THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 15, 2016 among MODINE MANUFACTURING COMPANY AIREDALE INTERNATIONAL AIR CONDITIONING LIMITED and MODINE NETHERLANDS HOLDING B.V., as Initial Subsidiary Borrowers, The Other Subsidiary...

(e)  If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender and for the benefit of the Administrative Agent, the Swingline Lenders or the Issuing Banks to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account over which the Administrative Agent shall have exclusive control as cash collateral for, and application to, any future funding obligations of such Lender under any such Section; in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion; it being understood that the Administrative Agent shall, to the extent permitted by law, apply any cash collateral to such obligations when due.

SECTION 2.19.  Mitigation Obligations; Replacement of Lenders.  (a)   If any Lender requests compensation under Section 2.15, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be materially disadvantageous to such Lender.  The Company hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)  If (i) any Lender (or any of its Participants) requests compensation under Section 2.15, (ii) any Borrower is required to pay any additional amount to any Lender (or any of its Participants) or any Governmental Authority for the account of any Lender (or any of its Participants) pursuant to Section 2.17 (other than amounts in respect of Other Taxes or VAT), (iii) any Lender (w) has become the subject of a Bail-In Action (or any case or other proceeding in which a Bail-In Action may occur), (x) is or becomes a Defaulting Lender, a Disqualified Institution or a Dutch Non-Public Lender or (y) rejects the designation of an Agreed Currency or of a Foreign Subsidiary as an Eligible Subsidiary if, in each case, such Agreed Currency or designation of a Foreign Subsidiary as an Eligible Subsidiary has otherwise been approved by the Required Revolving Lenders, (iv) any Lender shall determine that any law, regulation or treaty or directive, or any change therein or in the interpretation or application thereof, shall make it unlawful for such Lender to make or maintain any Eurocurrency Loans as contemplated by this Agreement, (v) any Lender shall enter into, or purport to enter into, any assignment or participation with a Disqualified Institution in violation of this Agreement or (vi) the Lender that is the Impacted Lender fails to provide the written confirmation to the Collateral Agent of the completion of flood insurance due diligence and flood insurance compliance (as contemplated by Section 2.27 and/or Section 5.11(c)) within fourteen (14) days after the date on which the Collateral Agent delivers the applicable documents contemplated by such Section(s), then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Sections 2.15 or 2.17) and obligations under the Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) such Lender is reasonably acceptable to the Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Banks and the Swingline Lenders), (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments.

 

