Document:

EXHIBIT
10.2

 

EXECUTION
VERSION

 

 

Published Deal CUSIP Number: 62475VAA5

Published Revolver CUSIP Number: 62475VAB3

Published Term CUSIP Number: 62475VAC1

 

CREDIT
AGREEMENT

 

Dated as of October 3,
2005

among

 

MUELLER
GROUP, LLC

as the Borrower,

 

BANK OF AMERICA,
N.A.,

as Administrative Agent, Swing
Line Lender,

L/C Issuer and a Lender,

 

MORGAN
STANLEY SENIOR FUNDING, INC.,

as Syndication Agent and as a
Lender,

 

CALYON
NEW YORK BRANCH,

FIFTH
THIRD BANK

and

JPMORGAN
CHASE BANK, N.A.

as Co-Documentation Agents

 

 

and

 

The Other Lenders Party Hereto

 

 

BANC OF
AMERICA SECURITIES LLC,

and

MORGAN
STANLEY SENIOR FUNDING, INC.

as

Joint Lead Arrangers and Joint
Book Managers

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE I.

  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.01

  	
  Defined Terms

  	
   

  
	
  1.02

  	
  Other Interpretive Provisions

  	
   

  
	
  1.03

  	
  Accounting Terms

  	
   

  
	
  1.04

  	
  Rounding

  	
   

  
	
  1.05

  	
  Times of Day

  	
   

  
	
  1.06

  	
  Letter of Credit Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II.

  THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.01

  	
  Term Loan

  	
   

  
	
  2.02

  	
  Revolving Loans

  	
   

  
	
  2.03

  	
  Borrowings, Conversions and Continuations
  of Committed Loans

  	
   

  
	
  2.04

  	
  Letters of Credit and Bankers’ Acceptances

  	
   

  
	
  2.05

  	
  Swing Line Loans

  	
   

  
	
  2.06

  	
  Prepayments

  	
   

  
	
  2.07

  	
  Termination or Reduction of Commitments

  	
   

  
	
  2.08

  	
  Repayment of Loans

  	
   

  
	
  2.09

  	
  Interest

  	
   

  
	
  2.10

  	
  Fees

  	
   

  
	
  2.11

  	
  Computation of Interest and Fees

  	
   

  
	
  2.12

  	
  Evidence of Debt

  	
   

  
	
  2.13

  	
  Payments Generally; Administrative Agent’s
  Clawback

  	
   

  
	
  2.14

  	
  Sharing of Payments by Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE III.

  SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.01

  	
  Security

  	
   

  
	
  3.02

  	
  Further Assurances

  	
   

  
	
  3.03

  	
  Information Regarding Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV.

  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  4.01

  	
  Taxes

  	
   

  
	
  4.02

  	
  Illegality

  	
   

  
	
  4.03

  	
  Inability to Determine Rates

  	
   

  
	
  4.04

  	
  Increased Costs; Reserves on Eurodollar
  Rate Loans

  	
   

  
	
  4.05

  	
  Compensation for Losses

  	
   

  
	
  4.06

  	
  Mitigation Obligations; Replacement of
  Lenders

  	
   

  

 

i

 

	
  4.07

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE V.

  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.01

  	
  Conditions of Initial Credit Extension

  	
   

  
	
  5.02

  	
  Conditions to all Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI.

  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.01

  	
  Existence, Qualification and Power;
  Compliance with Laws

  	
   

  
	
  6.02

  	
  Authorization; No Contravention

  	
   

  
	
  6.03

  	
  Governmental Authorization; Other Consents

  	
   

  
	
  6.04

  	
  Binding Effect

  	
   

  
	
  6.05

  	
  Financial Statements; No Material Adverse
  Effect

  	
   

  
	
  6.06

  	
  Litigation

  	
   

  
	
  6.07

  	
  No Default

  	
   

  
	
  6.08

  	
  Ownership of Property; Liens

  	
   

  
	
  6.09

  	
  Environmental Compliance

  	
   

  
	
  6.10

  	
  Insurance

  	
   

  
	
  6.11

  	
  Taxes

  	
   

  
	
  6.12

  	
  ERISA Compliance

  	
   

  
	
  6.13

  	
  Subsidiaries; Equity Interests

  	
   

  
	
  6.14

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

  	
   

  
	
  6.15

  	
  Disclosure

  	
   

  
	
  6.16

  	
  Compliance with Laws

  	
   

  
	
  6.17

  	
  Intellectual Property; Licenses, Etc

  	
   

  
	
  6.18

  	
  Senior Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VII.

  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.01

  	
  Financial Statements

  	
   

  
	
  7.02

  	
  Certificates; Other Information

  	
   

  
	
  7.03

  	
  Notices

  	
   

  
	
  7.04

  	
  Payment of Obligations

  	
   

  
	
  7.05

  	
  Preservation of Existence, Etc

  	
   

  
	
  7.06

  	
  Maintenance of Properties

  	
   

  
	
  7.07

  	
  Maintenance of Insurance

  	
   

  
	
  7.08

  	
  Compliance with Laws

  	
   

  
	
  7.09

  	
  Books and Records

  	
   

  
	
  7.10

  	
  Inspection Rights

  	
   

  
	
  7.11

  	
  Use of Proceeds

  	
   

  
	
  7.12

  	
  New Subsidiaries, Pledgors and Real
  Property

  	
   

  

 

ii

 

	
  7.13

  	
  Compliance with ERISA

  	
   

  
	
  7.14

  	
  Further Assurances

  	
   

  
	
  7.15

  	
  Interest Rate Protection

  	
   

  
	
  7.16

  	
  Change of Control Offer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VIII.

  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.01

  	
  Liens

  	
   

  
	
  8.02

  	
  Investments

  	
   

  
	
  8.03

  	
  Indebtedness

  	
   

  
	
  8.04

  	
  Fundamental Changes

  	
   

  
	
  8.05

  	
  Dispositions

  	
   

  
	
  8.06

  	
  Restricted Payments

  	
   

  
	
  8.07

  	
  Change in Nature of Business

  	
   

  
	
  8.08

  	
  Transactions with Affiliates

  	
   

  
	
  8.09

  	
  Burdensome Agreements

  	
   

  
	
  8.10

  	
  Use of Proceeds

  	
   

  
	
  8.11

  	
  Prepayment of Indebtedness; Amendment to
  Material Agreements

  	
   

  
	
  8.12

  	
  Financial Covenants

  	
   

  
	
  8.13

  	
  Acquisitions

  	
   

  
	
  8.14

  	
  Creation of New Subsidiaries

  	
   

  
	
  8.15

  	
  Securities of Subsidiaries

  	
   

  
	
  8.16

  	
  Sale and Leaseback

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IX.

  EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  9.01

  	
  Events of Default

  	
   

  
	
  9.02

  	
  Remedies Upon Event of Default

  	
   

  
	
  9.03

  	
  Application of Funds

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE X.

  ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  10.01

  	
  Appointment and Authority

  	
   

  
	
  10.02

  	
  Rights as a Lender

  	
   

  
	
  10.03

  	
  Exculpatory Provisions

  	
   

  
	
  10.04

  	
  Reliance by Administrative Agent

  	
   

  
	
  10.05

  	
  Delegation of Duties

  	
   

  
	
  10.06

  	
  Resignation of Administrative Agent

  	
   

  
	
  10.07

  	
  Non-Reliance on Administrative Agent and
  Other Lenders

  	
   

  
	
  10.08

  	
  No Other Duties, Etc

  	
   

  
	
  10.09

  	
  Administrative Agent May File Proofs
  of Claim

  	
   

  
	
  10.10

  	
  Collateral and Guaranty Matters

  	
   

  

 

iii

 

	
   

  	
  ARTICLE XI.

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.01

  	
  Amendments, Etc

  	
   

  
	
  11.02

  	
  Notices; Effectiveness; Electronic Communication

  	
   

  
	
  11.03

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  11.04

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  
	
  11.05

  	
  Payments Set Aside

  	
   

  
	
  11.06

  	
  Successors and Assigns

  	
   

  
	
  11.07

  	
  Treatment of Certain Information;
  Confidentiality

  	
   

  
	
  11.08

  	
  Right of Setoff

  	
   

  
	
  11.09

  	
  Interest Rate Limitation

  	
   

  
	
  11.10

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
  11.11

  	
  Survival of Representations and Warranties

  	
   

  
	
  11.12

  	
  Severability

  	
   

  
	
  11.13

  	
  Replacement of Lenders

  	
   

  
	
  11.14

  	
  Governing Law; Jurisdiction; Etc

  	
   

  
	
  11.15

  	
  Waiver of Jury Trial

  	
   

  
	
  11.16

  	
  USA PATRIOT Act Notice

  	
   

  
	
  11.17

  	
  No Fiduciary Relationship

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  

 

iv

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  1.01(a)   Existing Letters of Credit

  
	
  1.01(b)

  	
  Unrestricted
  Subsidiaries

  
	
  2.01

  	
  Commitments
  and Pro Rata Shares

  
	
  3.01

  	
  Mortgaged
  Real Property

  
	
  3.03

  	
  Information
  Regarding Collateral

  
	
  5.01

  	
  Good
  Standing and Foreign Qualification Jurisdictions

  
	
  6.06

  	
  Litigation

  
	
  6.09

  	
  Environmental Matters

  
	
  6.11

  	
  Proposed Tax
  Assessments

  
	
  6.13(a)

  	
  Subsidiaries

  
	
  6.13(b)

  	
  Other Equity
  Investments

  
	
  8.01

  	
  Existing
  Liens

  
	
  8.02

  	
  Existing
  Investments

  
	
  8.03

  	
  Existing
  Indebtedness

  
	
  11.02

  	
  Administrative
  Agent’s Office; Certain Addresses for Notices

  
	
  11.06

  	
  Processing
  and Recordation Fees

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
   

  	
  Form of

  
	
   

  	
   

  
	
  A-1

  	
  Revolving
  Loan Notice

  
	
  A-2

  	
  Term Loan
  Interest Rate Selection Notice

  
	
  B

  	
  Swing Line
  Loan Notice

  
	
  C-1

  	
  Term Loan
  Note

  
	
  C-2

  	
  Revolving
  Loan Note

  
	
  D

  	
  Compliance
  Certificate

  
	
  E

  	
  Assignment
  and Assumption

  
	
  F

  	
  Guaranty Agreement

  
	
  G

  	
  Opinion
  Matters

  
	
  H

  	
  Parent Guaranty Agreement

  
	
  I

  	
  Security
  Agreement

  
	
  J

  	
  Mortgage

  

 

v

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT is
entered into as of October 3, 2005, among MUELLER GROUP, LLC,
a Delaware limited liability company (the “Borrower”), each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

 

The Borrower has requested that the Lenders provide a revolving credit
facility and a term loan facility, and the Lenders are willing to do so on the
terms and conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

“Acceptance
Credit” means a commercial Letter of Credit in which the L/C
Issuer engages with the beneficiary of such Letter of Credit to accept a time
draft, and shall include those Existing Letters of Credit identified as “Acceptance
Credits” on Schedule 1.01(a).

 

“Acceptance
Documents” means such general acceptance agreements,
applications, certificates and other documents as the L/C Issuer may require in
connection with the creation of Bankers’ Acceptances.

 

“Account”
means any account (as that term is defined in Section 9-102(a)(2)(i) and
(ii) of the UCC) of the Borrower or any Subsidiary arising from the sale
or lease of goods or the rendering of services.

 

“Acquisition”
means the acquisition of (a) a controlling equity or other ownership
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity or other ownership interest or upon exercise of an option or
warrant for, or conversion of securities into, such equity or other ownership
interest, or (b) assets of another Person which constitute all or
substantially all of the assets of such Person or of a line or lines of
business conducted by such Person.

 

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

 

“Administrative
Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

 

1

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

 

“Agency Fee
Letter” means the letter agreement, dated as of June 17,
2005, between Walter and the Administrative Agent.

 

“Aggregate Commitments”
means, as at any date of determination thereof, the sum of (a) the
Aggregate Revolving Credit Commitments at such date, plus (b) the
Outstanding Amount with respect to the Term Loan Facility at such date.

 

“Aggregate
Credit Exposures” means, as at any date of determination
thereof, the sum of (a) the unused portion of the Aggregate Revolving
Credit Commitments then in effect, plus (b) the Total Outstandings at such
time.

 

“Aggregate
Revolving Credit Commitments” means, as at any date of
determination thereof, the sum of all Revolving Credit Commitments of all
Lenders at such date.

 

“Agreement”
means this Credit Agreement.

 

“Applicable Rate”
means, from time to time,

 

(a)           with respect to
Segments of the Term Loan that are Eurodollar Rate Loans, 2.25%, provided
that if the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section 7.02(b) is
less than 3.50 to 1.00, then the “2.25%” in this clause (a) shall be
deemed to read “2.00%” as of the date set forth in the paragraph of this
definition following clause (c);

 

(b)           with respect to
Segments of the Term Loan that are Base Rate Loans, 1.25%, provided that
if the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 7.02(b) is
less than 3.50 to 1.00, then the “1.25%” in this clause (b) shall be
deemed to read “1.00%” as of the date set forth in the paragraph of this
definition following clause (c); and

 

(c) with respect to the Commitment Fee, Revolving Loans, Swing
Line Loans and Letter of Credit - BA Fees, the following percentages per annum,
based upon the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section 7.02(b):

 

2

 

	
   

  	
   

  	
   

  	
   

  	
  Revolving Loans, Swing Line Loans

  and Letter of Credit – BA Fees

  	
   

  	
   

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Consolidated
  Leverage Ratio

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurodollar Rate

  Loans and Letter

  of Credit – BA Fees

  	
   

  	
  Commitment Fee

  	
   

  
	
  1

  	
   

  	
  Greater than or equal to 5.00 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Less than 5.00 to 1.00 but greater than or equal to 4.00 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Less than 3.00 to 1.00

  	
   

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  0.375

  	
  %

  

 

Any increase or decrease in the Applicable Rate with respect to
Revolving Loans, the Term Loan (including Segments), Swing Line Loans and
Letter of Credit - BA Fees resulting from a change in the Consolidated Leverage
Ratio shall become effective as of the first Business Day immediately following
the date a Compliance Certificate is delivered pursuant to Section 7.02(b);
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level 1 (or
with respect to the Term Loan (including Segments), the higher of the rates set
forth in each of clauses (a) and (b) above) shall apply thereto as of
the first Business Day after the date on which such Compliance Certificate was
required to have been delivered until the Business Day following the date the
appropriate certificate is so delivered. 
Subject to the proviso in the preceding sentence, from the Closing Date
to the Business Day following the date the Compliance Certificate for the
fiscal period ending December 31, 2005 is delivered or is required to be
delivered (whichever shall first occur), the Applicable Rate with respect to
the Commitment Fee, Revolving Loans, Swing Line Loans and Letter of Credit - BA
Fees shall be Pricing Level 2 and the Applicable Rate with respect to the Term
Loan (including Segments thereof) shall be the higher of the rates set forth in
each of clauses (a) and (b) above.

 

“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 BAS and Morgan Stanley, each in its capacity as a joint lead arranger and
joint book manager.

 

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

 

“Assignment and
Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form
approved by the Administrative Agent, and shall include, in the case of the
initial assignments of portions of Term Loan by Bank of America and/or Morgan
Stanley as the initial Term Loan Lenders, one or more master assignments and
assumption agreements to effect assignments to multiple assignees substantially
on the terms of the form of Assignment and Assumption set forth in Exhibit E.

 

“Assumed
Indebtedness” means Indebtedness of a Person which is (a) in
existence at the time such Person becomes a Restricted Subsidiary of the
Borrower or (b) is assumed in

 

3

 

connection
with an Investment in or acquisition of such Person, and has not been incurred
or created by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Borrower.

 

“Attributable
Indebtedness” means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease
that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.

 

“Audited
Financial Statements” means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended September 30,
2004, and the related consolidated statements of income or operations, retained
earnings and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.

 

“Auditor”
has the meaning specified in Section 7.01(a).

 

“Availability
Period” means the period from and including the Closing Date to
the earliest of (a) the Revolving Credit Maturity Date, (b) the date
of termination of the Aggregate Revolving Credit Commitments pursuant to Section 2.07,
and (c) the date of termination of the commitment of each Lender to make
Loans and of the obligation of the L/C Issuer to make L/C- BA Credit Extensions
pursuant to Section 9.02.

 

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

 

“Bankers’ Acceptance”
or “BA”
means a time draft, drawn by the beneficiary under an Acceptance Credit and
accepted by the L/C Issuer upon presentation of documents by the beneficiary of
an Acceptance Credit pursuant to Section 2.04 hereof, in the
standard form for bankers’ acceptances of the L/C Issuer.

 

“BAS”
means Banc of America Securities LLC.

 

“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 Loan”
means a Loan (including a Segment) that bears interest based on the Base Rate.

 

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

 

4

 

“Base Rate
Segment” means a Segment bearing interest or to bear interest at
the Base Rate.

 

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

 

“Borrower
Materials” has the meaning specified in Section 7.02.

 

“Borrowing”
means any of (a) the advance of the Term Loan pursuant to Section 2.01,
(b) a Revolving Borrowing, or (c) a Swing Line Borrowing, as the
context may require.

 

“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the
state where the Administrative Agent’s Office is located and, if such day
relates to any Eurodollar Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.

 

“Cash
Collateralize” has the meaning specified in Section 2.04(g).

 

“Cash
Equivalents” means any of the following types of property, to
the extent owned by the Borrower or any of its Restricted Subsidiaries free and
clear of all Liens (other than Liens created under the Security Instruments):

 

(a)           cash, denominated in U.S. Dollars or
in a currency other than U.S. Dollars that is freely transferable or
convertible into U.S. Dollars;

 

(b)           readily marketable direct obligations
of the government of the United States or any agency or instrumentality
thereof, or obligations the timely payment of principal and interest on which
are fully and unconditionally guaranteed by the government of the United States
or any state or municipality thereof, in each case so long as such obligation
has an investment grade rating by S&P and Moody’s;

 

(c)           commercial paper rated at least P-1
(or the then equivalent grade) by Moody’s and A-1 (or the then equivalent
grade) by S&P, or carrying an equivalent rating by a nationally recognized
rating agency if at any time neither Moody’s and S&P shall be rating such
obligations; provided that
up to 25% of the aggregate amount of Investments in Cash Equivalents pursuant
to this subpart (c) of the definition thereof may be in commercial paper
that is rated (I) at least P-1 (or the then equivalent grade) by Moody’s and at
least A-2 (or the then equivalent grade) by S&P, or (II) at least P-2 (or
the then equivalent grade) by Moody’s and at least A-1 (or the then equivalent
grade) by S&P;

 

(d)           insured certificates of deposit or
bankers’ acceptances of, or time deposits with any Lender or with any
commercial bank that (i) is a member of the Federal Reserve System, (ii) issues
(or the parent of which issues) commercial paper rated as described in the
first portion of clause (c) above (without regard to the proviso), (iii) is
organized under the laws of the United States or of any state thereof and (iv) has
combined capital and surplus of at least $250,000,000, provided that no
more than 25% of the aggregate amount of Investments in Cash Equivalents
pursuant to this subpart (d) of the definition thereof may be in such
items with a maturity longer than one year;

 

5

 

(e)           readily marketable general
obligations of any corporation organized under the laws of any state of the
United States of America, payable in the United States of America, expressed to
mature not later than twelve months following the date of issuance thereof and
rated A or better by S&P or A2 or better by Moody’s;

 

(f)            readily marketable shares of
investment companies or money market funds that, in each case, invest solely in
the foregoing Investments described in clauses (a) through (e) above;
and

 

(g)           in the case of any Restricted
Subsidiary of the Borrower organized or having its principal place of business
outside the United States, investments denominated in the currency of the
jurisdiction in which such Subsidiary is organized or has its principal place
of business which are similar to the items specified in clauses (a) through
(f) above.

 

“Change in Law”
means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental
Authority.

 

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

 

(a)           any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act, but
excluding (i) any employee benefit plan of such person or its subsidiaries
or Walter or its Subsidiaries, and any person or entity acting in its capacity
as trustee, agent or other fiduciary or administrator of any such plan, and (ii) Walter
and its Subsidiaries) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 25% or more of the Voting Securities of the Borrower on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right); or

 

(b)           prior to any Specified Transaction,

 

(i)            any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 33-1/3% or more of the Voting Securities of Walter on a
fully-diluted basis (and taking into account all such

 

6

 

securities that such person or group has the right to acquire pursuant
to any option right); or

 

(ii)           during any period of 24 consecutive months, a majority of
the members of the board of directors or other equivalent governing body of
Walter ceases to be composed of individuals (A) who were members of that
board or equivalent governing body on the first day of such period, (B) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (A) above constituting at the time of
such election or nomination at least a majority of that board or equivalent
governing body or (C) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (A) and
(B) above constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body (excluding, in the case
of both clause (B) and clause (C), any individual whose initial nomination
for, or assumption of office as, a member of that board or equivalent governing
body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

 

(c)           after a Specified Transaction, during
any period of 24 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Borrower cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of
such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election
or nomination at least a majority of that board or equivalent governing body
(excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member
of that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors).

 

“Closing Date”
means the first date all the conditions precedent in Section 5.01
are satisfied or waived in accordance with Section 11.01 (or, in
the case of Section 5.01(b), waived by the Person entitled to
receive the applicable payment).

 

“Code”
means the Internal Revenue Code of 1986.

 

“Collateral”
means, collectively, all personal and real property of the Borrower, any
Restricted Subsidiary or any other Person in which the Administrative Agent or
any Lender is granted a Lien under any Security Instrument as security for all
or any portion of the Obligations or any other obligation arising under any
Loan Document.

 

7

 

“Commitment Fee”
has the meaning specified in Section 2.10(a).

 

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

 

“Consolidated
Capital Expenditures” means, with respect to the Borrower and
its Restricted Subsidiaries on a consolidated basis, for any period the sum of
(without duplication) all expenditures (whether paid in cash or accrued as
liabilities) by the Borrower or any Restricted Subsidiary during such period
for items that would be classified as “property, plant or equipment” or
comparable items on the consolidated balance sheet of the Borrower and its
Restricted Subsidiaries, including without limitation all transactional costs
incurred in connection with such expenditures provided the same have been
capitalized; provided, that Consolidated Capital Expenditures shall
exclude (i) any expenditures paid for with the proceeds of property
insurance, casualty insurance, any asset sale permitted under Section 8.05(c) or
any asset sale of obsolete or worn out equipment permitted under Section 8.05(a),
in each case as evidenced in writing and submitted to the Administrative Agent
together with any Compliance Certificate delivered pursuant to Section 7.02(b)),
and (ii) any portion of the purchase price of an Acquisition permitted by Section 8.13
which is accounted for as a capital expenditure.

 

“Consolidated
Cash Interest Charges” means, for any period, for the Borrower
and its Restricted Subsidiaries on a consolidated basis, that portion of
Consolidated Interest Charges that is either paid or required to be paid in
cash during such period, but excluding prepayment or similar premiums paid in
connection with any prepayment, repurchase or redemption of Consolidated Funded
Indebtedness.

 

“Consolidated
Current Assets” means, on any date, without duplication, all
assets which, in accordance with GAAP, would be included as current assets on a
consolidated balance sheet of the Borrower and the Restricted Subsidiaries at
such date (excluding, however, amounts due and to become due from Affiliates of
the Borrower which have arisen from transactions which are other than arm’s-length
and in the ordinary course of business).

 

“Consolidated
Current Liabilities” means all amounts which, in accordance with
GAAP, would be included as current liabilities on a consolidated balance sheet
of the Borrower and the Restricted Subsidiaries at such date excluding current
maturities of Indebtedness.

 

“Consolidated EBITDA”
means, for any period and in each case without duplication (including any
duplication with any item excluded in calculating Consolidated Net Income),
with respect to the Borrower and its Restricted Subsidiaries, on a consolidated
basis determined in accordance with GAAP, an amount equal to:

 

(a)           Consolidated Net
Income for such period,

 

plus                         (b)           Consolidated Interest Charges for
such period, to the extent deducted in computing Consolidated Net Income,

 

plus                         (c)           the
provision for federal, state, local and foreign income taxes payable for such
period, to the extent deducted in computing Consolidated Net Income,

 

8

 

plus                         (d)           depreciation
and depletion expense, to the extent deducted in computing Consolidated Net
Income,

 

plus                         (e)           amortization expense, to the extent
deducted in computing Consolidated Net Income,

 

plus                         (f)            all
other non-cash charges or expenses (excluding any non-cash charges representing
an accrual of, or reserve for, cash charges to be paid within the next twelve
months) to the extent deducted in computing Consolidated Net Income,

 

plus                         (g)           any amounts deducted in determining Consolidated Net Income representing mark-to-market losses
that must be recognized currently in net income under Financial Accounting
Standards Board Statement 133 (to the extent not included in Consolidated
Interest Charges),

 

minus                (h)           any amounts added in determining
Consolidated Net Income representing mark-to-market gains that must be
recognized currently in net income under Financial Accounting Standards Board Statement 133 (to the extent not
included in Consolidated Interest Charges),

 

minus                (i)            all other non-cash income or gains
added in determining Consolidated Net Income,

 

plus                         (j)            expenses incurred in connection with
the Transactions to the extent deducted in computing Consolidated Net Income,
not more than $36,500,000 in the aggregate of which shall be in cash,

 

plus                         (k)           amounts deducted in determining Consolidated Net Income representing cash charges in
respect of the Specified Items,

 

plus                         (l)            any amounts deducted in determining Consolidated Net Income representing cash
restructuring costs, or cash costs reasonably determined by the Borrower to be
associated with facility or product line closures, consolidation or
rationalization, not to exceed $50,0000,000, in the aggregate while this
Agreement is in effect, and

 

plus                         (m)          through December 31, 2006, up to
75% of any amounts deducted in
determining Consolidated Net
Income representing costs associated with compliance with
Sarbanes-Oxley;

 

provided,
however, Consolidated EBITDA shall be decreased by the amount of any
cash expenditures in such period related to non-cash charges added back to
Consolidated Net Income in computing Consolidated EBITDA during any prior
periods.

 

9

 

“Consolidated
Funded Indebtedness” means, as of any date of determination, for
the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum
of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all
direct obligations arising under standby and commercial letters of credit
(excluding the undrawn amount thereof), bankers’ acceptances (including all BAs
hereunder), bank guaranties (excluding the amounts available thereunder as to
which demand for payment has not yet been made), surety bonds (excluding the
amounts available thereunder as to which demand for payment has not yet been
made) and similar instruments, (d) all obligations in respect of the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business), (e) Attributable Indebtedness
in respect of capital leases and Synthetic Lease Obligations and all Receivables
Facility Outstandings, (f) without duplication, all Guarantees with
respect to outstanding Indebtedness of the types specified in clauses (a) through
(e) above of Persons other than the Borrower or any Restricted Subsidiary,
and (g) all Indebtedness of the types referred to in clauses (a) through
(f) above of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which the
Borrower or a Restricted Subsidiary is a general partner or joint venturer, to
the extent such Indebtedness is recourse to the Borrower or such Restricted
Subsidiary.

 

“Consolidated Interest Charge
Coverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the Four-Quarter Period ending on
such date to (b) Consolidated Cash Interest Charges for such period; provided
that for the fiscal quarters of the Borrower ending December 31, 2005, March 31,
2006 and June 30, 2006, the Consolidated Cash Interest Charges used in
determining the Consolidated Interest Charge Coverage Ratio shall be,
respectively (x) Consolidated Interest Charges for the one-quarter period
ending December 31, 2005 multiplied by 4, (y) Consolidated Interest
Charges for the two-quarter period ending March 31, 2006 multiplied by 2
and (z) Consolidated Interest Charges for the three-quarter period ending June 30,
2006 multiplied by 4/3.

 

“Consolidated
Interest Charges” means, for any period, for the Borrower and
its Restricted Subsidiaries on a consolidated basis, the sum of the following
(without duplication), in each case net of interest income earned (without
duplication) on cash balances or under Swap Contracts hedging against, or
otherwise entered into to manage risks relating to, fluctuations in interest
rates to the extent such interest income is included in the calculation of
Consolidated Net Income: (a) all interest, (b) the portion of rent
expense of the Borrower and its Restricted Subsidiaries with respect to such
period under capital leases that is treated as interest in accordance with
GAAP, and (c) any amounts included in interest expense in respect of
Permitted Receivables Transactions (or, if any such Permitted Receivables
Transaction is an “off-balance sheet” transaction under GAAP, any amounts that
would have been so included in respect of such Permitted Receivables
Transaction if it were an “on-balance sheet” transaction under GAAP).

 

“Consolidated
Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Funded Indebtedness as of such date less Cash
Equivalents of the Borrower and the Restricted Subsidiaries on a consolidated
basis as of such date to (b) Consolidated EBITDA for

 

10

 

the
Four-Quarter Period most recently ended for which the Borrower has delivered
financial statements pursuant to Section 7.01(a) or (b).

 

“Consolidated Net Income” means, for any period, for the Borrower and
its Restricted Subsidiaries on a consolidated basis, the net income after
taxation of the Borrower and its Restricted Subsidiaries for that period
excluding (a) net losses or gains realized in connection with (i) any
sale, lease, conveyance or other disposition of any asset (other than in the
ordinary course of business), or (ii) repayment, repurchase or redemption
of Indebtedness, and (b) extraordinary or nonrecurring income (or
expense), including, any compensation charge incurred in connection with the
Transactions; provided that the net income or loss of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to the Borrower or a Restricted Subsidiary in cash.

 

“Consolidated Senior Secured Indebtedness” means, as of any date of determination, all
Consolidated Funded Indebtedness that, as of such date, is secured by any Lien
on any asset or property of the Borrower or any of its Restricted Subsidiaries.

 

“Consolidated Senior Secured Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Senior Secured Indebtedness as of such date less
(i) Cash Equivalents of the Borrower and the Restricted Subsidiaries on a
consolidated basis as of such date, and (ii) from the Closing Date until March 30,
2006, the aggregate outstanding amount of Loans the proceeds of which were used
to redeem either Mueller Water Products Notes (including any premiums paid in
connection therewith) or Subordinated Notes in accordance with clauses (iii) or
(iv) of Section 7.11, to
(b) Consolidated EBITDA for the Four-Quarter Period most recently ended
for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or
(b).

 

“Contractual
Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have
meanings correlative thereto.  Without
limiting the generality of the foregoing, a Person shall be deemed to be
Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 10% or more of the securities having ordinary voting
power for the election of directors, managing general partners or the
equivalent.

 

“Core Business”
means any material line of business conducted by the Borrower and its
Subsidiaries as of the Closing Date and any business reasonably related or
incidental thereto.

 

“Cost of
Acquisition” means, with respect to any Acquisition, as at the
date of entering into any agreement therefor, the sum of the following (without
duplication):  (a) the amount of any
cash and fair market value of other property (excluding the value of any
capital stock, warrants or options to acquire capital stock of Walter, New
Holdco, the Borrower or any

 

11

 

Restricted
Subsidiary and the unpaid principal amount of any debt instrument) given as
consideration, (b) the amount (determined by using the face amount or the
amount payable at maturity, whichever is greater) of any Indebtedness incurred,
assumed or acquired by the Borrower or any Restricted Subsidiary in connection with such Acquisition, (c) all
additional purchase price amounts in the form of earnouts and other contingent
obligations that are to be paid in cash and that should be recorded on the
financial statements of the Borrower and its Restricted Subsidiaries in accordance with GAAP, (d) all
amounts paid in cash in respect of covenants not to compete, and consulting
agreements that should be recorded on financial statements of the Borrower and
its Restricted Subsidiaries in
accordance with GAAP, (e) the aggregate fair market value of all other
consideration given by the Borrower or any Restricted Subsidiary in connection with such Acquisition (but
excluding the value of any capital stock, warrants or options to acquire
capital stock of Walter, New Holdco, the Borrower or any Restricted Subsidiary), and (f) out-of-pocket
transaction costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such transaction, and other similar
transaction costs so incurred and capitalized in accordance with GAAP.

 

“Credit
Extension” means each of the following: (a) a Borrowing and
(b) an L/C– BA Credit Extension.

 

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

 

“Default”
means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would unless cured or
waived be an Event of Default.

 

“Default Rate”
means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate with respect to Base Rate Loans plus (c) 2% per annum; provided,
however, that (i) with respect to a Eurodollar Rate Loan, until the
end of the Interest Period during which the Default Rate is first applicable,
the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate) otherwise applicable to such Eurodollar Rate
Loan plus 2% per annum, and thereafter as set forth in the portion of this
sentence preceding this proviso, and (ii) with respect to Letter of Credit–
BA Fees, the Default Rate shall equal the Letter of Credit– BA Fee, then in
effect plus 2% per annum, in each case to the fullest extent permitted by
applicable Laws.

 

“Defaulting
Lender” means any Lender that (a) has failed to fund any
portion of the Revolving Loans, participations in L/C - BA Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder within one Business Day of
the date when due, unless the subject of a good faith dispute, or (c) has
been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.

 

12

 

“Direct Foreign
Subsidiary” means a Foreign Subsidiary a majority of whose
Voting Securities, or a majority of whose Subsidiary Securities, are owned by
the Borrower or a Domestic Subsidiary.

 

“Disposition”
or “Dispose”
means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction) of any property by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith.

 

“Dividend
Distribution” means the distribution by the Borrower to Mueller
Water Products of a dividend of not less than $400,000,000, and the further
distribution thereof by Mueller Water Products to New Holdco, collectively.

 

“DLJ Entity” means each of DLJ
Merchant Banking Partners II, L.P., a Delaware limited partnership, DLJ
Merchant Banking Partners II-A, L.P., a Delaware limited partnership, DLJ
Merchant Banking II, Inc., a Delaware corporation, as advisory general partner
on behalf of DLJ Offshore Partners II, C.V., a Netherlands Antilles limited
partnership, DLJ Diversified Partners, L.P., a Delaware limited partnership,
DLJ Diversified Partners-A, L.P., a Delaware limited partnership, DLJMB Funding
II, Inc., a Delaware corporation, DLJ Millennium Partners, L.P., a
Delaware limited partnership, DLJ Millennium Partners-A, L.P., a Delaware
limited partnership, DLJ EAB Partners, L.P., a Delaware limited partnership,
DLJ ESC II, L.P., a Delaware limited partnership, DLJ First ESC, L.P., a
Delaware limited partnership, DLJ Investment Partners L.P., a Delaware limited
partnership, DLJ Investment Partners II, L.P., a Delaware limited partnership
and DLJIP II Holdings, L.P., a Delaware limited partnership.

 

“Dollar”
and “$”
mean lawful money of the United States.

 

“Domestic
Subsidiary” means any Subsidiary that is organized under the
laws of any political subdivision of the United States (but excluding any
territory or possession thereof).

 

“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 and, in the case
of any assignment of a Revolving Credit Commitment, the L/C Issuer and the
Swing Line Lender, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

“Entity
Conversion” means, individually or collectively as the context
may indicate, the conversion under the general corporate law of the state of
Delaware or Alabama, as applicable, of (a) United States Pipe and Foundry
Company, Inc., an Alabama corporation, into United States Pipe and Foundry
Company, LLC, an Alabama limited liability company, (b) Mueller Water
Products, Inc, a Delaware corporation, into Mueller Water Products, LLC, a
Delaware limited liability company, and (c) Mueller Group, Inc., a
Delaware corporation, into Mueller Group, LLC, a Delaware limited liability
company.

 

“Environmental
Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants,

 

13

 

franchises,
licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.

 

“Environmental
Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation,
fines, penalties or indemnities), of the Borrower, any other Loan Party or any
of their respective Subsidiaries directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release
or threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“Equity
Interests” means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person,
all of the warrants, options or other rights for the purchase or acquisition
from such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests
are outstanding on any date of determination.

 

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

 

“ERISA Affiliate”
means any trade or business (whether or not incorporated) under common control
with the Borrower within the meaning of section 414(b) or (c) of
the Code (and sections 414(m) and (o) of the Code for purposes of provisions
relating to section 412 of the Code); provided, that none of the
DLJ Entities or any of their Affiliates (other than the Borrower and its
Subsidiaries) shall be considered an ERISA Affiliate of the Borrower or any of
its Subsidiaries.

 

“ERISA Event”
means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing by the Borrower or any ERISA
Affiliate or the PBGC of a notice of intent to terminate, the treatment by the
PBGC of a Pension Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
(f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Borrower or any ERISA Affiliate; or (g) 
any event or condition that results in

 

14

 

(i) the
termination of any Plan that is regulated by any Foreign Benefit Law, (ii) the
revocation of such Plan’s authority to operate under the applicable Foreign
Benefit Law or (iii) a complete or partial withdrawal by the Borrower or
any Subsidiary from a Foreign Pension Plan.

 

“Eurodollar Rate”
means, for any Interest Period with respect to a Eurodollar 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 Dollar deposits (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 “Eurodollar Rate” for such Interest Period
shall be the rate per annum determined by the Administrative Agent to be the
rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
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 to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.

 

“Eurodollar Rate
Loan” means a Loan (including a Segment) that bears interest at
a rate based on the Eurodollar Rate.

 

“Eurodollar Rate
Segment” means a Segment bearing interest or to bear interest at
the Eurodollar Rate.

 

“Event of
Default” has the meaning specified in Section 9.01.

 

“Excess Cash
Flow” means, with respect to the Borrower and its Restricted
Subsidiaries on a consolidated basis for any fiscal year, the following:

 

(a) Consolidated
EBITDA for such period,

 

minus

 

(b) the sum of (i) the amount of the net increase (if
any) of Consolidated Current Assets, other than Cash Equivalents, over
Consolidated Current Liabilities for such period; plus (ii) Consolidated
Capital Expenditures actually made during such period pursuant to Section 8.12(d) (excluding
Consolidated Capital Expenditures constituting payments in respect of capital
leases and by way of the incurrence of Indebtedness permitted pursuant to Section 8.03(e) to
a vendor or financer of any assets permitted to be acquired pursuant to Section 8.12(d) to
finance the acquisition of such assets and any capital expenditure described in
the second proviso of such Section 8.12(d)); plus (iii) Consolidated
Cash Interest Charges for such period; plus (iv) taxes actually
paid in cash for such period and added in the calculation of Consolidated
EBITDA pursuant to part (c) of the definition thereof; plus (v) the
aggregate amount of any payments of the Term Loan made by the Borrower during
such period pursuant to Sections 2.06(a) and 2.08(c); plus
(vi) the aggregate amount of all scheduled payments and optional and
mandatory prepayments of Consolidated Funded Indebtedness (other than
Obligations) made during

 

15

 

such period; plus (vii) the aggregate amount of mandatory
prepayments of Revolving Loans made by the Borrower pursuant to Section 2.06(c) during
such period in connection with permanent reductions of the Revolving Credit Commitments
pursuant to Section 2.07; plus (viii) Investments
permitted and actually made, in cash, pursuant to clause (f), (l) or (m) of Section 8.02
during such period (excluding Investments financed with the proceeds of any
issuance of any Equity Interest or Indebtedness other than Revolving Loans); plus
(ix) Restricted Payments of the type described in clause (e) of Section 8.06
made during such period plus (x) transaction fees and costs actually
paid in cash in connection with the Transactions during such period;

 

provided, that, notwithstanding the foregoing,
the calculation of “Excess Cash Flow” with respect to the fiscal year ending December 31,
2006, shall also include the period from the Closing Date through the beginning
of such fiscal year.

 

“Exchange Act”
means the Securities Exchange Act of 1934 and the regulations promulgated
thereunder.

 

“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the L/C Issuer or
any other recipient of any payment to be made by or on account of any
obligation of the 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 the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 11.13), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 4.01(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 Borrower with respect to such withholding tax pursuant to Section 4.01(a).

 

“Existing Credit
Agreement” means that certain Second Amended and Restated Credit
Agreement dated as of April 23, 2004, among the Borrower, Credit Suisse
First Boston, acting through its Cayman Islands Branch, as agent, and a
syndicate of lenders, as amended through the Closing Date.

 

“Existing Letters of Credit”
means the letters of credit described on Schedule 1.01(a).

 

“Existing
Second Lien Notes” means those second
priority senior secured floating rate notes due 2011 issued by the Borrower
pursuant to that certain Indenture dated as of April 23, 2004 by and among
the Borrower, as issuer, certain subsidiaries of the Borrower as guarantors
thereunder, and Law Debenture Trust Company of New York, as trustee.

 

16

 

“Existing Walter
Credit Agreement” means that certain Credit Agreement dated as of April 17, 2003,
among Walter, Bank of America, as administrative agent, and a syndicate of
lenders, as amended through the Closing Date.

 

“Facility
Termination Date” means the date as of which all of the
following shall have occurred:  (a) the
Borrower shall have permanently terminated the Revolving Credit Facility and
the Term Loan Facility by final payment in full of all Outstanding Amounts,
together with all accrued and unpaid interest and fees thereon, other than (i) the
undrawn portion of Letters of Credit, (ii) the aggregate face amount of
all outstanding Bankers’ Acceptances and (iii) all fees relating to any
Letters of Credit accruing after such date (which fees shall be payable solely
for the account of the L/C Issuer and shall be computed (based on interest
rates and the Applicable Rate then in effect) on such undrawn amounts to the
respective expiry dates of the Letters of Credit), in each case as have been
fully Cash Collateralized or as to which other arrangements with respect
thereto satisfactory to the Administrative Agent and the L/C Issuer shall have
been made, (b) the Aggregate Revolving Credit Commitments, if any, shall
have terminated or expired, (c) the obligations and liabilities of the
Borrower and each other Loan Party under all Related Credit Arrangements shall
have been fully, finally and irrevocably paid and satisfied in full and the
Related Credit Arrangements shall have expired or been terminated, or other
arrangements satisfactory to the counterparties shall have been made with
respect thereto, and (d) each Guarantor shall have fully, finally and
irrevocably paid and satisfied in full its respective obligations and
liabilities arising under the Loan Documents, (except for future obligations
consisting of continuing indemnities and other contingent Obligations of the
Borrower or any Loan Party that may be owing to the Administrative Agent or any
of its Related Parties or any Lender pursuant to the Loan Documents and
expressly survive termination of this Agreement).

 

“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.

 

“Foreign Benefit
Law” means any Law of any foreign nation or any province, state,
territory, protectorate or other political subdivision thereof regulating,
relating to, or imposing liability or standards of conduct concerning, any Plan
or Pension Plan.

 

“Foreign
Investment Basket Utilization” means, on any date, the sum of (a) the
aggregate Investments in any Foreign Subsidiaries that are Restricted
Subsidiaries pursuant to Section 8.02(k), plus, (b) the
outstanding aggregate principal amount of Indebtedness incurred by Foreign
Subsidiaries pursuant to Section 8.03(j)(ii) plus (c) the
aggregate Costs of Acquisition with respect to all Acquisitions of Foreign
Subsidiaries occurring after the Closing Date, without duplication for any
portion thereof made with the proceeds of Investments described in clause (a) or
Indebtedness described in clause (b) of this definition.

 

17

 

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

 

“Foreign Pension
Plan” means any plan, arrangement, understanding or scheme
maintained by the Borrower or any Subsidiary that provides retirement or
deferred compensation benefits covering any employee or former employee and
which is administered under any Foreign Benefit Law or regulated by any
Governmental Authority other than the United States.

 

“Foreign
Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“Four-Quarter
Period” means a period of four full consecutive fiscal quarters
of the Borrower and its Subsidiaries, taken together as one accounting period.

 

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

 

“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course.

 

“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Governmental
Authority” means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government
(including any supra-national bodies such as the European Union or the European
Central Bank).

 

“Granting Lender”
has the meaning specified in Section 11.06(h).

 

“Guarantee”
means, as to any Person, any (a) any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or
services for the purpose of assuring the obligee in respect of such
Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or

 

18

 

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

 

“Guarantors”
means, collectively, New Holdco, Mueller Water Products, Mueller Water Products
Co-Issuer, Inc., Mueller Group Co-Issuer, Inc. and the Subsidiary
Guarantors.

 

“Guaranty”
means that certain Guaranty Agreement dated as of the date hereof among certain
Affiliates of the Borrower party thereto, certain Subsidiaries of the Borrower
party thereto and the Administrative Agent (on behalf of the Lenders)
substantially in the form of Exhibit F, as supplemented from time
to time by the execution and delivery of Guaranty Joinder Agreements pursuant
to Section 7.12, as from time to time the same may be otherwise
supplemented or amended, modified, amended and restated or replaced.

 

“Guaranty Joinder Agreement” means each Guaranty Joinder Agreement,
substantially in the form thereof attached to the Guaranty, executed and
delivered by a Guarantor to the Administrative Agent pursuant to Section 7.12,
as amended, modified, supplemented or amended and restated.

 

“Hazardous
Materials” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Honor Date”
has the meaning set forth in Section 2.04(c).

 

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

 

(a)           all obligations of such Person for
borrowed money and all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments;

 

(b)           all direct or contingent obligations
of such Person arising under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments;

 

(c)           net obligations of such Person under
any Swap Contract;

 

19

 

(d)           all obligations of such Person to pay
the deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business);

 

(e)           indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;

 

(f)            capital leases and Synthetic Lease
Obligations of such Person and all Receivables Facility Outstandings; and

 

(g)           all Guarantees of such Person in
respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which
such Person is a general partner or a joint venturer, to the extent such
Indebtedness is recourse to such Person. 
The amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date.  The amount of any capital lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

 

“Indemnified
Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees”
has the meaning specified in Section 11.04.

 

“Information”
has the meaning specified in Section 11.07.

 

“Interest
Payment Date” means, (a) as to any Eurodollar Rate Loan,
the last day of the relevant Interest Period, any date that such Loan is
prepaid or converted, in whole or in part, and the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as applicable; provided, however,
that if any Interest Period for a Eurodollar Rate Loan exceeds three months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan (including a Swing Line Loan), (i) the fifteenth (or the
next Business Day after the fifteenth, if the fifteenth is not a Business Day)
of each January, April, July and October with respect to interest
accrued through the last day of each fiscal quarter of the Borrower ending
immediately prior to such date, and (ii) the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as applicable, with respect to interest
accrued through such date; provided, further, that interest
accruing at the Default Rate shall be payable from time to time upon demand of
the Administrative Agent.

 

“Interest Period”
means, as to each Eurodollar Rate Loan, the period commencing on the date such
Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar
Rate Loan and ending, in each case, on the date one, two, three or six or, if
consented to by each applicable Lender, nine or twelve months thereafter, as selected by the
Borrower in its Revolving Loan Notice or Term Loan Interest Rate Selection
Notice (or, in the case of any Eurodollar Rate Loan made on the Closing Date,
such other interest period less than six months that may be approved by the
Administrative Agent); provided that:

 

20

 

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

 

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

 

(iii)          no Interest Period shall extend beyond
(a) with respect to Revolving Loans, the Revolving Credit Maturity Date,
and (b) with respect to the Term Loan, the date set forth in part (a) of
the definition of the Term Loan Maturity Date.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance
or capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute a business unit, or (d) the purchase of land and related
infrastructure improvements.  For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment, less all returns of principal or
equity thereon (and without adjustment by reason of the financial condition of
such other Person) and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or
capital amount equal to the fair market value of such property at the time of
such transfer or exchange.

 

“IP Rights”
has the meaning set forth in Section 6.17.

 

“IRS”
means the United States Internal Revenue Service.

 

“ISP”
means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

 

“Issuer
Documents” means with respect to any Letter of Credit or
Acceptance Credit, the Letter of Credit Application, and any other document,
agreement and instrument entered into by the L/C Issuer and the Borrower (or
any Subsidiary) or in favor the L/C Issuer and relating to any such Letter of
Credit or Acceptance Credit.

 

“Joinder
Agreements” means, collectively, Guaranty Joinder Agreements,
the Pledge Joinder Agreements and the Security Joinder Agreements.

 

“Joint Fee
Letter” means the letter agreement, dated as of June 17,
2005, among Walter, the Administrative Agent and the Arrangers.

 

21

 

“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, 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 – BA
Advance” means, with respect to each Revolving Lender, such
Revolving Lender’s funding of its participation in any L/C – BA Borrowing in
accordance with its Pro Rata Revolving Share.

 

“L/C – BA
Borrowing” means an extension of credit resulting from (a) a
drawing under any Letter of Credit (other than an Acceptance Credit) or (b) a
payment of a Bankers’ Acceptance upon presentation, in each case which has not
been reimbursed on the date when made or refinanced as a Revolving Borrowing.

 

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

 

“L/C – BA
Obligations” means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit, plus the
sum of the maximum aggregate amount which is, or at any time thereafter may
become, payable by the L/C Issuers under all then outstanding Bankers’
Acceptances, plus the aggregate of all Unreimbursed Amounts, including all L/C –
BA Borrowings.  For purposes of computing
the amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.06.  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 Issuer”
means each of Bank of America and JPMorgan Chase Bank, N.A., each in its
capacity as an issuer of Letters of Credit and Bankers’ Acceptances hereunder,
or any successor issuer of Letters of Credit and Bankers’ Acceptances
hereunder.  At any time there is more
than one L/C Issuer, all singular references to the L/C Issuer shall mean any
L/C Issuer, either L/C Issuer, each L/C Issuer, the L/C Issuer that has issued
the applicable Letter of Credit, or both L/C Issuers, as the context may
require.

 

“Lender”
has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the L/C Issuer and the Swing Line Lender.

 

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

 

22

 

“Letter of
Credit” means any letter of credit issued hereunder, and shall
include the Existing Letters of Credit. 
A Letter of Credit may be a commercial letter of credit (including an
Acceptance Credit) or a standby letter of credit.

 

“Letter of
Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer and, in the case of any Acceptance Credit, shall include
the related Acceptance Documents.

 

“Letter of
Credit – BA Expiration Date” means the day that is seven days
prior to the Revolving Credit Maturity Date then in effect (or, if such day is
not a Business Day, the next preceding Business Day).

 

“Letter of
Credit – BA Fees” means, collectively or individually as the
context may indicate, the fees with respect to Letters of Credit and Bankers’
Acceptances described in Section 2.04(i).

 

“Letter of Credit
– BA Sublimit” means an amount equal to the lesser of (a) $50,000,000
and (b) the Aggregate Revolving Credit Commitments.  The Letter of Credit – BA Sublimit is part
of, and not in addition to, the Aggregate Revolving Credit Commitments.

 

“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loan”
means an extension of credit by a Lender to the Borrower under Article II
in the form of a Revolving Loan, a Term Loan or a Swing Line Loan, including
any Segment.

 

“Loan Documents”
means this Agreement, each Note, the Guaranty (including each Guaranty Joinder
Agreement), the Parent Guaranty, each Security Instrument, each Revolving Loan
Notice, each Term Loan Interest Rate Selection Notice, each Issuer Document and
each Compliance Certificate, and all other instruments and documents heretofore
or hereafter executed or delivered to or in favor of any Lender or the
Administrative Agent in connection with the Loans made and transactions
contemplated by this Agreement.

 

“Loan Parties”
means, collectively, the Borrower, each Guarantor and each other Person providing
Collateral pursuant to any Security Instrument.

 

“Material
Adverse Effect” means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, assets, properties,
liabilities (actual or contingent), condition (financial or otherwise) or
prospects of the Borrower and its Restricted Subsidiaries taken as a whole; (b) a
material impairment of the ability of any Loan Party to perform its obligations
under any Loan Document to which it is a party; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against
any Loan Party of any Loan Document to which it is a party.

 

23

 

“Material
Subsidiary” means, as of any date of determination thereof (and,
as of the Closing Date, giving effect to the US Pipe Contribution), each direct
or indirect Restricted Subsidiary of the Borrower that (a) holds, owns or
contributes, as the case may be, 3% or more of the gross revenues, assets
(including Equity Interests in other Subsidiaries) or Consolidated EBITDA of
the Borrower and the Restricted Subsidiaries, on a consolidated basis
(calculated as of the most recent fiscal period with respect to which the
Administrative Agent shall have received financial statements required to be
delivered pursuant to Sections 7.01(a) or (b) or if
prior to delivery of any financial statements pursuant to such Sections, then
calculated with respect to the financial statements dated as of June 30,
2005, but pro forma for the US Pipe Contribution), (b) is designated by
the Borrower as a Material Subsidiary, or (c) Guarantees the Mueller Water
Products Notes.  The Borrower shall
designate one or more Restricted Subsidiaries of the Borrower as Material
Subsidiaries if, in the absence of such designation, the aggregate gross
revenues, assets (including Equity Interests in other Subsidiaries) or
contribution to Consolidated EBITDA of all Restricted Subsidiaries of the
Borrower that are not Material Subsidiaries would exceed 3% of the gross
revenues, assets or Consolidated EBITDA (calculated as of the most recent
fiscal period with respect to which the Administrative Agent shall have
received financial statements required to be delivered pursuant to Sections
7.01(a) or (b) or if prior to delivery of any financial
statements pursuant to such Sections, then calculated with respect to the
financial statements dated as of June 30, 2005, but pro forma for the US
Pipe Contribution).

 

“Merger”
means the acquisition by Walter of all of the issued and outstanding capital
stock of Mueller Water Products by means of the merger of Mueller Water
Products with JW MergerCo, Inc., a Delaware corporation and a direct
Subsidiary of New Holdco, with Mueller Water Products being the surviving
entity of such merger.

 

“Merger
Agreement” means that certain Agreement and Plan of Merger dated
as of June 17, 2005, by and among Mueller Water Products, Walter, JW
MergerCo, Inc. and DLJ Merchant Banking II, Inc., as the Stockholders’
Representative (including all schedules and exhibits thereto and the Disclosure
Letter (as defined therein)).

 

“Merger
Documents” means, individually or collectively as the context
may indicate, (a) the Merger Agreement, (b) the Escrow Agreement (as
defined in the Merger Agreement), (c) the Voting Agreement (as defined in
the Merger Agreement) and (d) each other material agreement, instrument
and document relating to the Merger.

 

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

 

“Morgan Stanley”
means Morgan Stanley Senior Funding, Inc. and its successors.

 

“Mortgage”
means, individually or collectively as the context may indicate, those
mortgages, deeds of trust, deeds to secure debt and comparable real estate Lien
documents delivered on or after the Closing Date to the Administrative Agent
with respect to any Mortgaged Fee Property, substantially in the form attached
hereto as Exhibit J.

 

“Mortgaged Fee
Property” means, collectively, the fee interests of the Borrower
or any Guarantor, as applicable, in such real property, improvements, fixtures
and other items of real

 

24

 

and personal
property related thereto (and the products and proceeds thereof) as may be
granted to the Administrative Agent on the Closing Date or from time to time
thereafter in accordance with the terms of this Agreement pursuant to a
Mortgage.

 

“Mortgaged
Property Support Documents” shall mean, for each Mortgaged Fee
Property, (a) the Title Policy pertaining thereto, (b) such surveys
and flood hazard certifications thereof as the Administrative Agent may require
prepared by recognized experts in their respective fields selected by the
Borrower and reasonably satisfactory to the Administrative Agent provided
that if the Title Policy for any Mortgaged Fee Property does not contain a
blanket survey exception and contains survey coverage and survey related
endorsements which are reasonably acceptable to the Administrative Agent, then
no survey shall be required for such Mortgaged Fee Property, (c) as to the
Mortgaged Properties located in a flood hazard area, such flood hazard
insurance as the Administrative Agent may require, (d) such lessee’s
affidavits as the Administrative Agent may reasonably require with respect to
any such property leased to a third party, (e) such opinions of local
counsel with respect to the Mortgages, as applicable, as the Administrative
Agent may reasonably require, and (f) such other documentation as the
Administrative Agent may reasonably require, in each case as shall be in form
and substance reasonably acceptable to the Administrative Agent.

 

“Mueller Water
Products” means Mueller Water Products, LLC, a Delaware limited
liability company and successor by conversion to Mueller Water Products, Inc.,
a Delaware corporation (f/k/a Mueller Holdings (N.A.), Inc.).

 

“Mueller Water
Products Indenture” means the Indenture, dated as of April 29,
2004, among Mueller Water Products, Mueller Water Products Co-Issuer, Inc.
and Law Debenture Trust Company of New York, as trustee, as in effect on the
Closing Date.

 

“Mueller Water
Products Notes” means the senior discount notes issued by
Mueller Water Products and Mueller Water Products Co-Issuer, Inc. in an
aggregate initial accreted value not in excess of $110,100,000 pursuant to the
Mueller Water Products Indenture, as in effect on the Closing Date.

 

“Mueller Water
Products Senior Exchange Notes  “ means senior unsecured exchange
notes which refinance all or part of the Mueller Water Products Senior Rollover
Loans and which have terms consistent with the following: (a) maturity
date no earlier than April 15, 2014, (b) no scheduled payments of
principal until on or after April 15, 2014, (c) interest rates not in
excess of 16.0% per annum which interest shall be payable solely in kind; provided,
that, in the case of a payment default, the applicable rate for past due
amounts may be increased by 2.0% per annum, and (d) covenants, terms and
conditions terms and conditions substantially similar to those set forth in the
Put Backstop Facility of Mueller Water Products or other covenants, terms and
conditions acceptable to the Administrative Agent.

 

“Mueller Water
Products Senior Rollover Loans” means senior unsecured rollover
loans which refinance all or part of the Put Backstop Facility of Mueller Water
Products and which have terms consistent with the following: (a) maturity
date no earlier than April 15, 2014, (b) no scheduled payments of
principal until on or after April 15, 2014, (c) interest rates not in
excess of 16.0% per annum which interest shall be payable solely in kind; provided,
that, in the case of

 

25

 

a payment
default, the applicable rate for past due amounts may be increased by 2.0% per
annum, and (d) covenants, terms and conditions terms and conditions
substantially similar to those set forth in the Put Backstop Facility of
Mueller Water Products or other covenants, terms and conditions acceptable to
the Administrative Agent.

 

“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

 

“Net Cash
Proceeds” means:

 

(a)           with respect to the sale of any asset
by the Borrower or any Restricted Subsidiary, the excess, if any, of (i) the
sum of cash and cash equivalents received in connection with such sale
(including any cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by such asset and that is required to be repaid in
connection with the sale thereof (other than Indebtedness under the Loan
Documents and Indebtedness owing to the Borrower or any Restricted Subsidiary),
(B) the out-of-pocket expenses incurred by the Borrower or any Restricted
Subsidiary in connection with such sale, including any brokerage commissions,
underwriting fees and discount, legal fees, finder’s fees and other similar
fees and commissions, (C) taxes paid or reasonably estimated to be payable
by the Borrower or any Restricted Subsidiary in connection with the relevant
asset sale, (D) the amount of any reasonable reserve required to be
established in accordance with GAAP against liabilities (other than taxes
deducted pursuant to (C) above) to the extent such reserves are (I)
associated with the assets that are the object of such sale and (II) retained
by the Borrower or any Restricted Subsidiary, and (E) the amount of any
reasonable reserve for purchase price adjustments and retained fixed
liabilities reasonably expected to be payable by the Borrower or any Restricted
Subsidiary in connection therewith to the extent such reserves are (I)
associated with the assets that are the object of such sale and (II) retained
by the Borrower or any Restricted Subsidiary; provided that the amount
of any subsequent reduction of any reserve provided for in clause (D) or (E) above
(other than in connection with a payment in respect of such liability) shall
(X) be deemed to be Net Cash Proceeds of such asset sale occurring on the date
of such reduction, and (Y) immediately be applied to the prepayment of Loans in
accordance with Section 2.06(d);

 

(b)           with respect to the public and
private issuance of any Indebtedness by the Borrower or any Restricted
Subsidiary, the excess of (i) the sum of the cash and cash equivalents
received in connection with such issuance over (ii) the sum of (A) the
underwriting discounts and commissions, and all legal, accounting, printing,
rating agency, banking, title and recording fees and expenses and other
out-of-pocket expenses, incurred by the Borrower or such Restricted Subsidiary
in connection with such issuance, (B) all taxes required to be paid or
accrued as a consequence of such issuance, and (C) in the case of debt
incurred, sold or issued by any Foreign Subsidiary, any taxes or other costs or
expenses resulting from repatriating any such proceeds to the United States;
and

 

26

 

(c)           with respect to the sale or issuance
of any Equity Interest by the Borrower or any Restricted Subsidiary, the excess
of (i) the sum of the cash and cash equivalents received in connection
with such sale or issuance over (ii) the underwriting discounts and
commissions, and all legal, accounting, printing, banking and other
out-of-pocket expenses, incurred by the Borrower or such Restricted Subsidiary
in connection with such issuance or sale, and (B) all taxes and other
governmental costs and expenses required to be paid or accrued as a consequence
of such issuance or sale (including, in the case of a transfer, sale or other
disposition of non-U.S. assets, any such taxes or other costs or expenses
resulting from repatriating any such proceeds to the United States).

 

“New Holdco”
means Mueller Holding Company, Inc., a Delaware corporation.

 

“Notes”
means, collectively, the Revolving Loan Notes and the Term Loan Notes.

