8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 3, 2004

Commission file number 1-11625

Pentair, Inc.

(Exact name of Registrant as specified in its charter)

Minnesota	41-0907434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification number)
5500 Wayzata Blvd, Suite 800, Golden Valley, Minnesota	55416
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (763) 545-1730

ITEM 5. OTHER EVENTS

On February 3, 2004, Pentair, Inc. (“Pentair”) entered into an agreement to acquire WICOR Industries (“WICOR”), a unit of Wisconsin Energy Corporation, Milwaukee, Wisconsin. WICOR, which manufactures water system, filtration, and pool equipment products under the Sta-Rite, Shurflo, and Hypro brands, is expected to generate sales of approximately $750 million in 2003. The $850 million cash transaction, which Pentair plans to complete in the second or third quarter of 2004, is subject to satisfaction of customary conditions and applicable regulatory approvals. As part of the transaction, Pentair will assume approximately $24 million of WICOR debt.

Pentair also announced that is has engaged Goldman Sachs to explore strategic alternatives for its $1,080.4 million Tools Group, comprising the Porter-Cable, Delta, DeVilbiss Air Power, Oldham Saw, and Flex businesses.

Pentair expects to fund the WICOR acquisition through its currently available and newly committed lines of credit. Pentair has obtained a commitment in the aggregate amount of $850 million from Bank of America, N.A., and U.S. Bank National Association (the “Facility”), for the payment of the cash portion of the purchase price. Each lender will make available $425 million under the Facility. The Facility extends for a period up to the earlier of (i) September 1, 2004, (ii) the closing of the acquisition without the use of the Facility or (iii) the sale of the Pentair Tool Group.

The term loan to be made under the Facility (the “Loan”), pursuant to a formal loan agreement to be negotiated and executed by the parties, is contemplated to be available in a single disbursement upon closing of the WICOR acquisition and is for the purpose of payment of the purchase price and related fees and expense. The closing of the Loan must occur before September 1, 2004. Any balance due under the Loan is repayable in full, with accrued interest, no later than December 31, 2004. The terms and conditions of the term loan agreement under the Commitment Letter are reflected in the Term Sheet attached as Exhibit A to the Commitment letter, filed herewith as Exhibit 99.3

On February 4, 2004, we issued the press release, Stock Purchase Agreement, and Facility Commitment Letter attached hereto as Exhibits 99.1, 99.2 and 99.3.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c) Exhibits – The following exhibits are provided as part of the information filed under Item 5 and furnished under Item 12 of this Current Report on Form 8-K:

Exhibit	Description
99.1	Pentair, Inc. press release dated February 4, 2004 announcing the acquisition of WICOR Industries and exploring strategic alternatives for the Pentair Tools Group.
99.2	Stock Purchase Agreement among Pentair, Inc., WICOR, Inc., and Wisconsin Energy Corporation dated February 3, 2004.
99.3	Facility Commitment Letter for $850 million Senior Term Loan Facility among Bank of America, N.A., Banc of America Securities LLC, U.S. Bank National Association and Pentair Inc
99.4	Pentair, Inc. press release dated February 4, 2004 announcing earnings results for the fourth quarter and year ended December 31, 2003.

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 4, 2004, Pentair, Inc. issued a press release announcing earnings for the three and twelve months ended December 31, 2003. A copy of the release is furnished herewith as Exhibit 99.4 and incorporated herein by reference. This Current Report on Form 8-K and the press release attached hereto are being furnished by Pentair pursuant to Item 12 of Form 8-K.

This press release contains information regarding a non-GAAP financial measure, free cash flow. Pentair uses free cash flow (cash from operations less capital expenditures) as a measure of cash generation from the business and we believe the free cash flow trend is a useful measure to investors to demonstrate the sustainability of Pentair’s operations and the ability to continue to pay dividends and fund acquisitions.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 4, 2004.

PENTAIR, INC. Registrant
By	/s/    David D. Harrison
	David D. Harrison Executive Vice President and Chief Financial Officer (Chief Accounting Officer)

EX-99.1

                                                                    EXHIBIT 99.1

PENTAIR, INC.
5500 Wayzata Blvd., Suite 800
Golden Valley, MN 55416
763 545 1730 Tel
763 656 5204 Fax


NEWS RELEASE                                              [LOGO OF PENTAIR, INC]

Acquisition of WICOR Industries to Transform Pentair into a Global Leader in
Water Technologies

Pentair launches exploration of strategic alternatives for its Tools Group

GOLDEN VALLEY, Minn. - February 4, 2004 - Pentair, Inc. (NYSE: PNR) announced
today that it entered into an agreement to acquire WICOR Industries, a unit of
Wisconsin Energy Corporation (NYSE: WEC), Milwaukee, Wisconsin. WICOR, which
manufactures water system, filtration, and pool equipment products under the
Sta-Rite, SHURflo, and Hypro brands, is expected to generate sales of
approximately $750 million in 2003 and employs 3,500 people in 24 locations
worldwide. The $850 million cash transaction, which Pentair plans to complete in
the second or third quarter of 2004, is subject to satisfaction of customary
conditions and applicable regulatory approvals. Pentair expects to finance the
purchase of WICOR, including the assumption of approximately $24 million of
WICOR debt, through available and committed lines of credit. The acquisition is
anticipated to be accretive to earnings in the first 12 months of ownership.

Pentair also announced that it has engaged Goldman, Sachs & Co. to explore
strategic alternatives for its Tools Group, with 2003 sales of $1.08 billion,
comprising the Porter-Cable, Delta, DeVilbiss Air Power, Oldham Saw, and FLEX
businesses.

"The WICOR acquisition will transform Pentair into a diversified company defined
largely by a $2 billion Water Technologies business," said Pentair Chairman and
Chief Executive Officer, Randall J. Hogan. "Not only do we anticipate creating a
significant water and wastewater systems business having some $900 million in
sales, but we will also be operating a global pool and spa equipment business
with revenues of roughly $600 million. We expect our revenues in the filtration
and purification space to jump to approximately $500 million. We would become
considerably more global in scope, with anticipated total international
water-related sales of 20 percent or about $400 million. This transaction will
allow us to accelerate Pentair's growth through the more rapid creation of
innovative products and systems, and capture cost savings and other synergies,
thereby adding value for our customers and shareholders."

                                     (more)



                                       -2-

According to Richard J. Cathcart, president and chief operating officer of
Pentair's Water Technologies Group, "This transaction represents a giant step
toward our goal of satisfying the global need for safe, clean water. We expect
to combine Pentair's proven operating disciplines with WICOR's strong customer
orientation to enhance sales relationships with our customers, build our
collective brands, grow our technology, accelerate the development of innovative
products, expand our global footprint, and deliver superior products and service
to our customers.

"Growing the sales of our Water Technologies business will be a top priority,"
Cathcart noted. "Accomplishing that goal is a task made easier by the fact that
both Pentair and WICOR possess strong management teams, have experience in the
water industry, and have recognized products. There are also strong parallels in
our company cultures, both of which are built on core values of integrity and
respect."

Pentair has a solid record of success in managing the integration of acquired
water businesses. In 2002, Pentair acquired the Plymouth Products water
filtration equipment business from USFilter. In the first year of ownership by
Pentair, Plymouth Product's profits improved 17 percent, while EBIT margins
gained 150 basis points.

"Pentair has made 11 acquisitions in the Water Technologies arena since 1995,
and each has increased sales, captured synergies, and contributed to Pentair's
earnings within the first 12 months of ownership. We expect to generate similar
results with the integration of WICOR," Cathcart said. "We have a rigorous
integration planning process underway with a fully staffed integration planning
office and more than a dozen teams for our business units and functional
business support. We expect to save more than $30 million in the first full year
of ownership, primarily through sourcing, supply chain, and manufacturing
synergies."

Pentair said that although the Water Technologies Group will be its largest
business, the Company remains committed to a diverse business mix.

"Our Enclosures Group has done a tremendous job of fighting through a difficult
market downturn during the last three years," Hogan said. "Today, we believe
this business is well positioned to continue growing profitably, as evidenced by
its eight consecutive quarters of margin improvement. Our proven ability to
capture organic growth in Enclosures is one of several strengths we expect to
lever to create a larger business platform. In addition, we will continue to
enjoy the benefits that a diverse business portfolio offers Pentair's
shareholders."

                                     (more)



                                       -3-

In a separate announcement, Pentair said its fourth quarter 2003 earnings per
share from continuing operations was $0.69, a 21 percent gain over fourth
quarter 2002 EPS of $0.57.

Pentair's Water Technologies Group manufactures water and wastewater pumps for
water systems; filters, control valves, tanks, and pressure vessels for
filtration systems; and pool and spa equipment, with $1.06 billion in sales in
2003. The Group's key brand names include: Myers, Hydromatic, Aurora, and
Fairbanks Morse pumps; Fleck and SIATA water conditioning valves; WellMate and
Structural tanks; Plymouth Products, American Plumber, Pentek, and Everpure
filtration products; National Pool Tile, Rainbow Lifegard, Kreepy Krauly, Letro
Products, and Pentair Pool Products.

About Pentair, Inc.
Pentair is a diversified operating company headquartered in Minnesota. Its Water
Technologies Group is a global leader in providing innovative products and
systems used worldwide in the movement, treatment, storage and enjoyment of
water. Pentair's Enclosures group is a leader in the global enclosures market,
serving industrial and electronic customers, and its Tools Group manufactures
and markets innovative products under established brand names to professionals
and do-it-yourself users. Pentair's 2003 revenues totaled $2.7 billion. The
company employs more than 12,000 people in over 50 locations around the world.

This report contains statements that we believe to be "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, including any statements about the company's anticipated sales,
synergies or other results or expected benefits of the WICOR acquisition. These
forward-looking statements generally can be identified by the use of words such
as "believes," "anticipates" or "expects," or words of similar import. Such
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ from those currently anticipated, including the
company's ability to integrate the WICOR acquisition successfully, the ability
to obtain regulatory approvals of the acquisition on anticipated terms and
schedule, and the risk that expected synergies may not be fully realized or may
take longer to realize than expected. Forward-looking statements included herein
are made as of the date hereof and the company undertakes no obligation to
update publicly such statements to reflect subsequent events or circumstances.

Contact:
Mark Cain, Pentair
Tel. (763) 656-5278
e-mail: mark.cain@pentair.com

EX-99.2

                                                                    EXHIBIT 99.2

                                                                  EXECUTION COPY

================================================================================

                            STOCK PURCHASE AGREEMENT

                                      AMONG

                                  PENTAIR, INC.

                                   WICOR, INC.

                                       AND

                          WISCONSIN ENERGY CORPORATION

                                February 3, 2004

================================================================================



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1. PURCHASE AND SALE OF SHARES.................................................1
   1.1.   Purchase and Sale....................................................1
   1.2.   Designated Purchasers................................................1

2. PURCHASE PRICE; PAYMENT.....................................................1
   2.1.   Purchase Price.......................................................1
   2.2.   Payment..............................................................2
   2.3.   Determination of Net Asset Value.....................................2

3. REPRESENTATIONS AND WARRANTIES OF SELLER....................................5
   3.1.   Corporate............................................................5
   3.2.   Seller...............................................................7
   3.3.   Authority............................................................7
   3.4.   No Violation.........................................................7
   3.5.   Financial Statements.................................................8
   3.6.   Tax Matters..........................................................8
   3.7.   Absence of Certain Changes...........................................9
   3.8.   Absence of Undisclosed Liabilities..................................11
   3.9.   No Litigation.......................................................11
   3.10.  Compliance with Laws and Orders.....................................11
   3.11.  Title to and Condition of Properties................................12
   3.12.  Insurance...........................................................13
   3.13.  Contracts and Commitments...........................................13
   3.14.  No Default..........................................................15
   3.15.  Labor Matters.......................................................15
   3.16.  Employee Benefit Plans..............................................15
   3.17.  Trade Rights........................................................18
   3.18.  Product Warranty and Product Liability..............................18
   3.19.  Certain Relationships to Company....................................19
   3.20.  Customers and Suppliers.............................................19
   3.21.  No Brokers or Finders...............................................19
   3.22.  Limit of Representations............................................20

4. REPRESENTATIONS AND WARRANTIES OF BUYER....................................20
   4.1.   Corporate...........................................................20
   4.2.   Authority...........................................................20
   4.3.   No Violation........................................................20
   4.4.   Sufficient Funds....................................................20
   4.5.   No Brokers or Finders...............................................21
   4.6.   Investment Intent Representation....................................21

5. COVENANTS PRIOR TO THE CLOSING.............................................21
   5.1.   Pre-Closing Access to Information and Real Property.................21
   5.2.   Conduct of Business Pending the Closing.............................23
   5.3.   Further Assurances..................................................24
   5.4.   Certain Filings.....................................................24
   5.5.   Title Insurance.....................................................25
   5.6.   Surveys.............................................................25

                                        i



   5.7.   Notification........................................................25
   5.8.   Financing...........................................................25
   5.9.   Non-Water Subsidiaries..............................................26
   5.10.  Intercompany Indebtedness...........................................26
   5.11.  Employee Benefit Plan Matters.......................................26
   5.12.  Limitation on Covenants.............................................27

6. ADDITIONAL COVENANTS.......................................................27
   6.1.   Post-Closing Access to Information; Cooperation.....................27
   6.2.   Tax Matters.........................................................28
   6.3.   Employee Benefit Plan Matters.......................................31
   6.4.   Pump Business Headquarters..........................................32
   6.5.   Certain Product Safety Matters......................................32
   6.6.   Investigation.......................................................32
   6.7.   Confidentiality.....................................................32

7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS................................33
   7.1.   Representations and Warranties True on the Closing Date.............33
   7.2.   Compliance With Agreement...........................................33
   7.3.   No Orders...........................................................33
   7.4.   HSR Act and Other Approvals.........................................33
   7.5.   Financing...........................................................33

8. CONDITIONS PRECEDENT TO COMPANY'S AND SELLER'S OBLIGATIONS.................33
   8.1.   Representations and Warranties True on the Closing Date.............33
   8.2.   Compliance With Agreement...........................................34
   8.3.   No Orders...........................................................34
   8.4.   HSR Act and Other Approvals.........................................34
   8.5.   PSCW Approval.......................................................34

9. INDEMNIFICATION............................................................34
   9.1.   By Seller...........................................................34
   9.2.   By Buyer............................................................35
   9.3.   Indemnification Claims..............................................35
   9.4.   Limitations on Indemnification......................................37
   9.5.   Adjustments for Insurance and Taxes and Calculation of Losses.......38

10. CLOSING...................................................................39
   10.1.  Closing Date; Location..............................................39
   10.2.  Documents to be Delivered by Company and Seller.....................40
   10.3.  Documents to be Delivered by Buyer..................................40

11. TERMINATION...............................................................40
   11.1.  Termination.........................................................40
   11.2.  Effect of Termination...............................................41

12. MISCELLANEOUS.............................................................41
   12.1.  Disclosure Schedule.................................................41
   12.2.  Publicity...........................................................41
   12.3.  Assignment..........................................................42
   12.4.  Parties in Interest.................................................42
   12.5.  Law Governing Agreement; Waiver of Jury Trial.......................42
   12.6.  Severability........................................................42

                                       ii



   12.7.  Amendment and Modification..........................................42
   12.8.  Waiver..............................................................42
   12.9.  Notice..............................................................43
   12.10. Expenses............................................................44
   12.11. Equitable Relief....................................................45
   12.12. Interpretive Provisions.............................................46
   12.13. Entire Agreement....................................................46
   12.14. Counterparts........................................................46
   12.15. Section Headings; Table of Contents.................................46
   12.16. No Strict Construction..............................................46
   12.17. Definitions.........................................................46

                                       iii



                                    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

                                       iv




                         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.

                                        1



                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 (10th)
        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

                                        2



        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).

                                        3



                (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

                                        4



                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

                                        5



        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.

                                        6



                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")

                                        7



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

                                        8



        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.

                                        9



                        (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

                                       10



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

                                       11



        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

                                       12



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.

                                       13



                        (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

                                       14



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.

                                       15



                        (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

                                       16



        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

                                       17



        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

                                       18



        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) relate to Non-Water Subsidiaries, no representation
or warranty contained in this Article 3 shall in any way apply to any Non-Water
Subsidiary or the business or operations of any Non-Water Subsidiary or any
Other Businesses.

        4.      REPRESENTATIONS AND WARRANTIES OF BUYER

                Buyer makes the following representations and warranties to
Company and Seller.

                4.1.    Corporate.

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

                        (b)     Corporate Power. Buyer has all requisite
        corporate power and authority to execute and deliver this Agreement and
        to perform its obligations hereunder.

                4.2.    Authority. The execution and delivery of this Agreement
by Buyer and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by the board of directors of Buyer and no other or
further corporate act or proceeding on the part of Buyer or its shareholders is
necessary to authorize this Agreement or the consummation by Buyer of the
transactions contemplated hereby. This Agreement constitutes a valid and binding
agreement of Buyer, 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.

                                       19



                4.3.    No Violation. Neither the execution and delivery of this
Agreement nor the consummation by Buyer of the transactions contemplated hereby
(a) will violate any Laws or Orders of any Governmental Entity applicable to
Buyer, (b) except for applicable requirements (i) of 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 Buyer are listed, will
require on the part of Buyer any authorization, consent, approval, exemption or
other action by or notice to, declaration, filing or registration with, any
Governmental Entity or (c) except as set forth on Exhibit 4.3 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 Buyer, any term or
provision of the charter, bylaws or similar organizational documents of Buyer or
of any Contract to which Buyer is a party or by which Buyer or any of its assets
or properties may be bound.

                4.4.    Sufficient Funds. Buyer has obtained legally binding
financing commitments from responsible financial institutions, copies of which
are attached as Exhibit 4.4 (the "Financing Commitments"), to provide cash to
Buyer in an amount sufficient to enable Buyer to consummate the transactions
contemplated by this Agreement.

                4.5.    No Brokers or Finders. Except for such fees that will be
paid by Buyer, neither Buyer nor any of its directors, officers, employees or
agents have retained, employed or used any investment banking firm, broker or
finder in connection with the transactions provided for herein or in connection
with the negotiation thereof, nor are any of them responsible for the payment of
any investment banking, broker's or finder's fees.

                4.6.    Investment Intent Representation. Buyer is acquiring the
Shares for its own account and not with a view toward any resale or distribution
of any of the Shares or any beneficial interest in the Shares. Buyer agrees that
the Shares may not be sold, transferred, offered for sale, pledged, hypothecated
or otherwise disposed of without registration under the Securities Act of 1933,
as amended, or an applicable exemption therefrom and without compliance with
foreign securities laws, in each case, to the extent applicable.

        5.      COVENANTS PRIOR TO THE CLOSING

                5.1.    Pre-Closing Access to Information and Real Property.

                        (a)     General. From the date hereof until the earlier
        of the Closing and date of termination of this Agreement and except as
        prohibited by applicable Law, Company and Seller shall, and shall use
        their commercially reasonable efforts to cause Water Subsidiaries and
        Company's and Water Subsidiaries' officers, employees, agents,
        independent accountants and advisors ("Representatives") to, furnish to
        Buyer and its Representatives, at reasonable times and places, (i)
        subject to Section 5.1(b), such access to the facilities of the Water
        Business as Buyer may from time to time reasonably request; (ii) such
        access to the assets, books and records of Company and Water
        Subsidiaries as Buyer may from time to time reasonably request; and
        (iii) such access to financial and operating data and other information
        relating to Company and Water Subsidiaries as Buyer may from time to
        time reasonably request, including access to the work papers of
        Company's independent auditors (with the consent of such auditors);
        provided, however, that nothing herein shall require Company or Water
        Subsidiaries to disclose any information to Buyer if such disclosure (A)
        would cause significant competitive harm to Company, Water Subsidiaries
        or their Affiliates

                                       20



        if the transactions contemplated by this Agreement are not consummated
        or (B) would be in violation of applicable Laws of any Governmental
        Entity or the provisions of any agreement to which Seller or Company or
        any Water Subsidiary is a party; provided further, that notwithstanding
        clause (A), and subject to clause (B), of the foregoing proviso, Seller
        and Company shall, and shall use their commercially reasonable efforts
        to cause Water Subsidiaries and their Representatives to, provide
        information to Buyer's Consultant subject to the terms of Exhibit
        5.1(a). Buyer will hold any such information which is nonpublic in
        confidence in accordance with the provisions of the Confidentiality
        Agreement, the terms of which are hereby incorporated herein by
        reference and which shall survive termination of this Agreement and
        which shall govern the treatment of all information provided to or
        obtained by Buyer in connection with the transactions contemplated by
        the Agreement.