SECTION 2.20.  Expansion Option.  The Company may from time to time elect to increase the Revolving Commitments or enter into one or more tranches of term loans (each an “Incremental Term Loan”), in each case in a minimum amount of $25,000,000 and minimum increments of $5,000,000 in excess thereof, so long as, after giving effect thereto, the aggregate amount of such increases and all such Incremental Term Loans does not exceed $250,000,000.  The Company may arrange for any such increase or tranche to be provided by one or more Lenders (each Lender so agreeing to an increase in its Revolving Commitment, or to participate in such Incremental Term Loans, an “Increasing Lender”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “Augmenting Lender”; provided that no Ineligible Institution may be an Augmenting Lender), which agree to increase their existing Revolving Commitments, or to participate in such Incremental Term Loans, or provide new Revolving Commitments, as the case may be; provided that (i) each Augmenting Lender shall be subject to the approval of the Company and the Administrative Agent (not to be unreasonably withheld, conditioned or delayed) and (ii) (x) in the case of an Increasing Lender, the Company and such Increasing Lender execute an agreement substantially in the form of Exhibit C-1 hereto, and (y) in the case of an Augmenting Lender, the Company and such Augmenting Lender execute an agreement substantially in the form of Exhibit C-2 hereto.  No consent of any Lender (other than the Lenders participating in the increase or any Incremental Term Loan) shall be required for any increase in Revolving Commitments or Incremental Term Loan pursuant to this Section 2.20.  Increases and new Revolving Commitments and Incremental Term Loans created pursuant to this Section 2.20 shall become effective on the date agreed by the Company, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, and the Administrative Agent shall notify each Lender thereof.  Notwithstanding the foregoing, no increase in the Revolving Commitments (or in the Revolving Commitment of any Lender) or tranche of Incremental Term Loans shall become effective under this paragraph unless, (i) on the proposed date of the effectiveness of such increase or Incremental Term Loans, (A) the conditions set forth in paragraphs (a) and (b) of Section 4.03 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by an Authorized Officer of the Company and (B) the Company shall be in compliance (on a pro forma basis) with the covenants contained in Section 6.07, (ii) the Administrative Agent shall have received documents and opinions consistent with those delivered on the Effective Date as to the organizational power and authority of the Borrowers to borrow hereunder after giving effect to such increase or Incremental Term Loans, as the case may be and (iii) the Company or the Administrative Agent shall have provided written notice to the Lenders (which may be delivered electronically on an Electronic System) of any such increase or Incremental Term Loans at least five (5) Business Days prior to the date of effectiveness thereof.  On the effective date of any increase in the Revolving Commitments or any Incremental Term Loans being made, (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its Applicable Percentage of such outstanding Revolving Loans, and (ii) the Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase in the Revolving Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the applicable Borrower, or the Company on behalf of the applicable Borrower, in accordance with the requirements of Section 2.03).  The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurocurrency Loan, shall be subject to indemnification by the Borrowers pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods.  The Incremental Term Loans (a) shall rank pari passu in right of payment with the Revolving Loans and the initial Term Loans, (b) shall not mature earlier than the latest Maturity Date in effect on the date of incurrence of such Incremental Term Loans (but may have amortization prior to such date) and (c) shall be treated substantially the same as (and in any event no more favorably than) the Revolving Loans and the initial Term Loans; provided that (i) the terms and conditions applicable to any tranche of Incremental Term Loans maturing after the latest Maturity Date in effect on the date of incurrence of such Incremental Term Loans may provide for material additional or different financial or other covenants or prepayment requirements applicable only during periods after the latest Maturity Date in effect on the date of incurrence of such Incremental Term Loans and (ii) the Incremental Term Loans may be priced differently than the Revolving Loans and the initial Term Loans.  Incremental Term Loans may be made hereunder pursuant to an amendment or restatement (an “Incremental Term Loan Amendment”) of this Agreement and, as appropriate, the other Loan Documents, executed by the Borrowers, each Increasing Lender participating in such tranche, each Augmenting Lender participating in such tranche, if any, and the Administrative Agent.  The Incremental Term Loan Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.20.  Nothing contained herein shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Revolving Commitment hereunder, or provide Incremental Term Loans, at any time.

 

SECTION 2.21.  Market Disruption.  Notwithstanding the satisfaction of all conditions referred to in Article II and Article IV with respect to any Credit Event to be effected in any Foreign Currency, if (i) there shall occur on or prior to the date of such Credit Event any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would in the reasonable opinion of the Administrative Agent, the relevant Issuing Bank (if such Credit Event is a Letter of Credit) or the Required Revolving Lenders make it impracticable for the Eurocurrency Borrowings or Letters of Credit comprising such Credit Event to be denominated in the Agreed Currency specified by the applicable Borrower or (ii) an Equivalent Amount of such currency is not readily calculable, then the Administrative Agent shall forthwith give notice thereof to such Borrower, the Lenders and, if such Credit Event is a Letter of Credit, the relevant Issuing Bank, and such Credit Events shall not be denominated in such Agreed Currency but shall, except as otherwise set forth in Section 2.07, be made on the date of such Credit Event in Dollars, (a) if such Credit Event is a Borrowing, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related request for a Credit Event or Interest Election Request, as the case may be, as ABR Loans, unless such Borrower notifies the Administrative Agent prior to the occurrence of such Credit Event that (i) it elects not to borrow on such date or (ii) it elects to borrow on such date in a different Agreed Currency, as the case may be, in which the denomination of such Loans would in the reasonable opinion of the Administrative Agent and the Required Revolving Lenders be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related request for a Credit Event or Interest Election Request, as the case may be or (b) if such Credit Event is a Letter of Credit, in a face amount equal to the Dollar Amount of the face amount specified in the related request or application for such Letter of Credit, unless such Borrower notifies the Administrative Agent prior to the occurrence of such Credit Event that (i) it elects not to request the issuance of such Letter of Credit on such date or (ii) it elects to have such Letter of Credit issued on such date in a different Agreed Currency, as the case may be, in which the denomination of such Letter of Credit would in the reasonable opinion of the Issuing Bank which has issued such Letter of Credit, the Administrative Agent and the Required Revolving Lenders be practicable and in face amount equal to the Dollar Amount of the face amount specified in the related request or application for such Letter of Credit, as the case may be.