 

“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and duties
of, any Loan Party arising under any Loan Document or otherwise with respect to
any Loan, Letter of Credit or Bankers’ Acceptance, or arising under any Related
Credit Arrangement, in each case whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.

 

“Organization
Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Other Taxes”
means all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document.

 

“Outstanding
Amount” means (a) with respect to the Term Loan on any
date, the aggregate outstanding principal amount thereof after giving effect to
the Borrowing of the Term Loan on the Closing Date, and any prepayments or
repayments of the Term Loan (or any Segment) occurring on such date, (b) with
respect to Revolving Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any Revolving Borrowings and any
prepayments or repayments of Revolving Loans occurring on such date; (c) with
respect to Swing Line Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of Swing Line Loans occurring on such

 

27

 

date; and (d) with
respect to any L/C – BA Obligations on any date, the amount of such L/C – BA
Obligations on such date after giving effect to any L/C – BA Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
– BA Obligations as of such date, including as a result of any reimbursements
of amounts paid under Bankers’ Acceptances or outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.

 

“Parent Guaranty”
means the Guaranty Agreement dated as of the date hereof by New Holdco and
Mueller Water Products to the Administrative Agent for the benefit of the
Secured Parties, substantially in the form of Exhibit H.

 

“Participant”
has the meaning specified in Section 11.06(d).

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

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

 

“Permitted
Mueller Water Products Debt” means (a) means, individually
or collectively as the context may indicate, each of  (a) the Mueller Water Products Senior
Exchange Notes, (b) the Mueller Water Products Senior Rollover Loans, and (c) any
other Indebtedness of Mueller Water Products which has terms consistent with
the following: (i) no scheduled payments of principal prior to the ninth
anniversary of the Closing Date, (ii) no payments of interest required to
be made in cash prior to the fifth anniversary of the Closing Date, (iii) commercially
reasonable interest or accretion rate, (iv) the absence of financial
maintenance covenants, (v) the absence of guarantees or Liens by the
Borrower or any Restricted Subsidiary, and (vi) the absence of covenants
or other terms or conditions that, taken as a whole, are more restrictive than
the covenants, terms and restrictions contained in this Agreement and the other
Loan Documents; provided, in each case that such Indebtedness is either
exchanged for, or 100% of the proceeds of such Indebtedness is used to repay,
redeem or repurchase, in whole or in part, the Mueller Water Products Notes,
either Put Backstop Facility, any other Permitted Mueller Water Products Debt,
Term Loans, the Subordinated Debt or any Permitted Subordinated Debt and to pay
related premiums, interest, fees, costs and expenses.

 

“Permitted
Receivables Transaction” means one or more trade receivables
financing transactions pursuant to which the Borrower and any of its Restricted
Subsidiaries sells Accounts and assets related thereto that are customarily
transferred with such Accounts in receivables financing transactions, or
interests therein, directly or indirectly through another Restricted Subsidiary
of the Borrower to a Receivables Co., and such Receivables Co. sells such
Accounts and related assets, or interests therein, or grants Liens in such
Accounts and related assets, or interests therein, to buyers thereof or
providers of financing based thereon, so long as (i) the aggregate
principal amount outstanding (without duplication) at any time of all such
financings

 

28

 

does not
exceed $100,000,000, (ii) such financings are subject to customary terms
and conditions or other terms and conditions reasonably acceptable to the
Administrative Agent and (iii) each such financing is subject to a
backstop facility provided by a credit support provider reasonably acceptable
to the Administrative Agent, which backstop facility has a term of not less
than 3  years from the date such backstop
facility is entered into, or otherwise has credit support acceptable to the
Administrative Agent.

 

“Permitted
Subordinated Debt” means, individually or collectively as the
context may indicate, each of  (a) the
Senior Subordinated Exchange Notes, (b) the Senior Subordinated Rollover
Loans, and (c) any other unsecured subordinated notes issued by the
Borrower having terms consistent with the following: (i) subordination in
right of payment to the Obligations pursuant to terms and conditions substantially
similar to those set forth in the Subordinated Note Indenture or other terms
and conditions acceptable to the Administrative Agent, (ii) no scheduled
payments of principal for at least one year following the Term Loan Maturity
Date, (iii) commercially reasonable interest rates, (iv) the absence
of financial maintenance covenants, and (v) the absence of covenants or
any other terms or conditions that, taken as a whole, are more restrictive than
the covenants, terms and restrictions contained in this Agreement and the other
applicable Loan Documents; provided, in each case that such Indebtedness
is either exchanged for, or 100% of the proceeds of such Indebtedness is used
to repay, redeem or repurchase, in whole or in part, the Subordinated Notes,
the Put Backstop Facility of the Borrower or other Permitted Subordinated Debt
and to pay related premiums, interest, fees, costs and expenses.

 

“Permitted
Subordinated Debt Documents” means all loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements evidencing or executed in connection with Permitted
Subordinated Debt, in each case as amended, supplemented, amended and restated
or otherwise modified in accordance with Section 8.11.

 

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

 

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

 

“Platform”
has the meaning specified in Section 7.02.

 

“Pledge
Agreement” means that certain Securities Pledge Agreement dated
as of the date hereof among New Holdco, Mueller Water Products, the Borrower,
certain Guarantors and the Administrative Agent, as supplemented from time to
time by the execution and delivery of Pledge Joinder Agreements pursuant to Sections
3.01 and 7.12, as the same may be otherwise supplemented (including
by Pledge Agreement Supplement).

 

“Pledge
Agreement Supplement” means the Pledge Agreement Supplement in
the form affixed as an exhibit to the Pledge Agreement.

 

“Pledged
Interests” means (a) 100% of the outstanding Equity
Interests of (i) the Borrower, (ii) Mueller Water Products, (iii) Mueller
Water Products Co-Issuer, Inc., and (iv)

 

29

 

Mueller Group Co-Issuer, Inc.,
(b) the Subsidiary Securities of each of the existing or hereafter
organized or acquired Domestic Subsidiaries of the Borrower that at any time are on Schedule I
to the Pledge Agreement (or any similar schedule serving the same purpose
in the Pledge Agreement); (c) all of the Subsidiary Securities of each of
the existing or hereafter organized or acquired Domestic Subsidiaries of the
Borrower that is a Material
Subsidiary; and (d) 65% of the Voting Securities (or if the relevant
Person shall own less than 65% of such Voting Securities, then 100% of the
Voting Securities owned by such Person) and 100% of the nonvoting Subsidiary
Securities of each of the existing or hereafter organized or acquired Direct
Foreign Subsidiaries of the Borrower  that is a Material Subsidiary; provided,
in the case of the foregoing clauses (b), (c) and (d), that the Pledged
Interests shall in each case exclude the Voting Securities and Subsidiary
Securities of any Unrestricted Subsidiary.

 

“Pledge Joinder
Agreement” means each Pledge Joinder Agreement, substantially in
the form thereof attached to the Pledge Agreement, executed and delivered by a
Guarantor to the Administrative Agent pursuant to Section 7.12.

 

“Pro Rata
Revolving Share” means, with respect to each Revolving Lender at
any time, a fraction (expressed as a percentage, carried out to the ninth
decimal place), the numerator of which is the amount of the Revolving Credit
Commitment of such Revolving Lender at such time and the denominator of which
is the amount of the Aggregate Revolving Credit Commitments at such time; provided
that if the Aggregate Revolving Credit Commitments have been terminated at such
time, then the Pro Rata Revolving Share of each Revolving Lender shall be the
Pro Rata Revolving Share of such Revolving Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to Section 11.06.  The
initial Pro Rata Revolving Share of each Revolving Lender is set forth opposite
the name of such Revolving Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Revolving Lender becomes a
party hereto, as applicable.

 

“Pro Rata Term
Share” means, with respect to each Term Loan Lender, the
percentage (carried out to the ninth decimal place) of the principal amount of
the Term Loan funded by such Term Loan Lender. 
The initial Pro Rata Term Share of each Term Loan Lender is set forth
opposite the name of such Term Loan Lender on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Term Loan Lender becomes a
party hereto, as applicable.

 

“Put Backstop
Commitment Letter” means that certain commitment letter dated as
of June 17, 2005 by and among Walter, Banc of America Bridge LLC, Banc of
America Securities LLC and Morgan Stanley Senior Funding, Inc. regarding
the commitments for the Put Backstop Facilities.

 

“Put Backstop
Commitment Letter Amendment” means that certain Letter Amendment
to the Commitment Letter dated on or before the Closing Date by and among Walter,
Banc of America Bridge LLC, Banc of America Securities LLC and Morgan Stanley
Senior Funding, Inc. extending one element of the termination of the
commitments under the Put Backstop Commitment Letter for the Put Backstop
Facilities to a date that is not earlier than the date that is 60 days after
the Closing Date.

 

30

 

“Put Backstop
Facilities” means, individually or collectively as the context
may indicate, each of (a) a senior subordinated bridge facility of the
Borrower entered into, if at all, within 60 days after the Closing Date in an
aggregate principal amount of not less than $320,000,000 for the purpose of
providing liquidity in the event that more than $25,000,000 of the Subordinated
Notes are tendered in response to an offer to repurchase such Subordinated
Notes as a result of the consummation of the Merger, and (b) a senior
bridge facility of Mueller Water Products entered into, if at all, within 60
days after the Closing Date in an aggregate principal amount of not less than
$145,000,000 for the purpose of providing liquidity in the event that more than
$25,000,000 of the Mueller Water Products Notes are tendered in response to an
offer to repurchase such notes as a result of the consummation of the Merger,
in each with terms consistent with Put Backstop Commitment Letter.

 

“Receivables Co.” means any Restricted Subsidiary of the
Borrower whose sole business consists of purchasing Accounts and related
assets, or interests therein, pursuant to a Permitted Receivables Transaction,
from the Borrower and its Restricted Subsidiaries, selling and granting Liens
on such Accounts and related assets, or interests therein, obtaining credit on
the basis of sales of or Liens on such Accounts and related assets, or
interests therein, and such other activities as are incidental to the
foregoing.

 

“Receivables
Facility Outstandings” means obligations of
the Borrower and its Restricted Subsidiaries, with respect to any Permitted
Receivables Transaction, and, for purposes of this Agreement and each other
Loan Document, the amount of such obligations in respect of any Permitted
Receivables Transaction shall be (a) if such Permitted Receivables
Transaction is or should be an “on-balance-sheet” transaction in accordance
with GAAP, the aggregate principal amount of debt required to be reflected on
the consolidated balance sheet of the Borrower and the Restricted Subsidiaries
in respect thereof in accordance with GAAP and (b) if such Permitted
Receivables Transaction is or should be an “off-balance-sheet” transaction in
accordance with GAAP, the aggregate principal amount of debt that would be
required to be reflected on the consolidated balance sheet of the Borrower and
the Restricted Subsidiaries in respect thereof in accordance with GAAP if such
Permitted Receivables Transaction were an “on-balance-sheet” transaction in
accordance with GAAP.

 

“Register”
has the meaning specified in Section 11.06(c).

 

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

 

“Related Credit
Arrangements” means, collectively, Related Swap Contracts and
Related Treasury Management Arrangements.

 

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

 

“Related Swap
Contract” means all Swap Contracts that are entered into or
maintained with a Lender or Affiliate of a Lender that are not prohibited by
the express terms of the Loan Documents.

 

31

 

“Related
Treasury Management Arrangements” means all arrangements for the
delivery of treasury management services to or for the benefit of any Loan
Party which are entered into or maintained with a Lender or Affiliate of a
Lender and which are not prohibited by the express terms of the Loan Documents.

 

“Replacement Walter
Facilities” means
the senior, secured credit facilities of Walter pursuant to that certain Credit
Agreement dated as of the Closing Date by and among Walter, Bank of America, as
administrative agent, Morgan Stanley, as syndication agent, and the lenders
from time to time party thereto, which such facilities refinance the Existing
Walter Credit Agreement.

 

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

 

“Request for
Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Revolving Loans, a Revolving Loan Notice, (b) with
respect to a conversion or continuation of Segments, a Term Loan Interest Rate
Selection Notice, (c) with respect to an L/C - BA Credit Extension, a
Letter of Credit Application, and (d) with respect to a Swing Line Loan, a
Swing Line Loan Notice.

 

“Required
Lenders” means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuers to make L/C - BA Credit
Extensions have been terminated pursuant to Section 9.02, Lenders
holding in the aggregate more than 50% of the Total Outstandings (with the
aggregate amount of each Lender’s risk participation and funded participation
in L/C – BA Obligations and Swing Line Loans being deemed “held” by such Lender
for purposes of this definition); provided that any Revolving Credit
Commitment of, and the portion of the Total Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

“Required
Revolving Lenders” means, as of any date of determination,
Revolving Lenders having more than 50% of the Aggregate Revolving Credit
Commitments and Outstanding Amount (including risk participations in Letters of
Credit and Swing Line Loans) under the Revolving Credit Facility; provided
that the Revolving Credit Commitment of, and the portion of the Outstanding
Amount (including risk participations in Letters of Credit and Swing Line
Loans) under the Revolving Credit Facility held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Revolving Lenders.

 

“Required Term
Loan Lenders” means, as of any date of determination, Term Loan
Lenders having more than 50% of the Outstanding Amount of the Term Loan; provided
that the Outstanding Amount of the Term Loan held or deemed held by any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Term Loan Lenders.

 

“Responsible
Officer” means, with respect to each Loan Party, the chief
executive officer, president, chief financial officer, treasurer, controller or
assistant treasurer 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,

 

32

 

partnership
and/or other action on the part of such Loan Party and such Responsible Officer
shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted
Payment” means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of the Borrower or any Restricted Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to the Borrower’s
stockholders, partners or members (or the equivalent Person thereof).  For avoidance of doubt, payments pursuant to
any shared services agreement described in Section 8.08 shall not
be deemed to be Restricted Payments.

 

“Restricted
Subsidiaries” means all Subsidiaries of the Borrower other than
the Unrestricted Subsidiaries.

 

“Revolving
Borrowing” means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period, made by each of the Revolving Lenders pursuant
to Section 2.02.

 

“Revolving
Credit Commitment” means, as to each Revolving Lender, its
obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.02,
(b) purchase participations in L/C - BA Obligations, and (c) purchase
participations in Swing Line Loans, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Revolving
Lender’s name on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

 

“Revolving
Credit Facility” means the facility described in Sections
2.02, 2.04 and 2.05 providing for Revolving Loans, Swing Line
Loans, Letters of Credit and BAs to or for the benefit of  the Borrower by the Revolving Lenders, Swing
Line Lender and L/C Issuer, as the case may be, in the maximum aggregate
principal amount at any time outstanding of $145,000,000, as adjusted from time to time pursuant to
the terms of this Agreement.

 

“Revolving
Credit Maturity Date” means October 4, 2010.

 

“Revolving
Lender” means each Lender that has a Revolving Credit Commitment
or, following termination of the Revolving Credit Commitments, has Revolving
Loans outstanding or participations in an outstanding Letter of Credit, Banker’s
Acceptance or Swing Line Loan.

 

“Revolving Loan”
means a Base Rate Loan or a Eurodollar Rate Loan made to the Borrower by a
Revolving Lender in accordance with its Pro Rata Revolving Share pursuant to Section 2.02,
except as otherwise provided herein.

 

“Revolving Loan
Note” means a promissory note made by the Borrower in favor of a
Revolving Lender evidencing Revolving Loans made by such Revolving Lender,
substantially in the form of Exhibit C-2.

 

33

 

“Revolving Loan
Notice” means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.03(a),
which, if in writing, shall be substantially in the form of Exhibit A-1.

 

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

 

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

 

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

 

“Secured Parties”
means, collectively, with respect to each of the Security Instruments, the
Administrative Agent, the Lenders and such other Persons for whose benefit the
Lien thereunder is conferred, as therein provided.

 

“Securities Laws”
means the Securities Act of 1933, the Exchange Act, Sarbanes-Oxley and the
applicable accounting and auditing principles, rules, standards and practices
promulgated, approved or incorporated by the SEC or the Public Company
Accounting Oversight Board, as each of the foregoing may be amended and in
effect on any applicable date hereunder.

 

“Security
Agreement” means the Security Agreement dated as of the date
hereof by the Borrower and one or more of the Guarantors to the Administrative
Agent for the benefit of the Secured Parties, substantially in the form of Exhibit J,
as supplemented from time to time by the execution and delivery of Security
Joinder Agreements pursuant to Section 7.12.

 

“Security Instruments”
means, collectively or individually as the context may indicate, the Security
Agreement (including the Security Joinder Agreements), the Pledge Agreement
(including the Pledge Joinder Agreements and the Pledge Agreement Supplements),
each Mortgage, each Title Policy and each other Mortgaged Property Support
Document and all other agreements (including control agreements), instruments
and other documents, whether now existing or hereafter in effect, pursuant to
which the Borrower or any Restricted Subsidiary or other Person shall grant or
convey to the Administrative Agent or the Lenders a Lien in, or any other
Person shall acknowledge any such Lien in, property as security for all or any
portion of the Obligations or any other obligation under any Loan Document, as
any of them may be reinstated from time to time in accordance with the terms
hereof and thereof.

 

“Security
Joinder Agreement” means each Security Joinder Agreement,
substantially in the form thereof attached to the Security Agreement, executed
and delivered by a Guarantor or any other Person to the Administrative Agent
pursuant to Section 7.12.

 

“Segment”
means a portion of any Term Loan (or all thereof) with respect to which a
particular interest rate is (or is proposed to be) applicable.

 

“Senior Credit
Facility” means, collectively, the Term Loan Facility and the
Revolving Credit Facility.

 

34

 

“Senior
Subordinated Exchange Notes  “ means senior subordinated exchange
notes which refinance all or part of the Senior Subordinated Rollover Loans and
which have terms consistent with the following: (a) subordination to the
Obligations pursuant to terms and conditions substantially similar to those set
forth in the Put Backstop Facility of the Borrower or other terms and
conditions acceptable to the Administrative Agent, (b) maturity date no
earlier than May 1, 2012, (c) no scheduled payments of principal
until on or after May 1, 2012, (d) interest rates not in excess of
12.5% per annum; provided, that, in the case of a payment default, the
applicable rate for past due amounts may be increased by 2.0% per annum, (e) covenants,
terms and conditions terms and conditions substantially similar to those set
forth in the Put Backstop Facility of the Borrower or other covenants, terms
and conditions acceptable to the Administrative Agent.

 

“Senior
Subordinated Rollover Loans” means senior subordinated rollover
loans which refinance all or part of the Put Backstop Facility of the Borrower
and which have terms consistent with the following: (a) subordination to
the Obligations pursuant to terms and conditions substantially similar to those
set forth in the Put Backstop Facility of the Borrower or other terms and
conditions acceptable to the Administrative Agent, (b) maturity date no
earlier than May 1, 2012, (c) no scheduled payments of principal
until on or after May 1, 2012, (d) interest rates not in excess of
12.5% per annum; provided, that, in the case of a payment default, the
applicable rate for past due amounts may be increased by 2.0% per annum, (e) covenants,
terms and conditions terms and conditions substantially similar to those set
forth in the Put Backstop Facility of the Borrower or other covenants, terms
and conditions acceptable to the Administrative Agent.

 

“Solvent”
means, when used with respect to any Person, that at the time of determination:

 

(a)           the fair value of its assets (both at
fair valuation and at present fair saleable value on an orderly basis) is in
excess of the total amount of its liabilities, including contingent
obligations; and

 

(b)           it is then able and expects to be
able to pay its debts as they mature; and

 

(c)            it has capital
sufficient to carry on its business as conducted and as proposed to be
conducted.

 

“SPC”
has the meaning specified in Section 11.06(h).

 

“Specified
Credit Agreement Representations” means the representations and
warranties set forth in Sections 6.01, 6.02, 6.03, 6.04,
6.06, 6.07, 6.14 and 6.15 of this Agreement.

 

“Specified Items”
means the following expenses incurred in any fiscal quarter of the Borrower
ending on or before June 30, 2005:  (a) up
to $1,500,000 associated with facility or product line closures, consolidation
or rationalization; (b) up to $2,700,000 associated with acquisitions and
dispositions; (c) up to $100,000 associated with purchase accounting
inventory write up; (d) up to $1,400,000 associated with recapitalization
expenses; (e) up to $1,500,000 associated with management fees; (f) up
to $1,900,000 associated with Sarbanes-Oxley compliance; and (g) up to
$3,100,000 associated with accounting investigation inquiry expenses.

 

35

 

“Specified Merger Document
Representations” means the representations and warranties made
by Mueller Water Products and DLJ Merchant Banking II, Inc. to Walter, JW
MergerCo, Inc., or any Subsidiary of Walter in the Merger Documents, in
each case without giving effect to any consent or waiver by any party to the
Merger Agreement to any exception thereto or deviation therefrom but only to
the extent that Walter, JW MergerCo, Inc., or any Subsidiary of Walter
party thereto has the right to terminate their obligations under the Merger
Agreement as a result of a breach of such representations or warranties.

 

“Specified Transaction”
means any of (a) a dividend or distribution by Walter to its shareholders
of all or any portion of the Equity Interests of New Holdco owned by Walter, (b) an
initial public offering of Equity Interests of New Holdco, or (c) the
Disposition by Walter of any of its Equity Interests of New Holdco.

 

“Subordinated
New Holdco Note” means that certain 9% Subordinated Note due
2013 by New Holdco in favor of the Borrower representing a subordinated loan
from the Borrower to New Holdco in an initial principal amount of $20,000,000,
and including a subordinated guarantee by Walter of the obligations of New
Holdco thereunder.

 

“Subordinated
New Holdco Loan” means the loan evidenced by the Subordinated
New Holdco Note.

 

“Subordinated
Notes” means the 10% senior subordinated
notes due 2012 issued by the Borrower and Mueller Group Co-Issuer, Inc. in
an aggregate principal amount of $315,000,000, as in effect on the Closing Date
and, thereafter, as amended, supplemented, amended and restated or otherwise
modified in accordance with Section 8.11 and any registered
exchange notes issued in exchange therefor.

 

“Subordinated
Note Indenture” means the Indenture, dated as of April 23,
2004 , among the Borrower, Mueller Group Co-Issuer, Inc., the guarantors
signatory thereto, and Law Debenture Trust Company of New York, as trustee, as
in effect on the Closing Date and, thereafter, as amended, supplemented,
amended and restated or otherwise modified in accordance with Section 8.11.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower and shall include, without
limitation, the Unrestricted Subsidiaries.

 

“Subsidiary
Guarantor” means each Subsidiary of the Borrower that has
executed and delivered the Guaranty or a Guaranty Joinder Agreement.

 

36

 

“Subsidiary
Securities” means the Equity Interests issued by or in any
Subsidiary, whether or not constituting a “security” under Article 8 of
the Uniform Commercial Code as in effect in any jurisdiction.

 

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

 

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

 

“Swing Line”
means the revolving credit facility made available by the Swing Line Lender
pursuant to Section 2.05.

 

“Swing Line
Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.05.

 

“Swing Line
Lender” means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan”
has the meaning specified in Section 2.05(a).

 

“Swing Line Loan
Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.05(b),
which, if in writing, shall be substantially in the form of Exhibit B.

 

“Swing Line
Sublimit” means an amount equal to the lesser of (a) $10,000,000
and (b) the Aggregate Revolving Credit Commitments.  The Swing Line Sublimit is part of, and not
in addition to, the Aggregate Revolving Credit Commitments.

 

37

 

“Syndication
Agent” means Morgan Stanley in its capacity as syndication agent
under any of the Loan Documents, or any successor syndication agent.

 

“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).

 

“Tax Sharing
Agreement” means that certain Tax Sharing Agreement dated as of
the Closing Date by and between New Holdco and Walter relating to Walter’s
payment of taxes imposed on New Holdco and its Subsidiaries and their
properties, income or assets.

 

“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.

 

“Term Loan”
means the loans made pursuant to the Term Loan Facility in accordance with Section 2.01.

 

“Term Loan
Facility” means the facility described in Section 2.01
providing for an advance of the Term Loan to the Borrower by the Term Loan
Lenders in the original principal amount of $1,050,000,000.

 

“Term Loan
Interest Rate Selection Notice” means the written notice
delivered by a Responsible Officer of the Borrower in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Segment or the
conversion of any Eurodollar Rate Segment into a Base Rate Segment or the
conversion of any Base Rate Segment into a Eurodollar Rate Segment, which, if
in writing, shall be substantially in the form of Exhibit A-2.

 

“Term Loan
Lender” means each Lender that has a portion of the Term Loan
outstanding under the Term Loan Facility.

 

“Term Loan
Maturity Date” means the earliest of (a) October 3,
2012, (b) November 1,
2011, unless the Subordinated Notes are paid in full prior to such date with
the proceeds of Permitted Subordinated Debt in accordance with Section 8.03(o),
or (c) such earlier date upon which the Outstanding Amounts under the Term
Loan Facility, including all accrued and unpaid interest, are paid in full in
accordance with the terms hereof.

 

“Term Loan Note”
means a promissory note made by the Borrower in favor of a Term Loan Lender
evidencing the portion of the Term Loan made by such Term Loan Lender,
substantially in the form of Exhibit C-1.

 

“Title Policy”
means an ALTA mortgagee title policy insuring the first lien priority of a
Mortgage reflecting only such Liens as are permitted under Section 8.01(a),
(c), (d), (g) or (j) or which are otherwise
acceptable to the Administrative Agent, together with all endorsements
reasonably requested by the Administrative Agent.

 

38

 

“Total
Outstandings” means the aggregate Outstanding Amount of all
Loans and all L/C - BA Obligations.

 

“Total Revolving
Outstandings” means the aggregate Outstanding Amount of all
Revolving Loans, Swing Line Loans and L/C - BA Obligations.

 

“Transactions”
means, individually or collectively as the context may indicate, (a) the
creation of New Holdco and the transfer of the Equity Interests of US Pipe and
of JW Merger Co, Inc. thereto, (b) the Merger, (c) the US Pipe
Contribution, (d) the distribution by the Borrower, Mueller Water
Products, and the receipt by New Holdco, of the Dividend Distribution, (e) the
entering into by New Holdco and Walter (as guarantor) of, and the receipt by
New Holdco of the proceeds of the Subordinated New Holdco Note, (f) the
entering by the Borrower of this Agreement and the funding of the Term Loan
Facility and Revolving Credit Facility, and the related repayment and
retirement of the Existing Credit Agreement and Existing Second Lien Notes, (g) the
entering into and funding of the Replacement Walter Facilities and the related
repayment and retirement of the Existing Walter Credit Agreement, (h) the
consummation of each of the Entity Conversions and (i) the entering into
of the Put Backstop Commitment Letter Amendment.

 

“Type”
means with respect to (a) a Revolving Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan, and (b) a Segment, its character as a Base
Rate Segment or a Eurodollar Rate Segment.

 

“UCC”
means the Uniform Commercial Code as in effect from time to time in the State
of New York; provided that if, with respect to any financing statement
or by reason of any mandatory provisions of law, the perfection or the effect
of perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to any applicable Loan Document is governed by
the Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, the term “UCC” shall also include the Uniform Commercial Code as
in effect from time to time in such other jurisdiction for purposes of the
provisions of this Agreement, each Loan Document and any financing statement
relating to such perfection or effect of perfection or non-perfection.

 

“Unfunded
Pension Liability” means (a) the excess of a Pension Plan’s
(other than a Foreign Pension Plan’s) benefit liabilities under Section 4001(a)(16)
of ERISA, over the current value of that Pension Plan’s (other than a Foreign
Pension Plan’s) assets, determined in accordance with the assumptions used for
funding the Pension Plan (other than a Foreign Pension Plan) pursuant to section 412
of the Code for the applicable plan year, and (b) with respect to each
Foreign Pension Plan required to be funded under Foreign Benefit Law, the
amount (if any) by which the present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan exceeds the current
value of the assets of such Foreign Pension Plan’s assets allocable to such benefits,
all as determined in accordance with the applicable Foreign Benefit Law for the
applicable plan year.

 

“United States”
and “U.S.”
mean the United States of America.

 

“Unreimbursed
Amount” has the meaning specified in Section 2.04(c)(i).

 

39

 

“Unrestricted
Subsidiaries” means the entities identified on Schedule 1.01(b) hereto.

 

“US Pipe”
means United States Pipe and Foundry Company LLC, an Alabama limited liability
company, successor to United States Pipe and Foundry Company, Inc., an
Alabama corporation, as a result of the Entity Conversion.

 

“US Pipe
Contribution” means the contribution by Walter of 100% of the
Equity Interests of US Pipe to New Holdco for further contribution to Mueller
Water Products and for further contribution to the Borrower, such that after
giving effect to all such contributions, US Pipe is a wholly-owned direct
Subsidiary of the Borrower.

 

“Voting
Securities” means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.

 

“Walter”
means Walter Industries, Inc., a Delaware corporation.

 

“Walter Credit
Agreement” means that certain Credit Agreement dated as of even
date herewith among Bank of America, as Administrative Agent, Walter and the
Lenders from time to time party thereto.

 

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.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) other than the Merger Agreement shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (iii) the
words “herein,” “hereof” and “hereunder,” and words of
similar import when used in any Loan Document, shall be construed to refer to
such Loan Document in its entirety and not to any particular provision thereof,
(iv) all references in a Loan Document to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, the Loan Document in which such references appear, (v) any
reference to any law shall include all statutory and regulatory provisions
consolidating, amending, replacing or interpreting such law and any reference
to any law or regulation shall, unless otherwise specified, refer to such law
or regulation as amended, modified or supplemented from time to time, and (vi) the
words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

40

 

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

 

(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.

 

1.03        Accounting Terms.  (a) Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed
herein.  Notwithstanding the foregoing,
it is agreed and acknowledged that (i) prior to December 31, 2005, the
Borrower and its Subsidiaries shall change their fiscal years to end on December 31
of each year, and (ii) for the purposes of Section 8.12(d),
all other covenants measured based on a fiscal year, and all reporting
requirements that pertain to, or require the delivery of information after the
end of, a fiscal year, the term fiscal year shall be deemed to refer to the
twelve calendar month period ending December 31 of the applicable year,
whether or not such fiscal year change is yet effective; provided, that,
with respect to the twelve calendar month period ending December 31, 2005,
the audited financial statements and reports, certifications and opinions of
the Auditor described in Section 7.01(a) shall be required
only to the extent such reports are required to be prepared and filed under
applicable Securities Laws and in the event such audited financial statements
and reports, certifications and opinions are not required to be prepared and
filed with the SEC, the requirements of Section 7.01(b) shall
apply.

 

(b)           Changes in GAAP.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall negotiate
in good faith to amend such ratio or requirement to preserve the original
intent thereof in light of such change in GAAP (subject to the approval of the
Required Lenders); provided  that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.

 

(c)           All defined terms
used in the calculation of the financial covenants set forth in Section 8.12
hereof (including Consolidated Capital Expenditures, in the case of any
Disposition, but excluding Consolidated Capital Expenditures, in the case of
any Acquisition other than the Acquisition of US Pipe) shall be calculated on
an historical pro forma basis giving effect (by inclusion or exclusion, as
applicable), during any period of measurement that includes the Merger, the US
Pipe Contribution, any Acquisition permitted by Section 8.13 or any Disposition permitted by Section 8.05(e), to the actual
historical results of the Person so acquired or disposed and which amounts
shall include only adjustments as are permitted under Regulation S-X of the

 

41

 

SEC or are otherwise
reasonably satisfactory to the Administrative Agent.  In addition, in determining Excess Cash Flow
for the period ending December 31, 2006, Excess Cash Flow and the defined
terms used therein shall be calculated on an historical pro forma basis giving
effect to the US Pipe Contribution.

 

(d)           For the avoidance of
doubt, the term “the Borrower and its Restricted Subsidiaries” as used in the
defined terms used in the calculation of the financial covenants set forth in Section 8.12
hereof shall not include any consolidation of the assets, liabilities or
results of operations of the Unrestricted Subsidiaries in the assets,
liabilities or results of the Borrower or any Restricted Subsidiary.

 

(e)           Consolidation
of Variable Interest Entities. 
Except as expressly provided otherwise herein, all references herein to
consolidated financial statements of the Borrower and its Subsidiaries or to
the determination of any amount for the Borrower and its Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that the Borrower is required to
consolidate pursuant to FASB Interpretation No. 46 – Consolidation of
Variable Interest Entities:  an
interpretation of ARB No. 51 (January 2003) as if such variable
interest entity were a Subsidiary as defined herein.

 

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

 

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

 

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

 

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01        Term
Loan.

 

(a)           Subject to the terms
and conditions of this Agreement, each Term Loan Lender severally agrees to
make an advance of its Pro Rata Term Share of the Term Loan to the Borrower on
the Closing Date, and from the Closing Date to the Term Loan Maturity Date,
convert and continue Segments from time to time in accordance with the terms
hereof.  The principal amount of each
Segment of the Term Loan outstanding hereunder from time to time shall bear
interest and the Term Loan shall be repayable as herein provided.  No amount of the

 

42

 

Term
Loan repaid or prepaid by the Borrower may be reborrowed hereunder, and no
subsequent advance under the Term Loan Facility shall be allowed after the initial
such advance of the Term Loan on the Closing Date.  Segments of the Term Loan may be Base Rate
Segments or Eurodollar Rate Segments at the Borrower’s election, as provided
herein.

 

(b)           Not later than 1:00 P.M.
New York time, on the Closing Date, each Term Loan Lender shall, pursuant to
the terms and subject to the conditions of this Agreement, make the amount of
its Pro Rata Term Share of the Term Loan available by wire transfer to the
Administrative Agent.  Such wire transfer
shall be directed to the Administrative Agent at the Administrative Agent’s
Office and shall be in the form of same day funds in Dollars.  The amount so received by the Administrative
Agent shall, subject to the terms and conditions of this Agreement, including
without limitation the satisfaction of all applicable conditions in Sections
5.01 and 5.02, be made available to the Borrower by delivery of the
proceeds thereof as shall be directed by the Responsible Officer of the
Borrower and reasonably acceptable to the Administrative Agent.  The initial Borrowing of the Term Loan may be
a Eurodollar Rate Segment, a Base Rate Segment, or both; provided that
if the Borrower desires that any portion of the initial Borrowing of the Term
Loan is advanced as a Eurodollar Rate Segment, the Administrative Agent shall
make such Borrowing as a Eurodollar Rate Segment only if, not later than three
Business Days prior to the date that is then anticipated to be the Closing
Date, the Administrative Agent has received from the Borrower a Term Loan Interest
Rate Selection Notice with respect thereto, together with the Borrower’s
written acknowledgement in form and substance satisfactory to the
Administrative Agent that the provisions of Section 4.05 hereof
shall apply to any failure by the Borrower to borrow on the date set forth in
such Term Loan Interest Rate Selection notice any or all of the amounts
specified in such Term Loan Interest Rate Selection Notice.

 

2.02        Revolving Loans.  Subject to the terms and conditions set forth
herein, each Revolving Lender severally agrees to make, convert and continue
Revolving Loans to the Borrower from time to time, on any Business Day during
the Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Revolving Lender’s Revolving Credit Commitment; provided,
however, that after giving effect to any Revolving Borrowing, (i) the
Total Revolving Outstandings shall not exceed the Aggregate Revolving Credit
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Revolving Lender, plus such Lender’s Pro Rata Revolving
Share of the Outstanding Amount of all L/C - BA Obligations, plus such
Lender’s Pro Rata Revolving Share of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Revolving Credit Commitment.  Within the limits of each Revolving Lender’s
Revolving Credit Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.02, prepay
under Section 2.06, and reborrow under this Section 2.02.  Revolving Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

 

2.03        Borrowings, Conversions and
Continuations of Committed Loans.

 

(a)           Each Revolving
Borrowing, each conversion of Revolving Loans or Segments of the Term Loan from
one Type to the other, and each continuation of Eurodollar Rate Loans shall be
made upon the 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

 

43

 

than
12:00 noon (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by the Borrower
pursuant to this Section 2.03(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Revolving Loan Notice (as to
Revolving Borrowings) or Term Loan Interest Rate Selection Notice,
appropriately completed and signed by a Responsible Officer of the Borrower
(unless such Revolving Loan Notice is being delivered by a Swing Line Lender
pursuant to Section 2.05(c) or by the Administrative Agent on
behalf of the L/C Issuer pursuant to Section 2.04(c)(i)); provided
that the lack of such prompt confirmation shall not affect the conclusiveness
or binding effect of such telephonic notice. 
Each Borrowing of, conversion to or continuation of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.  Except as
provided in Sections 2.04(c) and 2.05(c), each Borrowing of
or conversion to Base Rate Loans shall be in a principal amount of $5,000,000
or a whole multiple of $1,000,000 in excess thereof.  Each Revolving Loan Notice and Term Loan
Interest Rate Selection Notice (whether telephonic or written) shall specify (i) whether
the Borrower is requesting a Revolving Borrowing (applicable to Revolving Loan
Notices only), a conversion of Revolving Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Revolving Loans to be
borrowed, converted or continued, (iv) the Type of Revolving Loans to be
borrowed or to which existing Revolving Loans are to be converted, and (v) if
applicable, the duration of the Interest Period with respect thereto.  Each written Revolving Loan Notice shall be
substantially in the form of Exhibit A-1 attached hereto, and each
written Term Loan Interest Rate Selection Notice shall be substantially in the
form of Exhibit A-2 attached hereto.  If the Borrower fails to specify a Type of
Revolving Loans in a Revolving Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation of Loans, then the applicable
Loans shall, subject to the last sentence of this Section 2.03(a),
be made as, 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 Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Revolving
Loan Notice or Term Loan Interest Rate Selection 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 Revolving Loan Notice, the Administrative Agent shall promptly notify each
applicable Lender of its Pro Rata Revolving Share of the applicable Revolving
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrower, the Administrative Agent shall notify each applicable Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection.  In the case of a
Revolving Borrowing, each applicable Lender shall make the amount of its
Revolving Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 2:00 p.m. on the
Business Day specified in the applicable Revolving Loan Notice.  Upon satisfaction of the applicable
conditions set forth in Section 5.02 (and, if such Borrowing is the
initial Credit Extension, Section 5.01), the Administrative Agent
shall make all funds so received available to the Borrower in like funds as
received by the Administrative Agent either by (i) crediting the account
of the Borrower on the books of Bank of America with the amount of such funds
or (ii) wire transfer of such funds, in each case in

 

44

 

accordance
with instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower; provided, however, that if, on the date the Revolving
Loan Notice with respect to such Borrowing is given by the Borrower, there are
Swing Line Loans or L/C - BA Borrowings outstanding, then the proceeds of such
Borrowing shall be applied, first, to the payment in full of any such
L/C - BA Borrowings, second, to the payment in full of any such Swing
Line Loans, and third, to the Borrower as provided above.

 

(c)           Except as otherwise
provided herein, a Eurodollar Rate Loan may be continued or converted only on
the last day of an Interest Period for such Eurodollar Rate Loan.  During the existence of a Default, no Loans
may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Revolving Lenders or the Required Term Loan
Lenders, as applicable.

 

(d)           The Administrative
Agent shall promptly notify the Borrower and the applicable Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
determination of such interest rate.  The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. 
At any time that Base Rate Loans are outstanding, the Administrative
Agent shall notify the Borrower 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 Borrowings, all conversions of Loans from one Type to the other, and all
continuations of Loans as the same Type, there shall not at any time be more
than (a) ten Interest Periods in effect with respect to the Term Loan and (b) ten
Interest Periods in effect with respect to the Revolving Credit Facility.

 

2.04        Letters of Credit and Bankers’
Acceptances.

 

(a)           The Letter of
Credit – BA Commitment.

 

(i)            Subject
to the terms and conditions set forth herein, (A) the L/C Issuer agrees,
in reliance upon the agreements of the Revolving
Lenders set forth in this Section 2.04, (1) from time
to time on any Business Day during the period from the Closing Date until the
earlier to occur of the Letter of Credit - BA Expiration Date or the
termination of the Availability Period, to issue Letters of Credit for the
account of the Borrower or the Borrower
and a Restricted Subsidiary, and to amend Letters of Credit previously
issued by it, in accordance with subsection (b) below, (2) to honor
drafts under the Letters of Credit; and (3) with respect to Acceptance
Credits, to create Bankers’ Acceptances in accordance with the terms thereof
and hereof, and (B) the Revolving Lenders
severally agree to participate in Letters of Credit and Bankers’ Acceptances
issued for the account of the Borrower or
the Borrower and a Restricted Subsidiary and any drawings thereunder; provided
that the L/C Issuer shall not be obligated to make any L/C – BA Credit
Extension with respect to any Letter of Credit, and no Revolving Lender shall
be obligated to participate in any Letter of Credit if (A) as of the date
of such L/C - BA Credit Extension, (x) the Total Revolving Outstandings would
exceed the Aggregate Revolving Credit
Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Pro Rata Revolving Share

 

45

 

of the Outstanding
Amount of all L/C - BA Obligations, plus such Revolving Lender’s Pro
Rata Revolving Share of the Outstanding Amount of all Swing Line Loans would
exceed such Revolving Lender’s Revolving Credit Commitment, or (z) the
Outstanding Amount of the L/C - BA Obligations would exceed the Letter of
Credit - BA Sublimit, or (B) as to Acceptance Credits, the Bankers’
Acceptance created or to be created thereunder shall not be an eligible bankers’
acceptance under Section 13 of the Federal Reserve Act (12 U.S.C. § 372).  Each request by the Borrower for the issuance
or amendment of a Letter of Credit shall be deemed to be a representation by
the Borrower that the L/C – BA 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 Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.  All
Existing Letters of Credit shall be deemed to have been issued pursuant hereto,
and from and after the Closing Date shall be subject to and governed by the
terms and conditions hereof.

 

(ii)           The
L/C Issuer shall not issue any Letter of Credit, if:

 

(A)          subject
to Section 2.04(b)(iii), the expiry date of such requested Letter
of Credit would occur (i) as to standby Letters of Credit, more than
twenty-four months after the date of issuance or last renewal, and (ii) as
to commercial Letters of Credit, later than the earlier of (1) 270 days
after the date of issuance thereof and (2) 60 days before the Letter of
Credit - BA Expiration Date, unless in each case the Required Revolving Lenders
have approved such expiry date;

 

(B)           the
maturity date of any Bankers’ Acceptance issued under any such requested
Acceptance Credit would occur earlier than 30 or later than 120 days from date
of issuance and in any event later than 60 days before the Letter of Credit -
BA Expiration Date, unless the Required Revolving Lenders have approved such
expiry date;

 

(C)           the
expiry date of such requested Letter of Credit, or the maturity date of any
Bankers’ Acceptance issued under such requested Letter of Credit, would occur
after the Letter of Credit - BA Expiration Date, unless all the Revolving
Lenders have approved such expiry date;

 

(iii)          The
L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

 

(A)          any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter
of Credit or any related Bankers’ Acceptance, or any Law applicable to the L/C
Issuer or any request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of letters
of credit or related bankers’ acceptances generally or such Letter of Credit

 

46

 

or any related Bankers’ Acceptance in particular or shall impose upon
the L/C Issuer with respect to such Letter of Credit or related Bankers’
Acceptance any restriction, reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the L/C Issuer
in good faith deems material to it;

 

(B)           the
issuance of such Letter of Credit or any related Bankers’ Acceptance would
violate one or more policies of the L/C Issuer, or the creation of any related
Bankers’ Acceptance would cause the L/C Issuer to exceed the maximum amount of
outstanding bankers’ acceptances permitted by applicable Law;

 

(C)           except
as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter
of Credit or related Bankers’ Acceptance is to be denominated in a currency
other than Dollars or is in an initial amount less than $10,000; provided,
that the Administrative Agent and L/C Issuer agree that up to 10 Letters of
Credit may be issued and outstanding hereunder in amounts less than $10,000; or

 

(D)          a
default of any Revolving Lender’s obligations to fund under Section 2.04(c) exists
or any Revolving Lender is at such time a Defaulting Lender hereunder, unless
the L/C Issuer has entered into satisfactory arrangements with the Borrower or
such Revolving Lender to eliminate the L/C Issuer’s risk with respect to such
Revolving Lender.

 

(iv)          The
L/C Issuer shall not amend any Letter of Credit or Bankers’ Acceptance if the
L/C Issuer would not be permitted at such time to issue such Letter of Credit
or Bankers’ Acceptance in its amended form under the terms hereof.

 

(v)           The
L/C Issuer shall be under no obligation to amend any Letter of Credit or
Bankers’ Acceptance if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit or Bankers’ Acceptance in its amended form
under the terms hereof, or (B) the beneficiary of such Letter of Credit or
Bankers’ Acceptance does not accept the proposed amendment to such Letter of
Credit or Bankers’ Acceptance .

 

(vi)          The
L/C Issuer shall act on behalf of the Revolving Lenders with respect to any
Letters of Credit or Bankers’ Acceptance issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits and
immunities (A) provided to the Administrative Agent in Article X
with respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit and Bankers’ Acceptances issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit and Bankers’ Acceptances as fully as if the term “Administrative Agent”
as used in Article X included the L/C Issuer with respect to such
acts or omissions, and (B) as additionally provided herein with respect to
the L/C Issuer.

 

47

 

(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 Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower and, if applicable, of the applicable
Restricted Subsidiary.  Such Letter of
Credit Application must be received by the L/C Issuer and the Administrative
Agent not later than 11:00 a.m. at least two Business Days (or such later
date and time as the Administrative Agent and the L/C Issuer may agree in a
particular instance in its sole discretion) prior to the proposed issuance date
or date of amendment, as the case may be. 
In the case of a request for an initial issuance of a Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory
to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount 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 or
presentation thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing or presentation
thereunder; and (G) such other matters as the L/C Issuer may require.  In the case of a request for an amendment of
any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof (which
shall be a Business Day); (C) the nature of the proposed amendment; and (D) such
other matters as the L/C Issuer may require.  Additionally, the Borrower
shall furnish to the L/C Issuer and the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may require.

 

(ii)           Promptly
after receipt of any Letter of Credit Application, the L/C Issuer will confirm
with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof.  Unless the
L/C Issuer has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article V shall not then be
satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower or the Borrower and the applicable Restricted Subsidiary or enter into
the applicable amendment, as the case may be, in each case in accordance with the
L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter
of Credit, each Revolving Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Revolving
Lender’s Pro Rata Revolving Share times the amount of such Letter of
Credit.  Immediately upon the creation of
each Bankers’ Acceptance, each Revolving Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Bankers’ Acceptance in an amount equal to the

 

48

 

product of such Revolving Lender’s Pro Rata Revolving Share times
the amount of such Bankers’ Acceptance.

 

(iii)          If the Borrower so requests in any applicable Letter
of Credit Application, the L/C Issuer may, in its sole and absolute discretion,
agree to issue a Letter of Credit other than a commercial Letter of Credit that
has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided
that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued.  Unless otherwise
directed by the L/C Issuer, the Borrower shall not be required to make a
specific request to the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has
been issued, the Revolving Lenders shall be deemed to have authorized (but may
not require) the L/C Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit - BA Expiration
Date; provided, however, that the L/C Issuer shall not permit any such extension if
(A) the L/C Issuer has determined that it would not be permitted, or would
have no obligation, at such time to issue such Letter of Credit in its revised
form (as extended) under the terms hereof (by reason of the provisions clause (ii) or
(iii) of Section 2.04(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 Revolving Lenders have elected not
to permit such extension or (2) from the Administrative Agent, any
Revolving Lender or the Borrower that one or more of the applicable conditions
specified in Section 5.02 is not then satisfied, and in each such
case directing the L/C Issuer not to permit such extension.

 

(iv)          Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the L/C Issuer will also deliver to the Borrower and the Administrative Agent a
true and complete copy of such Letter of Credit or amendment.

 

(c)           Drawings and
Reimbursements; Funding of Participations.

 

(i)            Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
or, with respect to any Acceptance Credit, presentation of documents under such
Letter of Credit, or any presentation for payment of a Bankers’ Acceptance, the
L/C Issuer shall notify the Borrower and the Administrative Agent thereof.  Not later than 1:00 p.m. on the date of
any payment by the L/C Issuer under a Letter of Credit or Bankers’ Acceptance
(each such date, an “Honor
Date”), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing or
Bankers’ Acceptance, as applicable.  If
the Borrower fails so to reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Revolving Lender of the Honor
Date, the amount of the unreimbursed drawing or payment (the “Unreimbursed Amount”),
and the amount of such Revolving Lender’s Pro Rata Revolving Share
thereof.  In such event, the Borrower
shall be deemed to have

 

49

 

requested a Revolving 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 2.03 for the
principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Revolving Credit Commitments and the
conditions set forth in Section 5.02 (other than the delivery of a
Revolving Loan Notice).  Any notice given
by the L/C Issuer or the Administrative Agent pursuant to this Section 2.04(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
Revolving Lender shall upon any notice pursuant to Section 2.04(c)(i) make
funds available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent’s Office in an amount equal to its Pro Rata
Revolving Share of the Unreimbursed Amount not later than 3:00 p.m. on the
Business Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.04(c)(iii), each Revolving
Lender that so makes funds available shall be deemed to have made a Base Rate
Revolving Loan to the Borrower in such amount. 
The Administrative Agent shall remit the funds so received to the L/C
Issuer.

 

(iii)          With
respect to any Unreimbursed Amount that is not fully refinanced by a Revolving
Borrowing of Base Rate Loans because the conditions set forth in Section 5.02
cannot be satisfied or for any other reason, the Borrower shall be deemed to
have incurred from the L/C Issuer an L/C – BA Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C – BA Borrowing shall
be due and payable on demand (together with interest) and shall bear interest
at the Default Rate.  In such event, each
Revolving Lender’s payment to the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed
payment in respect of its participation in such L/C – BA Borrowing and shall
constitute an L/C - BA Advance from such Revolving Lender in satisfaction of
its participation obligation under this Section 2.04.

 

(iv)          Until
each Revolving Lender funds its Revolving Loan or L/C - BA Advance pursuant to
this Section 2.04(c) to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit or payments made on any Bankers’
Acceptance, interest in respect of such Revolving Lender’s Pro Rata Revolving
Share of such amount shall be solely for the account of the L/C Issuer.

 

(v)           Each
Revolving Lender’s obligation to make Revolving Loans or L/C - BA Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit and payments
made on Bankers’ Acceptances, as contemplated by this Section 2.04(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 Revolving Lender may have against the L/C Issuer, the
Borrower or any other Person for any reason whatsoever; (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Revolving Lender’s obligation to make Revolving Loans pursuant to
this Section 2.04(c) is subject to the conditions set forth in
Section 5.02 (other than delivery

 

50

 

by the Borrower of a Revolving Loan Notice).  No such making of an L/C - BA Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit or Bankers’ Acceptance, together with interest as provided herein.

 

(vi)          If
any Revolving Lender fails to make available to the Administrative Agent for
the account of the L/C Issuer any amount required to be paid by such Revolving
Lender pursuant to the foregoing provisions of this Section 2.04(c) by
the time specified in Section 2.04(c)(ii), the L/C Issuer shall be
entitled to recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the L/C Issuer in
accordance with banking industry rules on interbank compensation.  A certificate of the L/C Issuer submitted to
any Revolving Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.

 

(d)           Repayment of
Participations.

 

(i)            At
any time after the L/C Issuer has made a payment under any Letter of Credit or
Bankers’ Acceptance and has received from any Revolving Lender such Revolving
Lender’s L/C - BA Advance in respect of such payment in accordance with Section 2.04(c),
if the Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Revolving Lender its Pro Rata Revolving Share thereof
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Revolving Lender’s L/C - BA Advance was
outstanding) in the same funds as those received by the Administrative Agent.

 

(ii)           If
any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.04(c)(i) is required to be
returned under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Revolving Lender shall pay to the Administrative Agent for
the account of the L/C Issuer its Pro Rata Revolving 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 Revolving Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The obligations of the Revolving Lenders under
this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e)           Obligations
Absolute.  The obligation of the
Borrower to reimburse the L/C Issuer for each drawing under each Letter of
Credit and each payment under any Bankers’ Acceptance, and to repay each L/C –
BA Borrowing shall be absolute, unconditional and irrevocable, and

 

51

 

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 or Bankers’
Acceptance, this Agreement, or any other agreement or instrument relating
thereto;

 

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

 

(iii)          any
draft, demand, certificate or other document or endorsement  presented under or in connection with such
Letter of Credit or Bankers’ Acceptance 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 or obtain payment under any Bankers’ Acceptance ;

 

(iv)          any
payment by the L/C Issuer under such Letter of Credit or Bankers’ Acceptance
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit, or any payment made by the L/C Issuer
under such Letter of Credit or Bankers’ Acceptance 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 or Bankers’ Acceptance,
including any arising in connection with any proceeding under any Debtor Relief
Law; or

 

(v)           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 Borrower or any Subsidiary.

 

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

 

(f)            Role of L/C
Issuer.  Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit or making any payment under a
Bankers’ Acceptance, the L/C Issuer shall not have any responsibility to obtain
any document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document.  None of
the L/C Issuer, the Administrative Agent, any of their

 

52

 

respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders, the Revolving Lenders, the Required Lenders or the
Required Revolving 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, Bankers’ Acceptance or Issuer
Document.  The Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit or Bankers’ Acceptance; provided,
however, that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties, nor any correspondent,
participant or assignee of the L/C Issuer, shall be liable or responsible for
any of the matters described in clauses (i) through (v) of
Section 2.04(e); provided, however, that anything in
such clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C
Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit or to
honor any Bankers’ Acceptance presented for payment in strict compliance with
its terms and conditions.  In furtherance
and not in limitation of the foregoing, the L/C Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and the
L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument endorsing, transferring or assigning or purporting to endorse,
transfer or assign a Letter of Credit or Bankers’ Acceptance 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.  Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request
under any Letter of Credit or made any payment under any Bankers’ Acceptance
and such drawing has resulted in an L/C – BA Borrowing, or (ii) if, as of
the Letter of Credit - BA Expiration Date, any Letter of Credit for any reason
remains outstanding and partially or wholly undrawn, any Bankers’ Acceptance
for any reason remains outstanding, or any L/C – BA Obligation for any reason
remains outstanding, then in each such case the Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C - BA Obligations (in an
amount equal to such Outstanding Amount determined as of the date of such L/C -
BA Borrowing or the Letter of Credit - BA Expiration Date, as the case may
be).  Sections 2.06 and 9.02(c) set
forth certain additional requirements to deliver Cash Collateral
hereunder.  For purposes hereof, “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for
the benefit of the L/C Issuer and the Revolving Lenders, as collateral for the
L/C - BA Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the Revolving
Lenders).  Derivatives of such term have
corresponding meanings.  The Borrower
hereby grants to the Administrative Agent, for the benefit of the L/C Issuer
and the Revolving Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the

 

53

 

foregoing.  Cash collateral shall be maintained in
blocked, interest bearing deposit accounts at Bank of America.

 

(h)           Applicability of
ISP and UCP.  Unless otherwise
expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of the ISP shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce at the time of issuance shall apply to each commercial Letter of
Credit.

 

(i)            Letter of Credit
– BA Fees.  Subject to the provisions
of the last sentence of this subsection (i), the Borrower shall pay to the
Administrative Agent for the account of each Revolving Lender in accordance
with its Pro Rata Revolving Share (i) a
Letter of Credit – BA Fee for each commercial Letter of Credit and each Bankers’
Acceptance equal to 50% of the Applicable Rate times the 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) or the maximum
stated amount of such Bankers’ Acceptance, as the case may be, and (ii) a
Letter of Credit – BA Fee for each standby
Letter of Credit equal to the Applicable Rate times the 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).  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  Such Letter of Credit – BA Fees shall be
computed on a quarterly basis in arrears. 
Such Letter of Credit – BA Fees accrued through the last day of each
fiscal quarter of the Borrower and shall be due and payable on the fifteenth
(or the next Business Day after the fifteenth, if the fifteenth is not a
Business Day) of each January, April, July and
October, commencing with the first such date to occur after the issuance
of such Letter of Credit or Bankers’ Acceptance (as the case may be), on the
Letter of Credit - BA Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate
during any quarter, the daily maximum amount of each Letter of Credit and
Bankers’ Acceptance shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.  At all times that the Default
Rate shall be applicable to any Loans pursuant to Section 2.09(b),
the Letter of Credit – BA Fees payable under this subsection (i) shall
accrue and be payable at the Default Rate.

 

(j)            Fronting Fee and
Documentary and Processing Charges Payable to L/C Issuer.  The Borrower shall pay directly to the L/C
Issuer for its own account a fronting fee with respect to each Letter of Credit
and each Bankers’ Acceptance issued by the L/C Issuer in the amount of 0.125%
times the 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) or the maximum stated amount of such Bankers’ Acceptance, as the
case may be.  Such fronting fees shall be
computed on a quarterly basis in arrears. 
Such fronting fee shall accrue through the last day of each fiscal
quarter of the Borrower and shall be due and payable on the fifteenth (or the
next Business Day after the fifteenth, if the fifteenth is not a Business Day)
of each January, April, July and October, commencing with the first such
date to occur after the issuance of such Letter of Credit or Bankers’
Acceptance, as applicable, on the Letter of Credit - BA Expiration Date and
thereafter on demand.  For purposes of
computing the daily amount available to be drawn under any Letter of Credit,
the amount of such Letter of Credit shall be determined in

 

54

 

accordance
with Section 1.06.  In
addition, the Borrower shall pay directly to the L/C Issuer for its own account
the customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit and bankers’ acceptances issued by it as from time to time in
effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.

 

(k)           Conflict with
Issuer Documents.  In the event of
any conflict between the terms hereof and the terms of any Issuer Document, the
terms hereof shall control.

 

(l)            Letters
of Credit Issued for Restricted Subsidiaries.  Notwithstanding that a Letter of Credit or
Bankers’ Acceptance issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Restricted Subsidiary, the Borrower
shall be obligated to reimburse the L/C Issuer hereunder for any and all
drawings under such Letter of Credit. 
The Borrower hereby acknowledges that the issuance of Letters of Credit
and/or Bankers’ Acceptances for the account of Restricted Subsidiaries inures
to the benefit of the Borrower, and that the Borrower’s business derives
substantial benefits from the businesses of such Restricted Subsidiaries.

 

2.05        Swing Line Loans.

 

(a)           The Swing Line.  Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees, in reliance upon the agreements of the
other Lenders set forth in this Section 2.05, to make loans (each
such loan, a “Swing Line Loan”) in Dollars to the Borrower from time to
time on any Business Day during the Availability Period in an aggregate amount
not to exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Pro Rata Revolving Share of the Outstanding Amount of Revolving Loans and L/C -
BA Obligations of the Revolving Lender acting as Swing Line Lender, may exceed
the amount of such Revolving Lender’s Revolving Credit Commitment; provided,
however, that after giving effect to any Swing Line Loan, (i) the
Total Revolving Outstandings shall not exceed the Aggregate Revolving Credit
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Revolving Lender, plus such Revolving Lender’s Pro Rata
Revolving Share of the Outstanding Amount of all L/C - BA Obligations, plus
such Revolving Lender’s Pro Rata Revolving Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Credit
Commitment, and provided, further, that the Borrower shall not
use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan.  Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.05, prepay under Section 2.06, and
reborrow under this Section 2.05. 
Each Swing Line Loan shall be a Base Rate Revolving Loan.  Immediately upon the making of a Swing Line
Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Revolving Lender’s Pro Rata Revolving Share times the amount of such
Swing Line Loan.

 

(b)           Borrowing
Procedures.  Each Swing Line
Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing
Line Lender and the Administrative Agent, which may be given by telephone. Each
such notice must be received by the Swing Line Lender and the

 

55

 

Administrative
Agent not later than 2:00 p.m. on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and integral multiples of $100,000
in excess thereof, and (ii) the requested borrowing date, which
shall be a Business Day.  Each such
telephonic notice must be confirmed promptly by delivery to the Swing Line
Lender and the Administrative Agent of a written Swing Line Loan Notice,
appropriately completed and signed by a Responsible Officer of the
Borrower.  Promptly after receipt by the
Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line
Lender will confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has also received such Swing Line Loan Notice
and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at
the request of any Lender) prior to 3:00 p.m. on the date of the proposed
Swing Line Borrowing (A) directing the Swing Line Lender not to make such
Swing Line Loan as a result of the limitations set forth in the proviso to the
first sentence of Section 2.05(a), or (B) that one or more of
the applicable conditions specified in Article V is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 3:30 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available
to the Borrower at its office by
crediting the account of the Borrower on the books of the Swing Line Lender in
immediately available funds.

 

(c)           Refinancing of
Swing Line Loans.