                        (b)     Access to Real Property. Buyer understands and
        agrees that any on-site inspections of the Real Property, including by
        the Environmental Consultant, shall be conducted upon not less than
        forty-eight (48) hours' prior notice to Company and/or the Water
        Subsidiary operating at such Real Property and in the presence of a
        representative of Company or the applicable Water Subsidiary. Without
        limiting Section 5.1(a)(i), from the date hereof until the earlier of
        the Closing and date of termination of this Agreement, Seller and
        Company agree to furnish to Buyer and its Representatives, at reasonable
        times and places such access to the facilities of the Water Business as
        Buyer may from time to time reasonably request for the Environmental
        Consultant to conduct environmental inspections, investigations and
        testing (including Phase I environmental site assessments and audits) of
        the operations and Real Property of Company and the Water Subsidiaries.
        Notwithstanding the foregoing, the Parties agree that the Environmental
        Consultant may only conduct Phase II environmental site assessments and
        audits on a Real Property if Buyer, Buyer's environmental counsel, the
        Environmental Consultant and Seller and Seller's environmental counsel
        collectively shall reasonably determine, based on the results of the
        Phase I environmental site assessments and audits or any other
        information or evidence available to them, that Waste is present or
        likely present on, at, above or below any Real Property and (A) such
        Phase I environmental site assessments and audits or other information
        or evidence indicate that a release of such Waste into structures on the
        Real Property or into the ground, groundwater or surface water of the
        Real Property has occurred, (B) such Waste presents a material risk to
        human health or the environment or (C) such Waste is reasonably likely
        to result in material Liability to the Company or any Water Subsidiary
        under Environmental Laws. Buyer shall (i) use commercially reasonable
        efforts to conduct its investigations at the Real Property, including by
        the Environmental Consultant, in a manner that minimizes any disruption
        of the operations of Company and/or any Water Subsidiary at the Real
        Property and (ii) indemnify, protect, defend and hold harmless Company
        and each Water Subsidiary from any and all claims (including, without
        limitation, any claim for a mechanic's lien or materialman's lien),
        causes of action, costs, losses, damages and reasonable attorneys' fees
        incurred by Company or any Water Subsidiary in connection with or
        arising out of any inspections carried on by or on behalf of Buyer
        pursuant to this Section 5.1 (except to the extent of conditions
        disclosed in any such inspection that existed prior to such inspection
        and that constitute a breach of a representation or warranty contained
        in Section 3.10(c)). The provisions of the preceding sentence of this
        Section 5.1(b) shall survive the termination of this Agreement.

                        (c)     Financial Statements. Seller, at its expense,
        shall engage Deloitte to conduct an audit of the consolidated balance
        sheet of Industries as of December 31, 2003 and

                                       21



        shall deliver such audited consolidated balance sheet of Industries on
        or prior to March 15, 2004. Upon the Closing or earlier with the consent
        of Seller (which consent shall not be unreasonably withheld or delayed),
        Buyer may arrange, at Buyer's sole cost and expense, and Company and
        Seller shall use commercially reasonable efforts to cooperate with
        Buyer, to have such financial statements of Company after giving effect
        to the Distribution audited to the extent Buyer is required to file with
        the Securities and Exchange Commission in a Current Report on Form 8-K
        pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
        as amended.

                        (d)     Sarbanes-Oxley Implementation. From the date
        hereof until the earlier of the Closing and date of termination of this
        Agreement and except as prohibited by applicable Law, Seller will use
        commercially reasonably efforts to cause Company and Water Subsidiaries
        to (i) implement a process to document their significant internal
        controls over financial reporting and an internal testing and
        remediation program with respect to such controls and (ii) furnish to
        Buyer and its Representatives, at reasonable times and places, and in
        accordance with the limitations described in Section 5.1(a), access to
        the Representatives of Seller, Company and Water Subsidiaries primarily
        responsible for the implementation described in clause (i) above. Buyer
        shall be solely responsible for the payment of all costs and expenses
        relating to the activities of Buyer and its Representatives pursuant to
        the foregoing clause (ii) and any incremental costs or expenses that may
        be imposed on Seller, Company or Water Subsidiaries as a result of such
        activities of Buyer and its Representatives.

                5.2.    Conduct of Business Pending the Closing. From the date
hereof until the earlier of the Closing and date of termination of the
Agreement, except as required or contemplated by or in connection with the
transactions contemplated by this Agreement, including as disclosed on the
Disclosure Schedule, and except for any actions taken by Seller, Company or
Water Subsidiaries of the type set forth in Exhibit 5.2 or otherwise consented
to by Buyer in writing (which consent shall not be unreasonably withheld or
delayed):

                        (a)     No Material Changes. Seller will cause Company
        and each Water Subsidiary to conduct its business in the ordinary and
        usual course of business and will not make or institute any material
        changes in its methods of operation.

                        (b)     Maintain Organization. Seller will cause Company
        and each Water Subsidiary to use commercially reasonable efforts to
        preserve its business intact and to preserve for Buyer its current
        relationships with its suppliers, customers and others with which it has
        business dealings.

                        (c)     No Corporate Changes. Seller will cause Company
        and each Water Subsidiary not to amend its charter, bylaws or similar
        organizational documents or make any changes in its authorized or issued
        capital stock. Seller will cause Company and each Water Subsidiary not
        to issue any additional capital stock or enter into any Contract to
        issue any additional capital stock.

                        (d)     No Capital Expenditures. Seller will cause
        Company and each Water Subsidiary not to make any unbudgeted capital
        expenditure, nor commit to make any unbudgeted capital expenditure, in
        excess of Five Hundred Thousand Dollars ($500,000) (or its foreign
        currency equivalent as of the date hereof), except pursuant to a Listed
        Contract.

                                       22



                        (e)     Maintenance of Insurance. Seller will cause
        Company and Water Subsidiaries to use commercially reasonable efforts to
        maintain insurance policies comparable to the policies in effect as of
        the date of this Agreement.

                        (f)     Interim Financials. Seller will cause Company to
        make available to Buyer such interim monthly financial statements of
        Company and Water Subsidiaries as Company and Water Subsidiaries have
        prepared and Company has used in the ordinary course of managing the
        Water Business and measuring and reporting the operating results of
        Company and Water Subsidiaries, as soon as practicable after they are
        available.

                        (g)     No Negotiations. Until the Closing or until this
        Agreement has been terminated in accordance with its terms, Seller will
        not, and will cause Company and Seller's and Company's respective
        officers, director and agents not to, solicit or furnish any information
        to, commence or conduct presently ongoing negotiations with, or enter
        into any Contract with, any Person other than Buyer relating to the sale
        or other disposition of a material portion of the assets of the Water
        Business or of all or any portion of the capital stock of Company or any
        Water Subsidiary, in each case whether directly or indirectly, or by
        merger, sale of stock, reorganization, recapitalization or otherwise (an
        "Acquisition Proposal"). Company and Seller will promptly provide Buyer
        written notice of any such Acquisition Proposal and the terms thereof.

                        (h)     No Transfer of Shares. Seller will not transfer
        any of the Shares except to Buyer pursuant hereto.

                5.3.    Further Assurances. Each of the Parties hereto agrees to
use its respective commercially reasonable efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable Laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.

                5.4.    Certain Filings. Each Party shall make or cause to be
made, in cooperation with the other Parties and to the extent applicable and as
promptly as practicable, (a) an appropriate filing of a Notification and Report
Form pursuant to the HSR Act with respect to the transactions contemplated
hereby (which filing shall be made in any event within ten (10) business days
following the date hereof) and (b) all other necessary filings, forms,
declarations, notifications, registrations and notices with other Governmental
Entities under Competition Laws relating to the transactions contemplated
hereby. Each Party shall use commercially reasonable efforts to respond at the
earliest practicable date with any requests for additional information made by
the Federal Trade Commission (the "FTC"), the United States Department of
Justice (the "DOJ") or any other Governmental Entities, and act in good faith
and reasonably cooperate with the other party in connection with any
investigation of any Governmental Entity. Each party shall use all commercially
reasonable efforts to furnish to each other all information required for any
filing, form, declaration, notification, registration and notice. Each party
shall give the other party reasonable prior notice of any communication with,
and any proposed understanding or agreement with, any Governmental Entity
regarding any filings, forms, declarations, notifications, registrations or
notices, and permit the other to review and discuss in advance, and consider in
good faith the views of the other in connection with any proposed communication,
understanding or agreement with any Governmental Entity with respect to the
transactions contemplated by the Agreement. None of the parties shall
independently participate in any meeting, or engage in any substantive
conversation, with any governmental authority in respect of any filings or
inquiry without giving the other party

                                       23



prior notice of the meeting and, unless prohibited by such Governmental Entity,
the opportunity to attend and/or participate. The parties will consult and
cooperate with one another in connection with any information or proposals
submitted in connection with proceedings under or relating to any Competition
Law. Without limiting the foregoing, Buyer and Seller shall each use all
commercially reasonable efforts: (i) to avoid the entry of any judgment that
would restrain, prevent or delay the Closing, on or before the Termination Date;
and (ii) to eliminate every impediment under any Competition Law that may be
asserted by any Governmental Entity so as to enable the Closing to occur as soon
as reasonably possible (and in any event no later than the Termination Date).

                5.5.    Title Insurance. Not less than thirty (30) calendar days
prior to the Closing, Company and Seller shall provide to Buyer copies of any
title insurance commitments and/or policies for the Real Property that are
currently in their possession. Company and Seller shall use commercially
reasonable efforts to cooperate with Buyer (which shall not include the
expenditure of any amounts by Seller and/or Company) to assist Buyer in
obtaining title insurance commitments pursuant to which the title company shall
commit to issue to Buyer standard form owner's policies of title insurance with
respect to all Real Property owned by the Water Subsidiaries. Such cooperation
by Company and Seller shall include providing the title insurance company with
such affidavits, certificates or similar instruments as the title insurance
company may reasonably and customarily require. Buyer shall be solely
responsible for all costs associated with such title insurance commitments and
any premiums for any title policies for the Real Property.

                5.6.    Surveys. Not less than thirty (30) calendar days prior
to the Closing, Company and Seller shall provide to Buyer copies of any surveys
of the Real Property that are currently in their possession. Subject to the
provisions of Section 5.1(b), Company and Seller shall use commercially
reasonable efforts to cooperate with Buyer (which shall not include the
expenditure of any amounts by Seller and/or Company) to assist Buyer in
obtaining surveys of all Real Property owned by the Water Subsidiaries. Buyer
shall be solely responsible for all costs associated with the preparation of
such surveys.

                5.7.    Notification. Prior to the Closing, Seller shall
promptly notify Buyer (after Seller has notice thereof), and Buyer shall
promptly notify Seller (after Buyer has notice thereof), and keep such other
Parties advised, as to any Litigation pending and known to such Party or, to its
actual knowledge, threatened against such Party that challenges the transactions
contemplated hereby. In addition, prior to the Closing, Seller shall promptly
notify Buyer (after Seller has notice thereof), as to any Company Material
Adverse Effect and Buyer shall promptly notify Seller (after Buyer has notice
thereof) of any Buyer Material Adverse Effect.

                5.8.    Financing. Buyer will use its best efforts to consummate
the funding contemplated by the Financing Commitments prior to Closing. If any
portion of the funding contemplated by the Financing Commitments becomes
unavailable, regardless of fault, then Buyer will use its best efforts to obtain
from other sources the financing necessary for the consummation of the
transactions contemplated hereby (the "Other Financing"). Consistent with the
foregoing, Buyer will not take any action or omit to take any action that may
impair its ability, or its prospective lenders' willingness, to consummate the
Financing Commitments in accordance with the terms of the Financing Commitments.
Buyer will keep Seller reasonably informed as to the status of the Financing
Commitments and will notify Seller promptly of any material developments with
respect to the Financing Commitments.

                                       24



                5.9.    Non-Water Subsidiaries. Prior to the Closing, Seller
shall cause Company to distribute to Seller (a) its direct or indirect equity or
other ownership interest in Non-Water Subsidiaries (the "Distribution"), (b) all
of Company's cash such that the sole asset of Company at the Closing is the
equity interests of Industries and (c) all of Industries' cash. Seller will use
its commercially reasonable efforts to obtain any requisite approvals from the
Public Service Commission of the State of Wisconsin (the "PSCW") to permit the
consummation of the Distribution and to confirm that Company and the Water
Subsidiaries will not be subject to regulation by the PSCW as of the
Distribution. Buyer shall use its commercially reasonable efforts to cooperate
with Seller, as and to the extent reasonably requested by Seller, in connection
with obtaining such approvals. Seller and Company will (i) consult with Buyer
with respect to, permit Buyer and its counsel to review in advance and make
reasonable comments on, any proposed material written communications, including
any application for an order for such approvals, to the PSCW, (ii) furnish to
Buyer copies of all material correspondence, filings and written communications
between Seller or Company and the PSCW with respect to such approvals and (iii)
notify Buyer promptly of any material developments with respect to obtaining
such approvals.

                5.10.   Intercompany Indebtedness. Immediately prior to the
Closing, Seller shall, and shall cause its Affiliates (other than Company and
Water Subsidiaries) to, settle any outstanding obligations or indebtedness of
Company and Water Subsidiaries owed to Seller or its Affiliates (other than
Company and Water Subsidiaries) ("Intercompany Indebtedness") by way of capital
contribution in kind.

                5.11.   Employee Benefit Plan Matters.

                        (a)     Effective not later than immediately before the
        Closing, Seller shall cause the assets of any Employee Plan/Agreement
        that are attributable to Company Employees or former employees of the
        Water Business and that are held under a trust or other arrangement that
        is intended to be exempt from taxation under Section 501(a) of the Code
        to be held under such a trust or other arrangement of which Company or a
        Water Subsidiary is the sole settlor (but in any event only to the
        extent that the liabilities attributable to such assets will be
        liabilities of a Buyer Plan immediately after the Closing). Subject to
        ERISA and other applicable Law, the assets so held under each trust so
        settled by Company or a Water Subsidiary (net of any trading,
        transaction or trust establishment expenses), shall consist of cash,
        marketable and other liquid securities, or other property which can be
        liquidated to cash within a commercially reasonable period of time or
        which provides for the payment of benefits as and when the become due
        (e.g., an annuity contract).

                        (b)     Not later than two weeks after the date hereof,
        Buyer shall identify for Seller not fewer than twenty (20) Company
        Employees who shall be identified on Exhibit B of the form of Company
        Retention and Severance Plan attached hereto as Exhibit 5.11(b), and
        effective not later than the Closing, Company shall adopt such plan
        (with Exhibit B thereto incorporating solely the names of the Company
        Employees so identified by Buyer) in the form of the document attached
        hereto as Exhibit 5.11(b).

                        (c)     The Parties shall use their commercially
        reasonable efforts to cooperate and share such information as is
        reasonably necessary for the transition in the administration and
        provision of benefits under the Employee Plans/Agreements.

                                       25



                5.12.   Limitation on Covenants.

Notwithstanding anything to the contrary contained in this Agreement, no
obligations or covenants of Company and Water Subsidiaries contained in Article
5 (other than as specifically set forth in Section 5.9) shall in any way apply
to or restrict the operations of any Non-Water Subsidiary or any Other
Businesses.

        6.      ADDITIONAL COVENANTS

                6.1.    Post-Closing Access to Information; Cooperation.

                        (a)     Access to Information. After the Closing, for a
        period of seven (7) years after the Closing Date, each Party shall
        preserve and retain, or, cause its Subsidiaries to preserve and retain,
        all corporate, accounting, Tax, legal, auditing or other books and
        records of such Party and its Subsidiaries (including any documents
        relating to any governmental or non-governmental actions, suits,
        proceedings or investigations) relating to the conduct of the business
        and operations of Company and Water Subsidiaries prior to the Closing
        Date. Notwithstanding the foregoing, during such seven-year period, each
        Party and its Subsidiaries may dispose of any such books and records
        which are offered to, but not accepted by, the other Party. Each Party
        shall not, and shall not permit its Subsidiaries to, dispose of any such
        books and records at any time after such seven-year period without first
        offering such books and records to the other Party. After the Closing
        Date, each Party shall, and shall cause its Subsidiaries to, permit the
        other Party and its authorized Representatives to have reasonable access
        to, and to inspect and copy, all materials referred to in this Section
        6.1(a) and to meet with officers and employees of such Party and its
        Subsidiaries on a mutually convenient basis in order to obtain
        explanations with respect to such materials and to obtain additional
        information and to call such officers as witnesses. Without limiting the
        foregoing, after the Closing, each Party shall make available to any
        other Party, as reasonably requested, and to any Tax authority that is
        legally permitted to receive the following pursuant to its subpoena
        power or its equivalent, all books, records and other data relating to
        Tax Liabilities or potential Tax Liabilities as is reasonably necessary
        for the filing of all Tax Returns, the preparation for any audit by any
        Governmental Entity and the prosecution or defense of any claim, suit or
        proceeding relating to any Tax Return and shall preserve all such books,
        records and other data until the expiration of any applicable statute of
        limitations for assessment or refund of Taxes or extensions thereof.

                        (b)     Cooperation. Each Party shall use their
        respective commercially reasonable efforts to cooperate with each other,
        as and to the extent reasonably requested by any other Party, in
        connection with (i) the filing of Tax Returns pursuant to Section 6.2
        and (ii) any Litigation (including insurance claims) brought by or
        against any third party in connection with (A) any transaction
        contemplated by this Agreement or (B) any fact or condition relating to
        Company's business or assets. Such cooperation shall include making
        available to the requesting Party, at such times and under such
        circumstances so as not to unreasonably disrupt business, the relevant
        information, documents, records and employees of the cooperating Party,
        allowing the relevant personnel of the cooperating Party to assist the
        requesting Party in participating in any such matter (including
        providing testimony in Litigation), executing and delivering documents
        or instruments and taking all such action as the requesting Party
        reasonably requests in connection with such matter; provided, however,
        that the requesting Party shall promptly reimburse the cooperating Party
        for all out-of-pocket costs, for a pro-rata portion of the salary
        (including fringe benefits with such pro-rata portion determined based
        upon the time spent in connection with cooperation) and for travel and

                                       26



        subsistence expenses directly relating to such cooperation of any of the
        cooperating Party's employees who assist the requesting Party, unless
        the requesting Party is entitled to indemnification therefor under
        Article 9 or such costs, salary and expenses are incurred by the
        cooperating Party in assisting the requesting Party to prepare a Tax
        Return described in Section 6.2(a) or Section 6.2(b).

                        (c)     Adversarial Proceedings Involving Parties.
        Notwithstanding the provisions of this Section 6.1, although the
        existence of a Dispute or other adversarial proceeding between or among
        any of the Parties shall not abrogate or suspend the provisions of this
        Section 6.1, as to such records or other information directly pertinent
        to such Dispute or other adversarial proceeding, the Parties may not
        utilize this Section 6.1 but rather, absent agreement, must utilize the
        rules of discovery.

