STOCK PURCH AGREEMENT

Exhibit 2.4

 

 

 

 

 

 

STOCK PURCHASE AGREEMENT

AMONG

PENTAIR, INC.

WICOR, INC.

AND

WISCONSIN ENERGY CORPORATION

February 3, 2004

 

 

 

 

 

TABLE OF CONTENTS

1. PURCHASE AND SALE OF SHARES

1.1.       Purchase and Sale

1.2.       Designated Purchasers

2. PURCHASE PRICE; PAYMENT

2.1.       Purchase Price

2.2.       Payment

2.3.       Determination of Net Asset Value

3. REPRESENTATIONS AND WARRANTIES OF SELLER

3.1.       Corporate

3.2.       Seller

3.3.       Authority

3.4.       No Violation

3.5.       Financial Statements

3.6.       Tax Matters

3.7.       Absence of Certain Changes

3.8.       Absence of Undisclosed Liabilities

3.9.       No Litigation

3.10.     Compliance with Laws and Orders

3.11.     Title to and Condition of Properties

3.12.     Insurance

3.13.     Contracts and Commitments

3.14.     No

3.15.     Labor Matters

3.16.     Employee Benefit Plans

3.17.     Trade Rights

3.18.     Product Warranty and Product Liability

3.19.     Certain Relationships to Company

3.20.     Customers and Suppliers

3.21.     No Brokers or Finders

3.22.     Limit of Representations

4. REPRESENTATIONS AND WARRANTIES OF BUYER

4.1.       Corporate

4.2.       Authority

4.3.       No Violation

4.4.       Sufficient Funds

4.5.       No Brokers or Finders

4.6.       Investment Intent Representation

5. COVENANTS PRIOR TO THE CLOSING

5.1.       Pre-Closing Access to Information and Real Property

5.2.       Conduct of Business Pending the Closing

5.3.       Further Assurances

5.4.       Certain Filings

5.5.       Title Insurance

5.6.       Surveys

5.7.       Notification

5.8.       Financing

5.9.       Non-Water Subsidiaries

5.10.     Intercompany Indebtedness

5.11.     Employee Benefit Plan Matters

5.12.     Limitation on Covenants

6. ADDITIONAL COVENANTS

6.1.       Post-Closing Access to Information; Cooperation

6.2.       Tax Matters

6.3.       Employee Benefit Plan Matters

6.4.       Pump Business Headquarters

6.5.       Certain Product Safety Matters

6.6.       Investigation

6.7.       Confidentiality

7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS

7.1.       Representations and Warranties True on the Closing Date

7.2.       Compliance With Agreement

7.3.       No Orders

7.4.       HSR Act and Other Approvals

7.5.       Financing

8. CONDITIONS PRECEDENT TO COMPANY'S AND SELLER'S OBLIGATIONS

8.1.       Representations and Warranties True on the Closing Date

8.2.       Compliance With Agreement

8.3.       No Orders

8.4.       HSR Act and Other Approvals

8.5.       PSCW Approval

9. INDEMNIFICATION

9.1.       By Seller

9.2.       By Buyer

9.3.       Indemnification Claims

9.4.       Limitations on Indemnification

9.5.       Adjustments for Insurance and Taxes and Calculation of Losses

10. CLOSING

10.1.     Closing Date; Location

10.2.     Documents to be Delivered by Company and Seller

10.3.     Documents to be Delivered by Buyer

11. TERMINATION

11.1.     Termination

11.2.     Effect of Termination

12. MISCELLANEOUS

12.1.     Disclosure Schedule

12.2.     Publicity

12.3.     Assignment

12.4.     Parties in Interest

12.5.     Law Governing Agreement; Waiver of Jury Trial

12.6.     Severability

12.7.     Amendment and Modification

12.8.     Waiver

12.9.     Notice

12.10.   Expenses

12.11.   Equitable Relief

12.12.   Interpretive Provisions

12.13.   Entire Agreement

12.14.   Counterparts

12.15.   Section Headings; Table of Contents

12.16.   No Strict Construction

12.17.   Definitions

 

 

 

 

SCHEDULES

Schedule 3.1(c)	-	Qualification
Schedule 3.1(d)	-	Subsidiaries
Schedule 3.1(e)	-	Corporate Documents
Schedule 3.1(f)	-	Capitalization
Schedule 3.4	-	No Violation
Schedule 3.5	-	Financial Statements
Schedule 3.6(d)	-	Tax Audits
Schedule 3.6(f)	-	Other Tax Matters
Schedule 3.7	-	Absence of Certain Changes
Schedule 3.8	-	Absence of Undisclosed Liabilities
Schedule 3.9	-	No Litigation
Schedule 3.10(a)	-	Compliance with Laws and Orders
Schedule 3.10(b)	-	Licenses and Permits
Schedule 3.10(c)	-	Environmental Matters
Schedule 3.11(b)	-	Real Property
Schedule 3.12	-	Company Insurance Policies
Schedule 3.13	-	Contracts and Commitments
Schedule 3.14	-	No Default
Schedule 3.15	-	Labor Matters
Schedule 3.16(a)-1	-	Employee Benefit Plans
Schedule 3.16(a)-2	-	Multiemployer Plans
Schedule 3.16(c)(vii)	-	Accumulated Benefit Obligations
Schedule 3.16(d)	-	Prohibited Transactions
Schedule 3.16(f)	-	Payments and Compliance
Schedule 3.16(g)	-	Post Retirement Benefits
Schedule 3.16(h)	-	Triggering of Obligations
Schedule 3.17	-	Trade Rights
Schedule 3.18	-	Product Warranty and Product Liability
Schedule 3.19	-	Certain Relationships to Company
Schedule 3.20(a)	-	Customers
Schedule 3.20(b)	-	Suppliers

 

EXHIBITS

Exhibit 4.3	-	No Violation
Exhibit 4.4	-	Financing Commitments
Exhibit 5.1(a)	-	Buyer's Consultant Information Sharing Protocol
Exhibit 5.2	-	Conduct of Business Pending the Closing
Exhibit 5.11(b)	-	Form of Company Retention and Severance Plan
Exhibit 12.10(b)	-	Severance Obligations

 

 

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this " Agreement ") is made and effective as of February 3, 2004 among Pentair, Inc., a Minnesota corporation (" Buyer "), WICOR, Inc., a Wisconsin corporation (" Company "), and Wisconsin Energy Corporation, a Wisconsin corporation (" Seller ").

WHEREAS, Company is engaged, through the Water Subsidiaries, including WICOR Industries, LLC, a Wisconsin limited liability company (" Industries "), in the research and development, design, manufacture, production, marketing, distribution and sale of water equipment and systems (the " Water Business "); and

WHEREAS, Company is engaged, through the Non-Water Subsidiaries, in businesses other than the Water Business (the " Other Businesses "); and

WHEREAS, Seller owns all of the issued and outstanding shares of capital stock of Company (collectively, the " Shares "); and

WHEREAS, Buyer desires to purchase the Shares from Seller, and Seller desires to sell the Shares to Buyer, upon the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, capitalized terms used but not defined in the context of the Section in which such terms first appear shall have the respective meanings set forth in Section 12.17 .

