7.03(F) AND
7.03(J); AND
(J)
LIENS ON ANY PROPERTY OWNED BY WATTS GERMANY, ANY SUBSIDIARY
THEREOF OR ANY GERMAN SUBSIDIARY OF WHICH WATTS GERMANY IS A SUBSIDIARY, IN EACH
CASE SECURING INDEBTEDNESS PERMITTED BY SECTION 7.03(G).
7.02
INVESTMENTS.
MAKE ANY INVESTMENTS, EXCEPT:
(A)
EXISTING INVESTMENTS IN SUBSIDIARIES AND OTHER INVESTMENTS IN
EXISTENCE ON THE CLOSING DATE AND DESCRIBED IN SCHEDULE 7.02 AND ANY RENEWAL OR
EXTENSION OF ANY SUCH INVESTMENTS THAT DOES NOT INCREASE THE AMOUNT OF THE
INVESTMENT BEING RENEWED OR EXTENDED AS DETERMINED AS OF SUCH DATE OF RENEWAL OR
EXTENSION;
(B)
INVESTMENTS HELD BY THE COMPANY OR SUCH SUBSIDIARY IN THE FORM OF
CASH EQUIVALENTS OR SHORT-TERM MARKETABLE DEBT SECURITIES;
(C)
SUBJECT TO THE LIMITATIONS SET FORTH IN THE SARBANES-OXLEY ACT OF
2002 AND ALL RULES AND REGULATIONS RELATED THERETO, (I) ADVANCES TO OFFICERS,
DIRECTORS AND EMPLOYEES OF THE COMPANY AND SUBSIDIARIES FOR TRAVEL,
ENTERTAINMENT, RELOCATION AND ANALOGOUS ORDINARY BUSINESS PURPOSES AND (II)
LOANS TO EMPLOYEES OF THE COMPANY PURSUANT TO THE TERMS OF THE COMPANY'S
NON-QUALIFIED STOCK OPTION PLAN, SECURED BY PLEDGES OF THE EQUITY INTERESTS OF
THE COMPANY OWNED BY SUCH EMPLOYEE; PROVIDED THAT THE AGGREGATE OUTSTANDING
AMOUNT OF SUCH INVESTMENTS PERMITTED PURSUANT TO THIS SECTION 7.02(C) SHALL NOT
EXCEED $3,000,000 AT ANY TIME;
(D)
INVESTMENTS OF ANY LOAN PARTY IN ANY OTHER LOAN PARTY;
(E)
INVESTMENTS CONSISTING OF EXTENSIONS OF CREDIT IN THE NATURE OF
ACCOUNTS RECEIVABLE OR NOTES RECEIVABLE ARISING FROM THE GRANT OF TRADE CREDIT
IN THE ORDINARY COURSE OF BUSINESS, AND INVESTMENTS RECEIVED IN SATISFACTION OR
PARTIAL SATISFACTION THEREOF FROM FINANCIALLY TROUBLED ACCOUNT DEBTORS TO THE
EXTENT REASONABLY NECESSARY IN ORDER TO PREVENT OR LIMIT LOSS;
(F)
GUARANTEES PERMITTED BY SECTION 7.03;
(G)
INVESTMENTS (OTHER THAN INVESTMENTS PERMITTED PURSUANT TO SECTION
7.02(A)) IN JOINT VENTURES IN LINES OF BUSINESS THAT ARE THE SAME OR SIMILAR TO
THE LINE OF BUSINESS IN WHICH THE COMPANY AND ITS SUBSIDIARIES ARE THEN ENGAGED
PRIOR TO SUCH INVESTMENT, NOT TO EXCEED $25,000,000 IN THE AGGREGATE AT ANY TIME
OUTSTANDING; AND
(H)
INVESTMENTS IN PERMITTED ACQUISITIONS.
7.03
INDEBTEDNESS.
CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY
INDEBTEDNESS, EXCEPT:
(A)
INDEBTEDNESS UNDER THE LOAN DOCUMENTS;
73
(B)
INDEBTEDNESS OUTSTANDING ON THE DATE HEREOF AND LISTED ON SCHEDULE
7.03 AND NOT OTHERWISE PERMITTED UNDER THIS SECTION 7.03, AND ANY REFINANCINGS,
REFUNDINGS, RENEWALS OR EXTENSIONS THEREOF; PROVIDED THAT (I) THE AMOUNT OF SUCH
INDEBTEDNESS IS NOT INCREASED AT THE TIME OF SUCH REFINANCING, REFUNDING,
RENEWAL OR EXTENSION EXCEPT BY AN AMOUNT EQUAL TO A REASONABLE PREMIUM OR OTHER
REASONABLE AMOUNT PAID, AND FEES AND EXPENSES REASONABLY INCURRED, IN CONNECTION
WITH SUCH REFINANCING AND BY AN AMOUNT EQUAL TO ANY EXISTING COMMITMENTS
UNUTILIZED THEREUNDER AND (II) THE TERMS RELATING TO PRINCIPAL AMOUNT,
AMORTIZATION, MATURITY, COLLATERAL (IF ANY) AND SUBORDINATION (IF ANY), AND
OTHER MATERIAL TERMS TAKEN AS A WHOLE, OF ANY SUCH REFINANCING, REFUNDING,
RENEWING OR EXTENDING INDEBTEDNESS, AND OF ANY AGREEMENT ENTERED INTO AND OF ANY
INSTRUMENT ISSUED IN CONNECTION THEREWITH, ARE NO LESS FAVORABLE IN ANY MATERIAL