                6.2.    Tax Matters. The following provisions shall govern the
        allocation of responsibility as between Buyer and Seller for certain Tax
        matters following the Closing Date:

                        (a)     Tax Periods Ending on or Before the Closing
        Date. Between the date of this Agreement and the Closing Date, Seller
        shall file, or cause Company and Water Subsidiaries to file, on a timely
        basis all Tax Returns that are required to be filed by Company and Water
        Subsidiaries prior to the Closing Date (taking into account any
        extensions of time to file). Buyer shall prepare or cause to be
        prepared, in a manner consistent with the past practice of Company and
        Water Subsidiaries, except as otherwise required by applicable Law, and
        file or cause to be filed all Tax Returns for Company and Water
        Subsidiaries for all periods ending on or prior to the Closing Date that
        are required to be filed after the Closing Date (other than income (or
        franchise) Tax Returns with respect to periods for which a consolidated,
        unitary or combined income (or franchise) Tax Return of Seller or any
        Affiliate of Seller (other than Company or a Water Subsidiary) will
        include the operations of Company or any Water Subsidiary). In the case
        of each such Tax Return prepared or filed by Buyer, Buyer shall submit a
        pro forma Tax Return (with copies of any relevant schedules, work papers
        and other documentation) to Seller for approval within a reasonable time
        prior to the date on which such Tax Return is due to be filed (taking
        into account any applicable extensions), which approval shall not be
        unreasonably withheld, and shall incorporate on such Tax Return any
        reasonable comments timely provided in writing by Seller in respect of
        such Tax Return. Seller shall pay or cause Company and Water
        Subsidiaries to pay all Taxes due and payable on the Tax Returns filed
        under the first sentence of this Section 6.2(a) and shall reimburse
        Buyer for all Taxes of Company and Water Subsidiaries due and payable on
        the Tax Returns filed under the second sentence of this Section 6.2(a)
        within ten (10) business days after payment by Buyer, Company or any
        Water Subsidiary of such Taxes to the extent such Taxes are not
        reflected in the reserve for Tax Liability (rather than any reserve for
        deferred Taxes established to reflect timing differences between book
        and Tax income) shown on the face of the Final Closing Balance Sheet.

                        (b)     Tax Periods Beginning Before and Ending After
        the Closing Date. Buyer shall prepare or cause to be prepared, in a
        manner consistent with the past practice of Company and Water
        Subsidiaries, except as otherwise required by applicable Law, and file
        or cause to be filed any Tax Returns of Company and Water Subsidiaries
        for Tax periods that begin before the Closing Date and end after the
        Closing Date. In the case of each such Tax

                                       27



        Return prepared or filed by Buyer, Buyer shall submit a pro forma Tax
        Return (with copies of any relevant schedules, work papers and other
        documentation) to Seller for approval within a reasonable time prior to
        the date on which such Tax Return is due to be filed (taking into
        account any applicable extensions), which approval shall not be
        unreasonably withheld, and shall incorporate on such Tax Return any
        reasonable comments timely provided in writing by Seller in respect of
        such Tax Return. Seller shall pay to Buyer within ten (10) business days
        after the date on which Taxes are paid with respect to such periods an
        amount equal to the portion of such Taxes that relates to the portion of
        such Tax period ending on the Closing Date to the extent such Taxes are
        not reflected in the reserve for Tax Liability (rather than any reserve
        for deferred Taxes established to reflect timing differences between
        book and Tax income) shown on the face of the Final Closing Balance
        Sheet. For purposes of this Agreement, in the case of any Taxes that are
        imposed on a periodic basis and are payable for a Tax period that
        includes (but does not end on) the Closing Date, the portion of such
        Taxes that relates to the portion of such Tax period ending on the
        Closing Date shall (i) in the case of any Taxes other than Taxes based
        upon or related to income or receipts or net worth (e.g., franchise
        taxes), be deemed to be the amount of such Taxes for the entire Tax
        period multiplied by a fraction, the numerator of which is the number of
        days in the Tax period ending on and including the Closing Date, and the
        denominator of which is the number of days in the entire Tax period, and
        (ii) in the case of any Taxes based upon or related to income or
        receipts or net worth (e.g., franchise taxes), be deemed equal to the
        amount that would be payable if the relevant Tax period ended on the
        Closing Date, using the "closing of the books" method of accounting, and
        in a manner consistent with the Final Closing Balance Sheet. Any credits
        relating to a Tax period that begins before and ends after the Closing
        Date shall be taken into account as though the relevant Tax period ended
        on the Closing Date.

                        (c)     Consolidated Returns for Periods Through the
        Closing Date. Seller shall include the income of Company and Water
        Subsidiaries (including any deferred income triggered into income by
        Treasury Regulation Section 1.1502-13 and Treasury Regulation Section
        1.1502-14 and any excess loss accounts taken into income under Treasury
        Regulation Section 1.1502-19) on the consolidated, combined or unitary
        federal (and state) income (or franchise) Tax Returns of Seller for all
        periods through and including the Closing Date and pay any Taxes
        attributable to such income. Company and Water Subsidiaries shall
        furnish Tax information to Seller for inclusion in Seller's federal (and
        state) consolidated (or combined) income Tax Return for the period that
        includes the Closing Date in accordance with the past custom and
        practice of Company and Water Subsidiaries. Seller shall allow Buyer an
        opportunity to review and comment upon such Tax Returns (including any
        amended returns) to the extent that they relate to Company or any Water
        Subsidiary. Seller shall take no position on such Tax Returns that
        relate to Company or any Water Subsidiary that would materially
        adversely affect Company or any Water Subsidiary after the Closing Date,
        unless such position would be reasonable in the case of a Person that
        owned Company or any Water Subsidiary both before and after the Closing
        Date. For the purposes of such Tax Returns, the income of Company and
        Water Subsidiaries shall be apportioned to the period up to and
        including the Closing Date and the period after the Closing Date by
        closing the books of Company and Water Subsidiaries as of the end of the
        Closing Date and in a manner consistent with the Final Closing Balance
        Sheet. Seller shall not settle any audit of a federal or state income
        (or franchise) Tax Return with respect to periods for which a
        consolidated, unitary or combined income (or franchise) Tax Return of
        Seller or of any Affiliate of Seller (other than Company or any Water
        Subsidiary) will include the operations of Company or any Water
        Subsidiary in a manner that would materially adversely affect

                                       28



        Company or any Water Subsidiary after the Closing Date, unless such
        settlement would be reasonable in the case of a Person that owned
        Company or any Water Subsidiary both before and after the Closing Date,
        and Seller shall disclose to Buyer information relating to any such
        settled audit to the extent such settled audit has a material effect on
        the Tax Liabilities of Company or any Water Subsidiary in any Tax
        period, or portion thereof, that begins after the Closing Date.

                        (d)     Refunds or Credits. At the reasonable request of
        Seller, Buyer shall cooperate, or cause Company or Water Subsidiaries to
        cooperate, with Seller in obtaining any refunds or credits (including
        interest thereon) relating to Taxes for which Seller or any of its
        Affiliates (other than Company or a Water Subsidiary) may be liable
        under this Agreement; provided, however, that Buyer shall not be
        required to file such claims for refund to the extent such claims for
        refund would have a material adverse effect in future periods or to the
        extent the claims for refund relate to a carryback of an item. Buyer,
        Company or Water Subsidiary, as applicable, shall be entitled to all
        other refunds and credits of Taxes; provided, however, that Buyer shall
        not allow the amendment of any Tax Return relating to any Taxes of
        Company or any Water Subsidiary for a period ending on or prior to the
        Closing Date or the carryback of an item to a period ending on or prior
        to the Closing Date without Seller's consent. For purposes of this
        paragraph, the terms "refund" and "credit" shall include a reduction in
        Taxes and the use of an overpayment of Taxes as an audit or other Tax
        offset. Receipt of a refund shall occur upon the filing of a return or
        an adjustment thereto using such reduction, overpayment or offset, or
        upon the receipt of cash.

                        (e)     Resolution of Disagreements Between Seller and
        Buyer. If either Seller or Buyer disagrees as to the amount of Taxes for
        which it is liable under this Agreement, Seller and Buyer shall promptly
        consult each other to resolve such dispute following the receipt of
        written notice from either Party to begin such consultation. If any such
        point of disagreement cannot be resolved within twenty (20) business
        days of the date of such written notice, Seller and Buyer shall within
        ten (10) business days after such period jointly select a nationally
        recognized independent public accounting or law firm with no material
        relationship to Seller or Buyer to act as an arbitrator to resolve,
        within forty-five (45) days after its selection, all points of
        disagreement concerning Tax matters with respect to this Agreement and
        presented to such accounting or law firm at the time of its selection.
        If Seller, on the one hand, and Buyer, on the other hand, cannot agree
        on the selection of an accounting or law firm within such ten-day
        period, they shall cause their respective accounting or law firms to
        select such firm within five (5) business days of the end of such
        ten-day period. Any such resolution shall be conclusive and binding on
        Buyer and Seller. The fees of such independent public accounting or law
        firm shall be divided equally between Seller, on the one hand, and
        Buyer, on the other hand. Seller and Buyer shall (and shall cause
        Company and each Water Subsidiary to) provide to such firm full
        cooperation.

                        (f)     Payments.

                                (i)     The Parties hereto agree to treat all
                        indemnification payments made pursuant to this Agreement
                        as adjustments to the Purchase Price for all income Tax
                        purposes and to take no position contrary thereto in any
                        Tax Return or proceeding before any taxing authority,
                        except as otherwise required by applicable Law or any
                        applicable Order.

                                       29



                                (ii)    The Parties hereto agree to allocate the
                        Purchase Price to the Shares for all income Tax purposes
                        and to take no position contrary thereto in any Tax
                        Return or proceeding before any taxing authority, except
                        as otherwise required by applicable Law or any
                        applicable Order.

                        (g)     Tax Sharing Agreement. All Tax sharing Contracts
        or similar Contracts with respect to or involving Company or any Water
        Subsidiary shall be terminated as of the Closing Date, and after the
        Closing Date, neither Company nor any Water Subsidiary shall be bound
        thereby or have any Liability thereunder, and such Contracts shall have
        no further effect for any Tax year (whether the current year, a future
        year or a past year).

                6.3.    Employee Benefit Plan Matters.

                        (a)     With respect to any employee benefits that are
        provided to an individual who is an employee of Company or any Water
        Subsidiary (including any individual on layoff, disability or leave of
        absence, paid or unpaid) immediately before the Closing ("Company
        Employees") under any employee benefit plan, program, arrangement or
        agreement maintained after the Closing by Buyer or its Affiliates
        ("Buyer Plans"), Buyer shall cause service accrued by Company Employees
        during employment with Company or Water Subsidiaries prior to the
        Closing Date to be recognized for all purposes to the same extent
        recognized by Company or Water Subsidiaries immediately prior to the
        Closing Date, except to the extent necessary to prevent duplication of
        benefits. Notwithstanding the foregoing, with respect to any Buyer Plan
        which did not benefit Company Employees prior to Closing, service
        accrued by Company Employees for employment with Company or a Water
        Subsidiary prior to Closing need not be recognized for purposes of
        benefit accrual, except as required by applicable Law. With respect to
        any medical, dental or other welfare benefits that are provided at any
        time to Company Employees under Buyer Plans, any applicable pre-existing
        condition exclusions and waiting periods (except to the extent such
        limitations or waiting periods are already in effect with respect to
        such employees and have not been satisfied under the comparable Employee
        Plan/Agreement immediately prior to the Closing Date) shall be waived,
        and each Company Employee shall be provided with credit for any
        copayments and deductibles paid prior to the Closing Date in satisfying
        any applicable deductible or out-of-pocket requirements under any
        welfare plans that such employees are eligible to participate in after
        the Closing Date.

                        (b)     Buyer shall cause to be provided and be solely
        responsible for any continuation coverage required under Section 4980B
        of the Code, Sections 601-608 of ERISA or applicable state Law ("COBRA")
        with respect to any current or former employee of Company or any Water
        Subsidiary whose "qualifying event" (as that term is defined in COBRA)
        occurs or occurred at or before the Closing or in connection with the
        transactions contemplated by this Agreement.

                        (c)     Buyer shall cause Company and Water Subsidiaries
        to honor in accordance with its terms the Company Retention and
        Severance Plan referenced in Section 5.11(b).

                6.4.    Pump Business Headquarters. After the Closing, Buyer
will establish the headquarters for its water pump business in Southeastern
Wisconsin.

                                       30



                6.5.    Certain Product Safety Matters.

Buyer acknowledges and agrees that Seller, Company and Water Subsidiaries have
been actively involved in efforts to prevent and minimize Liabilities associated
with certain consumer product safety matters commonly referred to as "entrapment
injuries" including, without limitation, through cooperation with The Industry
Consortium for the Prevention of Entrapment Injuries. Buyer agrees that,
following the Closing, Buyer, Company and its Subsidiaries shall continue in
good faith to address, prevent and minimize any Liability associated with,
relating to or arising from any such matters.

                6.6.    Investigation.

Each of Buyer, on the one hand, and Seller and Company on the other hand,
acknowledges and agrees that (i) none of the other Party nor the other Party's
directors, officers, employees, stockholders, Affiliates, or Representatives
makes any representation or warranty, either express or implied, as to the
accuracy or completeness of any of the information provided or made available by
it to the other Party or its Representatives (other than the representations and
warranties contained in this Agreement) and (ii) each Party will not assert any
claim (whether in contract or tort, under federal or state securities Laws or
otherwise) against the other Party or the other Party's directors, officers,
employees, stockholders, Affiliates or Representatives, or hold any such Persons
liable for, any inaccuracies, misstatements or omissions with respect to
information (other than the representations and warranties contained in this
Agreement and rights to indemnification in connection therewith) furnished by
the other Parties or any such Persons concerning such other Parties; provided
the foregoing shall not preclude any Party from seeking any remedy for fraud or
fraudulent misrepresentation.

                6.7.    Confidentiality. Except as may be required (i) by Law;
(ii) in connection with fulfilling its obligations under the terms of this
Agreement; (iii) in connection with the defense of or other involvement in any
claim or adversarial proceeding relating to Company or the Water Business or the
transactions contemplated by this Agreement, whether among the Parties or
involving any third party; or (iv) as otherwise consented to in writing by
Buyer, Seller agrees that, for a period of three (3) years following the Closing
Date, (A) Seller will not directly or indirectly disclose any Confidential
Information that is in its possession; and (B) if Seller receives a request to
disclose all or any part of the Confidential Information in connection with a
legal proceeding, Seller will (1) promptly notify Buyer of the existence, terms
and circumstances surrounding such request so that Buyer may seek a protective
order or other appropriate remedy, and (2) in the event no such protective order
or other remedy is obtained and disclosure of such information is required, at
Buyer's cost and expense, exercise all commercially reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded such portion of
the disclosed information that Buyer so designates.

        7.      CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS

                The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to the satisfaction (or written waiver
by Buyer), prior to or at the Closing, of each of the following conditions:

                7.1.    Representations and Warranties True on the Closing Date.
The representations and warranties of Company and Seller herein shall be true
and accurate as of the

                                       31



Closing Date as if made at and as of such time (other than those representations
and warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and accurate as of
such date or with respect to such period), except where the failure of such
representations and warranties, individually or in the aggregate, to be so true
and accurate (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) would not have a Company Material
Adverse Effect.

                7.2.    Compliance With Agreement. Company and Seller shall have
in all material respects performed and complied with all of their respective
agreements and obligations under this Agreement that are to be performed or
complied with by Company or Seller prior to or on the Closing Date.

                7.3.    No Orders. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Order that is in effect and enjoins or otherwise prohibits consummation of the
transactions contemplated by this Agreement and no United States federal or
state or German Governmental Entity shall have instituted any proceeding seeking
any such Order.

                7.4.    HSR Act and Other Approvals. All applicable waiting
periods under the HSR Act and any other Competition Law applicable to the
transactions contemplated by this Agreement shall have expired or terminated.

                7.5.    Financing. The funding conditions set forth in the
Financing Commitments or in the Other Financing shall have been satisfied or
waived.

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

                The obligation of Company and Seller to consummate the
transactions contemplated by this Agreement is subject to the satisfaction (or
written waiver by Seller), prior to or at the Closing, of each of the following
conditions:

                8.1.    Representations and Warranties True on the Closing Date.
The representations and warranties of Buyer herein shall be true and accurate as
of the Closing Date as if made at and as of such time (other than those
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time which need only be true and
accurate as of such date or with respect to such period), except where the
failure of such representations and warranties, individually or in the
aggregate, to be so true and accurate (without giving effect to any limitation
as to "materiality" or "material adverse effect" set forth therein) would not
have a Buyer Material Adverse Effect.

                8.2.    Compliance With Agreement. Buyer shall have in all
material respects performed and complied with all of its agreements and
obligations under this Agreement that are to be performed or complied with by
Buyer prior to or on the Closing Date.

                8.3.    No Orders. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Order that is in effect and enjoins or otherwise prohibits consummation of the
transactions contemplated by this Agreement and no United States

                                       32



federal or state or German Governmental Entity shall have instituted any
proceeding seeking any such Order.

                8.4.    HSR Act and Other Approvals. All applicable waiting
periods under the HSR Act and any other Competition Law applicable to the
transactions contemplated by this Agreement shall have expired or terminated.

                8.5.    PSCW Approval. Seller and Company shall have obtained
any requisite approvals from the PSCW to permit the consummation of the
Distribution.

        9.      INDEMNIFICATION

                9.1.    By Seller. Upon the terms and subject to the conditions
set forth in this Article 9, from and after the Closing, Seller shall indemnify,
defend and hold harmless Buyer and its Affiliates (including Company), and their
respective directors, officers and employees (collectively, the "Buyer
Indemnified Parties"), from and against all losses, damages, costs, other
Liabilities and reasonable expenses (including reasonable expenses of
investigation and defense fees and disbursements of counsel and other
professionals) ("Losses") incurred by such Buyer Indemnified Parties arising out
of or resulting from: (a) any inaccuracy or breach of any representation or
warranty of Seller contained in this Agreement (ignoring, for purposes of
determining the existence of any such inaccuracy or breach or the amount of any
Losses with respect thereto, any "materiality," "material adverse effect" or
similar qualifier set forth in such representation or warranty); (b) any breach
of any covenant of Seller or Company (in the case of Company only with respect
to those covenants required to be performed or complied with by Company prior to
the Closing) contained in this Agreement; (c) any Liability of Company or Water
Subsidiaries for (i) Taxes of Company or Water Subsidiaries with respect to any
taxable period or portion thereof that ends on or before the Closing Date, or
which are otherwise allocated to Seller under this Agreement, to the extent not
reflected in the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income)
shown on the Final Closing Balance Sheet, or (ii) Taxes with respect to any
taxable period or portion thereof that ends on or before the Closing Date, or
which are otherwise allocated to Seller under this Agreement, to the extent not
reflected in the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income)
shown on the Final Closing Balance Sheet, of any Person other than Company or
Water Subsidiaries (A) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign Law), (B) as a transferee or
successor, (C) by Contract or (D) otherwise; (d) all Liabilities of Company to
the extent they relate to or arise from the ownership of the capital stock of or
other ownership interests in Non-Water Subsidiaries and all Taxes or other
Liabilities assessed on or incurred by Company or any Water Subsidiary as a
result of the Distribution; (e) any Liability of Company or Water Subsidiaries
relating to Products manufactured or sold by Company or Water Subsidiaries prior
to the Closing Date that contain or are alleged to contain asbestos; or (f) any
Liability of Company or Water Subsidiaries arising from product liabilities,
losses, injuries or damages that occur prior to the Closing arising from, caused
by or arising out of the design, manufacture, assembly, installation or sale of
any Product by Company or Water Subsidiaries prior to the Closing.
Notwithstanding any other provision to the contrary contained in this Agreement,
the indemnification obligations of Seller contained in each of clauses (e) and
(f), respectively, of this Section 9.1 shall in each case be Buyer's sole and
exclusive remedy with respect to the matters referred to therein, except for
actions grounded in fraud with respect to which such limitations shall not
apply. For the avoidance of doubt, no Buyer Indemnified Party shall

                                       33



be entitled to recover Losses under any of clauses (a), (b), (c) or (d) of this
Section 9.1 to the extent Seller has an indemnification obligation under either
clause (e) or (f) of this Section 9.1.

                9.2.    By Buyer. Upon the terms and subject to the conditions
set forth in this Article 9, from and after the Closing, Buyer shall indemnify,
defend and hold harmless Seller and its Affiliates, and their respective
directors, officers, employees and other representatives (collectively, the
"Seller Indemnified Parties"), from and against all Losses incurred by such
Seller Indemnified Parties arising out of or resulting from (a) any inaccuracy
or breach of any representation or warranty of Buyer contained in this Agreement
(ignoring, for purposes of determining the existence of any such inaccuracy or
breach or the amount of any Losses with respect thereto, any "materiality,"
"material adverse effect" or similar qualifier set forth in such representation
or warranty), (b) any breach of any covenant of Buyer contained in this
Agreement or (c) any Liability of Company or Water Subsidiaries for Taxes of
Company or Water Subsidiaries for which Seller is not required to indemnify
Buyer pursuant to Section 9.1(c) and (d) hereof.