 

SECTION 2.22.  Judgment Currency.  If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from any Borrower hereunder in the currency expressed to be payable herein (the “specified currency”) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the specified currency with such other currency at the Administrative Agent’s main New York City office on the Business Day preceding that on which final, non‑appealable judgment is given.  The obligations of each Borrower in respect of any sum due to any Lender or the Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Administrative Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency.  If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Administrative Agent, as the case may be, in the specified currency, each Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Administrative Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 2.18, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to such Borrower.

SECTION 2.23.  Designation of Subsidiary Borrowers.  On the Effective Date, and subject to the satisfaction of the applicable conditions in Article IV hereto, each of the Initial Subsidiary Borrowers shall be Subsidiary Borrowers party to this Agreement until the Company shall have executed and delivered to the Administrative Agent a Subsidiary Borrower Termination with respect to any such Subsidiary, whereupon such Subsidiary shall cease to be a Subsidiary Borrower and cease to be a party to this Agreement.  After the Effective Date, the Company may at any time and from time to time designate any Eligible Subsidiary as a Subsidiary Borrower by delivery to the Administrative Agent of a Borrowing Subsidiary Agreement executed by such Subsidiary and the Company and the satisfaction of the other conditions precedent set forth in Section 4.04, and upon such delivery and satisfaction such Subsidiary shall for all purposes of this Agreement be a Subsidiary Borrower and a party to this Agreement until the Company shall have executed and delivered to the Administrative Agent a Borrowing Subsidiary Termination with respect to such Subsidiary, whereupon such Subsidiary shall cease to be a Subsidiary Borrower and a party to this Agreement.  Notwithstanding the preceding sentence, no Borrowing Subsidiary Termination will become effective as to any Subsidiary Borrower at a time when any principal of or interest on any Loan to such Borrower shall be outstanding hereunder, provided that such Borrowing Subsidiary Termination shall be effective to terminate the right of such Subsidiary Borrower to make further Borrowings under this Agreement.  As soon as practicable upon receipt of a Borrowing Subsidiary Agreement, the Administrative Agent shall furnish a copy thereof to each Lender.

SECTION 2.24.  Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)  fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b)  the Commitment and Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders, the Required Revolving Lenders, the Required Term Lenders or the Required Euro Term Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided, that, except as otherwise provided in Section 9.02, this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

 

(c)  if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i)  all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender (other than the portion of such Swingline Exposure referred to in clause (b) of the definition of such term) shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments;

(ii)  if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Company shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, Cash Collateralize for the benefit of the Issuing Banks only the Borrowers’ obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii)  if the Company Cash Collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is Cash Collateralized;

(iv)  if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v)  if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor Cash Collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Banks until and to the extent that such LC Exposure is reallocated and/or Cash Collateralized; and

(d)  so long as such Lender is a Defaulting Lender, the Swingline Lenders shall not be required to fund any Swingline Loan and the Issuing Banks shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or Cash Collateral will be provided by the Company in accordance with Section 2.24(c), and participating interests in any such newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.24(c)(i) (and such Defaulting Lender shall not participate therein).

 

If (i) a Bankruptcy Event or a Bail-In Action with respect to a Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) any Swingline Lender or any Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, no Swingline Lender shall be required to fund any Swingline Loan and no Issuing Bank shall be required to issue, amend or increase any Letter of Credit, unless the Swingline Lenders or the Issuing Banks, as the case may be, shall have entered into arrangements with the Company or such Lender, satisfactory to the Swingline Lenders or the Issuing Banks, as the case may be, to defease any risk to it in respect of such Lender hereunder.

 

In the event that the Administrative Agent, the Company, each Swingline Lender and each Issuing Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

 

SECTION 2.25.  Extension of Maturity Date.