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants, agreements and conditions set forth in this Agreement, and intending to be legally bound, the Parties agree as follows:

1.     PURCHASE AND SALE OF SHARES

1.1.      Purchase and Sale . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of the Shares.

1.2.      Designated Purchasers . Buyer may, upon prior written notice to Seller, assign its rights and obligations, in whole or in part, under this Agreement to one or more of its wholly-owned Subsidiaries (each such Entity, a " Designated Purchaser ") for the purpose of carrying out the transactions contemplated hereby; provided , however , that Buyer shall fully and unconditionally guarantee the performance of all obligations of Buyer and any such Designated Purchaser under this Agreement and the other documents and instruments to be executed and delivered by Buyer or any such Designated Purchaser pursuant hereto.

2.     PURCHASE PRICE; PAYMENT

2.1.      Purchase Price . The purchase price (the " Purchase Price ") for the Shares shall be an amount equal to Eight Hundred Fifty Million Dollars ($850,000,000), as adjusted pursuant to Section 2.2(a) and Section 2.2(b) , if at all.

2.2.      Payment . The Purchase Price shall be paid as follows:

(a)      Cash to Seller . At the Closing, Buyer shall deliver to Seller an amount equal to Eight Hundred Fifty Million Dollars ($850,000,000), minus the amount, if any, by which the Net Asset Value as reflected on the Estimated Closing Balance Sheet is less than Six Hundred Fifty-Nine Million Nine Hundred Eight Thousand Five Hundred Thirty-Six Dollars ($659,908,536) or plus the amount, if any, by which the Net Asset Value as reflected on the Estimated Closing Balance Sheet exceeds Six Hundred Fifty-Nine Million Nine Hundred Eight Thousand Five Hundred Thirty-Six Dollars ($659,908,536).

(b)      Adjustment Amount . On or before the tenth (10 ^th ) business day following the final determination of the Final Closing Balance Sheet pursuant to Section 2.3 , either (i) Seller shall pay to Buyer the amount, if any, by which the Net Asset Value as reflected on the Final Closing Balance Sheet is less than the Net Asset Value as reflected on the Estimated Closing Balance Sheet, together with interest on the amount being paid from the Closing Date to the date of the payment at a rate per annum equal to the 90-day London Inter-Bank Offered Rate plus 200 basis points, or (ii) Buyer shall pay to Seller the amount, if any, by which the Net Asset Value as reflected on the Final Closing Balance Sheet exceeds the Net Asset Value as reflected on the Estimated Closing Balance Sheet, together with interest on the amount being paid from the Closing Date to the date of the payment at a rate per annum equal to the 90-day London Inter-Bank Offered Rate plus 200 basis points.

(c)      Method of Payment . All payments under this Section 2.2 shall be made by wire transfer of immediately available funds to an account that the recipient, at least forty-eight (48) hours prior to the time for payment specified hereunder, has designated in writing.

2.3.      Determination of Net Asset Value .

(a)      Balance Sheet . As used in this Agreement, " Balance Sheet " shall mean a schedule in the form of a balance sheet of Company showing the net book values, as of a specified time, of the respective categories of Balance Sheet Assets and Balance Sheet Liabilities set forth in the Recent Balance Sheet. All references in this Agreement to "Balance Sheet" or "Net Asset Value" of Company shall be deemed to refer to Company after giving effect to the Distribution. The Estimated Closing Balance Sheet, the Preliminary Closing Balance Sheet, the Audited Closing Balance Sheet and the Final Closing Balance Sheet shall be prepared in accordance with generally accepted accounting principles in the United States taking into account the Distribution (" GAAP ") applied on a basis consistent with that used in the preparation of the Recent Balance Sheet, including the application of consistent accounting policies, principles, methodologies and practices. Notwithstanding any other provision in this Agreement to the contrary, to the extent that, during the period from December 31, 2003 to the Closing Date, there are any changes in reserves of Company relating to (i) asbestos, product liability, current Tax or environmental Liabilities of Company or Water Subsidiaries or (ii) Liabilities of the Non-Water Subsidiaries, such changes shall not be reflected on the Estimated Closing Balance Sheet, the Preliminary Closing Balance Sheet, the Audited Closing Balance Sheet or the Final Closing Balance Sheet (except and only to the extent required by Deloitte in its presentation of the Audited Closing Balance Sheet) and, in any case, shall in no event be taken into account for purposes of determining the amount of the adjustment to the Purchase Price, if any, to be made pursuant to Section 2.2(a) or Section 2.2(b) .

(b)      Estimated Closing Balance Sheet . For purposes of determining the Purchase Price payable by Buyer at the Closing, not less than five (5) business days prior to the Closing Date, Seller shall, in consultation with Buyer, prepare, or cause to be prepared, and deliver to Buyer a Balance Sheet as of the close of business on the business day immediately prior to the Closing Date (the " Effective Time "), which shall represent Seller's reasonable estimate of the Final Closing Balance Sheet and be accompanied by Seller's determination of (i) the amount of the Net Asset Value as of the Effective Time as reflected on such Balance Sheet and (ii) the amount of any adjustment to the Purchase Price pursuant to Section 2.2(a) . If Buyer shall reasonably object to any of the information set forth on such Balance Sheet, then, during the remainder of such five (5) business day period prior to the Closing, Buyer and Seller shall negotiate in good faith to agree upon appropriate adjustments such that such Balance Sheet and accompanying schedules reflect a mutually acceptable estimate of the Final Closing Balance Sheet and the Net Asset Value as of the Effective Time to be reflected on the Final Closing Balance Sheet, but in the absence of such agreement, the most recent month-end Balance Sheet of Company with respect to the Water Business shall control (the estimated Balance Sheet as agreed to by the Parties pursuant to this Section 2.3(b) , or in the absence of such agreement, the most recent month-end Balance Sheet of Company with respect to the Water Business, is referred to as the " Estimated Closing Balance Sheet "). Company and Seller shall provide to Buyer such information relating to the preparation of the Estimated Closing Balance Sheet as Buyer reasonably requests in connection with its review of the Estimated Closing Balance Sheet.

(c)      Preliminary Closing Balance Sheet . Within sixty (60) calendar days after the Closing, Buyer and Company shall prepare, or cause to be prepared, in consultation with Seller, and deliver to the Milwaukee office of Deloitte & Touche LLP (" Deloitte ") a Balance Sheet as of the Effective Time (the " Preliminary Closing Balance Sheet "). The Preliminary Closing Balance Sheet shall be prepared in accordance with GAAP on a basis consistent with the Estimated Closing Balance Sheet.

(d)      Audited Closing Balance Sheet . Upon its receipt of the Preliminary Closing Balance Sheet, Deloitte shall conduct an audit of the Preliminary Closing Balance Sheet in accordance with generally accepted accounting standards and in accordance with the standards set forth in Section 2.3(a) and Section 2.3(c) . In connection with the engagement of Deloitte, each Party shall execute reasonable engagement letters and supply such other documents and information as Deloitte reasonably requires. Deloitte shall be instructed to use every reasonable effort to conduct such audit and deliver to Buyer and Seller its audit report with respect to the Preliminary Closing Balance Sheet (the " Audited Closing Balance Sheet ") within thirty (30) calendar days after its receipt of the Preliminary Closing Balance Sheet and, in any case, as soon as practicable after such receipt. In connection with Deloitte's audit, Deloitte may reflect such adjustments to the Preliminary Closing Balance Sheet on the Audited Closing Balance Sheet as shall be required by Deloitte as a condition to providing its clean opinion in its audit report. Promptly upon completion of its audit, Deloitte shall deliver to Buyer and Seller the Audited Closing Balance Sheet accompanied by Deloitte's determination of (i) the amount of the Net Asset Value as of the Effective Time as reflected on the Audited Closing Balance Sheet and (ii) the amount of any adjustment to the Purchase Price to be paid and by whom pursuant to Section 2.2(b) .