                9.3.    Indemnification Claims. All claims for indemnification
by a Party to be indemnified hereunder (an "Indemnified Party") from a Party
required to provide indemnification hereunder (an "Indemnifying Party") shall be
asserted and resolved as set forth in this Section 9.3.

                        (a)     The Indemnified Party shall promptly notify the
        Indemnifying Party in writing of any claim or demand which the
        Indemnified Party has determined has given rise to a right of
        indemnification under this Agreement. Subject to the Indemnifying
        Party's right to defend third party claims as hereinafter provided, the
        Indemnifying Party shall satisfy its obligations under this Article 9 as
        soon as practicable after the receipt of written notice thereof from the
        Indemnified Party.

                        (b)     In the event that any written claim or demand
        for which an Indemnifying Party may be liable to any Indemnified Party
        hereunder is asserted against or sought to be collected from any
        Indemnified Party by a third party, such Indemnified Party shall
        promptly, but in no event later than fifteen (15) days following such
        Indemnified Party's receipt of such claim or demand (including a copy of
        any related written third party demand, claim or complaint) (a "Claim"),
        notify in writing the Indemnifying Party of such Claim (the "Claim
        Notice"). The Indemnifying Party shall be relieved of its obligations to
        indemnify the Indemnified Party with respect to such Claim if the
        Indemnified Party fails to timely deliver the Claim Notice and the
        Indemnifying Party is actually prejudiced thereby. If a Claim is made
        against an Indemnified Party, the Indemnifying Party shall be entitled
        to participate therein and, to the extent that they shall wish, to
        assume the defense thereof, and, after written notice from the
        Indemnifying Party to the Indemnified Party of such election to so
        assume the defense thereof, the Indemnifying Party shall not be liable
        to the Indemnified Party for any legal expenses of other counsel or any
        other expenses subsequently incurred by the Indemnified Party in
        connection with the defense thereof. The Indemnified Party shall
        cooperate fully with the Indemnifying Party and its counsel in the
        defense against any such Claim. The Indemnified Party shall have the
        right to participate at its own expense in the defense of such Claim.
        Except as provided in Section 6.2(c) with respect to Claims arising out
        of audits of Tax Returns described in Section 6.2(c), neither the
        Indemnifying Party, on the one hand, nor the Indemnified Party, on the
        other hand, shall admit liability to, or settle, compromise or discharge
        any such Claim without the prior consent of the other party, which
        consent shall not be unreasonably withheld or delayed; provided,
        however, that the Indemnified Party may refuse its consent to a bona
        fide offer of settlement that the

                                       34



        Indemnifying Party wishes to accept if such proposed settlement might
        reasonably be expected to affect adversely the ability of the
        Indemnified Party to conduct its business. In such event, the
        Indemnified Party shall assume the defense of such matter at the sole
        expense of the Indemnified Party and the obligation of the Indemnifying
        Party to the Indemnified Party shall be equal to the lesser of (i) the
        amount of the bona fide offer of settlement that the Indemnified Party
        refused to accept plus the costs and expenses of the Indemnified Party
        prior to the date the Indemnifying Party notified the Indemnified Party
        of the offer of settlement and (ii) the actual out-of-pocket amount the
        Indemnified Party is obligated to pay as a result of the Indemnified
        Party's continuing to pursue such matter. In the event the Indemnifying
        Party elects not to or fails to defend such Claim, the Indemnified Party
        shall defend against such Claim in good faith and in a commercially
        reasonable manner at the cost and expense of the Indemnifying Party, and
        the Indemnifying Party shall have the right to participate in such
        defense at its own expense. Without limiting the generality of the
        foregoing, to the extent that, following the Closing, pursuant to this
        Section 9.3(b), any of Buyer, Company or their respective Subsidiaries
        are engaged in the management or defense of any matter relating to the
        Liabilities described in clauses (e) or (f) of Section 9.1 (an "Asbestos
        or Product Liability Claim"), Buyer will, and will cause Company and
        their respective Subsidiaries and Affiliates to, manage and defend
        against any such Asbestos or Product Liability Claim in good faith and
        in a commercially reasonable manner, subject to Seller's right to make
        inquiries to and receive information from Buyer regarding the management
        and defense of any such Asbestos or Product Liability Claim. If Seller
        objects to Buyer's management and defense of any such Asbestos or
        Product Liability Claim, then Seller may elect to manage and defend
        against any such Asbestos or Product Liability Claim in good faith and
        in a commercially reasonable manner, subject to Buyer's right to make
        inquiries to and receive information from Seller regarding the
        management and defense of any such Asbestos or Product Liability Claim.

                9.4.    Limitations on Indemnification. Except for fraud or any
willful misrepresentation, as to which claims may be brought without limitation
as to time or amount:

                        (a)     Time Limitation. The representations and
        warranties shall survive the Closing for a period lasting until, and no
        claim or action shall be brought under this Article 9 for breach of a
        representation or warranty after the lapse of, twelve (12) months after
        the Closing. Regardless of the foregoing, however, or any other
        provision of this Agreement:

                                (i)     There shall be no time limitation on any
                        claim or action brought for breach of any representation
                        or warranty made in or pursuant to Sections 3.2(c) and
                        3.3, such representations and warranties shall survive
                        the Closing indefinitely, and Seller hereby waives all
                        applicable statutory limitation periods with respect
                        thereto.

                                (ii)    Any claim or action brought for breach
                        of any representation or warranty made in or pursuant to
                        Section 3.6 may be brought at any time until the date
                        that is thirty (30) calendar days after the underlying
                        obligation is barred by the applicable period of
                        limitation under federal, state or any other applicable
                        Laws relating thereto (as such period may be extended by
                        tolling or waiver) and such representations and
                        warranties shall survive the Closing for a period
                        lasting until such date.

                                       35



                                (iii)   The representations and warranties in
                        Section 3.10(c) shall survive the Closing for a period
                        lasting until, and no claim or action shall be brought
                        under this Article 9 for breach of a representation or
                        warranty under Section 3.10(c) after the lapse of, five
                        years after the Closing.

                                (iv)    The representations and warranties in
                        Section 3.16 shall survive the Closing for a period
                        lasting until, and no claim or action shall be brought
                        under this Article 9 for breach of a representation or
                        warranty under Section 3.16 after the lapse of, three
                        years after the Closing.

                                (v)     Any claim made by a Party hereunder by
                        filing a suit or action in a court of competent
                        jurisdiction or a court reasonably believed to be of
                        competent jurisdiction for breach of a representation or
                        warranty prior to the termination of the survival period
                        for such claim shall be preserved despite the subsequent
                        termination of such survival period.

                                (vi)    If any act, omission, disclosure or
                        failure to disclose shall form the basis for a claim or
                        action for breach of more than one representation or
                        warranty, and such claims have different periods of
                        survival hereunder, then the termination of the survival
                        period of one claim or action shall not affect a Party's
                        right to make a claim or action based on the breach of
                        representation or warranty still surviving.

                        (b)     Minimum Claim; Basket; Cap. Except with respect
        to claims for breaches of representations or warranties contained in
        Sections 3.2(c) and 3.3 (as to which the following limitations shall not
        apply), a Buyer Indemnified Party shall be entitled to indemnification
        under clauses (a), (e) or (f) of Section 9.1 only in the event that the
        aggregate amount of Losses (without duplication) suffered or incurred by
        all Buyer Indemnified Parties with respect to all such matters, in the
        aggregate, exceeds Ten Million Dollars ($10,000,000) (the "Basket") and
        then only to the extent of such excess; and provided, further, that
        Seller shall be required to indemnify, defend and hold harmless the
        Buyer Indemnified Parties with respect to a breach of a representation
        or warranty only if and to the extent the Losses arising therefrom
        exceed Fifty Thousand Dollars ($50,000) (the "Minimum Claim Amount") and
        such Losses shall be applied against the Basket only to the extent such
        Losses exceed the Minimum Claim Amount; and provided, further, that the
        Buyer Indemnified Parties shall not be entitled to recover from Seller
        under clause (a) of Section 9.1 more than Eighty-Five Million Dollars
        ($85,000,000), in the aggregate.

                        (c)     Indemnification as Sole Remedy. Following the
        Closing, notwithstanding any other provision of this Agreement or the
        provisions of any Environmental Law including the Comprehensive
        Environmental Response, Compensation and Liability Act, 42 U.S.C.
        Sections 9601 et seq., the indemnities provided in this Article 9 shall
        be the sole and exclusive remedy of the Parties hereto, their
        Affiliates, successors and assigns with respect to any and all claims
        for Losses under this Agreement or arising out of Liabilities of Company
        or its Subsidiaries with respect to the Real Property under
        Environmental Laws, except for actions grounded in fraud, with respect
        to which the limitations set forth in this Agreement shall not apply.

                                       36



                9.5.    Adjustments for Insurance and Taxes and Calculation of
Losses.

                        (a)     In the event that an Indemnified Party has been
        indemnified for any Loss pursuant to this Article 9 and the payment or
        accrual of such Loss by such Indemnified Party results in a deduction
        which in turn results in an actual reduction in the Tax Liability of the
        Indemnified Party or any Affiliate thereof for any Tax period, then
        (without duplication for any such reduction otherwise taken into
        account) the Indemnified Party will pay to the Indemnifying Party the
        amount of such reduction in Tax Liability at the time such Indemnified
        Party actually realizes such reduction in Tax Liability through receipt
        of a refund of Tax or a credit against Tax Liability then due and
        payable. For purposes of this paragraph, a payment or accrual of a Tax
        Liability results in an actual reduction in a party's Tax Liability with
        respect to a Tax period, only to the extent that the amount of such
        party's Tax Liability with respect to such period, taking into account
        such accrual or payment, is less than the amount of such Liability
        determined without regard to such payment or accrual.

                        (b)     If any Losses sustained by an Indemnified Party
        are covered by an insurance policy or an indemnification, contribution
        or similar obligation of another Person (other than an Affiliate of such
        Indemnified Party), the Indemnified Party shall use commercially
        reasonable efforts to collect such insurance proceeds or indemnity,
        contribution or similar payments; provided, however, that if any such
        insurance policy is owned by an Indemnifying Party, then the Indemnified
        Party shall have no obligation to collect such insurance proceeds but
        shall use its commercially reasonable efforts to cooperate with the
        Indemnifying Party (including providing notice to the Indemnifying Party
        so that the Indemnify Party may timely submit a claim under the terms of
        such insurance policy) to permit the Indemnifying Party to cause, at the
        Indemnifying Party's sole expense, such insurance proceeds to be
        collected. If the Indemnified Party receives such insurance proceeds or
        indemnity, contribution or similar payments prior to being indemnified,
        held harmless and reimbursed under Section 9.1 or Section 9.2, as
        applicable, with respect to such Losses, the payment by an Indemnifying
        Party under this Article 9 with respect to such Losses shall be reduced
        by the net amount of such insurance proceeds or indemnity, contribution
        or similar payments to the extent related to such Losses, less
        reasonable attorney's fees and other expenses incurred in connection
        with such recovery. If the Indemnified Party receives such insurance
        proceeds or indemnity, contribution or similar payments after being
        indemnified and held harmless by an Indemnifying Party with respect to
        such Losses, the Indemnified Party shall pay to the Indemnifying Party
        the net amount of such insurance proceeds or indemnity, contribution or
        similar payment to the extent related to such Losses, less reasonable
        attorney's fees and other expenses incurred in connection with such
        recovery. If any Indemnified Party receives payment under this Article 9
        on account of a claim that an Indemnifying Party believes in good faith
        is covered by an insurance policy or an indemnification, contribution or
        similar obligation of another Person (other than an Affiliate of such
        Indemnified Party), that Indemnified Party shall (i) on written request
        of the Indemnifying Party assign, to the extent assignable, its rights
        under such insurance policy or indemnification, contribution or similar
        obligation with respect to such claim to the Indemnifying Party and (ii)
        be relieved of any further obligation to pursue collection of such
        insurance or indemnification, contribution or similar obligation (except
        that, if requested to do so by the Indemnifying Party, the Indemnified
        Party shall reasonably cooperate with the Indemnifying Party at the
        Indemnifying Party's sole expense, to collect any such insurance or
        indemnification, contribution or similar obligation).

                                       37



                        (c)     If during the period from December 31, 2003 to
        the Closing Date, there is a change in the amount of any reserve of
        Company and such change in reserve is reflected on the Final Closing
        Balance Sheet and is taken into account for purposes of determining the
        amount of an adjustment, if any, to the Purchase Price pursuant to
        Section 2.2(a) or Section 2.2(b) and the Liability to which any such
        reserve relates is a matter for which a Buyer Indemnified Party would
        otherwise be entitled to indemnification under Section 9.1, then the
        calculation of a Buyer Indemnified Party's Losses shall be reduced by
        the amount of the increase in such reserve during the period from
        December 31, 2003 to the Closing Date.

                        (d)     Notwithstanding any other provision in this
        Agreement, as to any claims by an Indemnified Party, Losses shall not
        include, and no Indemnified Party shall be entitled to be indemnified or
        to make any claim for, lost profits or any indirect, consequential,
        incidental, special or punitive damages other than any such damages
        actually paid by an Indemnified Party to a Person other than an
        Indemnified Party.

        10.     CLOSING

                10.1.   Closing Date; Location. Subject to the terms and
conditions of this Agreement, the consummation of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Foley & Lardner, 777
East Wisconsin Avenue, Milwaukee, Wisconsin, at 10:00 a.m., local time, on the
fifth (5th) business day after the satisfaction or waiver of the conditions to
the Closing set forth in Article 7 and Article 8 or such other place, date or
time as the Parties shall mutually agree in writing. The actual time and date of
the Closing is referred to as the "Closing Date."

                10.2.   Documents to be Delivered by Company and Seller. At the
Closing, Company and Seller shall deliver to Buyer (a) the stock certificate or
certificates representing the Shares, duly endorsed for transfer or with duly
executed stock powers attached; (b) a certificate signed by officers of Company
and Seller reasonably acceptable to Buyer, in form and substance reasonably
satisfactory to Buyer and Seller, certifying that the conditions set forth in
Sections 7.1 and 7.2 have been satisfied (except to the extent waived in writing
by Buyer); (c) the resignations of directors and/or officers, as the case may
be, of Company and Water Subsidiaries who are employees or officers of Seller,
effective as of the Closing Date, in form and substance reasonably satisfactory
to Buyer and Seller, duly executed by such persons; and (d) all other previously
undelivered documents, instruments or writings required to be delivered by
Seller or Company to Buyer at or prior to the Closing in connection with the
transactions contemplated hereby.

                10.3.   Documents to be Delivered by Buyer. At the Closing,
Buyer shall deliver to Seller (a) the cash payment required by Section 2.2(a),
in accordance with Section 2.2(c); (b) a certificate signed by an officer of
Buyer reasonably acceptable to Seller, in form and substance reasonably
satisfactory to Buyer and Seller, certifying that the conditions set forth in
Sections 8.1 and 8.2 have been satisfied (except to the extent waived in writing
by Seller); and (c) all other previously undelivered documents, instruments or
writings required to be delivered by Buyer to Seller at or prior to the Closing
in connection with the transactions contemplated hereby.

                                       38



        11.     TERMINATION

                11.1.   Termination. This Agreement may be terminated at any
time prior to the Closing:

                        (a)     by mutual written agreement of Buyer and Seller;

                        (b)     by either Buyer or Seller, by giving written
        notice of such termination to the other Party, if such other Party or
        one of its Affiliates shall have breached any of its material
        obligations or agreements under this Agreement and such breach shall be
        incapable of cure or has not been cured within thirty (30) days
        following the giving of written notice by the non-breaching Party to the
        other Party of such breach;

                        (c)     by either Buyer or Seller, by giving written
        notice of such termination to the other Party, if any Order permanently
        enjoining or otherwise prohibiting consummation of the transactions
        contemplated hereby shall become final and nonappealable;

                        (d)     by either Buyer or Seller, by giving written
        notice of such termination to the other, if the Closing shall not have
        occurred on or prior to September 1, 2004, provided that such date shall
        be extended for a period not to exceed sixty (60) calendar days to the
        extent necessary for (i) the Parties to substantially comply with any
        request for additional information made by the FTC or DOJ or (ii) any
        applicable waiting period under the HSR Act to expire or terminate up to
        a thirty (30) day maximum following substantial compliance with a
        request for additional information made by the FTC or DOJ (such date, as
        it may be extended pursuant to the foregoing proviso, the "Termination
        Date"); provided further, that the terminating Party and its Affiliates
        shall not be in material breach of their obligations under this
        Agreement;

                        (e)     by Seller, by giving written notice of such
        termination to Buyer, if there has been a breach of the representations
        and warranties of Buyer contained in this Agreement which (i) would
        result in the failure of the condition set forth in Section 8.1; and
        (ii) cannot be or is not cured prior to the Termination Date; or

                        (f)     by Buyer, by giving written notice of such
        termination to Seller, if there has been a breach of the representations
        and warranties of Company and Seller contained in this Agreement which
        (i) would result in the failure of the condition set forth in Section
        7.1; and (ii) cannot be or is not cured prior to the Termination Date.

                11.2.   Effect of Termination. In the event of the termination
of this Agreement in accordance with Section 11.1, this Agreement shall
thereafter become void and have no effect, and no Party hereto or its respective
Affiliates or their directors, officers, employees, agents or advisors shall
have any Liability to the other Party hereto or their respective Affiliates,
directors, officers or employees, except for the obligations of the Parties
hereto in the Confidentiality Agreement or contained in this Section 11.2, the
penultimate sentence of Section 5.1(b) and Sections 12.2, 12.5, 12.9 and 12.10
hereof, and except that nothing herein will relieve any Party from Liability for
any willful breach of this Agreement by it or one of its Affiliates prior to
such termination.

                                       39



        12.     MISCELLANEOUS

                12.1.   Disclosure Schedule. Company and Seller have prepared
the schedules attached to this Agreement (the "Disclosure Schedule") and
delivered them to Buyer on the date hereof. No representation or warranty shall
be qualified or otherwise affected by any fact or item disclosed on any Schedule
unless such representation or warranty is expressly qualified by reference to a
Schedule, and any fact or item disclosed on any Schedule shall be deemed
disclosed on all other Schedules to which such fact or item may reasonably apply
so long as such disclosure is in sufficient detail to enable a reasonable person
to identify the other article or Section of this Agreement to which such
information is responsive. The Disclosure Schedule shall be construed with and
as an integral part of this Agreement to the same extent as if the same had been
set forth verbatim herein. Any matter disclosed pursuant to the Disclosure
Schedule shall not be deemed to be an admission or representation as to the
materiality of the item so disclosed. No supplement or update to the Disclosure
Schedule after the date hereof shall be deemed to cure any inaccuracy or breach
of a representation or warranty for the purposes of Section 7.1 or Section 9.1.

                12.2.   Publicity. Each Party agrees that, from the date hereof
through the Closing Date, no public release or announcement relating to the
transactions contemplated hereby shall be issued or made by any Party without
the prior consent of the other Parties (which consent shall not be unreasonably
withheld), except as such release or announcement may, in the judgment of the
releasing Party, be required by Law or Order or the rules or regulations of any
United States securities exchange, in which case the Party required to make the
release or announcement shall allow the other Parties reasonable time to comment
on such release or announcement in advance of such issuance. Without limiting
the generality of the foregoing, (a) the Parties shall cooperate to prepare a
joint press release to be issued following the execution of this Agreement and
on the Closing Date, and (b) except as prohibited by applicable Law, Company and
Seller shall provide Buyer access to, and facilitate meetings with, employees of
Company for the purpose of making announcements relating to, and preparing for
the consummation of, the transactions contemplated hereby.

                12.3.   Assignment. Except as expressly set forth in Section
1.2, neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the Parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other Parties.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the Parties and their respective permitted
successors and assigns.

                12.4.   Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of and be enforceable by the Parties and their
respective heirs, personal representatives, permitted successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer
any rights upon any other Person, except as expressly provided in Article 9.

                12.5.   Law Governing Agreement; Waiver of Jury Trial. This
Agreement shall be construed and interpreted according to the Laws of the State
of Wisconsin, excluding any choice of law rules that may direct the application
of the Laws of another jurisdiction. Each Party waives any right to trial by
jury with respect to any Litigation arising out of or relating to this
Agreement.