(a)  Requests for Extension.  The Company may, by notice to the Administrative Agent (who shall promptly notify the applicable Class of Lenders) during the Extension Availability Period, request that each applicable Lender extend such Lender’s Revolving Credit Maturity Date, Dollar Term Loan Maturity Date or Euro Term Loan Maturity Date, as the case may be (the “Applicable Maturity Date”), to a date (the “Extended Maturity Date”) that does not cause the tenor of any Lender’s Revolving Commitment, any Lender’s outstanding Dollar Term Loans or any Lender’s outstanding Euro Term Loans to exceed five (5) years from the date upon which the conditions precedent to the effectiveness of such extension of the Applicable Maturity Date set forth in clause (f) below have been satisfied (an “Extension Date”).  For the avoidance of doubt, the Company may request extensions of any Class without requesting an extension of the other Class.

(b)  Lender Elections to Extend.  Each Lender of the applicable Class, acting in its sole and individual discretion, shall, by notice to the Administrative Agent (which shall be irrevocable unless the Company otherwise consents in writing in its sole discretion) given not later than the date that is 15 days after the date on which the Administrative Agent received the Company’s extension request (the “Lender Notice Date”), advise the Administrative Agent whether or not such Lender agrees to such extension (each Lender of the applicable Class that determines to so extend its Applicable Maturity Date, an “Extending Lender”).  Each Lender of the applicable Class that determines not to so extend its Applicable Maturity Date (a “Non-Extending Lender”) shall notify the Administrative Agent of such fact promptly after such determination (but in any event no later than the Lender Notice Date), and any Lender of the applicable Class that does not so advise the Administrative Agent on or before the Lender Notice Date shall be deemed to be a Non-Extending Lender.  The election of any Lender to agree to such extension shall not obligate any other Lender to so agree, and it is understood and agreed that no Lender shall have any obligation whatsoever to agree to any request made by the Company for extension of the Applicable Maturity Date.

(c)  Notification by Administrative Agent.  The Administrative Agent shall notify the Company of each applicable Lender’s determination under this Section promptly after the Administrative Agent’s receipt thereof and, in any event, no later than the date that is 15 days prior to the applicable Extension Date (or, if such date is not a Business Day, on the next preceding Business Day).

 

(d)  Additional Commitment Lenders.  The Company shall have the right, but shall not be obligated, on or before the Applicable Maturity Date for any Non-Extending Lender to replace such Non-Extending Lender with, and add as a “Revolving Lender” (in the case of any extension of the Revolving Credit Maturity Date), as a “Dollar Term Lender” (in the case of any extension of the Dollar Term Loan Maturity Date) or as a “Euro Term Lender” (in the case of any extension of the Euro Term Loan Maturity Date) under this Agreement in place thereof, one or more financial institutions that are not Ineligible Institutions (each, an “Additional Commitment Lender”) approved by the Administrative Agent and, in the case of an Additional Commitment Lender assuming a new or additional Revolving Commitment, the Issuing Banks, the Swingline Lenders and Administrative Agent (in each case, such approval not to be unreasonably withheld, conditioned or delayed) in accordance with the procedures provided in Section 2.19(b), each of which applicable Additional Commitment Lenders shall have entered into an Assignment and Assumption (in accordance with and subject to the restrictions contained in Section 9.04, with the Company or replacement Lender obligated to pay any applicable processing or recordation fee) with such Non-Extending Lender, pursuant to which such Additional Commitment Lenders shall, effective on or before the Applicable Maturity Date for such Non-Extending Lender, assume a Revolving Commitment, Dollar Term Loans and/or Euro Term Loans, as the case may be (and, if any such Additional Commitment Lender is already a Lender of the applicable Class, its Revolving Commitment, its outstanding Dollar Term Loans and/or its outstanding Euro Term Loans, as applicable, so assumed shall be in addition to such Lender’s Revolving Commitment, its outstanding Dollar Term Loans and/or its outstanding Euro Term Loans, as applicable, hereunder on such date).  Prior to any Non-Extending Lender being replaced by one or more Additional Commitment Lenders pursuant hereto, such Non-Extending Lender may elect, in its sole discretion, by giving irrevocable notice thereof to the Administrative Agent and the Company (which notice shall set forth such Lender’s new Applicable Maturity Date), to become an Extending Lender, provided that the Company consents thereto in writing in its sole discretion.  The Administrative Agent may effect such amendments to this Agreement as are reasonably necessary to provide for any such extensions with the consent of the Company but without the consent of any other Lenders.