(e)      Objection to Audited Closing Balance Sheet . After the Audited Closing Balance Sheet is delivered to Buyer and Seller pursuant to Section 2.3(d) , Buyer and Seller shall each have thirty (30) calendar days to review and respond to it in accordance with this Section 2.3(e) . Buyer and Company shall preserve, and shall instruct Deloitte to preserve, all documents or records used in or relevant to the preparation of the Audited Closing Balance Sheet and the calculation of Net Asset Value including, without limitation, accountants' workpapers used in the preparation or audit thereof. During the period of any review or dispute within the contemplation of this Section 2.3 , Buyer and Company shall afford Seller and its authorized Representatives reasonable access to the same, as well as to employees of Buyer, Company and Water Subsidiaries and their respective accountants, including, without limitation, Deloitte, upon Seller's request. If Buyer or Seller objects to any item on the Audited Closing Balance Sheet, then such objecting Party shall inform the other Party on or before the last day of such thirty (30) calendar day period by delivering written notice to the other Party (each a " Balance Sheet Objection ") (i) setting forth in detail a description of the basis of the Balance Sheet Objection and the adjustments to the Audited Closing Balance Sheet that such objecting Party believes should be made and (ii) setting forth the amount of the Net Asset Value as of the Effective Time based on the Audited Closing Balance Sheet, adjusted in accordance with such Party's Balance Sheet Objection. If no Balance Sheet Objection is delivered within such thirty (30) calendar day period, then Buyer and Seller shall be deemed to have accepted the Audited Closing Balance Sheet, which shall be deemed final, binding, conclusive and nonappealable.

(f)      Dispute Resolution Following Objection .

(i)      Negotiation . If either Buyer or Seller shall deliver a Balance Sheet Objection pursuant to Section 2.3(e) , then Buyer and Seller shall promptly meet and attempt in good faith to resolve any dispute or disagreement relating to the Audited Closing Balance Sheet (the " Balance Sheet Dispute "). Any resolution between Buyer and Seller as to any disputed amount shall be final, binding, conclusive and nonappealable.

(ii)      Resolution by CPA Firm . If Buyer and Seller are unable to resolve the Balance Sheet Dispute within thirty (30) calendar days following the delivery of a Balance Sheet Objection, then at any time thereafter Buyer or Seller may elect to have the Balance Sheet Dispute resolved by a nationally recognized firm of independent public accountants as to which Buyer and Seller mutually agree (the " CPA Firm "). The CPA Firm shall not be rendering, and during the preceding two-year period shall not have rendered, audit services to Buyer, Seller or Company. The CPA Firm shall, acting as experts and not as arbitrators, determine on the basis of the standards set forth in Section 2.3(a) and Section 2.3(c) , and only with respect to the remaining accounting-related differences so submitted to the CPA Firm (and not by independent review), whether and to what extent, if any, any item on the Audited Closing Balance Sheet or the Net Asset Value as of the Effective Time as reflected on the Audited Closing Balance Sheet requires adjustment. In connection with the engagement of the CPA Firm, each Party shall execute reasonable engagement letters and supply such other documents and information as the CPA Firm reasonably requires. Without limiting the Parties' obligations under this Section 2.3(f) , each Party may submit such data and information to the CPA Firm as such Party deems appropriate. The CPA Firm shall be instructed to use every reasonable effort to perform its services within fifteen (15) calendar days after submission of the Balance Sheet Dispute to it and, in any case, as soon as practicable after such submission. In resolving the Balance Sheet Dispute, the CPA Firm shall not assign a value to any item greater than the greatest value for such item claimed by any Party, or less than the smallest value for such item claimed by any Party, as presented to the CPA Firm pursuant hereto. The CPA Firm's determination hereunder shall be set forth in a written statement delivered to Seller and Buyer and shall be final, binding, conclusive and nonappealable.

(iii)      Payment of Fees of CPA Firm . Buyer and Seller shall each pay 50% of the fees and expenses of the CPA Firm in connection with the services provided pursuant Section 2.3(f)(ii) .

(g)      Final Closing Balance Sheet . As used in this Agreement, the " Final Closing Balance Sheet " shall be: (i) the Audited Closing Balance Sheet if (A) no Balance Sheet Objection is delivered during the thirty (30) calendar day period specified in Section 2.3(e) or (B) Buyer and Seller so agree in writing; or (ii) the Audited Closing Balance Sheet, as adjusted by (A) the written agreement of Buyer and Seller and/or (B) the CPA Firm in accordance with Section 2.3(f)(ii) .

3.     REPRESENTATIONS AND WARRANTIES OF SELLER

Seller makes the following representations and warranties to Buyer, other than as disclosed in the Disclosure Schedule delivered to Buyer at the time of the execution of this Agreement.

3.1.      Corporate .

(a)      Organization . Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Wisconsin.

(b)      Corporate Power . Company has all requisite corporate power and authority to own and operate its assets, to carry on its business as currently being conducted, to execute and deliver this Agreement and to perform its obligations hereunder.

(c)      Qualification . Company is qualified to do business as a foreign corporation, and is in good standing, in each jurisdiction in which the ownership or operation of the assets owned or operated by it, or the conduct of its business, makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Company Material Adverse Effect. Schedule 3.1(c) sets forth a list of all the jurisdictions in which Company is qualified to do business as a foreign corporation.

(d)      Subsidiaries . Schedule 3.1(d) contains a list of the name, jurisdiction of incorporation or organization and ownership of each corporation, limited liability company, partnership or other Entity of which capital stock or other equity or ownership interests are directly or indirectly owned by Company (collectively, the " Company Subsidiaries "), setting forth whether each such Company Subsidiary is engaged in the Water Business (each, a " Water Subsidiary ") or in the Other Businesses (each, a " Non-Water Subsidiary "). Except as set forth in Schedule 3.1(d) , Company does not directly or indirectly own any capital stock or other equity or ownership interest of any corporation, limited liability company, partnership or other Entity. Except as set forth in Schedule 3.1(d) , no Person other than Company directly or indirectly owns any capital stock or other equity or ownership interest of any Water Subsidiary. All outstanding capital stock and other equity or ownership interests of each Water Subsidiary are free and clear of any Liens and are validly issued, fully paid and nonassessable, except (i) as set forth on Schedule 3.1(d) ; (ii) for restrictions imposed by federal or state securities Laws; and (iii) in the case of Wisconsin corporations, to the extent provided by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law. Except as set forth on Schedule 3.1(d) , there are no (A) securities convertible into or exchangeable for the capital stock or other equity or ownership interests of any Water Subsidiary; (B) options, warrants or other rights to purchase or subscribe to capital stock or other equity or ownership interests of any Water Subsidiary or securities that are convertible into or exchangeable for capital stock or other equity or ownership interests of any Water Subsidiary; or (C) contracts, commitments or agreements relating to the issuance, sale or transfer of any capital stock or other equity or ownership interests of any Water Subsidiary, any such convertible or exchangeable securities or any such options, warrants or other rights. Each Water Subsidiary (1) is a corporation, limited liability company, partnership or other Entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation or organization, (2) has all requisite corporate or other similar power and authority to carry on its business as it is now being conducted and to own and operate the properties and assets it now owns and operates and (3) is in good standing and is qualified to do business as a foreign corporation or other Entity in each jurisdiction wherein the ownership or operation of the properties owned by it, or the conduct of its business, makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Company Material Adverse Effect.