                12.6.   Severability. If any court of competent jurisdiction
determines that the provisions of this Agreement are illegal or excessively
broad as to duration, geographical scope or activity, then such provisions shall
be construed so that the remaining provisions of this Agreement

                                       40



shall not be affected, but shall remain in full force and effect, and any such
illegal or overly broad provisions shall be deemed, without further action on
the part of any Person, to be modified, amended and/or limited, but only to the
extent necessary to render the same valid and enforceable in the applicable
jurisdiction.

                12.7.   Amendment and Modification. Buyer and Seller may amend,
modify and supplement this Agreement in such manner as may be agreed upon by
them in writing.

                12.8.   Waiver. No waiver by any Party of any of the provisions
hereof shall be effective unless expressly set forth in writing and executed by
the Party so waiving. The waiver by any Party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.

                12.9.   Notice. All notices, requests, demands and other
communications under this Agreement shall be given in writing and shall be
personally delivered; sent by telecopier or facsimile transmission; or sent to
the applicable Parties at their respective addresses indicated in this Section
12.9 by private overnight courier service, as follows:

                        (i)     If to Seller, to:

                                Wisconsin Energy Corporation
                                231 West Michigan Street
                                Milwaukee, Wisconsin  53203
                                Attention: Larry Salustro, Esq.
                                Facsimile: (414) 221-2140

                                (with a copy, which shall not constitute notice
                                to Seller, to)

                                Skadden, Arps, Slate, Meagher & Flom LLP
                                333 West Wacker Drive
                                Chicago, Illinois  60606
                                Attention: Charles W. Mulaney, Jr., Esq.
                                Facsimile: (312) 407-0411

                        (ii)    If to Company prior to the Closing, to:

                                WICOR, Inc.
                                231 West Michigan Street
                                Milwaukee, Wisconsin  53203
                                Attention: Larry Salustro, Esq.
                                Facsimile: (414) 221-2140

                                       41



                                (with a copy, which shall not constitute notice
                                to Company, to)

                                Skadden, Arps, Slate, Meagher & Flom LLP
                                333 West Wacker Drive
                                Chicago, Illinois  60606
                                Attention: Charles W. Mulaney, Jr., Esq.
                                Facsimile: (312) 407-0411

                        (iii)   If to Company after the Closing, to:

                                WICOR, Inc.
                                5500 Wayzata Boulevard, Suite 800
                                Golden Valley, Minnesota  55416
                                Attention: Louis L. Ainsworth, Esq.
                                Facsimile: (763) 656-5403

                                (with a copy, which shall not constitute notice
                                to Company, to)

                                Foley & Lardner
                                777 East Wisconsin Avenue
                                Milwaukee, Wisconsin  53202
                                Attention: Benjamin F. Garmer, III, Esq.
                                Facsimile: (414) 297-4900

                           (iv) If to Buyer, to:

                                Pentair, Inc.
                                5500 Wayzata Boulevard, Suite 800
                                Golden Valley, Minnesota  55416
                                Attention: Louis L. Ainsworth, Esq.
                                Facsimile: (763) 656-5403

                                (with a copy, which shall not constitute notice
                                to Buyer, to)

                                Foley & Lardner
                                777 East Wisconsin Avenue
                                Milwaukee, Wisconsin  53202
                                Attention: Benjamin F. Garmer, III, Esq.
                                Facsimile: (414) 297-4900

or to such other Person or address as any Party shall have specified by notice
in writing to the other Parties. In addition, any notice given to Company prior
to the Closing shall be given in the same manner to Seller; any notice given to
Company after the Closing shall be given in the same manner to Buyer. If
personally delivered, such communication shall be deemed delivered upon actual
receipt; if sent by telecopier or facsimile transmission, such communication
shall be deemed delivered the day of the transmission, or if the transmission is
not made on a business day, the first business day after transmission (and
sender shall bear the burden of proof of delivery); and if sent by overnight
courier, such communication shall be deemed delivered upon receipt.

                                       42



                12.10.  Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:

                        (a)     Expenses to be Paid by Buyer. Buyer shall be
        solely responsible for the payment and discharge of all claims for
        brokerage commissions or finder's fees arising as a result of the
        retention, employment or other use of any broker or finder by Buyer and
        any of its directors, officers, employees or agents in connection with
        the transactions provided for herein or the negotiation thereof (which
        shall not constitute a Liability payable by Company, Water Subsidiaries
        or Seller).

                        (b)     Expenses to be Paid by Seller. Seller shall pay
        each of the following (none of which shall constitute a Liability
        payable by Company, Water Subsidiaries or Buyer):

                                (i)     Brokerage. Seller shall be solely
                        responsible for the payment and discharge of all claims
                        for brokerage commissions or finder's fees arising as a
                        result of the retention, employment or other use of any
                        broker or finder by Company or Seller and any of their
                        respective directors, officers, employees or agents in
                        connection with the transactions provided for herein or
                        the negotiation thereof.

                                (ii)    Professional Fees. Except as otherwise
                        contemplated by this Agreement in Article 2 and Section
                        5.1(c) with respect to accounting fees, all fees and
                        expenses of Company's and Water Subsidiaries' legal,
                        accounting, investment banking and other professional
                        counsel in connection with the transactions contemplated
                        hereby.

                                (iii)   Severance Obligations. All severance,
                        change of control and other payments related to
                        employment of, or under any agreements maintained by
                        Seller with respect to, the individuals set forth on
                        Exhibit 12.10(b), and any Liability arising under or in
                        respect of any benefit plan or arrangement set forth on
                        Exhibit 12.10(b).

                                (iv)    Transfer Taxes. All Taxes or fees
                        (including any penalties and interest) applicable to,
                        imposed upon or arising out of the sale or transfer of
                        the Shares to Buyer and the other transactions
                        contemplated hereby, including the transaction described
                        in Section 5.9.

                        (c)     Environmental Consultant. Buyer and Seller shall
        each pay 50% of the fees and expenses of the Environmental Consultant in
        connection with the activities contemplated by Section 5.1(b).

                        (d)     Deloitte. Buyer and Seller shall each pay 50% of
        the fees and expenses of Deloitte in connection with the audit
        contemplated by Section 2.3(d) with respect to the Audited Closing
        Balance Sheet.

                        (e)     Other. Except to the extent otherwise expressly
        set forth in this Agreement, each Party shall bear its own expenses and
        the expenses of its counsel and other agents in connection with the
        transactions contemplated hereby.

                                       43



                12.11.  Equitable Relief. The Parties hereto agree that (a) any
breach of the provisions of this Agreement will result in irreparable injury to
the non-breaching Party for which a remedy at law would be inadequate, and (b)
in addition to any relief at law that may be available to Buyer for such breach
and regardless of any other provision contained in this Agreement, the Parties
hereto shall be entitled to injunctive and other equitable relief as a court may
grant.

                12.12.  Interpretive Provisions. The term "knowledge" when used
in the phrases "to Seller's knowledge" or "Seller has no knowledge" or words of
similar import shall mean, and shall be limited to, the actual knowledge,
without independent investigation of any of the following individuals: Jim
Donnelly, Russ Phillips, Don Jorgensen, Tom Rettler or Jim Green. The terms
"including" and "include" shall mean "including without limitation" and "include
without limitation," respectively. The term "commercially reasonable efforts" as
used in Section 5.4 has the meaning as mutually understood by the parties.

                12.13.  Entire Agreement. This Agreement (including the exhibits
and schedules attached hereto) and the Confidentiality Agreement supersede all
prior agreements among the Parties with respect to its subject matter and
constitutes (together with the other documents and instruments to be executed
and delivered pursuant hereto) a complete and exclusive statement of the terms
of the agreement among the Parties with respect to its subject matter.

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

                12.15.  Section Headings; Table of Contents. The Section and
Sub-Section headings contained in this Agreement and the Table of Contents to
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.

                12.16.  No Strict Construction. Notwithstanding the fact that
this Agreement has been drafted or prepared by one of the Parties, each of the
Parties confirms that both it and its counsel have reviewed, negotiated and
adopted this Agreement as the joint agreement and understanding of the Parties.
The language used in this Agreement shall be deemed to be the language chosen by
the Parties to express their mutual intent, and no rule of strict construction
shall be applied against any Party.

                12.17.  Definitions. For purposes of this Agreement, the term:

                        (a)     "Acquisition Proposal" has the meaning set forth
        in Section 5.2(g).

                        (b)     "Affiliate" has the meaning ascribed to such
        term in Rule 12b-2 promulgated under the Exchange Act by the Securities
        and Exchange Commission, as in effect on the date hereof.

                        (c)     "Agreement" has the meaning set forth in the
        preamble of this Agreement.

                        (d)     "Asbestos or Product Liability Claim" has the
        meaning set forth in Section 9.3(b).

                                       44



                        (e)     "Audited Closing Balance Sheet" has the meaning
        set forth in Section 2.3(d).

                        (f)     "Balance Sheet" has the meaning set forth in
        Section 2.3(a).

                        (g)     "Balance Sheet Assets" means the consolidated
        assets of Company.

                        (h)     "Balance Sheet Dispute" has the meaning set
        forth in Section 2.3(f)(i).

                        (i)     "Balance Sheet Liabilities" means the
        consolidated Liabilities of Company.

                        (j)     "Balance Sheet Objection" has the meaning set
        forth in Section 2.3(e).

                        (k)     "Basket" has the meaning set forth in Section
        9.4(b).

                        (l)     "Buyer" has the meaning set forth in the
        preamble of this Agreement.

                        (m)     "Buyer Indemnified Parties" has the meaning set
        forth in Section 9.1.

                        (n)     "Buyer Material Adverse Effect" means any
        material adverse change in, or material adverse effect on, (i) the
        business, financial condition or results of operations of Buyer and its
        Subsidiaries, taken as a whole or (ii) Buyer's ability to consummate the
        transactions contemplated by this Agreement; provided, however, that the
        changes or effects that are generally applicable to (A) the industries
        or markets in which Buyer and its Subsidiaries operate; (B) the United
        States or global economy or (C) the United States securities markets
        shall be excluded from the determination of Buyer Material Adverse
        Effect.

                        (o)     "Buyer Plans" has the meaning set forth in
        Section 6.3(a).

                        (p)     "Buyer's Consultant" means McKinsey & Company.

                        (q)     "Claim" has the meaning set forth in Section
        9.3(b).

                        (r)     "Claim Notice" has the meaning set forth in
        Section 9.3(b).

                        (s)     "Closing" has the meaning set forth in Section
        10.1.

                        (t)     "Closing Date" has the meaning set forth in
        Section 10.1.

                        (u)     "COBRA" has the meaning set forth in Section
        6.3(b).

                        (v)     "Code" has the meaning set forth in Section
        3.6(f).

                        (w)     "Company" has the meaning set forth in the
        preamble of this Agreement.

                                       45



                        (x)     "Company Employees" has the meaning set forth in
        Section 6.3(a).

                        (y)     "Company Insurance Policies" has the meaning set
        forth in Section 3.12.

                        (z)     "Company Material Adverse Effect" means any
        material adverse change in, or material adverse effect on, the business,
        financial condition or results of operations of Company and the Water
        Subsidiaries, taken as a whole; provided, however, that the changes or
        effects that are generally applicable to (i) the industries and markets
        in which Company and the Water Subsidiaries operate; (ii) the United
        States or global economy; or (iii) the United States securities markets
        shall be excluded from the determination of Company Material Adverse
        Effect; and provided, further, that any adverse change or effect on
        Company or the Water Subsidiaries resulting from (i) the execution of
        this Agreement and the announcement of this Agreement and the
        transactions contemplated hereby or (ii) the failure of Buyer to consent
        to any of the actions proscribed by Section 5.2, shall also be excluded
        from the determination of Company Material Adverse Effect.

                        (aa)    "Company Subsidiaries" has the meaning set forth
        in Section 3.1(d).

                        (bb)    "Company Trade Rights" means all of Company's
        and Water Subsidiaries' worldwide rights in, to and under Trade Rights.

                        (cc)    "Competition Law" means the HSR Act and all
        other federal, state and foreign Laws and Orders that are designed or
        intended to prohibit, restrict or regulate (i) actions having the
        purpose or effect of monopolization or restraint of trade or lessening
        of competition or (ii) foreign investment.

                        (dd)    "Confidential Information" means any and all
        information relating to the management, operations, finances, products,
        trade secrets or services of the Water Business, including financial
        data, employee information, computer programs and systems, computer
        based information, plans, projections, formulae, processes, methods,
        products, manuals, drawings and marketing information, whether written,
        oral or computer generated which relates exclusively to the Water
        Business , other than such information as may at any time be or become
        lawfully available to the general public through no fault of Seller.

                        (ee)    "Confidentiality Agreement" means that certain
        Confidentiality Agreement, dated October 15, 2003, between Seller and
        Buyer.

                        (ff)    "Contracts" means all oral and written
        contracts, purchase orders, sales orders, licenses, leases and other
        agreements, commitments, arrangements and understandings.

                        (gg)    "Control" (including the correlative meanings of
        the terms "Controlled by" and "under Common Control with"), as used with
        respect to any Person, means the possession, directly or indirectly, of
        the power to direct or cause the direction of management policies of
        such Person, whether through the ownership of voting securities, by
        contract or otherwise.

                        (hh)    "CPA Firm" has the meaning set forth in Section
        2.3(f)(ii).

                                       46



                        (ii)    "Deloitte" has the meaning set forth in Section
        2.3(c).

                        (jj)    "Designated Purchaser" has the meaning set forth
        in Section 1.2.

                        (kk)    "Disclosure Schedule" has the meaning set forth
        in Section 12.1.

                        (ll)    "Distribution" has the meaning set forth in
        Section 5.9.

                        (mm)    "DOJ" has the meaning set forth in Section 5.4.

                        (nn)    "Effective Time" has the meaning set forth in
        Section 2.3(b).

                        (oo)    "Employee Plans/Agreements" has the meaning set
        forth in Section 3.16(a).

                        (pp)    "Entity" shall mean any corporation, firm,
        unincorporated organization, association, partnership, limited liability
        company, business trust, joint stock company, joint venture
        organization, entity or business.

                        (qq)    "Environmental Consultant" means ENSR
        International.

                        (rr)    "Environmental Laws" means all Laws currently in
        effect (including common law) relating to pollution, protection of the
        environment or human health, occupational safety and health or
        sanitation, including Laws relating to emissions, spills, discharges,
        generation, storage, leaks, injection, leaching, seepage, releases or
        threatened releases of Waste into the environment (including ambient
        air, surface water, ground water, land surface or subsurface strata) or
        otherwise relating to the manufacture, processing, distribution, use,
        treatment, storage, disposal, transport or handling of Waste, together
        with any regulation, code, plan, order, decree, judgment, injunction,
        notice or demand letter issued, entered, promulgated or approved
        thereunder.

                        (ss)    "ERISA" means the Employee Retirement Income
        Security Act of 1974, as amended.

                        (tt)    "ERISA Affiliate" means any Entity that is a
        member of a controlled group of corporations (as defined in Section
        414(b) of the Code) of which Company or any Water Subsidiary is a
        member, an unincorporated trade or business under common control with
        Company or any Water Subsidiary (as determined under Section 414(c) of
        the Code), or a member of an "affiliated service group" (within the
        meaning of Section 414(m) of the Code) of which Company or any Water
        Subsidiary is a member.

                        (uu)    "Estimated Closing Balance Sheet" has the
        meaning set forth in Section 2.3(b)

                        (vv)    "Exchange Act" means the Securities Exchange Act
        of 1934, as amended.

                        (ww)    "Final Closing Balance Sheet" has the meaning
        set forth in Section 2.3(g).

                                       47



                        (xx)    "Financial Statements" has the meaning set forth
        in Section 3.5.

                        (yy)    "Financing Commitments" has the meaning set
        forth in Section 4.4.

                        (zz)    "FTC" has the meaning set forth in Section 5.4.

                        (aaa)   "GAAP" has the meaning set forth in Section
        2.3(a).

                        (bbb)   "Governmental Entities" has the meaning set
        forth in Section 3.4.

                        (ccc)   "HSR Act" has the meaning set forth in Section
        3.4.

                        (ddd)   "Indemnified Party" has the meaning set forth in
        Section 9.3.

                        (eee)   "Indemnifying Party" has the meaning set forth
        in Section 9.3.

                        (fff)   "Industries" has the meaning set forth in the
        recitals of this Agreement.

                        (ggg)   "Intercompany Indebtedness" has the meaning set
        forth in Section 5.10.

                        (hhh)   "IRS" has the meaning set forth in Section
        3.6(d).

                        (iii)   "Laws" has the meaning set forth in Section 3.4.

                        (jjj)   "Liability" means any direct or indirect
        indebtedness, loss, damage, cost, expense or obligation, fixed or
        unfixed, known or unknown, asserted or unasserted, liquidated or
        unliquidated, secured or unsecured.

                        (kkk)   "Liens" means any mortgages, liens (statutory or
        otherwise), security interests, claims, pledges, levies, easements,
        encroachments, hypothecations, restrictions, rights-of-way, charges,
        possibilities of reversion, rights of refusal or other encumbrances.

                        (lll)   "Listed Contracts" has the meaning set forth in
        Section 3.13.

                        (mmm)   "Litigation" means any action, suit, proceeding,
        arbitration or other alternate dispute resolution procedure,
        investigation or inquiry, whether civil, criminal or administrative,
        before any Governmental Entity.

                        (nnn)   "Losses" has the meaning set forth in Section
        9.1.

                        (ooo)   "Minimum Claim Amount" has the meaning set forth
        in Section 9.4(b).

                        (ppp)   "Net Asset Value" means the amount in United
        States Dollars of the consolidated shareholders' equity of Company, plus
        net Intercompany Indebtedness, and minus all cash on hand in Company and
        Industries.

                        (qqq)   "Non-Water Subsidiary" has the meaning set forth
        in Section 3.1(d).

                                       48



                        (rrr)   "Orders" has the meaning set forth in Section
        3.4.

                        (sss)   "Other Business" has the meaning set forth in
        the recitals of this Agreement.

                        (ttt)   "Other Financing" has the meaning set forth in
        Section 5.8.

                        (uuu)   "Party" or "Parties" means Buyer, Company and/or
        Seller, as the case may be.

                        (vvv)   "Permits" has the meaning set forth in Section
        3.10(b).

                        (www)   "Permitted Liens" has the meaning set forth in
        Section 3.11(a).

                        (xxx)   "Person" means any natural person or Entity.

                        (yyy)   "Preliminary Closing Balance Sheet" has the
        meaning set forth in Section 2.3(c).

                        (zzz)   "Products" means all products sold at any time
        prior to the Closing by Company, any Water Subsidiary or that have borne
        a trademark of Company, as part of, in or through the operations of
        Company prior to the Closing.

                        (aaaa)  "PSCW" has the meaning set forth in Section 5.9.

                        (bbbb)  "Purchase Price" has the meaning set forth in
        Section 2.1.

                        (cccc)  "Real Property" has the meaning set forth in
        Section 3.11(b).

                        (dddd)  "Recent Balance Sheet" has the meaning set forth
        in Section 3.5.

                        (eeee)  "Representatives" has the meaning set forth in
        Section 5.1(a).

                        (ffff)  "Seller" has the meaning set forth in the
        preamble of this Agreement.

                        (gggg)  "Seller Indemnified Party" has the meaning set
        forth in Section 9.2.

                        (hhhh)  "Shares" has the meaning set forth in the
        recitals of this Agreement.

                        (iiii)  "Subsidiaries" means, as to any Person, any
        Person (i) of which such Person directly or indirectly owns securities
        or other equity interests representing fifty percent (50%) or more of
        the aggregate voting power; (ii) of which such Person possesses fifty
        percent (50%) or more of the right to elect directors or Persons holding
        similar positions; or (iii) which such Person Controls directly or
        indirectly through one or more intermediaries, at any time during the
        period for which the determination of Subsidiary is being made.

                        (jjjj)  "Tax Return" means any return, declaration,
        report, estimate, claim for refund, election or information return or
        statement relating to, or required to be filed in connection with, any
        Taxes, including any schedule, form, attachment or amendment.