(e)  Minimum Extension Requirement.  If (and only if) the total of the applicable Revolving Commitments or the applicable outstanding Term Loans of the Lenders of the applicable Class that have agreed to extend their Applicable Maturity Date and the new or increased Revolving Commitments or the applicable newly assumed outstanding Term Loans of any Additional Commitment Lenders is more than 50% of the aggregate amount of the Revolving Commitments or the applicable outstanding Term Loans, as applicable, in effect immediately prior to the applicable Extension Date, then, effective as of the applicable Extension Date, the Applicable Maturity Date of each Extending Lender and of each Additional Commitment Lender of the applicable Class shall be extended to the Extended Maturity Date (except that, if such date is not a Business Day, such Applicable Maturity Date as so extended shall be the next preceding Business Day) and each Additional Commitment Lender of such Class shall thereupon become a “Revolving Lender”, a “Dollar Term Lender” and/or a “Euro Term Lender”, as the case may be, for all purposes of this Agreement and shall be bound by the provisions of this Agreement as a Revolving Lender, a Dollar Term Lender and/or Euro Term Lender, as the case may be, hereunder and shall have the obligations of a Revolving Lender, a Dollar Term Lender and/or a Euro Term Lender, as the case may be, hereunder.

(f)  Conditions to Effectiveness of Extension.  Notwithstanding the foregoing, (x) no more than one (1) extension of the Revolving Credit Maturity Date and no more than one (1) extension of the Dollar Term Loan Maturity Date and no more than one (1) extension of the Euro Term Loan Maturity Date shall be permitted hereunder and (y) any extension of any Maturity Date pursuant to this Section 2.25 shall not be effective with respect to any Extending Lender and each Additional Commitment Lender unless:

(i)  no Default or Event of Default shall have occurred and be continuing on the applicable Extension Date and immediately after giving effect thereto;

 

(ii)  the representations and warranties of the Borrowers set forth in this Agreement shall be true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of the applicable Extension Date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and

(iii)  the Administrative Agent shall have received a certificate from the Company signed by an Authorized Officer of the Company (A) certifying the accuracy of the foregoing clauses (i) and (ii) and (B) certifying and attaching the resolutions adopted by each Borrower approving or consenting to such extension.

(g)  Maturity Date for Non-Extending Lenders.  On the Applicable Maturity Date of each Non-Extending Lender, (i) to the extent of the Revolving Commitments and Term Loans of each Non-Extending Lender of the relevant Class not assigned to the Additional Commitment Lenders of such Class, the Revolving Commitment of each Non-Extending Lender of such Class shall automatically terminate and (ii) the Company shall repay such Non-Extending Lender of such Class in accordance with Section 2.10 (and shall pay to such Non-Extending Lender all of the other Obligations due and owing to it under this Agreement) and after giving effect thereto shall prepay any Loans of the applicable Class outstanding on such date (and pay any additional amounts required pursuant to Section 2.16) to the extent necessary to keep outstanding Loans of the applicable Class ratable with any revised Applicable Percentages of the respective Lenders of such Class effective as of such date, and the Administrative Agent shall administer any necessary reallocation of the applicable Credit Exposures (without regard to any minimum borrowing, pro rata borrowing and/or pro rata payment requirements contained elsewhere in this Agreement).

(h)  Conflicting Provisions.  This Section shall supersede any provisions in Section 2.18 or Section 9.02 to the contrary.

SECTION 2.26.  Foreign Financing Obligations.  Each Lender (other than the Lender acting as Collateral Agent) or Affiliate thereof providing one or more credit facilities to any Foreign Subsidiary that are intended to constitute, or are otherwise approved by the Collateral Agent as, Foreign Financing Obligations shall deliver to the Collateral Agent, promptly upon the Collateral Agent’s request, such information as the Collateral Agent reasonably requests in respect of such credit facilities.  The most recent information provided to the Collateral Agent pursuant to this Section 2.26 shall be used in determining the amounts to be applied in respect of the Foreign Financing Obligations under such credit facilities pursuant to Section 2.18(b).