 

(i)            The
Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line
Lender to so request on its behalf), that each Revolving Lender make a Base
Rate Revolving Loan in an amount equal to such Revolving Lender’s Pro Rata
Revolving Share of the amount of Swing Line Loans then outstanding.  Such request shall be made in writing (which written
request shall be deemed to be a Revolving Loan Notice for purposes hereof) and
in accordance with the requirements of Section 2.03, without regard
to the minimum and multiples specified therein for the principal amount of Base
Rate Loans, but subject to the unutilized portion of the Aggregate Revolving
Credit Commitments and the conditions set forth in Section 5.02.  The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Revolving Loan Notice promptly after
delivering such notice to the Administrative Agent.  Each Revolving Lender shall make an amount
equal to its Pro Rata Revolving Share of the amount specified in such Revolving
Loan Notice available to the Administrative Agent in immediately available
funds for the account of the Swing Line Lender at the Administrative Agent’s
Office not later than 2:00 p.m. on the day specified in such Revolving
Loan Notice, whereupon, subject to Section 2.05(c)(ii), each
Revolving Lender that so makes funds available shall be deemed to have made a
Base Rate Revolving Loan to the Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

 

(ii)           If
for any reason any Swing Line Loan cannot be refinanced by such a Revolving
Borrowing in accordance with Section 2.05(c)(i), the request for
Base Rate Revolving Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of
the Revolving Lenders fund its risk participation in the relevant Swing Line
Loan and each Revolving Lender’s payment to

 

56

 

the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.05(c)(i) shall be deemed payment in
respect of such participation.

 

(iii)          If
any Revolving Lender fails to make available to the Administrative Agent for
the account of the Swing Line Lender any amount required to be paid by such
Revolving Lender pursuant to the foregoing provisions of this Section 2.05(c) by
the time specified in Section 2.05(c)(i), the Swing Line Lender
shall be entitled to recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank
compensation.  A certificate of the Swing
Line Lender submitted to any Revolving Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.

 

(iv)          Each
Revolving Lender’s obligation to make Revolving Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to 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 Revolving Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Revolving Lender’s obligation to make Revolving Loans pursuant to
this Section 2.05(c) is subject to the conditions set forth in
Section 5.02.  No such
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
herein.

 

(d)           Repayment of
Participations.

 

(i)            At
any time after any Revolving Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Revolving Lender its Pro Rata Revolving Share of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Revolving Lender’s risk participation was
funded) in the same funds as those received by the Swing Line Lender.

 

(ii)           If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Revolving Lender shall pay to the Swing Line Lender its
Pro Rata Revolving Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such
demand upon the request of the Swing Line

 

57

 

Lender.  The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

 

(e)           Interest for
Account of Swing Line Lender.  The
Swing Line Lender shall be responsible for invoicing the Borrower for interest
on the Swing Line Loans.  Until each
Revolving Lender funds its Base Rate Revolving Loan or risk participation
pursuant to this Section 2.05 to refinance such Lender’s Pro Rata
Revolving Share of any Swing Line Loan, interest in respect of such Pro Rata
Revolving Share shall be solely for the account of the Swing Line Lender.

 

(f)            Payments
Directly to Swing Line Lender.  The
Borrower shall make all payments of principal and interest in respect of the
Swing Line Loans directly to the Swing Line Lender.

 

2.06        Prepayments.

 

(a)           The Borrower may,
upon notice to the Administrative Agent, at any time or from time to time
voluntarily prepay Loans under the Revolving Credit Facility or the Term Loan Facility
in whole or in part without premium or penalty; provided that (i) such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(A) three Business Days prior to any date of prepayment of Eurodollar Rate
Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any
prepayment of Eurodollar Rate Loans under any such credit facility shall be in
a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; and (iii) any prepayment of Base Rate Loans under any such credit
facility shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof or, in each case, the entire principal amount
thereof then outstanding.  Each such
notice shall specify the date and amount of such prepayment, the credit
facility to which the prepayment is to be applied, and the Type(s) of Loans to
be prepaid.  Prepayments of the Term Loan
shall be applied pro rata to remaining installments of the scheduled amortization
of the Term Loan Facility.  The
Administrative Agent will promptly notify each applicable Lender of its receipt
of each such notice, and of the amount of such Lender’s ratable share of such
prepayment.  If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 4.05.  Each such prepayment shall be applied to the
Loans of the applicable Lenders in accordance with their Pro Rata Revolving
Shares and Pro Rata Term Shares, as applicable.

 

(b)           The Borrower may,
upon notice to the Swing Line Lender (with a copy to the Administrative Agent),
at any time or from time to time, voluntarily prepay Swing Line Loans in whole
or in part without premium or penalty; provided that (i) such
notice must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the date of the prepayment, and (ii) any
such prepayment shall be in a minimum principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. 
Each such notice shall specify the date and amount of such
prepayment.  If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.

 

58

 

(c)           If for any reason
the Total Revolving Outstandings at any time exceed the Aggregate Revolving
Credit Commitments then in effect, the Borrower shall immediately prepay
Revolving Loans and/or Swing Line Loans and/or Cash Collateralize the L/C - BA
Obligations in an aggregate amount equal to such excess; provided, however,
that the Borrower shall not be required to Cash Collateralize the L/C - BA
Obligations pursuant to this Section 2.06(c) unless after the
prepayment in full of the Revolving Loans and Swing Line Loans, the Total
Revolving Outstandings exceed the Aggregate Revolving Credit Commitments then
in effect.

 

(d)           In addition to any
required payments of principal of the Term Loan and any optional payments of
principal of the Term Loan and the Revolving Loans effected under subsection (a) above,
the Borrower shall make the following required prepayments, each such payment
to be made to the Administrative Agent for the benefit of the applicable
Lenders within the time period specified below:

 

(i)            No
later than 30 calendar days following the receipt of any Net Cash Proceeds from
any Disposition permitted by Section 8.05(e), the Borrower shall
deliver to the Administrative Agent a calculation of the amount of such Net
Cash Proceeds and, to the extent the amount of such Net Cash Proceeds with
respect to any single transaction or series of related transactions, exceeds
$2,000,000, the Borrower shall make, or shall cause each applicable Restricted
Subsidiary to make, a prepayment of the Outstanding Amount of the Term Loan in
an amount equal to one hundred percent (100%) of such Net Cash Proceeds; provided
that no mandatory prepayment on account of such Net Cash Proceeds shall be
required under this clause (i) if the Borrower informs the Administrative
Agent no later than 30 days following the receipt of such Net Cash Proceeds of
its or its Restricted Subsidiary’s good faith      intention to apply such Net Cash Proceeds
to the acquisition of other assets or property consistent with the Core
Business (including by way of merger or investment) within 365 days following
the receipt of such Net Cash Proceeds, with the amount of such Net Cash     Proceeds unused after such 365 day period
being required to applied to such prepayment on 366th day after such Net Cash
Proceeds are received.

 

(ii)           At
any time after the aggregate Net Cash Proceeds from all private and public
issuances of Indebtedness of the Borrower or any Restricted Subsidiary after
the Closing Date (other than Indebtedness permitted under Section 8.03)
has reached $2,000,000, the Borrower shall make, or shall cause each applicable
Restricted Subsidiary to make, a prepayment of the Outstanding Amount of the
Term Loan in an amount equal to one hundred percent (100%) of any further Net
Cash Proceeds (including any portion of the Net Cash Proceeds thereof that
causes the aggregate Net Cash Proceeds to exceed the $2,000,000 threshold) of
each private or public issuance of Indebtedness of the Borrower or any
Restricted Subsidiary other than Indebtedness permitted under Section 8.03.  Each prepayment required to be made pursuant
to this Section 2.06(d)(ii) shall be made within ten (10) Business
Days of receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the Net Cash Proceeds
of such issuance; provided that despite the application of this Section 2.06(d)(ii) to
any issuance of Indebtedness that is not otherwise permitted under this

 

59

 

Agreement, nothing in this Section 2.06(d)(ii) shall
be deemed to permit any Indebtedness not expressly permitted under this
Agreement or to constitute a waiver or cure of any Default or Event of Default
that arises as a result of the incurrence of Indebtedness that is not permitted
under this Agreement.

 

(iii)          The Borrower shall make, or shall cause each applicable
Restricted Subsidiary to make, a prepayment of the Outstanding Amount of the
Term Loan in an amount equal to 50% of the Net Cash Proceeds of each private or
public issuance of Equity Interests of the Borrower or any Restricted
Subsidiary; provided that such     
prepayment shall only be required to the extent the amount of
Consolidated Senior Secured Indebtedness, as reduced by giving effect to such
prepayment, would result in a 
Consolidated Senior Secured Leverage Ratio of greater than or equal to
1.50 to 1.00 on a pro forma basis as of the date of such prepayment.  Each such prepayment will be made within ten (10) Business
Days of receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the pro forma
Consolidated Senior Secured Leverage Ratio and the Net Cash Proceeds of such
issuance.  Notwithstanding the
application of this Section 2.06(d)(iii) to any issuance of
Equity Interests that is not otherwise permitted under this Agreement, nothing
in this Section 2.06(d)(iii) shall be deemed to permit any
issuance of Equity Interests of the Borrower or any Restricted Subsidiary not
expressly permitted under this Agreement or to constitute a waiver or cure of
any Default or Event of Default that arises as a result of the issuance of any
such Equity Interest that is not permitted under this Agreement.

 

(iv)          Within
ten Business Days after financial statements have been delivered pursuant to Section 7.01(a) and
the related Compliance Certificate has been delivered pursuant to Section 7.02(b),
the Borrower shall make a prepayment of the Outstanding Amount of the Term Loan
in an amount equal to 50% of Excess Cash Flow for the fiscal year covered by
such financial statements; provided that (x) for the fiscal year of the
Borrower ending December 31, 2006, the prepayment required by this Section 2.06(d)(iv) the
calculation of “Excess Cash Flow” shall also include the period from the
Closing Date through the beginning of such fiscal year, and (y) such prepayment
shall only be required to the extent the amount of Consolidated Senior Secured
Indebtedness, as reduced by giving effect to such prepayment, would result in a
Consolidated Senior Secured Leverage Ratio of greater than or equal to 1.50 to
1.00 on a pro forma basis as of the date of such prepayment.

 

Each prepayment of
the Term Loan required under this Section 2.06(d) shall be
applied pro rata to remaining installments of the scheduled amortization of the
Term Loan Facility (including the scheduled payment of all remaining
Outstanding Amounts of the Term Loan on the Term Loan Maturity Date).

 

(e)           Any prepayment of a
Eurodollar Rate Loan under this Section 2.06 shall be accompanied
by all accrued interest thereon, together with any additional amounts required
pursuant to Section 4.05. 
Each prepayment under this Section 2.06 shall be applied to
the Loans

 

60

 

of the applicable
Lenders in accordance with their Pro Rata Term Shares or Pro Rata Revolving
Shares, as applicable.

 

2.07        Termination or Reduction of Commitments.  The Borrower may, upon notice to the
Administrative Agent, terminate the Aggregate Revolving Credit Commitments, or
from time to time permanently reduce the Aggregate Revolving Credit
Commitments; provided that (i) any such notice shall be received by
the Administrative Agent not later than 11:00 a.m. five Business Days
prior to the date of termination or reduction, (ii) any such partial
reduction shall be in an aggregate amount of $5,000,000 or any whole multiple
of $1,000,000 in excess thereof, or the entire remaining Aggregate Revolving
Credit Commitments, (iii) the Borrower shall not terminate or reduce the
Aggregate Revolving Credit Commitments if, after giving effect thereto and to
any concurrent prepayments hereunder, the Total Revolving Outstandings would
exceed the Aggregate Revolving Credit Commitments, and (iv) if, after
giving effect to any reduction of the Aggregate Revolving Credit Commitments,
the Letter of Credit - BA Sublimit or the Swing Line Sublimit exceeds the
amount of the Aggregate Revolving Credit Commitments, such sublimit shall be
automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify
the Lenders of any such notice of termination or reduction of the Aggregate
Revolving Credit Commitments.  Any
reduction of the Aggregate Revolving Credit Commitments shall be applied to the
Revolving Credit Commitment of each Revolving Lender according to its Pro Rata
Revolving Share.  All commitment fees
accrued until the effective date of any termination of the Aggregate Revolving
Credit Commitments shall be paid on the effective date of such termination.

 

2.08        Repayment of Loans.

 

(a)           The Borrower shall
repay to the Revolving Lenders on the Revolving Credit Maturity Date the
aggregate principal amount of Revolving Loans outstanding on such date.

 

(b)           The Borrower shall
repay each Swing Line Loan on the earlier to occur of (i) the date ten
Business Days after such Loan is made and (ii) the Revolving Credit
Maturity Date.

 

(c)           The Borrower shall
repay the principal amount of the Term Loan in twenty-seven (27) consecutive
quarterly installments equal to $2,625,000 on the last Business Day of each
March, June, September and December, commencing on December 31, 2005,
and in a final installment equal to the aggregate Outstanding Amount of the
Term Loan on the Term Loan Maturity Date, in each case subject to adjustments
for prepayments made pursuant to Section 2.06.

 

2.09        Interest.

 

(a)           Subject to the
provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof

 

61

 

from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.

 

(b)           If any amount
payable by the Borrower under any Loan Document is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.  Furthermore, while any Event of Default
exists, the Borrower shall pay interest, at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws, on the principal amount of all (a) outstanding
Obligations under the Revolving Credit Facility upon the affirmative vote of the Required Revolving Lenders, (b) outstanding
Obligations under the Term Loan
Facility upon the affirmative vote of the Required Term Loan Lenders and (c) other
Obligations hereunder upon the affirmative vote of the Required Lenders.  Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

 

(c)           Interest on each
Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

 

2.10        Fees.  In addition to certain fees described in
subsections (i) and (j) of Section 2.04:

 

(a)           Commitment Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender in accordance with its Pro Rata
Revolving Share, a commitment fee (the “Commitment Fee”) equal to the Applicable Rate
times the actual daily amount by which the Aggregate Revolving Credit
Commitments exceed the sum of (i) the Outstanding Amount of Revolving
Loans and (ii) the Outstanding Amount of L/C - BA Obligations.  The Commitment Fee shall accrue at all times
during the Availability Period, including at any time during which one or more
of the conditions in Article V is not met, and the amount accrued
through the end of each fiscal quarter of the Borrower shall be due and payable
in arrears on the fifteenth (or the next Business Day after the fifteenth, if
the fifteenth is not a Business Day) of each January, April, July and
October, commencing with the first such date to occur after the Closing Date,
and on the Revolving Credit Maturity Date. 
The Commitment Fee shall be calculated quarterly in arrears, and if
there is any change in the Applicable Rate during any quarter, the actual daily
amount shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.

 

(b)           Other Fees.  The Borrower shall pay to the Arrangers, the
Administrative Agent and each of the Lenders, for their own respective
accounts, such fees as shall have been separately agreed upon in writing
(including in the Joint Fee Letter and in the Agency Fee Letter, as applicable)
in the amounts and at the times so specified, including an annual
administrative fee payable to the Administrative Agent.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

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2.11        Computation of Interest and Fees.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime rate” shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that
any Loan that is repaid on the same day on which it is made shall, subject to Section 2.13(a),
bear interest for one day.  Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

 

2.12        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 Borrower and the interest and payments
thereon.  Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.

 

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

 

(c)           Entries made in good
faith by the Administrative Agent in the Register pursuant to Section 2.12(b),
and by each Lender in its account or accounts pursuant to Section 2.12(a),
shall be prima facie evidence of the amount of principal and interest due and
payable or to become due and payable from the Borrower to, in the case of the
Register, each Lender and, in the case of such account or accounts, such
Lender, under this Agreement and the other Loan Documents, absent manifest
error; provided that the failure of the Administrative Agent or any
Lender to make an entry, or any finding that any entry is incorrect, in the
Register or such account or accounts shall not limit or otherwise affect the
Obligations.

 

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2.13        Payments Generally; Administrative Agent’s
Clawback.

 

(a)           General.  All payments to be made by the Borrower shall
be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower 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
Dollars and in immediately available funds not later than 2:00 p.m. on the
date specified herein.  The Administrative
Agent will promptly distribute to such Lender its ratable 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 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

 

(b)           (i)  Funding by Lenders;
Presumption by Administrative Agent. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in
the case of any Borrowing of Base Rate Loans, prior to 1:00 p.m. on the
date of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.03 (or, in the case of a Borrowing of
Base Rate Loans, that such Lender has made such share available in accordance
with and at the time required by Section 2.03) and may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case
of a payment to be made by the Borrower, the interest rate applicable to Base
Rate Loans; provided that the Administrative Agent agrees that it shall
first make a request (which request may be telephonic) for payment from such
applicable Lender before making a request with respect thereto to the
Borrower.  If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Revolving Loan or Pro Rata Term Share of the Term
Loan, as applicable, included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

64

 

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

 

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

 

(c)           Failure to
Satisfy Conditions Precedent.  If any
Lender makes available to the Administrative Agent funds for any Loan to be
made by such Lender as provided in the foregoing provisions of this Article II,
and such funds are not made available to the Borrower by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in Article V
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

(d)           Obligations of
Lenders Several.  The obligations of
the Lenders hereunder to make Revolving Loans, to fund their respective Pro
Rata Term Shares of the Term Loan, to fund participations in Letters of Credit
and Swing Line Loans and to make payments pursuant to Section 11.04(c) are
several and not joint.  The failure of
any Lender to make any Revolving Loan, to fund its Pro Rata Term Share of the
Term Loan B, to fund any participation in Letters of Credit and Swing Line
Loans or to make any payment under Section 11.04(c) on any
date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Revolving Loan, to fund its Pro Rata
Term Share of the Term Loan, to purchase its participations in Letters of
Credit and Swing Line Loans or to make its payment under Section 11.04(c).

 

(e)           Funding Source.  Nothing herein shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or manner
or to constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.

 

2.14        Sharing of Payments by Lenders.  If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Revolving Loans or the portion of the
Term Loan made by it, or the participations in L/C – BA Obligations or in Swing
Line Loans held by it resulting in such Lender’s receiving

 

65

 

payment
of a proportion of the aggregate amount of such Loans or participations and
accrued interest thereon greater than its ratable 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 applicable Revolving Loans and/or portion of the
Term Loan made by it and/or subparticipations in the participations in L/C – BA
Obligations or Swing Line Loans of the other Lenders, as the case may be, or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the applicable Lenders ratably in accordance
with the aggregate amount of principal of and accrued interest on their
respective Revolving Loans, portion of the Term Loan and/or 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 shall not be construed to apply to (x) any
payment made by the 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
Revolving Loans, portion of the Term Loan or subparticipations in L/C – BA
Obligations or Swing Line Loans to any assignee or participant, other than to
the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall
apply).

 

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

 

ARTICLE III.

SECURITY

 

3.01        Security.  As
security for the full and timely payment and performance of all Obligations,
the Borrower shall, and shall cause all other Loan Parties to, on or before the
Closing Date, do or cause to be done all things necessary in the opinion of the
Administrative Agent and its counsel to grant to the Administrative Agent for
the benefit of the Secured Parties a duly perfected first priority security
interest in all Collateral subject to no prior Lien or other encumbrance or
restriction on transfer, except as expressly permitted hereunder.  Without limiting the foregoing, on the Closing
Date the Borrower shall deliver, and shall cause each Guarantor to deliver, to
the Administrative Agent, in form and substance reasonably acceptable to the
Administrative Agent, (a) if such party has rights in any Pledged
Interests (i) the Pledge Agreement which shall pledge all of the Pledged
Interests held by such party to the Administrative Agent for the benefit of the

 

66

 

Secured
Parties, and (ii) if such Pledged Interests are in the form of certificated
securities, such certificated securities, together with undated stock powers or
other appropriate transfer documents indorsed in blank pertaining thereto, (b) the
Security Agreement, which shall pledge to the Administrative Agent for the
benefit of the Secured Parties certain personal property of the Borrower and
the Guarantors more particularly described therein, (c) if such party has
a fee interest in any of the real property set forth on Schedule 3.01,
a Mortgage with respect thereto and such Mortgaged Property Support Documents
as the Administrative Agent may request, and (d) Uniform Commercial Code
financing statements in form, substance and number as requested by the
Administrative Agent, reflecting the Lien in favor of the Secured Parties on
the Pledged Interests and all other Collateral, and shall take such further
action and deliver or cause to be delivered such further documents as required
by the Security Instruments or otherwise as the Administrative Agent may
request to effect the transactions contemplated by this Article III.  The Borrower shall also, and shall cause each
Guarantor, to pledge to the Administrative Agent for the benefit of the Secured
Parties (and as appropriate to reaffirm its prior pledge of) all of the Pledged
Interests acquired or created after the Closing Date and held by such party, or
otherwise acquired by such party and not theretofore pledged to the
Administrative Agent for the benefit of the Secured Parties, and to deliver to
the Administrative Agent all of the documents and instruments in connection
therewith as are required pursuant to the terms of Section 7.12 and
of the Security Instruments.

 

3.02        Further
Assurances.

 

(a)           At the request of
the Administrative Agent, the Borrower will or will cause all other Loan Parties,
as the case may be, from time to time to execute, by its duly authorized
officers, alone or with the Administrative Agent, any certificate, instrument,
financing statement, control agreement, statement or document, or to procure
any such certificate, instrument, statement or document, or to take such other
action (and pay all connected costs) which the Administrative Agent reasonably
deems necessary from time to time to create, continue or preserve the liens and
security interests in Collateral (and the perfection and priority thereof) of
the Administrative Agent contemplated hereby and by the other Loan Documents
and specifically including all Collateral acquired by the Borrower or other
Loan Party after the Closing Date.

 

(b)           Without limiting the
generality of the foregoing subsection (a), in the event that the Borrower
or any Loan Party (or any Domestic Subsidiary that is required to be a Loan
Party pursuant to the terms of this Agreement) shall acquire (including as a
result of the creation or acquisition of a Restricted Subsidiary or an existing
Subsidiary becoming a Restricted Subsidiary, in each case in accordance with
the terms of this Agreement) any fee interest in real property having a fair
market value as determined in good faith by the Administrative Agent or the
Borrower in excess of $10,000,000 in the aggregate, the Borrower or the
applicable Domestic Subsidiary shall, promptly after such acquisition, execute
and deliver to the Administrative Agent a Mortgage in favor of the
Administrative Agent, as mortgagee for the ratable benefit of the Lenders, and
provide the Administrative Agent with evidence of the completion (or reasonably
satisfactory arrangements for the completion) of all recordings and filings of
such Mortgage as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to effectively create a valid, perfected, first
priority Lien, subject to Liens permitted by Section 8.01(a), (c),
(d), (g), (h), (i) or (j), against the
properties purported to be covered thereby, including evidence of the payment
of any filing or recordation fees or taxes, and deliver to the Administrative
Agent such Mortgaged Property Support Documents as the Administrative Agent may
request with respect to the property purported to be covered by such Mortgage.

 

67

 

(c)           Without limiting the
generality of the foregoing subsection (a), prior to entering into any new
lease of real property or renewing any existing lease of real property following
the Closing Date, the Borrower shall, and shall cause each of its Domestic
Subsidiaries that are or are required to be Loan Parties to, use its (and
their) best efforts (which shall not require the expenditure of cash or the
making of any material concessions under the relevant lease) to deliver to the
Administrative Agent a waiver, in form and substance reasonably satisfactory to
the Administrative Agent, executed by the lessor of any real property that is
to be leased by the Borrower or such Domestic Subsidiary for a term in excess
of one year in any state which by statute grants such lessor a “landlord’s” (or
similar) Lien which is superior to the Administrative Agent’s, to the extent
the value of any personal property of the Borrower and its Domestic
Subsidiaries that are Restricted Subsidiaries held or to be held at such leased
property exceeds (or it is anticipated that the value of such personal property
will, at any point in time during the term of such leasehold term, exceed)
$12,000,000.

 

(d)           The Administrative
Agent is hereby irrevocably authorized to execute (if necessary) and file or
cause to be filed, with or if permitted by applicable law without the signature
of the Borrower or any Loan Party appearing thereon, all Uniform Commercial Code
financing statements reflecting the Borrower or any other Loan Party as “debtor”
and the Administrative Agent as “secured party”, and continuations thereof and
amendments thereto, as the Administrative Agent reasonably deems necessary or
advisable to give effect to the transactions contemplated hereby and by the
other Loan Documents.

 

3.03        Information Regarding Collateral.  The Borrower represents, warrants and
covenants that (a) the chief executive office of the Borrower and each
other Person providing Collateral pursuant to a Security Instrument (each, a “Grantor”) at the
Closing Date is located at the address or addresses specified on Schedule 3.03,
and (b) Schedule 3.03 contains a true and complete list of (i) the
exact legal name, jurisdiction of formation, and address within the United
States of each Grantor and of each other Person that has effected any merger or
consolidation with a Grantor or contributed or transferred to a Grantor any
property constituting Collateral at any time since January 1, 2000
(excluding Persons making sales in the ordinary course of their businesses to a
Grantor of property constituting inventory in the hands of such seller), (ii) the
exact legal name, jurisdiction of formation, jurisdiction identification
number, and each location of the chief executive office of each Grantor at any
time since January 1, 2000, (iii) each location within the United
States in which material goods constituting Collateral are or have been located
since April 17, 2003 (together with the name of each owner of the property
located at such address if not the applicable Grantor, and a summary
description of the relationship between the applicable Grantor and such
Person), and (iv) each trade name, trademark or other trade style used by
any Grantor since April 17, 2003 and the purposes for which it was
used.  The Borrower shall not change, and
shall not permit any other Grantor to change, its name, jurisdiction of
formation (whether by reincorporation, merger or otherwise), the location of
its chief executive office or any location specified in clause (b)(iii) of
the immediately preceding sentence, or use or permit any other Grantor to use,
any additional trade name, trademark or other trade style, except upon giving
not less than thirty (30) days’ prior written notice to the Agent and taking or
causing to be taken all such action at Borrower’s or such other Grantor’s
expense as may be reasonably requested by the Administrative Agent to perfect
or maintain the perfection of the Lien of the Administrative Agent in
Collateral.

 

68

 

ARTICLE IV.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

4.01        Taxes.

 

(a)           Payments Free of
Taxes.  Any and all payments by or on
account of any obligation of the Borrower 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 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) the
Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)           Payment of Other
Taxes by the Borrower.  Without
limiting the provisions of subsection (a) above, the Borrower shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

 

(c)           Indemnification
by the Borrower.  The Borrower shall
indemnify the Administrative Agent, each Lender and the L/C Issuer, 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) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or
the L/C Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the L/C
Issuer, shall be conclusive absent manifest error.

 

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

 

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the 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 Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower 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

 

69

 

Borrower
or the Administrative Agent, shall deliver such other documentation prescribed
by applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower 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 the
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower 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 Borrower 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 Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of
the Code and (y) duly completed copies of 
Internal Revenue Service Form W-8BEN, or

 

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

 

(f)            Treatment of
Certain Refunds.  If the
Administrative Agent, any Lender or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent, such
Lender or the L/C Issuer, as the case may be, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the
Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Lender or the L/C Issuer in the event the Administrative Agent, such
Lender or the L/C Issuer is required to repay such refund to such Governmental
Authority.  This subsection shall
not be construed to require the Administrative Agent, any Lender or the L/C
Issuer to make available its tax returns (or any

 

70

 

other
information relating to its taxes that it deems confidential) to the Borrower
or any other Person.

 

4.02        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 Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies
the Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist.  Upon
receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all
Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

4.03        Inability to Determine Rates.  If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not
being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate
and reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Borrower and each Lender. 
Thereafter, the obligation of the Lenders to make or maintain Eurodollar
Rate Loans shall be suspended until the Administrative Agent (upon the instruction
of the Required Lenders) revokes such notice. 
Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for
a Borrowing of Base Rate Loans in the amount specified therein.

 

4.04        Increased Costs; Reserves on Eurodollar Rate Loans.

 

(a)           Increased Costs
Generally.  If any Change in Law
shall:

 

(i)            impose,
modify or deem applicable any reserve, special deposit, compulsory loan, insurance
charge or similar requirement against assets of, deposits with or for the
account of, or credit extended or participated in by, any Lender (except any
reserve requirement contemplated by Section 4.04(e))
or the L/C Issuer;

 

(ii)           subject
any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any Bankers’ Acceptance, any

 

71

 

participation in a Letter of Credit or a Bankers’ Acceptance, or any
Eurodollar Rate Loan made by it, or change the basis of taxation of payments to
such Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes
or Other Taxes covered by Section 4.01 and the imposition of, or
any change in the rate of, any Excluded Tax payable by such Lender or the L/C
Issuer); or

 

(iii)          impose
on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans
made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Rate Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or the L/C Issuer of participating in, issuing or maintaining any
Letter of Credit or Bankers’ Acceptance (or of maintaining its obligation to
participate in or to issue any Letter of Credit or Bankers’ Acceptance), or to
reduce the amount of any sum received or receivable by such Lender or the L/C
Issuer hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or the L/C Issuer, the Borrower will pay to such
Lender or the L/C Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.

 

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

 

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

 

(d)           Delay in Requests.  Failure or delay on the part of any Lender or
the L/C Issuer to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender’s or the L/C
Issuer’s right to demand such compensation, provided that

 

72

 

the Borrower shall
not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six months prior to the date that such Lender or
the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
L/C Issuer’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

(e)           Reserves
on Eurodollar Rate Loans.  The
Borrower shall 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 Eurodollar 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
the Borrower 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.

 

4.05        Compensation for Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the 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 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 the
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 the Borrower; or

 

(c)           any assignment of a
Eurodollar Rate Loan on a day other than the last day of the Interest Period
therefor as a result of a request by the Borrower pursuant to Section 11.13;

 

including any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable
to terminate the deposits from which such funds were obtained.  The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 4.05, each Lender shall be deemed to have
funded each Eurodollar Rate Loan made by it at the  Eurodollar Rate for such Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Loan was in fact so funded.

 

73

 

4.06        Mitigation Obligations; Replacement of
Lenders.

 

(a)           Designation of a
Different Lending Office.  If any
Lender requests compensation under Section 4.04, or the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 4.01,
or if any Lender gives a notice pursuant to Section 4.02, then such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 4.01 or 4.04,
as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 4.02, as applicable, and (ii) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

 

(b)           Replacement of
Lenders.  If any Lender requests
compensation under Section 4.04, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 4.01, the Borrower may
replace such Lender in accordance with Section 11.13.

 

4.07        Survival.  All of the Borrower’s obligations under this Article IV
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE V.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

5.01        Conditions of Initial Credit Extension.  The obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)           The Administrative
Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and its legal counsel:

 

(i)            executed
counterparts of this Agreement, each of the Security Instruments, the Guaranty
and the Parent Guaranty, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;

 

(ii)           Revolving
Loan Notes executed by the Borrower in favor of each Revolving Lender
requesting such a Note;

 

(iii)          Term
Loan Notes executed by the Borrower in favor of each Term Loan Lender
requesting such a Note;

 

74

 

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

 

(v)           such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that each of
the Borrower and each Guarantor is validly existing, in good standing and
qualified to engage in business in its jurisdiction of organization and in any
other jurisdiction requested by the Administrative Agent, including certified
copies of each Loan Party’s Organization Documents, shareholders’ agreements,
certificates of good standing and/or qualification to engage in business;

 

(vi)          a
favorable opinion of Simpson Thacher & Bartlett LLP, counsel to the
Loan Parties, and appropriate local counsel to the Loan Parties, each addressed
to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G
and such other matters concerning the Loan Parties and the Loan Documents as
the Required Lenders may reasonably request;

 

(vii)         certificates
of Responsible Officers of New Holdco, the Borrower or the applicable Loan
Parties either (A) identifying all consents, licenses and approvals
required in connection with the execution, delivery and performance by each
Loan Party and the validity against each such Loan Party of the Loan Documents
to which it is a party, and stating that such consents, licenses and approvals
shall be in full force and effect, and attaching true and correct copies
thereof or (B) stating that no such consents, licenses or approvals are so
required;

 

(viii)        a
certificate signed by a Responsible Officer of the Borrower certifying:

 

(A)          that
the conditions specified in Sections 5.02(a) and (b) have
been satisfied;

 

(B)           as
to the matters described in Section 5.01(d);

 

(C)           that
none of the Merger Documents (including any condition to the consummation of
the Merger) has been altered, amended, waived or otherwise changed or
supplemented since their execution on June 17, 2005, in any respect
materially adverse to the Lenders, except to the extent agreed to by prior
written consent of the Arrangers, which consent shall not be unreasonably
withheld; and

 

(D)          that
the Merger has been consummated prior to, or is being consummated substantially
simultaneously with, the Closing Date, in accordance with the terms of the
Merger Documents (only as amended, altered, waived or otherwise changed in
compliance with subpart (C) above);

 

75

 

(ix)           evidence
satisfactory to the Arrangers of the consummation, prior to or substantially
simultaneously with the occurrence of the Closing Date, of each of the
following, in each case in compliance with all applicable laws and regulations,
with the receipt of all necessary material governmental, shareholder and third
party consents (including Hart-Scott-Rodino clearance) and approvals:  (A) the creation of New Holdco and the
transfer of the Equity Interests of US Pipe and of JW MergerCo, Inc.
thereto, such that after giving effect thereto (but prior to giving effect to
the Merger and to the US Pipe Contribution) New Holdco is a direct subsidiary
of Walter and JW MergerCo, Inc. and US Pipe are direct Subsidiaries of New
Holdco, (B) the Entity Conversions, including the filing of any
certificates of conversion required or requested by the Administrative Agent, (C) the
US Pipe Contribution in accordance with the terms of, and such that after
giving effect thereto US Pipe is a “Restricted Subsidiary” under, the
Indentures for both the Mueller Water Products and the Subordinated Notes, and
otherwise on terms and conditions reasonably satisfactory to the Arrangers, (D) the
receipt by Walter of (I) not less than $400,000,000 of net proceeds from the
Dividend Distribution, and (II) not less than $20,000,000 of net proceeds from the Subordinated New
Holdco Loan, and the application of all such proceeds as consideration for the
Merger, (E) the refinancing (in an amount sufficient, inter alia, to
support the tender, defeasance or satisfaction and discharge of the Existing
Second Lien Notes), termination and payment in full of all obligations
outstanding under the Existing Walter Credit Agreement with the Replacement
Walter Facilities, and (F) the execution and effectiveness Put Backstop
Commitment Letter Amendment;

 

(x)            a
certificate signed by the Chief Financial Officers of Mueller Water Products
and the Borrower certifying that, after giving effect to the entering into of
the Loan Documents, the termination of the Existing Credit Agreement, and the
consummation of all of the Transactions, both Mueller Water Products and its
Subsidiaries and the Borrower and its Subsidiaries, measured on a consolidated
basis, are Solvent;

 

(xi)           evidence satisfactory to the Arrangers that the Existing Credit Agreement has been
or concurrently with the Closing Date is being terminated and all Liens
securing obligations under the Existing Credit Agreement have been or
concurrently with the Closing Date are being released;

 

(xii)          evidence
that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect;

 

(xiii)         an
initial Revolving Loan Notice, if any;

 

(xiv)        an
initial Term Loan Interest Rate Selection Notice, if any;

 

(xv)         delivery
of Uniform Commercial Code financing statements suitable in form and substance
for filing in all places required by applicable law to perfect the Liens of the
Administrative Agent under the Security Instruments as a first priority Lien as
to items of Collateral in which a security interest may be perfected by the
filing of financing statements, and such other documents and/or evidence of
other actions as may be

 

76

 

reasonably necessary under applicable law to perfect the Liens of the
Administrative Agent under such Security Instruments as a first priority Lien
in and to such other Collateral as the Administrative Agent may require,
including without limitation the delivery by the Borrower of all certificates
evidencing Pledged Interests, accompanied in each case by duly executed stock
powers (or other appropriate transfer documents) in blank affixed thereto;

 

(xvi)        with
respect to those parcels of real property set forth on Schedule 3.01,
a Mortgage and such Mortgaged Property Support Documents as the Administrative
Agent may request;

 

(xvii)       Uniform
Commercial Code search results showing only those Liens as are acceptable to
the Lenders;

 

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

 

(b)           Any fees required to
be paid on or before the Closing Date shall have been paid.

 

(c)           Unless waived by the
Administrative Agent, the Borrower shall have paid all reasonable fees, charges
and disbursements of counsel to the Administrative Agent to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of such
reasonable fees, charges and disbursements as shall constitute its reasonable
estimate of such reasonable fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).

 

(d)           The
Administrative Agent shall be satisfied that after giving effect to the initial
Credit Extension hereunder, the remaining amount available to be drawn under
the Revolving Credit Facility shall not be less than $72,500,000.

 

Without limiting the generality of the provisions of Section 10.04,
for purposes of determining compliance with the conditions specified in this Section 5.01,
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 Closing Date specifying its
objection thereto.

 

5.02        Conditions to all Credit Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Revolving Loan Notice or Term Loan
Interest Rate Selection Notice requesting only a conversion of Revolving Loans
or Segments, as applicable, to the other Type or a continuation of Eurodollar
Rate Loans or Eurodollar Rate Segments, as applicable) or make the initial
Credit Extension hereunder is subject to the following conditions precedent:

 

(a)           The representations
and warranties of the Borrower and each other Loan Party contained in Article VI
(subject, in the case of the representations and warranties made on the

 

77

 

Closing
Date, to the limitation set forth in the last sentence of this Section 5.02(a))
or any other Loan Document, or which are contained in any document furnished at
any time under or in connection herewith or therewith, 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, and
except that for purposes of this Section 5.02(a), the
representations and warranties contained in subsections (a) and (b) of
Section 6.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 7.01.  Notwithstanding anything to this Agreement to
the contrary, the representations and warranties made in Article VI
on the Closing Date pertaining to the activities or status of Mueller Water
Products, the Borrower, their respective Subsidiaries (other than U.S. Pipe and
any Subsidiaries thereof) or their respective businesses (other than the
businesses of U.S. Pipe and its Subsidiaries) prior to the consummation of the
Merger shall be deemed to be limited to the Specified Credit Agreement
Representations and the Specified Merger Document Representations.

 

(b)           No Default or Event
of Default shall have occurred and be continuing, or would result from such
proposed Credit Extension or from the application of the proceeds thereof.

 

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

 

(d)           No limitation exists
on any Borrowing or Credit Extension contained in Article II.

 

Each Request for Credit Extension (other than a Revolving Loan Notice
or Term Loan Interest Rate Selection Notice requesting only a conversion of
Revolving Loans or Segments, as applicable, to the other Type or a continuation
of Eurodollar Rate Loans or Eurodollar Rate Segments, as applicable) submitted
by the Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 5.02(a) and (b) have
been satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and
the Lenders, subject to the limitation set forth in Section 5.02(a),
that:

 

6.01        Existence, Qualification and Power;
Compliance with Laws. 
Each Loan Party (a) is a corporation, partnership or limited
liability company duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation, organization
or formation, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own
or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party and
to consummate the Transactions, (c) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all

 

78

 

Laws;
except in each case referred to in clause (b)(i), (c) or (d), to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

6.02        Authorization; No Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, and the
consummation of the Transactions, have been duly authorized by all necessary
corporate or other organizational action, and do not and will not (a) contravene
the terms of the Organization Documents of any such Person or of any Person
whose Equity Interests are being pledged; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under (i) any
Contractual Obligation to which such Person or any Person whose Equity
Interests are being pledged is a party (other than, in the case of the
consummation of the Merger, breaches of Contractual Obligations that are not,
individually or in the aggregate, material) or (ii) any order, injunction,
writ or decree of any Governmental Authority or any arbitral award to which
such Person or its property is subject; or (c) violate any Law.

 

6.03        Governmental Authorization; Other
Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document or the
consummation of the Transactions (other than, in the case of the consummation
of the Merger, approvals, consents, exemptions, authorizations or other actions
that have been obtained or taken or where the failure to do so is not,
individually or in the aggregate, material).

 

6.04        Binding Effect.  This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto.  This
Agreement constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of such Loan Party,
enforceable against each Loan Party that is party thereto in accordance with
its terms.

 

6.05        Financial Statements; No Material
Adverse Effect.

 

(a)           The Audited
Financial Statements of the Borrower and its Subsidiaries (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; (iii) show all
material indebtedness and other liabilities, direct or contingent, of the Borrower
and its Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness.

 

(b)           The unaudited
consolidated balance sheet of the Borrower and its Subsidiaries dated as of June 30,
2005, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered

 

79

 

thereby,
subject, in the case of clauses (i) and (ii), to the absence of footnotes
and to normal year-end audit adjustments.

 

(c)           Since the later of (i) June 30,
2005 and (ii) the date of the most recent audited financial statements
delivered pursuant to Section 7.01(a), there has been no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

 

(d)           The Borrower and its
Subsidiaries, on a consolidated basis, have no material indebtedness or other liabilities,
direct or contingent, including liabilities for taxes, material commitments and
Indebtedness, except to the extent (i) set forth in the most recent of (A) the
Audited Financial Statements and (B) the financial statements most
recently delivered pursuant to Section 7.01(a) or (b), (ii) set
forth on Schedule 8.03, or (iii) incurred since the date
referred to in subsection (i) hereof in accordance with the terms of
this Agreement and the other Loan Documents.

 

6.06        Litigation.  There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of the Borrower after due
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its Subsidiaries
or against any of their properties or revenues that (a) purport to affect
or pertain to this Agreement or any other Loan Document or any of the
Transactions or (b) except as specifically disclosed in Schedule 6.06,
either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect, and there has been no
adverse change in the status, or financial effect on any Loan Party or any
Subsidiary thereof, of the matters described on Schedule 6.06 which
could reasonably be expected to have a Material Adverse Effect.

 

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

 

6.08        Ownership of Property; Liens.  Each of the Borrower and each Subsidiary has
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  The property of the Borrower and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 8.01.

 

6.09        Environmental Compliance.  The Borrower and its Restricted Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility
for violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that, except as set forth on Schedule 6.09, such Environmental Laws
and claims could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

80

 

6.10        Insurance.  The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies 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 Borrower or the applicable
Subsidiary operates, none of which insurance shall be provided by any
Subsidiary or any other Affiliate of the Borrower.

 

6.11        Taxes.  The Borrower and its Subsidiaries have filed
all Federal, state and other material tax returns and reports required to be
filed, and have paid all Federal, state and other material taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are
being contested in good faith by appropriate proceedings diligently conducted
and for which adequate reserves have been provided in accordance with
GAAP.  Except as specifically described
on Schedule 6.11 hereto, there is no proposed tax assessment
against the Borrower or any Subsidiary that would, if made, have a Material
Adverse Effect.  Neither any Loan Party
nor any Subsidiary thereof is party to any tax sharing agreement other than the
Tax Sharing Agreement.

 

6.12        ERISA Compliance.

 

(a)           Each Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the Code and other applicable Laws, including Foreign Benefit Laws.  Each Plan that is intended to qualify under section 401(a) of
the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto or an application for such letter will be filed within twelve
months of the first Plan year for a newly adopted Plan and, to the best
knowledge of the Borrower, nothing has occurred which would reasonably be
expected to  prevent, or cause the loss
of, such qualification.  Each Plan
subject to any Foreign Benefit Law has, if required under applicable Foreign
Benefit Law, received the required approvals by any Governmental Authority
regulating such Plan or an application for such approvals is currently being
processed.  The Borrower and each ERISA
Affiliate have made all required contributions to each Plan subject to section 412
of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to section 412 of the Code has been made with
respect to any Plan.  The Borrower has
not (i) failed to make a required contribution or payment, or (ii) otherwise
failed to operate in compliance with any Foreign Pension Plan except to the
extent that the failure to so operate 
could not reasonably be expected to have a Material Adverse Effect.

 

(b)           There are no pending
or, to the best knowledge of the Borrower, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan
that could reasonably be expected to have a Material Adverse Effect.  Neither the Borrower nor any ERISA Affiliate
has engaged in a non-exempt prohibited transaction or violation of the
fiduciary responsibility rules described in section 4975 of the Code
or Part 4 of Title I of ERISA with respect to any Plan that has resulted
or could reasonably be expected to result in a Material Adverse Effect.

 

(c)           (i) No ERISA
Event has occurred for which any liability remains unsatisfied or is reasonably
expected to occur; (ii) except to the extent it could reasonably be
expected to have  a Material Adverse
Effect, no Pension Plan has any Unfunded Pension Liability; (iii) neither
the

 

81

 

Borrower
nor any ERISA Affiliate has had imposed on it, or reasonably expects to have
imposed on it, any material liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under Section 4007
of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any material liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would reasonably be expected to result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) to the
knowledge of the Borrower, neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.

 

(d)           Each Plan governed
by any Foreign Benefit Law is (i) funded to at least the minimum level
required by law or, if higher, to the level required by the terms governing the
Plan, (ii) provided for or recognized in the financial statements most
recently delivered to the Administrative Agent or (iii) estimated in the
formal notes to the financial statements most recently delivered to the
Administrative Agent; provided, that the failure to so fund, provide
for, recognize or estimate the liabilities arising under such Plan shall not be
deemed to be a breach of this representation unless such failure could
reasonably be expected to have a Material Adverse Effect.

 

6.13        Subsidiaries; Equity Interests.  The Borrower (a) has no Subsidiaries other than those
specifically disclosed in Schedule 6.13(a) or created or acquired
in compliance with Section 7.12, and (b) has no equity
investments in any other corporation or entity other than those specifically
disclosed Schedule 6.13(b) or made after the Closing Date in
compliance with this Agreement and the other Loan Documents.

 

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

 

(a)           The Borrower is not
engaged and will not engage, principally or as one of its important activities,
in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock.

 

(b)           None of the
Borrower, any Person Controlling the Borrower, or any Subsidiary (i) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is
or is required to be registered as an “investment company” under the Investment
Company Act of 1940.

 

6.15        Disclosure.  The Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf
of any Loan Party to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other

 

82

 

information
so furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

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

 

6.17        Intellectual Property; Licenses, Etc.  The
Borrower and its Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the
operation of their respective businesses, without known conflict with the IP
Rights of any other Person, except to the extent any failure so to own or possess
the right to use could not reasonably be expected to have a Material Adverse
Effect.  To the knowledge of the
Borrower, the operation by the Borrower and its Subsidiaries of their
respective businesses does not infringe upon any IP Rights held by any other
Person.

 

6.18        Senior Indebtedness.  All Obligations including those to pay
principal of and interest (including post-petition interest, whether or not
allowed as a claim under bankruptcy or similar laws) on the Loans and other
Obligations, and fees and expenses in connection therewith, constitute “Senior
Indebtedness” or similar term relating to the Obligations and all such
Obligations are entitled to the benefits of the subordination created by the
Put Backstop Facility of the Borrower, the Subordinated Note Indenture or any
other applicable Permitted Subordinated Debt Document, as applicable. The
Borrower acknowledges that the Administrative Agent, each Lender and the L/C
Issuer is entering into this Agreement and is extending its Commitments in reliance
upon the subordination provisions of the Put Backstop Facility of the Borrower,
the Put Backstop Replacement Facility of the Borrower, the Subordinated Note
Indenture or applicable Permitted Subordinated Debt Document.

 

ARTICLE VII.

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Revolving Credit Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit or Bankers’Acceptance shall remain
outstanding, the Borrower shall, and shall (except in the case of the covenants
set forth in Sections 7.01, 7.02, 7.03 and 7.11)
cause each Restricted Subsidiary to:

 

7.01        Financial Statements.  Deliver to the
Administrative Agent and each Lender:

 

83

 

(a)           as soon as
available, but in any event within 90 days after the end of each fiscal year of
the Borrower (subject to Section 1.03(a) with respect to the
fiscal year ending December 31, 2005) or, if earlier, 15 days after the
date required to be filed with the SEC (without giving effect to any extension
permitted by the SEC), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, and audited and
accompanied by (i) a report and opinion of a Registered Public Accounting
Firm of nationally recognized standing reasonably acceptable to the
Administrative Agent (the “Auditor”),
which report and opinion shall be prepared in accordance with audit standards of the Public Company
Accounting Oversight Board and applicable Securities Laws and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit or with respect to the absence of material
misstatement and (ii) to the extent required to be prepared under
applicable Securities Laws, the report(s) of management on the Borrower’s
internal control over financial reporting pursuant to Items 308(a) and 308(c) of
Regulation S-K promulgated under the Exchange Act, the Auditor’s attestation
report on management’s assessment of the Borrower’s internal control over
financial reporting as filed with the SEC on Form 10-K for the Borrower,
and an independent assessment by the Auditor as to the effectiveness of the
Borrower’s internal control over financial reporting as required by Auditing
Standard No. 2 of the Public Company Accounting Oversight Board; and

 

(b)           as
soon as available, but in any event within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower or, if earlier,
five Business Days after the date required to be filed with the SEC (without
giving effect to any extension permitted by the SEC), a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated statements of income or operations, and
cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal
year then ended, setting forth in each case in comparative form the figures
consistent with the Borrower’s financial statements filed with the SEC with
respect to the fiscal quarter ended July 2, 2005, or with other
comparative figures as are acceptable to the Administrative Agent, all in
reasonable detail and certified by a Responsible Officer of the Borrower as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.

 

As to any information contained in materials furnished pursuant to Section 7.02(d),
the Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in derogation
of the obligation of the Borrower to furnish the information and materials
described in subsections (a) and (b) above at the times specified
therein.

 

7.02        Certificates; Other Information.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)           concurrently with
the delivery of the financial statements referred to in Section 7.01(a),
a certificate of its independent certified public accountants certifying such
financial

 

84

 

statements
and stating that in making the examination necessary they have not become aware
of any Default  in respect of any term,
covenant, condition of Section 8.12 or other provision in so far as
they relate to accounting matters or, if any such Default shall exist, stating
the nature and status of such event;

 

(b)           concurrently with
the delivery of the financial statements referred to in Sections 7.01(a) and
(b), a duly completed Compliance Certificate signed by a Responsible
Officer of the Borrower;

 

(c)           promptly after any
request by the Administrative Agent, documents and other information supporting
the calculation of any defined term used in the computation in any Compliance
Certificate of the financial covenants set forth in Section 8.12;

 

(d)           promptly after the
same are available, copies of each annual report, proxy or financial statement
sent to the stockholders of the Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower may
file or be required to file with the SEC under Section 13 or 15(d) of
the Exchange Act, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;

 

(e)           as
soon as available and in any event no later than 60 days after the beginning of
each fiscal year of the Borrower, a consolidated business plan for the Borrower
and its Subsidiaries prepared by management of the Borrower including balance
sheets, and related statements of operations, retained earnings and cash flow
(to include separate forecasts for Consolidated Capital Expenditures and
Consolidated EBITDA), on a quarterly basis for such fiscal year, and a
reasonably detailed explanation of any underlying assumptions with respect
thereto; and

 

(f)            promptly, such
additional information regarding the business, financial or corporate affairs
of the Borrower or any Subsidiary, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may from time to time reasonably
request.

 

Documents required to be delivered pursuant to Section 7.01(a) or
(b) or Section 7.02(d) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 11.02; or (ii) on which
such documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower 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 Borrower 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 Borrower shall be required to provide
paper

 

85

 

copies of the
Compliance Certificates required by Section 7.02(b) to the
Administrative Agent.  Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower 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.

 

The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arrangers will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or
another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to the
Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that, so long as the Borrower is the issuer of any
outstanding debt or equity securities that are registered or issued pursuant to
a private offering or is actively contemplating issuing any such securities,
(w) all Borrower Materials that are to be made available to Public Lenders
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to
have authorized the Administrative Agent, the Arrangers, the L/C Issuer and the
Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall
be treated as set forth in Section 11.07); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated “Public Investor”; and (z) the Administrative Agent
and the Arrangers shall be entitled to treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the Platform
not designated “Public Investor”.  Notwithstanding the foregoing, the Borrower
shall be under no obligation to mark any Borrower Materials “PUBLIC.”

 

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

 

(a)           of the occurrence of
any Default;

 

(b)           of any matter that
has resulted or could reasonably be expected to result in a Material Adverse
Effect, including (i) breach or non-performance of, or any default under,
a Contractual Obligation of the Borrower or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;

 

(c)           of the occurrence of
any ERISA Event; and

 

(d)           of any material
change in accounting policies or financial reporting practices by the Borrower
or any Subsidiary.

 

86

 

Each notice pursuant to this Section 7.03 shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 7.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

 

7.04        Payment of Obligations.  Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful
claims which, if unpaid, would by law become a Lien upon its property, except
to the extent that any such Lien would otherwise be permitted by Section 8.01;
and (c) all Indebtedness having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
$10,000,000, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

 

7.05        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization or formation except in a transaction permitted
by Section 8.04 or 8.05; (b) take all reasonable action
to maintain all rights, privileges, permits, licenses and franchises necessary
or desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.

 

7.06        Maintenance of Properties.  (a) Maintain, preserve and protect all
of its properties (other than insignificant properties) and equipment necessary
in the operation of its business in good working order and condition, ordinary
wear and tear excepted except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect; (b) make all necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care
typical in the industry in the operation and maintenance of its facilities.

 

7.07        Maintenance of Insurance.  In the event compliance with the insurance
requirements set forth in the Security Instruments does not satisfy the
following requirements, and not in limitation of such insurance requirements in
the Security Instruments, maintain, with financially sound and reputable
insurance companies, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons and providing for
not less than 15 days’ prior notice to the Administrative Agent of termination,
lapse or cancellation of such insurance, none of which insurance (other than
worker’s compensation insurance, disability insurance and other similar types
of insurance that do not constitute the insurance of its properties or of
interruptions to its business operations) shall be provided by any Subsidiary
or any other Affiliate of the Borrower.

 

87

 

7.08        Compliance with Laws.  Comply in all material respects with the
requirements of all Laws (including without limitation all applicable
Environmental Laws) and all orders, writs, injunctions and decrees applicable
to it or to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect.

 

7.09        Books and Records.  (a) 
Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority
having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

 

7.10        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists
the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.

 

7.11        Use of Proceeds.  Use the proceeds of the Credit Extensions (i) to
finance the Dividend Distribution, (ii) to refinance existing
indebtedness, including all indebtedness outstanding under the Existing Credit
Agreement and the payment of all fees and expenses in connection therewith (but
excluding the Mueller Water Products Notes and Subordinated Notes), (iii) to
redeem Mueller Water Products Notes (including any premiums paid in connection
therewith) in an aggregate amount not to exceed $25,000,000 resulting from the
exercise of put rights by the holders of thereof upon the consummation of the
Transactions, (iv) to redeem Subordinated Notes (including any premiums
paid in connection therewith) in an aggregate amount not to exceed $25,000,000
resulting from the exercise of put rights by the holders of thereof upon the
consummation of the Transactions, (v) to make the Subordinated New Holdco
Loan, (vi) to pay fees and expenses in connection with the Transactions,
and (vii) for working capital, capital expenditures, and other general
corporate purposes not in contravention of any Law or of any Loan Document.

 

7.12        New Subsidiaries, Pledgors and Real Property.

 

(a)           As soon as
practicable but in any event within 30 Business Days following the acquisition
or creation of any Subsidiary that is a Restricted Subsidiary (other than a
Receivables Co.), or the time any existing Subsidiary (other than any Unrestricted
Subsidiary or any Receivables Co.) becomes a Material Subsidiary, cause to be
delivered to the Administrative Agent each of the following:

 

88

 

(i)            if
such Subsidiary is both a Domestic Subsidiary and a Material Subsidiary, a
Guaranty Joinder Agreement duly executed by such Material Subsidiary;

 

(ii)           if
such Subsidiary is both a Domestic Subsidiary and a Material Subsidiary, (A) a
Security Joinder Agreement duly executed by such Material Subsidiary (with all
schedules thereto appropriately completed) and (B) if such Material
Subsidiary owns a fee interest in any real property having a fair market value
in excess of $10,000,000, those documents as are required by Section 3.02(b);

 

(iii)          if
such Subsidiary is both a Material Subsidiary and either a Domestic Subsidiary
or a Direct Foreign Subsidiary, and if any of the Subsidiary Securities issued
by such Material Subsidiary are Pledged Interests and are owned by a Material
Subsidiary who has not then executed and delivered to the Administrative Agent
the Pledge Agreement or a Pledge Joinder Agreement granting a Lien to the
Administrative Agent, for the benefit of the Secured Parties, in such Pledged
Interests, a Pledge Joinder Agreement (with all schedules thereto appropriately
completed) duly executed by the Material Subsidiary that directly owns such
Pledged Interests;

 

(iv)          if
such Subsidiary is both a Material Subsidiary and either a Domestic Subsidiary
or a Direct Foreign Subsidiary, and if any of the Subsidiary Securities issued
by such Material Subsidiary are owned by the Borrower or a Material Subsidiary
who has previously executed a Pledge Agreement or a Pledge Joinder Agreement, a
Pledge Agreement Supplement by the Borrower (if applicable) and each Material
Subsidiary that owns any of such Pledged Interests with respect to such Pledged
Interests in the form required by the Pledge Agreement;

 

(v)           if
such Subsidiary is a Material Subsidiary and owns any Domestic Subsidiary or
Direct Foreign Subsidiary that is also a Material Subsidiary, a Pledge Joinder
Agreement (with all schedules thereto appropriately completed) duly executed by
such Material Subsidiary;

 

(vi)          if
the Pledged Interests issued or owned by such Subsidiary constitute securities
under Article 8 of the Uniform Commercial Code (A) the certificates
representing 100% of such Pledged Interests and (B) duly executed, undated
stock powers or other appropriate powers of assignment in blank affixed
thereto;

 

(vii)         with
respect to any Person that has executed a Pledge Joinder Agreement, a Pledge
Agreement Supplement, or a Security Joinder Agreement, Uniform Commercial Code
financing statements naming such Person as “Debtor” and naming the
Administrative Agent for the benefit of the Secured Parties as “Secured Party,”
in form, substance and number sufficient in the reasonable opinion of the
Administrative Agent and its special counsel to be filed in all Uniform
Commercial Code filing offices and in all jurisdictions in which filing is
necessary to perfect in favor of the Administrative Agent for the benefit of
the Secured Parties the Lien on the Collateral conferred under such Security
Instrument to the extent such Lien may be perfected by Uniform Commercial Code
filing;

 

89

 

(viii)        upon
the reasonable request of the Administrative Agent, an opinion of counsel to
each Subsidiary executing any Joinder Agreement or Pledge Supplement, and the
Borrower if it executes a Pledge Agreement Supplement, pursuant to this Section 7.12,
dated as of the date of delivery of such applicable Joinder Agreements (and
other Loan Documents) provided for in this Section 7.12 and
addressed to the Administrative Agent and the Lenders, in form and substance
reasonably acceptable to the Administrative Agent, each of which opinions may
be in form and substance, including assumptions and qualifications contained
therein, substantially similar to those opinions of counsel delivered pursuant
to Section 5.01(a); and

 

(ix)           with
respect to each Subsidiary executing any Joinder Agreement or Pledge
Supplement, and the Borrower if it executes a Pledge Agreement Supplement,
pursuant to this Section 7.12, current copies of the Organization
Documents of each such Person, minutes of duly called and conducted meetings
(or duly effected consent actions) of the Board of Directors, partners, or
appropriate committees thereof (and, if required by such Organization Documents
or applicable law, of the shareholders, members or partners) of such Person
authorizing the actions and the execution and delivery of documents described
in this Section 7.12, all certified by the applicable Governmental
Authority or appropriate officer as the Administrative Agent may elect.

 

(b)           As soon as
practicable but in any event within 30 Business Days following the acquisition
of any Pledged Interests by any Material Subsidiary who has not theretofore
executed the Pledge Agreement or a Pledge Joinder Agreement and who is not
otherwise required to deliver a Pledge Joinder Agreement pursuant to Section 7.12(a),
cause to be delivered to the Administrative Agent a Pledge Joinder Agreement
(with all schedules thereto appropriately completed) duly executed by such
Material Subsidiary, and the documents, stock certificates, stock powers, financing
statements, opinions, Organization Documents and organizational action relating
thereto and to the pledge contained therein and described in Section 7.12(a)(vi),
(vii), (viii) and (ix).

 

(c)           As soon as
practicable but in any event within 30 Business Days following the acquisition
of any fee interest in any real property having a fair market value in excess
of $5,000,000 by any Material Subsidiary, notify the Administrative Agent of
such acquisition and provide to the Administrative Agent the location and use
of such real property, and if requested by the Administrative Agent, cause to
be delivered to the Administrative Agent a Mortgage with respect thereto, along
with such Mortgaged Property Support Documents as are requested by the
Administrative Agent, duly executed by such Material Subsidiary, and such other
documents, financing statements and opinions with respect to the grant of a
mortgage therein as the Administrative Agent may reasonably request, including
evidence of the payment of any filing or recordation fees or taxes.

 

7.13        Compliance with ERISA.  Do,
and cause each of its ERISA Affiliates to do, each of the following: (a) maintain
each Plan in compliance in all material respects with the applicable provisions
of ERISA, the Code and other applicable Laws, including Foreign Benefit Laws; (b) cause
each Plan which is qualified under section 401(a) of the Code to
maintain such qualification; (c) cause each Plan subject to any Foreign
Benefit Law to maintain any required approvals by any Governmental Authority
regulating such Plan, (d) make all required

 

90

 

contributions
to any Plan subject to section 412 of the Code, and (e) make all
required contributions and payments to any Foreign Pension Plans.