                                       49



                        (kkkk)  "Taxes" means any federal, state, county, local,
        territorial, provincial, or foreign income, net income, gross receipts,
        single business, unincorporated business, license, payroll, employment,
        excise, severance, stamp, occupation, premium, windfall profits,
        environmental (including taxes under Section 59A of the Code), customs
        duties, capital stock, franchise, profits, gains, withholding, social
        security (or similar), payroll, unemployment, disability, workers
        compensation, real property, personal property, ad valorem, replacement,
        sales, use, transfer, registration, value added, alternative or add-on
        minimum, estimated, or other tax of any kind whatsoever, including any
        interest, penalty, or addition, whether or not disputed and whether
        imposed by Law, Order, Contract or otherwise.

                        (llll)  "Termination Date" has the meaning set forth in
        Section 11.1(d).

                        (mmmm)  "Trade Rights" means rights in the following:
        (i) all trademark rights, business identifiers, trade dress, service
        marks, trade names and brand names; (ii) all copyrights and all other
        rights associated therewith and the underlying works of authorship;
        (iii) all patents and all proprietary rights associated therewith; (iv)
        all inventions, mask works and mask work registrations, know how,
        discoveries, improvements, designs, computer source codes, programs and
        other software (including all machine readable code, printed listings of
        code, documentation and related property and information), trade
        secrets, websites, domain names, shop and royalty rights, and all other
        types of intellectual property; and (v) all registrations of any of the
        foregoing, all applications therefor, all goodwill associated with any
        of the foregoing and all claims for infringement thereof.

                        (nnnn)  "Waste" means (i) any petroleum, hazardous or
        toxic petroleum-derived substance or petroleum product, flammable or
        explosive material, radioactive materials, asbestos in any form that is
        or could become friable, urea formaldehyde foam insulation, foundry sand
        or polychlorinated biphenyls (PCBs); (ii) any chemical or other material
        or substance that is now regulated, classified or defined as or included
        in the definition of "hazardous substance," "hazardous waste,"
        "hazardous material," "extremely hazardous substance," "restricted
        hazardous waste," "toxic substance," "toxic pollutant," "pollutant" or
        "contaminant" under any Environmental Law, or any similar denomination
        intended to classify substance by reason of toxicity, carcinogenicity,
        ignitability, corrosivity or reactivity under any Environmental Law; or
        (iii) any other chemical or other material, waste or substance, exposure
        to which is now prohibited, limited or regulated by or under any
        Environmental Law.

                        (oooo)  "Water Business" has the meaning set forth in
        the recitals of this Agreement.

                        (pppp)  "Water Subsidiary" has the meaning set forth in
        Section 3.1(d).

Unless the context otherwise requires, the foregoing definitions in the singular
include the plural and vice versa.

                     [The next page is the signature page.]

                                       50



                IN WITNESS WHEREOF, the undersigned have caused their duly
authorized officers to execute and deliver this Stock Purchase Agreement as of
the day and year first written above.

                                        PENTAIR, INC.

                                        By: /s/ Randall J. Hogan
                                            ------------------------------------
                                            Name:  Randall J. Hogan
                                                   -----------------------------
                                            Title: Chairman and CEO
                                                   -----------------------------

                                        WICOR, INC.

                                        By: /s/ Larry Salustro
                                            ------------------------------------
                                            Name:  Larry Salustro
                                                   -----------------------------
                                            Title: Senior VP and General Counsel
                                                   -----------------------------

                                        WISCONSIN ENERGY CORPORATION

                                        By: /s/ Richard A. Abdoo
                                            ------------------------------------
                                            Name:  Richard A. Abdoo
                                                   -----------------------------
                                            Title: Chairman and CEO
                                                   -----------------------------

EX-99.3

                                                                    EXHIBIT 99.3

February 3, 2004

Pentair, Inc.
5500 Wayzata Boulevard, Suite 800
Golden Valley, Minnesota 55416-1259
Attention: Michael G. Meyer

        Re:     $850,000,000 Senior Term Loan Facility

Ladies and Gentlemen:

You have advised Bank of America, N.A. ("Bank of America"), Banc of America
Securities LLC ("BAS") and U.S. Bank National Association ("US Bank") that
Pentair, Inc. (the "Borrower" or "you") intends to acquire all of the stock of
WICOR, Inc. ("WICOR") from Wisconsin Energy Corporation and to assume certain
debt of WICOR (the "Acquisition"), the sources and uses with respect to all of
which are set forth in more detail on Schedule I hereto (as so set forth, the
"Sources and Uses").

You have also advised Bank of America, BAS and US Bank (collectively the
"Agents") that you intend to finance the Acquisition and the costs and expenses
related to the Transaction (as defined below) with a senior term loan facility
in the amount of up to $850 million (the "Facility"). The Acquisition, the
entering into and funding of the Facility, the related amendment of your
existing $500,000,000 Credit Agreement agented by Bank of America, N.A. (the
"Existing Bank Facility") and all related transactions are hereinafter
collectively referred to as the "Transaction."

In connection with the foregoing, (a) Bank of America and US Bank are pleased to
advise you of their several commitments to provide (or, in each case, cause one
of its affiliates to provide) $425 million of the principal amount of the
Facility, (b) Bank of America is pleased to offer to act as the sole and
exclusive administrative agent (in such capacity, the "Administrative Agent")
for the Facility, (c) US Bank is pleased to offer to act as Syndication Agent
for the Facility (in such capacity, the "Syndication Agent") and (d) BAS and US
Bank are pleased to advise you of their willingness to act as the exclusive
joint lead arrangers and joint book managers (in such capacities, the "Lead
Arrangers") for the Facility and to form, in consultation with you, a syndicate
of financial institutions and institutional lenders, including Bank of America
and US Bank (collectively, the "Lenders"), for the Facility, all upon and
subject to the terms and conditions set forth in this letter and in the summary
of terms and conditions attached as Exhibit A hereto and incorporated herein by
this reference (the "Summary of Terms and Conditions" and, together with this
letter agreement, this "Commitment Letter"). The maximum aggregate principal
amount of the Facility shall be reduced dollar-for-dollar (and the commitments
of Bank of America and US Bank shall be reduced pro rata) by the gross cash
proceeds received by the Borrower from any issuance of equity or debt securities
by the Borrower prior to the Closing Date (as defined below) other than
issuances of equity in the ordinary course of business in connection with the
administration of existing employee, officer and director compensation programs.
To carry out their respective commitments and undertakings hereunder, the Agents
reserve the right to engage the services of one or more of their affiliates to
furnish the services, and to perform the obligations, contemplated hereby. You
further agree that upon acceptance of the commitments contained herein, you will
not solicit, initiate or enter into any discussions in respect of any offering,
placement or arrangement of any competing facilities for the Borrower and its
subsidiaries with respect to the matters addressed in this Commitment Letter,
and will refrain from engaging in any additional debt financings for the
Transaction.



Pentair, Inc.
February 3, 2004
Page 2

All capitalized terms used and not otherwise defined herein shall have
respective meanings ascribed thereto in the Summary of Terms and Conditions.

The commitments of Bank of America and US Bank hereunder and the undertakings of
the Lead Arrangers hereunder are subject to the satisfaction of each of the
following conditions precedent in a manner satisfactory to the Lead Arrangers:
(a) the accuracy and completeness of all representations that you and your
affiliates make to the Agents and your compliance with the terms of this
Commitment Letter (including the Summary of Terms and Conditions) and the Fee
Letters (as defined below); (b) prior to and during the syndication of the
Facility there shall be no competing offering, placement or arrangement of any
debt securities or bank financing by or on behalf of the Borrower or any of its
subsidiaries; (c) no material adverse change in or material disruption of
conditions in the market for syndicated bank credit facilities or the financial,
banking or capital markets generally shall have occurred that, in the judgment
of the Lead Arrangers, would impair the syndication of the Facility; and (d) all
of the terms and conditions set forth in the Summary of Terms and Conditions.

The Lead Arrangers intend to commence syndication of the Facility promptly upon
your acceptance of this Commitment Letter and the Fee Letters, and the
commitments of Bank of America and US Bank hereunder shall be reduced, on a pro
rata basis, by the amount of any commitment received from any other Lender. You
agree to actively assist, and to cause WICOR to actively assist, the Lead
Arrangers in achieving a syndication of the Facility that is satisfactory to the
Lead Arrangers and you. Such assistance shall include (a) your providing and
causing your advisors to provide the Agents and the Lenders upon request with
all information reasonably deemed necessary by the Lead Arrangers to complete
syndication, including, but not limited to, information and evaluations prepared
by you, WICOR and your and their advisors, or on your or their behalf, relating
to the Transaction, (b) your assistance in the preparation of an Information
Memorandum to be used in connection with the syndication of the Facility, (c)
using your best efforts to ensure that the syndication efforts of the Lead
Arrangers benefit materially from your existing lending relationships and (d)
otherwise assisting the Lead Arrangers in their syndication efforts, including
by making your officers and advisors and the officers and advisors of WICOR
available from time to time to attend and make presentations regarding the
business and prospects of the Borrower (including WICOR, giving effect to the
Acquisition) and its subsidiaries, as appropriate, at one or more meetings of
prospective Lenders.

It is understood and agreed that the Lead Arrangers will manage and control all
aspects of the syndication, including decisions as to the selection of
prospective Lenders and any titles offered to proposed Lenders, when commitments
will be accepted and the final allocations of the commitments among the Lenders.
It is understood that no Lender participating in the Facility will receive
compensation from you in order to obtain its commitment, except on the terms
contained herein and in the Summary of Terms and Conditions. It is also
understood and agreed that the amount and distribution of the fees among the
Lenders will be at the discretion of the Lead Arrangers, in consultation with
you.

You hereby represent, warrant and covenant that (a) all information, other than
Projections (as defined below), which has been or is hereafter made available to
the Agents or the Lenders by you or any of your representatives (or on your or
their behalf) in connection with any aspect of the Transaction (the
"Information") is and will be complete and correct in all material respects and
does not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading and (b) all financial projections concerning the Borrower and its
subsidiaries (whether or not giving effect to the Acquisition) and of WICOR that
have been or are hereafter made available to the Agents or the Lenders by you or
any of your representatives (or on your or their behalf) or by WICOR or any of
its representatives (or on behalf of any of them) (the "Projections")



Pentair, Inc.
February 3, 2004
Page 3

have been or will be prepared in good faith based upon reasonable assumptions.
You agree to furnish the Agents with such Information and Projections as they
may reasonably request and to supplement the Information and the Projections
from time to time until the date of the borrowing under the Facility (the
"Closing Date") so that each representation, warranty and covenant in the
immediately preceding sentence is correct on the Closing Date. In issuing this
commitment and in arranging and syndicating the Facility, each of the Agents is
and will be using and relying on the Information and the Projections
(collectively, the "Pre-Commitment Information") without independent
verification thereof.

By executing this Commitment Letter, you agree to reimburse the Agents from time
to time on demand for all reasonable out-of-pocket fees and expenses (including,
but not limited to, (a) the reasonable fees, disbursements and other charges of
Mayer, Brown, Rowe & Maw LLP, as counsel to the Lead Arrangers and the
Administrative Agent, (b) with the prior written consent of the Borrower (such
consent not to be unreasonably withheld), the reasonable fees, disbursements and
other charges of special and local counsel to the Lenders retained by any Agent
and (c) reasonable due diligence expenses) incurred in connection with the
Facility, the syndication thereof, the preparation of the definitive
documentation therefor, the Transaction and the other transactions contemplated
hereby.

You agree to indemnify and hold harmless each Agent, each Lender and each of
their affiliates and their respective officers, directors, employees, agents,
advisors and other representatives (each an "Indemnified Party") from and
against (and will reimburse each Indemnified Party as the same are incurred for)
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, the reasonable fees, disbursements and other charges of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (a) any
aspect of the Transaction or any other transaction contemplated hereby or (b)
the Facility and any other financings, or any use made or proposed to be made
with the proceeds thereof, except to the extent such claim, damage, loss,
liability or expense is found in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence, willful misconduct or bad faith. In the case of an investigation,
litigation or proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by you, your equityholders or creditors or an Indemnified
Party, whether or not an Indemnified Party is otherwise a party thereto and
whether or not any aspect of the Transaction is consummated. You also agree that
no Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to you or your subsidiaries or affiliates or to
your or their respective equity holders or creditors arising out of, related to
or in connection with any aspect of the Acquisition or any other transaction
contemplated hereby, except to the extent of direct, as opposed to special,
indirect, consequential or punitive, damages determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence, willful misconduct or bad faith.
It is further agreed that the Agents shall only have liability to you (as
opposed to any other person), that the Agents shall be liable solely in respect
of their respective commitments and undertakings (and that Bank of America and
US Bank shall be liable for their respective commitments, if any, to the
Facility on a several, and not joint, basis with any other Lender) and that any
such liability shall only arise to the extent damages have been caused by a
breach by an Agent of its obligations hereunder to negotiate in good faith
definitive documentation for the Facility on the terms set forth herein as
determined in a final non-appealable judgment by a court of competent
jurisdiction. Notwithstanding any other provision of this Commitment Letter, no
Indemnified Party shall be liable for any damages arising from the use by others
of information or other materials obtained through electronic telecommunications
or other information transmission systems.



Pentair, Inc.
February 3, 2004
Page 4

This Commitment Letter and the fee letters referring to the Facility among you,
Bank of America and BAS and between you and US Bank, each of even date herewith
referring to the Facility (the "Fee Letters"), and the contents hereof and
thereof are to be held in confidence by you and, except for the disclosure
hereof or thereof on a confidential basis to your accountants, attorneys and
other professional advisors retained by you in connection with the Transaction
or as otherwise required by law, may not be disclosed in whole or in part to any
person or entity without the prior written consent of all other parties thereto;
provided, however, it is understood and agreed that you may disclose this
Commitment Letter (including the Summary of Terms and Conditions) but not the
Fee Letters (a) on a confidential basis to the board of directors and advisors
of WICOR and its parent in connection with their consideration of the portion of
the Transaction relevant to such persons, and (b) after your acceptance of this
Commitment Letter and the Fee Letters, in filings with the Securities and
Exchange Commission and other applicable regulatory authorities and stock
exchanges. Further, the Agents shall be permitted to use information related to
the syndication and arrangement of the Facility in connection with marketing,
press releases or other transactional announcements or updates provided to
investor or trade publications. The Agents hereby notify you that pursuant to
the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed
into law October 26, 2001) (the "Act"), each of them is required to obtain,
verify and record information that identifies you, which information includes
your name and address and other information that will allow the Agents to
identify you in accordance with the Act.

You acknowledge that any Agent or its affiliates may be providing financing or
other services to parties whose interests may conflict with yours. The Agents
agree that they will not furnish confidential information obtained from you to
any of their other customers and that they will treat confidential information
relating to you, WICOR and your and their respective affiliates with the same
degree of care as they treat their own confidential information. The Agents
further advise you that they will not make available to you confidential
information that they have obtained or may obtain from any other customer. In
connection with the services and transactions contemplated hereby, you agree
that the Agents are permitted to access, use and share with any of their
affiliates, agents, advisors (legal or otherwise) or representatives any
information concerning you, WICOR or any of your or its respective affiliates
that is or may come into the possession of any Agent or any of such affiliates.

The provisions of the immediately preceding four paragraphs shall remain in full
force and effect regardless of whether any definitive documentation for the
Facility shall be executed and delivered, and notwithstanding the termination of
this Commitment Letter or any commitment or undertaking of any Agent hereunder.

This Commitment Letter and the Fee Letters may be executed in counterparts
which, taken together, shall constitute an original. Delivery of an executed
counterpart of this Commitment Letter or a Fee Letter by facsimile shall be
effective as delivery of a manually executed counterpart thereof.

This Commitment Letter and the Fee Letters shall be governed by, and construed
in accordance with, the laws of the State of New York. Each of you and each
Agent hereby irrevocably waives any and all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Commitment Letter (including,
without limitation, the Summary of Terms and Conditions), either Fee Letter, the
Transaction and the other transactions contemplated hereby and thereby or the
actions of the Agents in the negotiation, performance or enforcement hereof. The
commitments and undertakings of the Agents may be terminated by us if you fail
to perform your obligations under this Commitment Letter or the Fee Letters on a
timely basis.



Pentair, Inc.
February 3, 2004
Page 5

This Commitment Letter, together with the Summary of Terms and Conditions and
the Fee Letters, embodies the entire agreement and understanding among the
Agents, you and your affiliates with respect to the Facility and supersedes all
prior agreements and understandings relating to the specific matters hereof.
However, please note that the terms and conditions of the commitments and
undertakings of the Agents hereunder are not limited to those set forth herein
or in the Summary of Terms and Conditions. Those matters that are not covered or
made clear herein or in the Summary of Terms and Conditions or the Fee Letters
are subject to mutual agreement of the parties. No party has been authorized by
any Agent to make any oral or written statements that are inconsistent with this
Commitment Letter.

This Commitment Letter is not assignable by you without the prior written
consent of the Agents and is intended to be solely for the benefit of the
parties hereto and the Indemnified Parties.

This Commitment Letter and all commitments and undertakings of the Agents
hereunder will expire at 5:00 p.m. (New York City time) on February 4, 2004,
unless prior to that time you execute this Commitment Letter and the Fee Letters
and return them to us together with any fee required to be paid concurrently
with your acceptance hereof pursuant to either Fee Letter. Thereafter, all
commitments and undertakings of the Agents hereunder will expire on the earliest
of (a) September 1, 2004, unless the Closing Date occurs on or prior thereto,
(b) the closing of the Acquisition without the use of the Facility, (c) the sale
of the tools business of the Borrower and (d) the acceptance by the current
owners of WICOR of an offer for all or any substantial part of the capital stock
or property and assets of WICOR other than as part of the Transaction.

             [THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]



We are pleased to have the opportunity to work with you in connection with this
important financing.

                                            Very truly yours,


                                            BANK OF AMERICA, N.A.

                                            By:    /s/ Chas McDonell
                                                   --------------------------
                                            Name:  Chas McDonell
                                                   --------------------------
                                            Title: Managing Director
                                                   --------------------------


                                            BANC OF AMERICA SECURITIES LLC

                                            By:    /s/ Peter C. Hall
                                                   --------------------------
                                            Name:  Peter C. Hall
                                                   --------------------------
                                            Title: Managing Director
                                                   --------------------------


                                            U.S. BANK NATIONAL ASSOCIATION

                                            By:    /s/ David A. Draxler
                                                   --------------------------
                                            Name:  David A. Draxler
                                                   --------------------------
                                            Title: Vice President
                                                   --------------------------

ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:

PENTAIR, INC.

By:    /s/ David D. Harrison
       -------------------------------
Name:  David D. Harrison
       -------------------------------
Title: EVP and CFO
       -------------------------------


                                                                        Facility
                                                               Commitment Letter



                                                                      Schedule I

                            SOURCES AND USES OF FUNDS
                                  ($ millions)

              Sources                                     Uses

Facility                     $ 850.0    Purchase of Acquired Company
                                         equity                          $ 850.0

Cash                            14.3    Assumed Debt                        23.9

Assumed Debt                    23.9    Estimated fees and expenses of
                                         Transaction                        14.3

                             -------                                     -------
    Total Sources            $ 888.2        Total Uses                   $ 888.2
                             =======                                     =======



                                                                       EXHIBIT A

                              SENIOR TERM FACILITY
                         SUMMARY OF TERMS AND CONDITIONS

BORROWER:               Pentair, Inc. (the "Borrower"). Upon consummation of the
                        Transaction (as defined below), the Borrower will own
                        all of the stock of WICOR, Inc. ("WICOR").

ACQUISITION:            The acquisition (the "Acquisition") by the Borrower of
                        100% of the stock of WICOR from Wisconsin Energy
                        Corporation and the assumption of certain debt of WICOR.