(e)      Corporate Documents . Company has made available to Buyer copies of its and each Water Subsidiary's charter, bylaws or similar organizational documents, as in effect on the date hereof. The corporate minute book and stock records of Company and each Water Subsidiary made available for Buyer's inspection are materially complete copies of such instruments. Set forth in Schedule 3.1(e) is a list of the directors and senior executive officers of Company, Industries, Sta-Rite Industries, LLC, Hypro, LLC and SHURflo, LLC, as of the date hereof.

(f)      Capitalization . The authorized capital stock of Company consists entirely of 121,500,000 shares of common stock, par value $1.00 per share. No shares of such capital stock are issued or outstanding except for 100 shares of common stock of Company, which are owned of record and beneficially by Seller. All Shares are validly issued, fully paid and nonassessable, except to the extent provided by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law. Except as set forth on Schedule 3.1(f) , there are no (i) securities convertible into or exchangeable for any capital stock or other securities of Company, (ii) options, warrants or other rights to purchase or subscribe to capital stock or other securities of Company or securities that are convertible into or exchangeable for capital stock or other securities of Company or (iii) contracts, commitments, agreements, understandings or arrangements of any kind relating to the issuance, sale or transfer of any capital stock or other securities of Company, any such convertible or exchangeable securities or any such options, warrants or other rights.

3.2.      Seller .

(a)      Organization . Seller is a corporation duly organized, validly existing and in good standing under the Laws of the State of Wisconsin.

(b)      Corporate Power . Seller has all requisite corporate power and authority to own and operate its assets, to carry on its business as currently being conducted, to execute and deliver this Agreement and to perform its obligations hereunder.

(c)      Title . Seller has, and upon consummation of the transactions contemplated hereby Buyer will receive, title to the Shares, free and clear of all Liens, other than restrictions imposed by federal or state securities Laws.

3.3.      Authority . The execution and delivery of this Agreement by Company or Seller and the consummation by Seller or Company of the transactions contemplated hereby have been duly authorized by the respective boards of directors of each of Company and Seller and the shareholder of Company and no other or further act or proceeding on the part of Company or Seller or their respective shareholders is necessary to authorize this Agreement or the consummation by Seller or Company of the transactions contemplated hereby. Assuming due and valid authorization, execution and delivery hereof by Buyer, this Agreement constitutes a valid and binding agreement of Company and Seller, enforceable in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors' rights generally, and by general equitable principles.

3.4.      No Violation . Except as set forth on Schedule 3.4 and except as may result from facts or circumstances relating solely to Buyer or its Affiliates, neither the execution and delivery of this Agreement nor the consummation by Company or Seller of the transactions contemplated hereby (a) will violate any applicable statute, law, ordinance or regulation (collectively, " Laws ") or any order, writ, injunction, judgment or decree (collectively, " Orders ") of any court, arbitrator, commission, regulatory board, bureau, agency, or authority or other governmental body, whether federal, state, municipal, county, local or foreign (collectively, " Governmental Entities ") applicable to Seller, Company or Water Subsidiaries, (b) except for applicable requirements (i) of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the " HSR Act ") and any other Competition Laws; (ii) under the Exchange Act; and (iii) of any national securities exchange upon which shares of common stock of Seller are listed, will require on the part of Seller or Company any authorization, consent, approval, exemption or other action by or notice to, declaration, filing or registration with, any Governmental Entity or (c) will violate or conflict with, or constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, or will result in the termination of, or accelerate the performance required by Seller, Company or any Water Subsidiary, or result in the creation of any Lien upon any of the assets of Company or any Water Subsidiary under, any term or provision of the charter, bylaws or similar organizational documents of Company, Seller or any Water Subsidiary or of any Contract to which Company, Seller or any Water Subsidiary is a party or by which Company, Seller or any Water Subsidiary or any of their respective assets or properties may be bound, except in the case of each of clauses (a), (b) and (c) as would not have a Company Material Adverse Effect or would not materially adversely affect the ability of Seller or Company to consummate the transactions contemplated hereby.

3.5.      Financial Statements . Included as Schedule 3.5 are consolidated financial statements of Industries or Company, as applicable, (collectively, the " Financial Statements ") consisting of (a) the financial statements (including balance sheets and statements of earnings, shareholders' equity and cash flows) of Industries as of and for each of the fiscal years ended December 31, 2002, 2001 and 2000 (including the notes contained therein or annexed thereto), which financial statements have been reported on, and are accompanied by, the signed, unqualified opinion of Deloitte & Touche LLP for 2002 and Arthur Andersen LLP for 2001 and 2000, (b) the unaudited consolidated financial statements (including balance sheet and statements of earnings, shareholders' equity and cash flows) of Industries as of and for the year ended December 31, 2003, and (c) an unaudited consolidated balance sheet of Company as of December 31, 2003 giving effect to the Distribution as if it had occurred on December 31, 2003 (the " Recent Balance Sheet "). Except as set forth on Schedule 3.5 and except as set forth therein, the Financial Statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved and fairly present in all material respects the financial position and results of operations of Industries or Company, as applicable, as of the dates and for the periods indicated, except in the case of unaudited statements, for the absence of notes thereto.

3.6.      Tax Matters .

(a)      Provision For Taxes . All material Taxes of Company and Water Subsidiaries attributable to periods preceding or ending with the date of the Recent Balance Sheet have been paid or have been included in a liability accrual for the specific Taxes on the Recent Balance Sheet. The provision made for Taxes on the Recent Balance Sheet is sufficient for the payment of all material Taxes of Company and Water Subsidiaries at the date of the Recent Balance Sheet and for all years and periods prior thereto. Since the date of the Recent Balance Sheet, neither Company nor any Water Subsidiary has incurred any material Taxes other than Taxes incurred in the ordinary course of business consistent in type and amount with its respective past practices, other than as the result of the transaction described in Section 5.9 of this Agreement.

(b)      Tax Returns Filed . All federal income Tax and other material Tax Returns required to be filed by or on behalf of Company and each Water Subsidiary have been timely filed and, when filed, were true, correct and complete in all material respects. All material Taxes owed and/or due, and the Taxes shown as due on such Tax Returns, were paid or adequately accrued. Copies of all federal income Tax and other material Tax Returns filed by Company and each Water Subsidiary for each such Entity's three most recent fiscal years have been made available to Buyer.

(c)      Withholding . Company and each Water Subsidiary has duly withheld and paid all material Taxes that it is required to withhold and pay in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party.