 

7.14        Further Assurances.  At
the Borrower’s cost and expense, upon request of the Administrative Agent, duly
execute and deliver or cause to be duly executed and delivered, to the
Administrative Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Administrative Agent to carry out more effectively the provisions and
purposes of this Agreement, the Guaranty, the Security Instruments and the
other Loan Documents.

 

7.15        Interest Rate Protection.  Within 90 days following the Closing Date,
obtain and for a period of not less than three (3)  years after the
Closing Date maintain in effect, Swap Contracts to the extent necessary to
cause at least fifty percent (50%) of the Consolidated Funded Indebtedness on
the Closing Date to either have a fixed interest rate or to have interest rate
protection on terms and conditions reasonably satisfactory to the
Administrative Agent, which Swap Contracts shall be for a term of not less than
one (1)  year from the date such Swap Contracts are entered into.

 

7.16        Change of Control Offer.  Promptly, and in any event no later than 20
days after the Closing Date, make any Change of Control Offer (as defined in
the Subordinated Note Indenture) required as a result of the consummation of
the Transactions, which Change of Control Offer shall establish a purchase date
no later than 60 days after the Closing Date for the Subordinated Notes
tendered in connection therewith.

 

ARTICLE VIII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any Revolving Credit Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit or Bankers’Acceptance shall remain
outstanding, the Borrower shall not, nor shall it permit any Restricted Subsidiary to, directly or indirectly:

 

8.01        Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following:

 

(a)           Liens pursuant to
any Loan Document;

 

(b)           Liens existing on
the date hereof and listed on Schedule 8.01 and any renewals or
extensions thereof, provided that the property covered thereby consists
only of the property covered by the Liens being renewed or extended and any
renewal or extension of the obligations secured or benefited thereby is
permitted by Section 8.03(b);

 

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

 

91

 

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

 

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

 

(f)            Liens or deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business, and including deposits (but
not Liens) related to the acquisition of property;

 

(g)           (i) Liens with
respect to minor imperfections of title and easements, rights-of-way,
covenants, consents, reservations, encroachments, variations and zoning and
other similar restrictions, charges, encumbrances or title defects affecting
real property which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of
the applicable Person, (ii) in the case of any property covered by a
Mortgage, encumbrances disclosed in the title insurance policy issued to, and
reasonably approved by, the Administrative Agent insuring the Mortgage; and (iii) in
the case of any property covered by a Mortgage, upon certification by the
Borrower that an easement, right-of-way, restriction, reservation, permit,
servitude or other similar encumbrance granted or to be granted by the Borrower
or any such      Restricted Subsidiary
does not materially detract from the value of or materially impair the use by
the Borrower or such Restricted Subsidiary in the ordinary course of its
business of the property subject to or to be subject to such encumbrance, the
Administrative Agent shall execute such documents as are reasonably requested
to subordinate its Mortgage to such encumbrance;

 

(h)           with respect to any
Mortgaged Fee Property, Liens which appear as exceptions to the Title Policy
delivered to the Administrative Agent with respect to such Mortgaged Fee
Property that are not otherwise permitted by Section 8.01(a), (c),
(d), (g) or (i) and are acceptable to the
Administrative Agent, it being understood that Liens appearing on the Title
Policies delivered to the Administrative Agent on the Closing Date are
acceptable to the Administrative Agent;

 

(i)            any interest or
title of a lessor or sublessor and any restriction or encumbrance to which the
interest or title of such lessor or sublessor may be subject that is incurred
in the ordinary course of business and, either individually or when aggregated
with all other Liens described in clauses (a) through (h) in effect
on any date of determination, could not be reasonably expected to have a
Material Adverse Effect;

 

(j)            Liens securing
judgments for the payment of money not constituting an Event of Default under Section 9.01
or securing appeal or other surety bonds related to such judgments;

 

92

 

(k)           Liens securing
Indebtedness permitted under Section 8.03(e); provided that (i) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;

 

(l)            Liens
in the nature of trustees’ Liens granted pursuant to any indenture governing
any Indebtedness permitted by Section 8.03, in each case in favor
of the trustee under such indenture and securing only obligations to pay
compensation to such trustee, to reimburse its expenses and to indemnify it
under the terms thereof;

 

(m)          Liens
of sellers of goods to the Borrower and the Restricted Subsidiaries arising
under Article 2 of the UCC or similar provisions of applicable law in the
ordinary course of business, covering only the goods sold and securing only the
unpaid purchase price for such goods and related expenses;

 

(n)           Liens
securing Assumed Indebtedness of the Borrower and the Restricted Subsidiaries
permitted pursuant to Section 8.03(f); provided that (i) such
Liens do not at any time encumber any property other than property of the Subsidiary acquired, or the property
acquired, and proceeds thereof in connection with such Assumed Indebtedness and
shall not attach to any      assets of
the Borrower or any of the Restricted Subsidiaries theretofore existing or
(except for any such proceeds) which arise after the date thereof and (ii) the Assumed Indebtedness and other secured
Indebtedness of the Borrower and the Restricted Subsidiaries secured by any
such Lien does not exceed the fair market value of the property being
acquired in connection with such
Assumed Indebtedness;

 

(o)           Liens
on assets of Foreign Subsidiaries of the Borrower securing Indebtedness of such
Foreign Subsidiaries permitted pursuant to clause (h), (l) or (m) of Section 8.03;

 

(p)           Liens
on the Equity Interests of Unrestricted Subsidiaries securing Indebtedness
incurred by such Unrestricted Subsidiaries;

 

(q)           operating
leases or subleases granted by the Borrower or any of the Restricted
Subsidiaries to any other Person in the ordinary course of business; and

 

(r)            Liens
on (i) Accounts sold or contributed to a Receivables Co. in  connection with a Permitted Receivables
Transaction, (ii) other assets related to such Accounts and (iii) proceeds
of the foregoing, in each case created in connection with such Permitted
Receivables Transaction.

 

8.02        Investments.  Make any Investments, except:

 

(a)           Investments held by
the Borrower or such Subsidiary in the form of Cash Equivalents;

 

(b)           loans and advances
to officers, directors and employees of the Borrower and Subsidiaries the
ordinary course of the business of the Borrower and its Subsidiaries as
conducted on the Closing Date to the extent permitted by applicable Law;

 

93

 

(c)           Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;

 

(d)           letters of credit
issued in support of and Guarantees permitted by Section 8.03;

 

(e)           equity Investments
existing as of the date hereof and as set forth in Schedule 6.13
and other Investments existing as of the date hereof and as set forth in Schedule 8.02
and extensions or renewals thereof, provided that no such extension or
renewal shall be permitted if it would (x) increase the amount of such
Investment at the time of such extension or renewal or (y) result in a Default
hereunder;

 

(f)            without
duplication, Investments permitted as Consolidated Capital Expenditures
pursuant to Section 8.12(d) (including any such Investments
which would otherwise constitute Consolidated 
Capital Expenditures but for the operation of clause (i) of the
proviso to the definition thereof);

 

(g)           Investments made by
the Borrower or any of the Restricted Subsidiaries, solely with proceeds which
have been contributed, directly or indirectly after the Closing Date, to the
Borrower or such Restricted Subsidiary as cash equity from Walter for the
purpose of making an Investment identified in a notice to the Administrative
Agent on or prior to the date that such capital contribution is made, which
Investments shall result in the Borrower or such Restricted Subsidiary
acquiring a majority controlling interest in the Person in which such
Investment was made or increasing any such controlling interest already
maintained by it;

 

(h)           Investments in the
form of non-cash consideration received from a Disposition permitted by Section 8.05(e);

 

(i)            Investments by the
Borrower or any Domestic Subsidiary that is a Restricted Subsidiary consisting
of the transfer of Equity Interests of a Foreign Subsidiary to another Foreign
Subsidiary that is a Restricted Subsidiary;

 

(j)            Investments made or
held by any Foreign Subsidiary of the Borrower that is a Restricted Subsidiary
in any other Foreign Subsidiary of the Borrower that is a Restricted
Subsidiary;

 

(k)           Investments of the
Borrower or any Domestic Subsidiary of the Borrower that is a Restricted
Subsidiary in the Borrower or any Subsidiary of the Borrower that is a
Restricted Subsidiary; provided that (i) such Investments in any
Receivables Co. shall only be made in connection with and as part of a
Permitted Receivables Transaction and (ii) after making such Investment
the Foreign Investment Basket Utilization shall not exceed $75,000,000

 

(l)            Investments in the
form of securities of any Person acquired in an Acquisition permitted hereunder
and Assumed Indebtedness in respect of a Person or property acquired in an
Acquisition permitted hereunder;

 

94

 

(m)          Investments in
Persons (other than New Holdco and its Subsidiaries) that are engaged in the
Core Business and are not permitted under clauses (a) through (l) above in
an aggregate principal amount at any one time outstanding not to exceed
$30,000,000;

 

(n)           Investments in Swap
Contracts permitted to be maintained under Section 8.03(d) or
required to be maintained under Section 7.15;

 

(o)           Investments
consisting of Indebtedness held by the Borrower or any Restricted Subsidiary
arising on account of the accrual of interest on such Investments;

 

(p)           the Subordinated New
Holdco Loan; and

 

(q)           Investments made by
any Receivables Co. in connection with any Permitted Receivables Transaction;

 

provided
that, notwithstanding the foregoing, (i) any Investment which when made
complies with the requirements of the definition of the term “Cash Equivalent”
may continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements; and (ii) no Investment otherwise
permitted by clause (d) (except to the extent related to Indebtedness then
permitted to be incurred under Section 8.03), (l) or (m) shall be
permitted to be made if, immediately before or after giving effect thereto, any
Default shall have occurred and be continuing.

 

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

 

(a)           Indebtedness under
the Loan Documents;

 

(b)           Indebtedness
outstanding on the date hereof and listed on Schedule 8.03 and any
refinancings, refundings, renewals or extensions thereof; provided that (i) the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder, (ii) the average life to
maturity of any refinancing, refunding, renewal or extension of such
Indebtedness permitted hereby is not less than the then average life to
maturity of the Indebtedness so refinanced or replaced, and (iii) any
refinancing, refunding, renewal or extension of Indebtedness subordinated to
the Obligations shall be on terms no less favorable to the Administrative Agent
and the Lenders, and no more restrictive to the Borrower, than the subordinated
Indebtedness being refinanced, refunded, renewed or extended and in an amount
not less than the amount outstanding at the time thereof;

 

(c)           Guarantees of the
Borrower or any Guarantor in respect of Indebtedness otherwise permitted
hereunder of the Borrower or any other Guarantor (other than Indebtedness
described in clauses (h), (j),
(m), (n) and (o) below);

 

(d)           obligations
(contingent or otherwise) of the Borrower or any Subsidiary existing or arising
under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, cash flows or property held or

 

95

 

reasonably
anticipated by such Person, or changes in the value of securities issued by
such Person, and not for purposes of speculation or taking a “market view;” and
(ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;

 

(e)           Indebtedness in
respect of capital leases, Synthetic Lease Obligations and purchase money
obligations for real property and fixed or capital assets within the
limitations set forth in Section 8.01(k); provided, however,
that the aggregate amount of all such Indebtedness at any one time outstanding
shall not exceed $30,000,000;

 

(f)            Assumed
Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate
principal amount not to exceed $20,000,000 at any time outstanding;

 

(g)           Indebtedness of the
Borrower in respect of the Subordinated Notes in an      aggregate principal amount not to exceed
$315,000,000;

 

(h)           Indebtedness of
Foreign Subsidiaries of the Borrower in an aggregate principal amount not to
exceed $40,000,000 at any time outstanding;

 

(i)            the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business;

 

(j)            Indebtedness of (i) (x)
any Domestic Subsidiary that is a Restricted Subsidiary owing to the Borrower
or any of the Restricted Subsidiaries, or (y) the Borrower owing to any of the
Restricted Subsidiaries, and (ii) any Foreign Subsidiary that is a
Restricted Subsidiary of the Borrower owing to the Borrower or any Domestic
Subsidiary that is a Restricted Subsidiary; provided that (A) the
Foreign Investment Basket Utilization does not exceed $75,000,000, and (B) any
such Indebtedness described in this clause (j) which is owing to the Borrower
or any of its Domestic Subsidiaries that are Restricted Subsidiaries, (1) to
the extent requested by the Administrative Agent, such Indebtedness shall be
evidenced by one or more promissory notes in form and substance satisfactory to
the Administrative Agent which shall be duly executed and delivered to (and
indorsed to the order of) the Administrative Agent in pledge pursuant to a
Pledge Agreement and (2) in the case of any such Indebtedness owed by a
Person other than the Borrower or a Subsidiary Guarantor, such Indebtedness
shall not be forgiven or otherwise discharged for any consideration other than
payment (Dollar for Dollar) in cash unless the Administrative Agent otherwise
consents;

 

(k)           surety bonds
permitted under Section 8.01;

 

(l)            other Indebtedness
of the Borrower and the Restricted Subsidiaries in an aggregate principal
amount outstanding not to exceed at any time $20,000,000; provided that,
unless such Indebtedness is Indebtedness of a Foreign Subsidiary, such
Indebtedness is  unsecured;

 

(m)          Indebtedness of any
Foreign Subsidiary owing to any other Foreign Subsidiary;

 

(n)           the Put Backstop
Facility;

 

96

 

(o)           Permitted
Subordinated Debt; and

 

(p)           Receivables Facility
Outstandings in an aggregate amount at any time not to exceed $100,000,000, the
recourse of which shall (except in respect of fees, costs, indemnifications,
representations and warranties and other obligations in which recourse is
customarily available against originators or servicers of Accounts included in
special-purpose-vehicle receivables financing arrangements, other than any of
the foregoing which are in effect credit substitutes) be limited solely to any
applicable Receivables Co. and its assets;

 

provided
that (i) no Indebtedness otherwise permitted by clause (e), (f), (h), (j)
(as such clause (j) relates to loans made by the Borrower or any Subsidiary
Guarantor to Restricted Subsidiaries which are not Subsidiary Guarantors) or
(l) may be incurred if, immediately before or after giving effect to the
incurrence thereof, any Default shall have occurred and be continuing, and (ii) all
such Indebtedness of the type described in clause (j)(i)(y) above that is owed
to Subsidiaries that are not Subsidiary Guarantors shall be subordinated, in
writing, to the Obligations upon terms satisfactory to the Administrative
Agent.

 

8.04        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:

 

(a)           any Restricted
Subsidiary (other than a Receivables Co.) may merge with the Borrower or any
one or more other Restricted Subsidiaries, provided that (i) when
the Borrower is merging with a Restricted Subsidiary, the Borrower shall be the
continuing or surviving Person, and (ii) when any Guarantor is merging with another Subsidiary, the Guarantor shall be the continuing or
surviving Person; and

 

(b)           any Restricted
Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or another Restricted
Subsidiary (other than a Receivables Co.); provided that if the
transferor in such a transaction is a Guarantor, then the transferee must also
be a Guarantor or the Borrower; and

 

(c)           a merger or
consolidation necessary to consummate (i) an Acquisition permitted by and
in compliance with Section 8.13 or (ii) a Disposition
permitted by and in compliance with Section 8.05.

 

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

 

(a)           Dispositions in the
ordinary course of its business (and neither constitutes a Disposition of all
or a substantial part of the Borrower’s and the Restricted Subsidiaries’
assets, taken as a whole, nor is made in connection with a Permitted
Receivables Transaction) or of obsolete or worn out property;

 

(b)           any Disposition that
constitutes (i) an Investment permitted under Section 8.02, (ii) a
Lien permitted under Section 8.01 or Section 8.04(a) or
(b), or (iii) a Restricted Payment permitted under Section 8.06;

 

97

 

(c)           Dispositions for
fair market value of equipment or real property to the extent that (i) such
equipment or real property is exchanged for credit against the purchase price
of similar replacement property or (ii) the proceeds of such Disposition
are reasonably promptly applied to the purchase price of such replacement
equipment or real property, and in each case if the disposed property
constituted Collateral then the relevant Loan Party shall grant a Lien to the
Administrative Agent (including the delivery of any necessary Mortgage and
Mortgaged Property Support Documents) on such new or replacement property;

 

(d)           Dispositions of
property by the Borrower or any Restricted Subsidiary
to a wholly-owned Restricted Subsidiary
(other  than a Receivables Co.) or, solely with respect to Dispositions of
the stock of a Restricted Subsidiary of the Borrower, the Borrower; provided
that if the transferor of such property is the Borrower or a Guarantor, the
transferee thereof must be a Guarantor or, subject to the limitation above, the
Borrower;

 

(e)           any
Disposition of assets or stock of the Subsidiaries, so long as (with respect to
each such Disposition) such Disposition is for fair market value and:

 

(i)            at
least 75% of the consideration for such Disposition is cash;

 

(ii)           the
Net Cash Proceeds are applied in accordance with Section 2.06(d);

 

(iii)          no
Default exists or would exist immediately prior to or after giving pro forma
effect to the Disposition;

 

(iv)          to
the extent not otherwise granted therein, the Borrower agrees that it will, and
will cause each of its Restricted Subsidiaries that are Domestic Subsidiaries
to, grant to the Administrative Agent a security interest in any non-cash
consideration received in connection with a Disposition provided for in this Section 8.05(e) that
is evidenced by a promissory note or other written instrument; and

 

(v)           the aggregate book value of the assets (or assets of the
Person) subject to such Disposition, when taken together with the aggregate
book value of all assets (or assets of the Person(s)) Disposed of in reliance
on this clause (e) shall not exceed $100,000,000 after the Closing
Date;

 

(f)            such Disposition results from a casualty or
condemnation in respect of such property or assets;

 

(g)           such Disposition consists of the sale or
discount of overdue accounts receivable in the ordinary course of business, but
only in connection with the compromise or collection thereof; or

 

(h)           such Disposition is of Accounts and related
assets and is made pursuant to a Permitted Receivables Transaction.

 

8.06        Restricted Payments.  Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, in each case

 

98

 

(except
Section 8.06(a)) so long as no Default or Event of Default shall
have occurred and be continuing (both before and after the making of such
Restricted Payment):

 

(a)           each Restricted
Subsidiary may make Restricted Payments to the Borrower and to wholly-owned
Restricted Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Restricted Subsidiary, to the Borrower and any Restricted
Subsidiary and to each other owner of capital stock or other equity interests
of such Restricted Subsidiary on a pro rata basis based on their relative
ownership interests);

 

(b)           the Borrower and
each Subsidiary may declare and make dividend payments or other distributions
payable solely in the common stock or other common Equity Interests of such
Person;

 

(c)           to the extent
available after making any prepayment required by Section 2.06(d),
and subject to the making of each such prepayment, the Borrower and each
Subsidiary may purchase, redeem or otherwise acquire shares of, or pay
dividends or make distributions with respect to, its common stock or other
common Equity Interests or warrants or options to acquire any such shares with
the proceeds received from the issue of new shares of its common stock or other
common Equity Interests;

 

(d)           the
Borrower may make the Dividend Distribution;

 

(e)           the Borrower shall
be permitted to make Restricted Payments to Mueller Water Products to the
extent necessary to enable Mueller Water Products to (i) pay taxes and
make payments to New Holdco sufficient to permit Mueller Water Products or New
Holdco, as applicable, to pay any U.S. Taxes which are due and payable in
respect of taxable income of the Borrower and its Subsidiaries that is
allocable to it for U.S. tax purposes (including, in the case of New Holdco,
any amounts that are payable to Walter pursuant to the Tax Sharing Agreement);
and (ii) make regularly scheduled payments when due of interest and
principal on the Mueller Water Products Notes, the Put Backstop Facility of
Mueller Water Products and any Permitted Mueller Water Products Debt; and

 

(f)            the Borrower may
declare and pay cash dividends to its stockholders in an aggregate amount in
any fiscal year not to exceed $7,500,000 or $15,000,000 in the aggregate when
taken together with all other cash dividends pursuant to this clause (f) after
the Closing Date.

 

8.07        Change in Nature of Business.  Engage in any material line of business that
is not a Core Business; provided, that the foregoing shall not restrict
any Receivables Co. from entering into any Permitted Receivables Transaction.

 

8.08        Transactions with Affiliates.  Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than (a) transactions on fair and reasonable terms
substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s
length transaction with a Person other than an Affiliate, (b) the
consummation by the Borrower and its Subsidiaries of the transactions effected
by the Loan Documents, (c) any employment arrangement entered into by the
Borrower or any of its Subsidiaries in the ordinary

 

99

 

course
of business and consistent with the past practices of the Borrower or such
Subsidiary, (d) transactions between or among the Borrower and its
Restricted Subsidiaries or between or among Restricted Subsidiaries of the
Borrower, in each case to the extent permitted under the terms of the Loan
Documents, (e) the declaration and payment of dividends and the making of
distributions to all holders of any class of capital stock of the Borrower or
any of its Restricted Subsidiaries to the extent otherwise permitted under Section 8.06,
(f) Permitted Receivables Transactions, (g) the Tax Sharing
Agreement, and (h) shared service arrangements entered into in the ordinary
course of business and allocating expenses and fees reasonably in accordance
with the services provided.

 

8.09        Burdensome Agreements.  Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document and, to the extent pertaining to
any Receivables Co., any Permitted Securitization Transaction) that:

 

(a)           requires the grant
of a Lien to secure an obligation of such Person if a Lien is granted to secure
another obligation of such Person; or

 

(b)           limits the ability (i) of
any Restricted Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the Borrower or any Guarantor
other than customary restrictions required in connection with (x) financings
permitted by this Agreement, the limitations of which are no more restrictive
than the corresponding limitations applicable to the Borrower hereunder, and
(y) Dispositions permitted by this Agreement and which limitations cover only
such assets or Person(s) which are the subject matter of such Dispositions and,
prior to such Disposition, permit the Liens granted under the Loan Documents
therein, and (ii) of any Restricted Subsidiary to Guarantee the
Indebtedness of the Borrower, or (iii) of the Borrower or any Restricted
Subsidiary to create, incur, assume or suffer to exist Liens on property of
such Person; provided, however, that this clause (iii) shall
not prohibit:

 

(A)          a
negative pledge contained in either (x) Indebtedness of any Restricted
Subsidiary as of the date it becomes a Restricted Subsidiary of the Borrower in
any transaction otherwise permitted hereunder or (y) Indebtedness outstanding
on the date hereof and listed on Schedule 8.03, in each case so
long as such provision does not impair or conflict with any Security Instrument
or with Section 7.12 hereof;

 

(B)           provisions
limiting Liens on property as may be contained in the terms of any Indebtedness
permitted under Section 8.03(e) or (f) solely to
the extent any such limitations relates to the property financed by or the subject
of such Indebtedness;

 

(C)           provisions
limiting Liens on property, and only on such property, subject to a prior Lien
permitted under Section 8.01(c), (d), (e), (f),
(i), (k), (o), (p) and (r); and

 

(D)          such
provisions as may be contained in any refinancing or replacing Indebtedness
permitted under Section 8.03, provided that the terms of such
provisions shall be no less favorable to the Administrative Agent and the
Lenders as were contained in the Indebtedness being refinanced or replaced.

 

100

 

8.10        Use of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, in any manner that might cause the Credit Extension or the application
of such proceeds to violate Regulations T, U or X of the FRB, in each case as
in effect on the date or dates of such Credit Extension and such use of
proceeds.

 

8.11        Prepayment of Indebtedness; Amendment to
Material Agreements.

 

(a)           Prepay, redeem, purchase,
repurchase, defease or otherwise satisfy any Indebtedness that is subordinated
to the Indebtedness hereunder prior to the scheduled maturity thereof, or make
any payment in violation of any subordination terms thereof, including pursuant
to any change of control, sale of assets, issuance of any equity or otherwise
as may be set forth in the terms thereof or available to the Borrower at its
option, except those prepayments that are made (i) in connection with a
refinancing thereof permitted by Section 8.03(o), (ii) with
the proceeds of any Permitted Mueller Water Products Debt; or (iii) to the
extent available after making any prepayment required by Section 2.06(d),
and subject to the making of each such prepayment, with the proceeds of any
issuance or sale by the New Holdco, Mueller Water Products or the Borrower of
its Equity Interests or any capital contribution to New Holdco, Mueller Water
Products or the Borrower (in the case of such issuances, sales or capital
contributions to New Holdco or Mueller Water Products, to the extent such
proceeds received by in cash by the Borrower as an equity capital
contribution); or

 

(b)           Amend, modify or
change in any manner any term or condition of (i) any Subordinated Note or
the Subordinated Note Indenture, (ii) any Permitted Subordinated Debt
Document, (iii) the Put Backstop Facility of the Borrower, or (iv) any
documents, instruments and agreements delivered in connection with a Permitted
Receivables Transaction or any schedules, exhibits or agreements related
thereto, in each case so that the
terms and conditions thereof are less favorable in any material respect to the
Administrative Agent and the Lenders than the terms of such Indebtedness as of
the Closing Date, but in no event shall terms of recourse, guarantees or credit
support be any less favorable to the Administrative Agent or the Lenders than
the terms of such Indebtedness as of the Closing Date.

 

8.12        Financial Covenants.

 

(a)           Consolidated
Leverage Ratio.  Permit the
Consolidated Leverage Ratio at any time during any period of four fiscal
quarters of the Borrower set forth below to be greater than the ratio set forth
below opposite such period:

 

101

 

	
  Four
  Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated

  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing Date through December 30, 2006

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  December 31, 2006 through December 30, 2007

  	
   

  	
  5.10 to 1.00

  	
   

  
	
  December 31, 2007 through December 30, 2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  December 31, 2008 and each fiscal quarter thereafter

  	
   

  	
  4.00 to 1.00

  	
   

  

 

(b)           Consolidated
Senior Secured Leverage Ratio. 
Permit the Consolidated Senior Secured Leverage Ratio at any time during
any period of four fiscal quarters of the Borrower set forth below to be
greater than the ratio set forth below opposite such period:

 

	
  Four
  Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated Senior

  Secured Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing Date through December 30, 2006

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  December 31, 2006 through December 30, 2007

  	
   

  	
  3.90 to 1.00

  	
   

  
	
  December 31, 2007 through December 30, 2008

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  December 31, 2008 and each fiscal quarter thereafter

  	
   

  	
  3.00 to 1.00

  	
   

  

 

(c)           Consolidated
Interest Charge Coverage Ratio. 
Permit the Consolidated Interest Charge Coverage Ratio as of the end of
any Four-Quarter Period of the Borrower to be less than the ratio set forth
below opposite such fiscal quarter:

 

	
  Four-Quarter
  Period Ending

  	
   

  	
  Minimum

  Consolidated

  Interest Charge

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2005 through September 30, 2007

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  December 31, 2007 and each fiscal quarter thereafter

  	
   

  	
  2.50 to 1.00

  	
   

  

 

(d)           Capital Expenditures.  Make or become legally obligated
to make Consolidated Capital Expenditures in the aggregate for the Borrower and
its Restricted Subsidiaries during any fiscal year (calculated for the entire
fiscal year ending December 31, 2005, including the period prior to the
Closing Date) in an amount exceeding an amount equal to (i) $80,000,000 in
such fiscal year (the “Base
Amount”); plus (ii) an aggregate amount in addition to the
Base Amount after the Closing Date equal to $80,000,000; provided that,
to the extent the Base Amount exceeds the aggregate amount of Consolidated
Capital Expenditures (other than amounts permitted to be made pursuant to the
second proviso below) actually made during such fiscal year, such excess amount
(up to an aggregate of 50% of the amount of the Base Amount for such fiscal
year) may be carried forward to (but only to) the next succeeding fiscal year
(any such

 

102

 

amount
to be certified by the Borrower to the Administrative Agent in the Compliance
Certificate delivered for the last fiscal quarter of such fiscal year, and any
such amount carried forward to a succeeding fiscal year shall be deemed to be
used prior to the Borrower and the Restricted Subsidiaries using the Base
Amount for such succeeding fiscal year, without giving effect to such
carry-forward); provided, further that, the limitation in the
foregoing sentence shall be exclusive of (i) the amount of Consolidated
Capital Expenditures actually made with cash capital contributions made to the
Borrower or any of the Restricted Subsidiaries, directly or indirectly, by
Walter, after the Closing Date and specifically identified in a certificate
delivered by a Responsible Officer of the Borrower to the Administrative Agent
on or about the time such capital contribution is made (but in any event prior
to the time of the Capital Expenditure made with such capital contribution),
and (ii)  any portion of any Acquisition that is permitted under Section 8.13
that is accounted for as a Capital Expenditure.

 

8.13        Acquisitions.  Enter into any agreement, contract, binding commitment or other
arrangement providing for any Acquisition, or take any action to solicit the
tender of securities or proxies in respect thereof in order to effect any
Acquisition, unless (i) the Person to be (or whose assets are to be)
acquired does not oppose such Acquisition and the line or lines of business of
the Person to be acquired constitute Core Businesses, (ii) no Default or
Event of Default shall have occurred and be continuing either immediately prior
to or immediately after giving effect to such Acquisition and, if the Cost of
Acquisition is in excess of $25,000,000, the Borrower shall have furnished to
the Administrative Agent (A) pro forma historical financial statements as
of the end of the most recently completed fiscal year of the Borrower and most
recent interim fiscal quarter, if applicable, giving effect to such
Acquisition, and (B) a Compliance Certificate prepared on a historical pro
forma basis as of June 30, 2005, or, if later, as of the most recent date
for which financial statements have been furnished pursuant to Section 7.01(a) or
(b), giving effect to such Acquisition, which Compliance Certificate
shall demonstrate that no Default or Event of Default would exist immediately
after giving effect thereto, (iii) the Person acquired shall be a
wholly-owned Restricted Subsidiary, or be merged with or into a Restricted
Subsidiary, immediately upon consummation of the Acquisition (or if assets are
being acquired, the acquiror shall be a Restricted Subsidiary), (iv) upon
consummation of the Acquisition each Subsidiary shall have complied with the
provisions of Section 7.12, including with respect to any new
assets (including real property) acquired, (v) if the Cost of Acquisition
in any single transaction or series of related 
transactions shall exceed $120,000,000 (or the Cost of Acquisition
payable in the form of cash or Cash Equivalents shall exceed $60,000,000), the
Required Lenders shall consent to such Acquisition in their discretion, and (vi) after
giving effect to such Acquisition, the aggregate Costs of Acquisition incurred
since the Closing Date shall not exceed $240,000,000 (of which no more than
$120,000,000 of the Costs of Acquisition payable by the Borrower and its
Restricted Subsidiaries in respect of all such transactions after the Closing
Date shall be in the form of cash or Cash Equivalents).

 

8.14        Creation of New Subsidiaries.  Create or acquire any new Subsidiary after the Closing Date other than
Restricted Subsidiaries created or acquired in accordance with Section 7.12,
provided that any Unrestricted Subsidiary may create a Subsidiary that is an
Unrestricted Subsidiary.

 

103

 

8.15        Securities of Subsidiaries.  Permit any Restricted Subsidiary to issue any
Equity Interests (whether for value or otherwise) to any Person other than the
Borrower or another Subsidiary of the Borrower that is a Restricted Subsidiary.

 

8.16        Sale and Leaseback. 
Enter into, or permit any Restricted Subsidiary to, enter into any
agreement or arrangement with any other Person providing for the leasing by the
Borrower or any of the Restricted Subsidiaries of real or personal property
which has been or is to be sold or transferred by the Borrower or any of the
Restricted Subsidiaries to such other Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of the Borrower or any of the Restricted
Subsidiaries.

 

ARTICLE IX.

EVENTS OF DEFAULT AND REMEDIES

 

9.01        Events of
Default.  Any of the following shall constitute an
Event of Default:

 

(a)           Non-Payment.  The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of
any Loan or any L/C - BA Obligation, or (ii) within three days after the
same becomes due, any interest on any Loan or on any L/C - BA Obligation, or
any commitment or other fee due hereunder, or (iii) within five days after
the same becomes due, any other amount payable hereunder or under any other
Loan Document; or

 

(b)           Specific Covenants.  (i) The
Borrower fails to perform or observe any term, covenant or agreement contained (A) in
any of Section 7.03(a) or (b), 7.05 (other than
with respect to the maintenance of good standing), 7.10, 7.11 or 7.12
or Article VIII, or (B) in either Section 7.01 or 7.02
and such failure continues for 15 days, or (ii) New Holdco or Mueller
Water Products fails to perform or observe any term, covenant or agreement
contained in the Parent Guaranty; or

 

(c)           Other Defaults.  Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days after the earlier of (i) receipt of notice
of such default by a Responsible Officer of the Borrower from the
Administrative Agent, or (ii) any Responsible Officer of the Borrower
becomes aware of such default; or

 

(d)           Representations
and Warranties.  Any representation,
warranty, certification or statement of fact made or deemed made by or on
behalf of the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading when made or deemed made in any material
respect; or

 

(e)           Cross-Default.  (i) The Borrower, any Restricted
Subsidiary or any other Loan Party (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise, and after passage of any grace period) in respect of any
Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness

 

104

 

under
Swap Contracts) having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $15,000,000,
or (B) fails to observe or perform any other agreement or condition
relating to any such Indebtedness or Guarantee or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
occurs, and such default continues for more than the period of grace, if any,
therein specified, the effect of which default or other event is to cause, or
to permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under
any Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to
which the Borrower, any Restricted Subsidiary or any other Loan Party is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination
Event (as so defined) under such Swap Contract as to which the Borrower, any
Restricted Subsidiary or any other Loan Party is an Affected Party (as so
defined) and, in either event, the Swap Termination Value owed by the Borrower,
any Restricted Subsidiary or any other Loan Party as a result thereof is
greater than $15,000,000;

 

(f)            Insolvency
Proceedings, Etc.  The Borrower, any
Restricted Subsidiary or any other Loan Party 
institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

 

(g)           Inability to Pay
Debts; Attachment.  (i) The
Borrower, any Restricted Subsidiary or any other Loan Party   becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 days after its issue or
levy; or

 

(h)           Judgments.  There is entered against the Borrower, any
Restricted Subsidiary or any other Loan Party (i) a final judgment or
order for the payment of money in an aggregate amount exceeding $15,000,000 (to
the extent not covered by insurance provided by a Person described in Section 7.07
as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in
either case, such judgment or order remains unvacated and unpaid and either (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B) there
is a period of 30 consecutive days during

 

105

 

which
a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or

 

(i)            ERISA.  (i) An ERISA Event occurs with respect
to a Pension Plan or Multiemployer Plan which has resulted or would reasonably
be expected to result in liability of the Borrower under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of $15,000,000, or (ii) the Borrower or any ERISA Affiliate fails
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$15,000,000; or (iii) the benefit liabilities of all Plans governed by
Foreign Benefit Laws, or the funding of which are regulated by any Foreign
Benefit Laws, at any time exceed all such Plans’ assets, as computed in
accordance with applicable law as of the most recent valuation date for such
Plans, by more than $15,000,000; or

 

(j)            Invalidity of
Loan Documents.  Any Loan Document,
or any Lien granted thereunder, at any time after its execution and delivery
and for any reason other than as expressly permitted hereunder or satisfaction
in full of all the Obligations, ceases to be in full force and effect (except
with respect to immaterial assets); or any Loan Party or any other Person
contests in any manner the validity or enforceability of any Loan Document or
any Lien granted to the Administrative Agent pursuant to the Security
Instruments; or any Loan Party denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; or

 

(k)           Subordinated
Notes and Permitted Subordinated Debt. 
The subordination provisions relating to the Subordinated Notes, the Put
Backstop Facility of the Borrower or any Permitted Subordinated Debt (the “Subordination
Provisions”) shall fail to be enforceable by the Lenders (which have not
effectively waived the benefits thereof) in accordance with the terms thereof,
or the principal or interest on any Loan, any L/C - BA Obligation or other
Obligations shall fail to constitute “designated senior debt” (or any other
similar term) under any document, instrument or agreement evidencing such
Subordinated Notes, the Put Backstop Facility of the Borrower or Permitted
Subordinated Debt; or the Borrower or any of its Subsidiaries shall, directly
or indirectly, disavow or contest in any manner (i) the effectiveness,
validity or enforceability of any of the Subordination Provisions, or (ii) that
any of such Subordination Provisions exist for the benefit of the Secured
Parties; or

 

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

 

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

 

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

 

(b)           declare the unpaid
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other
Loan

 

106

 

Document
to be immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower;

 

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

 

(d)           exercise on behalf
of itself and the Lenders all rights and remedies available to it and the
Lenders under the Loan Documents or applicable Law;

 

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

 

9.03        Application of Funds.  After the exercise of
remedies provided for in Section 9.02 (or after the Loans have
automatically become immediately due and payable and the L/C – BA Obligations
have automatically been required to be Cash Collateralized as set forth in the
proviso to Section 9.02), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following
order:

 

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

 

Second, to payment of that portion of the
Obligations constituting fees, indemnities and other amounts (other than
principal, interest, Letter of Credit – BA Fees and other Obligations expressly
described in clauses Third through Fifth below) payable to the
Lenders and the L/C Issuer (including reasonable fees, charges and
disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article IV), ratably among them in proportion
to the respective amounts described in this clause Second payable to them;

 

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

 

Fourth, (ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Fourth
held by them) to (i) the payment of that portion of the Obligations
constituting unpaid principal of the Loans and L/C – BA Borrowings, (ii) the
payment of the maximum amount of all Bankers’ Acceptances then outstanding,
such payment to be for the account of the L/C Issuer (or to the extent
Revolving Lenders have theretofore funded their participations in any such
Bankers’ Acceptance, ratably among such Revolving Lenders in accordance with
their Pro Rata Revolving Shares) and (iii) to Cash Collateralize that
portion of

 

107

 

L/C – BA
Obligations comprising the aggregate undrawn amount of Letters of Credit, to
the Administrative Agent for the account of the L/C Issuer; provided
that if the amounts available are insufficient to make all payments provided
for in this clause Fourth, that portion allocable to clause (iii) shall
be applied first to pay Outstanding Amounts of Revolving Loans and L/C – BA
Borrowings before being utilized to Cash Collateralize L/C – BA Obligations;

 

Fifth, to payment of Swap Termination Values
and amounts owing under Related Treasury Management Arrangements, in each case
to the extent owing to any Lender or any Affiliate of any Lender arising under
Related Credit Arrangements that shall have been terminated and as to which the
Administrative Agent shall have received notice of such termination and the
Swap Termination Value thereof or the amount owing under the applicable Related
Treasury Management Arrangement from the applicable Lender or Affiliate of a
Lender;

 

Sixth, to the payment of all other Obligations
of the Loan Parties owing under or in respect of the Loan Document that are due
and payable to the Administrative Agent and the other Secured Parties, or any
of them, on such date, ratably based on the respective aggregate amounts of all
such Obligations owing to the Administrative Agent and the other Secured
Parties on such date; and

 

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

 

Subject to Section 2.04(c), amounts used to Cash
Collateralize the aggregate undrawn amount of Letters of Credit pursuant to
clause Fourth above shall be applied to satisfy drawings under such
Letters of Credit as they occur.  If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE X.

ADMINISTRATIVE AGENT

 

10.01      Appointment and Authority.  Each of the Lenders and the L/C Issuer hereby
irrevocably appoints Bank of America to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Article are
solely for the benefit of the Administrative Agent, the Lenders and the L/C
Issuer, and neither the Borrower nor any other Loan Party shall have rights as
a third party beneficiary of any of such provisions.

 

10.02      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

 

108

 

the
Borrower 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.

 

10.03      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 the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 11.01 and 9.02)
or (ii) in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or the L/C Issuer.

 

The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article V or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

10.04      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

 

109

 

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 or Bankers’ Acceptance, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the L/C Issuer
unless the Administrative Agent shall have received notice to the contrary from
such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit or Bankers’ Acceptance.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), 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.

 

10.05      Delegation of Duties.  The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.

 

10.06      Resignation of Administrative Agent.  The Administrative Agent may at any time give
notice of its resignation to the Lenders, the L/C Issuer and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the
United States.  If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting
the qualifications set forth above; provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any Collateral held by the Administrative
Agent on behalf of the Lenders or the L/C Issuer under any of the Loan
Documents, the retiring Administrative Agent shall continue to hold such
Collateral until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender and the L/C Issuer directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this
Section.  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). 
The fees payable by the Borrower to a successor Administrative Agent
shall be the

 

110

 

same
as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor.  After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.04
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 shall also constitute its
resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring
L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit and/or Bankers’ Acceptances, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations
of the retiring L/C Issuer with respect to such Letters of Credit and/or
Bankers’ Acceptances.

 

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

 

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

 

10.09      Administrative
Agent May File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Loan
Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C – BA 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 the 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 – BA 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

 

111

 

have the claims of the Lenders, the L/C Issuer and
the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the L/C Issuer and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections
2.04(i) and (j), 2.10 and 11.04) allowed in such
judicial proceeding; and

 

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

 

and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Lender and the L/C Issuer to
make such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of
the Administrative Agent and its agents and counsel, and any other amounts due
the Administrative Agent under Sections 2.10 and 11.04.

 

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

 

10.10      Collateral
and Guaranty Matters.  The
Lenders and the L/C Issuer irrevocably authorize the Administrative Agent, at
its option and in its discretion,

 

(a)           to
release any Pledged Interest and any Lien on any property granted to or held by
the Administrative Agent under any Loan Document (i) upon the occurrence
of the Facility Termination Date, (ii) that is Disposed or to be Disposed
as part of or in connection with any Disposition permitted hereunder or under
any other Loan Document, or (iii) subject to Section 11.01, if
approved, authorized or ratified in writing by the Required Lenders;

 

(b)           to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that
is permitted by Section 8.01(k); and

 

(c)           to
release any Guarantor from its obligations under the 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 or subordinate its interest in particular types or items
of property, or to release any Guarantor from its obligations under the
Guaranty pursuant to this Section 10.10.

 

112

 

ARTICLE XI.

MISCELLANEOUS

 

11.01      Amendments,
Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however,
that no such amendment, waiver or consent shall:

 

(a)           waive any condition set
forth in Section 5.01(a) without the written consent of each
Lender except to the extent otherwise provided for in Section 5.01(a);

 

(b)           extend or increase (i) the
Revolving Credit Commitment of any Revolving Lender (or reinstate any Revolving
Credit Commitment terminated pursuant to Section 9.02) without the
written consent of such Revolving Lender, or (ii) the obligation of any
Term Loan Lender to make any portion of the Term Loan without the written
consent of such Term Loan Lender;

 

(c)           postpone any date
fixed by this Agreement or any other Loan Document for any payment (but
excluding mandatory prepayments) of principal, interest, fees or other amounts
due to the Lenders (or any of them), including the Term Loan Maturity Date and
the Revolving Credit Maturity Date, or
any scheduled reduction of the Aggregate Revolving Credit Commitments
hereunder or under any other Loan Document, in each case without the written
consent of each Lender directly affected thereby;

 

(d)           reduce the principal
of, or the rate of interest specified herein on, any Loan or L/C - BA
Borrowing, or (subject to clause (v) of the second proviso to this Section 11.01)
any fees or other amounts payable hereunder or under any other Loan Document,
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be
necessary (i) to amend the definition of “Default Rate” (so long as such
amendment does not result in the Default Rate being lower than the interest rate
then applicable to Base Rate Loans or Eurodollar Rate Loans, as applicable) or
to waive any obligation of the Borrower to pay interest or Letter of Credit –
BA Fees at the Default Rate or (ii) to
amend any financial covenant hereunder (or any defined term used therein) even
if the effect of such amendment would be to change the Applicable Rate or
amount of prepayment required under Section 2.06(d)(iii) or (iv);

 

(e)           change Section 2.14
or Section 9.03 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender
directly affected thereby;

 

(f)            change any
provision of this Section 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;

 

113

 

(g)           change
any provision of this Section or the definition of “Required Revolving
Lenders” or any other provision hereof specifying the number or percentage of
Revolving 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 Revolving Lender;

 

(h)           change
any provision of this Section or the definition of “Required Term Loan
Lenders” or any other provision hereof specifying the number or percentage of
Term Loan 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 Term Loan Lender;

 

(i)            impose
any greater restriction on the ability of any Lender to assign any of its rights
or obligations hereunder without the written consent of Lenders having more
than 50% of the Aggregate Credit Exposures then in effect within each of the
following classes of commitments:  (i) the
class consisting of the Revolving Lenders, and (ii) the class consisting
of the Term Loan Lenders; provided that for purposes of this clause, the
aggregate amount of each Lender’s risk participation and funded participation
in L/C - BA Obligations and Swing Line Loans shall be deemed to be held by such
Lender;

 

(j)            release any Guarantor from the Guaranty or
Parent Guaranty, as applicable, without the written consent of each Lender,
except to the extent such Guarantor is the subject of a Disposition permitted
by Section 8.05 (in which case such release may be made by the
Administrative Agent acting alone);

 

(k)           release
all or a material part of the Collateral without the written consent of each
Lender except with respect to Dispositions and releases of Collateral permitted
or required hereunder (including pursuant to Section 8.05) or as
provided in the other Loan Documents (in which case such release may be made by
the Administrative Agent acting alone); or

 

(l)            reduce
the number or type of events that give rise to a mandatory prepayment pursuant
to Section 2.06(d) or change the order or manner of
application of the Net Cash Proceeds provided therein, in each case without the
written consent of each Lender directly affected thereby;

 

and, provided  further, that (i) no amendment, waiver
or consent shall, unless in writing and signed by the L/C Issuer in addition to
the Lenders required above, affect the rights or duties of the L/C Issuer under
this Agreement or any Issuer Document relating to any Letter of Credit or
Bankers’ Acceptance issued or to be issued by it; (ii) no amendment,
waiver or consent shall, unless in writing and signed by the Swing Line Lender
in addition to the Lenders required above, affect the rights or duties of the
Swing Line Lender under this Agreement; (iii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv) Section 11.06(h) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Loans are being funded by an SPC at the time of such amendment, waiver or other
modification; (v) each of the Joint Fee Letter and the Agency Fee
Letter may be amended, or rights or privileges

 

114

 

thereunder
waived, in a writing executed only by the respective parties thereto; and (vi) no
amendment, waiver or consent which has the effect of  enabling the Borrower to satisfy any
condition to a Borrowing contained in Section 5.02 hereof which,
but for such amendment, waiver or consent would not be satisfied, shall be
effective to require the Revolving Lenders, the Swing Line Lender or the L/C
Issuer to make any additional Revolving Loan or Swing Line Loan, or to issue
any additional or renew any existing Letter of Credit or issue any Bankers’
Acceptance, unless and until the Required Revolving Lenders (or, if applicable,
all Revolving Lenders) shall have approved such amendment, waiver or consent.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Revolving Credit
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

 

11.02      Notices; Effectiveness; Electronic
Communication.

 

(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone or in the case of
notices otherwise expressly provided herein (and except as provided in subsection (b) below),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:

 

(i)            if
to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 11.02, as changed
pursuant to subsection (d) below; and

 

(ii)           if
to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire, as changed
pursuant to subsection (d) below.

 

Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient).  Notices delivered
through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).

 

(b)           Electronic
Communications.  Notices and other
communications to the Lenders and the L/C Issuer hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or
intranet websites) pursuant to procedures approved by the Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender or
the L/C Issuer pursuant to Article II if such Lender or the L/C
Issuer, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant

 

115

 

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

 

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

 

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

 

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

 

(e)           Reliance by
Administrative Agent, L/C Issuer and Lenders.  The Administrative Agent, the L/C
Issuer and the Lenders shall be entitled to rely and act upon any notices

 

116

 

(including
telephonic Revolving Loan Notices, Swing Line Loan Notices and Term Loan
Interest Rate Selection Notices) purportedly given by or on behalf of the
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 Borrower shall indemnify the
Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower.  All telephonic notices to
and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

 

11.03      No Waiver; Cumulative Remedies.  No failure by any Lender, the L/C Issuer 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.

 

11.04      Expenses; Indemnity; Damage Waiver.

 

(a)           Costs and
Expenses.  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates and the Arrangers (including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent and the Arrangers), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or Banker’s Acceptance or any
demand for payment thereunder and (iii) all out-of-pocket expenses
incurred by the Administrative Agent, the L/C Issuer, the Swing Line Lender or
the Arrangers (including the fees, charges and disbursements of any counsel for
the Administrative Agent, the Swing Line Lender, the L/C Issuer or the
Arrangers), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

 

(b)           Indemnification
by the Borrower.  The Borrower shall
indemnify the Administrative Agent (and any sub-agent thereof), each Lender and
the L/C Issuer, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses
(including the reasonable fees, charges and disbursements of any counsel for
any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Borrower or any other Loan Party arising out of,
in connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Loan Document or any agreement or

 

117

 

instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder, the consummation of the
transactions contemplated hereby or thereby or, in the case of the
Administrative agent (and any sub-agent thereof) and its Related Parties only,
the administration of this Agreement and the other Loan Documents, (ii) any
Loan, Letter of Credit or Bankers’ Acceptance or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit or Bankers’ Acceptance if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit or Bankers’ Acceptance), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or (y) result from a
claim brought by the Borrower or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.

 

(c)           Reimbursement by
Lenders.  To the extent that the
Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by it to the Administrative Agent (or
any sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought based on such Lender’s
portion of Loans, commitments and risk participations with respect to the
Revolving Credit Facility and the Term Loan Facility) of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or L/C Issuer in connection with
such capacity.  The obligations of the
Lenders under this subsection (c) are subject to the provisions of Section 2.13(d);
provided
further that any amount due exclusively to the L/C Issuer in its capacity as
such shall be borne pursuant to this Section 11.04(c) pro
rata by the Revolving Lenders, and not by any Term Lender.

 

(d)           Waiver of
Consequential Damages, Etc.  To the
fullest extent permitted by applicable law, the Borrower shall not 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, Letter of
Credit or Bankers’ Acceptance or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be

 

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liable
for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby
or thereby.

 

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

 

(f)            Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, the L/C Issuer and the
Swing Line Lender, the replacement of any Lender and the occurrence of the
Facility Termination Date.

 

11.05      Payments Set Aside.  To the extent that any
payment by or on behalf of the Borrower is made to the Administrative Agent,
the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or
any Lender exercises its right of setoff, and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, the L/C Issuer or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to
pay to the Administrative Agent upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Administrative Agent,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding sentence shall
survive the occurrence of the Facility Termination Date.

 

11.06      Successors and Assigns.

 

(a)           Successors and
Assigns Generally.  The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an Eligible Assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) of
this Section (and any other attempted assignment or transfer by any
party hereto shall be null and void). 
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

119

 

(b)           Assignments by
Lenders.  Any Lender may at any time
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Revolving
Credit Commitment and its Revolving Loans (including for purposes of this subsection (b),
participations in L/C – BA Obligations and in Swing Line Loans) or of its Pro
Rata Term Share of the Term Loan at the time owing to it (such Lender’s portion
of Loans, commitments and risk participations with respect to each of the
Revolving Credit Facility and the Term Loan Facility (each, an “Applicable Facility”)
being referred to in this Section 11.06 as its “Applicable Share”))
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 Applicable Share of the Applicable Facility 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 Applicable
Share (which for this purpose includes Loans outstanding thereunder) with
respect to each Applicable Facility, 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 (A) $5,000,000
with respect to the Revolving Credit Facility and (B) $1,000,000 with
respect to the Term Loan Facility, unless in either case each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed), provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a single
assignment for purposes of determining whether such minimum amount has been
met;

 

(ii)           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 Applicable Facility, except that this clause (ii) shall not
(A) prohibit any Lender from assigning all or a portion of its rights and
obligations among the Applicable Facilities on a non-pro rata basis or (B) apply
to rights in respect of Swing Line Loans;

 

(iii)          any
assignment of a Revolving Credit Commitment must be approved by the
Administrative Agent, the L/C Issuer and the Swing Line Lender unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and

 

(iv)          the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee in the amount, if any, required as set forth in Schedule 11.06,
and the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, 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

 

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obligations of
a Revolving Lender or a Term Lender, as applicable, 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 4.01, 4.04, 4.05, and 11.04
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Upon request, the
Borrower (at its expense) shall execute and deliver applicable Notes to the
assignee Lender.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower (in such capacity, subject to Section 11.17),
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 Revolving Credit Commitments of, and
principal amounts of the Loans and L/C – BA Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, 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 Borrower
and the L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice.  In addition, at any time
that a request for a consent for a material or substantive change to the Loan
Documents is pending, any Lender 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, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’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 Revolving Credit Commitment and/or the Loans
(including such Lender’s participations in L/C – BA Obligations and/or Swing
Line Loans) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent, the
Lenders and the L/C Issuer shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.01 that affects such
Participant.  Subject to subsection (e) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 4.01, 4.04 and 4.05 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also

 

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shall be
entitled to the benefits of Section 11.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.14
as though it were a Lender.

 

(e)           Limitations upon
Participant Rights.  A Participant
shall not be entitled to receive any greater payment under Section 4.01
or 4.04 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 Borrower’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 4.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 4.01(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, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g)           Electronic
Execution of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

 

(h)           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 Borrower (an “SPC”)
the option to provide all or any part of any 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 Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Loan, the Granting Lender shall
be obligated to make such 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(b)(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
Borrower under this Agreement (including its obligations under Section 4.04),
(ii) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, 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 Loan by an SPC hereunder shall utilize the Revolving
Credit Commitment or commitment to make a Term Loan of the Granting Lender to
the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto

 

122

 

hereby agrees (which agreement shall survive the
occurrence of the Facility Termination Date) 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 Borrower and the Administrative
Agent and with the payment of a processing fee in the amount of $2,500, assign
all or any portion of its right to receive payment with respect to any Loan to
the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPC.

 

(i)            Resignation as
L/C Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary contained
herein, if at any time Bank of America or JPMorgan Chase Bank, N.A assigns all
of its Revolving Credit Commitment,
Revolving Loans and any Pro Rata Term Share of the Term Loan pursuant to subsection (b) above,
such Person may, (i) upon 30 days’ notice to the Borrower and the Lenders,
resign as L/C Issuer and/or (ii) in the case of Bank of America, upon 30
days’ notice to the Borrower, resign as Swing Line Lender.  In the event of any such resignation as L/C
Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders willing to serve in such capacity a successor L/C Issuer or
Swing Line Lender hereunder, as the case may be; provided, however,
that no failure by the Borrower to appoint any such successor shall affect the
resignation of such Person as L/C Issuer or Swing Line Lender, as the case may
be.  If Bank of America or JPMorgan Chase
Bank, N.A resigns as L/C Issuer, such Person shall retain all the rights,
powers, privileges and duties of the L/C Issuer hereunder with respect to all
Letters of Credit and Bankers’ Acceptances outstanding as of the effective date
of its resignation as L/C Issuer and all L/C – BA Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or fund
risk participations in Unreimbursed Amounts pursuant to Section 2.04(c)).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.05(c). Upon the appointment of a
successor L/C Issuer and/or Swing Line Lender, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and
(b) the successor L/C Issuer shall issue letters of credit in substitution
for the Letters of Credit and/or Bankers’ Acceptances, if any, outstanding at
the time of such successor or make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of such L/C Issuer
with respect to such Letters of Credit and/or Bankers’ Acceptances.

 

11.07      Treatment of Certain Information;
Confidentiality.  Each
of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, trustees, officers, employees,
agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority purporting to

 

123

 

have
jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the
extent such Information (x) becomes publicly available other than as a result
of a breach of this Section or (y) becomes available to the Administrative
Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower.

 

For purposes of this Section, “Information” means all information received
from the Borrower or any Subsidiary
relating to the Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the
case of information received from the Borrower or any Subsidiary after the date hereof, any information not marked “PUBLIC”
at the time of delivery will be deemed to be confidential; provided, that any
information marked “PUBLIC may also be marked “Confidential”.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

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

 

11.08      Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of
the Administrative Agent, to the fullest extent permitted by applicable
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the L/C
Issuer or any such Affiliate to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement or any other Loan Document to such Lender or the
L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall
have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrower may be
contingent or unmatured or are owed to a branch or office of such Lender or the
L/C Issuer different from the branch or office holding such deposit or obligated
on such indebtedness.  The rights of each
Lender, the L/C Issuer and their respective Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and

 

124

 

the
L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly
after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such setoff and application.

 

11.09      Interest Rate Limitation.  Notwithstanding anything to
the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the 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 hereunder.

 

11.10      Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
provided in Section 5.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

11.11      Survival of Representations and
Warranties.  All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been
or will be relied upon by the Administrative Agent and each Lender, regardless
of any investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.

 

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

 

125

 

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

 

11.13      Replacement of Lenders.  If any Lender requests compensation under Section 4.04,
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.01,
if any Lender is a Defaulting Lender, or if any Lender fails to approve any
amendment, waiver or consent requested by Borrower pursuant to Section 11.01
that has received the written approval of not less than the Required Lenders
but also requires the approval of such Lender, then in each such case the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.06), 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 Borrower shall
have paid to the Administrative Agent the assignment fee specified in Section 11.06(b);

 

(b)           such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and L/C – BA 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 4.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

 

(c)           in the case of any
such assignment resulting from a claim for compensation under Section 4.04
or payments required to be made pursuant to Section 4.01, such
assignment will result in a reduction in such compensation or payments
thereafter;

 

(d)           in the case of any
such assignment resulting from the refusal of a Lender to approve a requested
amendment, waiver or consent, the Person to whom such assignment is being made
has agreed to approve such requested amendment, waiver or consent; and

 

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

 

A Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

 

11.14      Governing Law; Jurisdiction; Etc.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)           SUBMISSION TO
JURISDICTION.  THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT

 

126

 

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

 

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

 

(d)           SERVICE OF
PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 11.02.  NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.15      Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

127

 

11.16      USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower 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
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.

 

11.17      No Fiduciary Relationship.  The Borrower acknowledges and agrees that in
connection with all aspects of each transaction contemplated by this Agreement,
the Borrower, on the one hand, and each of Bank of America, Morgan Stanley, the
Arrangers and any affiliate through which any of them may be acting (each, a “Transaction Affiliate”),
on the other hand, have an arms-length business relationship that creates no
fiduciary duty on the part of any of Bank of America, Morgan Stanley, either Arranger
or any of their respective Transaction Affiliates and each of them expressly
disclaims any fiduciary relationship.

 

 

[Remainder of page is intentionally left
blank; signature pages follow]

 

128

 

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

 

	
   

  	
  MUELLER
  GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Miles C.
  Dearden, III

  
	
   

  	
  Name:

  	
  Miles C.
  Dearden, III

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

Mueller Group, LLC 

CREDIT AGREEMENT

Signature Page

 

 

	
   

  	
  BANK OF
  AMERICA, N.A., as

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W.
  Thomas Barnett

  
	
   

  	
  Name:

  	
    W.
  Thomas Barnett

  
	
   

  	
  Title:

  	
    Senior
  Vice President

  
					

 

 

	
   

  	
  BANK OF
  AMERICA, N.A., as a Lender, L/C

  Issuer and Swing Line Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W.
  Thomas Barnett

  
	
   

  	
  Name:

  	
    W.
  Thomas Barnett

  
	
   

  	
  Title:

  	
    Senior
  Vice President

  
					

 

 

	
   

  	
  MORGAN
  STANLEY SENIOR FUNDING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eugene
  F. Martin

  
	
   

  	
  Name:

  	
  Eugene F.
  Martin

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as a Lender,

  and L/C Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Suzanne
  Ergastolo

  
	
   

  	
  Name:

  	
  Suzanne
  Ergastolo

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  AMSOUTH
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  A. Browy

  
	
   

  	
  Name:

  	
  Jonathan A.
  Browy

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  THE CIT
  GROUP/BUSINESS CREDIT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A.
  Brennan, Jr.

  
	
   

  	
  Name:

  	
  James A.
  Brennan, Jr.

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  CALYON
  NEW YORK BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel
  L. Hill

  
	
   

  	
  Name:

  	
  Samuel L.
  Hill

  
	
   

  	
  Title:

  	
  Managing
  Director & Regional Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P.
  Cagle

  
	
   

  	
  Name:

  	
  David P.
  Cagle

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  THE BANK
  OF NEW YORK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David C.
  Siegel

  
	
   

  	
  Name:

  	
  David C.
  Siegel

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  FIFTH
  THIRD BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marisol
  Lugo

  
	
   

  	
  Name:

  	
  Marisol Lugo

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  SUNTRUST
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bradley
  J. Staples

  
	
   

  	
  Name:

  	
  Bradley J.
  Staples

  
	
   

  	
  Title:

  	
  Managing
  DirectorEXHIBIT
10.1

 

EXECUTION
VERSION

 

 

Published Deal CUSIP Number: 62475VAA5

Published Revolver CUSIP Number: 62475VAB3

Published Term CUSIP Number: 62475VAC1

 

CREDIT
AGREEMENT

 

Dated as of October 3,
2005

among

 

MUELLER
GROUP, LLC

as the Borrower,

 

BANK OF AMERICA,
N.A.,

as Administrative Agent, Swing
Line Lender,

L/C Issuer and a Lender,

 

MORGAN
STANLEY SENIOR FUNDING, INC.,

as Syndication Agent and as a
Lender,

 

CALYON
NEW YORK BRANCH,

FIFTH
THIRD BANK

and

JPMORGAN
CHASE BANK, N.A.

as Co-Documentation Agents

 

 

and

 

The Other Lenders Party Hereto

 

 

BANC OF
AMERICA SECURITIES LLC,

and

MORGAN
STANLEY SENIOR FUNDING, INC.

as

Joint Lead Arrangers and Joint
Book Managers

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE I.

