Document:

<PAGE>
                                                                  Exhibit 10.27
                                                                  EXECUTION COPY

                                  FEE AGREEMENT

      This Agreement (this "Agreement") is entered into as of the 30th day of
September, 2002, by and between National Waterworks, Inc., a Delaware
corporation (the "Company"), THL Managers V, LLC, a Delaware limited liability
company, ("THL") and J.P. Morgan Partners, LLC, a Delaware limited liability
company, ("JPMP" and, together with THL, the "Sponsors").

            WHEREAS, the Company has entered into a certain Asset Purchase
Agreement (the "Purchase Agreement") dated as of September 12, 2002, pursuant to
which it shall acquire substantially all of the assets and certain liabilities
of U.S. Filter Distribution Group, Inc., a Georgia corporation (the
"Transaction").

            WHEREAS, certain Affiliates (as defined herein) of THL and JPMP have
provided equity financing (the "Equity Financing") to the Company's corporate
parent, National Waterworks Holdings, Inc. ("Holdings") in connection with the
consummation of the Transaction (the "Closing") pursuant to that certain
Subscription and Purchase Agreement (the "Subscription Agreement"), dated as of
November 22, 2002, that certain Stockholders Agreement (the "Stockholders
Agreement") dated as of November 22, 2002, and that certain Registration Rights
Agreement (the "Registration Rights Agreement") dated as of November 22, 2002.
The Purchase Agreement, the Subscription Agreement, the Registration Rights
Agreement, and all other ancillary documents related thereto are collectively
referred to as the "Transaction Documents".

            WHEREAS, the Sponsors are providing advisory and other services to
the Company in connection with (i) the senior secured financing being obtained
in connection with the Transaction, (ii) the senior unsecured subordinated note
financing being obtained in connection with the Transaction and, to the extent
necessary, (iii) appropriate bridge financing (clauses (i), (ii) and (iii),
collectively, the "Debt Financing");

            NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:

            1. PAYMENT OF FEES. In consideration of the services provided by
each Sponsor in connection with the Transaction, including, without limitation,
in connection with the Equity Financing and Debt Financing, the Company hereby
agrees to pay to each Sponsor (or its designee) a fee equal to $8,000,000.00
payable concurrently with, and upon, the Closing. If the Closing does not occur
then no fees shall be payable pursuant to this Section 1. Such payment made
pursuant to this Section 1 shall be paid by wire transfer of immediately
available federal funds to the accounts specified on Exhibit A, attached hereto,
or to such other account(s) as each Sponsor may specify in writing to the
Company.

            2. EXPENSES; INDEMNIFICATION.

            a. Expenses. The Company agrees to (i) pay on demand all fees and
expenses incurred by the Sponsors and their Controlled Affiliates (as defined
herein) or any of them in connection with the Transaction Documents, including
but not limited to the fees and disbursements of Weil, Gotshal & Manges LLP,
counsel to THL, and O'Melveny & Myers LLP, counsel to JPMP, and any other
consultants or advisors retained by the Sponsors or their respective counsel,
including but not limited to the preparation, negotiation and execution of the
Transaction Documents, (ii) hold the
<PAGE>
Sponsors and their Controlled Affiliates harmless against all liability for the
payment of all fees and expenses incurred from time to time by the Company or
Holdings in connection with the Company's or Holdings' performance and
compliance with all agreements and conditions contained in the Transaction
Documents on its or their part to be performed or complied with, (iii) pay on
demand the reasonable costs and expenses (including fees and expenses of
counsel, accountants and other advisors) incurred by the Sponsors or their
Controlled Affiliates in connection with any amendment or waiver of, or
enforcement of, any Transaction Document, and (iv) pay on demand the reasonable
fees and expenses incurred by the Sponsors and their Controlled Affiliates in
any filing with any governmental authority with respect to their investment in
Holdings or in any other filing with any governmental authority with respect to
the Company or Holdings that mentions the Investors or any of their Controlled
Affiliates.. The provisions of this Section 2(a) are automatically assignable to
any person who acquires from the Sponsors or their Controlled Affiliates any
shares of capital stock of Holdings.