(d)      Tax Audits . No claim has ever been made in writing by any authority in a jurisdiction in which Company or any Water Subsidiary does not file Tax Returns that Company or such Water Subsidiary, as the case may be, is or may be subject to taxation by that jurisdiction or authority. The material Tax Returns of Company and each Water Subsidiary that are under audit or have been audited by the Internal Revenue Service (" IRS ") or other applicable Tax authorities within the past three (3) years, together with a list of all powers of attorney granted by Company or any Water Subsidiary with respect to any material Tax matter, are set forth in Schedule 3.6(d) . Neither Company nor any Water Subsidiary has received from the IRS or any other applicable Tax authorities any written notice of material underpayment or assessment of Taxes that has not been paid or any written objection to any material Tax Return filed by Company or any Water Subsidiary. Except as set forth on Schedule 3.6(d) , there are no outstanding Contracts or waivers extending the statutory period of limitations applicable to any material Tax Return.

(e)      No Tax Liens . Neither Company nor any Water Subsidiary has any material Liens for Taxes other than Permitted Liens.

(f)      Other . Except as set forth on Schedule 3.6(f) , neither Company nor any Water Subsidiary has (i) filed any consent or agreement under Section 341(f) of the Internal Revenue Code of 1986, as amended (the " Code "), (ii) to Seller's knowledge, applied for any Tax ruling, (iii) to Seller's knowledge, entered into a closing agreement as described in Section 7121 of the Code or otherwise (or any corresponding or similar provision of state, municipal, county, local, foreign or other Tax Law) or any other Contract with any Tax authority, (iv) made any payments, or been a party to a Contract (including this Agreement) that under any circumstances could obligate it to make payments (either before or after the Closing Date) that will not be deductible because of Section 162(m) or Section 280G of the Code, or (v) been a party to any material Tax allocation, Tax sharing or Tax indemnification Contract. Neither Company nor any Water Subsidiary is a "United States real property holding company" within the meaning of Section 897 of the Code. Neither Company nor any Water Subsidiary has been the "distributing corporation" or a "controlled corporation" (within the meaning of Section 355 of the Code) with respect to a transaction described in Section 355 of the Code that occurred during a Tax period for which the applicable statute of limitations for assessment has not yet expired, taking into account all mitigation provisions under the Code and other applicable Law.

3.7.      Absence of Certain Changes . Except as set forth in Schedule 3.7 , as disclosed in the Financial Statements or as contemplated by or in connection with the transactions contemplated by this Agreement, since the date of the Recent Balance Sheet, there has not been:

(a)      No Adverse Change . Any change constituting a Company Material Adverse Effect.

(b)      No Increase in Compensation . Any material increase in the compensation, salaries, commissions or wages payable or to become payable to any employees of Company or any Water Subsidiary, including any bonus or other employee benefit granted, made or accrued in respect of such employees (including any such increase or change pursuant to any Employee Plan/Agreement or other commitment), except to the extent increased, granted, made or accrued in the ordinary course of business consistent with past practice or as required by Law or applicable Employee Plan/Agreement.

(c)      No Labor Disputes . Except as may result from facts, circumstances or actions relating to Buyer or its Affiliates or the transactions contemplated by this Agreement, any labor dispute or disturbance relating to Company or any Water Subsidiary, other than routine individual grievances or other disputes that would not have a Company Material Adverse Effect.

(d)      No Distributions . Any declaration, setting aside or payment of any dividend or other distribution in respect of the capital stock of Company or any Water Subsidiary, other than the Distribution and any distributions of cash to Seller; any redemption, purchase or other acquisition by Company or any Water Subsidiary of any capital stock of such Entity, or any security relating to such capital stock; or any other payment of any kind to Seller as a shareholder of Company or to any shareholder of a Water Subsidiary as such a shareholder.

(e)      No Disposition of Property . Any sale, lease or other disposition of any material assets of Company or any Water Subsidiary, except for sales, leases or other dispositions in the ordinary course of business.

(f)      No Amendment of Contracts, Rights . Any entering into, material amendment or early termination of any material Contract relating to employment to which Company or any Water Subsidiary is a party, or any entering into, material amendment or early termination of any other material Contract to which Company or any Water Subsidiary is a party, or any release or waiver of any material claims or rights under any material Contract to which Company or any Water Subsidiary is a party, other than in the ordinary course of business.

(g)      Loans and Advances . Any loan or advance made by Company or any Water Subsidiary to any Person, other than in the ordinary course of business.

(h)      Credit . Any grant of credit by Company or any Water Subsidiary to any customer (including any distributor) of Company or such Water Subsidiary on terms or in amounts that are materially more favorable than those that have been extended to such customer in the past or any other material change in the terms of any credit heretofore extended by Company or any Water Subsidiary, except for changes made in the ordinary course of business.

(i)      Discharge of Obligations . Any discharge, satisfaction or written agreement to satisfy or discharge any material Liability of Company or any Water Subsidiary, other than the discharge or satisfaction of Liabilities in the ordinary course of business.

(j)      Accounting Principles . Any material change or application for any material change in Company's or any Water Subsidiary's financial or Tax accounting principles or methods, except as required by GAAP or applicable Law.

3.8.      Absence of Undisclosed Liabilities . Except as disclosed, reflected or reserved for in the Recent Balance Sheet, the Final Closing Balance Sheet or in Schedule 3.8 , since December 31, 2003, neither Company nor any Water Subsidiary has incurred any Liabilities that would be required to be reflected or reserved against in a consolidated balance sheet of Company and Water Subsidiaries prepared in accordance with GAAP as applied in preparing the Financial Statements other than: (a) Liabilities incurred since the date of the Recent Balance Sheet in the ordinary course of business consistent with past practice, none of which has had or would have a Company Material Adverse Effect; (b) Liabilities disclosed in the Disclosure Schedule or that are of the type or kind that would be disclosed in the Disclosure Schedule if they did not fall below the minimum threshold amount, term or materiality of the disclosures called for by the terms of this Agreement to be set forth in the Disclosure Schedule; and (c) Liabilities incurred in connection with the transactions contemplated hereby or otherwise contemplated or permitted by this Agreement.

3.9.      No Litigation . Except as set forth in Schedule 3.9 and except as may result from facts, circumstances or actions relating to Buyer or its Affiliates or the transactions contemplated by this Agreement, there is no Litigation pending or, to Seller's knowledge, threatened against Company or any Water Subsidiary that would have a Company Material Adverse Effect.

3.10.      Compliance with Laws and Orders .

(a)      Laws and Orders . Except as set forth in Schedule 3.10(a) or as would not have a Company Material Adverse Effect, Company and each Water Subsidiary (including its business and assets) are in compliance with all applicable Laws and Orders. Except as set forth in Schedule 3.10(a) , neither Company nor any Water Subsidiary has received written notice of any violation or alleged violation of any Laws or Orders within the last two (2) years, except for such violations or alleged violations as would not have a Company Material Adverse Effect.

(b)      Licenses and Permits . Company and each Water Subsidiary have all licenses, permits, approvals, certifications and consents of all Governmental Entities and all governmental certification organizations (" Permits ") required, and all exemptions from requirements to obtain or apply for any of the foregoing, for the conduct of its business (as currently conducted) and the operation of its facilities (as currently operated), except where the failure to hold such Permits or exemptions would not have a Company Material Adverse Effect. Except as would not result in a Company Material Adverse Effect or as set forth on Schedule 3.10(b) , all such Permits are in full force and effect and will not be made subject to any loss, limitation or obligation to reapply as a result of the transactions contemplated hereby.