GUARANTORS:             The obligations of the Borrower under the Facility (as
                        defined below) and under any interest protection or
                        other hedging arrangements entered into with a Lender
                        (or any affiliate thereof) will at all times be
                        guaranteed by subsidiaries of the Borrower (other than
                        foreign subsidiaries) that, in the aggregate together
                        with the Borrower, own 90% or more of the consolidated
                        assets of the Borrower and its Subsidiaries (excluding
                        foreign subsidiaries) and earned 90% or more of the
                        consolidated revenue of the Borrower and its
                        subsidiaries (excluding foreign subsidiaries) during the
                        most recent period of four consecutive fiscal quarters
                        (excluding the revenues of any subsidiary or business
                        unit which has been divested or liquidated on or prior
                        to any date of determination); provided that no
                        subsidiary shall be obligated to guarantee such
                        obligations of the Borrower on the first date after the
                        Closing Date on which the Borrower's Senior Debt Rating
                        (as defined below) is BBB or better by S&P and Baa2 or
                        better by Moody's. All guarantees will be guarantees of
                        payment and not of collection.

ADMINISTRATIVE AGENT:   Bank of America, N.A. ("Bank of America") will act as
                        sole and exclusive administrative agent (in such
                        capacity, the "Administrative Agent").

SYNDICATION AGENT:      U.S. Bank National Association ("US Bank") will act as
                        sole and exclusive syndication agent (in such capacity,
                        the "Syndication Agent").

JOINT LEAD ARRANGERS
AND BOOK MANAGERS       Banc of America Securities LLC ("BAS") and US Bank will
                        act as joint lead arrangers and joint book managers (in
                        such capacity, the "Lead Arrangers").

                                       A-1



LENDERS:                Bank of America, US Bank and other financial
                        institutions and institutional lenders acceptable to the
                        Lead Arrangers, selected in consultation with the
                        Borrower (collectively, the "Lenders").

FACILITY:               A single-draw term loan facility in an aggregate
                        principal amount of up to $850 million (the "Facility").
                        The Acquisition, the entering into and funding of the
                        Facility, the amendment of the Senior Bank Facility (as
                        defined below) and all related transactions are
                        collectively called the "Transaction."

                        As used herein, the term "Senior Bank Facility" shall
                        mean the $500,000,000 Amended and Restated Credit
                        Agreement, dated as of July 25, 2003, among the
                        Borrower, Pentair UK Group Limited, Pentair Canada Inc.,
                        EuroPentair GmbH, Pentair Global Sarl, various financial
                        institutions and Bank of America, N.A., as
                        Administrative Agent.

PURPOSE:                The proceeds of the Facility shall be used to (i)
                        finance in part the Acquisition; and (ii) pay in part
                        the fees and expenses incurred in connection with the
                        Transaction.

CLOSING DATE:           The execution of definitive loan documentation to occur
                        on or before September 1, 2004 (the "Closing Date").

MATURITY:               All amounts outstanding under the Facility, including
                        accrued interest thereon, shall be due and payable in
                        full on December 31, 2004 (the "Maturity Date").

CONTINUATION FEE:       If at any time on or after September 30, 2004, the
                        Borrower does not have a contract for the sale of its
                        tools business in an amount sufficient to pay the
                        Facility in full, the Borrower shall pay to the
                        Administrative Agent, for the account of each Lender
                        (including Bridge and its affiliates), a continuation
                        fee in an amount equal to (i) the applicable
                        "Continuation Fee Rate" set forth on the following fee
                        grid, as determined on the date of such payment,
                        multiplied by (ii) such Lender's outstanding loans on
                        the date of such payment. Such Continuation Fee shall be
                        payable (a) if, on September 30, 2004, the Borrower does
                        not have a contract for the sale of its tools business
                        in an amount sufficient to pay the Facility in full, on
                        September 30, 2004; and (b) if, on September 30, 2004,
                        the Borrower has a contract for the sale of its tools
                        business in an amount sufficient to pay the Facility in
                        full, but such contract is later terminated (for
                        whatever reason), on the earlier of the date of such
                        termination and the Maturity Date.

                                       A-2





                                                     LEVEL I            LEVEL II           LEVEL III
                                               ----------------------------------------------------------
                                                                                  
                        Bank Debt Ratings,
                        Corporate Ratings or        BBB-/Baa3           BBB-/Ba1            BB+/Ba1
                        Senior Debt Ratings         or Higher         or BB+/Baa3          or Lower

                        Continuation Fee
                        Rate (bps)                     15.0               15.0               25.0


TICKING FEE:            Commencing on the date of the execution of the
                        Commitment Letter (as defined below), a ticking fee
                        shall be payable by the Borrower to the Administrative
                        Agent, for the account of each Lender (including Bank of
                        America, US Bank and their respective affiliates) in an
                        amount equal to (i) the applicable "Ticking Fee Rate"
                        set forth on the following fee grid, as in effect from
                        time to time, multiplied by (ii) such Lender's
                        outstanding commitment on the date of such payment, such
                        fee to be payable quarterly in arrears and on the
                        Closing Date.



                                                     LEVEL I            LEVEL II           LEVEL III
                                               ----------------------------------------------------------
                                                                                  
                        Bank Debt Ratings,
                        Corporate Ratings or        BBB-/Baa3           BBB-/Ba1           BB+/Ba1
                        Senior Debt Ratings         or Higher         or BB+/Baa3          or Lower

                        Ticking Fee Rate               25.0               25.0               30.0


INTEREST RATES:         At the Borrower's option, segments (in minimum
                        denominations to be determined) of the loans under the
                        Facility will bear interest at a rate equal to (i) LIBOR
                        plus the Applicable Margin or (ii) the Alternate Base
                        Rate (to be defined as the higher of (a) the Bank of
                        America prime rate and (b) the Federal Funds rate plus
                        .50%) plus the Applicable Margin. If any breakage costs,
                        charges or fees are incurred on account of the
                        syndication of the Facility, the Borrower shall
                        immediately reimburse the Administrative Agent for any
                        such costs, charges or fees. Such right of reimbursement
                        shall be in addition to and not in limitation of
                        customary cost and yield protections.

                        The Applicable Margin shall be as set forth in the table
                        below and shall be calculated based on (a) the credit
                        ratings assigned by Moody's and S&P to the Borrower's
                        debt obligations under the Senior Bank Facility (each a
                        "Bank Debt Rating"), if Moody's and S&P have issued such
                        ratings, or (b) if either Moody's or S&P has not issued
                        a Bank Debt Rating, the general corporate rating

                                       A-3



                        assigned by Moody's and S&P to the Borrower (each a
                        "Corporate Rating"), or (c) if either Moody's or S&P has
                        issued neither a Bank Debt Rating nor a Corporate
                        Rating, the credit ratings assigned by Moody's and S&P
                        to the Borrower's long term senior unsecured
                        non-credit-enhanced public debt (each a "Senior Debt
                        Rating"). The pricing shall be adjusted two Business
                        Days after any applicable change in the Bank Debt
                        Rating, Corporate Rating or Senior Debt Rating, as
                        applicable, by either Moody's or S&P.

                        If one Bank Debt Rating, Corporate Rating or Senior Debt
                        Rating is higher than the other (i.e., the Moody's
                        rating is higher than the S&P rating, or vice versa),
                        the higher of such ratings shall determine the pricing.
                        If at any time either Moody's or S&P does not have in
                        effect a Bank Debt Rating, a Corporate Rating or a
                        Senior Debt Rating (including any time when neither
                        Moody's nor S&P has in effect any such rating), the
                        pricing shall be Level IV.



                                          LEVEL I         LEVEL II     LEVEL III   LEVEL IV
                                         -----------------------------------------------------
                                                                         
                        Bank Debt
                        Ratings,
                        Corporate
                        Ratings or
                        Senior Debt         BBB/Baa2      BBB-/Baa3      BB+/Bal      BB/Ba2
                        Ratings            or Higher                                 or Lower

                        Applicable
                        Margin  for
                        LIBOR Loans (bps)    137.5          150.0         175.0       200.0

                        Applicable
                        Margin  for Base
                        Rate Loans (bps)      25.0           50.0          75.0       100.0


                        The Borrower may select interest periods of one, two,
                        three or six months for LIBOR advances, subject to
                        availability. Interest shall be payable at the end of
                        the selected interest period, but no less frequently
                        than quarterly.

                        During the continuance of any default under the loan
                        documentation, the Applicable Margin on all obligations
                        owing under the loan documentation shall increase by 2%
                        per annum.

CALCULATION OF
INTEREST AND FEES:      Other than calculations in respect of interest at the
                        Bank of America prime rate (which shall be made on the
                        basis of actual number of days elapsed in a 365/366 day
                        year), all calculations of

                                       A-4



                        interest and fees shall be made on the basis of actual
                        number of days elapsed in a 360 day year.

COST AND YIELD
PROTECTION:             Customary for transactions and facilities of this type,
                        including, without limitation, in respect of breakage or
                        redeployment costs incurred in connection with
                        prepayments, changes in capital adequacy and capital
                        requirements or their interpretation, illegality,
                        unavailability, reserves without proration or offset and
                        payments free and clear of withholding or other taxes.

MANDATORY
PREPAYMENTS:            Subject to certain to-be-determined exceptions and
                        baskets, the Facility will be repaid with 100% of the
                        net proceeds of:

                                (i)     each debt, equity or equity-linked
                                        capital markets transaction or other
                                        issuance of debt or equity of the
                                        Borrower or any of its subsidiaries
                                        occurring after the Closing Date
                                        (including, without limitation, all
                                        Takeout Transactions (as defined
                                        below));
                                (ii)    each disposition of assets of the
                                        Borrower or any of its subsidiaries; and
                                (iii)   without limitation of (i) or (ii) above,
                                        such other events as give rise to
                                        mandatory prepayment obligations under
                                        the Senior Bank Facility or any other
                                        senior debt facility of the Borrower or
                                        any of its subsidiaries (the "Senior
                                        Credit Facilities").

                                       A-5



OPTIONAL PREPAYMENTS:   The Facility may be prepaid at any time in whole or in
                        part without premium or penalty, except that any
                        prepayment of LIBOR advances other than at the end of
                        the applicable interest periods therefor shall be made
                        together with reimbursement for any funding losses and
                        redeployment costs of the Lenders resulting therefrom.

TAKEOUT
TRANSACTIONS:           If (i) the Borrower sells its tools business and does
                        not concurrently pay all obligations of the Borrower
                        under the Facility or (ii) at any time on or after
                        September 30, 2004, the Borrower does not have a
                        contract for the sale of its tools business in an amount
                        sufficient to pay the then-outstanding balance of the
                        Facility in full, then the Borrower shall promptly
                        commence one or more debt, equity or equity-linked
                        capital markets transactions in an aggregate amount
                        sufficient to pay all obligations under the Facility on
                        or before the Maturity Date (each a "Takeout
                        Transaction").

CONDITIONS PRECEDENT
TO CLOSING:             Funding under the Facility will be subject to
                        satisfaction of the conditions precedent deemed
                        appropriate by the Administrative Agent for acquisition
                        financings of this type generally and for this
                        transaction in particular, including, but not limited
                        to, the following:

                        (i)     The negotiation, execution and delivery of
                                definitive documentation satisfactory to the
                                Lead Arrangers, the Administrative Agent and the
                                Syndication Agent with respect to the Facility.

                        (ii)    No Event of Default (as such term is defined in
                                the Senior Bank Facility) or comparable event
                                shall exist under any Senior Credit Facility.

                        (iii)   The final terms and conditions of each aspect of
                                the Transaction, including, without limitation,
                                all tax aspects thereof, shall be (i) as
                                described in the commitment letter dated as of
                                the date hereof and delivered in connection with
                                the Transaction (the "Commitment Letter") and
                                otherwise consistent with the description
                                thereof received in writing as part of the
                                information and projections received by the Lead
                                Arrangers from the Borrower and its
                                representatives in connection with the
                                Transaction and (ii) substantially similar to
                                the terms contained in the draft purchase
                                agreement (including all schedules and exhibits
                                thereto) for

                                       A-6



                                the Acquisition (the "Purchase Agreement")
                                delivered to the Lead Arrangers on February 3,
                                2004. The Acquisition shall have been
                                consummated in accordance with the terms thereof
                                and in compliance with applicable law and
                                required regulatory approvals.

                        (iv)    There shall not have occurred a material adverse
                                change in, or material adverse effect on, the
                                business, financial condition or results of
                                operations or prospects of WICOR and its
                                subsidiaries, taken as a whole, since December
                                31, 2002.

                        (v)     The Administrative Agent shall have received
                                satisfactory opinions of counsel to the Borrower
                                and the Guarantors (which shall cover, among
                                other things, authority, legality, validity,
                                binding effect and enforceability of the
                                documents for the Facility) and of appropriate
                                local counsel and such corporate resolutions,
                                certificates and other documents as the
                                Administrative Agent shall reasonably require.

                        (vi)    Receipt of all governmental, shareholder and
                                third party consents and approvals (including
                                Hart-Scott-Rodino clearance and any necessary
                                consents of the holders of securities issued by
                                the Borrower) necessary or, in the opinion of
                                the Lead Arrangers, desirable in connection with
                                the Transaction and the related financings and
                                other transactions contemplated hereby and
                                expiration of all applicable waiting periods
                                without any action being taken by any authority
                                that could restrain or prevent the Borrower from
                                entering into the Transaction or require the
                                Borrower or WICOR and/or their respective
                                subsidiaries to divest assets that generate, in
                                the aggregate, annual revenues greater than
                                $200,000,000, or that could seek or threaten any
                                of the foregoing, and no law or regulation shall
                                be applicable which in the reasonable judgment
                                of the Lead Arrangers could have such effect.

                        (vii)   The Lead Arrangers shall have had an opportunity
                                to review Phase I environmental assessments made
                                in accordance with ASTM standards of conditions
                                and such other environmental assessments as may
                                be requested by Pentair of each manufacturing
                                facility currently owned or operated by WICOR,
                                which assessments shall be in form and substance
                                reasonably satisfactory to the Lead Arrangers.

                                       A-7



                        (viii)  The Lead Arrangers shall have received (a) the
                                unqualified audited financial statements of the
                                Borrower and its subsidiaries for the fiscal
                                year ended December 31, 2003, (b) the
                                unqualified audited financial statements, in
                                form and substance satisfactory to the Lead
                                Arrangers, of WICOR for the fiscal year ended
                                December 31, 2003, (c) interim financial
                                statements of the Borrower and its subsidiaries
                                dated the end of the most recent fiscal quarter
                                ending after December 31, 2003, for which
                                financial statements are available, and (d)
                                interim financial statements, in form and
                                substance satisfactory to the Lead Arrangers, of
                                WICOR and its subsidiaries dated the end of the
                                most recent fiscal quarter ending after December
                                31, 2003, for which financial statements are
                                available.

                        (ix)    The Administrative Agent shall have received a
                                compliance certificate satisfactory to the
                                Administrative Agent demonstrating compliance
                                with each of the financial covenants contained
                                in the loan documentation as of the Closing Date
                                (pro forma for the effectiveness of all aspects
                                of the Transaction).

                        (x)     All accrued fees and expenses of the Lead
                                Arrangers, the Administrative Agent and the
                                Lenders (including without limitation the fees
                                and expenses of counsel for the Administrative
                                Agent and local counsel for the Lenders) shall
                                have been paid.

REPRESENTATIONS AND
WARRANTIES:             Usual and customary for transactions of this type to
                        include, without limitation: (i) corporate existence and
                        power; (ii) corporate and government authorization; no
                        contravention; (iii) binding effect; (iv) financial
                        information; (v) litigation; (vi) compliance with ERISA;
                        (vii) taxes; (viii) subsidiaries; (ix) Investment
                        Company Act; (x) environmental matters; (xi) tax shelter
                        regulations; (xii) insurance; (xiii) no default; and
                        (xiv) use of proceeds, in each case substantially
                        similar to the representations and warranties in the
                        Senior Bank Facility.

COVENANTS:              Those affirmative, negative and financial covenants
                        (applicable to the Borrower and its subsidiaries)
                        customarily found in transactions of this type, to
                        include, without limitation: (i) information; (ii)
                        maximum leverage ratio (at levels to be determined);
                        (iii) minimum interest coverage ratio (at levels to be
                        determined); (iv) negative pledge; (v) consolidations
                        and mergers;

                                       A-8



                        (vi) subsidiary debt; (vii) use of proceeds; (viii)
                        compliance with contractual obligations and law; (ix)
                        securitization transactions; (x) insurance; and (xi)
                        guaranties, in each case substantially similar to the
                        covenants in the Senior Bank Facility; provided, that
                        the Facility shall also contain additional covenants
                        regarding (i) restrictions on sales of assets and
                        acquisitions and (ii) limitations on distributions and
                        other restricted payments (which covenant will permit
                        dividends in an amount not to exceed historical levels).

PARI PASSU, ETC.:       In the event that any adjustment to the terms (including
                        without limitation security, representations and
                        warranties, covenants and conditions to closing) of any
                        of the Senior Credit Facilities shall be effected, then
                        comparable adjustments shall be effected with respect to
                        the Facility, with the effect that (except as to certain
                        matters, including the order of application of mandatory
                        prepayments) the terms applicable to the Facility shall
                        be comparable to such applicable terms of the Senior
                        Credit Facilities, and the Facility shall rank pari
                        passu in all respects with the Senior Credit Facilities.

EVENTS OF DEFAULT:      Usual and customary in transactions of this nature, to
                        include, without limitation: (i) non-payment of
                        principal, interest, fees and other amounts; (ii)
                        violation of covenants; (iii) inaccuracy of
                        representations and warranties; (iv) cross-default to
                        other agreements and indebtedness; (v) bankruptcy and
                        other insolvency events; (vi) material judgments; (vii)
                        actual or asserted invalidity of any loan documentation;
                        (viii) ERISA matters; and (ix) change of control (to be
                        defined), in each case substantially similar to the
                        events of default in the Senior Bank Facility.

ASSIGNMENTS AND
PARTICIPATIONS:         Each Lender will be permitted to make assignments in
                        respect of the Facility in a minimum amount equal to $1
                        million to other financial institutions approved by the
                        Administrative Agent (which approval shall not be
                        unreasonably withheld or delayed); provided, however,
                        that the approval of the Administrative Agent shall not
                        be required in connection with assignments to other
                        Lenders, to any affiliate of a Lender, or to any
                        Approved Fund. An assignment fee of $3,500 will be
                        charged with respect to each assignment (other than
                        assignments to affiliates). Each Lender will also have
                        the right, without the consent of the Borrower or the
                        Administrative Agent, to assign as security all or part
                        of its rights under the loan documentation to any
                        Federal Reserve Bank.

                        Lenders will be permitted to sell participations with
                        voting rights limited to significant matters such as
                        changes in amount, rate,

                                       A-9



                        maturity date and releases of all or substantially all
                        of the collateral (if any) or the value of the
                        guarantees (if any).

WAIVERS AND
AMENDMENTS:             Amendments and waivers of the provisions of the loan
                        documentation will require the approval of Lenders
                        holding loans representing more than 50% of the
                        aggregate loans under the Facility, except that the
                        consent of all of the Lenders directly affected thereby
                        be required with respect to (a) increases in principal
                        amounts, (b) reductions of principal, interest or fees,
                        (c) extensions of scheduled maturities or times for
                        payment and (d) releases of all or substantially all of
                        the Guarantors or, if the Facility shall be secured,
                        releases of all or substantially all of the collateral.

