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EXHIBIT 10.16
THIRD AMENDMENT
TO
REVOLVING CREDIT AGREEMENT AND LIMITED WAIVER
Third
Amendment and Limited Waiver dated as of December 16, 2003 to
Revolving Credit Agreement (the "THIRD
AMENDMENT"), by and among WATTS REGULATOR
CO., a Massachusetts corporation (the
"DOMESTIC BORROWER"), WATTS INDUSTRIES
EUROPE B.V., a private company with limited
liability organized under the laws
of The Netherlands (the "FOREIGN BORROWER",
and together with the Domestic
Borrower, the "BORROWERS" and each
individually, a "BORROWER"), and FLEET
NATIONAL BANK and the other lending
institutions listed on SCHEDULE 1 to the
Credit Agreement (as hereinafter defined)
(the "LENDERS"), amending certain
provisions of the Revolving Credit
Agreement dated as of February 28, 2002 (as
amended and in effect from time to time,
the "CREDIT AGREEMENT") by and among
the WATTS WATER TECHNOLOGIES, INC. (F/K/A
WATTS INDUSTRIES, INC.), a Delaware
corporation (the "PARENT"), the Borrowers,
the Lenders, and FLEET NATIONAL BANK
in its capacity as administrative agent for
the Lenders (the "ADMINISTRATIVE
AGENT"). Terms not otherwise defined herein
which are defined in the Credit
Agreement shall have the same respective
meanings herein as therein.
WHEREAS,
the Borrowers and the Lenders have agreed to modify certain
terms
and conditions of the Credit Agreement and
waive certain terms of the Credit
Agreement, in each case as specifically set
forth in this Third Amendment;
NOW,
THEREFORE, in consideration of the premises and the mutual
agreements
contained herein and for other good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
SECTION 1.
AMENDMENT TO SECTION 1 OF THE CREDIT AGREEMENT. Section 1 of
the Credit Agreement is hereby amended by
inserting the following definitions
in the following alphabetical order:
DECEMBER CLASS A OFFERING. That certain Equity Issuance
consisting
of the
underwritten public offering of approximately 4,600,000 shares
of
the
Parent's Class A common stock consummated on or about December
16,
2003
pursuant to which the Parent received Net Cash Equity Issuance
Proceeds
of approximately $82,400,000.
WATTS FLOWMATIC. Watts Flowmatic, Inc., a Delaware corporation
and
wholly-owned Subsidiary of the Domestic Borrower.
SECTION 2.
AMENDMENT TO SECTION 3 OF THE CREDIT AGREEMENT. Section
3.2.2(b) of the Credit Agreement is hereby
amended by inserting immediately
after the words "Net Cash Equity
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Issuance Proceeds in excess of $50,000,000
from Equity Issuances" a comma and
the words "other than the Net Cash Equity
Issuance Proceeds received in
connection with the December Class A
Offering".
SECTION 3.
AMENDMENT TO SECTION 7 OF THE CREDIT AGREEMENT. Section 7.15
of the Credit Agreement is hereby amended
by inserting immediately at the end of
the first sentence thereof a semicolon and
the words "PROVIDED, HOWEVER,
notwithstanding the foregoing, the Parent
shall not be required to cause Watts
Flowmatic to become a Guarantor hereunder,
and otherwise comply with the
provisions of this Section 7.15(a), until
February 15, 2004".
SECTION 4.
LIMITED WAIVER. Pursuant to Section 7.14 of the Credit
Agreement, if, after the Closing Date, the
Parent or any of its Subsidiaries
creates or acquires, either directly or
indirectly, any Subsidiary, it will
promptly (but in any event no later than
five (5) days after such creation or
acquisition) notify the Administrative
Agent of such creation or acquisition, as
the case may be, and provide the
Administrative Agent and the Lenders with an
updated SCHEDULE 6.18(a) thereto. Martin
Orgee UK Ltd. became a Subsidiary on
April 18, 2003, Giuliani Anello S.r.l
became a Subsidiary on July 30, 2003, and
Watts Flowmatic became a Subsidiary on
November 19, 2003 (each such event being
hereinafter referred to as a "SUBSIDIARY
CREATION EVENT" and the date on which
such Subsidiary became a Subsidiary being
hereinafter referred to as a
"SUBSIDIARY CREATION DATE"). To the extent
the Parent or any Subsidiary failed
to notify the Administrative Agent and the
Lenders of each such creation or
acquisition as required by Section 7.14 of
the Credit Agreement and failed to
provide the Administrative Agent and the
Lenders with an updated SCHEDULE
6.18(a), the Administrative Agent and the
Lenders hereby waive such notice and
delivery requirements of Section 7.14 o