(c)      Environmental Matters . Except for past violations for which Company or any Water Subsidiary is neither subject to any current Liability nor is reasonably likely to become subject to any future Liability and except as set forth in Schedule 3.10(c) , Company and each Water Subsidiary (including its respective business and assets) are in compliance with applicable requirements of Environmental Laws including, without limitation, the requirements to hold and comply with the conditions of all Permits required by such Environmental Laws, except for such failure to comply as would not have a Company Material Adverse Effect. Except as set forth in Schedule 3.10(c) , there is no Litigation nor any claim, hearing, notice of violation or demand letter pending or, to Seller's knowledge, threatened against Company or any Water Subsidiary relating in any way to the Environmental Laws except for any such matter that would not have a Company Material Adverse Effect. To Seller's knowledge, there is no Litigation pending or threatened against any Person whose Liability therefor may have been retained or assumed by or could be imputed or attributed to Company or any Water Subsidiary relating in any way to the Environmental Laws. Except as set forth in Schedule 3.10(c) , to Seller's knowledge, (i) there are no events, conditions, circumstances, activities, practices, incidents, actions, omissions or plans that are reasonably likely to result in any Liability to Company or any Water Subsidiary under Environmental Laws, including any Liabilities related to offsite disposal locations, or interfere with or prevent continued material compliance by Company or any Water Subsidiary with applicable Environmental Laws; and (ii) no Waste has been released or is present on the Real Properties as a result of the operation of the Water Business in quantities or under circumstances that require remediation reasonably likely to result in material costs pursuant to applicable Environmental Laws. Copies of all material environmental studies in the possession of Company, any Water Subsidiary or Seller, relating to any Real Property or property with respect to which any Liability has been asserted against any Water Subsidiary have been made available to Buyer. Notwithstanding anything to the contrary contained in this Agreement, the representations and warranties in this Section 3.10(c) are Company's and Seller's exclusive representations and warranties regarding compliance with and Liabilities under Environmental Laws.

3.11.      Title to and Condition of Properties .

(a)      Marketable Title . Company and each Water Subsidiary has good and marketable title, valid license rights or a valid leasehold interest in all of the properties and assets used by such Entity in the operation of the Water Business, free and clear of all Liens, except for (i) zoning Laws and other land use restrictions that do not materially adversely impair the present use or occupancy of the property subject thereto; (ii) any Liens for Taxes, assessments and other governmental charges not yet due and payable or due but not delinquent or due and being contested in good faith; (iii) any mechanics', workmen's, repairmen's, warehousemen's, carriers' or other similar Liens arising in the ordinary course of business, or being contested in good faith; (iv) any Liens which have not had and are not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect and (v) any defects, easements, rights of way, restrictions, covenants, claims or other similar charges or any other matters of record, which do not, individually or in the aggregate, have a material adverse effect on the use or possession of such properties or assets (collectively, the " Permitted Liens ").

(b)      Real Property . Schedule 3.11(b) sets forth all real property owned, used or occupied by Company and each Water Subsidiary primarily in the operation of the Water Business as of the date hereof (the " Real Property "). Each Real Property has adequate rights of access to public ways.

(c)      Condition . Except as would not result in a Company Material Adverse Effect, all material tangible assets owned or utilized by Company or any Water Subsidiary in the operation of the Water Business as currently conducted and located on the Real Property are in adequate condition for the purposes for which they are currently used. Except as would not result in a Company Material Adverse Effect, all buildings, plants and other physical structures owned or utilized by Company or any Water Subsidiary in the operation of the Water Business as currently conducted and located on the Real Property are in adequate condition for the purposes for which they are currently used.

(d)      No Condemnation, Expropriation or Similar Action . To Seller's knowledge, no condemnation, expropriation or taking is pending nor has Company or Seller received written notice that any such condemnation, expropriation or taking has been planned, scheduled or proposed.

3.12.      Insurance . Schedule 3.12 sets forth a list of all policies of fire, liability, product liability, workers compensation, health, product, recall and other forms of insurance currently in effect with respect to, or that provides coverage for, the business or assets of Company and each Water Subsidiary (collectively, the " Company Insurance Policies "). Schedule 3.12 includes the carrier, the description of coverage, the limits of coverage, retention or deductible amounts, amount of annual premiums, date of expiration and date through which premiums have been paid with respect to each Company Insurance Policy and the name of the Entity that is the owner of such policy. Company has made available copies of each Company Insurance Policy to Buyer. All Company Insurance Policies are valid and enforceable policies and provide insurance coverage with respect to the business and assets of Company and each Water Subsidiary of the kinds, in the amounts and against the risks which, in Seller's judgment, are customary for organizations of similar size and business, except for such failures to be valid or enforceable as would not have a Company Material Adverse Effect. Except as set forth in Schedule 3.12 , neither Company nor any Water Subsidiary has received any written notice of cancellation or termination with respect to any Company Insurance Policy. To Seller's knowledge, Company and each Water Subsidiary has timely made all claims that it has been entitled to make under each Company Insurance Policy, except for such failure to make such claims as would not have a Company Material Adverse Effect. Except as set forth in Schedule 3.12 , neither Company nor any Water Subsidiary has received any written notice from or on behalf of any insurance carrier issuing any Company Insurance Policy that insurance rates therefor will hereafter be substantially increased (except to the extent insurance rates may be increased for all similarly situated risks) or that there will hereafter be an increase in a deductible (or an increase in premiums to maintain an existing deductible) or nonrenewal of any Company Insurance Policy. Except as set forth in Schedule 3.12 , there is no claim by Company or any Water Subsidiary pending under any Company Insurance Policy as to which coverage has been denied or disputed by the underwriters of such policies.

3.13.      Contracts and Commitments . Except as set forth in Schedule 3.13 (the items listed in Schedule 3.13 , the " Listed Contracts "):

(a)      Real Property Leases . Neither Company nor any Water Subsidiary (whether as lessor or lessee) is a party to any material Contracts for the lease or occupancy of Real Property, other than those entered into in the ordinary course of business.

(b)      Personal Property Leases . Neither Company nor any Water Subsidiary (whether as lessor or lessee) is a party to any Contracts for the lease or use of any material personal property involving any remaining consideration, termination charge or other expenditure in excess of $1,000,000 (or its foreign currency equivalent as of the date hereof) or involving performance over a period of more than twelve (12) months.

(c)      Contracts for Services . Neither Company nor any Water Subsidiary has any material Contract with any officer, employee, consultant, sales representative, dealer, distributor, franchisee or other third party performing similar functions that is not cancelable by Company or any Water Subsidiary on notice of not longer than thirty (30) calendar days without material Liability, penalty or premium.

(d)      Powers of Attorney . Neither Company nor any Water Subsidiary has given a power of attorney or proxy that is currently in effect to any Person for any purpose whatsoever.

(e)      Collective Bargaining Agreements . Neither Company nor any Water Subsidiary has any collective bargaining Contract with any union, guild, shop committee or other collective bargaining group.

(f)      Loan Agreements . Neither Company nor any Water Subsidiary has any material loan Contract, promissory note, letter of credit or other evidence of indebtedness, as a signatory, guarantor or otherwise.

(g)      Guarantees . Neither Company nor any Water Subsidiary has guaranteed the payment or performance of any Person, agreed to indemnify any Person (except under Contracts entered into by Company or a Water Subsidiary in the ordinary course of business) or to act as a surety, or otherwise agreed to be contingently or secondarily liable for the obligations of any Person for amounts that are material to Company and Water Subsidiaries taken as a whole.