  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.01

  	
  Defined Terms

  	
   

  
	
  1.02

  	
  Other Interpretive Provisions

  	
   

  
	
  1.03

  	
  Accounting Terms

  	
   

  
	
  1.04

  	
  Rounding

  	
   

  
	
  1.05

  	
  Times of Day

  	
   

  
	
  1.06

  	
  Letter of Credit Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II.

  THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.01

  	
  Term Loan

  	
   

  
	
  2.02

  	
  Revolving Loans

  	
   

  
	
  2.03

  	
  Borrowings, Conversions and Continuations of Committed Loans

  	
   

  
	
  2.04

  	
  Letters of Credit and Bankers’ Acceptances

  	
   

  
	
  2.05

  	
  Swing Line Loans

  	
   

  
	
  2.06

  	
  Prepayments

  	
   

  
	
  2.07

  	
  Termination or Reduction of Commitments

  	
   

  
	
  2.08

  	
  Repayment of Loans

  	
   

  
	
  2.09

  	
  Interest

  	
   

  
	
  2.10

  	
  Fees

  	
   

  
	
  2.11

  	
  Computation of Interest and Fees

  	
   

  
	
  2.12

  	
  Evidence of Debt

  	
   

  
	
  2.13

  	
  Payments Generally; Administrative Agent’s Clawback

  	
   

  
	
  2.14

  	
  Sharing of Payments by Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE III.

  SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.01

  	
  Security

  	
   

  
	
  3.02

  	
  Further Assurances

  	
   

  
	
  3.03

  	
  Information Regarding Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV.

  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  4.01

  	
  Taxes

  	
   

  
	
  4.02

  	
  Illegality

  	
   

  
	
  4.03

  	
  Inability to Determine Rates

  	
   

  
	
  4.04

  	
  Increased Costs; Reserves on Eurodollar Rate Loans

  	
   

  
	
  4.05

  	
  Compensation for Losses

  	
   

  
	
  4.06

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  

 

i

 

	
  4.07

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE V.

  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.01

  	
  Conditions of Initial Credit Extension

  	
   

  
	
  5.02

  	
  Conditions to all Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI.

  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.01

  	
  Existence, Qualification and Power; Compliance with Laws

  	
   

  
	
  6.02

  	
  Authorization; No Contravention

  	
   

  
	
  6.03

  	
  Governmental Authorization; Other Consents

  	
   

  
	
  6.04

  	
  Binding Effect

  	
   

  
	
  6.05

  	
  Financial Statements; No Material Adverse Effect

  	
   

  
	
  6.06

  	
  Litigation

  	
   

  
	
  6.07

  	
  No Default

  	
   

  
	
  6.08

  	
  Ownership of Property; Liens

  	
   

  
	
  6.09

  	
  Environmental Compliance

  	
   

  
	
  6.10

  	
  Insurance

  	
   

  
	
  6.11

  	
  Taxes

  	
   

  
	
  6.12

  	
  ERISA Compliance

  	
   

  
	
  6.13

  	
  Subsidiaries; Equity Interests

  	
   

  
	
  6.14

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

  	
   

  
	
  6.15

  	
  Disclosure

  	
   

  
	
  6.16

  	
  Compliance with Laws

  	
   

  
	
  6.17

  	
  Intellectual Property; Licenses, Etc

  	
   

  
	
  6.18

  	
  Senior Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VII.

  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.01

  	
  Financial Statements

  	
   

  
	
  7.02

  	
  Certificates; Other Information

  	
   

  
	
  7.03

  	
  Notices

  	
   

  
	
  7.04

  	
  Payment of Obligations

  	
   

  
	
  7.05

  	
  Preservation of Existence, Etc

  	
   

  
	
  7.06

  	
  Maintenance of Properties

  	
   

  
	
  7.07

  	
  Maintenance of Insurance

  	
   

  
	
  7.08

  	
  Compliance with Laws

  	
   

  
	
  7.09

  	
  Books and Records

  	
   

  
	
  7.10

  	
  Inspection Rights

  	
   

  
	
  7.11

  	
  Use of Proceeds

  	
   

  
	
  7.12

  	
  New Subsidiaries, Pledgors and Real Property

  	
   

  

 

ii

 

	
  7.13

  	
  Compliance with ERISA

  	
   

  
	
  7.14

  	
  Further Assurances

  	
   

  
	
  7.15

  	
  Interest Rate Protection

  	
   

  
	
  7.16

  	
  Change of Control Offer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VIII.

  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.01

  	
  Liens

  	
   

  
	
  8.02

  	
  Investments

  	
   

  
	
  8.03

  	
  Indebtedness

  	
   

  
	
  8.04

  	
  Fundamental Changes

  	
   

  
	
  8.05

  	
  Dispositions

  	
   

  
	
  8.06

  	
  Restricted Payments

  	
   

  
	
  8.07

  	
  Change in Nature of Business

  	
   

  
	
  8.08

  	
  Transactions with Affiliates

  	
   

  
	
  8.09

  	
  Burdensome Agreements

  	
   

  
	
  8.10

  	
  Use of Proceeds

  	
   

  
	
  8.11

  	
  Prepayment of Indebtedness; Amendment to Material Agreements

  	
   

  
	
  8.12

  	
  Financial Covenants

  	
   

  
	
  8.13

  	
  Acquisitions

  	
   

  
	
  8.14

  	
  Creation of New Subsidiaries

  	
   

  
	
  8.15

  	
  Securities of Subsidiaries

  	
   

  
	
  8.16

  	
  Sale and Leaseback

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IX.

  EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  9.01

  	
  Events of Default

  	
   

  
	
  9.02

  	
  Remedies Upon Event of Default

  	
   

  
	
  9.03

  	
  Application of Funds

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE X.

  ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  10.01

  	
  Appointment and Authority

  	
   

  
	
  10.02

  	
  Rights as a Lender

  	
   

  
	
  10.03

  	
  Exculpatory Provisions

  	
   

  
	
  10.04

  	
  Reliance by Administrative Agent

  	
   

  
	
  10.05

  	
  Delegation of Duties

  	
   

  
	
  10.06

  	
  Resignation of Administrative Agent

  	
   

  
	
  10.07

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
   

  
	
  10.08

  	
  No Other Duties, Etc

  	
   

  
	
  10.09

  	
  Administrative Agent May File Proofs of Claim

  	
   

  
	
  10.10

  	
  Collateral and Guaranty Matters

  	
   

  

 

iii

 

	
   

  	
  ARTICLE XI.

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.01

  	
  Amendments, Etc

  	
   

  
	
  11.02

  	
  Notices; Effectiveness; Electronic Communication

  	
   

  
	
  11.03

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  11.04

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  
	
  11.05

  	
  Payments Set Aside

  	
   

  
	
  11.06

  	
  Successors and Assigns

  	
   

  
	
  11.07

  	
  Treatment of Certain Information; Confidentiality

  	
   

  
	
  11.08

  	
  Right of Setoff

  	
   

  
	
  11.09

  	
  Interest Rate Limitation

  	
   

  
	
  11.10

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
  11.11

  	
  Survival of Representations and Warranties

  	
   

  
	
  11.12

  	
  Severability

  	
   

  
	
  11.13

  	
  Replacement of Lenders

  	
   

  
	
  11.14

  	
  Governing Law; Jurisdiction; Etc

  	
   

  
	
  11.15

  	
  Waiver of Jury Trial

  	
   

  
	
  11.16

  	
  USA PATRIOT Act Notice

  	
   

  
	
  11.17

  	
  No Fiduciary Relationship

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  

 

iv

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  1.01(a)   Existing Letters of Credit

  
	
  1.01(b)

  	
  Unrestricted
  Subsidiaries

  
	
  2.01

  	
  Commitments
  and Pro Rata Shares

  
	
  3.01

  	
  Mortgaged
  Real Property

  
	
  3.03

  	
  Information
  Regarding Collateral

  
	
  5.01

  	
  Good
  Standing and Foreign Qualification Jurisdictions

  
	
  6.06

  	
  Litigation

  
	
  6.09

  	
  Environmental Matters

  
	
  6.11

  	
  Proposed Tax
  Assessments

  
	
  6.13(a)

  	
  Subsidiaries

  
	
  6.13(b)

  	
  Other Equity
  Investments

  
	
  8.01

  	
  Existing
  Liens

  
	
  8.02

  	
  Existing
  Investments

  
	
  8.03

  	
  Existing
  Indebtedness

  
	
  11.02

  	
  Administrative
  Agent’s Office; Certain Addresses for Notices

  
	
  11.06

  	
  Processing
  and Recordation Fees

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
   

  	
  Form of

  
	
   

  	
   

  
	
  A-1

  	
  Revolving
  Loan Notice

  
	
  A-2

  	
  Term Loan
  Interest Rate Selection Notice

  
	
  B

  	
  Swing Line
  Loan Notice

  
	
  C-1

  	
  Term Loan Note

  
	
  C-2

  	
  Revolving
  Loan Note

  
	
  D

  	
  Compliance
  Certificate

  
	
  E

  	
  Assignment
  and Assumption

  
	
  F

  	
  Guaranty Agreement

  
	
  G

  	
  Opinion
  Matters

  
	
  H

  	
  Parent Guaranty Agreement

  
	
  I

  	
  Security
  Agreement

  
	
  J

  	
  Mortgage

  

 

v

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT is
entered into as of October 3, 2005, among MUELLER GROUP, LLC,
a Delaware limited liability company (the “Borrower”), each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.

 

The Borrower has requested that the Lenders provide a revolving credit
facility and a term loan facility, and the Lenders are willing to do so on the
terms and conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

“Acceptance
Credit” means a commercial Letter of Credit in which the L/C
Issuer engages with the beneficiary of such Letter of Credit to accept a time
draft, and shall include those Existing Letters of Credit identified as “Acceptance
Credits” on Schedule 1.01(a).

 

“Acceptance
Documents” means such general acceptance agreements,
applications, certificates and other documents as the L/C Issuer may require in
connection with the creation of Bankers’ Acceptances.

 

“Account”
means any account (as that term is defined in Section 9-102(a)(2)(i) and
(ii) of the UCC) of the Borrower or any Subsidiary arising from the sale
or lease of goods or the rendering of services.

 

“Acquisition”
means the acquisition of (a) a controlling equity or other ownership
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity or other ownership interest or upon exercise of an option or
warrant for, or conversion of securities into, such equity or other ownership
interest, or (b) assets of another Person which constitute all or
substantially all of the assets of such Person or of a line or lines of
business conducted by such Person.

 

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

 

“Administrative
Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

 

1

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

 

“Agency Fee
Letter” means the letter agreement, dated as of June 17,
2005, between Walter and the Administrative Agent.

 

“Aggregate
Commitments” means, as at any date of determination thereof, the
sum of (a) the Aggregate Revolving Credit Commitments at such date, plus (b) the
Outstanding Amount with respect to the Term Loan Facility at such date.

 

“Aggregate
Credit Exposures” means, as at any date of determination
thereof, the sum of (a) the unused portion of the Aggregate Revolving
Credit Commitments then in effect, plus (b) the Total Outstandings at such
time.

 

“Aggregate
Revolving Credit Commitments” means, as at any date of
determination thereof, the sum of all Revolving Credit Commitments of all
Lenders at such date.

 

“Agreement”
means this Credit Agreement.

 

“Applicable Rate”
means, from time to time,

 

(a)           with respect to
Segments of the Term Loan that are Eurodollar Rate Loans, 2.25%, provided
that if the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section 7.02(b) is
less than 3.50 to 1.00, then the “2.25%” in this clause (a) shall be
deemed to read “2.00%” as of the date set forth in the paragraph of this
definition following clause (c);

 

(b)           with respect to
Segments of the Term Loan that are Base Rate Loans, 1.25%, provided that
if the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 7.02(b) is
less than 3.50 to 1.00, then the “1.25%” in this clause (b) shall be
deemed to read “1.00%” as of the date set forth in the paragraph of this
definition following clause (c); and

 

(c) with respect to the Commitment Fee, Revolving Loans, Swing
Line Loans and Letter of Credit - BA Fees, the following percentages per annum,
based upon the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section 7.02(b):

 

2

 

	
   

  	
   

  	
   

  	
   

  	
  Revolving Loans, Swing Line Loans

  and Letter of Credit – BA Fees

  	
   

  	
   

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Consolidated
  Leverage Ratio

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurodollar Rate

  Loans and Letter

  of Credit – BA Fees

  	
   

  	
  Commitment Fee

  	
   

  
	
  1

  	
   

  	
  Greater than or equal to 5.00 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Less than 5.00 to 1.00 but greater than or equal to 4.00 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Less than 3.00 to 1.00

  	
   

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  0.375

  	
  %

  

 

Any increase or decrease in the Applicable Rate with respect to
Revolving Loans, the Term Loan (including Segments), Swing Line Loans and
Letter of Credit - BA Fees resulting from a change in the Consolidated Leverage
Ratio shall become effective as of the first Business Day immediately following
the date a Compliance Certificate is delivered pursuant to Section 7.02(b);
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level 1 (or
with respect to the Term Loan (including Segments), the higher of the rates set
forth in each of clauses (a) and (b) above) shall apply thereto as of
the first Business Day after the date on which such Compliance Certificate was
required to have been delivered until the Business Day following the date the
appropriate certificate is so delivered. 
Subject to the proviso in the preceding sentence, from the Closing Date
to the Business Day following the date the Compliance Certificate for the
fiscal period ending December 31, 2005 is delivered or is required to be
delivered (whichever shall first occur), the Applicable Rate with respect to the
Commitment Fee, Revolving Loans, Swing Line Loans and Letter of Credit - BA
Fees shall be Pricing Level 2 and the Applicable Rate with respect to the Term
Loan (including Segments thereof) shall be the higher of the rates set forth in
each of clauses (a) and (b) above.

 

“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 BAS and Morgan Stanley, each in its capacity as a joint lead arranger and
joint book manager.

 

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

 

“Assignment and
Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form
approved by the Administrative Agent, and shall include, in the case of the
initial assignments of portions of Term Loan by Bank of America and/or Morgan
Stanley as the initial Term Loan Lenders, one or more master assignments and
assumption agreements to effect assignments to multiple assignees substantially
on the terms of the form of Assignment and Assumption set forth in Exhibit E.

 

“Assumed
Indebtedness” means Indebtedness of a Person which is (a) in
existence at the time such Person becomes a Restricted Subsidiary of the
Borrower or (b) is assumed in

 

3

 

connection
with an Investment in or acquisition of such Person, and has not been incurred
or created by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Borrower.

 

“Attributable
Indebtedness” means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease
that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.

 

“Audited
Financial Statements” means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended September 30,
2004, and the related consolidated statements of income or operations, retained
earnings and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.

 

“Auditor”
has the meaning specified in Section 7.01(a).

 

“Availability
Period” means the period from and including the Closing Date to
the earliest of (a) the Revolving Credit Maturity Date, (b) the date
of termination of the Aggregate Revolving Credit Commitments pursuant to Section 2.07,
and (c) the date of termination of the commitment of each Lender to make
Loans and of the obligation of the L/C Issuer to make L/C- BA Credit Extensions
pursuant to Section 9.02.

 

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

 

“Bankers’
Acceptance” or “BA” means a time draft, drawn by the beneficiary under
an Acceptance Credit and accepted by the L/C Issuer upon presentation of
documents by the beneficiary of an Acceptance Credit pursuant to Section 2.04
hereof, in the standard form for bankers’ acceptances of the L/C Issuer.

 

“BAS”
means Banc of America Securities LLC.

 

“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 Loan”
means a Loan (including a Segment) that bears interest based on the Base Rate.

 

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

 

4

 

“Base Rate
Segment” means a Segment bearing interest or to bear interest at
the Base Rate.

 

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

 

“Borrower
Materials” has the meaning specified in Section 7.02.

 

“Borrowing”
means any of (a) the advance of the Term Loan pursuant to Section 2.01,
(b) a Revolving Borrowing, or (c) a Swing Line Borrowing, as the
context may require.

 

“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the
state where the Administrative Agent’s Office is located and, if such day
relates to any Eurodollar Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.

 

“Cash
Collateralize” has the meaning specified in Section 2.04(g).

 

“Cash
Equivalents” means any of the following types of property, to
the extent owned by the Borrower or any of its Restricted Subsidiaries free and
clear of all Liens (other than Liens created under the Security Instruments):

 

(a)           cash, denominated in U.S. Dollars or
in a currency other than U.S. Dollars that is freely transferable or
convertible into U.S. Dollars;

 

(b)           readily marketable direct obligations
of the government of the United States or any agency or instrumentality
thereof, or obligations the timely payment of principal and interest on which
are fully and unconditionally guaranteed by the government of the United States
or any state or municipality thereof, in each case so long as such obligation
has an investment grade rating by S&P and Moody’s;

 

(c)           commercial paper rated at least P-1
(or the then equivalent grade) by Moody’s and A-1 (or the then equivalent
grade) by S&P, or carrying an equivalent rating by a nationally recognized
rating agency if at any time neither Moody’s and S&P shall be rating such
obligations; provided that
up to 25% of the aggregate amount of Investments in Cash Equivalents pursuant
to this subpart (c) of the definition thereof may be in commercial paper
that is rated (I) at least P-1 (or the then equivalent grade) by Moody’s and at
least A-2 (or the then equivalent grade) by S&P, or (II) at least P-2 (or
the then equivalent grade) by Moody’s and at least A-1 (or the then equivalent
grade) by S&P;

 

(d)           insured certificates of deposit or
bankers’ acceptances of, or time deposits with any Lender or with any
commercial bank that (i) is a member of the Federal Reserve System, (ii) issues
(or the parent of which issues) commercial paper rated as described in the
first portion of clause (c) above (without regard to the proviso), (iii) is
organized under the laws of the United States or of any state thereof and (iv) has
combined capital and surplus of at least $250,000,000, provided that no
more than 25% of the aggregate amount of Investments in Cash Equivalents
pursuant to this subpart (d) of the definition thereof may be in such
items with a maturity longer than one year;

 

5

 

(e)           readily marketable general
obligations of any corporation organized under the laws of any state of the
United States of America, payable in the United States of America, expressed to
mature not later than twelve months following the date of issuance thereof and
rated A or better by S&P or A2 or better by Moody’s;

 

(f)            readily marketable shares of
investment companies or money market funds that, in each case, invest solely in
the foregoing Investments described in clauses (a) through (e) above;
and

 

(g)           in the case of any Restricted
Subsidiary of the Borrower organized or having its principal place of business
outside the United States, investments denominated in the currency of the
jurisdiction in which such Subsidiary is organized or has its principal place
of business which are similar to the items specified in clauses (a) through
(f) above.

 

“Change in Law”
means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental
Authority.

 

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

 

(a)           any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act, but
excluding (i) any employee benefit plan of such person or its subsidiaries
or Walter or its Subsidiaries, and any person or entity acting in its capacity
as trustee, agent or other fiduciary or administrator of any such plan, and (ii) Walter
and its Subsidiaries) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 25% or more of the Voting Securities of the Borrower on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right); or

 

(b)           prior to any Specified Transaction,

 

(i)            any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 33-1/3% or more of the Voting Securities of Walter on a
fully-diluted basis (and taking into account all such

 

6

 

securities that such person or group has the right to acquire pursuant
to any option right); or

 

(ii)           during any period of 24 consecutive months, a majority of
the members of the board of directors or other equivalent governing body of
Walter ceases to be composed of individuals (A) who were members of that
board or equivalent governing body on the first day of such period, (B) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (A) above constituting at the time of
such election or nomination at least a majority of that board or equivalent
governing body or (C) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (A) and
(B) above constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body (excluding, in the case
of both clause (B) and clause (C), any individual whose initial nomination
for, or assumption of office as, a member of that board or equivalent governing
body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

 

(c)           after a Specified Transaction, during
any period of 24 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Borrower cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of
such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election
or nomination at least a majority of that board or equivalent governing body
(excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member
of that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors).

 

“Closing Date”
means the first date all the conditions precedent in Section 5.01
are satisfied or waived in accordance with Section 11.01 (or, in
the case of Section 5.01(b), waived by the Person entitled to
receive the applicable payment).

 

“Code”
means the Internal Revenue Code of 1986.

 

“Collateral”
means, collectively, all personal and real property of the Borrower, any
Restricted Subsidiary or any other Person in which the Administrative Agent or
any Lender is granted a Lien under any Security Instrument as security for all
or any portion of the Obligations or any other obligation arising under any
Loan Document.

 

7

 

“Commitment Fee”
has the meaning specified in Section 2.10(a).

 

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

 

“Consolidated
Capital Expenditures” means, with respect to the Borrower and
its Restricted Subsidiaries on a consolidated basis, for any period the sum of
(without duplication) all expenditures (whether paid in cash or accrued as
liabilities) by the Borrower or any Restricted Subsidiary during such period
for items that would be classified as “property, plant or equipment” or
comparable items on the consolidated balance sheet of the Borrower and its Restricted
Subsidiaries, including without limitation all transactional costs incurred in
connection with such expenditures provided the same have been capitalized; provided,
that Consolidated Capital Expenditures shall exclude (i) any expenditures
paid for with the proceeds of property insurance, casualty insurance, any asset
sale permitted under Section 8.05(c) or any asset sale of
obsolete or worn out equipment permitted under Section 8.05(a), in
each case as evidenced in writing and submitted to the Administrative Agent
together with any Compliance Certificate delivered pursuant to Section 7.02(b)),
and (ii) any portion of the purchase price of an Acquisition permitted by Section 8.13
which is accounted for as a capital expenditure.

 

“Consolidated
Cash Interest Charges” means, for any period, for the Borrower
and its Restricted Subsidiaries on a consolidated basis, that portion of
Consolidated Interest Charges that is either paid or required to be paid in
cash during such period, but excluding prepayment or similar premiums paid in
connection with any prepayment, repurchase or redemption of Consolidated Funded
Indebtedness.

 

“Consolidated
Current Assets” means, on any date, without duplication, all
assets which, in accordance with GAAP, would be included as current assets on a
consolidated balance sheet of the Borrower and the Restricted Subsidiaries at
such date (excluding, however, amounts due and to become due from Affiliates of
the Borrower which have arisen from transactions which are other than arm’s-length
and in the ordinary course of business).

 

“Consolidated
Current Liabilities” means all amounts which, in accordance with
GAAP, would be included as current liabilities on a consolidated balance sheet
of the Borrower and the Restricted Subsidiaries at such date excluding current
maturities of Indebtedness.

 

“Consolidated EBITDA”
means, for any period and in each case without duplication (including any
duplication with any item excluded in calculating Consolidated Net Income),
with respect to the Borrower and its Restricted Subsidiaries, on a consolidated
basis determined in accordance with GAAP, an amount equal to:

 

(a)           Consolidated Net
Income for such period,

 

plus                         (b)           Consolidated Interest Charges for
such period, to the extent deducted in computing Consolidated Net Income,

 

plus                         (c)           the
provision for federal, state, local and foreign income taxes payable for such
period, to the extent deducted in computing Consolidated Net Income,

 

8

 

plus                         (d)           depreciation
and depletion expense, to the extent deducted in computing Consolidated Net
Income,

 

plus                         (e)           amortization expense, to the extent
deducted in computing Consolidated Net Income,

 

plus                         (f)            all
other non-cash charges or expenses (excluding any non-cash charges representing
an accrual of, or reserve for, cash charges to be paid within the next twelve
months) to the extent deducted in computing Consolidated Net Income,

 

plus                         (g)           any amounts deducted in determining Consolidated Net Income representing mark-to-market losses
that must be recognized currently in net income under Financial Accounting
Standards Board Statement 133 (to the extent not included in Consolidated
Interest Charges),

 

minus                (h)           any amounts added in determining
Consolidated Net Income representing mark-to-market gains that must be
recognized currently in net income under Financial Accounting Standards Board Statement 133 (to the extent not
included in Consolidated Interest Charges),

 

minus                (i)            all other non-cash income or gains
added in determining Consolidated Net Income,

 

plus                         (j)            expenses incurred in connection with
the Transactions to the extent deducted in computing Consolidated Net Income,
not more than $36,500,000 in the aggregate of which shall be in cash,

 

plus                         (k)           amounts deducted in determining Consolidated Net Income representing cash charges in
respect of the Specified Items,

 

plus                         (l)            any amounts deducted in determining Consolidated Net Income representing cash
restructuring costs, or cash costs reasonably determined by the Borrower to be
associated with facility or product line closures, consolidation or
rationalization, not to exceed $50,0000,000, in the aggregate while this
Agreement is in effect, and

 

plus                         (m)          through December 31, 2006, up to
75% of any amounts deducted in determining
Consolidated Net Income
representing costs associated with compliance with Sarbanes-Oxley;

 

provided,
however, Consolidated EBITDA shall be decreased by the amount of any
cash expenditures in such period related to non-cash charges added back to Consolidated
Net Income in computing Consolidated EBITDA during any prior periods.

 

9

 

“Consolidated
Funded Indebtedness” means, as of any date of determination, for
the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum
of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all
direct obligations arising under standby and commercial letters of credit
(excluding the undrawn amount thereof), bankers’ acceptances (including all BAs
hereunder), bank guaranties (excluding the amounts available thereunder as to
which demand for payment has not yet been made), surety bonds (excluding the
amounts available thereunder as to which demand for payment has not yet been
made) and similar instruments, (d) all obligations in respect of the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business), (e) Attributable Indebtedness
in respect of capital leases and Synthetic Lease Obligations and all
Receivables Facility Outstandings, (f) without duplication, all Guarantees
with respect to outstanding Indebtedness of the types specified in clauses (a) through
(e) above of Persons other than the Borrower or any Restricted Subsidiary,
and (g) all Indebtedness of the types referred to in clauses (a) through
(f) above of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which the
Borrower or a Restricted Subsidiary is a general partner or joint venturer, to
the extent such Indebtedness is recourse to the Borrower or such Restricted
Subsidiary.

 

“Consolidated Interest Charge
Coverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the Four-Quarter Period ending on
such date to (b) Consolidated Cash Interest Charges for such period; provided
that for the fiscal quarters of the Borrower ending December 31, 2005, March 31,
2006 and June 30, 2006, the Consolidated Cash Interest Charges used in
determining the Consolidated Interest Charge Coverage Ratio shall be,
respectively (x) Consolidated Interest Charges for the one-quarter period
ending December 31, 2005 multiplied by 4, (y) Consolidated Interest
Charges for the two-quarter period ending March 31, 2006 multiplied by 2
and (z) Consolidated Interest Charges for the three-quarter period ending June 30,
2006 multiplied by 4/3.

 

“Consolidated
Interest Charges” means, for any period, for the Borrower and
its Restricted Subsidiaries on a consolidated basis, the sum of the following
(without duplication), in each case net of interest income earned (without
duplication) on cash balances or under Swap Contracts hedging against, or
otherwise entered into to manage risks relating to, fluctuations in interest
rates to the extent such interest income is included in the calculation of
Consolidated Net Income: (a) all interest, (b) the portion of rent
expense of the Borrower and its Restricted Subsidiaries with respect to such
period under capital leases that is treated as interest in accordance with
GAAP, and (c) any amounts included in interest expense in respect of
Permitted Receivables Transactions (or, if any such Permitted Receivables
Transaction is an “off-balance sheet” transaction under GAAP, any amounts that
would have been so included in respect of such Permitted Receivables
Transaction if it were an “on-balance sheet” transaction under GAAP).

 

“Consolidated
Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Funded Indebtedness as of such date less Cash
Equivalents of the Borrower and the Restricted Subsidiaries on a consolidated
basis as of such date to (b) Consolidated EBITDA for

 

10

 

the
Four-Quarter Period most recently ended for which the Borrower has delivered
financial statements pursuant to Section 7.01(a) or (b).

 

“Consolidated Net Income” means, for any period, for the Borrower and
its Restricted Subsidiaries on a consolidated basis, the net income after
taxation of the Borrower and its Restricted Subsidiaries for that period
excluding (a) net losses or gains realized in connection with (i) any
sale, lease, conveyance or other disposition of any asset (other than in the
ordinary course of business), or (ii) repayment, repurchase or redemption
of Indebtedness, and (b) extraordinary or nonrecurring income (or
expense), including, any compensation charge incurred in connection with the
Transactions; provided that the net income or loss of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to the Borrower or a Restricted Subsidiary in cash.

 

“Consolidated Senior Secured Indebtedness” means, as of any date of determination, all
Consolidated Funded Indebtedness that, as of such date, is secured by any Lien
on any asset or property of the Borrower or any of its Restricted Subsidiaries.

 

“Consolidated Senior Secured Leverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Senior Secured Indebtedness as of such date less
(i) Cash Equivalents of the Borrower and the Restricted Subsidiaries on a
consolidated basis as of such date, and (ii) from the Closing Date until March 30,
2006, the aggregate outstanding amount of Loans the proceeds of which were used
to redeem either Mueller Water Products Notes (including any premiums paid in
connection therewith) or Subordinated Notes in accordance with clauses (iii) or
(iv) of Section 7.11, to
(b) Consolidated EBITDA for the Four-Quarter Period most recently ended
for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or
(b).

 

“Contractual
Obligation” means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have
meanings correlative thereto.  Without
limiting the generality of the foregoing, a Person shall be deemed to be
Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 10% or more of the securities having ordinary voting
power for the election of directors, managing general partners or the
equivalent.

 

“Core Business”
means any material line of business conducted by the Borrower and its
Subsidiaries as of the Closing Date and any business reasonably related or
incidental thereto.

 

“Cost of
Acquisition” means, with respect to any Acquisition, as at the
date of entering into any agreement therefor, the sum of the following (without
duplication):  (a) the amount of any
cash and fair market value of other property (excluding the value of any
capital stock, warrants or options to acquire capital stock of Walter, New
Holdco, the Borrower or any

 

11

 

Restricted
Subsidiary and the unpaid principal amount of any debt instrument) given as
consideration, (b) the amount (determined by using the face amount or the
amount payable at maturity, whichever is greater) of any Indebtedness incurred,
assumed or acquired by the Borrower or any Restricted Subsidiary in connection with such Acquisition, (c) all
additional purchase price amounts in the form of earnouts and other contingent
obligations that are to be paid in cash and that should be recorded on the
financial statements of the Borrower and its Restricted Subsidiaries in accordance with GAAP, (d) all
amounts paid in cash in respect of covenants not to compete, and consulting
agreements that should be recorded on financial statements of the Borrower and
its Restricted Subsidiaries in
accordance with GAAP, (e) the aggregate fair market value of all other
consideration given by the Borrower or any Restricted Subsidiary in connection with such Acquisition (but
excluding the value of any capital stock, warrants or options to acquire
capital stock of Walter, New Holdco, the Borrower or any Restricted Subsidiary), and (f) out-of-pocket
transaction costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such transaction, and other similar
transaction costs so incurred and capitalized in accordance with GAAP.

 

“Credit
Extension” means each of the following: (a) a Borrowing and
(b) an L/C– BA Credit Extension.

 

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

 

“Default”
means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would unless cured or
waived be an Event of Default.

 

“Default Rate”
means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate with respect to Base Rate Loans plus (c) 2% per annum; provided,
however, that (i) with respect to a Eurodollar Rate Loan, until the
end of the Interest Period during which the Default Rate is first applicable,
the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate) otherwise applicable to such Eurodollar Rate
Loan plus 2% per annum, and thereafter as set forth in the portion of this
sentence preceding this proviso, and (ii) with respect to Letter of Credit–
BA Fees, the Default Rate shall equal the Letter of Credit– BA Fee, then in
effect plus 2% per annum, in each case to the fullest extent permitted by
applicable Laws.

 

“Defaulting
Lender” means any Lender that (a) has failed to fund any
portion of the Revolving Loans, participations in L/C - BA Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount required to be paid by it hereunder within one Business Day of
the date when due, unless the subject of a good faith dispute, or (c) has
been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.

 

12

 

“Direct Foreign
Subsidiary” means a Foreign Subsidiary a majority of whose
Voting Securities, or a majority of whose Subsidiary Securities, are owned by
the Borrower or a Domestic Subsidiary.

 

“Disposition”
or “Dispose”
means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction) of any property by any Person, including any
sale, assignment, transfer or other disposal, with or without recourse, of any
notes or accounts receivable or any rights and claims associated therewith.

 

“Dividend
Distribution” means the distribution by the Borrower to Mueller
Water Products of a dividend of not less than $400,000,000, and the further
distribution thereof by Mueller Water Products to New Holdco, collectively.

 

“DLJ Entity” means each of DLJ
Merchant Banking Partners II, L.P., a Delaware limited partnership, DLJ
Merchant Banking Partners II-A, L.P., a Delaware limited partnership, DLJ
Merchant Banking II, Inc., a Delaware corporation, as advisory general
partner on behalf of DLJ Offshore Partners II, C.V., a Netherlands Antilles
limited partnership, DLJ Diversified Partners, L.P., a Delaware limited
partnership, DLJ Diversified Partners-A, L.P., a Delaware limited partnership,
DLJMB Funding II, Inc., a Delaware corporation, DLJ Millennium Partners,
L.P., a Delaware limited partnership, DLJ Millennium Partners-A, L.P., a
Delaware limited partnership, DLJ EAB Partners, L.P., a Delaware limited
partnership, DLJ ESC II, L.P., a Delaware limited partnership, DLJ First ESC,
L.P., a Delaware limited partnership, DLJ Investment Partners L.P., a Delaware
limited partnership, DLJ Investment Partners II, L.P., a Delaware limited
partnership and DLJIP II Holdings, L.P., a Delaware limited partnership.

 

“Dollar”
and “$”
mean lawful money of the United States.

 

“Domestic
Subsidiary” means any Subsidiary that is organized under the
laws of any political subdivision of the United States (but excluding any
territory or possession thereof).

 

“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 and, in the case
of any assignment of a Revolving Credit Commitment, the L/C Issuer and the
Swing Line Lender, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

“Entity
Conversion” means, individually or collectively as the context
may indicate, the conversion under the general corporate law of the state of
Delaware or Alabama, as applicable, of (a) United States Pipe and Foundry
Company, Inc., an Alabama corporation, into United States Pipe and Foundry
Company, LLC, an Alabama limited liability company, (b) Mueller Water
Products, Inc, a Delaware corporation, into Mueller Water Products, LLC, a
Delaware limited liability company, and (c) Mueller Group, Inc., a
Delaware corporation, into Mueller Group, LLC, a Delaware limited liability
company.

 

“Environmental
Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants,

 

13

 

franchises,
licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment,
including those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.

 

“Environmental
Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation,
fines, penalties or indemnities), of the Borrower, any other Loan Party or any
of their respective Subsidiaries directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release
or threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“Equity
Interests” means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person,
all of the warrants, options or other rights for the purchase or acquisition
from such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are outstanding
on any date of determination.

 

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

 

“ERISA Affiliate”
means any trade or business (whether or not incorporated) under common control
with the Borrower within the meaning of section 414(b) or (c) of
the Code (and sections 414(m) and (o) of the Code for purposes of provisions
relating to section 412 of the Code); provided, that none of the
DLJ Entities or any of their Affiliates (other than the Borrower and its
Subsidiaries) shall be considered an ERISA Affiliate of the Borrower or any of
its Subsidiaries.

 

“ERISA Event”
means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing by the Borrower or any ERISA
Affiliate or the PBGC of a notice of intent to terminate, the treatment by the
PBGC of a Pension Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
(f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Borrower or any ERISA Affiliate; or (g) 
any event or condition that results in

 

14

 

(i) the
termination of any Plan that is regulated by any Foreign Benefit Law, (ii) the
revocation of such Plan’s authority to operate under the applicable Foreign
Benefit Law or (iii) a complete or partial withdrawal by the Borrower or
any Subsidiary from a Foreign Pension Plan.

 

“Eurodollar Rate”
means, for any Interest Period with respect to a Eurodollar 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 Dollar deposits (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 “Eurodollar Rate” for such Interest Period
shall be the rate per annum determined by the Administrative Agent to be the
rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
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 to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.

 

“Eurodollar Rate
Loan” means a Loan (including a Segment) that bears interest at
a rate based on the Eurodollar Rate.

 

“Eurodollar Rate
Segment” means a Segment bearing interest or to bear interest at
the Eurodollar Rate.

 

“Event of
Default” has the meaning specified in Section 9.01.

 

“Excess Cash
Flow” means, with respect to the Borrower and its Restricted
Subsidiaries on a consolidated basis for any fiscal year, the following:

 

(a) Consolidated
EBITDA for such period,

 

minus

 

(b) the sum of (i) the amount of the net increase (if
any) of Consolidated Current Assets, other than Cash Equivalents, over
Consolidated Current Liabilities for such period; plus (ii) Consolidated
Capital Expenditures actually made during such period pursuant to Section 8.12(d) (excluding
Consolidated Capital Expenditures constituting payments in respect of capital
leases and by way of the incurrence of Indebtedness permitted pursuant to Section 8.03(e) to
a vendor or financer of any assets permitted to be acquired pursuant to Section 8.12(d) to
finance the acquisition of such assets and any capital expenditure described in
the second proviso of such Section 8.12(d)); plus (iii) Consolidated
Cash Interest Charges for such period; plus (iv) taxes actually
paid in cash for such period and added in the calculation of Consolidated
EBITDA pursuant to part (c) of the definition thereof; plus (v) the
aggregate amount of any payments of the Term Loan made by the Borrower during
such period pursuant to Sections 2.06(a) and 2.08(c); plus
(vi) the aggregate amount of all scheduled payments and optional and
mandatory prepayments of Consolidated Funded Indebtedness (other than
Obligations) made during

 

15

 

such period; plus (vii) the aggregate amount of mandatory
prepayments of Revolving Loans made by the Borrower pursuant to Section 2.06(c) during
such period in connection with permanent reductions of the Revolving Credit Commitments
pursuant to Section 2.07; plus (viii) Investments
permitted and actually made, in cash, pursuant to clause (f), (l) or (m) of Section 8.02
during such period (excluding Investments financed with the proceeds of any
issuance of any Equity Interest or Indebtedness other than Revolving Loans); plus
(ix) Restricted Payments of the type described in clause (e) of Section 8.06
made during such period plus (x) transaction fees and costs actually
paid in cash in connection with the Transactions during such period;

 

provided, that, notwithstanding the foregoing,
the calculation of “Excess Cash Flow” with respect to the fiscal year ending December 31,
2006, shall also include the period from the Closing Date through the beginning
of such fiscal year.

 

“Exchange Act”
means the Securities Exchange Act of 1934 and the regulations promulgated
thereunder.

 

“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the L/C Issuer or
any other recipient of any payment to be made by or on account of any
obligation of the 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 the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 11.13), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 4.01(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 Borrower with respect to such withholding tax pursuant to Section 4.01(a).

 

“Existing Credit
Agreement” means that certain Second Amended and Restated Credit
Agreement dated as of April 23, 2004, among the Borrower, Credit Suisse
First Boston, acting through its Cayman Islands Branch, as agent, and a
syndicate of lenders, as amended through the Closing Date.

 

“Existing Letters of Credit”
means the letters of credit described on Schedule 1.01(a).

 

“Existing
Second Lien Notes” means those second
priority senior secured floating rate notes due 2011 issued by the Borrower
pursuant to that certain Indenture dated as of April 23, 2004 by and among
the Borrower, as issuer, certain subsidiaries of the Borrower as guarantors
thereunder, and Law Debenture Trust Company of New York, as trustee.

 

16

 

“Existing Walter
Credit Agreement” means that certain Credit Agreement dated as of April 17, 2003,
among Walter, Bank of America, as administrative agent, and a syndicate of
lenders, as amended through the Closing Date.

 

“Facility
Termination Date” means the date as of which all of the
following shall have occurred:  (a) the
Borrower shall have permanently terminated the Revolving Credit Facility and
the Term Loan Facility by final payment in full of all Outstanding Amounts,
together with all accrued and unpaid interest and fees thereon, other than (i) the
undrawn portion of Letters of Credit, (ii) the aggregate face amount of
all outstanding Bankers’ Acceptances and (iii) all fees relating to any
Letters of Credit accruing after such date (which fees shall be payable solely
for the account of the L/C Issuer and shall be computed (based on interest
rates and the Applicable Rate then in effect) on such undrawn amounts to the
respective expiry dates of the Letters of Credit), in each case as have been
fully Cash Collateralized or as to which other arrangements with respect
thereto satisfactory to the Administrative Agent and the L/C Issuer shall have
been made, (b) the Aggregate Revolving Credit Commitments, if any, shall
have terminated or expired, (c) the obligations and liabilities of the
Borrower and each other Loan Party under all Related Credit Arrangements shall
have been fully, finally and irrevocably paid and satisfied in full and the
Related Credit Arrangements shall have expired or been terminated, or other
arrangements satisfactory to the counterparties shall have been made with
respect thereto, and (d) each Guarantor shall have fully, finally and
irrevocably paid and satisfied in full its respective obligations and
liabilities arising under the Loan Documents, (except for future obligations
consisting of continuing indemnities and other contingent Obligations of the
Borrower or any Loan Party that may be owing to the Administrative Agent or any
of its Related Parties or any Lender pursuant to the Loan Documents and
expressly survive termination of this Agreement).

 

“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.

 

“Foreign Benefit
Law” means any Law of any foreign nation or any province, state,
territory, protectorate or other political subdivision thereof regulating,
relating to, or imposing liability or standards of conduct concerning, any Plan
or Pension Plan.

 

“Foreign
Investment Basket Utilization” means, on any date, the sum of (a) the
aggregate Investments in any Foreign Subsidiaries that are Restricted
Subsidiaries pursuant to Section 8.02(k), plus, (b) the
outstanding aggregate principal amount of Indebtedness incurred by Foreign
Subsidiaries pursuant to Section 8.03(j)(ii) plus (c) the
aggregate Costs of Acquisition with respect to all Acquisitions of Foreign
Subsidiaries occurring after the Closing Date, without duplication for any
portion thereof made with the proceeds of Investments described in clause (a) or
Indebtedness described in clause (b) of this definition.

 

17

 

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

 

“Foreign Pension
Plan” means any plan, arrangement, understanding or scheme
maintained by the Borrower or any Subsidiary that provides retirement or
deferred compensation benefits covering any employee or former employee and
which is administered under any Foreign Benefit Law or regulated by any
Governmental Authority other than the United States.

 

“Foreign
Subsidiary” means any Subsidiary that is not a Domestic
Subsidiary.

 

“Four-Quarter
Period” means a period of four full consecutive fiscal quarters
of the Borrower and its Subsidiaries, taken together as one accounting period.

 

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

 

“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course.

 

“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Governmental
Authority” means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government
(including any supra-national bodies such as the European Union or the European
Central Bank).

 

“Granting Lender”
has the meaning specified in Section 11.06(h).

 

“Guarantee”
means, as to any Person, any (a) any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or
services for the purpose of assuring the obligee in respect of such
Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or

 

18

 

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

 

“Guarantors”
means, collectively, New Holdco, Mueller Water Products, Mueller Water Products
Co-Issuer, Inc., Mueller Group Co-Issuer, Inc. and the Subsidiary
Guarantors.

 

“Guaranty”
means that certain Guaranty Agreement dated as of the date hereof among certain
Affiliates of the Borrower party thereto, certain Subsidiaries of the Borrower
party thereto and the Administrative Agent (on behalf of the Lenders)
substantially in the form of Exhibit F, as supplemented from time
to time by the execution and delivery of Guaranty Joinder Agreements pursuant
to Section 7.12, as from time to time the same may be otherwise
supplemented or amended, modified, amended and restated or replaced.

 

“Guaranty Joinder Agreement” means each Guaranty Joinder Agreement,
substantially in the form thereof attached to the Guaranty, executed and
delivered by a Guarantor to the Administrative Agent pursuant to Section 7.12,
as amended, modified, supplemented or amended and restated.

 

“Hazardous
Materials” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Honor Date”
has the meaning set forth in Section 2.04(c).

 

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

 

(a)           all obligations of such Person for
borrowed money and all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments;

 

(b)           all direct or contingent obligations
of such Person arising under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments;

 

(c)           net obligations of such Person under
any Swap Contract;

 

19

 

(d)           all obligations of such Person to pay
the deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business);

 

(e)           indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;

 

(f)            capital leases and Synthetic Lease
Obligations of such Person and all Receivables Facility Outstandings; and

 

(g)           all Guarantees of such Person in
respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, to the extent such Indebtedness is
recourse to such Person.  The amount of
any net obligation under any Swap Contract on any date shall be deemed to be
the Swap Termination Value thereof as of such date.  The amount of any capital lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.

 

“Indemnified
Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees”
has the meaning specified in Section 11.04.

 

“Information”
has the meaning specified in Section 11.07.

 

“Interest
Payment Date” means, (a) as to any Eurodollar Rate Loan,
the last day of the relevant Interest Period, any date that such Loan is
prepaid or converted, in whole or in part, and the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as applicable; provided, however,
that if any Interest Period for a Eurodollar Rate Loan exceeds three months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan (including a Swing Line Loan), (i) the fifteenth (or the
next Business Day after the fifteenth, if the fifteenth is not a Business Day)
of each January, April, July and October with respect to interest
accrued through the last day of each fiscal quarter of the Borrower ending
immediately prior to such date, and (ii) the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as applicable, with respect to interest
accrued through such date; provided, further, that interest
accruing at the Default Rate shall be payable from time to time upon demand of
the Administrative Agent.

 

“Interest Period”
means, as to each Eurodollar Rate Loan, the period commencing on the date such
Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar
Rate Loan and ending, in each case, on the date one, two, three or six or, if
consented to by each applicable Lender, nine or twelve months thereafter, as selected by the
Borrower in its Revolving Loan Notice or Term Loan Interest Rate Selection
Notice (or, in the case of any Eurodollar Rate Loan made on the Closing Date,
such other interest period less than six months that may be approved by the
Administrative Agent); provided that:

 

20

 

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

 

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

 

(iii)          no Interest Period shall extend beyond
(a) with respect to Revolving Loans, the Revolving Credit Maturity Date,
and (b) with respect to the Term Loan, the date set forth in part (a) of
the definition of the Term Loan Maturity Date.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance
or capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person and any arrangement pursuant to which the investor Guarantees Indebtedness
of such other Person, (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit, or (d) the purchase of land and related
infrastructure improvements.  For purposes
of covenant compliance, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment, less all returns of principal or equity thereon
(and without adjustment by reason of the financial condition of such other
Person) and shall, if made by the transfer or exchange of property other than
cash, be deemed to have been made in an original principal or capital amount
equal to the fair market value of such property at the time of such transfer or
exchange.

 

“IP Rights”
has the meaning set forth in Section 6.17.

 

“IRS”
means the United States Internal Revenue Service.

 

“ISP”
means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

 

“Issuer
Documents” means with respect to any Letter of Credit or
Acceptance Credit, the Letter of Credit Application, and any other document,
agreement and instrument entered into by the L/C Issuer and the Borrower (or
any Subsidiary) or in favor the L/C Issuer and relating to any such Letter of
Credit or Acceptance Credit.

 

“Joinder
Agreements” means, collectively, Guaranty Joinder Agreements,
the Pledge Joinder Agreements and the Security Joinder Agreements.

 

“Joint Fee
Letter” means the letter agreement, dated as of June 17,
2005, among Walter, the Administrative Agent and the Arrangers.

 

21

 

“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, 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 – BA
Advance” means, with respect to each Revolving Lender, such
Revolving Lender’s funding of its participation in any L/C – BA Borrowing in
accordance with its Pro Rata Revolving Share.

 

“L/C – BA
Borrowing” means an extension of credit resulting from (a) a
drawing under any Letter of Credit (other than an Acceptance Credit) or (b) a
payment of a Bankers’ Acceptance upon presentation, in each case which has not
been reimbursed on the date when made or refinanced as a Revolving Borrowing.

 

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

 

“L/C – BA
Obligations” means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit, plus the
sum of the maximum aggregate amount which is, or at any time thereafter may
become, payable by the L/C Issuers under all then outstanding Bankers’
Acceptances, plus the aggregate of all Unreimbursed Amounts, including all L/C –
BA Borrowings.  For purposes of computing
the amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.06.  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 Issuer”
means each of Bank of America and JPMorgan Chase Bank, N.A., each in its
capacity as an issuer of Letters of Credit and Bankers’ Acceptances hereunder,
or any successor issuer of Letters of Credit and Bankers’ Acceptances
hereunder.  At any time there is more
than one L/C Issuer, all singular references to the L/C Issuer shall mean any
L/C Issuer, either L/C Issuer, each L/C Issuer, the L/C Issuer that has issued
the applicable Letter of Credit, or both L/C Issuers, as the context may
require.

 

“Lender”
has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the L/C Issuer and the Swing Line Lender.

 

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

 

22

 

“Letter of
Credit” means any letter of credit issued hereunder, and shall
include the Existing Letters of Credit. 
A Letter of Credit may be a commercial letter of credit (including an
Acceptance Credit) or a standby letter of credit.

 

“Letter of
Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer and, in the case of any Acceptance Credit, shall include
the related Acceptance Documents.

 

“Letter of
Credit – BA Expiration Date” means the day that is seven days
prior to the Revolving Credit Maturity Date then in effect (or, if such day is
not a Business Day, the next preceding Business Day).

 

“Letter of
Credit – BA Fees” means, collectively or individually as the
context may indicate, the fees with respect to Letters of Credit and Bankers’
Acceptances described in Section 2.04(i).

 

“Letter of
Credit – BA Sublimit” means an amount equal to the lesser of (a) $50,000,000
and (b) the Aggregate Revolving Credit Commitments.  The Letter of Credit – BA Sublimit is part
of, and not in addition to, the Aggregate Revolving Credit Commitments.

 

“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loan”
means an extension of credit by a Lender to the Borrower under Article II
in the form of a Revolving Loan, a Term Loan or a Swing Line Loan, including
any Segment.

 

“Loan Documents”
means this Agreement, each Note, the Guaranty (including each Guaranty Joinder
Agreement), the Parent Guaranty, each Security Instrument, each Revolving Loan
Notice, each Term Loan Interest Rate Selection Notice, each Issuer Document and
each Compliance Certificate, and all other instruments and documents heretofore
or hereafter executed or delivered to or in favor of any Lender or the
Administrative Agent in connection with the Loans made and transactions
contemplated by this Agreement.

 

“Loan Parties”
means, collectively, the Borrower, each Guarantor and each other Person
providing Collateral pursuant to any Security Instrument.

 

“Material
Adverse Effect” means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, assets, properties,
liabilities (actual or contingent), condition (financial or otherwise) or
prospects of the Borrower and its Restricted Subsidiaries taken as a whole; (b) a
material impairment of the ability of any Loan Party to perform its obligations
under any Loan Document to which it is a party; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against
any Loan Party of any Loan Document to which it is a party.

 

23

 

“Material
Subsidiary” means, as of any date of determination thereof (and,
as of the Closing Date, giving effect to the US Pipe Contribution), each direct
or indirect Restricted Subsidiary of the Borrower that (a) holds, owns or
contributes, as the case may be, 3% or more of the gross revenues, assets
(including Equity Interests in other Subsidiaries) or Consolidated EBITDA of
the Borrower and the Restricted Subsidiaries, on a consolidated basis
(calculated as of the most recent fiscal period with respect to which the
Administrative Agent shall have received financial statements required to be
delivered pursuant to Sections 7.01(a) or (b) or if
prior to delivery of any financial statements pursuant to such Sections, then
calculated with respect to the financial statements dated as of June 30,
2005, but pro forma for the US Pipe Contribution), (b) is designated by
the Borrower as a Material Subsidiary, or (c) Guarantees the Mueller Water
Products Notes.  The Borrower shall
designate one or more Restricted Subsidiaries of the Borrower as Material
Subsidiaries if, in the absence of such designation, the aggregate gross
revenues, assets (including Equity Interests in other Subsidiaries) or
contribution to Consolidated EBITDA of all Restricted Subsidiaries of the
Borrower that are not Material Subsidiaries would exceed 3% of the gross
revenues, assets or Consolidated EBITDA (calculated as of the most recent
fiscal period with respect to which the Administrative Agent shall have
received financial statements required to be delivered pursuant to Sections
7.01(a) or (b) or if prior to delivery of any financial
statements pursuant to such Sections, then calculated with respect to the
financial statements dated as of June 30, 2005, but pro forma for the US
Pipe Contribution).

 

“Merger”
means the acquisition by Walter of all of the issued and outstanding capital
stock of Mueller Water Products by means of the merger of Mueller Water
Products with JW MergerCo, Inc., a Delaware corporation and a direct
Subsidiary of New Holdco, with Mueller Water Products being the surviving
entity of such merger.

 

“Merger Agreement”
means that certain Agreement and Plan of Merger dated as of June 17, 2005,
by and among Mueller Water Products, Walter, JW MergerCo, Inc. and DLJ
Merchant Banking II, Inc., as the Stockholders’ Representative (including
all schedules and exhibits thereto and the Disclosure Letter (as defined
therein)).

 

“Merger
Documents” means, individually or collectively as the context
may indicate, (a) the Merger Agreement, (b) the Escrow Agreement (as
defined in the Merger Agreement), (c) the Voting Agreement (as defined in
the Merger Agreement) and (d) each other material agreement, instrument
and document relating to the Merger.

 

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

 

“Morgan Stanley”
means Morgan Stanley Senior Funding, Inc. and its successors.

 

“Mortgage”
means, individually or collectively as the context may indicate, those
mortgages, deeds of trust, deeds to secure debt and comparable real estate Lien
documents delivered on or after the Closing Date to the Administrative Agent
with respect to any Mortgaged Fee Property, substantially in the form attached
hereto as Exhibit J.

 

“Mortgaged Fee
Property” means, collectively, the fee interests of the Borrower
or any Guarantor, as applicable, in such real property, improvements, fixtures
and other items of real

 

24

 

and personal
property related thereto (and the products and proceeds thereof) as may be
granted to the Administrative Agent on the Closing Date or from time to time thereafter
in accordance with the terms of this Agreement pursuant to a Mortgage.

 

“Mortgaged
Property Support Documents” shall mean, for each Mortgaged Fee
Property, (a) the Title Policy pertaining thereto, (b) such surveys
and flood hazard certifications thereof as the Administrative Agent may require
prepared by recognized experts in their respective fields selected by the
Borrower and reasonably satisfactory to the Administrative Agent provided
that if the Title Policy for any Mortgaged Fee Property does not contain a
blanket survey exception and contains survey coverage and survey related
endorsements which are reasonably acceptable to the Administrative Agent, then
no survey shall be required for such Mortgaged Fee Property, (c) as to the
Mortgaged Properties located in a flood hazard area, such flood hazard
insurance as the Administrative Agent may require, (d) such lessee’s
affidavits as the Administrative Agent may reasonably require with respect to
any such property leased to a third party, (e) such opinions of local
counsel with respect to the Mortgages, as applicable, as the Administrative
Agent may reasonably require, and (f) such other documentation as the
Administrative Agent may reasonably require, in each case as shall be in form
and substance reasonably acceptable to the Administrative Agent.

 

“Mueller Water
Products” means Mueller Water Products, LLC, a Delaware limited
liability company and successor by conversion to Mueller Water Products, Inc.,
a Delaware corporation (f/k/a Mueller Holdings (N.A.), Inc.).

 

“Mueller Water
Products Indenture” means the Indenture, dated as of April 29,
2004, among Mueller Water Products, Mueller Water Products Co-Issuer, Inc.
and Law Debenture Trust Company of New York, as trustee, as in effect on the
Closing Date.

 

“Mueller Water
Products Notes” means the senior discount notes issued by
Mueller Water Products and Mueller Water Products Co-Issuer, Inc. in an
aggregate initial accreted value not in excess of $110,100,000 pursuant to the
Mueller Water Products Indenture, as in effect on the Closing Date.

 

“Mueller Water
Products Senior Exchange Notes  “ means senior unsecured exchange
notes which refinance all or part of the Mueller Water Products Senior Rollover
Loans and which have terms consistent with the following: (a) maturity
date no earlier than April 15, 2014, (b) no scheduled payments of
principal until on or after April 15, 2014, (c) interest rates not in
excess of 16.0% per annum which interest shall be payable solely in kind; provided,
that, in the case of a payment default, the applicable rate for past due
amounts may be increased by 2.0% per annum, and (d) covenants, terms and
conditions terms and conditions substantially similar to those set forth in the
Put Backstop Facility of Mueller Water Products or other covenants, terms and
conditions acceptable to the Administrative Agent.

 

“Mueller Water
Products Senior Rollover Loans” means senior unsecured rollover
loans which refinance all or part of the Put Backstop Facility of Mueller Water
Products and which have terms consistent with the following: (a) maturity
date no earlier than April 15, 2014, (b) no scheduled payments of
principal until on or after April 15, 2014, (c) interest rates not in
excess of 16.0% per annum which interest shall be payable solely in kind; provided,
that, in the case of

 

25

 

a payment
default, the applicable rate for past due amounts may be increased by 2.0% per
annum, and (d) covenants, terms and conditions terms and conditions
substantially similar to those set forth in the Put Backstop Facility of
Mueller Water Products or other covenants, terms and conditions acceptable to
the Administrative Agent.

 

“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

 

“Net Cash
Proceeds” means:

 

(a)           with respect to the sale of any asset
by the Borrower or any Restricted Subsidiary, the excess, if any, of (i) the
sum of cash and cash equivalents received in connection with such sale
(including any cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by such asset and that is required to be repaid in
connection with the sale thereof (other than Indebtedness under the Loan
Documents and Indebtedness owing to the Borrower or any Restricted Subsidiary),
(B) the out-of-pocket expenses incurred by the Borrower or any Restricted
Subsidiary in connection with such sale, including any brokerage commissions,
underwriting fees and discount, legal fees, finder’s fees and other similar
fees and commissions, (C) taxes paid or reasonably estimated to be payable
by the Borrower or any Restricted Subsidiary in connection with the relevant
asset sale, (D) the amount of any reasonable reserve required to be
established in accordance with GAAP against liabilities (other than taxes
deducted pursuant to (C) above) to the extent such reserves are (I)
associated with the assets that are the object of such sale and (II) retained
by the Borrower or any Restricted Subsidiary, and (E) the amount of any
reasonable reserve for purchase price adjustments and retained fixed
liabilities reasonably expected to be payable by the Borrower or any Restricted
Subsidiary in connection therewith to the extent such reserves are (I)
associated with the assets that are the object of such sale and (II) retained
by the Borrower or any Restricted Subsidiary; provided that the amount
of any subsequent reduction of any reserve provided for in clause (D) or (E) above
(other than in connection with a payment in respect of such liability) shall
(X) be deemed to be Net Cash Proceeds of such asset sale occurring on the date
of such reduction, and (Y) immediately be applied to the prepayment of Loans in
accordance with Section 2.06(d);

 

(b)           with respect to the public and
private issuance of any Indebtedness by the Borrower or any Restricted
Subsidiary, the excess of (i) the sum of the cash and cash equivalents
received in connection with such issuance over (ii) the sum of (A) the
underwriting discounts and commissions, and all legal, accounting, printing,
rating agency, banking, title and recording fees and expenses and other
out-of-pocket expenses, incurred by the Borrower or such Restricted Subsidiary
in connection with such issuance, (B) all taxes required to be paid or
accrued as a consequence of such issuance, and (C) in the case of debt
incurred, sold or issued by any Foreign Subsidiary, any taxes or other costs or
expenses resulting from repatriating any such proceeds to the United States;
and

 

26

 

(c)           with respect to the sale or issuance
of any Equity Interest by the Borrower or any Restricted Subsidiary, the excess
of (i) the sum of the cash and cash equivalents received in connection
with such sale or issuance over (ii) the underwriting discounts and
commissions, and all legal, accounting, printing, banking and other
out-of-pocket expenses, incurred by the Borrower or such Restricted Subsidiary
in connection with such issuance or sale, and (B) all taxes and other
governmental costs and expenses required to be paid or accrued as a consequence
of such issuance or sale (including, in the case of a transfer, sale or other
disposition of non-U.S. assets, any such taxes or other costs or expenses
resulting from repatriating any such proceeds to the United States).

 

“New Holdco”
means Mueller Holding Company, Inc., a Delaware corporation.

 

“Notes”
means, collectively, the Revolving Loan Notes and the Term Loan Notes.

