	Title
	 	Director






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	PENTAIR JANUS HOLDINGS,

as a Borrowing Subsidiary
	 
	 	 	 	 
	 

	 	By
	 	/s/ Louis L. Ainsworth
	 

	 	Name
	 	Louis L. Ainsworth
	 

	 	Title
	 	Director






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,

as Administrative Agent, as Issuing Bank and as a
Lender
	 
	 	 	 	 
	 

	 	By
	 	/s/ Chas McDonell
	 

	 	Name
	 	Chas McDonell
	 

	 	Title
	 	Senior Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., CANADA BRANCH,
	 	 	as Canadian Administrative Agent and as a Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Medina Sales de Andrade
	 

	 	Name:
	 	Medina Sales de Andrade
	 

	 	Title:
	 	Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	BANC OF AMERICA SECURITIES LIMITED,

as a Borrowing Subsidiary Lender
	 
	 	 	 	 
	 

	 	By
	 	/s/ Keith Thomas
	 

	 	Name
	 	Keith Thomas
	 

	 	Title
	 	Senior Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.






 









 






	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,

as Syndication Agent and as a Lender
	 
	 	 	 	 
	 

	 	By
	 	/s/ Michael B. Kelly
	 

	 	Name
	 	Michael B. Kelly
	 

	 	Title
	 	Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CHICAGO
BRANCH,

as a Co-Documentation Agent and as a Lender
	 
	 	 	 	 
	 

	 	By
	 	/s/ Matthew A. Ross
	 

	 	Name
	 	Matthew A. Ross
	 

	 	Title
	 	Vice President & Manager






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,

as a Co-Documentation Agent and as a Lender
	 
	 	 	 	 
	 

	 	By
	 	/s/ David A. Draxler
	 

	 	Name
	 	David A. Draxler
	 

	 	Title
	 	Senior Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Co-Documentation Agent and as a Lender
	 
	 	 	 	 
	 

	 	By
	 	/s/ Jennifer Barrett
	 

	 	Name
	 	Jennifer Barrett
	 

	 	Title
	 	Senior Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	BNP PARIBAS
	 
	 	 	 	 
	 

	 	By
	 	/s/ Richard Broeren
	 

	 	Name
	 	Richard Broeren
	 

	 	Title
	 	Managing Director
	 
	 	 	 	 
	 

	 	By
	 	/s/ Andrew Strait
	 

	 	Name
	 	Andrew Strait
	 

	 	Title
	 	Managing Director






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	PNC BANK, N.A.
	 
	 	 	 	 
	 

	 	By
	 	/s/ Marc C. Van Horn
	 

	 	Name
	 	Marc C. Van Horn
	 

	 	Title
	 	Credit Officer






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	SUNTRUST BANK
	 
	 	 	 	 
	 

	 	By
	 	/s/ Robert Maddox
	 

	 	Name
	 	Robert Maddox
	 

	 	Title
	 	Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	BANK OF CHINA, LOS ANGELES BRANCH
	 
	 	 	 	 
	 

	 	By
	 	/s/ Xiao Wang
	 

	 	Name
	 	Xiao Wang
	 

	 	Title
	 	Branch Manager & FVP






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	NATIONAL CITY BANK
	 
	 	 	 	 
	 

	 	By
	 	/s/ Jon R. Hinard
	 

	 	Name
	 	Jon R. Hinard
	 

	 	Title
	 	Senior Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	THE NORTHERN TRUST COMPANY
	 
	 	 	 	 
	 

	 	By
	 	/s/ John C. Canty
	 

	 	Name
	 	John C. Canty
	 

	 	Title
	 	Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	MELLON BANK, N.A.
	 
	 	 	 	 
	 

	 	By
	 	/s/ Daniel J. Lenckos
	 

	 	Name
	 	Daniel J. Lenckos
	 

	 	Title
	 	First Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	FORTIS CAPITAL CORP.
	 
	 	 	 	 
	 

	 	By
	 	/s/ Douglas Riahi
	 

	 	Name
	 	Douglas Riahi
	 

	 	Title
	 	Managing Director
	 
	 	 	 	 
	 

	 	By
	 	/s/ Barbara E. Nash
	 

	 	Name
	 	Barbara E. Nash
	 

	 	Title
	 	Managing Director & Group Head






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	CITIBANK, N.A.
	 
	 	 	 	 
	 

	 	By
	 	/s/ Mark Floyd
	 

	 	Name
	 	Mark Floyd
	 

	 	Title
	 	Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	BANK OF MONTREAL
	 
	 	 	 	 
	 

	 	By
	 	/s/ Thad D. Rasche
	 

	 	Name
	 	Thad D. Rasche
	 

	 	Title
	 	Director






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	CHANG HWA COMMERCIAL BANK, LTD.,
 NEW YORK BRANCH
	 
	 	 	 	 
	 

	 	By
	 	/s/ Jim C.Y. Chen
	 

	 	Name
	 	Jim C.Y. Chen
	 

	 	Title
	 	VP & General Manager






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	HUA NAN, LOS ANGELES BRANCH
	 
	 	 	 	 
	 

	 	By
	 	/s/ Oliver C.H. Hsu
	 

	 	Name
	 	Oliver C.H. Hsu
	 

	 	Title
	 	VP & General Manager






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	HUA NAN, NEW YORK BRANCH
	 
	 	 	 	 
	 

	 	By
	 	/s/ Te-Chin Wang
	 

	 	Name
	 	Te-Chin Wang
	 

	 	Title
	 	Assistant Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	TAIPEI FUBON COMMERCIAL BANK
	 
	 	 	 	 
	 

	 	By
	 	/s/ Robin S. Wu
	 

	 	Name
	 	Robin S. Wu
	 

	 	Title
	 	AVP & General Manager






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	NATIONAL BANK OF EGYPT

NEW YORK BRANCH
	 
	 	 	 	 
	 

	 	By
	 	/s/ Andrew Bastone
	 

	 	Name
	 	Andrew Bastone
	 

	 	Title
	 	Senior Vice President






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.







 









 








	 	 	 	 	 
	 	 	FIRST COMMERCIAL BANK, LOS ANGELES BRANCH
	 
	 	 	 	 
	 

	 	By
	 	/s/ Larry Jen-Yu Lai
	 

	 	Name
	 	Larry Jen-Yu Lai
	 

	 	Title
	 	SAVP & Deputy General Manager






	 	 	 	 	 
	 
	 	 
	 	Signature Page
	 
	 	 	 	Pentair, Inc. Third Amended
	 
	 	 	 	and Restated Credit Agreement.