(h)      Governmental Contracts . Neither Company nor any Water Subsidiary has any material Contract with any Governmental Entity, other than those entered into in the ordinary course of business.

(i)      Agreements Relating to Company Trade Rights . Neither Company nor any Water Subsidiary has any material consulting, development, joint development or similar material Contract relating to any of the Company Trade Rights, other than those entered into in the ordinary course of business.

(j)      Restrictive Agreements . Neither Company nor any Water Subsidiary has any Contract (i) prohibiting or restricting Company or any Water Subsidiary from competing in any business or geographical area, or soliciting customers or employees, or otherwise restricting it from carrying on any business anywhere in the world or (ii) relating to the location of employees or a minimum number of employees to be employed by Company or any Water Subsidiary.

(k)      Other Material Contracts . Neither Company nor any Water Subsidiary has any Contract involving consideration or other expenditure in excess of $1,000,000 (or its foreign currency equivalent as of the date hereof), or involving performance over a period of more than twelve (12) months, or that is otherwise individually material to the operations of Company and Water Subsidiaries, taken as a whole and not entered into in the ordinary course of business.

3.14.      No Default . Except as set forth on Schedule 3.14 , neither Company nor any Water Subsidiary is in default under any Listed Contract to which it is a party, and to Seller's knowledge, no event or omission has occurred that, through the passage of time or the giving of notice, or both, would constitute a default by Company or any Water Subsidiary thereunder or cause the acceleration of any of Company's or any Water Subsidiary's obligations thereunder or result in the creation of any Lien, other than Permitted Liens, on any of Company's or any Water Subsidiary's assets, other than, in any such case, as would not have a Company Material Adverse Effect. To Seller's knowledge, no third party is in default in any material respect under any Listed Contract to which Company or any Water Subsidiary is a party, other than as would not have a Company Material Adverse Effect.

3.15.      Labor Matters . Except as may result from facts, circumstances or actions relating to Buyer or its Affiliates or the transactions contemplated by this Agreement or as set forth on Schedule 3.15 : (a) within the last three (3) years, neither Company nor any Water Subsidiary has experienced any material labor disputes, work stoppages due to labor disagreements or, to Seller's knowledge, any union organization attempts; (b) there is no unfair labor practice charge pending before the National Labor Relations Board or, to Seller's knowledge, threatened against Company or any Water Subsidiary; (c) there is no material labor strike, dispute, slowdown or stoppage actually pending or, to Seller's knowledge, threatened against or affecting Company or any Water Subsidiary; and (d) no question concerning representation has been raised or, to Seller's knowledge, is threatened relating to the employees of Company or any Water Subsidiary.

3.16.      Employee Benefit Plans .

(a)      Disclosure . Schedule 3.16(a)-1 sets forth a list of all plans, programs, Contracts, policies and practices, including any pension, thrift, savings, profit sharing, retirement, bonus, incentive, health, dental, death, accident, disability, stock purchase, stock option, stock appreciation, stock bonus, executive or deferred compensation, hospitalization, "parachute," severance, vacation, sick leave, fringe or welfare benefits, any employment Contracts, "golden parachutes," "employee benefit plans" (as defined in Section 3(3) of ERISA), and written or binding oral statements of policies, practices or understandings relating to employment that are sponsored or maintained by Company or any ERISA Affiliate, or to which Company or any ERISA Affiliate contributes or is required to contribute, for the benefit of any person who currently is or formerly was employed in respect of the Water Business or who currently serves or previously served as a director in respect of the Water Business (collectively, the " Employee Plans/Agreements "). Schedule 3.16(a)-1 separately identifies each Employee Plan/Agreement covering employees or former employees who primarily perform or performed, as the case may be, services outside of the United States. No Employee Plan/Agreement is a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA), and neither Company nor any Water Subsidiary and, except as set forth on Schedule 3.16(a)-2 , no ERISA Affiliate of Company or any Water Subsidiary has ever contributed nor been obligated to contribute to any such multiemployer plan.

(b)      Delivery of Documents . Company and Seller have made available to Buyer copies of the following information with respect to each Employee Plan/Agreement:

(i)     the Employee Plan/Agreement, including all amendments, or if there is not a written plan document, a written summary of the terms and conditions of the Employee Plan/Agreement;

(ii)     the most recent annual report, if required under ERISA;

(iii)     the summary plan description, together with each summary of material modifications, if required under ERISA;

(iv)     if the Employee Plan/Agreement is funded through insurance or a trust, insurance or any third party funding vehicle, the insurance policy or contract of the trust or other funding agreement and the most recent financial statements thereof; and

(v)     the most recent determination letter received from the IRS with respect to any Employee Plan/Agreement that is intended to be qualified under Section 401 of the Code.

(c)      Terminations, Proceedings, Penalties, Etc. With respect to each Employee Plan/Agreement that is subject to Title IV of ERISA, and, solely for purposes of clauses (i), (ii), (iii) and (iv) immediately following, with respect to any other plan subject to Title IV of ERISA and maintained or contributed to by an ERISA Affiliate of Company or any Water Subsidiary:

(i)     no such plan has been terminated so as to subject, directly or indirectly, Company or any Water Subsidiary to any Liability or any of Company's or any Water Subsidiary's assets to the imposition of any Lien under Title IV of ERISA;

(ii)     no proceeding has been initiated or threatened by any Person (including the Pension Benefit Guaranty Corporation) to terminate any such plan;

(iii)     no condition or event currently exists or is reasonably expected to occur that could subject, directly or indirectly, Company or any Water Subsidiary to any Liability (other than for the payment of termination insurance premiums) or any of Company's or any Water Subsidiary's assets to the imposition of any Lien under Title IV of ERISA;

(iv)     other than the execution of this Agreement or the consummation of any transaction contemplated by this Agreement, no "reportable event" (as defined in Section 4043 of ERISA) has occurred with respect to any such plan, except for any such reportable event for which the 30-day notice requirement has been waived or that could not reasonably be expected to subject Company or any Water Subsidiary to any Liability;

(v)     no such plan that is subject to Section 302 of ERISA or Section 412 of the Code has incurred any "accumulated funding deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code, respectively), whether or not waived;

(vi)     no such plan is a plan described in Section 4064 of ERISA; and

(vii)     except as disclosed on Schedule 3.16(c)(vii) , the present value of the accumulated benefit obligations under such plan, as determined by such plan's actuary based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared with respect to such plan, did not, as of such plan's most recent valuation date, exceed the then current value of the assets of such plan allocable to such accumulated benefit obligations.

(d)      Prohibited Transactions . Except as set forth on Schedule 3.16(d) , there have been no "prohibited transactions" (within the meaning of Section 406 or 407 of ERISA or Section 4975 of the Code) for which a statutory or administrative exemption does not exist with respect to any Employee Plan/Agreement, other than any such prohibited transaction that could not subject Company or any Water Subsidiary to any Liability. No Person who is a "fiduciary" (as defined in Section 3(21) of ERISA) with respect an Employee Plan/Agreement has any Liability for breach of fiduciary duty in connection with the administration or investment of the assets of an Employee Plan/Agreement.