INDEMNIFICATION:        The Borrower will indemnify and hold harmless the
                        Administrative Agent, the Lead Arrangers, each Lender
                        and each of their affiliates and their officers,
                        directors, employees, agents and advisors (each an
                        "Indemnified Party") from and against (and will
                        reimburse each Indemnified Party as the same are
                        incurred for) any and all claims, damages, losses,
                        liabilities and expenses (including, without limitation,
                        the reasonable fees, disbursements and other charges of
                        counsel) that may be incurred by or asserted or awarded
                        against any Indemnified Party, in each case arising out
                        of or in connection with or by reason of (including,
                        without limitation, in connection with any
                        investigation, litigation or proceeding or preparation
                        of a defense in connection therewith) (a) any aspect of
                        the Transaction or any similar transaction and any of
                        the other transactions contemplated thereby or (b) the
                        Facility and any other financings, or any use made or
                        proposed to be made with the proceeds thereof, except to
                        the extent such claim, damage, loss, liability or
                        expense is found in a final, nonappealable judgment by a
                        court of competent jurisdiction to have resulted from
                        such Indemnified Party's gross negligence, willful
                        misconduct or bad faith. In the case of an
                        investigation, litigation or proceeding to which the
                        indemnity in this paragraph applies, such indemnity
                        shall be effective whether or not such investigation,
                        litigation or proceeding is brought by the Borrower, its
                        equityholders or creditors or an Indemnified Party,
                        whether or not an Indemnified Party is otherwise a party
                        thereto and whether or not any aspect of the Transaction
                        or financings related thereto is consummated. No
                        Indemnified Party shall have any liability (whether
                        direct or indirect, in contract or tort or otherwise) to
                        the Borrower or its subsidiaries or affiliates or to its
                        respective equity holders or creditors arising out of,
                        related to or in connection with any aspect of the
                        Transaction or the Facility, except to the extent of
                        direct, as opposed to special, indirect, consequential
                        or punitive, damages

                                      A-10



                        determined in a final non-appealable judgment by a court
                        of competent jurisdiction to have resulted from such
                        Indemnified Party's gross negligence, willful misconduct
                        or bad faith. Notwithstanding any other provision of
                        this Summary of Terms, no Indemnified Party shall be
                        liable for any damages arising from the use by others of
                        information or other materials obtained through
                        electronic telecommunications or other information
                        transmission systems. This indemnification shall survive
                        and continue for the benefit of all such Indemnified
                        Parties notwithstanding any failure of the Facility to
                        close.

GOVERNING LAW:          New York.

EXPENSES:               The Borrower will pay all reasonable costs and expenses
                        associated with the preparation, due diligence,
                        administration, syndication and closing of all loan
                        documentation, including, without limitation, the legal
                        fees of the counsel to the Administrative Agent, the
                        Syndication Agent and the Lead Arrangers (including the
                        allocated cost of internal counsel), regardless of
                        whether or not the Facility is closed. The Borrower will
                        also pay the expenses of the Administrative Agent and
                        each Lender in connection with the enforcement of any of
                        the loan documentation.

COUNSEL TO THE
ADMINISTRATIVE
AGENT:                  Mayer, Brown, Rowe & Maw LLP.

MISCELLANEOUS:          Each of the parties shall (i) waive its right to a trial
                        by jury and (ii) submit to New York jurisdiction.

                                      A-11

EX-99.4

                                                                    EXHIBIT 99.4

PENTAIR, INC.
5500 Wayzata Blvd., Suite 800
Golden Valley, MN 55416
763 545 1730 Tel
763 656 5204 Fax

NEWS RELEASE                                             [LOGO OF PENTAIR, INC.]

Pentair's Fourth Quarter 2003 EPS Rises 21 Percent to $0.69 as Sales and Profits
Rise in the Water Technologies and Enclosures Groups

Pentair Generates Record Free Cash Flow of $219 Million

GOLDEN VALLEY, Minn. -- February 4, 2004 -- Pentair (NYSE: PNR) reported
earnings per share (EPS) from continuing operations of $0.69 for the fourth
quarter 2003, a 21 percent gain over fourth quarter 2002 EPS of $0.57. Sales for
the fourth quarter totaled $682.8 million, a seven percent gain over sales of
$640.3 million in the same period in 2002. Operating income for the fourth
quarter totaled $63.3 million, up 18 percent compared to $53.9 million in the
same period last year.

Pentair's net sales for 2003 totaled $2,724.4 million, up from the $2,580.8
million recorded in 2002. Operating income for the year totaled $259.6 million,
versus $236.0 million in 2002. EPS from continuing operations in 2003 was $2.90,
an 11 percent gain over 2002 EPS of $2.61. Full year free cash flow totaled
$219.3 million, representing a 155 percent conversion of 2003 net income.

"Pentair's fourth quarter 2003 performance reflected continued benefits flowing
from our five operating initiatives together with an improving economic
environment," said Randall J. Hogan, Pentair chairman and CEO. "The Water
Technologies Group turned in a tremendous quarter with solid organic sales
growth and a 39 percent profit gain over the fourth quarter of 2002. Our
Enclosures Group delivered an outstanding performance with margins of 10.5
percent in the fourth quarter -- the Group's eighth consecutive quarter of
margin improvement. Coupled with six percent organic sales growth, the margin
gain resulted in the strongest Enclosures Group performance since the first
quarter of 2001. Our Tools Group continued to battle through competitive market
conditions, and it too realized a fourth quarter sales gain of nearly three
percent."

                                     (more)



                                       -2-

In the Water Technologies Group, fourth quarter 2003 sales of $252.3 million
increased nine percent versus the same period last year, driven principally by
pool equipment, residential and commercial pumps, filtration, and the European
water business. Excluding the impact of currency translation, sales were up
seven percent. Operating income of $32.3 million increased 39 percent over the
same period last year, with pump margins increasing due to productivity
improvements and material savings. The European water business also contributed
stronger profits resulting from productivity improvements and the effects of
currency translation. Margins in the Group were 12.8 percent, up 280 basis
points from those of the same period last year.

In the Enclosures Group, fourth quarter 2003 sales of $152.5 million were up 11
percent over the same period in 2002, or six percent excluding the impact of
currency translation. The improved volume was driven by increased demand broadly
spread across all electrical and electronic markets. Fourth quarter operating
income of $16.0 million gained 69 percent over that of the previous year's
fourth quarter, while margins increased 360 basis points to 10.5 percent. The
Group's profit performance was driven by volume-related efficiencies and
continued productivity improvements.

In the Tools Group, the fourth quarter was the first quarter in 2003 in which
sales, excluding the effect of acquisitions, improved year-over-year. Sales of
$278.2 million in the quarter were up 3 percent compared to the fourth quarter
of last year. Operating income for the Group totaled $19.5 million, 21 percent
below that of the same period last year due to competitive marketplace pricing,
expenses related to capacity reductions, and other one-time costs. The Group
expects to improve sales and margins in 2004 by leveraging its brand strength,
introducing innovative products, and improving cost productivity.

Pentair reported a loss from discontinued operations of $0.06 per share for the
fourth quarter and full year of 2003 due to a reduction in estimated proceeds
related to exiting two remaining facilities associated with the fourth quarter
2001 disposal of Pentair's Equipment segment. There was no income or loss from
discontinued operations in 2002.

                                     (more)



                                       -3-

In a separate announcement, Pentair said it has entered into an agreement to
acquire WICOR Industries, a subsidiary of Wisconsin Energy Corporation (NYSE:
WEC) of Milwaukee, Wisconsin. WICOR, which manufactures water system,
filtration, and pool equipment products under the Sta-Rite, SHURflo, and Hypro
brands, is expected to generate sales of approximately $750 million in 2003 and
employs 3,500 people in 24 locations worldwide. Pentair expects the WICOR
acquisition to be accretive to earnings in the first 12 months of ownership.
Pentair also announced that it is exploring strategic alternatives for its Tools
Group businesses.

"Our Water Technologies and Enclosures groups are performing well in an economy
that seems to be gaining momentum," Hogan said. "Our acquisition of Everpure on
December 31, 2003, has already reinforced our water filtration platform, and our
planned acquisition of WICOR Industries will take Pentair's Water Technologies
Group to an entirely new level of performance and profitability. Enclosures will
continue to make the most of the sales gains it is capturing and this is
expected to further enhance profitability. Meanwhile, the Tools Group is
pursuing cost and productivity steps to strengthen its margins in 2004.

"Before any impact from WICOR, we expect to continue driving earnings growth and
forecast EPS in the range of $3.15 to $3.30 for 2004," Hogan added. "We expect
an increase of about 15 percent in the first quarter 2004."

A Pentair conference call scheduled for 9:00 a.m. CST today will be webcast live
via http://www.pentair.com. The conference call, which can be found on the
site's "Financial Information" page, will be archived at the same location.

                                     (more)



                                       -4-

                         PENTAIR, INC. AND SUBSIDIARIES

             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



                                                      THREE MONTHS ENDED               YEAR ENDED
                                                  --------------------------    --------------------------
                                                  DECEMBER 31    DECEMBER 31    DECEMBER 31    DECEMBER 31
In thousands, except per-share data                  2003           2002           2003           2002
- ---------------------------------------------     -----------    -----------    -----------    -----------
                                                                                   
Net sales                                         $   682,846    $   640,303    $ 2,724,365    $ 2,580,783
Cost of goods sold                                    509,594        486,556      2,045,327      1,965,076
                                                  -----------    -----------    -----------    -----------
Gross profit                                          173,252        153,747        679,038        615,707
    % of net sales                                       25.4%          24.0%          24.9%          23.9%

Selling, general and administrative                    98,405         89,276        375,586        342,806
    % of net sales                                       14.4%          13.9%          13.8%          13.3%

Research and development                               11,558         10,620         43,898         36,909
    % of net sales                                        1.7%           1.7%           1.6%           1.4%
                                                  -----------    -----------    -----------    -----------

Operating income                                       63,289         53,851        259,554        235,992
    % of net sales                                        9.3%           8.4%           9.5%           9.1%

Net interest expense                                   11,506         11,134         40,936         43,545
    % of net sales                                        1.7%           1.7%           1.5%           1.7%
                                                  -----------    -----------    -----------    -----------

Income from continuing operations before
 income taxes                                          51,783         42,717        218,618        192,447
    % of net sales                                        7.6%           6.7%           8.0%           7.5%

Provision for income taxes                             17,606         14,632         74,330         62,545
    Effective tax rate                                   34.0%          34.3%          34.0%          32.5%
                                                  -----------    -----------    -----------    -----------

Income from continuing operations                      34,177         28,085        144,288        129,902

Loss from discontinued operations, net of tax          (2,936)            --         (2,936)            --
                                                  -----------    -----------    -----------    -----------

Net income                                        $    31,241    $    28,085    $   141,352    $   129,902
                                                  ===========    ===========    ===========    ===========

EARNINGS PER COMMON SHARE
BASIC
Continuing operations                             $      0.70    $      0.57    $      2.95    $      2.64
Discontinued operations                                 (0.06)            --          (0.06)            --
                                                  -----------    -----------    -----------    -----------
Basic earnings per common share                   $      0.64    $      0.57    $      2.89    $      2.64
                                                  ===========    ===========    ===========    ===========

DILUTED
Continuing operations                             $      0.69    $      0.57    $      2.90    $      2.61
Discontinued operations                                 (0.06)            --          (0.06)            --
                                                  -----------    -----------    -----------    -----------
Diluted earnings per common share                 $      0.63    $      0.57    $      2.84    $      2.61
                                                  ===========    ===========    ===========    ===========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic                                                  48,963         49,305         48,938         49,235
Diluted                                                49,766         49,552         49,810         49,744

Cash dividends declared per common share          $      0.21    $      0.19    $      0.82    $      0.74


                                     (more)



                                       -5-

                         PENTAIR, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)



                                                                 DECEMBER 31     DECEMBER 31
In thousands                                                        2003            2002
- -----------------------------------------------------------     -------------   -------------
                                                                          
                                     ASSETS
CURRENT ASSETS
Cash and cash equivalents                                       $      47,989   $      39,648
Accounts and notes receivable, net                                    420,403         403,793
Inventories                                                           285,577         293,202
Deferred income taxes                                                  50,989          55,234
Prepaid expenses and other current assets                              26,205          18,931
                                                                -------------   -------------
Total current assets                                                  831,163         810,808

Property, plant and equipment, net                                    343,550         351,316

Goodwill                                                            1,373,549       1,218,341
Other assets                                                          235,113         133,985
                                                                -------------   -------------
Total assets                                                    $   2,783,375   $   2,514,450
                                                                =============   =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings                                           $          --   $         686
Current maturities of long-term debt                                   73,631          60,488
Accounts and notes payable                                            170,077         171,709
Employee compensation and benefits                                     84,587          84,965
Accrued product claims and warranties                                  37,148          36,855
Income taxes                                                           13,198          12,071
Other current liabilities                                             120,521         109,426
                                                                -------------   -------------
Total current liabilities                                             499,162         476,200

Long-term debt                                                        734,836         673,911
Pension and other retirement compensation                             101,704         124,301
Post-retirement medical and other benefits                             42,134          42,815
Deferred income taxes                                                  78,532          31,728
Other noncurrent liabilities                                           65,529          59,771
                                                                -------------   -------------
Total liabilities                                                   1,521,897       1,408,726

Shareholders' equity                                                1,261,478       1,105,724
                                                                -------------   -------------
Total liabilities and shareholders' equity                      $   2,783,375   $   2,514,450
                                                                =============   =============


Days sales in accounts receivable (13 month moving average)                56              59
Days inventory on hand (13 month moving average)                           63              63
Days in accounts payable (13 month moving average)                         51              53
Debt/total capital                                                       39.1%           39.9%


                                     (more)



                                       -6-

                         PENTAIR, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



                                                                                     YEAR ENDED
                                                                              --------------------------
                                                                              DECEMBER 31    DECEMBER 31
In thousands                                                                     2003            2002
- --------------------------------------------------------------------------    -----------    -----------
                                                                                       
OPERATING ACTIVITIES
Net income                                                                    $   141,352    $   129,902
Depreciation                                                                       61,129         58,833
Other amortization                                                                  4,514          5,869
Deferred income taxes                                                              33,134         29,677
Stock compensation                                                                    306             --
Loss from discontinued operations                                                   2,936             --
CHANGES IN ASSETS AND LIABILITIES, NET OF EFFECTS OF BUSINESS ACQUISITIONS
      Accounts and notes receivable                                                 9,400         25,535
      Inventories                                                                  25,782         29,717
      Prepaid expenses and other current assets                                    (4,491)         8,147
      Accounts payable                                                            (15,530)       (18,356)
      Employee compensation and benefits                                           (6,423)         6,289
      Accrued product claims and warranties                                        (1,012)        (1,704)
      Income taxes                                                                  2,349          5,863
      Other current liabilities                                                     4,845        (18,384)
      Pension and post-retirement benefits                                          5,621         (4,787)
      Other assets and liabilities                                                   (178)        10,667
                                                                              -----------    -----------
          Net cash provided by continuing operations                              263,734        267,268
          Net cash provided by (used for) discontinued operations                    (796)         3,526
                                                                              -----------    -----------
             Net cash provided by operating activities                            262,938        270,794

INVESTING ACTIVITIES
Capital expenditures                                                              (43,622)       (33,744)
Acquisition of previously leased facility                                              --        (22,952)
Proceeds (payments) from sale of businesses                                        (2,400)         1,744
Acquisitions, net of cash acquired                                               (229,094)      (170,270)
Equity investments                                                                 (5,294)        (9,383)
Other                                                                                  48             (7)
                                                                              -----------    -----------
             Net cash used for investing activities                              (280,362)      (234,612)

FINANCING ACTIVITIES
Net short-term (repayments) borrowings                                               (873)           665
Proceeds from long-term debt                                                      780,857        462,599
Repayment of long-term debt                                                      (709,886)      (468,161)
Proceeds from exercise of stock options                                             5,795          2,730
Repurchases of common stock                                                        (1,589)            --
Dividends paid                                                                    (40,494)       (36,420)
                                                                              -----------    -----------
             Net cash provided by (used for) financing activities                  33,810        (38,587)

Effect of exchange rate changes on cash                                            (8,045)         2,209
                                                                              -----------    -----------
Change in cash and cash equivalents                                                 8,341           (196)
Cash and cash equivalents, beginning of period                                     39,648         39,844
                                                                              -----------    -----------
Cash and cash equivalents, end of period                                      $    47,989    $    39,648
                                                                              ===========    ===========

FREE CASH FLOW
Net cash provided by operating activities                                     $   262,938    $   270,794
Less capital expenditures (including buyout of synthetic lease)                   (43,622)       (56,696)
                                                                              -----------    -----------
Free cash flow                                                                $   219,316    $   214,098
                                                                              ===========    ===========


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                                       -7-

                         PENTAIR, INC. AND SUBSIDIARIES

  SUPPLEMENTAL FINANCIAL INFORMATION BY REPORTABLE BUSINESS SEGMENT (Unaudited)



                                                FIRST QTR   SECOND QTR   THIRD QTR    FOURTH QTR       YEAR
In thousands                                      2003         2003        2003          2003          2003
- -------------------------------------------    ----------   ----------   ---------    ----------    -----------
                                                                                     
NET SALES TO EXTERNAL CUSTOMERS
Water                                          $  246,440   $  290,692   $ 270,901    $  252,332    $ 1,060,365
Enclosures                                        139,453      145,236     146,233       152,494        583,416
Tools                                             251,765      283,416     268,028       278,169      1,081,378
Intersegment sales elimination                       (142)        (355)       (148)         (149)          (794)
                                               ----------   ----------   ---------    ----------    -----------
Consolidated                                   $  637,516   $  718,989   $ 685,014    $  682,846    $ 2,724,365
                                               ==========   ==========   =========    ==========    ===========

OPERATING INCOME (loss)
Water                                          $   29,504   $   46,002   $  36,197    $   32,259    $   143,962
Enclosures                                          9,865       11,703      13,555        15,971         51,094
Tools                                              17,686       23,148      21,440        19,500         81,774
Other                                              (4,867)      (4,521)     (3,447)       (4,441)       (17,276)
                                               ----------   ----------   ---------    ----------    -----------
Consolidated                                   $   52,188   $   76,332   $  67,745    $   63,289    $   259,554
                                               ==========   ==========   =========    ==========    ===========

OPERATING INCOME AS A PERCENT OF NET SALES
Water                                                12.0%        15.8%       13.4%         12.8%          13.6%
Enclosures                                            7.1%         8.1%        9.3%         10.5%           8.8%
Tools                                                 7.0%         8.2%        8.0%          7.0%           7.6%
Consolidated                                          8.2%        10.6%        9.9%          9.3%           9.5%




                                                FIRST QTR   SECOND QTR   THIRD QTR    FOURTH QTR       YEAR
In thousands                                      2002         2002        2002          2002          2002
- -------------------------------------------    ----------   ----------   ---------    ----------    -----------
                                                                                     
NET SALES TO EXTERNAL CUSTOMERS
Water                                          $  211,411   $  265,531   $ 223,637    $  231,841    $   932,420
Enclosures                                        139,560      138,814     139,932       137,726        556,032
Tools                                             252,092      303,771     265,732       270,736      1,092,331
Intersegment sales elimination                         --           --          --            --             --
                                               ----------   ----------   ---------    ----------    -----------
Consolidated                                   $  603,063   $  708,116   $ 629,301    $  640,303    $ 2,580,783
                                               ==========   ==========   =========    ==========    ===========

OPERATING INCOME (loss)
Water                                          $   29,747   $   43,708   $  29,969    $   23,135    $   126,559
Enclosures                                          4,608        6,995       8,884         9,455         29,942
Tools                                              16,686       30,837      25,479        24,596         97,598
Other                                              (5,314)      (6,948)     (2,510)       (3,335)       (18,107)
                                               ----------   ----------   ---------    ----------    -----------
Consolidated                                   $   45,727   $   74,592   $  61,822    $   53,851    $   235,992
                                               ==========   ==========   =========    ==========    ===========

OPERATING INCOME AS A PERCENT OF NET SALES
Water                                                14.1%        16.5%       13.4%         10.0%          13.6%
Enclosures                                            3.3%         5.0%        6.3%          6.9%           5.4%
Tools                                                 6.6%        10.2%        9.6%          9.1%           8.9%
Consolidated                                          7.6%        10.5%        9.8%          8.4%           9.1%


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                                       -8-

About Pentair, Inc.

Pentair is a diversified operating company headquartered in Minnesota. Its Water
Technologies Group is a global leader in providing innovative products and
systems used worldwide in the movement, treatment, storage and enjoyment of
water. Pentair's Enclosures group is a leader in the global enclosures market,
serving industrial and electronic customers, and its Tools Group markets
innovative products under established brand names to professionals and
do-it-yourself users. Pentair's 2003 revenues totaled $2.7 billion. The company
employs 12,000 people in more than 50 locations around the world.

Any statements made about the company's anticipated financial results are
forward-looking statements subject to risks and uncertainties such as continued
economic growth; foreign currency effects; retail and industrial demand; product
introductions; and pricing and other competitive pressures. Forward-looking
statements included herein are made as of the date hereof and the company
undertakes no obligation to update publicly such statements to reflect
subsequent events or circumstances. Actual results could differ materially from
anticipated results.

Contacts:
Pentair: Mark Cain
Tel. (763) 656-5278
E-mail: mark.cain@pentair.com