 

“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and duties
of, any Loan Party arising under any Loan Document or otherwise with respect to
any Loan, Letter of Credit or Bankers’ Acceptance, or arising under any Related
Credit Arrangement, in each case whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.

 

“Organization
Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Other Taxes”
means all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document.

 

“Outstanding
Amount” means (a) with respect to the Term Loan on any
date, the aggregate outstanding principal amount thereof after giving effect to
the Borrowing of the Term Loan on the Closing Date, and any prepayments or
repayments of the Term Loan (or any Segment) occurring on such date, (b) with
respect to Revolving Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any Revolving Borrowings and any
prepayments or repayments of Revolving Loans occurring on such date; (c) with
respect to Swing Line Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of Swing Line Loans occurring on such

 

27

 

date; and (d) with
respect to any L/C – BA Obligations on any date, the amount of such L/C – BA
Obligations on such date after giving effect to any L/C – BA Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
– BA Obligations as of such date, including as a result of any reimbursements
of amounts paid under Bankers’ Acceptances or outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.

 

“Parent Guaranty”
means the Guaranty Agreement dated as of the date hereof by New Holdco and
Mueller Water Products to the Administrative Agent for the benefit of the
Secured Parties, substantially in the form of Exhibit H.

 

“Participant”
has the meaning specified in Section 11.06(d).

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

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

 

“Permitted
Mueller Water Products Debt” means (a) means, individually
or collectively as the context may indicate, each of  (a) the Mueller Water Products Senior
Exchange Notes, (b) the Mueller Water Products Senior Rollover Loans, and (c) any
other Indebtedness of Mueller Water Products which has terms consistent with
the following: (i) no scheduled payments of principal prior to the ninth
anniversary of the Closing Date, (ii) no payments of interest required to
be made in cash prior to the fifth anniversary of the Closing Date, (iii) commercially
reasonable interest or accretion rate, (iv) the absence of financial
maintenance covenants, (v) the absence of guarantees or Liens by the
Borrower or any Restricted Subsidiary, and (vi) the absence of covenants
or other terms or conditions that, taken as a whole, are more restrictive than
the covenants, terms and restrictions contained in this Agreement and the other
Loan Documents; provided, in each case that such Indebtedness is either
exchanged for, or 100% of the proceeds of such Indebtedness is used to repay,
redeem or repurchase, in whole or in part, the Mueller Water Products Notes,
either Put Backstop Facility, any other Permitted Mueller Water Products Debt,
Term Loans, the Subordinated Debt or any Permitted Subordinated Debt and to pay
related premiums, interest, fees, costs and expenses.

 

“Permitted
Receivables Transaction” means one or more trade receivables
financing transactions pursuant to which the Borrower and any of its Restricted
Subsidiaries sells Accounts and assets related thereto that are customarily
transferred with such Accounts in receivables financing transactions, or
interests therein, directly or indirectly through another Restricted Subsidiary
of the Borrower to a Receivables Co., and such Receivables Co. sells such
Accounts and related assets, or interests therein, or grants Liens in such
Accounts and related assets, or interests therein, to buyers thereof or
providers of financing based thereon, so long as (i) the aggregate
principal amount outstanding (without duplication) at any time of all such
financings

 

28

 

does not
exceed $100,000,000, (ii) such financings are subject to customary terms
and conditions or other terms and conditions reasonably acceptable to the
Administrative Agent and (iii) each such financing is subject to a
backstop facility provided by a credit support provider reasonably acceptable
to the Administrative Agent, which backstop facility has a term of not less
than 3  years from the date such backstop
facility is entered into, or otherwise has credit support acceptable to the
Administrative Agent.

 

“Permitted
Subordinated Debt” means, individually or collectively as the
context may indicate, each of  (a) the
Senior Subordinated Exchange Notes, (b) the Senior Subordinated Rollover
Loans, and (c) any other unsecured subordinated notes issued by the
Borrower having terms consistent with the following: (i) subordination in
right of payment to the Obligations pursuant to terms and conditions substantially
similar to those set forth in the Subordinated Note Indenture or other terms
and conditions acceptable to the Administrative Agent, (ii) no scheduled
payments of principal for at least one year following the Term Loan Maturity
Date, (iii) commercially reasonable interest rates, (iv) the absence
of financial maintenance covenants, and (v) the absence of covenants or
any other terms or conditions that, taken as a whole, are more restrictive than
the covenants, terms and restrictions contained in this Agreement and the other
applicable Loan Documents; provided, in each case that such Indebtedness
is either exchanged for, or 100% of the proceeds of such Indebtedness is used
to repay, redeem or repurchase, in whole or in part, the Subordinated Notes,
the Put Backstop Facility of the Borrower or other Permitted Subordinated Debt
and to pay related premiums, interest, fees, costs and expenses.

 

“Permitted
Subordinated Debt Documents” means all loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements evidencing or executed in connection with Permitted
Subordinated Debt, in each case as amended, supplemented, amended and restated
or otherwise modified in accordance with Section 8.11.

 

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

 

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

 

“Platform”
has the meaning specified in Section 7.02.

 

“Pledge
Agreement” means that certain Securities Pledge Agreement dated
as of the date hereof among New Holdco, Mueller Water Products, the Borrower,
certain Guarantors and the Administrative Agent, as supplemented from time to
time by the execution and delivery of Pledge Joinder Agreements pursuant to Sections
3.01 and 7.12, as the same may be otherwise supplemented (including
by Pledge Agreement Supplement).

 

“Pledge
Agreement Supplement” means the Pledge Agreement Supplement in
the form affixed as an exhibit to the Pledge Agreement.

 

“Pledged
Interests” means (a) 100% of the outstanding Equity
Interests of (i) the Borrower, (ii) Mueller Water Products, (iii) Mueller
Water Products Co-Issuer, Inc., and (iv)

 

29

 

Mueller Group Co-Issuer, Inc.,
(b) the Subsidiary Securities of each of the existing or hereafter
organized or acquired Domestic Subsidiaries of the Borrower that at any time are on Schedule I
to the Pledge Agreement (or any similar schedule serving the same purpose
in the Pledge Agreement); (c) all of the Subsidiary Securities of each of
the existing or hereafter organized or acquired Domestic Subsidiaries of the
Borrower that is a Material
Subsidiary; and (d) 65% of the Voting Securities (or if the relevant
Person shall own less than 65% of such Voting Securities, then 100% of the
Voting Securities owned by such Person) and 100% of the nonvoting Subsidiary
Securities of each of the existing or hereafter organized or acquired Direct
Foreign Subsidiaries of the Borrower  that is a Material Subsidiary; provided,
in the case of the foregoing clauses (b), (c) and (d), that the Pledged
Interests shall in each case exclude the Voting Securities and Subsidiary
Securities of any Unrestricted Subsidiary.

 

“Pledge Joinder
Agreement” means each Pledge Joinder Agreement, substantially in
the form thereof attached to the Pledge Agreement, executed and delivered by a
Guarantor to the Administrative Agent pursuant to Section 7.12.

 

“Pro Rata
Revolving Share” means, with respect to each Revolving Lender at
any time, a fraction (expressed as a percentage, carried out to the ninth
decimal place), the numerator of which is the amount of the Revolving Credit
Commitment of such Revolving Lender at such time and the denominator of which
is the amount of the Aggregate Revolving Credit Commitments at such time; provided
that if the Aggregate Revolving Credit Commitments have been terminated at such
time, then the Pro Rata Revolving Share of each Revolving Lender shall be the
Pro Rata Revolving Share of such Revolving Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to Section 11.06.  The
initial Pro Rata Revolving Share of each Revolving Lender is set forth opposite
the name of such Revolving Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Revolving Lender becomes a
party hereto, as applicable.

 

“Pro Rata Term
Share” means, with respect to each Term Loan Lender, the
percentage (carried out to the ninth decimal place) of the principal amount of
the Term Loan funded by such Term Loan Lender. 
The initial Pro Rata Term Share of each Term Loan Lender is set forth
opposite the name of such Term Loan Lender on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Term Loan Lender becomes a
party hereto, as applicable.

 

“Put Backstop
Commitment Letter” means that certain commitment letter dated as
of June 17, 2005 by and among Walter, Banc of America Bridge LLC, Banc of
America Securities LLC and Morgan Stanley Senior Funding, Inc. regarding
the commitments for the Put Backstop Facilities.

 

“Put Backstop
Commitment Letter Amendment” means that certain Letter Amendment
to the Commitment Letter dated on or before the Closing Date by and among Walter,
Banc of America Bridge LLC, Banc of America Securities LLC and Morgan Stanley
Senior Funding, Inc. extending one element of the termination of the
commitments under the Put Backstop Commitment Letter for the Put Backstop
Facilities to a date that is not earlier than the date that is 60 days after
the Closing Date.

 

30

 

“Put Backstop
Facilities” means, individually or collectively as the context
may indicate, each of (a) a senior subordinated bridge facility of the
Borrower entered into, if at all, within 60 days after the Closing Date in an
aggregate principal amount of not less than $320,000,000 for the purpose of
providing liquidity in the event that more than $25,000,000 of the Subordinated
Notes are tendered in response to an offer to repurchase such Subordinated
Notes as a result of the consummation of the Merger, and (b) a senior
bridge facility of Mueller Water Products entered into, if at all, within 60
days after the Closing Date in an aggregate principal amount of not less than
$145,000,000 for the purpose of providing liquidity in the event that more than
$25,000,000 of the Mueller Water Products Notes are tendered in response to an
offer to repurchase such notes as a result of the consummation of the Merger,
in each with terms consistent with Put Backstop Commitment Letter.

 

“Receivables Co.” means any Restricted Subsidiary of the
Borrower whose sole business consists of purchasing Accounts and related
assets, or interests therein, pursuant to a Permitted Receivables Transaction,
from the Borrower and its Restricted Subsidiaries, selling and granting Liens
on such Accounts and related assets, or interests therein, obtaining credit on
the basis of sales of or Liens on such Accounts and related assets, or
interests therein, and such other activities as are incidental to the
foregoing.

 

“Receivables
Facility Outstandings” means obligations of
the Borrower and its Restricted Subsidiaries, with respect to any Permitted
Receivables Transaction, and, for purposes of this Agreement and each other
Loan Document, the amount of such obligations in respect of any Permitted
Receivables Transaction shall be (a) if such Permitted Receivables
Transaction is or should be an “on-balance-sheet” transaction in accordance
with GAAP, the aggregate principal amount of debt required to be reflected on
the consolidated balance sheet of the Borrower and the Restricted Subsidiaries
in respect thereof in accordance with GAAP and (b) if such Permitted
Receivables Transaction is or should be an “off-balance-sheet” transaction in
accordance with GAAP, the aggregate principal amount of debt that would be
required to be reflected on the consolidated balance sheet of the Borrower and
the Restricted Subsidiaries in respect thereof in accordance with GAAP if such
Permitted Receivables Transaction were an “on-balance-sheet” transaction in
accordance with GAAP.

 

“Register”
has the meaning specified in Section 11.06(c).

 

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

 

“Related Credit
Arrangements” means, collectively, Related Swap Contracts and
Related Treasury Management Arrangements.

 

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

 

“Related Swap
Contract” means all Swap Contracts that are entered into or
maintained with a Lender or Affiliate of a Lender that are not prohibited by
the express terms of the Loan Documents.

 

31

 

“Related
Treasury Management Arrangements” means all arrangements for the
delivery of treasury management services to or for the benefit of any Loan
Party which are entered into or maintained with a Lender or Affiliate of a
Lender and which are not prohibited by the express terms of the Loan Documents.

 

“Replacement Walter
Facilities” means
the senior, secured credit facilities of Walter pursuant to that certain Credit
Agreement dated as of the Closing Date by and among Walter, Bank of America, as
administrative agent, Morgan Stanley, as syndication agent, and the lenders
from time to time party thereto, which such facilities refinance the Existing
Walter Credit Agreement.

 

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

 

“Request for
Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Revolving Loans, a Revolving Loan Notice, (b) with
respect to a conversion or continuation of Segments, a Term Loan Interest Rate
Selection Notice, (c) with respect to an L/C - BA Credit Extension, a
Letter of Credit Application, and (d) with respect to a Swing Line Loan, a
Swing Line Loan Notice.

 

“Required
Lenders” means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuers to make L/C - BA Credit
Extensions have been terminated pursuant to Section 9.02, Lenders
holding in the aggregate more than 50% of the Total Outstandings (with the
aggregate amount of each Lender’s risk participation and funded participation
in L/C – BA Obligations and Swing Line Loans being deemed “held” by such Lender
for purposes of this definition); provided that any Revolving Credit
Commitment of, and the portion of the Total Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

“Required
Revolving Lenders” means, as of any date of determination,
Revolving Lenders having more than 50% of the Aggregate Revolving Credit
Commitments and Outstanding Amount (including risk participations in Letters of
Credit and Swing Line Loans) under the Revolving Credit Facility; provided
that the Revolving Credit Commitment of, and the portion of the Outstanding
Amount (including risk participations in Letters of Credit and Swing Line
Loans) under the Revolving Credit Facility held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Revolving Lenders.

 

“Required Term
Loan Lenders” means, as of any date of determination, Term Loan
Lenders having more than 50% of the Outstanding Amount of the Term Loan; provided
that the Outstanding Amount of the Term Loan held or deemed held by any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Term Loan Lenders.

 

“Responsible
Officer” means, with respect to each Loan Party, the chief
executive officer, president, chief financial officer, treasurer, controller or
assistant treasurer 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,

 

32

 

partnership
and/or other action on the part of such Loan Party and such Responsible Officer
shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted
Payment” means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of the Borrower or any Restricted Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to the Borrower’s
stockholders, partners or members (or the equivalent Person thereof).  For avoidance of doubt, payments pursuant to
any shared services agreement described in Section 8.08 shall not
be deemed to be Restricted Payments.

 

“Restricted
Subsidiaries” means all Subsidiaries of the Borrower other than
the Unrestricted Subsidiaries.

 

“Revolving
Borrowing” means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period, made by each of the Revolving Lenders pursuant
to Section 2.02.

 

“Revolving
Credit Commitment” means, as to each Revolving Lender, its
obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.02,
(b) purchase participations in L/C - BA Obligations, and (c) purchase
participations in Swing Line Loans, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Revolving
Lender’s name on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

 

“Revolving
Credit Facility” means the facility described in Sections
2.02, 2.04 and 2.05 providing for Revolving Loans, Swing Line
Loans, Letters of Credit and BAs to or for the benefit of  the Borrower by the Revolving Lenders, Swing
Line Lender and L/C Issuer, as the case may be, in the maximum aggregate
principal amount at any time outstanding of $145,000,000, as adjusted from time to time pursuant to
the terms of this Agreement.

 

“Revolving
Credit Maturity Date” means October 4, 2010.

 

“Revolving
Lender” means each Lender that has a Revolving Credit Commitment
or, following termination of the Revolving Credit Commitments, has Revolving
Loans outstanding or participations in an outstanding Letter of Credit, Banker’s
Acceptance or Swing Line Loan.

 

“Revolving Loan”
means a Base Rate Loan or a Eurodollar Rate Loan made to the Borrower by a
Revolving Lender in accordance with its Pro Rata Revolving Share pursuant to Section 2.02,
except as otherwise provided herein.

 

“Revolving Loan
Note” means a promissory note made by the Borrower in favor of a
Revolving Lender evidencing Revolving Loans made by such Revolving Lender,
substantially in the form of Exhibit C-2.

 

33

 

“Revolving Loan
Notice” means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.03(a),
which, if in writing, shall be substantially in the form of Exhibit A-1.

 

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

 

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

 

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

 

“Secured Parties”
means, collectively, with respect to each of the Security Instruments, the
Administrative Agent, the Lenders and such other Persons for whose benefit the
Lien thereunder is conferred, as therein provided.

 

“Securities Laws”
means the Securities Act of 1933, the Exchange Act, Sarbanes-Oxley and the
applicable accounting and auditing principles, rules, standards and practices
promulgated, approved or incorporated by the SEC or the Public Company
Accounting Oversight Board, as each of the foregoing may be amended and in
effect on any applicable date hereunder.

 

“Security
Agreement” means the Security Agreement dated as of the date
hereof by the Borrower and one or more of the Guarantors to the Administrative
Agent for the benefit of the Secured Parties, substantially in the form of Exhibit J,
as supplemented from time to time by the execution and delivery of Security
Joinder Agreements pursuant to Section 7.12.

 

“Security Instruments”
means, collectively or individually as the context may indicate, the Security
Agreement (including the Security Joinder Agreements), the Pledge Agreement
(including the Pledge Joinder Agreements and the Pledge Agreement Supplements),
each Mortgage, each Title Policy and each other Mortgaged Property Support
Document and all other agreements (including control agreements), instruments
and other documents, whether now existing or hereafter in effect, pursuant to
which the Borrower or any Restricted Subsidiary or other Person shall grant or
convey to the Administrative Agent or the Lenders a Lien in, or any other
Person shall acknowledge any such Lien in, property as security for all or any
portion of the Obligations or any other obligation under any Loan Document, as
any of them may be reinstated from time to time in accordance with the terms
hereof and thereof.

 

“Security
Joinder Agreement” means each Security Joinder Agreement,
substantially in the form thereof attached to the Security Agreement, executed
and delivered by a Guarantor or any other Person to the Administrative Agent
pursuant to Section 7.12.

 

“Segment”
means a portion of any Term Loan (or all thereof) with respect to which a
particular interest rate is (or is proposed to be) applicable.

 

“Senior Credit
Facility” means, collectively, the Term Loan Facility and the
Revolving Credit Facility.

 

34

 

“Senior
Subordinated Exchange Notes  “ means senior subordinated exchange
notes which refinance all or part of the Senior Subordinated Rollover Loans and
which have terms consistent with the following: (a) subordination to the
Obligations pursuant to terms and conditions substantially similar to those set
forth in the Put Backstop Facility of the Borrower or other terms and
conditions acceptable to the Administrative Agent, (b) maturity date no
earlier than May 1, 2012, (c) no scheduled payments of principal
until on or after May 1, 2012, (d) interest rates not in excess of
12.5% per annum; provided, that, in the case of a payment default, the
applicable rate for past due amounts may be increased by 2.0% per annum, (e) covenants,
terms and conditions terms and conditions substantially similar to those set
forth in the Put Backstop Facility of the Borrower or other covenants, terms
and conditions acceptable to the Administrative Agent.

 

“Senior
Subordinated Rollover Loans” means senior subordinated rollover
loans which refinance all or part of the Put Backstop Facility of the Borrower
and which have terms consistent with the following: (a) subordination to
the Obligations pursuant to terms and conditions substantially similar to those
set forth in the Put Backstop Facility of the Borrower or other terms and
conditions acceptable to the Administrative Agent, (b) maturity date no
earlier than May 1, 2012, (c) no scheduled payments of principal
until on or after May 1, 2012, (d) interest rates not in excess of
12.5% per annum; provided, that, in the case of a payment default, the
applicable rate for past due amounts may be increased by 2.0% per annum, (e) covenants,
terms and conditions terms and conditions substantially similar to those set
forth in the Put Backstop Facility of the Borrower or other covenants, terms
and conditions acceptable to the Administrative Agent.

 

“Solvent”
means, when used with respect to any Person, that at the time of determination:

 

(a)           the fair value of its assets (both at
fair valuation and at present fair saleable value on an orderly basis) is in
excess of the total amount of its liabilities, including contingent
obligations; and

 

(b)           it is then able and expects to be
able to pay its debts as they mature; and

 

(c)            it has capital
sufficient to carry on its business as conducted and as proposed to be
conducted.

 

“SPC”
has the meaning specified in Section 11.06(h).

 

“Specified
Credit Agreement Representations” means the representations and
warranties set forth in Sections 6.01, 6.02, 6.03, 6.04,
6.06, 6.07, 6.14 and 6.15 of this Agreement.

 

“Specified Items”
means the following expenses incurred in any fiscal quarter of the Borrower
ending on or before June 30, 2005:  (a) up
to $1,500,000 associated with facility or product line closures, consolidation
or rationalization; (b) up to $2,700,000 associated with acquisitions and
dispositions; (c) up to $100,000 associated with purchase accounting
inventory write up; (d) up to $1,400,000 associated with recapitalization
expenses; (e) up to $1,500,000 associated with management fees; (f) up
to $1,900,000 associated with Sarbanes-Oxley compliance; and (g) up to
$3,100,000 associated with accounting investigation inquiry expenses.

 

35

 

“Specified Merger Document
Representations” means the representations and warranties made
by Mueller Water Products and DLJ Merchant Banking II, Inc. to Walter, JW
MergerCo, Inc., or any Subsidiary of Walter in the Merger Documents, in
each case without giving effect to any consent or waiver by any party to the
Merger Agreement to any exception thereto or deviation therefrom but only to
the extent that Walter, JW MergerCo, Inc., or any Subsidiary of Walter
party thereto has the right to terminate their obligations under the Merger
Agreement as a result of a breach of such representations or warranties.

 

“Specified Transaction”
means any of (a) a dividend or distribution by Walter to its shareholders
of all or any portion of the Equity Interests of New Holdco owned by Walter, (b) an
initial public offering of Equity Interests of New Holdco, or (c) the
Disposition by Walter of any of its Equity Interests of New Holdco.

 

“Subordinated
New Holdco Note” means that certain 9% Subordinated Note due
2013 by New Holdco in favor of the Borrower representing a subordinated loan
from the Borrower to New Holdco in an initial principal amount of $20,000,000,
and including a subordinated guarantee by Walter of the obligations of New
Holdco thereunder.

 

“Subordinated
New Holdco Loan” means the loan evidenced by the Subordinated
New Holdco Note.

 

“Subordinated
Notes” means the 10% senior subordinated
notes due 2012 issued by the Borrower and Mueller Group Co-Issuer, Inc. in
an aggregate principal amount of $315,000,000, as in effect on the Closing Date
and, thereafter, as amended, supplemented, amended and restated or otherwise
modified in accordance with Section 8.11 and any registered
exchange notes issued in exchange therefor.

 

“Subordinated
Note Indenture” means the Indenture, dated as of April 23,
2004 , among the Borrower, Mueller Group Co-Issuer, Inc., the guarantors
signatory thereto, and Law Debenture Trust Company of New York, as trustee, as
in effect on the Closing Date and, thereafter, as amended, supplemented,
amended and restated or otherwise modified in accordance with Section 8.11.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower and shall include, without
limitation, the Unrestricted Subsidiaries.

 

“Subsidiary
Guarantor” means each Subsidiary of the Borrower that has
executed and delivered the Guaranty or a Guaranty Joinder Agreement.

 

36

 

“Subsidiary
Securities” means the Equity Interests issued by or in any
Subsidiary, whether or not constituting a “security” under Article 8 of
the Uniform Commercial Code as in effect in any jurisdiction.

 

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

 

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

 

“Swing Line”
means the revolving credit facility made available by the Swing Line Lender
pursuant to Section 2.05.

 

“Swing Line
Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.05.

 

“Swing Line
Lender” means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan”
has the meaning specified in Section 2.05(a).

 

“Swing Line Loan
Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.05(b),
which, if in writing, shall be substantially in the form of Exhibit B.

 

“Swing Line
Sublimit” means an amount equal to the lesser of (a) $10,000,000
and (b) the Aggregate Revolving Credit Commitments.  The Swing Line Sublimit is part of, and not
in addition to, the Aggregate Revolving Credit Commitments.

 

37

 

“Syndication
Agent” means Morgan Stanley in its capacity as syndication agent
under any of the Loan Documents, or any successor syndication agent.

 

“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).

 

“Tax Sharing
Agreement” means that certain Tax Sharing Agreement dated as of
the Closing Date by and between New Holdco and Walter relating to Walter’s
payment of taxes imposed on New Holdco and its Subsidiaries and their
properties, income or assets.

 

“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.

 

“Term Loan”
means the loans made pursuant to the Term Loan Facility in accordance with Section 2.01.

 

“Term Loan
Facility” means the facility described in Section 2.01
providing for an advance of the Term Loan to the Borrower by the Term Loan
Lenders in the original principal amount of $1,050,000,000.

 

“Term Loan
Interest Rate Selection Notice” means the written notice
delivered by a Responsible Officer of the Borrower in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Segment or the
conversion of any Eurodollar Rate Segment into a Base Rate Segment or the
conversion of any Base Rate Segment into a Eurodollar Rate Segment, which, if
in writing, shall be substantially in the form of Exhibit A-2.

 

“Term Loan
Lender” means each Lender that has a portion of the Term Loan
outstanding under the Term Loan Facility.

 

“Term Loan
Maturity Date” means the earliest of (a) October 3,
2012, (b) November 1,
2011, unless the Subordinated Notes are paid in full prior to such date with
the proceeds of Permitted Subordinated Debt in accordance with Section 8.03(o),
or (c) such earlier date upon which the Outstanding Amounts under the Term
Loan Facility, including all accrued and unpaid interest, are paid in full in
accordance with the terms hereof.

 

“Term Loan Note”
means a promissory note made by the Borrower in favor of a Term Loan Lender
evidencing the portion of the Term Loan made by such Term Loan Lender,
substantially in the form of Exhibit C-1.

 

“Title Policy”
means an ALTA mortgagee title policy insuring the first lien priority of a
Mortgage reflecting only such Liens as are permitted under Section 8.01(a),
(c), (d), (g) or (j) or which are otherwise
acceptable to the Administrative Agent, together with all endorsements
reasonably requested by the Administrative Agent.

 

38

 

“Total
Outstandings” means the aggregate Outstanding Amount of all
Loans and all L/C - BA Obligations.

 

“Total Revolving
Outstandings” means the aggregate Outstanding Amount of all
Revolving Loans, Swing Line Loans and L/C - BA Obligations.

 

“Transactions”
means, individually or collectively as the context may indicate, (a) the
creation of New Holdco and the transfer of the Equity Interests of US Pipe and
of JW Merger Co, Inc. thereto, (b) the Merger, (c) the US Pipe
Contribution, (d) the distribution by the Borrower, Mueller Water
Products, and the receipt by New Holdco, of the Dividend Distribution, (e) the
entering into by New Holdco and Walter (as guarantor) of, and the receipt by
New Holdco of the proceeds of the Subordinated New Holdco Note, (f) the
entering by the Borrower of this Agreement and the funding of the Term Loan
Facility and Revolving Credit Facility, and the related repayment and
retirement of the Existing Credit Agreement and Existing Second Lien Notes, (g) the
entering into and funding of the Replacement Walter Facilities and the related
repayment and retirement of the Existing Walter Credit Agreement, (h) the
consummation of each of the Entity Conversions and (i) the entering into
of the Put Backstop Commitment Letter Amendment.

 

“Type”
means with respect to (a) a Revolving Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan, and (b) a Segment, its character as a Base
Rate Segment or a Eurodollar Rate Segment.

 

“UCC”
means the Uniform Commercial Code as in effect from time to time in the State
of New York; provided that if, with respect to any financing statement
or by reason of any mandatory provisions of law, the perfection or the effect
of perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to any applicable Loan Document is governed by
the Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, the term “UCC” shall also include the Uniform Commercial Code as
in effect from time to time in such other jurisdiction for purposes of the
provisions of this Agreement, each Loan Document and any financing statement
relating to such perfection or effect of perfection or non-perfection.

 

“Unfunded
Pension Liability” means (a) the excess of a Pension Plan’s
(other than a Foreign Pension Plan’s) benefit liabilities under Section 4001(a)(16)
of ERISA, over the current value of that Pension Plan’s (other than a Foreign
Pension Plan’s) assets, determined in accordance with the assumptions used for
funding the Pension Plan (other than a Foreign Pension Plan) pursuant to section 412
of the Code for the applicable plan year, and (b) with respect to each
Foreign Pension Plan required to be funded under Foreign Benefit Law, the
amount (if any) by which the present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan exceeds the current
value of the assets of such Foreign Pension Plan’s assets allocable to such benefits,
all as determined in accordance with the applicable Foreign Benefit Law for the
applicable plan year.

 

“United States”
and “U.S.”
mean the United States of America.

 

“Unreimbursed
Amount” has the meaning specified in Section 2.04(c)(i).

 

39

 

“Unrestricted
Subsidiaries” means the entities identified on Schedule 1.01(b) hereto.

 

“US Pipe”
means United States Pipe and Foundry Company LLC, an Alabama limited liability
company, successor to United States Pipe and Foundry Company, Inc., an
Alabama corporation, as a result of the Entity Conversion.

 

“US Pipe
Contribution” means the contribution by Walter of 100% of the
Equity Interests of US Pipe to New Holdco for further contribution to Mueller
Water Products and for further contribution to the Borrower, such that after
giving effect to all such contributions, US Pipe is a wholly-owned direct
Subsidiary of the Borrower.

 

“Voting
Securities” means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.

 

“Walter”
means Walter Industries, Inc., a Delaware corporation.

 

“Walter Credit
Agreement” means that certain Credit Agreement dated as of even
date herewith among Bank of America, as Administrative Agent, Walter and the
Lenders from time to time party thereto.

 

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.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) other than the Merger Agreement shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (iii) the
words “herein,” “hereof” and “hereunder,” and words of
similar import when used in any Loan Document, shall be construed to refer to
such Loan Document in its entirety and not to any particular provision thereof,
(iv) all references in a Loan Document to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, the Loan Document in which such references appear, (v) any
reference to any law shall include all statutory and regulatory provisions
consolidating, amending, replacing or interpreting such law and any reference
to any law or regulation shall, unless otherwise specified, refer to such law
or regulation as amended, modified or supplemented from time to time, and (vi) the
words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

40

 

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

 

(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.

 

1.03        Accounting Terms.  (a) Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed
herein.  Notwithstanding the foregoing,
it is agreed and acknowledged that (i) prior to December 31, 2005, the
Borrower and its Subsidiaries shall change their fiscal years to end on December 31
of each year, and (ii) for the purposes of Section 8.12(d),
all other covenants measured based on a fiscal year, and all reporting
requirements that pertain to, or require the delivery of information after the
end of, a fiscal year, the term fiscal year shall be deemed to refer to the
twelve calendar month period ending December 31 of the applicable year,
whether or not such fiscal year change is yet effective; provided, that,
with respect to the twelve calendar month period ending December 31, 2005,
the audited financial statements and reports, certifications and opinions of
the Auditor described in Section 7.01(a) shall be required
only to the extent such reports are required to be prepared and filed under
applicable Securities Laws and in the event such audited financial statements
and reports, certifications and opinions are not required to be prepared and
filed with the SEC, the requirements of Section 7.01(b) shall
apply.

 

(b)           Changes in GAAP.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall negotiate
in good faith to amend such ratio or requirement to preserve the original
intent thereof in light of such change in GAAP (subject to the approval of the
Required Lenders); provided  that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.

 

(c)           All defined terms
used in the calculation of the financial covenants set forth in Section 8.12
hereof (including Consolidated Capital Expenditures, in the case of any
Disposition, but excluding Consolidated Capital Expenditures, in the case of
any Acquisition other than the Acquisition of US Pipe) shall be calculated on
an historical pro forma basis giving effect (by inclusion or exclusion, as
applicable), during any period of measurement that includes the Merger, the US
Pipe Contribution, any Acquisition permitted by Section 8.13 or any Disposition permitted by Section 8.05(e), to the actual
historical results of the Person so acquired or disposed and which amounts
shall include only adjustments as are permitted under Regulation S-X of the

 

41

 

SEC or are otherwise
reasonably satisfactory to the Administrative Agent.  In addition, in determining Excess Cash Flow
for the period ending December 31, 2006, Excess Cash Flow and the defined
terms used therein shall be calculated on an historical pro forma basis giving
effect to the US Pipe Contribution.

 

(d)           For the avoidance of
doubt, the term “the Borrower and its Restricted Subsidiaries” as used in the
defined terms used in the calculation of the financial covenants set forth in Section 8.12
hereof shall not include any consolidation of the assets, liabilities or
results of operations of the Unrestricted Subsidiaries in the assets,
liabilities or results of the Borrower or any Restricted Subsidiary.

 

(e)           Consolidation
of Variable Interest Entities. 
Except as expressly provided otherwise herein, all references herein to
consolidated financial statements of the Borrower and its Subsidiaries or to
the determination of any amount for the Borrower and its Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that the Borrower is required to
consolidate pursuant to FASB Interpretation No. 46 – Consolidation of
Variable Interest Entities:  an
interpretation of ARB No. 51 (January 2003) as if such variable
interest entity were a Subsidiary as defined herein.

 

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

 

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

 

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

 

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01        Term
Loan.

 

(a)           Subject to the terms
and conditions of this Agreement, each Term Loan Lender severally agrees to
make an advance of its Pro Rata Term Share of the Term Loan to the Borrower on
the Closing Date, and from the Closing Date to the Term Loan Maturity Date,
convert and continue Segments from time to time in accordance with the terms
hereof.  The principal amount of each
Segment of the Term Loan outstanding hereunder from time to time shall bear
interest and the Term Loan shall be repayable as herein provided.  No amount of the

 

42

 

Term
Loan repaid or prepaid by the Borrower may be reborrowed hereunder, and no
subsequent advance under the Term Loan Facility shall be allowed after the initial
such advance of the Term Loan on the Closing Date.  Segments of the Term Loan may be Base Rate
Segments or Eurodollar Rate Segments at the Borrower’s election, as provided
herein.

 

(b)           Not later than 1:00 P.M.
New York time, on the Closing Date, each Term Loan Lender shall, pursuant to
the terms and subject to the conditions of this Agreement, make the amount of
its Pro Rata Term Share of the Term Loan available by wire transfer to the
Administrative Agent.  Such wire transfer
shall be directed to the Administrative Agent at the Administrative Agent’s
Office and shall be in the form of same day funds in Dollars.  The amount so received by the Administrative
Agent shall, subject to the terms and conditions of this Agreement, including
without limitation the satisfaction of all applicable conditions in Sections
5.01 and 5.02, be made available to the Borrower by delivery of the
proceeds thereof as shall be directed by the Responsible Officer of the
Borrower and reasonably acceptable to the Administrative Agent.  The initial Borrowing of the Term Loan may be
a Eurodollar Rate Segment, a Base Rate Segment, or both; provided that
if the Borrower desires that any portion of the initial Borrowing of the Term
Loan is advanced as a Eurodollar Rate Segment, the Administrative Agent shall
make such Borrowing as a Eurodollar Rate Segment only if, not later than three
Business Days prior to the date that is then anticipated to be the Closing
Date, the Administrative Agent has received from the Borrower a Term Loan Interest
Rate Selection Notice with respect thereto, together with the Borrower’s
written acknowledgement in form and substance satisfactory to the
Administrative Agent that the provisions of Section 4.05 hereof
shall apply to any failure by the Borrower to borrow on the date set forth in
such Term Loan Interest Rate Selection notice any or all of the amounts
specified in such Term Loan Interest Rate Selection Notice.

 

2.02        Revolving Loans.  Subject to the terms and conditions set forth
herein, each Revolving Lender severally agrees to make, convert and continue
Revolving Loans to the Borrower from time to time, on any Business Day during
the Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Revolving Lender’s Revolving Credit Commitment; provided,
however, that after giving effect to any Revolving Borrowing, (i) the
Total Revolving Outstandings shall not exceed the Aggregate Revolving Credit
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Revolving Lender, plus such Lender’s Pro Rata Revolving
Share of the Outstanding Amount of all L/C - BA Obligations, plus such
Lender’s Pro Rata Revolving Share of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Revolving Credit Commitment.  Within the limits of each Revolving Lender’s
Revolving Credit Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.02, prepay
under Section 2.06, and reborrow under this Section 2.02.  Revolving Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

 

2.03        Borrowings, Conversions and
Continuations of Committed Loans.

 

(a)           Each Revolving
Borrowing, each conversion of Revolving Loans or Segments of the Term Loan from
one Type to the other, and each continuation of Eurodollar Rate Loans shall be
made upon the 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

 

43

 

than
12:00 noon (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by the Borrower
pursuant to this Section 2.03(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Revolving Loan Notice (as to
Revolving Borrowings) or Term Loan Interest Rate Selection Notice,
appropriately completed and signed by a Responsible Officer of the Borrower
(unless such Revolving Loan Notice is being delivered by a Swing Line Lender
pursuant to Section 2.05(c) or by the Administrative Agent on
behalf of the L/C Issuer pursuant to Section 2.04(c)(i)); provided
that the lack of such prompt confirmation shall not affect the conclusiveness
or binding effect of such telephonic notice. 
Each Borrowing of, conversion to or continuation of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.  Except as
provided in Sections 2.04(c) and 2.05(c), each Borrowing of
or conversion to Base Rate Loans shall be in a principal amount of $5,000,000
or a whole multiple of $1,000,000 in excess thereof.  Each Revolving Loan Notice and Term Loan
Interest Rate Selection Notice (whether telephonic or written) shall specify (i) whether
the Borrower is requesting a Revolving Borrowing (applicable to Revolving Loan
Notices only), a conversion of Revolving Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Revolving Loans to be
borrowed, converted or continued, (iv) the Type of Revolving Loans to be
borrowed or to which existing Revolving Loans are to be converted, and (v) if
applicable, the duration of the Interest Period with respect thereto.  Each written Revolving Loan Notice shall be
substantially in the form of Exhibit A-1 attached hereto, and each
written Term Loan Interest Rate Selection Notice shall be substantially in the
form of Exhibit A-2 attached hereto.  If the Borrower fails to specify a Type of
Revolving Loans in a Revolving Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation of Loans, then the applicable
Loans shall, subject to the last sentence of this Section 2.03(a),
be made as, 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 Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Revolving
Loan Notice or Term Loan Interest Rate Selection 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 Revolving Loan Notice, the Administrative Agent shall promptly notify each
applicable Lender of its Pro Rata Revolving Share of the applicable Revolving
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrower, the Administrative Agent shall notify each applicable Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection.  In the case of a
Revolving Borrowing, each applicable Lender shall make the amount of its
Revolving Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 2:00 p.m. on the
Business Day specified in the applicable Revolving Loan Notice.  Upon satisfaction of the applicable
conditions set forth in Section 5.02 (and, if such Borrowing is the
initial Credit Extension, Section 5.01), the Administrative Agent
shall make all funds so received available to the Borrower in like funds as
received by the Administrative Agent either by (i) crediting the account
of the Borrower on the books of Bank of America with the amount of such funds
or (ii) wire transfer of such funds, in each case in

 

44

 

accordance
with instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower; provided, however, that if, on the date the Revolving
Loan Notice with respect to such Borrowing is given by the Borrower, there are
Swing Line Loans or L/C - BA Borrowings outstanding, then the proceeds of such
Borrowing shall be applied, first, to the payment in full of any such
L/C - BA Borrowings, second, to the payment in full of any such Swing
Line Loans, and third, to the Borrower as provided above.

 

(c)           Except as otherwise
provided herein, a Eurodollar Rate Loan may be continued or converted only on
the last day of an Interest Period for such Eurodollar Rate Loan.  During the existence of a Default, no Loans
may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Revolving Lenders or the Required Term Loan
Lenders, as applicable.

 

(d)           The Administrative
Agent shall promptly notify the Borrower and the applicable Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
determination of such interest rate.  The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. 
At any time that Base Rate Loans are outstanding, the Administrative
Agent shall notify the Borrower 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 Borrowings, all conversions of Loans from one Type to the other, and all
continuations of Loans as the same Type, there shall not at any time be more
than (a) ten Interest Periods in effect with respect to the Term Loan and (b) ten
Interest Periods in effect with respect to the Revolving Credit Facility.

 

2.04        Letters of Credit and Bankers’
Acceptances.

 

(a)           The Letter of
Credit – BA Commitment.

 

(i)            Subject
to the terms and conditions set forth herein, (A) the L/C Issuer agrees,
in reliance upon the agreements of the Revolving
Lenders set forth in this Section 2.04, (1) from time
to time on any Business Day during the period from the Closing Date until the
earlier to occur of the Letter of Credit - BA Expiration Date or the
termination of the Availability Period, to issue Letters of Credit for the
account of the Borrower or the Borrower
and a Restricted Subsidiary, and to amend Letters of Credit previously
issued by it, in accordance with subsection (b) below, (2) to honor
drafts under the Letters of Credit; and (3) with respect to Acceptance
Credits, to create Bankers’ Acceptances in accordance with the terms thereof
and hereof, and (B) the Revolving Lenders
severally agree to participate in Letters of Credit and Bankers’ Acceptances
issued for the account of the Borrower or
the Borrower and a Restricted Subsidiary and any drawings thereunder; provided
that the L/C Issuer shall not be obligated to make any L/C – BA Credit
Extension with respect to any Letter of Credit, and no Revolving Lender shall
be obligated to participate in any Letter of Credit if (A) as of the date
of such L/C - BA Credit Extension, (x) the Total Revolving Outstandings would
exceed the Aggregate Revolving Credit
Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Pro Rata Revolving Share

 

45

 

of the Outstanding
Amount of all L/C - BA Obligations, plus such Revolving Lender’s Pro
Rata Revolving Share of the Outstanding Amount of all Swing Line Loans would
exceed such Revolving Lender’s Revolving Credit Commitment, or (z) the
Outstanding Amount of the L/C - BA Obligations would exceed the Letter of
Credit - BA Sublimit, or (B) as to Acceptance Credits, the Bankers’
Acceptance created or to be created thereunder shall not be an eligible bankers’
acceptance under Section 13 of the Federal Reserve Act (12 U.S.C. § 372).  Each request by the Borrower for the issuance
or amendment of a Letter of Credit shall be deemed to be a representation by
the Borrower that the L/C – BA 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 Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.  All
Existing Letters of Credit shall be deemed to have been issued pursuant hereto,
and from and after the Closing Date shall be subject to and governed by the
terms and conditions hereof.

 

(ii)           The
L/C Issuer shall not issue any Letter of Credit, if:

 

(A)          subject
to Section 2.04(b)(iii), the expiry date of such requested Letter
of Credit would occur (i) as to standby Letters of Credit, more than
twenty-four months after the date of issuance or last renewal, and (ii) as
to commercial Letters of Credit, later than the earlier of (1) 270 days
after the date of issuance thereof and (2) 60 days before the Letter of
Credit - BA Expiration Date, unless in each case the Required Revolving Lenders
have approved such expiry date;

 

(B)           the
maturity date of any Bankers’ Acceptance issued under any such requested
Acceptance Credit would occur earlier than 30 or later than 120 days from date
of issuance and in any event later than 60 days before the Letter of Credit -
BA Expiration Date, unless the Required Revolving Lenders have approved such
expiry date;

 

(C)           the
expiry date of such requested Letter of Credit, or the maturity date of any
Bankers’ Acceptance issued under such requested Letter of Credit, would occur
after the Letter of Credit - BA Expiration Date, unless all the Revolving
Lenders have approved such expiry date;

 

(iii)          The
L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

 

(A)          any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter
of Credit or any related Bankers’ Acceptance, or any Law applicable to the L/C
Issuer or any request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of letters
of credit or related bankers’ acceptances generally or such Letter of Credit

 

46

 

or any related Bankers’ Acceptance in particular or shall impose upon
the L/C Issuer with respect to such Letter of Credit or related Bankers’
Acceptance any restriction, reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the L/C Issuer
in good faith deems material to it;

 

(B)           the
issuance of such Letter of Credit or any related Bankers’ Acceptance would
violate one or more policies of the L/C Issuer, or the creation of any related
Bankers’ Acceptance would cause the L/C Issuer to exceed the maximum amount of
outstanding bankers’ acceptances permitted by applicable Law;

 

(C)           except
as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter
of Credit or related Bankers’ Acceptance is to be denominated in a currency
other than Dollars or is in an initial amount less than $10,000; provided,
that the Administrative Agent and L/C Issuer agree that up to 10 Letters of
Credit may be issued and outstanding hereunder in amounts less than $10,000; or

 

(D)          a
default of any Revolving Lender’s obligations to fund under Section 2.04(c) exists
or any Revolving Lender is at such time a Defaulting Lender hereunder, unless
the L/C Issuer has entered into satisfactory arrangements with the Borrower or
such Revolving Lender to eliminate the L/C Issuer’s risk with respect to such
Revolving Lender.

 

(iv)          The
L/C Issuer shall not amend any Letter of Credit or Bankers’ Acceptance if the
L/C Issuer would not be permitted at such time to issue such Letter of Credit
or Bankers’ Acceptance in its amended form under the terms hereof.

 

(v)           The
L/C Issuer shall be under no obligation to amend any Letter of Credit or
Bankers’ Acceptance if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit or Bankers’ Acceptance in its amended form
under the terms hereof, or (B) the beneficiary of such Letter of Credit or
Bankers’ Acceptance does not accept the proposed amendment to such Letter of
Credit or Bankers’ Acceptance .

 

(vi)          The
L/C Issuer shall act on behalf of the Revolving Lenders with respect to any
Letters of Credit or Bankers’ Acceptance issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits and
immunities (A) provided to the Administrative Agent in Article X
with respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit and Bankers’ Acceptances issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit and Bankers’ Acceptances as fully as if the term “Administrative Agent”
as used in Article X included the L/C Issuer with respect to such
acts or omissions, and (B) as additionally provided herein with respect to
the L/C Issuer.

 

47

 

(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 Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower and, if applicable, of the applicable
Restricted Subsidiary.  Such Letter of
Credit Application must be received by the L/C Issuer and the Administrative
Agent not later than 11:00 a.m. at least two Business Days (or such later
date and time as the Administrative Agent and the L/C Issuer may agree in a
particular instance in its sole discretion) prior to the proposed issuance date
or date of amendment, as the case may be. 
In the case of a request for an initial issuance of a Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory
to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount 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 or
presentation thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing or presentation
thereunder; and (G) such other matters as the L/C Issuer may require.  In the case of a request for an amendment of
any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof (which
shall be a Business Day); (C) the nature of the proposed amendment; and (D) such
other matters as the L/C Issuer may require.  Additionally, the Borrower
shall furnish to the L/C Issuer and the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may require.

 

(ii)           Promptly
after receipt of any Letter of Credit Application, the L/C Issuer will confirm
with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof.  Unless the
L/C Issuer has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article V shall not then be
satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower or the Borrower and the applicable Restricted Subsidiary or enter into
the applicable amendment, as the case may be, in each case in accordance with the
L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter
of Credit, each Revolving Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Revolving
Lender’s Pro Rata Revolving Share times the amount of such Letter of
Credit.  Immediately upon the creation of
each Bankers’ Acceptance, each Revolving Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Bankers’ Acceptance in an amount equal to the

 

48

 

product of such Revolving Lender’s Pro Rata Revolving Share times
the amount of such Bankers’ Acceptance.

 

(iii)          If the Borrower so requests in any applicable Letter
of Credit Application, the L/C Issuer may, in its sole and absolute discretion,
agree to issue a Letter of Credit other than a commercial Letter of Credit that
has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided
that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued.  Unless otherwise
directed by the L/C Issuer, the Borrower shall not be required to make a
specific request to the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has
been issued, the Revolving Lenders shall be deemed to have authorized (but may
not require) the L/C Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit - BA Expiration
Date; provided, however, that the L/C Issuer shall not permit any such extension if
(A) the L/C Issuer has determined that it would not be permitted, or would
have no obligation, at such time to issue such Letter of Credit in its revised
form (as extended) under the terms hereof (by reason of the provisions clause (ii) or
(iii) of Section 2.04(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 Revolving Lenders have elected not
to permit such extension or (2) from the Administrative Agent, any
Revolving Lender or the Borrower that one or more of the applicable conditions
specified in Section 5.02 is not then satisfied, and in each such
case directing the L/C Issuer not to permit such extension.

 

(iv)          Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the L/C Issuer will also deliver to the Borrower and the Administrative Agent a
true and complete copy of such Letter of Credit or amendment.

 

(c)           Drawings and
Reimbursements; Funding of Participations.

 

(i)            Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
or, with respect to any Acceptance Credit, presentation of documents under such
Letter of Credit, or any presentation for payment of a Bankers’ Acceptance, the
L/C Issuer shall notify the Borrower and the Administrative Agent thereof.  Not later than 1:00 p.m. on the date of
any payment by the L/C Issuer under a Letter of Credit or Bankers’ Acceptance
(each such date, an “Honor
Date”), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing or
Bankers’ Acceptance, as applicable.  If
the Borrower fails so to reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Revolving Lender of the Honor
Date, the amount of the unreimbursed drawing or payment (the “Unreimbursed Amount”),
and the amount of such Revolving Lender’s Pro Rata Revolving Share
thereof.  In such event, the Borrower
shall be deemed to have

 

49

 

requested a Revolving 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 2.03 for the
principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Revolving Credit Commitments and the
conditions set forth in Section 5.02 (other than the delivery of a
Revolving Loan Notice).  Any notice given
by the L/C Issuer or the Administrative Agent pursuant to this Section 2.04(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
Revolving Lender shall upon any notice pursuant to Section 2.04(c)(i) make
funds available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent’s Office in an amount equal to its Pro Rata
Revolving Share of the Unreimbursed Amount not later than 3:00 p.m. on the
Business Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.04(c)(iii), each Revolving
Lender that so makes funds available shall be deemed to have made a Base Rate
Revolving Loan to the Borrower in such amount. 
The Administrative Agent shall remit the funds so received to the L/C
Issuer.

 

(iii)          With
respect to any Unreimbursed Amount that is not fully refinanced by a Revolving
Borrowing of Base Rate Loans because the conditions set forth in Section 5.02
cannot be satisfied or for any other reason, the Borrower shall be deemed to
have incurred from the L/C Issuer an L/C – BA Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C – BA Borrowing shall
be due and payable on demand (together with interest) and shall bear interest
at the Default Rate.  In such event, each
Revolving Lender’s payment to the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed
payment in respect of its participation in such L/C – BA Borrowing and shall
constitute an L/C - BA Advance from such Revolving Lender in satisfaction of
its participation obligation under this Section 2.04.

 

(iv)          Until
each Revolving Lender funds its Revolving Loan or L/C - BA Advance pursuant to
this Section 2.04(c) to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit or payments made on any Bankers’
Acceptance, interest in respect of such Revolving Lender’s Pro Rata Revolving
Share of such amount shall be solely for the account of the L/C Issuer.

 

(v)           Each
Revolving Lender’s obligation to make Revolving Loans or L/C - BA Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit and payments
made on Bankers’ Acceptances, as contemplated by this Section 2.04(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 Revolving Lender may have against the L/C Issuer, the
Borrower or any other Person for any reason whatsoever; (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Revolving Lender’s obligation to make Revolving Loans pursuant to
this Section 2.04(c) is subject to the conditions set forth in
Section 5.02 (other than delivery

 

50

 

by the Borrower of a Revolving Loan Notice).  No such making of an L/C - BA Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit or Bankers’ Acceptance, together with interest as provided herein.

 

(vi)          If
any Revolving Lender fails to make available to the Administrative Agent for
the account of the L/C Issuer any amount required to be paid by such Revolving
Lender pursuant to the foregoing provisions of this Section 2.04(c) by
the time specified in Section 2.04(c)(ii), the L/C Issuer shall be
entitled to recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the L/C Issuer in
accordance with banking industry rules on interbank compensation.  A certificate of the L/C Issuer submitted to
any Revolving Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.

 

(d)           Repayment of
Participations.

 

(i)            At
any time after the L/C Issuer has made a payment under any Letter of Credit or
Bankers’ Acceptance and has received from any Revolving Lender such Revolving
Lender’s L/C - BA Advance in respect of such payment in accordance with Section 2.04(c),
if the Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Revolving Lender its Pro Rata Revolving Share thereof
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Revolving Lender’s L/C - BA Advance was
outstanding) in the same funds as those received by the Administrative Agent.

 

(ii)           If
any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.04(c)(i) is required to be
returned under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Revolving Lender shall pay to the Administrative Agent for
the account of the L/C Issuer its Pro Rata Revolving 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 Revolving Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The obligations of the Revolving Lenders under
this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e)           Obligations
Absolute.  The obligation of the
Borrower to reimburse the L/C Issuer for each drawing under each Letter of
Credit and each payment under any Bankers’ Acceptance, and to repay each L/C –
BA Borrowing shall be absolute, unconditional and irrevocable, and

 

51

 

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 or Bankers’
Acceptance, this Agreement, or any other agreement or instrument relating
thereto;

 

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

 

(iii)          any
draft, demand, certificate or other document or endorsement  presented under or in connection with such
Letter of Credit or Bankers’ Acceptance 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 or obtain payment under any Bankers’ Acceptance ;

 

(iv)          any
payment by the L/C Issuer under such Letter of Credit or Bankers’ Acceptance
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit, or any payment made by the L/C Issuer
under such Letter of Credit or Bankers’ Acceptance 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 or Bankers’ Acceptance,
including any arising in connection with any proceeding under any Debtor Relief
Law; or

 

(v)           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 Borrower or any Subsidiary.

 

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

 

(f)            Role of L/C
Issuer.  Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit or making any payment under a
Bankers’ Acceptance, the L/C Issuer shall not have any responsibility to obtain
any document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document.  None of
the L/C Issuer, the Administrative Agent, any of their

 

52

 

respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders, the Revolving Lenders, the Required Lenders or the
Required Revolving 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, Bankers’ Acceptance or Issuer
Document.  The Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit or Bankers’ Acceptance; provided,
however, that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties, nor any correspondent,
participant or assignee of the L/C Issuer, shall be liable or responsible for
any of the matters described in clauses (i) through (v) of
Section 2.04(e); provided, however, that anything in
such clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C
Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit or to
honor any Bankers’ Acceptance presented for payment in strict compliance with
its terms and conditions.  In furtherance
and not in limitation of the foregoing, the L/C Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and the
L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument endorsing, transferring or assigning or purporting to endorse,
transfer or assign a Letter of Credit or Bankers’ Acceptance 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.  Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request
under any Letter of Credit or made any payment under any Bankers’ Acceptance
and such drawing has resulted in an L/C – BA Borrowing, or (ii) if, as of
the Letter of Credit - BA Expiration Date, any Letter of Credit for any reason
remains outstanding and partially or wholly undrawn, any Bankers’ Acceptance
for any reason remains outstanding, or any L/C – BA Obligation for any reason
remains outstanding, then in each such case the Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C - BA Obligations (in an
amount equal to such Outstanding Amount determined as of the date of such L/C -
BA Borrowing or the Letter of Credit - BA Expiration Date, as the case may
be).  Sections 2.06 and 9.02(c) set
forth certain additional requirements to deliver Cash Collateral
hereunder.  For purposes hereof, “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for
the benefit of the L/C Issuer and the Revolving Lenders, as collateral for the
L/C - BA Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the Revolving
Lenders).  Derivatives of such term have
corresponding meanings.  The Borrower
hereby grants to the Administrative Agent, for the benefit of the L/C Issuer
and the Revolving Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the

 

53

 

foregoing.  Cash collateral shall be maintained in
blocked, interest bearing deposit accounts at Bank of America.

 

(h)           Applicability of
ISP and UCP.  Unless otherwise
expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of the ISP shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce at the time of issuance shall apply to each commercial Letter of
Credit.

 

(i)            Letter of Credit
– BA Fees.  Subject to the provisions
of the last sentence of this subsection (i), the Borrower shall pay to the
Administrative Agent for the account of each Revolving Lender in accordance
with its Pro Rata Revolving Share (i) a
Letter of Credit – BA Fee for each commercial Letter of Credit and each Bankers’
Acceptance equal to 50% of the Applicable Rate times the 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) or the maximum
stated amount of such Bankers’ Acceptance, as the case may be, and (ii) a
Letter of Credit – BA Fee for each standby
Letter of Credit equal to the Applicable Rate times the 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).  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  Such Letter of Credit – BA Fees shall be
computed on a quarterly basis in arrears. 
Such Letter of Credit – BA Fees accrued through the last day of each
fiscal quarter of the Borrower and shall be due and payable on the fifteenth
(or the next Business Day after the fifteenth, if the fifteenth is not a
Business Day) of each January, April, July and
October, commencing with the first such date to occur after the issuance
of such Letter of Credit or Bankers’ Acceptance (as the case may be), on the
Letter of Credit - BA Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate
during any quarter, the daily maximum amount of each Letter of Credit and
Bankers’ Acceptance shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.  At all times that the Default
Rate shall be applicable to any Loans pursuant to Section 2.09(b),
the Letter of Credit – BA Fees payable under this subsection (i) shall
accrue and be payable at the Default Rate.

 

(j)            Fronting Fee and
Documentary and Processing Charges Payable to L/C Issuer.  The Borrower shall pay directly to the L/C
Issuer for its own account a fronting fee with respect to each Letter of Credit
and each Bankers’ Acceptance issued by the L/C Issuer in the amount of 0.125%
times the 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) or the maximum stated amount of such Bankers’ Acceptance, as the
case may be.  Such fronting fees shall be
computed on a quarterly basis in arrears. 
Such fronting fee shall accrue through the last day of each fiscal
quarter of the Borrower and shall be due and payable on the fifteenth (or the
next Business Day after the fifteenth, if the fifteenth is not a Business Day)
of each January, April, July and October, commencing with the first such
date to occur after the issuance of such Letter of Credit or Bankers’
Acceptance, as applicable, on the Letter of Credit - BA Expiration Date and
thereafter on demand.  For purposes of
computing the daily amount available to be drawn under any Letter of Credit,
the amount of such Letter of Credit shall be determined in

 

54

 

accordance
with Section 1.06.  In
addition, the Borrower shall pay directly to the L/C Issuer for its own account
the customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit and bankers’ acceptances issued by it as from time to time in
effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.

 

(k)           Conflict with
Issuer Documents.  In the event of
any conflict between the terms hereof and the terms of any Issuer Document, the
terms hereof shall control.

 

(l)            Letters
of Credit Issued for Restricted Subsidiaries.  Notwithstanding that a Letter of Credit or
Bankers’ Acceptance issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Restricted Subsidiary, the Borrower
shall be obligated to reimburse the L/C Issuer hereunder for any and all
drawings under such Letter of Credit. 
The Borrower hereby acknowledges that the issuance of Letters of Credit
and/or Bankers’ Acceptances for the account of Restricted Subsidiaries inures
to the benefit of the Borrower, and that the Borrower’s business derives
substantial benefits from the businesses of such Restricted Subsidiaries.

 

2.05        Swing Line Loans.

 

(a)           The Swing Line.  Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees, in reliance upon the agreements of the
other Lenders set forth in this Section 2.05, to make loans (each
such loan, a “Swing Line Loan”) in Dollars to the Borrower from time to
time on any Business Day during the Availability Period in an aggregate amount
not to exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Pro Rata Revolving Share of the Outstanding Amount of Revolving Loans and L/C -
BA Obligations of the Revolving Lender acting as Swing Line Lender, may exceed
the amount of such Revolving Lender’s Revolving Credit Commitment; provided,
however, that after giving effect to any Swing Line Loan, (i) the
Total Revolving Outstandings shall not exceed the Aggregate Revolving Credit
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Revolving Lender, plus such Revolving Lender’s Pro Rata
Revolving Share of the Outstanding Amount of all L/C - BA Obligations, plus
such Revolving Lender’s Pro Rata Revolving Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Credit
Commitment, and provided, further, that the Borrower shall not
use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan.  Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.05, prepay under Section 2.06, and
reborrow under this Section 2.05. 
Each Swing Line Loan shall be a Base Rate Revolving Loan.  Immediately upon the making of a Swing Line
Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Revolving Lender’s Pro Rata Revolving Share times the amount of such
Swing Line Loan.

 

(b)           Borrowing
Procedures.  Each Swing Line
Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing
Line Lender and the Administrative Agent, which may be given by telephone. Each
such notice must be received by the Swing Line Lender and the

 

55

 

Administrative
Agent not later than 2:00 p.m. on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and integral multiples of $100,000
in excess thereof, and (ii) the requested borrowing date, which
shall be a Business Day.  Each such
telephonic notice must be confirmed promptly by delivery to the Swing Line
Lender and the Administrative Agent of a written Swing Line Loan Notice,
appropriately completed and signed by a Responsible Officer of the
Borrower.  Promptly after receipt by the
Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line
Lender will confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has also received such Swing Line Loan Notice
and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at
the request of any Lender) prior to 3:00 p.m. on the date of the proposed
Swing Line Borrowing (A) directing the Swing Line Lender not to make such
Swing Line Loan as a result of the limitations set forth in the proviso to the
first sentence of Section 2.05(a), or (B) that one or more of
the applicable conditions specified in Article V is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 3:30 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available
to the Borrower at its office by
crediting the account of the Borrower on the books of the Swing Line Lender in
immediately available funds.

 

(c)           Refinancing of
Swing Line Loans.