            b. Indemnity and Liability. The Company agrees to indemnify,
exonerate and hold each of THL, JPMP, and each of their respective partners,
shareholders, Controlled Affiliates, directors, officers, fiduciaries, employees
and agents and each of the partners, shareholders, directors, officers,
fiduciaries, employees and agents of each of the foregoing (collectively, the
"Indemnitees") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities and damages, and expenses in connection
therewith, including without limitation reasonable attorneys' fees and
disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnitees or any of them as a result of, or arising out of, or relating to the
execution, delivery, performance, enforcement or existence of this Agreement
(including but not limited to any indemnification obligation assumed or incurred
by any Indemnitee to or on behalf of any Sponsor, or its accountants or other
representatives, agents or Controlled Affiliates) except for any such
Indemnified Liabilities arising on account of such Indemnitee's gross negligence
or willful misconduct, and if and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Company hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. None of the Indemnitees
shall be liable to the Company or any of its Affiliates for any act or omission
suffered or taken by such Indemnitee that does not constitute gross negligence
or willful gross negligence or misconduct.

            3. AMENDMENTS AND WAIVERS. No amendment or waiver of any term,
provision or condition of this Agreement shall be effective, unless in writing
and executed by each Sponsor and the Company. No waiver on any one occasion
shall extend to or effect or be construed as a waiver of any right or remedy on
any future occasion. No course of dealing of any person nor any delay or
omission in exercising any right or remedy shall constitute an amendment of this
Agreement or a waiver of any right or remedy of any party hereto.

            4. MISCELLANEOUS.

            a. Choice of Law. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule that
would cause the application of the domestic substantive laws of any other
jurisdiction.

                                      -2-
<PAGE>
            b. Consent to Jurisdiction. Each of the parties agrees that all
actions, suits or proceedings arising out of or based upon this Agreement or the
subject matter hereof shall be brought and maintained exclusively in the federal
and state courts of the State of Delaware. Each of the parties hereto by
execution hereof (i) hereby irrevocably submits to the jurisdiction of the
federal and state courts in the State of Delaware for the purpose of any action,
suit or proceeding arising out of or based upon this Agreement or the subject
matter hereof and (ii) hereby waives to the extent not prohibited by applicable
law, and agrees not to assert, by way of motion, as a defense or otherwise, in
any such action, suit or proceeding, any claim that it is not subject personally
to the jurisdiction of the above-named courts, that it is immune from
extraterritorial injunctive relief or other injunctive relief, that its property
is exempt or immune from attachment or execution, that any such action, suit or
proceeding may not be brought or maintained in one of the above-named courts,
that any such action, suit or proceeding brought or maintained in one of the
above-named courts should be dismissed on grounds of forum non conveniens,
should be transferred to any court other than one of the above-named courts,
should be stayed by virtue of the pendency of any other action, suit or
proceeding in any court other than one of the above-named courts, or that this
Agreement or the subject matter hereof may not be enforced in or by any of the
above-named courts. Each of the parties hereto hereby consents to service of
process in any such suit, action or proceeding in any manner permitted by the
laws of the State of Delaware, agrees that service of process by registered or
certified mail, return receipt requested, at the address specified in or
pursuant to Section 7 is reasonably calculated to give actual notice and waives
and agrees not to assert by way of motion, as a defense or otherwise, in any
such action, suit or proceeding any claim that service of process made in
accordance with Section 7 does not constitute good and sufficient service of
process. The provisions of this Section 4(b) shall not restrict the ability of
any party to enforce in any court any judgment obtained in a federal or state
court of the State of Delaware.

            c. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
BASED UPON THIS AGREEMENT OR THE SUBJECT HEREOF, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. Each
of the parties hereto acknowledges that it has been informed by each other party
that the provisions of this Section 4(c) constitute a material inducement upon
which such party is relying and will rely in entering into this Agreement and
the transactions contemplated hereby. Any of the parties hereto may file an
original counterpart or a copy of this Agreement with any court as written
evidence of the consent of each of the parties hereto to the waiver of its right
to trial by jury.

            5. INDEPENDENT CONTRACTOR. The parties agree and understand that
each Sponsor is and shall act as an independent contractor of the Company in the
performance of its duties hereunder. Each Sponsor is not, and in the performance
of its duties hereunder will not hold itself out as, an employee, agent or
partner of the Company.

            6. MERGER/ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes any prior communication or agreement with respect thereto. Nothing
herein relates to the matters covered in that certain

                                      -3-
<PAGE>
Management Agreement by and among the Company and the Sponsors dated as of
November 22, 2002.