(e)     No person engaged by Company or any Water Subsidiary as an independent contractor, third party contract laborer, temporary employee, or "leased employee" (within the meaning of Section 414(n) of the Code) has ever been improperly excluded from participation in an Employee Plan/Agreement, nor has Company or any Water Subsidiary used the services of such individuals to an extent that would reasonably be expected to result in the disqualification of any Employee Plan/Agreement or the imposition of penalties or excise Taxes with respect to the Employee Plan/Agreements by the IRS, the United States Department of Labor or other Governmental Entity.

(f)      Payments and Compliance . Except as set forth on Schedule 3.16(f) , with respect to each Employee Plan/Agreement, (i) all payments due from the Employee Plan/Agreement (or from Company or any Water Subsidiary with respect to the Employee Plan/Agreement) have been made, and all amounts properly accrued to date as Liabilities that have not been paid have been properly recorded on the books of Company or a Water Subsidiary; (ii) such Employee Plan/Agreement has been operated and administered in all material respects in accordance with its terms and all Laws, including ERISA and the Code; (iii) all reports and information relating to the Employee Plan/Agreement required to be filed with any Governmental Entity or provided to participants or their beneficiaries have been timely filed or disclosed and, when filed or disclosed, were true, correct and complete; (iv) if the Employee Plan/Agreement is intended to qualify under Section 401 of the Code, it has received a favorable determination letter from the IRS with respect to such qualification and nothing has occurred since the date of such letter that is reasonably likely to result in the revocation of such determination; (v) there is no Litigation pending (other than routine Litigation for benefits) or, to Seller's knowledge, threatened with respect to the Employee Plan/Agreement or against the assets of the Employee Plan/Agreement, except for such Litigation as would not have a Company Material Adverse Effect; and (vi) all employer and employee contributions that are due have been made within the time periods prescribed by ERISA and the Code, and all contributions for any period ending on or before the Closing Date that are not yet due have been made or accrued in accordance with past custom or practice of the Company or Water Subsidiary.

(g)      Post Retirement Benefits . Except as disclosed on Schedule 3.16(g) , no Employee Plan/Agreement provides benefits, including death or medical benefits (whether or not insured), with respect to current or former employees or directors of Company or any Water Subsidiary beyond their retirement or other termination of service, other than (i) coverage mandated solely by applicable Law, (ii) death benefits or retirement benefits under any "employee pension benefit plan," as defined in Section 3(2) of ERISA, (iii) deferred compensation benefits accrued as Liabilities on the books of Company or a Water Subsidiary or (iv) benefits the entire costs of which are borne by such individual or his or her beneficiary.

(h)      No Triggering of Obligations . Except as set forth on Schedule 3.16(h) , the consummation of the transactions contemplated hereby will not (i) entitle any current or former employee or director of Company or any Water Subsidiary to severance pay, unemployment compensation or any other payment, except as expressly provided in this Agreement or (ii) accelerate the time of payment or vesting or increase the amount of compensation due to any current or former employee or director of Company or any Water Subsidiary.

(i)      Future Commitments . Neither Company nor any Water Subsidiary has announced any plan or legally binding commitment to create any additional Employee Plans/Agreements or to amend or modify any existing Employee Plans/Agreements.

3.17.      Trade Rights .

Schedule 3.17 contains a list of all Company Trade Rights registrations and applications owned by Company or a Water Subsidiary. All Company Trade Rights shown as registered in Schedule 3.17 have been properly registered in the jurisdictions set forth in Schedule 3.17 . All pending registrations and applications listed on Schedule 3.17 have been properly made and filed, and all annuity, maintenance, renewal and other fees relating to such registrations or applications are current. To Seller's knowledge, to conduct its respective business as it is currently conducted, neither Company nor any Water Subsidiary requires any Trade Rights that it does not already have a right to use. Neither Company nor any Water Subsidiary is infringing or in the past two (2) years has infringed any Trade Rights of another. To Seller's knowledge, no Person is infringing or in the past two (2) years has infringed any of the Company Trade Rights. Except as set forth in Schedule 3.17 , neither Company nor any Water Subsidiary pays any material royalties or other material monetary consideration for the right to use any Trade Rights of others, other than payments in the ordinary course of business.

3.18.      Product Warranty and Product Liability .

Neither Company nor any Water Subsidiary has provided a warranty for sales of Products other than in the ordinary course of business. Schedule 3.18 also contains a description of all material pending product warranty claims. Except as set forth on Schedule 3.18 , none of the Products has been the subject of any replacement, field fix, retrofit, modification or recall campaign that would result in a Company Material Adverse Effect, and to Seller's knowledge, no facts or conditions exist that could reasonably be expected to result in such a recall campaign.

3.19.      Certain Relationships to Company .

All material Contracts and material obligations between Company or any Water Subsidiary and any Affiliate of Company or any Water Subsidiary (other than Company and Water Subsidiaries) are described in Schedule 3.19 . Schedule 3.19 contains a list of all material services provided to Company or any Water Subsidiary by employees of any Affiliates of Company or any Water Subsidiary (other than Company and Water Subsidiaries). Any assets owned, leased or licensed by the Non-Water Subsidiaries that are necessary to the operation of the business of Company and Water Subsidiaries as currently conducted will be owned, leased or licensed by Company or Water Subsidiaries as of the Closing.

3.20.      Customers and Suppliers .

(a)      Major Customers . Schedule 3.20(a) contains a list of the five (5) largest customers, including distributors, of each of Sta-Rite Industries, LLC, Hypro, LLC and SHURflo, LLC for the most recent fiscal year (determined on the basis of the total dollar amount of net sales) showing the total dollar amount of net sales to each such customer for such fiscal year without disclosure of such customers' names or other identifying characteristics. Except as would not result in a Company Material Adverse Effect, neither Company nor any Water Subsidiary has received any notice as of the date hereof that any of the customers described in Schedule 3.20(a) will not continue to be customers of Company and Water Subsidiaries after the Closing at substantially the same level of purchases set forth on Schedule 3.20(a) .

(b)      Major Suppliers . Schedule 3.20(b) contains a list of the five (5) largest suppliers to each of Sta-Rite Industries, LLC, Hypro, LLC and SHURflo, LLC for the most recent fiscal year (determined on the basis of the total dollar amount of purchases) showing the total dollar amount of purchases from each such supplier for such fiscal year without disclosure of such suppliers' names or other identifying characteristics. Except as would not result in a Company Material Adverse Effect, neither Company nor any Water Subsidiary has received any notice as of the date hereof that any of the suppliers described in Schedule 3.20(b) will not continue to be suppliers to Company and Water Subsidiaries after the Closing and will not continue to supply Company and Water Subsidiaries with substantially the same quantity of goods and services at competitive prices.

3.21.      No Brokers or Finders .

Except for such fees that will be paid by Seller, none of Company, Seller nor any Water Subsidiary nor any of their respective directors, officers or employees has retained, employed or used any investment banking firm, broker or finder in connection with the transactions provided for herein or the negotiation thereof, nor are any of them responsible for the payment of any investment banking, broker's or finder's fees.

3.22.      Limit of Representations .

Notwithstanding anything to the contrary contained in this Agreement, (a) all representations and warranties contained in this Article 3 shall assume the consummation of the Distribution; and (b) except to the extent the representations and warranties contained in Section 3.19 and the first two sentences of Section 3.1(d)