 

(i)            The
Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line
Lender to so request on its behalf), that each Revolving Lender make a Base
Rate Revolving Loan in an amount equal to such Revolving Lender’s Pro Rata
Revolving Share of the amount of Swing Line Loans then outstanding.  Such request shall be made in writing (which written
request shall be deemed to be a Revolving Loan Notice for purposes hereof) and
in accordance with the requirements of Section 2.03, without regard
to the minimum and multiples specified therein for the principal amount of Base
Rate Loans, but subject to the unutilized portion of the Aggregate Revolving
Credit Commitments and the conditions set forth in Section 5.02.  The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Revolving Loan Notice promptly after
delivering such notice to the Administrative Agent.  Each Revolving Lender shall make an amount
equal to its Pro Rata Revolving Share of the amount specified in such Revolving
Loan Notice available to the Administrative Agent in immediately available
funds for the account of the Swing Line Lender at the Administrative Agent’s
Office not later than 2:00 p.m. on the day specified in such Revolving
Loan Notice, whereupon, subject to Section 2.05(c)(ii), each
Revolving Lender that so makes funds available shall be deemed to have made a
Base Rate Revolving Loan to the Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

 

(ii)           If
for any reason any Swing Line Loan cannot be refinanced by such a Revolving
Borrowing in accordance with Section 2.05(c)(i), the request for
Base Rate Revolving Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of
the Revolving Lenders fund its risk participation in the relevant Swing Line
Loan and each Revolving Lender’s payment to

 

56

 

the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.05(c)(i) shall be deemed payment in
respect of such participation.

 

(iii)          If
any Revolving Lender fails to make available to the Administrative Agent for
the account of the Swing Line Lender any amount required to be paid by such
Revolving Lender pursuant to the foregoing provisions of this Section 2.05(c) by
the time specified in Section 2.05(c)(i), the Swing Line Lender
shall be entitled to recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank
compensation.  A certificate of the Swing
Line Lender submitted to any Revolving Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.

 

(iv)          Each
Revolving Lender’s obligation to make Revolving Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to 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 Revolving Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Revolving Lender’s obligation to make Revolving Loans pursuant to
this Section 2.05(c) is subject to the conditions set forth in
Section 5.02.  No such
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
herein.

 

(d)           Repayment of
Participations.

 

(i)            At
any time after any Revolving Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Revolving Lender its Pro Rata Revolving Share of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Revolving Lender’s risk participation was
funded) in the same funds as those received by the Swing Line Lender.

 

(ii)           If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Revolving Lender shall pay to the Swing Line Lender its
Pro Rata Revolving Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such
demand upon the request of the Swing Line

 

57

 

Lender.  The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

 

(e)           Interest for
Account of Swing Line Lender.  The
Swing Line Lender shall be responsible for invoicing the Borrower for interest
on the Swing Line Loans.  Until each
Revolving Lender funds its Base Rate Revolving Loan or risk participation
pursuant to this Section 2.05 to refinance such Lender’s Pro Rata
Revolving Share of any Swing Line Loan, interest in respect of such Pro Rata
Revolving Share shall be solely for the account of the Swing Line Lender.

 

(f)            Payments
Directly to Swing Line Lender.  The
Borrower shall make all payments of principal and interest in respect of the
Swing Line Loans directly to the Swing Line Lender.

 

2.06        Prepayments.

 

(a)           The Borrower may,
upon notice to the Administrative Agent, at any time or from time to time
voluntarily prepay Loans under the Revolving Credit Facility or the Term Loan Facility
in whole or in part without premium or penalty; provided that (i) such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(A) three Business Days prior to any date of prepayment of Eurodollar Rate
Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any
prepayment of Eurodollar Rate Loans under any such credit facility shall be in
a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; and (iii) any prepayment of Base Rate Loans under any such credit
facility shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof or, in each case, the entire principal amount
thereof then outstanding.  Each such
notice shall specify the date and amount of such prepayment, the credit
facility to which the prepayment is to be applied, and the Type(s) of Loans to
be prepaid.  Prepayments of the Term Loan
shall be applied pro rata to remaining installments of the scheduled amortization
of the Term Loan Facility.  The
Administrative Agent will promptly notify each applicable Lender of its receipt
of each such notice, and of the amount of such Lender’s ratable share of such
prepayment.  If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 4.05.  Each such prepayment shall be applied to the
Loans of the applicable Lenders in accordance with their Pro Rata Revolving
Shares and Pro Rata Term Shares, as applicable.

 

(b)           The Borrower may,
upon notice to the Swing Line Lender (with a copy to the Administrative Agent),
at any time or from time to time, voluntarily prepay Swing Line Loans in whole
or in part without premium or penalty; provided that (i) such
notice must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the date of the prepayment, and (ii) any
such prepayment shall be in a minimum principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. 
Each such notice shall specify the date and amount of such
prepayment.  If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein.

 

58

 

(c)           If for any reason
the Total Revolving Outstandings at any time exceed the Aggregate Revolving
Credit Commitments then in effect, the Borrower shall immediately prepay
Revolving Loans and/or Swing Line Loans and/or Cash Collateralize the L/C - BA
Obligations in an aggregate amount equal to such excess; provided, however,
that the Borrower shall not be required to Cash Collateralize the L/C - BA
Obligations pursuant to this Section 2.06(c) unless after the
prepayment in full of the Revolving Loans and Swing Line Loans, the Total
Revolving Outstandings exceed the Aggregate Revolving Credit Commitments then
in effect.

 

(d)           In addition to any
required payments of principal of the Term Loan and any optional payments of
principal of the Term Loan and the Revolving Loans effected under subsection (a) above,
the Borrower shall make the following required prepayments, each such payment
to be made to the Administrative Agent for the benefit of the applicable
Lenders within the time period specified below:

 

(i)            No
later than 30 calendar days following the receipt of any Net Cash Proceeds from
any Disposition permitted by Section 8.05(e), the Borrower shall
deliver to the Administrative Agent a calculation of the amount of such Net
Cash Proceeds and, to the extent the amount of such Net Cash Proceeds with
respect to any single transaction or series of related transactions, exceeds
$2,000,000, the Borrower shall make, or shall cause each applicable Restricted
Subsidiary to make, a prepayment of the Outstanding Amount of the Term Loan in
an amount equal to one hundred percent (100%) of such Net Cash Proceeds; provided
that no mandatory prepayment on account of such Net Cash Proceeds shall be
required under this clause (i) if the Borrower informs the Administrative
Agent no later than 30 days following the receipt of such Net Cash Proceeds of
its or its Restricted Subsidiary’s good faith      intention to apply such Net Cash Proceeds
to the acquisition of other assets or property consistent with the Core
Business (including by way of merger or investment) within 365 days following
the receipt of such Net Cash Proceeds, with the amount of such Net Cash     Proceeds unused after such 365 day period
being required to applied to such prepayment on 366th day after such Net Cash
Proceeds are received.

 

(ii)           At
any time after the aggregate Net Cash Proceeds from all private and public
issuances of Indebtedness of the Borrower or any Restricted Subsidiary after
the Closing Date (other than Indebtedness permitted under Section 8.03)
has reached $2,000,000, the Borrower shall make, or shall cause each applicable
Restricted Subsidiary to make, a prepayment of the Outstanding Amount of the
Term Loan in an amount equal to one hundred percent (100%) of any further Net
Cash Proceeds (including any portion of the Net Cash Proceeds thereof that
causes the aggregate Net Cash Proceeds to exceed the $2,000,000 threshold) of
each private or public issuance of Indebtedness of the Borrower or any
Restricted Subsidiary other than Indebtedness permitted under Section 8.03.  Each prepayment required to be made pursuant
to this Section 2.06(d)(ii) shall be made within ten (10) Business
Days of receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the Net Cash Proceeds
of such issuance; provided that despite the application of this Section 2.06(d)(ii) to
any issuance of Indebtedness that is not otherwise permitted under this

 

59

 

Agreement, nothing in this Section 2.06(d)(ii) shall
be deemed to permit any Indebtedness not expressly permitted under this
Agreement or to constitute a waiver or cure of any Default or Event of Default
that arises as a result of the incurrence of Indebtedness that is not permitted
under this Agreement.

 

(iii)          The Borrower shall make, or shall cause each applicable
Restricted Subsidiary to make, a prepayment of the Outstanding Amount of the
Term Loan in an amount equal to 50% of the Net Cash Proceeds of each private or
public issuance of Equity Interests of the Borrower or any Restricted
Subsidiary; provided that such     
prepayment shall only be required to the extent the amount of
Consolidated Senior Secured Indebtedness, as reduced by giving effect to such
prepayment, would result in a 
Consolidated Senior Secured Leverage Ratio of greater than or equal to
1.50 to 1.00 on a pro forma basis as of the date of such prepayment.  Each such prepayment will be made within ten (10) Business
Days of receipt of such Net Cash Proceeds and upon not less than five (5) Business
Days’ prior written notice to the Administrative Agent, which notice shall
include a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the calculations utilized in computing the pro forma
Consolidated Senior Secured Leverage Ratio and the Net Cash Proceeds of such
issuance.  Notwithstanding the
application of this Section 2.06(d)(iii) to any issuance of
Equity Interests that is not otherwise permitted under this Agreement, nothing
in this Section 2.06(d)(iii) shall be deemed to permit any
issuance of Equity Interests of the Borrower or any Restricted Subsidiary not
expressly permitted under this Agreement or to constitute a waiver or cure of
any Default or Event of Default that arises as a result of the issuance of any
such Equity Interest that is not permitted under this Agreement.

 

(iv)          Within
ten Business Days after financial statements have been delivered pursuant to Section 7.01(a) and
the related Compliance Certificate has been delivered pursuant to Section 7.02(b),
the Borrower shall make a prepayment of the Outstanding Amount of the Term Loan
in an amount equal to 50% of Excess Cash Flow for the fiscal year covered by
such financial statements; provided that (x) for the fiscal year of the
Borrower ending December 31, 2006, the prepayment required by this Section 2.06(d)(iv) the
calculation of “Excess Cash Flow” shall also include the period from the
Closing Date through the beginning of such fiscal year, and (y) such prepayment
shall only be required to the extent the amount of Consolidated Senior Secured
Indebtedness, as reduced by giving effect to such prepayment, would result in a
Consolidated Senior Secured Leverage Ratio of greater than or equal to 1.50 to
1.00 on a pro forma basis as of the date of such prepayment.

 

Each prepayment of
the Term Loan required under this Section 2.06(d) shall be
applied pro rata to remaining installments of the scheduled amortization of the
Term Loan Facility (including the scheduled payment of all remaining
Outstanding Amounts of the Term Loan on the Term Loan Maturity Date).

 

(e)           Any prepayment of a
Eurodollar Rate Loan under this Section 2.06 shall be accompanied
by all accrued interest thereon, together with any additional amounts required
pursuant to Section 4.05. 
Each prepayment under this Section 2.06 shall be applied to
the Loans

 

60

 

of the applicable
Lenders in accordance with their Pro Rata Term Shares or Pro Rata Revolving
Shares, as applicable.

 

2.07        Termination or Reduction of Commitments.  The Borrower may, upon notice to the
Administrative Agent, terminate the Aggregate Revolving Credit Commitments, or
from time to time permanently reduce the Aggregate Revolving Credit
Commitments; provided that (i) any such notice shall be received by
the Administrative Agent not later than 11:00 a.m. five Business Days
prior to the date of termination or reduction, (ii) any such partial
reduction shall be in an aggregate amount of $5,000,000 or any whole multiple
of $1,000,000 in excess thereof, or the entire remaining Aggregate Revolving
Credit Commitments, (iii) the Borrower shall not terminate or reduce the
Aggregate Revolving Credit Commitments if, after giving effect thereto and to
any concurrent prepayments hereunder, the Total Revolving Outstandings would
exceed the Aggregate Revolving Credit Commitments, and (iv) if, after
giving effect to any reduction of the Aggregate Revolving Credit Commitments,
the Letter of Credit - BA Sublimit or the Swing Line Sublimit exceeds the
amount of the Aggregate Revolving Credit Commitments, such sublimit shall be
automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify
the Lenders of any such notice of termination or reduction of the Aggregate
Revolving Credit Commitments.  Any
reduction of the Aggregate Revolving Credit Commitments shall be applied to the
Revolving Credit Commitment of each Revolving Lender according to its Pro Rata
Revolving Share.  All commitment fees
accrued until the effective date of any termination of the Aggregate Revolving
Credit Commitments shall be paid on the effective date of such termination.

 

2.08        Repayment of Loans.

 

(a)           The Borrower shall
repay to the Revolving Lenders on the Revolving Credit Maturity Date the
aggregate principal amount of Revolving Loans outstanding on such date.

 

(b)           The Borrower shall
repay each Swing Line Loan on the earlier to occur of (i) the date ten
Business Days after such Loan is made and (ii) the Revolving Credit
Maturity Date.

 

(c)           The Borrower shall
repay the principal amount of the Term Loan in twenty-seven (27) consecutive
quarterly installments equal to $2,625,000 on the last Business Day of each
March, June, September and December, commencing on December 31, 2005,
and in a final installment equal to the aggregate Outstanding Amount of the
Term Loan on the Term Loan Maturity Date, in each case subject to adjustments
for prepayments made pursuant to Section 2.06.

 

2.09        Interest.

 

(a)           Subject to the
provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof

 

61

 

from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.

 

(b)           If any amount
payable by the Borrower under any Loan Document is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.  Furthermore, while any Event of Default
exists, the Borrower shall pay interest, at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws, on the principal amount of all (a) outstanding
Obligations under the Revolving Credit Facility upon the affirmative vote of the Required Revolving Lenders, (b) outstanding
Obligations under the Term Loan
Facility upon the affirmative vote of the Required Term Loan Lenders and (c) other
Obligations hereunder upon the affirmative vote of the Required Lenders.  Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

 

(c)           Interest on each
Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

 

2.10        Fees.  In addition to certain fees described in
subsections (i) and (j) of Section 2.04:

 

(a)           Commitment Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender in accordance with its Pro Rata
Revolving Share, a commitment fee (the “Commitment Fee”) equal to the Applicable Rate
times the actual daily amount by which the Aggregate Revolving Credit
Commitments exceed the sum of (i) the Outstanding Amount of Revolving
Loans and (ii) the Outstanding Amount of L/C - BA Obligations.  The Commitment Fee shall accrue at all times
during the Availability Period, including at any time during which one or more
of the conditions in Article V is not met, and the amount accrued
through the end of each fiscal quarter of the Borrower shall be due and payable
in arrears on the fifteenth (or the next Business Day after the fifteenth, if
the fifteenth is not a Business Day) of each January, April, July and
October, commencing with the first such date to occur after the Closing Date,
and on the Revolving Credit Maturity Date. 
The Commitment Fee shall be calculated quarterly in arrears, and if
there is any change in the Applicable Rate during any quarter, the actual daily
amount shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.

 

(b)           Other Fees.  The Borrower shall pay to the Arrangers, the
Administrative Agent and each of the Lenders, for their own respective
accounts, such fees as shall have been separately agreed upon in writing
(including in the Joint Fee Letter and in the Agency Fee Letter, as applicable)
in the amounts and at the times so specified, including an annual
administrative fee payable to the Administrative Agent.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

62

 

2.11        Computation of Interest and Fees.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime rate” shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that
any Loan that is repaid on the same day on which it is made shall, subject to Section 2.13(a),
bear interest for one day.  Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

 

2.12        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 Borrower and the interest and payments
thereon.  Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.

 

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

 

(c)           Entries made in good
faith by the Administrative Agent in the Register pursuant to Section 2.12(b),
and by each Lender in its account or accounts pursuant to Section 2.12(a),
shall be prima facie evidence of the amount of principal and interest due and
payable or to become due and payable from the Borrower to, in the case of the
Register, each Lender and, in the case of such account or accounts, such
Lender, under this Agreement and the other Loan Documents, absent manifest
error; provided that the failure of the Administrative Agent or any
Lender to make an entry, or any finding that any entry is incorrect, in the
Register or such account or accounts shall not limit or otherwise affect the
Obligations.

 

63

 

2.13        Payments Generally; Administrative Agent’s
Clawback.

 

(a)           General.  All payments to be made by the Borrower shall
be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower 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
Dollars and in immediately available funds not later than 2:00 p.m. on the
date specified herein.  The Administrative
Agent will promptly distribute to such Lender its ratable 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 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

 

(b)           (i)  Funding by Lenders;
Presumption by Administrative Agent. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in
the case of any Borrowing of Base Rate Loans, prior to 1:00 p.m. on the
date of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.03 (or, in the case of a Borrowing of
Base Rate Loans, that such Lender has made such share available in accordance
with and at the time required by Section 2.03) and may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case
of a payment to be made by the Borrower, the interest rate applicable to Base
Rate Loans; provided that the Administrative Agent agrees that it shall
first make a request (which request may be telephonic) for payment from such
applicable Lender before making a request with respect thereto to the
Borrower.  If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Revolving Loan or Pro Rata Term Share of the Term
Loan, as applicable, included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

64

 

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

 

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

 

(c)           Failure to
Satisfy Conditions Precedent.  If any
Lender makes available to the Administrative Agent funds for any Loan to be
made by such Lender as provided in the foregoing provisions of this Article II,
and such funds are not made available to the Borrower by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in Article V
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

(d)           Obligations of
Lenders Several.  The obligations of
the Lenders hereunder to make Revolving Loans, to fund their respective Pro
Rata Term Shares of the Term Loan, to fund participations in Letters of Credit
and Swing Line Loans and to make payments pursuant to Section 11.04(c) are
several and not joint.  The failure of
any Lender to make any Revolving Loan, to fund its Pro Rata Term Share of the
Term Loan B, to fund any participation in Letters of Credit and Swing Line
Loans or to make any payment under Section 11.04(c) on any
date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Revolving Loan, to fund its Pro Rata
Term Share of the Term Loan, to purchase its participations in Letters of
Credit and Swing Line Loans or to make its payment under Section 11.04(c).

 

(e)           Funding Source.  Nothing herein shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or manner
or to constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.

 

2.14        Sharing of Payments by Lenders.  If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Revolving Loans or the portion of the
Term Loan made by it, or the participations in L/C – BA Obligations or in Swing
Line Loans held by it resulting in such Lender’s receiving

 

65

 

payment
of a proportion of the aggregate amount of such Loans or participations and
accrued interest thereon greater than its ratable 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 applicable Revolving Loans and/or portion of the
Term Loan made by it and/or subparticipations in the participations in L/C – BA
Obligations or Swing Line Loans of the other Lenders, as the case may be, or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the applicable Lenders ratably in accordance
with the aggregate amount of principal of and accrued interest on their
respective Revolving Loans, portion of the Term Loan and/or 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 shall not be construed to apply to (x) any
payment made by the 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
Revolving Loans, portion of the Term Loan or subparticipations in L/C – BA
Obligations or Swing Line Loans to any assignee or participant, other than to
the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall
apply).

 

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

 

ARTICLE III.

SECURITY

 

3.01        Security.  As
security for the full and timely payment and performance of all Obligations,
the Borrower shall, and shall cause all other Loan Parties to, on or before the
Closing Date, do or cause to be done all things necessary in the opinion of the
Administrative Agent and its counsel to grant to the Administrative Agent for
the benefit of the Secured Parties a duly perfected first priority security
interest in all Collateral subject to no prior Lien or other encumbrance or
restriction on transfer, except as expressly permitted hereunder.  Without limiting the foregoing, on the Closing
Date the Borrower shall deliver, and shall cause each Guarantor to deliver, to
the Administrative Agent, in form and substance reasonably acceptable to the
Administrative Agent, (a) if such party has rights in any Pledged
Interests (i) the Pledge Agreement which shall pledge all of the Pledged
Interests held by such party to the Administrative Agent for the benefit of the

 

66

 

Secured
Parties, and (ii) if such Pledged Interests are in the form of certificated
securities, such certificated securities, together with undated stock powers or
other appropriate transfer documents indorsed in blank pertaining thereto, (b) the
Security Agreement, which shall pledge to the Administrative Agent for the
benefit of the Secured Parties certain personal property of the Borrower and
the Guarantors more particularly described therein, (c) if such party has
a fee interest in any of the real property set forth on Schedule 3.01,
a Mortgage with respect thereto and such Mortgaged Property Support Documents
as the Administrative Agent may request, and (d) Uniform Commercial Code
financing statements in form, substance and number as requested by the
Administrative Agent, reflecting the Lien in favor of the Secured Parties on
the Pledged Interests and all other Collateral, and shall take such further
action and deliver or cause to be delivered such further documents as required
by the Security Instruments or otherwise as the Administrative Agent may
request to effect the transactions contemplated by this Article III.  The Borrower shall also, and shall cause each
Guarantor, to pledge to the Administrative Agent for the benefit of the Secured
Parties (and as appropriate to reaffirm its prior pledge of) all of the Pledged
Interests acquired or created after the Closing Date and held by such party, or
otherwise acquired by such party and not theretofore pledged to the
Administrative Agent for the benefit of the Secured Parties, and to deliver to
the Administrative Agent all of the documents and instruments in connection
therewith as are required pursuant to the terms of Section 7.12 and
of the Security Instruments.

 

3.02        Further
Assurances.

 

(a)           At the request of
the Administrative Agent, the Borrower will or will cause all other Loan Parties,
as the case may be, from time to time to execute, by its duly authorized
officers, alone or with the Administrative Agent, any certificate, instrument,
financing statement, control agreement, statement or document, or to procure
any such certificate, instrument, statement or document, or to take such other
action (and pay all connected costs) which the Administrative Agent reasonably
deems necessary from time to time to create, continue or preserve the liens and
security interests in Collateral (and the perfection and priority thereof) of
the Administrative Agent contemplated hereby and by the other Loan Documents
and specifically including all Collateral acquired by the Borrower or other
Loan Party after the Closing Date.

 

(b)           Without limiting the
generality of the foregoing subsection (a), in the event that the Borrower
or any Loan Party (or any Domestic Subsidiary that is required to be a Loan
Party pursuant to the terms of this Agreement) shall acquire (including as a
result of the creation or acquisition of a Restricted Subsidiary or an existing
Subsidiary becoming a Restricted Subsidiary, in each case in accordance with
the terms of this Agreement) any fee interest in real property having a fair
market value as determined in good faith by the Administrative Agent or the
Borrower in excess of $10,000,000 in the aggregate, the Borrower or the
applicable Domestic Subsidiary shall, promptly after such acquisition, execute
and deliver to the Administrative Agent a Mortgage in favor of the
Administrative Agent, as mortgagee for the ratable benefit of the Lenders, and
provide the Administrative Agent with evidence of the completion (or reasonably
satisfactory arrangements for the completion) of all recordings and filings of
such Mortgage as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to effectively create a valid, perfected, first
priority Lien, subject to Liens permitted by Section 8.01(a), (c),
(d), (g), (h), (i) or (j), against the
properties purported to be covered thereby, including evidence of the payment
of any filing or recordation fees or taxes, and deliver to the Administrative
Agent such Mortgaged Property Support Documents as the Administrative Agent may
request with respect to the property purported to be covered by such Mortgage.

 

67

 

(c)           Without limiting the
generality of the foregoing subsection (a), prior to entering into any new
lease of real property or renewing any existing lease of real property following
the Closing Date, the Borrower shall, and shall cause each of its Domestic
Subsidiaries that are or are required to be Loan Parties to, use its (and
their) best efforts (which shall not require the expenditure of cash or the
making of any material concessions under the relevant lease) to deliver to the
Administrative Agent a waiver, in form and substance reasonably satisfactory to
the Administrative Agent, executed by the lessor of any real property that is
to be leased by the Borrower or such Domestic Subsidiary for a term in excess
of one year in any state which by statute grants such lessor a “landlord’s” (or
similar) Lien which is superior to the Administrative Agent’s, to the extent
the value of any personal property of the Borrower and its Domestic
Subsidiaries that are Restricted Subsidiaries held or to be held at such leased
property exceeds (or it is anticipated that the value of such personal property
will, at any point in time during the term of such leasehold term, exceed)
$12,000,000.

 

(d)           The Administrative
Agent is hereby irrevocably authorized to execute (if necessary) and file or
cause to be filed, with or if permitted by applicable law without the signature
of the Borrower or any Loan Party appearing thereon, all Uniform Commercial Code
financing statements reflecting the Borrower or any other Loan Party as “debtor”
and the Administrative Agent as “secured party”, and continuations thereof and
amendments thereto, as the Administrative Agent reasonably deems necessary or
advisable to give effect to the transactions contemplated hereby and by the
other Loan Documents.

 

3.03        Information Regarding Collateral.  The Borrower represents, warrants and
covenants that (a) the chief executive office of the Borrower and each
other Person providing Collateral pursuant to a Security Instrument (each, a “Grantor”) at the
Closing Date is located at the address or addresses specified on Schedule 3.03,
and (b) Schedule 3.03 contains a true and complete list of (i) the
exact legal name, jurisdiction of formation, and address within the United
States of each Grantor and of each other Person that has effected any merger or
consolidation with a Grantor or contributed or transferred to a Grantor any
property constituting Collateral at any time since January 1, 2000
(excluding Persons making sales in the ordinary course of their businesses to a
Grantor of property constituting inventory in the hands of such seller), (ii) the
exact legal name, jurisdiction of formation, jurisdiction identification
number, and each location of the chief executive office of each Grantor at any
time since January 1, 2000, (iii) each location within the United
States in which material goods constituting Collateral are or have been located
since April 17, 2003 (together with the name of each owner of the property
located at such address if not the applicable Grantor, and a summary
description of the relationship between the applicable Grantor and such
Person), and (iv) each trade name, trademark or other trade style used by
any Grantor since April 17, 2003 and the purposes for which it was
used.  The Borrower shall not change, and
shall not permit any other Grantor to change, its name, jurisdiction of
formation (whether by reincorporation, merger or otherwise), the location of
its chief executive office or any location specified in clause (b)(iii) of
the immediately preceding sentence, or use or permit any other Grantor to use,
any additional trade name, trademark or other trade style, except upon giving
not less than thirty (30) days’ prior written notice to the Agent and taking or
causing to be taken all such action at Borrower’s or such other Grantor’s
expense as may be reasonably requested by the Administrative Agent to perfect
or maintain the perfection of the Lien of the Administrative Agent in
Collateral.

 

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ARTICLE IV.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

4.01        Taxes.

 

(a)           Payments Free of
Taxes.  Any and all payments by or on
account of any obligation of the Borrower 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 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) the
Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)           Payment of Other
Taxes by the Borrower.  Without
limiting the provisions of subsection (a) above, the Borrower shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

 

(c)           Indemnification
by the Borrower.  The Borrower shall
indemnify the Administrative Agent, each Lender and the L/C Issuer, 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) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or
the L/C Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the L/C
Issuer, shall be conclusive absent manifest error.

 

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

 

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the 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 Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower 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

 

69

 

Borrower
or the Administrative Agent, shall deliver such other documentation prescribed
by applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower 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 the
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower 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 Borrower 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 Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of
the Code and (y) duly completed copies of 
Internal Revenue Service Form W-8BEN, or

 

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

 

(f)            Treatment of
Certain Refunds.  If the
Administrative Agent, any Lender or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent, such
Lender or the L/C Issuer, as the case may be, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the
Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Lender or the L/C Issuer in the event the Administrative Agent, such
Lender or the L/C Issuer is required to repay such refund to such Governmental
Authority.  This subsection shall
not be construed to require the Administrative Agent, any Lender or the L/C
Issuer to make available its tax returns (or any

 

70

 

other
information relating to its taxes that it deems confidential) to the Borrower
or any other Person.

 

4.02        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 Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies
the Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist.  Upon
receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all
Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

4.03        Inability to Determine Rates.  If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not
being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate
and reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Borrower and each Lender. 
Thereafter, the obligation of the Lenders to make or maintain Eurodollar
Rate Loans shall be suspended until the Administrative Agent (upon the instruction
of the Required Lenders) revokes such notice. 
Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for
a Borrowing of Base Rate Loans in the amount specified therein.

 

4.04        Increased Costs; Reserves on Eurodollar Rate Loans.

 

(a)           Increased Costs
Generally.  If any Change in Law
shall:

 

(i)            impose,
modify or deem applicable any reserve, special deposit, compulsory loan, insurance
charge or similar requirement against assets of, deposits with or for the
account of, or credit extended or participated in by, any Lender (except any
reserve requirement contemplated by Section 4.04(e))
or the L/C Issuer;

 

(ii)           subject
any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any Bankers’ Acceptance, any

 

71

 

participation in a Letter of Credit or a Bankers’ Acceptance, or any
Eurodollar Rate Loan made by it, or change the basis of taxation of payments to
such Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes
or Other Taxes covered by Section 4.01 and the imposition of, or
any change in the rate of, any Excluded Tax payable by such Lender or the L/C
Issuer); or

 

(iii)          impose
on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans
made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Rate Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or the L/C Issuer of participating in, issuing or maintaining any
Letter of Credit or Bankers’ Acceptance (or of maintaining its obligation to
participate in or to issue any Letter of Credit or Bankers’ Acceptance), or to
reduce the amount of any sum received or receivable by such Lender or the L/C
Issuer hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or the L/C Issuer, the Borrower will pay to such
Lender or the L/C Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.

 

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

 

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

 

(d)           Delay in Requests.  Failure or delay on the part of any Lender or
the L/C Issuer to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender’s or the L/C
Issuer’s right to demand such compensation, provided that

 

72

 

the Borrower shall
not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six months prior to the date that such Lender or
the L/C Issuer, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
L/C Issuer’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

(e)           Reserves
on Eurodollar Rate Loans.  The
Borrower shall 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 Eurodollar 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
the Borrower 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.

 

4.05        Compensation for Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the 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 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 the
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 the Borrower; or

 

(c)           any assignment of a
Eurodollar Rate Loan on a day other than the last day of the Interest Period
therefor as a result of a request by the Borrower pursuant to Section 11.13;

 

including any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable
to terminate the deposits from which such funds were obtained.  The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 4.05, each Lender shall be deemed to have
funded each Eurodollar Rate Loan made by it at the  Eurodollar Rate for such Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Loan was in fact so funded.

 

73

 

4.06        Mitigation Obligations; Replacement of
Lenders.

 

(a)           Designation of a
Different Lending Office.  If any
Lender requests compensation under Section 4.04, or the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 4.01,
or if any Lender gives a notice pursuant to Section 4.02, then such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 4.01 or 4.04,
as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 4.02, as applicable, and (ii) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

 

(b)           Replacement of
Lenders.  If any Lender requests
compensation under Section 4.04, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 4.01, the Borrower may
replace such Lender in accordance with Section 11.13.

 

4.07        Survival.  All of the Borrower’s obligations under this Article IV
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE V.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

5.01        Conditions of Initial Credit Extension.  The obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)           The Administrative
Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and its legal counsel:

 

(i)            executed
counterparts of this Agreement, each of the Security Instruments, the Guaranty
and the Parent Guaranty, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;

 

(ii)           Revolving
Loan Notes executed by the Borrower in favor of each Revolving Lender
requesting such a Note;

 

(iii)          Term
Loan Notes executed by the Borrower in favor of each Term Loan Lender
requesting such a Note;

 

74

 

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

 

(v)           such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that each of
the Borrower and each Guarantor is validly existing, in good standing and
qualified to engage in business in its jurisdiction of organization and in any
other jurisdiction requested by the Administrative Agent, including certified
copies of each Loan Party’s Organization Documents, shareholders’ agreements,
certificates of good standing and/or qualification to engage in business;

 

(vi)          a
favorable opinion of Simpson Thacher & Bartlett LLP, counsel to the
Loan Parties, and appropriate local counsel to the Loan Parties, each addressed
to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G
and such other matters concerning the Loan Parties and the Loan Documents as
the Required Lenders may reasonably request;

 

(vii)         certificates
of Responsible Officers of New Holdco, the Borrower or the applicable Loan
Parties either (A) identifying all consents, licenses and approvals
required in connection with the execution, delivery and performance by each
Loan Party and the validity against each such Loan Party of the Loan Documents
to which it is a party, and stating that such consents, licenses and approvals
shall be in full force and effect, and attaching true and correct copies
thereof or (B) stating that no such consents, licenses or approvals are so
required;

 

(viii)        a
certificate signed by a Responsible Officer of the Borrower certifying:

 

(A)          that
the conditions specified in Sections 5.02(a) and (b) have
been satisfied;

 

(B)           as
to the matters described in Section 5.01(d);

 

(C)           that
none of the Merger Documents (including any condition to the consummation of
the Merger) has been altered, amended, waived or otherwise changed or
supplemented since their execution on June 17, 2005, in any respect
materially adverse to the Lenders, except to the extent agreed to by prior
written consent of the Arrangers, which consent shall not be unreasonably
withheld; and

 

(D)          that
the Merger has been consummated prior to, or is being consummated substantially
simultaneously with, the Closing Date, in accordance with the terms of the
Merger Documents (only as amended, altered, waived or otherwise changed in
compliance with subpart (C) above);

 

75

 

(ix)           evidence
satisfactory to the Arrangers of the consummation, prior to or substantially
simultaneously with the occurrence of the Closing Date, of each of the
following, in each case in compliance with all applicable laws and regulations,
with the receipt of all necessary material governmental, shareholder and third
party consents (including Hart-Scott-Rodino clearance) and approvals:  (A) the creation of New Holdco and the
transfer of the Equity Interests of US Pipe and of JW MergerCo, Inc.
thereto, such that after giving effect thereto (but prior to giving effect to
the Merger and to the US Pipe Contribution) New Holdco is a direct subsidiary
of Walter and JW MergerCo, Inc. and US Pipe are direct Subsidiaries of New
Holdco, (B) the Entity Conversions, including the filing of any
certificates of conversion required or requested by the Administrative Agent, (C) the
US Pipe Contribution in accordance with the terms of, and such that after
giving effect thereto US Pipe is a “Restricted Subsidiary” under, the
Indentures for both the Mueller Water Products and the Subordinated Notes, and
otherwise on terms and conditions reasonably satisfactory to the Arrangers, (D) the
receipt by Walter of (I) not less than $400,000,000 of net proceeds from the
Dividend Distribution, and (II) not less than $20,000,000 of net proceeds from the Subordinated New
Holdco Loan, and the application of all such proceeds as consideration for the
Merger, (E) the refinancing (in an amount sufficient, inter alia, to
support the tender, defeasance or satisfaction and discharge of the Existing
Second Lien Notes), termination and payment in full of all obligations
outstanding under the Existing Walter Credit Agreement with the Replacement
Walter Facilities, and (F) the execution and effectiveness Put Backstop
Commitment Letter Amendment;

 

(x)            a
certificate signed by the Chief Financial Officers of Mueller Water Products
and the Borrower certifying that, after giving effect to the entering into of
the Loan Documents, the termination of the Existing Credit Agreement, and the
consummation of all of the Transactions, both Mueller Water Products and its
Subsidiaries and the Borrower and its Subsidiaries, measured on a consolidated
basis, are Solvent;

 

(xi)           evidence satisfactory to the Arrangers that the Existing Credit Agreement has been
or concurrently with the Closing Date is being terminated and all Liens
securing obligations under the Existing Credit Agreement have been or
concurrently with the Closing Date are being released;

 

(xii)          evidence
that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect;

 

(xiii)         an
initial Revolving Loan Notice, if any;

 

(xiv)        an
initial Term Loan Interest Rate Selection Notice, if any;

 

(xv)         delivery
of Uniform Commercial Code financing statements suitable in form and substance
for filing in all places required by applicable law to perfect the Liens of the
Administrative Agent under the Security Instruments as a first priority Lien as
to items of Collateral in which a security interest may be perfected by the
filing of financing statements, and such other documents and/or evidence of
other actions as may be

 

76

 

reasonably necessary under applicable law to perfect the Liens of the
Administrative Agent under such Security Instruments as a first priority Lien
in and to such other Collateral as the Administrative Agent may require,
including without limitation the delivery by the Borrower of all certificates
evidencing Pledged Interests, accompanied in each case by duly executed stock
powers (or other appropriate transfer documents) in blank affixed thereto;

 

(xvi)        with
respect to those parcels of real property set forth on Schedule 3.01,
a Mortgage and such Mortgaged Property Support Documents as the Administrative
Agent may request;

 

(xvii)       Uniform
Commercial Code search results showing only those Liens as are acceptable to
the Lenders;

 

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

 

(b)           Any fees required to
be paid on or before the Closing Date shall have been paid.

 

(c)           Unless waived by the
Administrative Agent, the Borrower shall have paid all reasonable fees, charges
and disbursements of counsel to the Administrative Agent to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of such
reasonable fees, charges and disbursements as shall constitute its reasonable
estimate of such reasonable fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).

 

(d)           The
Administrative Agent shall be satisfied that after giving effect to the initial
Credit Extension hereunder, the remaining amount available to be drawn under
the Revolving Credit Facility shall not be less than $72,500,000.

 

Without limiting the generality of the provisions of Section 10.04,
for purposes of determining compliance with the conditions specified in this Section 5.01,
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 Closing Date specifying its
objection thereto.

 

5.02        Conditions to all Credit Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Revolving Loan Notice or Term Loan
Interest Rate Selection Notice requesting only a conversion of Revolving Loans
or Segments, as applicable, to the other Type or a continuation of Eurodollar
Rate Loans or Eurodollar Rate Segments, as applicable) or make the initial
Credit Extension hereunder is subject to the following conditions precedent:

 

(a)           The representations
and warranties of the Borrower and each other Loan Party contained in Article VI
(subject, in the case of the representations and warranties made on the

 

77

 

Closing
Date, to the limitation set forth in the last sentence of this Section 5.02(a))
or any other Loan Document, or which are contained in any document furnished at
any time under or in connection herewith or therewith, 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, and
except that for purposes of this Section 5.02(a), the
representations and warranties contained in subsections (a) and (b) of
Section 6.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 7.01.  Notwithstanding anything to this Agreement to
the contrary, the representations and warranties made in Article VI
on the Closing Date pertaining to the activities or status of Mueller Water
Products, the Borrower, their respective Subsidiaries (other than U.S. Pipe and
any Subsidiaries thereof) or their respective businesses (other than the
businesses of U.S. Pipe and its Subsidiaries) prior to the consummation of the
Merger shall be deemed to be limited to the Specified Credit Agreement
Representations and the Specified Merger Document Representations.

 

(b)           No Default or Event
of Default shall have occurred and be continuing, or would result from such
proposed Credit Extension or from the application of the proceeds thereof.

 

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

 

(d)           No limitation exists
on any Borrowing or Credit Extension contained in Article II.

 

Each Request for Credit Extension (other than a Revolving Loan Notice
or Term Loan Interest Rate Selection Notice requesting only a conversion of
Revolving Loans or Segments, as applicable, to the other Type or a continuation
of Eurodollar Rate Loans or Eurodollar Rate Segments, as applicable) submitted
by the Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 5.02(a) and (b) have
been satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and
the Lenders, subject to the limitation set forth in Section 5.02(a),
that:

 

6.01        Existence, Qualification and Power;
Compliance with Laws. 
Each Loan Party (a) is a corporation, partnership or limited
liability company duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation, organization
or formation, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own
or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party and
to consummate the Transactions, (c) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all

 

78

 

Laws;
except in each case referred to in clause (b)(i), (c) or (d), to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

6.02        Authorization; No Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, and the
consummation of the Transactions, have been duly authorized by all necessary
corporate or other organizational action, and do not and will not (a) contravene
the terms of the Organization Documents of any such Person or of any Person
whose Equity Interests are being pledged; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under (i) any
Contractual Obligation to which such Person or any Person whose Equity
Interests are being pledged is a party (other than, in the case of the
consummation of the Merger, breaches of Contractual Obligations that are not,
individually or in the aggregate, material) or (ii) any order, injunction,
writ or decree of any Governmental Authority or any arbitral award to which
such Person or its property is subject; or (c) violate any Law.

 

6.03        Governmental Authorization; Other
Consents.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document or the
consummation of the Transactions (other than, in the case of the consummation
of the Merger, approvals, consents, exemptions, authorizations or other actions
that have been obtained or taken or where the failure to do so is not,
individually or in the aggregate, material).

 

6.04        Binding Effect.  This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto.  This
Agreement constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of such Loan Party,
enforceable against each Loan Party that is party thereto in accordance with
its terms.

 

6.05        Financial Statements; No Material
Adverse Effect.

 

(a)           The Audited
Financial Statements of the Borrower and its Subsidiaries (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; (iii) show all
material indebtedness and other liabilities, direct or contingent, of the Borrower
and its Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness.

 

(b)           The unaudited
consolidated balance sheet of the Borrower and its Subsidiaries dated as of June 30,
2005, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered

 

79

 

thereby,
subject, in the case of clauses (i) and (ii), to the absence of footnotes
and to normal year-end audit adjustments.

 

(c)           Since the later of (i) June 30,
2005 and (ii) the date of the most recent audited financial statements
delivered pursuant to Section 7.01(a), there has been no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

 

(d)           The Borrower and its
Subsidiaries, on a consolidated basis, have no material indebtedness or other liabilities,
direct or contingent, including liabilities for taxes, material commitments and
Indebtedness, except to the extent (i) set forth in the most recent of (A) the
Audited Financial Statements and (B) the financial statements most
recently delivered pursuant to Section 7.01(a) or (b), (ii) set
forth on Schedule 8.03, or (iii) incurred since the date
referred to in subsection (i) hereof in accordance with the terms of
this Agreement and the other Loan Documents.

 

6.06        Litigation.  There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of the Borrower after due
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its Subsidiaries
or against any of their properties or revenues that (a) purport to affect
or pertain to this Agreement or any other Loan Document or any of the
Transactions or (b) except as specifically disclosed in Schedule 6.06,
either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect, and there has been no
adverse change in the status, or financial effect on any Loan Party or any
Subsidiary thereof, of the matters described on Schedule 6.06 which
could reasonably be expected to have a Material Adverse Effect.

 

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

 

6.08        Ownership of Property; Liens.  Each of the Borrower and each Subsidiary has
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  The property of the Borrower and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 8.01.

 

6.09        Environmental Compliance.  The Borrower and its Restricted Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility
for violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that, except as set forth on Schedule 6.09, such Environmental Laws
and claims could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

80

 

6.10        Insurance.  The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies 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 Borrower or the applicable
Subsidiary operates, none of which insurance shall be provided by any
Subsidiary or any other Affiliate of the Borrower.

 

6.11        Taxes.  The Borrower and its Subsidiaries have filed
all Federal, state and other material tax returns and reports required to be
filed, and have paid all Federal, state and other material taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are
being contested in good faith by appropriate proceedings diligently conducted
and for which adequate reserves have been provided in accordance with
GAAP.  Except as specifically described
on Schedule 6.11 hereto, there is no proposed tax assessment
against the Borrower or any Subsidiary that would, if made, have a Material
Adverse Effect.  Neither any Loan Party
nor any Subsidiary thereof is party to any tax sharing agreement other than the
Tax Sharing Agreement.

 

6.12        ERISA Compliance.

 

(a)           Each Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the Code and other applicable Laws, including Foreign Benefit Laws.  Each Plan that is intended to qualify under section 401(a) of
the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto or an application for such letter will be filed within twelve
months of the first Plan year for a newly adopted Plan and, to the best
knowledge of the Borrower, nothing has occurred which would reasonably be
expected to  prevent, or cause the loss
of, such qualification.  Each Plan
subject to any Foreign Benefit Law has, if required under applicable Foreign
Benefit Law, received the required approvals by any Governmental Authority
regulating such Plan or an application for such approvals is currently being
processed.  The Borrower and each ERISA
Affiliate have made all required contributions to each Plan subject to section 412
of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to section 412 of the Code has been made with
respect to any Plan.  The Borrower has
not (i) failed to make a required contribution or payment, or (ii) otherwise
failed to operate in compliance with any Foreign Pension Plan except to the
extent that the failure to so operate 
could not reasonably be expected to have a Material Adverse Effect.

 

(b)           There are no pending
or, to the best knowledge of the Borrower, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan
that could reasonably be expected to have a Material Adverse Effect.  Neither the Borrower nor any ERISA Affiliate
has engaged in a non-exempt prohibited transaction or violation of the
fiduciary responsibility rules described in section 4975 of the Code
or Part 4 of Title I of ERISA with respect to any Plan that has resulted
or could reasonably be expected to result in a Material Adverse Effect.

 

(c)           (i) No ERISA
Event has occurred for which any liability remains unsatisfied or is reasonably
expected to occur; (ii) except to the extent it could reasonably be
expected to have  a Material Adverse
Effect, no Pension Plan has any Unfunded Pension Liability; (iii) neither
the

 

81

 

Borrower
nor any ERISA Affiliate has had imposed on it, or reasonably expects to have
imposed on it, any material liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under Section 4007
of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any material liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would reasonably be expected to result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) to the
knowledge of the Borrower, neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.

 

(d)           Each Plan governed
by any Foreign Benefit Law is (i) funded to at least the minimum level
required by law or, if higher, to the level required by the terms governing the
Plan, (ii) provided for or recognized in the financial statements most
recently delivered to the Administrative Agent or (iii) estimated in the
formal notes to the financial statements most recently delivered to the
Administrative Agent; provided, that the failure to so fund, provide
for, recognize or estimate the liabilities arising under such Plan shall not be
deemed to be a breach of this representation unless such failure could
reasonably be expected to have a Material Adverse Effect.

 

6.13        Subsidiaries; Equity Interests.  The Borrower (a) has no Subsidiaries other than those
specifically disclosed in Schedule 6.13(a) or created or acquired
in compliance with Section 7.12, and (b) has no equity
investments in any other corporation or entity other than those specifically
disclosed Schedule 6.13(b) or made after the Closing Date in
compliance with this Agreement and the other Loan Documents.

 

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

 

(a)           The Borrower is not
engaged and will not engage, principally or as one of its important activities,
in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock.

 

(b)           None of the
Borrower, any Person Controlling the Borrower, or any Subsidiary (i) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is
or is required to be registered as an “investment company” under the Investment
Company Act of 1940.

 

6.15        Disclosure.  The Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf
of any Loan Party to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other

 

82

 

information
so furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

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

 

6.17        Intellectual Property; Licenses, Etc.  The
Borrower and its Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the
operation of their respective businesses, without known conflict with the IP
Rights of any other Person, except to the extent any failure so to own or possess
the right to use could not reasonably be expected to have a Material Adverse
Effect.  To the knowledge of the
Borrower, the operation by the Borrower and its Subsidiaries of their
respective businesses does not infringe upon any IP Rights held by any other
Person.

 

6.18        Senior Indebtedness.  All Obligations including those to pay
principal of and interest (including post-petition interest, whether or not
allowed as a claim under bankruptcy or similar laws) on the Loans and other
Obligations, and fees and expenses in connection therewith, constitute “Senior
Indebtedness” or similar term relating to the Obligations and all such
Obligations are entitled to the benefits of the subordination created by the
Put Backstop Facility of the Borrower, the Subordinated Note Indenture or any
other applicable Permitted Subordinated Debt Document, as applicable. The
Borrower acknowledges that the Administrative Agent, each Lender and the L/C
Issuer is entering into this Agreement and is extending its Commitments in reliance
upon the subordination provisions of the Put Backstop Facility of the Borrower,
the Put Backstop Replacement Facility of the Borrower, the Subordinated Note
Indenture or applicable Permitted Subordinated Debt Document.

 

ARTICLE VII.

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Revolving Credit Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit or Bankers’Acceptance shall remain
outstanding, the Borrower shall, and shall (except in the case of the covenants
set forth in Sections 7.01, 7.02, 7.03 and 7.11)
cause each Restricted Subsidiary to:

 

7.01        Financial Statements.  Deliver to the
Administrative Agent and each Lender:

 

83

 

(a)           as soon as
available, but in any event within 90 days after the end of each fiscal year of
the Borrower (subject to Section 1.03(a) with respect to the
fiscal year ending December 31, 2005) or, if earlier, 15 days after the
date required to be filed with the SEC (without giving effect to any extension
permitted by the SEC), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, and audited and
accompanied by (i) a report and opinion of a Registered Public Accounting
Firm of nationally recognized standing reasonably acceptable to the
Administrative Agent (the “Auditor”),
which report and opinion shall be prepared in accordance with audit standards of the Public Company
Accounting Oversight Board and applicable Securities Laws and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit or with respect to the absence of material
misstatement and (ii) to the extent required to be prepared under
applicable Securities Laws, the report(s) of management on the Borrower’s
internal control over financial reporting pursuant to Items 308(a) and 308(c) of
Regulation S-K promulgated under the Exchange Act, the Auditor’s attestation
report on management’s assessment of the Borrower’s internal control over
financial reporting as filed with the SEC on Form 10-K for the Borrower,
and an independent assessment by the Auditor as to the effectiveness of the
Borrower’s internal control over financial reporting as required by Auditing
Standard No. 2 of the Public Company Accounting Oversight Board; and

 

(b)           as
soon as available, but in any event within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower or, if earlier,
five Business Days after the date required to be filed with the SEC (without
giving effect to any extension permitted by the SEC), a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated statements of income or operations, and
cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal
year then ended, setting forth in each case in comparative form the figures
consistent with the Borrower’s financial statements filed with the SEC with
respect to the fiscal quarter ended July 2, 2005, or with other
comparative figures as are acceptable to the Administrative Agent, all in
reasonable detail and certified by a Responsible Officer of the Borrower as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.

 

As to any information contained in materials furnished pursuant to Section 7.02(d),
the Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in derogation
of the obligation of the Borrower to furnish the information and materials
described in subsections (a) and (b) above at the times specified
therein.

 

7.02        Certificates; Other Information.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)           concurrently with
the delivery of the financial statements referred to in Section 7.01(a),
a certificate of its independent certified public accountants certifying such
financial

 

84

 

statements
and stating that in making the examination necessary they have not become aware
of any Default  in respect of any term,
covenant, condition of Section 8.12 or other provision in so far as
they relate to accounting matters or, if any such Default shall exist, stating
the nature and status of such event;

 

(b)           concurrently with
the delivery of the financial statements referred to in Sections 7.01(a) and
(b), a duly completed Compliance Certificate signed by a Responsible
Officer of the Borrower;

 

(c)           promptly after any
request by the Administrative Agent, documents and other information supporting
the calculation of any defined term used in the computation in any Compliance
Certificate of the financial covenants set forth in Section 8.12;

 

(d)           promptly after the
same are available, copies of each annual report, proxy or financial statement
sent to the stockholders of the Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower may
file or be required to file with the SEC under Section 13 or 15(d) of
the Exchange Act, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;

 

(e)           as
soon as available and in any event no later than 60 days after the beginning of
each fiscal year of the Borrower, a consolidated business plan for the Borrower
and its Subsidiaries prepared by management of the Borrower including balance
sheets, and related statements of operations, retained earnings and cash flow
(to include separate forecasts for Consolidated Capital Expenditures and
Consolidated EBITDA), on a quarterly basis for such fiscal year, and a
reasonably detailed explanation of any underlying assumptions with respect
thereto; and

 

(f)            promptly, such
additional information regarding the business, financial or corporate affairs
of the Borrower or any Subsidiary, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may from time to time reasonably
request.

 

Documents required to be delivered pursuant to Section 7.01(a) or
(b) or Section 7.02(d) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 11.02; or (ii) on which
such documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower 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 Borrower 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 Borrower shall be required to provide
paper

 

85

 

copies of the
Compliance Certificates required by Section 7.02(b) to the
Administrative Agent.  Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower 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.

 

The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arrangers will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or
another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to the
Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that, so long as the Borrower is the issuer of any
outstanding debt or equity securities that are registered or issued pursuant to
a private offering or is actively contemplating issuing any such securities,
(w) all Borrower Materials that are to be made available to Public Lenders
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to
have authorized the Administrative Agent, the Arrangers, the L/C Issuer and the
Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall
be treated as set forth in Section 11.07); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated “Public Investor”; and (z) the Administrative Agent
and the Arrangers shall be entitled to treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the Platform
not designated “Public Investor”.  Notwithstanding the foregoing, the Borrower
shall be under no obligation to mark any Borrower Materials “PUBLIC.”

 

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

 

(a)           of the occurrence of
any Default;

 

(b)           of any matter that
has resulted or could reasonably be expected to result in a Material Adverse
Effect, including (i) breach or non-performance of, or any default under,
a Contractual Obligation of the Borrower or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;

 

(c)           of the occurrence of
any ERISA Event; and

 

(d)           of any material
change in accounting policies or financial reporting practices by the Borrower
or any Subsidiary.

 

86

 

Each notice pursuant to this Section 7.03 shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 7.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

 

7.04        Payment of Obligations.  Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful
claims which, if unpaid, would by law become a Lien upon its property, except
to the extent that any such Lien would otherwise be permitted by Section 8.01;
and (c) all Indebtedness having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
$10,000,000, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

 

7.05        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization or formation except in a transaction permitted
by Section 8.04 or 8.05; (b) take all reasonable action
to maintain all rights, privileges, permits, licenses and franchises necessary
or desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.

 

7.06        Maintenance of Properties.  (a) Maintain, preserve and protect all
of its properties (other than insignificant properties) and equipment necessary
in the operation of its business in good working order and condition, ordinary
wear and tear excepted except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect; (b) make all necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care
typical in the industry in the operation and maintenance of its facilities.

 

7.07        Maintenance of Insurance.  In the event compliance with the insurance
requirements set forth in the Security Instruments does not satisfy the
following requirements, and not in limitation of such insurance requirements in
the Security Instruments, maintain, with financially sound and reputable
insurance companies, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons and providing for
not less than 15 days’ prior notice to the Administrative Agent of termination,
lapse or cancellation of such insurance, none of which insurance (other than
worker’s compensation insurance, disability insurance and other similar types
of insurance that do not constitute the insurance of its properties or of
interruptions to its business operations) shall be provided by any Subsidiary
or any other Affiliate of the Borrower.

 

87

 

7.08        Compliance with Laws.  Comply in all material respects with the
requirements of all Laws (including without limitation all applicable
Environmental Laws) and all orders, writs, injunctions and decrees applicable
to it or to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect.

 

7.09        Books and Records.  (a) 
Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority
having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

 

7.10        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists
the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.

 

7.11        Use of Proceeds.  Use the proceeds of the Credit Extensions (i) to
finance the Dividend Distribution, (ii) to refinance existing
indebtedness, including all indebtedness outstanding under the Existing Credit
Agreement and the payment of all fees and expenses in connection therewith (but
excluding the Mueller Water Products Notes and Subordinated Notes), (iii) to
redeem Mueller Water Products Notes (including any premiums paid in connection
therewith) in an aggregate amount not to exceed $25,000,000 resulting from the
exercise of put rights by the holders of thereof upon the consummation of the
Transactions, (iv) to redeem Subordinated Notes (including any premiums
paid in connection therewith) in an aggregate amount not to exceed $25,000,000
resulting from the exercise of put rights by the holders of thereof upon the
consummation of the Transactions, (v) to make the Subordinated New Holdco
Loan, (vi) to pay fees and expenses in connection with the Transactions,
and (vii) for working capital, capital expenditures, and other general
corporate purposes not in contravention of any Law or of any Loan Document.

 

7.12        New Subsidiaries, Pledgors and Real Property.

 

(a)           As soon as
practicable but in any event within 30 Business Days following the acquisition
or creation of any Subsidiary that is a Restricted Subsidiary (other than a
Receivables Co.), or the time any existing Subsidiary (other than any Unrestricted
Subsidiary or any Receivables Co.) becomes a Material Subsidiary, cause to be
delivered to the Administrative Agent each of the following:

 

88

 

(i)            if
such Subsidiary is both a Domestic Subsidiary and a Material Subsidiary, a
Guaranty Joinder Agreement duly executed by such Material Subsidiary;

 

(ii)           if
such Subsidiary is both a Domestic Subsidiary and a Material Subsidiary, (A) a
Security Joinder Agreement duly executed by such Material Subsidiary (with all
schedules thereto appropriately completed) and (B) if such Material
Subsidiary owns a fee interest in any real property having a fair market value
in excess of $10,000,000, those documents as are required by Section 3.02(b);

 

(iii)          if
such Subsidiary is both a Material Subsidiary and either a Domestic Subsidiary
or a Direct Foreign Subsidiary, and if any of the Subsidiary Securities issued
by such Material Subsidiary are Pledged Interests and are owned by a Material
Subsidiary who has not then executed and delivered to the Administrative Agent
the Pledge Agreement or a Pledge Joinder Agreement granting a Lien to the
Administrative Agent, for the benefit of the Secured Parties, in such Pledged
Interests, a Pledge Joinder Agreement (with all schedules thereto appropriately
completed) duly executed by the Material Subsidiary that directly owns such
Pledged Interests;

 

(iv)          if
such Subsidiary is both a Material Subsidiary and either a Domestic Subsidiary
or a Direct Foreign Subsidiary, and if any of the Subsidiary Securities issued
by such Material Subsidiary are owned by the Borrower or a Material Subsidiary
who has previously executed a Pledge Agreement or a Pledge Joinder Agreement, a
Pledge Agreement Supplement by the Borrower (if applicable) and each Material
Subsidiary that owns any of such Pledged Interests with respect to such Pledged
Interests in the form required by the Pledge Agreement;

 

(v)           if
such Subsidiary is a Material Subsidiary and owns any Domestic Subsidiary or
Direct Foreign Subsidiary that is also a Material Subsidiary, a Pledge Joinder
Agreement (with all schedules thereto appropriately completed) duly executed by
such Material Subsidiary;

 

(vi)          if
the Pledged Interests issued or owned by such Subsidiary constitute securities
under Article 8 of the Uniform Commercial Code (A) the certificates
representing 100% of such Pledged Interests and (B) duly executed, undated
stock powers or other appropriate powers of assignment in blank affixed
thereto;

 

(vii)         with
respect to any Person that has executed a Pledge Joinder Agreement, a Pledge
Agreement Supplement, or a Security Joinder Agreement, Uniform Commercial Code
financing statements naming such Person as “Debtor” and naming the
Administrative Agent for the benefit of the Secured Parties as “Secured Party,”
in form, substance and number sufficient in the reasonable opinion of the
Administrative Agent and its special counsel to be filed in all Uniform
Commercial Code filing offices and in all jurisdictions in which filing is
necessary to perfect in favor of the Administrative Agent for the benefit of
the Secured Parties the Lien on the Collateral conferred under such Security
Instrument to the extent such Lien may be perfected by Uniform Commercial Code
filing;

 

89

 

(viii)        upon
the reasonable request of the Administrative Agent, an opinion of counsel to
each Subsidiary executing any Joinder Agreement or Pledge Supplement, and the
Borrower if it executes a Pledge Agreement Supplement, pursuant to this Section 7.12,
dated as of the date of delivery of such applicable Joinder Agreements (and
other Loan Documents) provided for in this Section 7.12 and
addressed to the Administrative Agent and the Lenders, in form and substance
reasonably acceptable to the Administrative Agent, each of which opinions may
be in form and substance, including assumptions and qualifications contained
therein, substantially similar to those opinions of counsel delivered pursuant
to Section 5.01(a); and

 

(ix)           with
respect to each Subsidiary executing any Joinder Agreement or Pledge
Supplement, and the Borrower if it executes a Pledge Agreement Supplement,
pursuant to this Section 7.12, current copies of the Organization
Documents of each such Person, minutes of duly called and conducted meetings
(or duly effected consent actions) of the Board of Directors, partners, or
appropriate committees thereof (and, if required by such Organization Documents
or applicable law, of the shareholders, members or partners) of such Person
authorizing the actions and the execution and delivery of documents described
in this Section 7.12, all certified by the applicable Governmental
Authority or appropriate officer as the Administrative Agent may elect.

 

(b)           As soon as
practicable but in any event within 30 Business Days following the acquisition
of any Pledged Interests by any Material Subsidiary who has not theretofore
executed the Pledge Agreement or a Pledge Joinder Agreement and who is not
otherwise required to deliver a Pledge Joinder Agreement pursuant to Section 7.12(a),
cause to be delivered to the Administrative Agent a Pledge Joinder Agreement
(with all schedules thereto appropriately completed) duly executed by such
Material Subsidiary, and the documents, stock certificates, stock powers, financing
statements, opinions, Organization Documents and organizational action relating
thereto and to the pledge contained therein and described in Section 7.12(a)(vi),
(vii), (viii) and (ix).

 

(c)           As soon as
practicable but in any event within 30 Business Days following the acquisition
of any fee interest in any real property having a fair market value in excess
of $5,000,000 by any Material Subsidiary, notify the Administrative Agent of
such acquisition and provide to the Administrative Agent the location and use
of such real property, and if requested by the Administrative Agent, cause to
be delivered to the Administrative Agent a Mortgage with respect thereto, along
with such Mortgaged Property Support Documents as are requested by the
Administrative Agent, duly executed by such Material Subsidiary, and such other
documents, financing statements and opinions with respect to the grant of a
mortgage therein as the Administrative Agent may reasonably request, including
evidence of the payment of any filing or recordation fees or taxes.

 

7.13        Compliance with ERISA.  Do,
and cause each of its ERISA Affiliates to do, each of the following: (a) maintain
each Plan in compliance in all material respects with the applicable provisions
of ERISA, the Code and other applicable Laws, including Foreign Benefit Laws; (b) cause
each Plan which is qualified under section 401(a) of the Code to
maintain such qualification; (c) cause each Plan subject to any Foreign
Benefit Law to maintain any required approvals by any Governmental Authority
regulating such Plan, (d) make all required

 

90

 

contributions
to any Plan subject to section 412 of the Code, and (e) make all
required contributions and payments to any Foreign Pension Plans.