            7. NOTICE. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:

      If to the Company, to it at:

            National Waterworks, Inc.
            American Plaza
            200 West Highway 6
            Suite 620
            Waco, Texas 76712
            Attention: President

      If to THL, to it at:

            THL Managers V, LLC
            c/o Thomas H. Lee Company
            75 State Street
            Boston, MA 02109
            Attention:  Mr. Anthony J. DiNovi

      with a copy to:

            Weil, Gotshal & Manges LLP
            101 Federal Street
            Boston, Massachusetts 02110
            Attention: James Westra, Esq.
            Telecopier:  (617) 772-8333

      If to JPMP, to it at:

            J.P. Morgan Partners, LLC
            c/o J.P. Morgan Partners, L.P.
            1221 Avenue of the Americas
            New York, New York 10020
            Attention:  Official Notices Clerk
            FBO:  Stephen Murray

      with a copy to:

                                      -4-
<PAGE>
            O'Melveny & Myers LLP
            30 Rockefeller Plaza
            New York, New York  10112
            Attention:  Gregory A. Gilbert, Esq.
            Telecopier:  (212) 408-2420

All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.

      8. SEVERABILITY. If in any judicial or arbitral proceedings a court or
arbitrator shall refuse to enforce any provision of this Agreement, then such
unenforceable provision shall be deemed eliminated from this Agreement for the
purpose of such proceedings to the extent necessary to permit the remaining
provisions to be enforced. To the full extent, however, that the provisions of
any applicable law may be waived, they are hereby waived to the end that this
Agreement be, deemed to be valid and binding agreement enforceable in accordance
with its terms, and in the event that any provision hereof shall be found to be
invalid or unenforceable, such provision shall be construed by limiting it so as
to be valid and enforceable to the maximum extent consistent with and possible
under applicable law.

      9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by each of the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.

      10. HEADINGS. All descriptive headings in this Agreement are inserted for
convenience only and shall be disregarded in construing or applying any
provision of this Agreement.

      11. PREVAILING PARTY. If any legal action or other proceedings is brought
for a breach of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys' fees and other costs incurred in bringing such
action or proceeding, in addition to any other relief to which such party may be
entitled.

      12. DEFINITIONS.

      a. Affiliate. As used herein, the term "Affiliate" means, with respect to
any Person, any (a) director, officer, limited or general partner, member or
stockholder holding 5% or more of the outstanding capital stock or other equity
interests of such Person, and (b) other Person that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person.

      b. Control. As used herein, the term "control" means, (including, with
correlative meaning, the terms "controlling," "controlled by" and "under common
control with") with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management,
policies or investment decisions of such Person, whether through the ownership
of voting securities, by contract or otherwise.

                                      -5-
<PAGE>
      c. Controlled Affiliate. As used herein, the term "Controlled Affiliate"
means, with respect to any Person, any (a) director, officer, limited or general
partner, member or stockholder holding 5% or more of the outstanding capital
stock or other equity interests of such Person, and (b) any other Person that,
directly or indirectly, through one or more intermediaries, is controlled by
such Person.

      d. Person. As used herein, the term "Person" shall be construed in the
broadest sense and means and includes a natural person, a partnership, a
corporation, an association, a joint stock company, a limited liability company,
a trust, a joint venture, an unincorporated organization and any other entity
and any federal, state, municipal, foreign or other government, governmental
department, commission, board, bureau, agency or instrumentality, or any private
or public court or tribunal.

                                      -6-
<PAGE>
      IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.

                                                 NATIONAL WATERWORKS, INC.

                                                 By: /s/ Mechelle Slaughter
                                                     ----------------------
                                                     Name:  Mechelle Slaughter
                                                     Title: C.F.O. and Secretary

                                                 THL MANAGERS V, LLC

                                                 By: Thomas H. Lee Partners,
                                                      L.P., its Managing Member

                                                 By: /s/ Anthony J. Dinovi
                                                     ---------------------
                                                     Name:  Anthony J. DiNovi
                                                     Title: Managing Director

                                                 J.P. MORGAN PARTNERS, LLC

                                                 By: /s/ Stephen Murray
                                                     ------------------
                                                     Name:  Stephen Murray
                                                     Title: Partner

                                      -7-
<PAGE>
                                    EXHIBIT A

J.P. Morgan Partners, LLC
J.P. Morgan Chase Bank
401 Madison Avenue
New York, New York 10017
ABA #: 021 000 021
Account #: 530-971-631
Contact: Elizabeth Plata

THL Managers V, LLC
FleetBoston
100 Federal Street
Boston, MA
ABA #011000138
Account Name:  THL Managers V, LLC
Account #270-07242

                                      -8-<PAGE>
                                                                  Exhibit 10.28

                              TAX SHARING AGREEMENT

            TAX SHARING AGREEMENT, made as of November 22, 2002, by and among
National Waterworks Holdings, Inc., a Delaware corporation having its principal
place of business at American Plaza, 200 West Highway 6, Suite 620, Waco, TX
76712 ("Holding"), and those corporations that have executed this Agreement and
whose names and principal places of business are set forth on Exhibit A hereto
(all of which are direct or indirect domestic subsidiaries of Holding and are
includible in the consolidated Federal income tax return of the affiliated group
(within the meaning of Section 1504 of the Internal Revenue Code of 1986, as
amended (the "Code")) of which Holding is the common parent corporation
(hereinafter, the "Holding Group") for the fiscal year ended December 31, 2002),
and such other parties as may become members of the Holding Group in subsequent
fiscal years for which Holding files a consolidated Federal income tax return as
the common parent corporation of an affiliated group, and who execute this
Agreement (hereinafter, sometimes referred to as the "Subsidiary").

            Holding and the Subsidiary wish to provide for payment of the
consolidated Federal income tax and certain state and local tax liabilities of
the Holding Group by Holding; for the contribution to such payment by the
various members of the Holding Group, including National Waterworks, Inc., a
Delaware corporation having its principal place of business at American Plaza,
200 West Highway 6, Suite 620, Waco, TX 76712 ("Water"), and any direct and
indirect subsidiaries of Water ("Water Subsidiaries") that may be includible in
the Holding Group (hereinafter, Water and such Water Subsidiaries are sometimes
collectively referred to as the "Water Group"), to which such liability may be
attributable in whole or in part; and for the reimbursement by Holding to those
Subsidiaries that produce losses or credits in any fiscal year in the amount of
the benefit that such Subsidiary would be entitled to with respect to such
losses
<PAGE>
or credits on a separate return basis, or for the benefit, in whole or in part,
that such losses or credits produce for the Holding Group.

            In consideration of the foregoing, and of the mutual covenants and
promises herein contained, Holding and the Subsidiaries agree as follows:

      1. Allocation and Payment of Tax Liability of Members of Group.

            (a) For the fiscal year ended December 31, 2002 and for each
subsequent fiscal year for which this Agreement may remain in effect, each
Subsidiary, for so long as it is a member of the Holding Group, shall be
required to pay to Holding (in the manner provided in paragraph 1(c) hereof), as
its share of the consolidated Federal income tax liability of the Holding Group,
an amount equal to the Federal income tax liability that would have been payable
by such Subsidiary for such year if it had filed a separate income tax return
for such year and all prior years; provided, however, that in computing separate
return tax liability, no account shall be taken of any deduction, loss or credit
of any Subsidiary to the extent that such Subsidiary has previously received
payment therefor, pursuant to Section 3 hereof. If a Subsidiary ceases to be a
member of the Holding Group during a taxable year, such Subsidiary shall be
required to pay to Holding only that portion of such Subsidiary's separate
return tax liability that is allocable to the portion of the taxable year in
which Subsidiary was a member of the Holding Group. Payments shall be required
to be made in each fiscal year pursuant to this Section without regard to the
actual consolidated Federal income tax liability, if any, of the Holding Group
for such year.

            (b) For the purposes of this Agreement, if, in any fiscal year, one
or more Water Subsidiaries are includible in the Holding Group, all members of
the Water Group shall be deemed to constitute a single member of the Holding
Group, and any portion of the Holding

                                       2
<PAGE>
Group consolidated Federal income tax liability for any fiscal year that is
apportioned to the Water Group in accordance with this Section shall be
allocated among the members thereof in such manner as they may agree. The amount
of separate return tax liability required to be paid to Holding by Water or the
Water Group in any year pursuant to this Section shall be determined as if Water
had filed a consolidated Federal income tax return for such year and for all
prior years, on behalf of itself and all Water Subsidiaries that were includible
corporations described in Section 1504(a)(1) of the Code for such year or prior
years, as the case may be.