 

7.14        Further Assurances.  At
the Borrower’s cost and expense, upon request of the Administrative Agent, duly
execute and deliver or cause to be duly executed and delivered, to the
Administrative Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Administrative Agent to carry out more effectively the provisions and
purposes of this Agreement, the Guaranty, the Security Instruments and the
other Loan Documents.

 

7.15        Interest Rate Protection.  Within 90 days following the Closing Date,
obtain and for a period of not less than three (3)  years after the
Closing Date maintain in effect, Swap Contracts to the extent necessary to
cause at least fifty percent (50%) of the Consolidated Funded Indebtedness on
the Closing Date to either have a fixed interest rate or to have interest rate
protection on terms and conditions reasonably satisfactory to the
Administrative Agent, which Swap Contracts shall be for a term of not less than
one (1)  year from the date such Swap Contracts are entered into.

 

7.16        Change of Control Offer.  Promptly, and in any event no later than 20
days after the Closing Date, make any Change of Control Offer (as defined in
the Subordinated Note Indenture) required as a result of the consummation of
the Transactions, which Change of Control Offer shall establish a purchase date
no later than 60 days after the Closing Date for the Subordinated Notes
tendered in connection therewith.

 

ARTICLE VIII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any Revolving Credit Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit or Bankers’Acceptance shall remain
outstanding, the Borrower shall not, nor shall it permit any Restricted Subsidiary to, directly or indirectly:

 

8.01        Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following:

 

(a)           Liens pursuant to
any Loan Document;

 

(b)           Liens existing on
the date hereof and listed on Schedule 8.01 and any renewals or
extensions thereof, provided that the property covered thereby consists
only of the property covered by the Liens being renewed or extended and any
renewal or extension of the obligations secured or benefited thereby is
permitted by Section 8.03(b);

 

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

 

91

 

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

 

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

 

(f)            Liens or deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business, and including deposits (but
not Liens) related to the acquisition of property;

 

(g)           (i) Liens with
respect to minor imperfections of title and easements, rights-of-way,
covenants, consents, reservations, encroachments, variations and zoning and
other similar restrictions, charges, encumbrances or title defects affecting
real property which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of
the applicable Person, (ii) in the case of any property covered by a
Mortgage, encumbrances disclosed in the title insurance policy issued to, and
reasonably approved by, the Administrative Agent insuring the Mortgage; and (iii) in
the case of any property covered by a Mortgage, upon certification by the
Borrower that an easement, right-of-way, restriction, reservation, permit,
servitude or other similar encumbrance granted or to be granted by the Borrower
or any such      Restricted Subsidiary
does not materially detract from the value of or materially impair the use by
the Borrower or such Restricted Subsidiary in the ordinary course of its
business of the property subject to or to be subject to such encumbrance, the
Administrative Agent shall execute such documents as are reasonably requested
to subordinate its Mortgage to such encumbrance;

 

(h)           with respect to any
Mortgaged Fee Property, Liens which appear as exceptions to the Title Policy
delivered to the Administrative Agent with respect to such Mortgaged Fee
Property that are not otherwise permitted by Section 8.01(a), (c),
(d), (g) or (i) and are acceptable to the
Administrative Agent, it being understood that Liens appearing on the Title
Policies delivered to the Administrative Agent on the Closing Date are
acceptable to the Administrative Agent;

 

(i)            any interest or
title of a lessor or sublessor and any restriction or encumbrance to which the
interest or title of such lessor or sublessor may be subject that is incurred
in the ordinary course of business and, either individually or when aggregated
with all other Liens described in clauses (a) through (h) in effect
on any date of determination, could not be reasonably expected to have a
Material Adverse Effect;

 

(j)            Liens securing
judgments for the payment of money not constituting an Event of Default under Section 9.01
or securing appeal or other surety bonds related to such judgments;

 

92

 

(k)           Liens securing
Indebtedness permitted under Section 8.03(e); provided that (i) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;

 

(l)            Liens
in the nature of trustees’ Liens granted pursuant to any indenture governing
any Indebtedness permitted by Section 8.03, in each case in favor
of the trustee under such indenture and securing only obligations to pay
compensation to such trustee, to reimburse its expenses and to indemnify it
under the terms thereof;

 

(m)          Liens
of sellers of goods to the Borrower and the Restricted Subsidiaries arising
under Article 2 of the UCC or similar provisions of applicable law in the
ordinary course of business, covering only the goods sold and securing only the
unpaid purchase price for such goods and related expenses;

 

(n)           Liens
securing Assumed Indebtedness of the Borrower and the Restricted Subsidiaries
permitted pursuant to Section 8.03(f); provided that (i) such
Liens do not at any time encumber any property other than property of the Subsidiary acquired, or the property
acquired, and proceeds thereof in connection with such Assumed Indebtedness and
shall not attach to any      assets of
the Borrower or any of the Restricted Subsidiaries theretofore existing or
(except for any such proceeds) which arise after the date thereof and (ii) the Assumed Indebtedness and other secured
Indebtedness of the Borrower and the Restricted Subsidiaries secured by any
such Lien does not exceed the fair market value of the property being
acquired in connection with such
Assumed Indebtedness;

 

(o)           Liens
on assets of Foreign Subsidiaries of the Borrower securing Indebtedness of such
Foreign Subsidiaries permitted pursuant to clause (h), (l) or (m) of Section 8.03;

 

(p)           Liens
on the Equity Interests of Unrestricted Subsidiaries securing Indebtedness
incurred by such Unrestricted Subsidiaries;

 

(q)           operating
leases or subleases granted by the Borrower or any of the Restricted
Subsidiaries to any other Person in the ordinary course of business; and

 

(r)            Liens
on (i) Accounts sold or contributed to a Receivables Co. in  connection with a Permitted Receivables
Transaction, (ii) other assets related to such Accounts and (iii) proceeds
of the foregoing, in each case created in connection with such Permitted
Receivables Transaction.

 

8.02        Investments.  Make any Investments, except:

 

(a)           Investments held by
the Borrower or such Subsidiary in the form of Cash Equivalents;

 

(b)           loans and advances
to officers, directors and employees of the Borrower and Subsidiaries the
ordinary course of the business of the Borrower and its Subsidiaries as
conducted on the Closing Date to the extent permitted by applicable Law;

 

93

 

(c)           Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;

 

(d)           letters of credit
issued in support of and Guarantees permitted by Section 8.03;

 

(e)           equity Investments
existing as of the date hereof and as set forth in Schedule 6.13
and other Investments existing as of the date hereof and as set forth in Schedule 8.02
and extensions or renewals thereof, provided that no such extension or
renewal shall be permitted if it would (x) increase the amount of such
Investment at the time of such extension or renewal or (y) result in a Default
hereunder;

 

(f)            without
duplication, Investments permitted as Consolidated Capital Expenditures
pursuant to Section 8.12(d) (including any such Investments
which would otherwise constitute Consolidated 
Capital Expenditures but for the operation of clause (i) of the
proviso to the definition thereof);

 

(g)           Investments made by
the Borrower or any of the Restricted Subsidiaries, solely with proceeds which
have been contributed, directly or indirectly after the Closing Date, to the
Borrower or such Restricted Subsidiary as cash equity from Walter for the
purpose of making an Investment identified in a notice to the Administrative
Agent on or prior to the date that such capital contribution is made, which
Investments shall result in the Borrower or such Restricted Subsidiary
acquiring a majority controlling interest in the Person in which such
Investment was made or increasing any such controlling interest already
maintained by it;

 

(h)           Investments in the
form of non-cash consideration received from a Disposition permitted by Section 8.05(e);

 

(i)            Investments by the
Borrower or any Domestic Subsidiary that is a Restricted Subsidiary consisting
of the transfer of Equity Interests of a Foreign Subsidiary to another Foreign
Subsidiary that is a Restricted Subsidiary;

 

(j)            Investments made or
held by any Foreign Subsidiary of the Borrower that is a Restricted Subsidiary
in any other Foreign Subsidiary of the Borrower that is a Restricted
Subsidiary;

 

(k)           Investments of the
Borrower or any Domestic Subsidiary of the Borrower that is a Restricted
Subsidiary in the Borrower or any Subsidiary of the Borrower that is a
Restricted Subsidiary; provided that (i) such Investments in any
Receivables Co. shall only be made in connection with and as part of a
Permitted Receivables Transaction and (ii) after making such Investment
the Foreign Investment Basket Utilization shall not exceed $75,000,000

 

(l)            Investments in the
form of securities of any Person acquired in an Acquisition permitted hereunder
and Assumed Indebtedness in respect of a Person or property acquired in an
Acquisition permitted hereunder;

 

94

 

(m)          Investments in
Persons (other than New Holdco and its Subsidiaries) that are engaged in the
Core Business and are not permitted under clauses (a) through (l) above in
an aggregate principal amount at any one time outstanding not to exceed
$30,000,000;

 

(n)           Investments in Swap
Contracts permitted to be maintained under Section 8.03(d) or
required to be maintained under Section 7.15;

 

(o)           Investments
consisting of Indebtedness held by the Borrower or any Restricted Subsidiary
arising on account of the accrual of interest on such Investments;

 

(p)           the Subordinated New
Holdco Loan; and

 

(q)           Investments made by
any Receivables Co. in connection with any Permitted Receivables Transaction;

 

provided
that, notwithstanding the foregoing, (i) any Investment which when made
complies with the requirements of the definition of the term “Cash Equivalent”
may continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements; and (ii) no Investment otherwise
permitted by clause (d) (except to the extent related to Indebtedness then
permitted to be incurred under Section 8.03), (l) or (m) shall be
permitted to be made if, immediately before or after giving effect thereto, any
Default shall have occurred and be continuing.

 

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

 

(a)           Indebtedness under
the Loan Documents;

 

(b)           Indebtedness
outstanding on the date hereof and listed on Schedule 8.03 and any
refinancings, refundings, renewals or extensions thereof; provided that (i) the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder, (ii) the average life to
maturity of any refinancing, refunding, renewal or extension of such
Indebtedness permitted hereby is not less than the then average life to
maturity of the Indebtedness so refinanced or replaced, and (iii) any
refinancing, refunding, renewal or extension of Indebtedness subordinated to
the Obligations shall be on terms no less favorable to the Administrative Agent
and the Lenders, and no more restrictive to the Borrower, than the subordinated
Indebtedness being refinanced, refunded, renewed or extended and in an amount
not less than the amount outstanding at the time thereof;

 

(c)           Guarantees of the
Borrower or any Guarantor in respect of Indebtedness otherwise permitted
hereunder of the Borrower or any other Guarantor (other than Indebtedness
described in clauses (h), (j),
(m), (n) and (o) below);

 

(d)           obligations
(contingent or otherwise) of the Borrower or any Subsidiary existing or arising
under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, cash flows or property held or

 

95

 

reasonably
anticipated by such Person, or changes in the value of securities issued by
such Person, and not for purposes of speculation or taking a “market view;” and
(ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;

 

(e)           Indebtedness in
respect of capital leases, Synthetic Lease Obligations and purchase money
obligations for real property and fixed or capital assets within the
limitations set forth in Section 8.01(k); provided, however,
that the aggregate amount of all such Indebtedness at any one time outstanding
shall not exceed $30,000,000;

 

(f)            Assumed
Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate
principal amount not to exceed $20,000,000 at any time outstanding;

 

(g)           Indebtedness of the
Borrower in respect of the Subordinated Notes in an      aggregate principal amount not to exceed
$315,000,000;

 

(h)           Indebtedness of
Foreign Subsidiaries of the Borrower in an aggregate principal amount not to
exceed $40,000,000 at any time outstanding;

 

(i)            the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business;

 

(j)            Indebtedness of (i) (x)
any Domestic Subsidiary that is a Restricted Subsidiary owing to the Borrower
or any of the Restricted Subsidiaries, or (y) the Borrower owing to any of the
Restricted Subsidiaries, and (ii) any Foreign Subsidiary that is a
Restricted Subsidiary of the Borrower owing to the Borrower or any Domestic
Subsidiary that is a Restricted Subsidiary; provided that (A) the
Foreign Investment Basket Utilization does not exceed $75,000,000, and (B) any
such Indebtedness described in this clause (j) which is owing to the Borrower
or any of its Domestic Subsidiaries that are Restricted Subsidiaries, (1) to
the extent requested by the Administrative Agent, such Indebtedness shall be
evidenced by one or more promissory notes in form and substance satisfactory to
the Administrative Agent which shall be duly executed and delivered to (and
indorsed to the order of) the Administrative Agent in pledge pursuant to a
Pledge Agreement and (2) in the case of any such Indebtedness owed by a
Person other than the Borrower or a Subsidiary Guarantor, such Indebtedness
shall not be forgiven or otherwise discharged for any consideration other than
payment (Dollar for Dollar) in cash unless the Administrative Agent otherwise
consents;

 

(k)           surety bonds
permitted under Section 8.01;

 

(l)            other Indebtedness
of the Borrower and the Restricted Subsidiaries in an aggregate principal
amount outstanding not to exceed at any time $20,000,000; provided that,
unless such Indebtedness is Indebtedness of a Foreign Subsidiary, such
Indebtedness is  unsecured;

 

(m)          Indebtedness of any
Foreign Subsidiary owing to any other Foreign Subsidiary;

 

(n)           the Put Backstop
Facility;

 

96

 

(o)           Permitted
Subordinated Debt; and

 

(p)           Receivables Facility
Outstandings in an aggregate amount at any time not to exceed $100,000,000, the
recourse of which shall (except in respect of fees, costs, indemnifications,
representations and warranties and other obligations in which recourse is
customarily available against originators or servicers of Accounts included in
special-purpose-vehicle receivables financing arrangements, other than any of
the foregoing which are in effect credit substitutes) be limited solely to any
applicable Receivables Co. and its assets;

 

provided
that (i) no Indebtedness otherwise permitted by clause (e), (f), (h), (j)
(as such clause (j) relates to loans made by the Borrower or any Subsidiary
Guarantor to Restricted Subsidiaries which are not Subsidiary Guarantors) or
(l) may be incurred if, immediately before or after giving effect to the
incurrence thereof, any Default shall have occurred and be continuing, and (ii) all
such Indebtedness of the type described in clause (j)(i)(y) above that is owed
to Subsidiaries that are not Subsidiary Guarantors shall be subordinated, in
writing, to the Obligations upon terms satisfactory to the Administrative
Agent.

 

8.04        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:

 

(a)           any Restricted
Subsidiary (other than a Receivables Co.) may merge with the Borrower or any
one or more other Restricted Subsidiaries, provided that (i) when
the Borrower is merging with a Restricted Subsidiary, the Borrower shall be the
continuing or surviving Person, and (ii) when any Guarantor is merging with another Subsidiary, the Guarantor shall be the continuing or
surviving Person; and

 

(b)           any Restricted
Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or another Restricted
Subsidiary (other than a Receivables Co.); provided that if the
transferor in such a transaction is a Guarantor, then the transferee must also
be a Guarantor or the Borrower; and

 

(c)           a merger or
consolidation necessary to consummate (i) an Acquisition permitted by and
in compliance with Section 8.13 or (ii) a Disposition
permitted by and in compliance with Section 8.05.

 

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

 

(a)           Dispositions in the
ordinary course of its business (and neither constitutes a Disposition of all
or a substantial part of the Borrower’s and the Restricted Subsidiaries’
assets, taken as a whole, nor is made in connection with a Permitted
Receivables Transaction) or of obsolete or worn out property;

 

(b)           any Disposition that
constitutes (i) an Investment permitted under Section 8.02, (ii) a
Lien permitted under Section 8.01 or Section 8.04(a) or
(b), or (iii) a Restricted Payment permitted under Section 8.06;

 

97

 

(c)           Dispositions for
fair market value of equipment or real property to the extent that (i) such
equipment or real property is exchanged for credit against the purchase price
of similar replacement property or (ii) the proceeds of such Disposition
are reasonably promptly applied to the purchase price of such replacement
equipment or real property, and in each case if the disposed property
constituted Collateral then the relevant Loan Party shall grant a Lien to the
Administrative Agent (including the delivery of any necessary Mortgage and
Mortgaged Property Support Documents) on such new or replacement property;

 

(d)           Dispositions of
property by the Borrower or any Restricted Subsidiary
to a wholly-owned Restricted Subsidiary
(other  than a Receivables Co.) or, solely with respect to Dispositions of
the stock of a Restricted Subsidiary of the Borrower, the Borrower; provided
that if the transferor of such property is the Borrower or a Guarantor, the
transferee thereof must be a Guarantor or, subject to the limitation above, the
Borrower;

 

(e)           any
Disposition of assets or stock of the Subsidiaries, so long as (with respect to
each such Disposition) such Disposition is for fair market value and:

 

(i)            at
least 75% of the consideration for such Disposition is cash;

 

(ii)           the
Net Cash Proceeds are applied in accordance with Section 2.06(d);

 

(iii)          no
Default exists or would exist immediately prior to or after giving pro forma
effect to the Disposition;

 

(iv)          to
the extent not otherwise granted therein, the Borrower agrees that it will, and
will cause each of its Restricted Subsidiaries that are Domestic Subsidiaries
to, grant to the Administrative Agent a security interest in any non-cash
consideration received in connection with a Disposition provided for in this Section 8.05(e) that
is evidenced by a promissory note or other written instrument; and

 

(v)           the aggregate book value of the assets (or assets of the
Person) subject to such Disposition, when taken together with the aggregate
book value of all assets (or assets of the Person(s)) Disposed of in reliance
on this clause (e) shall not exceed $100,000,000 after the Closing
Date;

 

(f)            such Disposition results from a casualty or
condemnation in respect of such property or assets;

 

(g)           such Disposition consists of the sale or
discount of overdue accounts receivable in the ordinary course of business, but
only in connection with the compromise or collection thereof; or

 

(h)           such Disposition is of Accounts and related
assets and is made pursuant to a Permitted Receivables Transaction.

 

8.06        Restricted Payments.  Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, in each case

 

98

 

(except
Section 8.06(a)) so long as no Default or Event of Default shall
have occurred and be continuing (both before and after the making of such
Restricted Payment):

 

(a)           each Restricted
Subsidiary may make Restricted Payments to the Borrower and to wholly-owned
Restricted Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Restricted Subsidiary, to the Borrower and any Restricted
Subsidiary and to each other owner of capital stock or other equity interests
of such Restricted Subsidiary on a pro rata basis based on their relative
ownership interests);

 

(b)           the Borrower and
each Subsidiary may declare and make dividend payments or other distributions
payable solely in the common stock or other common Equity Interests of such
Person;

 

(c)           to the extent
available after making any prepayment required by Section 2.06(d),
and subject to the making of each such prepayment, the Borrower and each
Subsidiary may purchase, redeem or otherwise acquire shares of, or pay
dividends or make distributions with respect to, its common stock or other
common Equity Interests or warrants or options to acquire any such shares with
the proceeds received from the issue of new shares of its common stock or other
common Equity Interests;

 

(d)           the
Borrower may make the Dividend Distribution;

 

(e)           the Borrower shall
be permitted to make Restricted Payments to Mueller Water Products to the
extent necessary to enable Mueller Water Products to (i) pay taxes and
make payments to New Holdco sufficient to permit Mueller Water Products or New
Holdco, as applicable, to pay any U.S. Taxes which are due and payable in
respect of taxable income of the Borrower and its Subsidiaries that is
allocable to it for U.S. tax purposes (including, in the case of New Holdco,
any amounts that are payable to Walter pursuant to the Tax Sharing Agreement);
and (ii) make regularly scheduled payments when due of interest and
principal on the Mueller Water Products Notes, the Put Backstop Facility of
Mueller Water Products and any Permitted Mueller Water Products Debt; and

 

(f)            the Borrower may
declare and pay cash dividends to its stockholders in an aggregate amount in
any fiscal year not to exceed $7,500,000 or $15,000,000 in the aggregate when
taken together with all other cash dividends pursuant to this clause (f) after
the Closing Date.

 

8.07        Change in Nature of Business.  Engage in any material line of business that
is not a Core Business; provided, that the foregoing shall not restrict
any Receivables Co. from entering into any Permitted Receivables Transaction.

 

8.08        Transactions with Affiliates.  Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than (a) transactions on fair and reasonable terms
substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s
length transaction with a Person other than an Affiliate, (b) the
consummation by the Borrower and its Subsidiaries of the transactions effected
by the Loan Documents, (c) any employment arrangement entered into by the
Borrower or any of its Subsidiaries in the ordinary

 

99

 

course
of business and consistent with the past practices of the Borrower or such
Subsidiary, (d) transactions between or among the Borrower and its
Restricted Subsidiaries or between or among Restricted Subsidiaries of the
Borrower, in each case to the extent permitted under the terms of the Loan
Documents, (e) the declaration and payment of dividends and the making of
distributions to all holders of any class of capital stock of the Borrower or
any of its Restricted Subsidiaries to the extent otherwise permitted under Section 8.06,
(f) Permitted Receivables Transactions, (g) the Tax Sharing
Agreement, and (h) shared service arrangements entered into in the ordinary
course of business and allocating expenses and fees reasonably in accordance
with the services provided.

 

8.09        Burdensome Agreements.  Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document and, to the extent pertaining to
any Receivables Co., any Permitted Securitization Transaction) that:

 

(a)           requires the grant
of a Lien to secure an obligation of such Person if a Lien is granted to secure
another obligation of such Person; or

 

(b)           limits the ability (i) of
any Restricted Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the Borrower or any Guarantor
other than customary restrictions required in connection with (x) financings
permitted by this Agreement, the limitations of which are no more restrictive
than the corresponding limitations applicable to the Borrower hereunder, and
(y) Dispositions permitted by this Agreement and which limitations cover only
such assets or Person(s) which are the subject matter of such Dispositions and,
prior to such Disposition, permit the Liens granted under the Loan Documents
therein, and (ii) of any Restricted Subsidiary to Guarantee the
Indebtedness of the Borrower, or (iii) of the Borrower or any Restricted
Subsidiary to create, incur, assume or suffer to exist Liens on property of
such Person; provided, however, that this clause (iii) shall
not prohibit:

 

(A)          a
negative pledge contained in either (x) Indebtedness of any Restricted
Subsidiary as of the date it becomes a Restricted Subsidiary of the Borrower in
any transaction otherwise permitted hereunder or (y) Indebtedness outstanding
on the date hereof and listed on Schedule 8.03, in each case so
long as such provision does not impair or conflict with any Security Instrument
or with Section 7.12 hereof;

 

(B)           provisions
limiting Liens on property as may be contained in the terms of any Indebtedness
permitted under Section 8.03(e) or (f) solely to
the extent any such limitations relates to the property financed by or the subject
of such Indebtedness;

 

(C)           provisions
limiting Liens on property, and only on such property, subject to a prior Lien
permitted under Section 8.01(c), (d), (e), (f),
(i), (k), (o), (p) and (r); and

 

(D)          such
provisions as may be contained in any refinancing or replacing Indebtedness
permitted under Section 8.03, provided that the terms of such
provisions shall be no less favorable to the Administrative Agent and the
Lenders as were contained in the Indebtedness being refinanced or replaced.

 

100

 

8.10        Use of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, in any manner that might cause the Credit Extension or the application
of such proceeds to violate Regulations T, U or X of the FRB, in each case as
in effect on the date or dates of such Credit Extension and such use of
proceeds.

 

8.11        Prepayment of Indebtedness; Amendment to
Material Agreements.

 

(a)           Prepay, redeem, purchase,
repurchase, defease or otherwise satisfy any Indebtedness that is subordinated
to the Indebtedness hereunder prior to the scheduled maturity thereof, or make
any payment in violation of any subordination terms thereof, including pursuant
to any change of control, sale of assets, issuance of any equity or otherwise
as may be set forth in the terms thereof or available to the Borrower at its
option, except those prepayments that are made (i) in connection with a
refinancing thereof permitted by Section 8.03(o), (ii) with
the proceeds of any Permitted Mueller Water Products Debt; or (iii) to the
extent available after making any prepayment required by Section 2.06(d),
and subject to the making of each such prepayment, with the proceeds of any
issuance or sale by the New Holdco, Mueller Water Products or the Borrower of
its Equity Interests or any capital contribution to New Holdco, Mueller Water
Products or the Borrower (in the case of such issuances, sales or capital
contributions to New Holdco or Mueller Water Products, to the extent such
proceeds received by in cash by the Borrower as an equity capital
contribution); or

 

(b)           Amend, modify or
change in any manner any term or condition of (i) any Subordinated Note or
the Subordinated Note Indenture, (ii) any Permitted Subordinated Debt
Document, (iii) the Put Backstop Facility of the Borrower, or (iv) any
documents, instruments and agreements delivered in connection with a Permitted
Receivables Transaction or any schedules, exhibits or agreements related
thereto, in each case so that the
terms and conditions thereof are less favorable in any material respect to the
Administrative Agent and the Lenders than the terms of such Indebtedness as of
the Closing Date, but in no event shall terms of recourse, guarantees or credit
support be any less favorable to the Administrative Agent or the Lenders than
the terms of such Indebtedness as of the Closing Date.

 

8.12        Financial Covenants.

 

(a)           Consolidated
Leverage Ratio.  Permit the
Consolidated Leverage Ratio at any time during any period of four fiscal
quarters of the Borrower set forth below to be greater than the ratio set forth
below opposite such period:

 

101

 

	
  Four
  Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated

  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing Date through December 30, 2006

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  December 31, 2006 through December 30, 2007

  	
   

  	
  5.10 to 1.00

  	
   

  
	
  December 31, 2007 through December 30, 2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  December 31, 2008 and each fiscal quarter thereafter

  	
   

  	
  4.00 to 1.00

  	
   

  

 

(b)           Consolidated
Senior Secured Leverage Ratio. 
Permit the Consolidated Senior Secured Leverage Ratio at any time during
any period of four fiscal quarters of the Borrower set forth below to be
greater than the ratio set forth below opposite such period:

 

	
  Four
  Fiscal Quarters Ending

  	
   

  	
  Maximum

  Consolidated Senior

  Secured Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing Date through December 30, 2006

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  December 31, 2006 through December 30, 2007

  	
   

  	
  3.90 to 1.00

  	
   

  
	
  December 31, 2007 through December 30, 2008

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  December 31, 2008 and each fiscal quarter thereafter

  	
   

  	
  3.00 to 1.00

  	
   

  

 

(c)           Consolidated
Interest Charge Coverage Ratio. 
Permit the Consolidated Interest Charge Coverage Ratio as of the end of
any Four-Quarter Period of the Borrower to be less than the ratio set forth
below opposite such fiscal quarter:

 

	
  Four-Quarter
  Period Ending

  	
   

  	
  Minimum

  Consolidated

  Interest Charge

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2005 through September 30, 2007

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  December 31, 2007 and each fiscal quarter thereafter

  	
   

  	
  2.50 to 1.00

  	
   

  

 

(d)           Capital Expenditures.  Make or become legally obligated
to make Consolidated Capital Expenditures in the aggregate for the Borrower and
its Restricted Subsidiaries during any fiscal year (calculated for the entire
fiscal year ending December 31, 2005, including the period prior to the
Closing Date) in an amount exceeding an amount equal to (i) $80,000,000 in
such fiscal year (the “Base
Amount”); plus (ii) an aggregate amount in addition to the
Base Amount after the Closing Date equal to $80,000,000; provided that,
to the extent the Base Amount exceeds the aggregate amount of Consolidated
Capital Expenditures (other than amounts permitted to be made pursuant to the
second proviso below) actually made during such fiscal year, such excess amount
(up to an aggregate of 50% of the amount of the Base Amount for such fiscal
year) may be carried forward to (but only to) the next succeeding fiscal year
(any such

 

102

 

amount
to be certified by the Borrower to the Administrative Agent in the Compliance
Certificate delivered for the last fiscal quarter of such fiscal year, and any
such amount carried forward to a succeeding fiscal year shall be deemed to be
used prior to the Borrower and the Restricted Subsidiaries using the Base
Amount for such succeeding fiscal year, without giving effect to such
carry-forward); provided, further that, the limitation in the
foregoing sentence shall be exclusive of (i) the amount of Consolidated
Capital Expenditures actually made with cash capital contributions made to the
Borrower or any of the Restricted Subsidiaries, directly or indirectly, by
Walter, after the Closing Date and specifically identified in a certificate
delivered by a Responsible Officer of the Borrower to the Administrative Agent
on or about the time such capital contribution is made (but in any event prior
to the time of the Capital Expenditure made with such capital contribution),
and (ii)  any portion of any Acquisition that is permitted under Section 8.13
that is accounted for as a Capital Expenditure.

 

8.13        Acquisitions.  Enter into any agreement, contract, binding commitment or other
arrangement providing for any Acquisition, or take any action to solicit the
tender of securities or proxies in respect thereof in order to effect any
Acquisition, unless (i) the Person to be (or whose assets are to be)
acquired does not oppose such Acquisition and the line or lines of business of
the Person to be acquired constitute Core Businesses, (ii) no Default or
Event of Default shall have occurred and be continuing either immediately prior
to or immediately after giving effect to such Acquisition and, if the Cost of
Acquisition is in excess of $25,000,000, the Borrower shall have furnished to
the Administrative Agent (A) pro forma historical financial statements as
of the end of the most recently completed fiscal year of the Borrower and most
recent interim fiscal quarter, if applicable, giving effect to such
Acquisition, and (B) a Compliance Certificate prepared on a historical pro
forma basis as of June 30, 2005, or, if later, as of the most recent date
for which financial statements have been furnished pursuant to Section 7.01(a) or
(b), giving effect to such Acquisition, which Compliance Certificate
shall demonstrate that no Default or Event of Default would exist immediately
after giving effect thereto, (iii) the Person acquired shall be a
wholly-owned Restricted Subsidiary, or be merged with or into a Restricted
Subsidiary, immediately upon consummation of the Acquisition (or if assets are
being acquired, the acquiror shall be a Restricted Subsidiary), (iv) upon
consummation of the Acquisition each Subsidiary shall have complied with the
provisions of Section 7.12, including with respect to any new
assets (including real property) acquired, (v) if the Cost of Acquisition
in any single transaction or series of related 
transactions shall exceed $120,000,000 (or the Cost of Acquisition
payable in the form of cash or Cash Equivalents shall exceed $60,000,000), the
Required Lenders shall consent to such Acquisition in their discretion, and (vi) after
giving effect to such Acquisition, the aggregate Costs of Acquisition incurred
since the Closing Date shall not exceed $240,000,000 (of which no more than
$120,000,000 of the Costs of Acquisition payable by the Borrower and its
Restricted Subsidiaries in respect of all such transactions after the Closing
Date shall be in the form of cash or Cash Equivalents).

 

8.14        Creation of New Subsidiaries.  Create or acquire any new Subsidiary after the Closing Date other than
Restricted Subsidiaries created or acquired in accordance with Section 7.12,
provided that any Unrestricted Subsidiary may create a Subsidiary that is an
Unrestricted Subsidiary.

 

103

 

8.15        Securities of Subsidiaries.  Permit any Restricted Subsidiary to issue any
Equity Interests (whether for value or otherwise) to any Person other than the
Borrower or another Subsidiary of the Borrower that is a Restricted Subsidiary.

 

8.16        Sale and Leaseback. 
Enter into, or permit any Restricted Subsidiary to, enter into any
agreement or arrangement with any other Person providing for the leasing by the
Borrower or any of the Restricted Subsidiaries of real or personal property
which has been or is to be sold or transferred by the Borrower or any of the
Restricted Subsidiaries to such other Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of the Borrower or any of the Restricted
Subsidiaries.

 

ARTICLE IX.

EVENTS OF DEFAULT AND REMEDIES

 

9.01        Events of
Default.  Any of the following shall constitute an
Event of Default:

 

(a)           Non-Payment.  The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of
any Loan or any L/C - BA Obligation, or (ii) within three days after the
same becomes due, any interest on any Loan or on any L/C - BA Obligation, or
any commitment or other fee due hereunder, or (iii) within five days after
the same becomes due, any other amount payable hereunder or under any other
Loan Document; or

 

(b)           Specific Covenants.  (i) The
Borrower fails to perform or observe any term, covenant or agreement contained (A) in
any of Section 7.03(a) or (b), 7.05 (other than
with respect to the maintenance of good standing), 7.10, 7.11 or 7.12
or Article VIII, or (B) in either Section 7.01 or 7.02
and such failure continues for 15 days, or (ii) New Holdco or Mueller
Water Products fails to perform or observe any term, covenant or agreement
contained in the Parent Guaranty; or

 

(c)           Other Defaults.  Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days after the earlier of (i) receipt of notice
of such default by a Responsible Officer of the Borrower from the
Administrative Agent, or (ii) any Responsible Officer of the Borrower
becomes aware of such default; or

 

(d)           Representations
and Warranties.  Any representation,
warranty, certification or statement of fact made or deemed made by or on
behalf of the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading when made or deemed made in any material
respect; or

 

(e)           Cross-Default.  (i) The Borrower, any Restricted
Subsidiary or any other Loan Party (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise, and after passage of any grace period) in respect of any
Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness

 

104

 

under
Swap Contracts) having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $15,000,000,
or (B) fails to observe or perform any other agreement or condition
relating to any such Indebtedness or Guarantee or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
occurs, and such default continues for more than the period of grace, if any,
therein specified, the effect of which default or other event is to cause, or
to permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under
any Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to
which the Borrower, any Restricted Subsidiary or any other Loan Party is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination
Event (as so defined) under such Swap Contract as to which the Borrower, any
Restricted Subsidiary or any other Loan Party is an Affected Party (as so
defined) and, in either event, the Swap Termination Value owed by the Borrower,
any Restricted Subsidiary or any other Loan Party as a result thereof is
greater than $15,000,000;

 

(f)            Insolvency
Proceedings, Etc.  The Borrower, any
Restricted Subsidiary or any other Loan Party 
institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

 

(g)           Inability to Pay
Debts; Attachment.  (i) The
Borrower, any Restricted Subsidiary or any other Loan Party   becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 days after its issue or
levy; or

 

(h)           Judgments.  There is entered against the Borrower, any
Restricted Subsidiary or any other Loan Party (i) a final judgment or
order for the payment of money in an aggregate amount exceeding $15,000,000 (to
the extent not covered by insurance provided by a Person described in Section 7.07
as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in
either case, such judgment or order remains unvacated and unpaid and either (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B) there
is a period of 30 consecutive days during

 

105

 

which
a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or

 

(i)            ERISA.  (i) An ERISA Event occurs with respect
to a Pension Plan or Multiemployer Plan which has resulted or would reasonably
be expected to result in liability of the Borrower under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of $15,000,000, or (ii) the Borrower or any ERISA Affiliate fails
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$15,000,000; or (iii) the benefit liabilities of all Plans governed by
Foreign Benefit Laws, or the funding of which are regulated by any Foreign
Benefit Laws, at any time exceed all such Plans’ assets, as computed in
accordance with applicable law as of the most recent valuation date for such
Plans, by more than $15,000,000; or

 

(j)            Invalidity of
Loan Documents.  Any Loan Document,
or any Lien granted thereunder, at any time after its execution and delivery
and for any reason other than as expressly permitted hereunder or satisfaction
in full of all the Obligations, ceases to be in full force and effect (except
with respect to immaterial assets); or any Loan Party or any other Person
contests in any manner the validity or enforceability of any Loan Document or
any Lien granted to the Administrative Agent pursuant to the Security
Instruments; or any Loan Party denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any Loan Document; or

 

(k)           Subordinated
Notes and Permitted Subordinated Debt. 
The subordination provisions relating to the Subordinated Notes, the Put
Backstop Facility of the Borrower or any Permitted Subordinated Debt (the “Subordination
Provisions”) shall fail to be enforceable by the Lenders (which have not
effectively waived the benefits thereof) in accordance with the terms thereof,
or the principal or interest on any Loan, any L/C - BA Obligation or other
Obligations shall fail to constitute “designated senior debt” (or any other
similar term) under any document, instrument or agreement evidencing such
Subordinated Notes, the Put Backstop Facility of the Borrower or Permitted
Subordinated Debt; or the Borrower or any of its Subsidiaries shall, directly
or indirectly, disavow or contest in any manner (i) the effectiveness,
validity or enforceability of any of the Subordination Provisions, or (ii) that
any of such Subordination Provisions exist for the benefit of the Secured
Parties; or

 

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

 

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

 

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

 

(b)           declare the unpaid
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other
Loan

 

106

 

Document
to be immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower;

 

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

 

(d)           exercise on behalf
of itself and the Lenders all rights and remedies available to it and the
Lenders under the Loan Documents or applicable Law;

 

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

 

9.03        Application of Funds.  After the exercise of
remedies provided for in Section 9.02 (or after the Loans have
automatically become immediately due and payable and the L/C – BA Obligations
have automatically been required to be Cash Collateralized as set forth in the
proviso to Section 9.02), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following
order:

 

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

 

Second, to payment of that portion of the
Obligations constituting fees, indemnities and other amounts (other than
principal, interest, Letter of Credit – BA Fees and other Obligations expressly
described in clauses Third through Fifth below) payable to the
Lenders and the L/C Issuer (including reasonable fees, charges and
disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article IV), ratably among them in proportion
to the respective amounts described in this clause Second payable to them;

 

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

 

Fourth, (ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Fourth
held by them) to (i) the payment of that portion of the Obligations
constituting unpaid principal of the Loans and L/C – BA Borrowings, (ii) the
payment of the maximum amount of all Bankers’ Acceptances then outstanding,
such payment to be for the account of the L/C Issuer (or to the extent
Revolving Lenders have theretofore funded their participations in any such
Bankers’ Acceptance, ratably among such Revolving Lenders in accordance with
their Pro Rata Revolving Shares) and (iii) to Cash Collateralize that
portion of

 

107

 

L/C – BA
Obligations comprising the aggregate undrawn amount of Letters of Credit, to
the Administrative Agent for the account of the L/C Issuer; provided
that if the amounts available are insufficient to make all payments provided
for in this clause Fourth, that portion allocable to clause (iii) shall
be applied first to pay Outstanding Amounts of Revolving Loans and L/C – BA
Borrowings before being utilized to Cash Collateralize L/C – BA Obligations;

 

Fifth, to payment of Swap Termination Values
and amounts owing under Related Treasury Management Arrangements, in each case
to the extent owing to any Lender or any Affiliate of any Lender arising under
Related Credit Arrangements that shall have been terminated and as to which the
Administrative Agent shall have received notice of such termination and the
Swap Termination Value thereof or the amount owing under the applicable Related
Treasury Management Arrangement from the applicable Lender or Affiliate of a
Lender;

 

Sixth, to the payment of all other Obligations
of the Loan Parties owing under or in respect of the Loan Document that are due
and payable to the Administrative Agent and the other Secured Parties, or any
of them, on such date, ratably based on the respective aggregate amounts of all
such Obligations owing to the Administrative Agent and the other Secured
Parties on such date; and

 

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

 

Subject to Section 2.04(c), amounts used to Cash
Collateralize the aggregate undrawn amount of Letters of Credit pursuant to
clause Fourth above shall be applied to satisfy drawings under such
Letters of Credit as they occur.  If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE X.

ADMINISTRATIVE AGENT

 

10.01      Appointment and Authority.  Each of the Lenders and the L/C Issuer hereby
irrevocably appoints Bank of America to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Article are
solely for the benefit of the Administrative Agent, the Lenders and the L/C
Issuer, and neither the Borrower nor any other Loan Party shall have rights as
a third party beneficiary of any of such provisions.

 

10.02      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

 

108

 

the
Borrower 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.

 

10.03      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 the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 11.01 and 9.02)
or (ii) in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or the L/C Issuer.

 

The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article V or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

10.04      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

 

109

 

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 or Bankers’ Acceptance, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the L/C Issuer
unless the Administrative Agent shall have received notice to the contrary from
such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit or Bankers’ Acceptance.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), 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.

 

10.05      Delegation of Duties.  The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.

 

10.06      Resignation of Administrative Agent.  The Administrative Agent may at any time give
notice of its resignation to the Lenders, the L/C Issuer and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the
United States.  If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting
the qualifications set forth above; provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any Collateral held by the Administrative
Agent on behalf of the Lenders or the L/C Issuer under any of the Loan
Documents, the retiring Administrative Agent shall continue to hold such
Collateral until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender and the L/C Issuer directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this
Section.  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). 
The fees payable by the Borrower to a successor Administrative Agent
shall be the

 

110

 

same
as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor.  After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.04
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 shall also constitute its
resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring
L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit and/or Bankers’ Acceptances, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations
of the retiring L/C Issuer with respect to such Letters of Credit and/or
Bankers’ Acceptances.

 

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

 

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

 

10.09      Administrative
Agent May File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Loan
Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C – BA 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 the 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 – BA 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

 

111

 

have the claims of the Lenders, the L/C Issuer and
the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the L/C Issuer and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections
2.04(i) and (j), 2.10 and 11.04) allowed in such
judicial proceeding; and

 

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

 

and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Lender and the L/C Issuer to
make such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of
the Administrative Agent and its agents and counsel, and any other amounts due
the Administrative Agent under Sections 2.10 and 11.04.

 

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

 

10.10      Collateral
and Guaranty Matters.  The
Lenders and the L/C Issuer irrevocably authorize the Administrative Agent, at
its option and in its discretion,

 

(a)           to
release any Pledged Interest and any Lien on any property granted to or held by
the Administrative Agent under any Loan Document (i) upon the occurrence
of the Facility Termination Date, (ii) that is Disposed or to be Disposed
as part of or in connection with any Disposition permitted hereunder or under
any other Loan Document, or (iii) subject to Section 11.01, if
approved, authorized or ratified in writing by the Required Lenders;

 

(b)           to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that
is permitted by Section 8.01(k); and

 

(c)           to
release any Guarantor from its obligations under the 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 or subordinate its interest in particular types or items
of property, or to release any Guarantor from its obligations under the
Guaranty pursuant to this Section 10.10.

 

112

 

ARTICLE XI.

MISCELLANEOUS

 

11.01      Amendments,
Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however,
that no such amendment, waiver or consent shall:

 

(a)           waive any condition set
forth in Section 5.01(a) without the written consent of each
Lender except to the extent otherwise provided for in Section 5.01(a);

 

(b)           extend or increase (i) the
Revolving Credit Commitment of any Revolving Lender (or reinstate any Revolving
Credit Commitment terminated pursuant to Section 9.02) without the
written consent of such Revolving Lender, or (ii) the obligation of any
Term Loan Lender to make any portion of the Term Loan without the written
consent of such Term Loan Lender;

 

(c)           postpone any date
fixed by this Agreement or any other Loan Document for any payment (but
excluding mandatory prepayments) of principal, interest, fees or other amounts
due to the Lenders (or any of them), including the Term Loan Maturity Date and
the Revolving Credit Maturity Date, or
any scheduled reduction of the Aggregate Revolving Credit Commitments
hereunder or under any other Loan Document, in each case without the written
consent of each Lender directly affected thereby;

 

(d)           reduce the principal
of, or the rate of interest specified herein on, any Loan or L/C - BA
Borrowing, or (subject to clause (v) of the second proviso to this Section 11.01)
any fees or other amounts payable hereunder or under any other Loan Document,
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be
necessary (i) to amend the definition of “Default Rate” (so long as such
amendment does not result in the Default Rate being lower than the interest rate
then applicable to Base Rate Loans or Eurodollar Rate Loans, as applicable) or
to waive any obligation of the Borrower to pay interest or Letter of Credit –
BA Fees at the Default Rate or (ii) to
amend any financial covenant hereunder (or any defined term used therein) even
if the effect of such amendment would be to change the Applicable Rate or
amount of prepayment required under Section 2.06(d)(iii) or (iv);

 

(e)           change Section 2.14
or Section 9.03 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender
directly affected thereby;

 

(f)            change any
provision of this Section 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;

 

113

 

(g)           change
any provision of this Section or the definition of “Required Revolving
Lenders” or any other provision hereof specifying the number or percentage of
Revolving 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 Revolving Lender;

 

(h)           change
any provision of this Section or the definition of “Required Term Loan
Lenders” or any other provision hereof specifying the number or percentage of
Term Loan 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 Term Loan Lender;

 

(i)            impose
any greater restriction on the ability of any Lender to assign any of its rights
or obligations hereunder without the written consent of Lenders having more
than 50% of the Aggregate Credit Exposures then in effect within each of the
following classes of commitments:  (i) the
class consisting of the Revolving Lenders, and (ii) the class consisting
of the Term Loan Lenders; provided that for purposes of this clause, the
aggregate amount of each Lender’s risk participation and funded participation
in L/C - BA Obligations and Swing Line Loans shall be deemed to be held by such
Lender;

 

(j)            release any Guarantor from the Guaranty or
Parent Guaranty, as applicable, without the written consent of each Lender,
except to the extent such Guarantor is the subject of a Disposition permitted
by Section 8.05 (in which case such release may be made by the
Administrative Agent acting alone);

 

(k)           release
all or a material part of the Collateral without the written consent of each
Lender except with respect to Dispositions and releases of Collateral permitted
or required hereunder (including pursuant to Section 8.05) or as
provided in the other Loan Documents (in which case such release may be made by
the Administrative Agent acting alone); or

 

(l)            reduce
the number or type of events that give rise to a mandatory prepayment pursuant
to Section 2.06(d) or change the order or manner of
application of the Net Cash Proceeds provided therein, in each case without the
written consent of each Lender directly affected thereby;

 

and, provided  further, that (i) no amendment, waiver
or consent shall, unless in writing and signed by the L/C Issuer in addition to
the Lenders required above, affect the rights or duties of the L/C Issuer under
this Agreement or any Issuer Document relating to any Letter of Credit or
Bankers’ Acceptance issued or to be issued by it; (ii) no amendment,
waiver or consent shall, unless in writing and signed by the Swing Line Lender
in addition to the Lenders required above, affect the rights or duties of the
Swing Line Lender under this Agreement; (iii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv) Section 11.06(h) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Loans are being funded by an SPC at the time of such amendment, waiver or other
modification; (v) each of the Joint Fee Letter and the Agency Fee
Letter may be amended, or rights or privileges

 

114

 

thereunder
waived, in a writing executed only by the respective parties thereto; and (vi) no
amendment, waiver or consent which has the effect of  enabling the Borrower to satisfy any
condition to a Borrowing contained in Section 5.02 hereof which,
but for such amendment, waiver or consent would not be satisfied, shall be
effective to require the Revolving Lenders, the Swing Line Lender or the L/C
Issuer to make any additional Revolving Loan or Swing Line Loan, or to issue
any additional or renew any existing Letter of Credit or issue any Bankers’
Acceptance, unless and until the Required Revolving Lenders (or, if applicable,
all Revolving Lenders) shall have approved such amendment, waiver or consent.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Revolving Credit
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

 

11.02      Notices; Effectiveness; Electronic
Communication.

 

(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone or in the case of
notices otherwise expressly provided herein (and except as provided in subsection (b) below),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:

 

(i)            if
to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 11.02, as changed
pursuant to subsection (d) below; and

 

(ii)           if
to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire, as changed
pursuant to subsection (d) below.

 

Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient).  Notices delivered
through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).

 

(b)           Electronic
Communications.  Notices and other
communications to the Lenders and the L/C Issuer hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or
intranet websites) pursuant to procedures approved by the Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender or
the L/C Issuer pursuant to Article II if such Lender or the L/C
Issuer, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant

 

115

 

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

 

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

 

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

 

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

 

(e)           Reliance by
Administrative Agent, L/C Issuer and Lenders.  The Administrative Agent, the L/C
Issuer and the Lenders shall be entitled to rely and act upon any notices

 

116

 

(including
telephonic Revolving Loan Notices, Swing Line Loan Notices and Term Loan
Interest Rate Selection Notices) purportedly given by or on behalf of the
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 Borrower shall indemnify the
Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower.  All telephonic notices to
and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

 

11.03      No Waiver; Cumulative Remedies.  No failure by any Lender, the L/C Issuer 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.

 

11.04      Expenses; Indemnity; Damage Waiver.

 

(a)           Costs and
Expenses.  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates and the Arrangers (including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent and the Arrangers), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or Banker’s Acceptance or any
demand for payment thereunder and (iii) all out-of-pocket expenses
incurred by the Administrative Agent, the L/C Issuer, the Swing Line Lender or
the Arrangers (including the fees, charges and disbursements of any counsel for
the Administrative Agent, the Swing Line Lender, the L/C Issuer or the
Arrangers), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

 

(b)           Indemnification
by the Borrower.  The Borrower shall
indemnify the Administrative Agent (and any sub-agent thereof), each Lender and
the L/C Issuer, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses
(including the reasonable fees, charges and disbursements of any counsel for
any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Borrower or any other Loan Party arising out of,
in connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Loan Document or any agreement or

 

117

 

instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder, the consummation of the
transactions contemplated hereby or thereby or, in the case of the
Administrative agent (and any sub-agent thereof) and its Related Parties only,
the administration of this Agreement and the other Loan Documents, (ii) any
Loan, Letter of Credit or Bankers’ Acceptance or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit or Bankers’ Acceptance if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit or Bankers’ Acceptance), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or (y) result from a
claim brought by the Borrower or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.

 

(c)           Reimbursement by
Lenders.  To the extent that the
Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by it to the Administrative Agent (or
any sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought based on such Lender’s
portion of Loans, commitments and risk participations with respect to the
Revolving Credit Facility and the Term Loan Facility) of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or L/C Issuer in connection with
such capacity.  The obligations of the
Lenders under this subsection (c) are subject to the provisions of Section 2.13(d);
provided
further that any amount due exclusively to the L/C Issuer in its capacity as
such shall be borne pursuant to this Section 11.04(c) pro
rata by the Revolving Lenders, and not by any Term Lender.

 

(d)           Waiver of
Consequential Damages, Etc.  To the
fullest extent permitted by applicable law, the Borrower shall not 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, Letter of
Credit or Bankers’ Acceptance or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be

 

118

 

liable
for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby
or thereby.

 

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

 

(f)            Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, the L/C Issuer and the
Swing Line Lender, the replacement of any Lender and the occurrence of the
Facility Termination Date.

 

11.05      Payments Set Aside.  To the extent that any
payment by or on behalf of the Borrower is made to the Administrative Agent,
the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or
any Lender exercises its right of setoff, and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, the L/C Issuer or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to
pay to the Administrative Agent upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Administrative Agent,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding sentence shall
survive the occurrence of the Facility Termination Date.

 

11.06      Successors and Assigns.

 

(a)           Successors and
Assigns Generally.  The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an Eligible Assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) of
this Section (and any other attempted assignment or transfer by any
party hereto shall be null and void). 
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

119

 

(b)           Assignments by
Lenders.  Any Lender may at any time
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Revolving
Credit Commitment and its Revolving Loans (including for purposes of this subsection (b),
participations in L/C – BA Obligations and in Swing Line Loans) or of its Pro
Rata Term Share of the Term Loan at the time owing to it (such Lender’s portion
of Loans, commitments and risk participations with respect to each of the
Revolving Credit Facility and the Term Loan Facility (each, an “Applicable Facility”)
being referred to in this Section 11.06 as its “Applicable Share”))
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 Applicable Share of the Applicable Facility 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 Applicable
Share (which for this purpose includes Loans outstanding thereunder) with
respect to each Applicable Facility, 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 (A) $5,000,000
with respect to the Revolving Credit Facility and (B) $1,000,000 with
respect to the Term Loan Facility, unless in either case each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed), provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a single
assignment for purposes of determining whether such minimum amount has been
met;

 

(ii)           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 Applicable Facility, except that this clause (ii) shall not
(A) prohibit any Lender from assigning all or a portion of its rights and
obligations among the Applicable Facilities on a non-pro rata basis or (B) apply
to rights in respect of Swing Line Loans;

 

(iii)          any
assignment of a Revolving Credit Commitment must be approved by the
Administrative Agent, the L/C Issuer and the Swing Line Lender unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and

 

(iv)          the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee in the amount, if any, required as set forth in Schedule 11.06,
and the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, 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

 

120

 

obligations of
a Revolving Lender or a Term Lender, as applicable, 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 4.01, 4.04, 4.05, and 11.04
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Upon request, the
Borrower (at its expense) shall execute and deliver applicable Notes to the
assignee Lender.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower (in such capacity, subject to Section 11.17),
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 Revolving Credit Commitments of, and
principal amounts of the Loans and L/C – BA Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, 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 Borrower
and the L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice.  In addition, at any time
that a request for a consent for a material or substantive change to the Loan
Documents is pending, any Lender 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, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’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 Revolving Credit Commitment and/or the Loans
(including such Lender’s participations in L/C – BA Obligations and/or Swing
Line Loans) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent, the
Lenders and the L/C Issuer shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.01 that affects such
Participant.  Subject to subsection (e) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 4.01, 4.04 and 4.05 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also

 

121

 

shall be
entitled to the benefits of Section 11.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.14
as though it were a Lender.

 

(e)           Limitations upon
Participant Rights.  A Participant
shall not be entitled to receive any greater payment under Section 4.01
or 4.04 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 Borrower’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 4.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 4.01(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, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g)           Electronic
Execution of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

 

(h)           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 Borrower (an “SPC”)
the option to provide all or any part of any 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 Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Loan, the Granting Lender shall
be obligated to make such 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(b)(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
Borrower under this Agreement (including its obligations under Section 4.04),
(ii) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, 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 Loan by an SPC hereunder shall utilize the Revolving
Credit Commitment or commitment to make a Term Loan of the Granting Lender to
the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto

 

122

 

hereby agrees (which agreement shall survive the
occurrence of the Facility Termination Date) 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 Borrower and the Administrative
Agent and with the payment of a processing fee in the amount of $2,500, assign
all or any portion of its right to receive payment with respect to any Loan to
the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPC.

 

(i)            Resignation as
L/C Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary contained
herein, if at any time Bank of America or JPMorgan Chase Bank, N.A assigns all
of its Revolving Credit Commitment,
Revolving Loans and any Pro Rata Term Share of the Term Loan pursuant to subsection (b) above,
such Person may, (i) upon 30 days’ notice to the Borrower and the Lenders,
resign as L/C Issuer and/or (ii) in the case of Bank of America, upon 30
days’ notice to the Borrower, resign as Swing Line Lender.  In the event of any such resignation as L/C
Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders willing to serve in such capacity a successor L/C Issuer or
Swing Line Lender hereunder, as the case may be; provided, however,
that no failure by the Borrower to appoint any such successor shall affect the
resignation of such Person as L/C Issuer or Swing Line Lender, as the case may
be.  If Bank of America or JPMorgan Chase
Bank, N.A resigns as L/C Issuer, such Person shall retain all the rights,
powers, privileges and duties of the L/C Issuer hereunder with respect to all
Letters of Credit and Bankers’ Acceptances outstanding as of the effective date
of its resignation as L/C Issuer and all L/C – BA Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or fund
risk participations in Unreimbursed Amounts pursuant to Section 2.04(c)).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.05(c). Upon the appointment of a
successor L/C Issuer and/or Swing Line Lender, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and
(b) the successor L/C Issuer shall issue letters of credit in substitution
for the Letters of Credit and/or Bankers’ Acceptances, if any, outstanding at
the time of such successor or make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of such L/C Issuer
with respect to such Letters of Credit and/or Bankers’ Acceptances.

 

11.07      Treatment of Certain Information;
Confidentiality.  Each
of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, trustees, officers, employees,
agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority purporting to

 

123

 

have
jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the
extent such Information (x) becomes publicly available other than as a result
of a breach of this Section or (y) becomes available to the Administrative
Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower.

 

For purposes of this Section, “Information” means all information received
from the Borrower or any Subsidiary
relating to the Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the
case of information received from the Borrower or any Subsidiary after the date hereof, any information not marked “PUBLIC”
at the time of delivery will be deemed to be confidential; provided, that any
information marked “PUBLIC may also be marked “Confidential”.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

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

 

11.08      Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of
the Administrative Agent, to the fullest extent permitted by applicable
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the L/C
Issuer or any such Affiliate to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement or any other Loan Document to such Lender or the
L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall
have made any demand under this Agreement or any other Loan Document and
although such obligations of the Borrower may be
contingent or unmatured or are owed to a branch or office of such Lender or the
L/C Issuer different from the branch or office holding such deposit or obligated
on such indebtedness.  The rights of each
Lender, the L/C Issuer and their respective Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and

 

124

 

the
L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly
after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such setoff and application.

 

11.09      Interest Rate Limitation.  Notwithstanding anything to
the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the 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 hereunder.

 

11.10      Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
provided in Section 5.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

11.11      Survival of Representations and
Warranties.  All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been
or will be relied upon by the Administrative Agent and each Lender, regardless
of any investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.

 

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

 

125

 

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

 

11.13      Replacement of Lenders.  If any Lender requests compensation under Section 4.04,
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.01,
if any Lender is a Defaulting Lender, or if any Lender fails to approve any
amendment, waiver or consent requested by Borrower pursuant to Section 11.01
that has received the written approval of not less than the Required Lenders
but also requires the approval of such Lender, then in each such case the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.06), 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 Borrower shall
have paid to the Administrative Agent the assignment fee specified in Section 11.06(b);

 

(b)           such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and L/C – BA 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 4.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

 

(c)           in the case of any
such assignment resulting from a claim for compensation under Section 4.04
or payments required to be made pursuant to Section 4.01, such
assignment will result in a reduction in such compensation or payments
thereafter;

 

(d)           in the case of any
such assignment resulting from the refusal of a Lender to approve a requested
amendment, waiver or consent, the Person to whom such assignment is being made
has agreed to approve such requested amendment, waiver or consent; and

 

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

 

A Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

 

11.14      Governing Law; Jurisdiction; Etc.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)           SUBMISSION TO
JURISDICTION.  THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT

 

126

 

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

 

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

 

(d)           SERVICE OF
PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 11.02.  NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.15      Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

127

 

11.16      USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower 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
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.

 

11.17      No Fiduciary Relationship.  The Borrower acknowledges and agrees that in
connection with all aspects of each transaction contemplated by this Agreement,
the Borrower, on the one hand, and each of Bank of America, Morgan Stanley, the
Arrangers and any affiliate through which any of them may be acting (each, a “Transaction Affiliate”),
on the other hand, have an arms-length business relationship that creates no
fiduciary duty on the part of any of Bank of America, Morgan Stanley, either Arranger
or any of their respective Transaction Affiliates and each of them expressly
disclaims any fiduciary relationship.

 

 

[Remainder of page is intentionally left
blank; signature pages follow]

 

128

 

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

 

	
   

  	
  MUELLER
  GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Miles C.
  Dearden, III

  
	
   

  	
  Name:

  	
  Miles C.
  Dearden, III

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

Mueller Group, LLC 

CREDIT AGREEMENT

Signature Page

 

 

	
   

  	
  BANK OF
  AMERICA, N.A., as

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W.
  Thomas Barnett

  
	
   

  	
  Name:

  	
    W.
  Thomas Barnett

  
	
   

  	
  Title:

  	
    Senior
  Vice President

  
					

 

 

	
   

  	
  BANK OF
  AMERICA, N.A., as a Lender, L/C

  Issuer and Swing Line Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W.
  Thomas Barnett

  
	
   

  	
  Name:

  	
    W.
  Thomas Barnett

  
	
   

  	
  Title:

  	
    Senior
  Vice President

  
					

 

 

	
   

  	
  MORGAN
  STANLEY SENIOR FUNDING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eugene
  F. Martin

  
	
   

  	
  Name:

  	
  Eugene F.
  Martin

  
	
   

  	
  Title:

  	
  Vice
  President

  
					

 

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as a Lender,

  and L/C Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Suzanne
  Ergastolo

  
	
   

  	
  Name:

  	
  Suzanne
  Ergastolo

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  AMSOUTH
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  A. Browy

  
	
   

  	
  Name:

  	
  Jonathan A.
  Browy

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  THE CIT
  GROUP/BUSINESS CREDIT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A.
  Brennan, Jr.

  
	
   

  	
  Name:

  	
  James A.
  Brennan, Jr.

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  CALYON
  NEW YORK BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel
  L. Hill

  
	
   

  	
  Name:

  	
  Samuel L.
  Hill

  
	
   

  	
  Title:

  	
  Managing
  Director & Regional Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P.
  Cagle

  
	
   

  	
  Name:

  	
  David P.
  Cagle

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  THE BANK
  OF NEW YORK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David C.
  Siegel

  
	
   

  	
  Name:

  	
  David C.
  Siegel

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  FIFTH
  THIRD BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marisol
  Lugo

  
	
   

  	
  Name:

  	
  Marisol Lugo

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
					

 

	
   

  	
  SUNTRUST
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bradley
  J. Staples

  
	
   

  	
  Name:

  	
  Bradley J.
  Staples

  
	
   

  	
  Title:

  	
  Managing
  Director

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