            (c) Each member (or group of members) of the Holding Group shall
make payment to Holding of any consolidated Federal income tax liability
allocated to it pursuant to this Section 1, and Holding shall have sole
responsibility for making any required payments to the Internal Revenue Service
(the "IRS") in satisfaction of the consolidated Federal income tax liability of
the Holding Group for each fiscal year. Subject to the provisions of Section
1(d) below, for each quarter of each fiscal year after the year ended December
31, 2002, each member (or group of members) of the Holding Group shall make
payment to Holding of any amount required to be paid pursuant to this Section no
later than the date upon which such member (or group of members) would be
required to make an installment payment of estimated income tax to the IRS for
such quarter, in accordance with Section 6655 of the Code. The amount of any
overpayment or underpayment pursuant to this Section shall be credited against
or added to, as the case may be, the amount otherwise required to be paid for
the fiscal quarter within which the amount of such overpayment or underpayment
first becomes reasonably ascertainable; provided, however, that, upon written
request (including supporting schedules) of any member (or group of members),
made after the close of any fiscal year but within the period described in
Section 6425(a)(1) of the Code, Holding shall repay to such member (or group of
members), within the

                                       3
<PAGE>
period described in Section 6425(b)(1) of the Code, the amount of any net
remaining overpayment of consolidated tax liability made by such member (or
group of members) for such year.

            (d) Anything contained in this Agreement to the contrary
notwithstanding, any payment to be made by any party hereto to any other party
hereto may be deferred until such time as either (I) the party obligated to make
such payment elects to make the relevant payment or (II) the party entitled to
receive such payment demands that such payment be made. All such deferred
payments shall bear interest at an annual rate that approximates the average
interest rate under Water's revolving credit facility over the time period that
such payment is deferred, computed on the basis of the actual number of days
elapsed over a 365-day period.

      2. Payment for Tax Benefits of Members. From and after the date hereof, if
any member (or group of members) of the Holding Group would be entitled to a
refund of Federal income taxes previously paid in any prior fiscal year,
computed on a separate return basis (in the manner described in Section 1
hereof), as a result of any losses, deductions or credits claimed by such member
(or group of members) for any fiscal year for which this Agreement may be in
effect (any such entitlement to a refund being referred to herein as a "Separate
Return Tax Benefit"), whether by reason of a carryback of a net operating loss,
or a net capital loss or tax credit, or otherwise, then, upon written request
(including supporting schedules) of such member (or group of members), made
within the period described in Section 6411(a) of the Code, Holding shall pay
the amount of such Separate Return Tax Benefit to such member, within the period
described in Section 6411(b) of the Code (subject to the provisions of Section
1(d) above). In the case of Water and Water Subsidiaries, the amount of the
Separate Return Tax Benefit for any year shall be computed as if watwr had filed
a consolidated Federal income tax

                                       4
<PAGE>
return for such year and for all prior years on behalf of itself and all other
Water Subsidiaries that were includible corporations described in Section
1504(a)(1) of the Code. The amount of any payment required to be made to any
member (or group of members) pursuant to this Section 2 shall be reduced by any
amount previously paid to such member (or group of members) with respect to such
losses, deductions or credits pursuant to Section 3 hereof.

      3. Payment for Tax Benefits of Group.

            (a) If, for any fiscal year during which this Agreement is in
effect, any member (or group of members) shall have a negative separate return
tax liability (hereinafter, a "Loss Member"), Holding intends to pay to such
Loss Member an amount equal to the tax benefit realized by the Holding Group for
such year (the "Group Tax Benefit") as a result of such negative separate return
tax liability. For purposes of this Agreement, the Group Tax Benefit for any
fiscal year shall be equal to the excess, if any, of (i) the sum of the separate
return tax liabilities of each member of the Holding Group having a positive
separate return tax liability for such year, over (ii) the actual consolidated
Federal income tax liability of the Holding Group for such year. For purposes of
this Section 3, "separate return tax liability" shall be computed in accordance
with, and subject to the exceptions and limitations provided in Treas. Reg.
Section 1.1552-1(a)(2)(ii). "Negative separate return tax liability" shall
similarly be ascertained under the principles of Treas. Reg. Section
1.1552-1(a)(2)(ii), as if the Loss Member had filed a separate return for such
fiscal year as its first separate return year and allocated to such separate
return year carryover and carryback items of consolidated net operating loss,
consolidated net capital loss, consolidated unused investment credit,
consolidated unused foreign tax credit, and consolidated excess charitable
contributions under the provisions of Treas. Reg. Section 1.1502-79. In the case
of

                                       5
<PAGE>
the Water Group, separate return tax liability and negative separate return tax
liability shall be computed in accordance with the principles set forth in this
Section 3, on a consolidated basis.

            (b) Within 90 days after the beginning of each fiscal year for which
this Agreement may be in effect, Holding shall give written notice to each
Subsidiary of its intention to pay one or more Loss Members an amount equal to
all, or any portion, of their proportionate part (determined in the manner
provided in paragraph 3(a)) of any Group Tax Benefit that may be realized by the
Holding Group for such year. Holding intends to make such payments on a
quarterly basis, in the manner described in paragraph 1(c) hereof; provided,
however, that all payments made pursuant to this Section 3 shall be made in the
sole discretion of Holding, and Holding shall have no obligations or liability
whatsoever with respect thereto to any Loss Member; and provided, further, that
any payment made to any Loss Member in a fiscal year pursuant to this Section 3
shall be reduced by any amount previously paid to such Loss Member with respect
to such year under Section 2 hereof.

      4. Adjustments. Any adjustment of income, deduction, or credit that
results after the fiscal year in question by reason of any carryback, amended
return, claim for refund, or audit shall be given effect by redetermining
amounts payable and reimbursable for such fiscal year hereunder as if such
adjustment had been part of the original determination hereunder, with interest
payable in the amounts provided in Section 6611 of the Code. Any increases in
the consolidated Federal income tax liability of the Holding Group, and any
penalties and interest imposed with respect to any consolidated Federal income
tax return filed on behalf of the Holding Group, shall be given effect by
redetermining amounts payable for such fiscal year as if such adjustment had
been part of the original determination hereunder.

                                       6
<PAGE>
      5. Alternative Minimum Tax. Each Subsidiary shall be required to pay to
Holding, as its share of any alternative minimum tax imposed on the Holding
Group pursuant to Section 55 of the Code, an amount of such liability that
Holding shall allocate to each Subsidiary, provided that any such amounts so
allocated pursuant to this Section 5 shall be allocated by Holding in a manner
that is equitable and is consistent with Section 55 and Section 1502 of the
Code, and the Treasury Regulations promulgated thereunder, including any
amendments thereto and consistent with the allocations of tax liability pursuant
to Section 1 hereof.

      6. State Taxes. If, at any time from and after the date hereof, the
liability of Holding and the Subsidiaries for any state or local income or
franchise taxes is determined on a consolidated or combined basis, this
Agreement shall be applied in like manner to determine liability for, and tax
benefit payments with respect to, such taxes.

      7. Termination. This Agreement may be terminated at any time upon mutual
agreement of the parties hereto; provided, however, that such termination shall
not relieve Holding of the obligation to make payments to any Subsidiary
pursuant to Section 2 hereof for any separate return tax benefit to which such
Subsidiary would have been entitled (if this Agreement had remained in effect)
as a result of any loss, deductions or credits taken by such Subsidiary for any
fiscal year for which this Agreement was in effect, nor will it relieve Holding
or the Subsidiaries of any obligations pursuant to Section 4 hereof.

      8. Effective Date. This Agreement shall be effective for the taxable year
of the Holding Group ended December 31, 2002, and for all taxable years
thereafter.

      9. Captions. All section captions contained in this Agreement are for
convenience only and shall not be deemed a part of this Agreement.

                                       7
<PAGE>
      10. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which, when taken together, shall
constitute one agreement.

      11. Governing Law. This Agreement shall be governed by the laws applicable
to contracts entered into and to be fully performed within the State of New York
by residents thereof.

      12. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

                                       8
<PAGE>
      IN WITNESS WHEREOF, Holding and the Subsidiaries have executed this
Agreement as of the day and year first above written.

                                              NATIONAL WATERWORKS HOLDINGS, INC.

                                              By: /s/ Harry K. Hornish
                                                 ---------------------
                                                 Name:  Harry K. Hornish
                                                 Title: President and C.E.O.

                                              NATIONAL WATERWORKS, INC.

                                              By: /s/ Mechelle Slaughter
                                                 -----------------------
                                                 Name:  Mechelle Slaughter
                                                 Title: C.F.O. and Secretary

                                      S-1
<PAGE>
                                    EXHIBIT A

<TABLE>
<CAPTION>
Name                                          Principal Place of Business
<S>                                           <C>
National Waterworks, Inc.                     American Plaza
                                              200 West Highway 6
                                              Suite 620
                                              Waco, TX  76712
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}]]