SECTION 2.27.  ▇▇▇▇ Events.  Each of the parties hereto acknowledges and agrees that, if there are any Mortgaged Properties, any increase, extension or renewal of any of the Commitments or Loans (including the provision of Incremental Term Loans or any other incremental credit facilities hereunder pursuant to Section 2.20, Section 9.02(e) or otherwise, but excluding (i) any continuation or conversion of Borrowings under Section 2.08, (ii) the making of any Revolving Loans or Swingline Loans or (iii) the issuance, renewal or extension of Letters of Credit) shall be subject to (and conditioned upon) (1) the prior delivery of all flood hazard determination certifications, acknowledgements and evidence of flood insurance and other flood-related documentation with respect to such Mortgaged Properties as required by Flood Insurance Law and as otherwise reasonably required by the Collateral Agent and (2) the Collateral Agent shall have received written confirmation from the Impacted Lender that flood insurance due diligence and flood insurance compliance has been completed by the Impacted Lender (such written confirmation not to be unreasonably withheld, conditioned or delayed).

 

ARTICLE III

 

The Company represents and warrants to the Lenders, as of the date hereof and as of the date of each Credit Event, that:

SECTION 3.01.  Corporate Existence and Power. The Company (a) is a corporation duly organized and validly existing under the laws of the jurisdiction of its incorporation, (b) is duly qualified to transact business in every jurisdiction where, by the nature of its business, such qualification is necessary, and (c) has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except, in the case of subsections (b) and (c), where the failure to do so would not have a Material Adverse Effect.  Each Foreign Subsidiary Borrower incorporated or organized in an EU jurisdiction represents and warrants to the Lenders that its centre of main interest (as that term is used in Article 3(1) of the Insolvency Regulation) is in its jurisdiction of incorporation and it has no establishment (as that term is used in Article 2(h) of the Insolvency Regulation) in any other jurisdiction.  Each UK Borrower incorporated in England and Wales represents and warrants to the Lenders that its centre of main interest (as that term is used in Article 3(1) of the Insolvency Regulation) is in England and Wales and it has no establishment (as that term is used in Article 2(h) of the Insolvency Regulation) in any other jurisdiction.

 

SECTION 3.02.  Authorization. The Transactions (a) are within each Loan Party’s corporate and other required powers and (b) have been duly authorized by all necessary corporate and other required action by or on behalf of the Loan Parties.

 

SECTION 3.03.  Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrowers enforceable in accordance with its terms, and each other Loan Document, when executed and delivered in accordance with this Agreement, will constitute a valid and binding obligation of each of the Borrowers and the Guarantors that is a party to such Loan Document, enforceable in accordance with such Loan Document’s terms, provided that the enforceability hereof and thereof is subject in each case to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally.

SECTION 3.04.  No Conflict; Government Consent. Neither the execution and delivery by each of the Borrowers and the Guarantors of the Loan Documents to which it is a party, nor the consummation of the Transactions, nor compliance with the provisions thereof will violate (a) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Company or any of its Subsidiaries, (b) the Company’s or any Subsidiary’s articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by‑laws, or operating or other management agreement, as the case may be, or (c) the provisions of any material indenture, instrument or agreement to which the Company or any of its Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the Property of the Company or a Subsidiary pursuant to the terms of any such indenture, instrument or agreement.  Subject to the Specified Collateral Limitation Provision and except for SEC filings and any actions contemplated by Section 5.11, no order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by the Company or any of its Subsidiaries, is required to be obtained by the Company or any of its Subsidiaries in connection with the execution and delivery by it of the Loan Documents, the borrowings under this Agreement, the payment and performance by the Borrowers of the Obligations or the legality, validity, binding effect or enforceability against the Loan Parties of any of the Loan Documents.

 

SECTION 3.05.  Financial Statements; Material Adverse Change.

(a)  The consolidated financial statements of the Company and its Subsidiaries as of March 31, 2016 reported on by PricewaterhouseCoopers LLP heretofore delivered to the Lenders, were prepared in accordance with generally accepted accounting principles in effect on the date such statements were prepared and fairly present in all material respects the consolidated financial condition and operations of the Company and its Subsidiaries at such date and the consolidated results of their operations for the period then ended.

(b)  Since March 31, 2016, there has been no change in the business, Property, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole, that could reasonably be expected to have a Material Adverse Effect.

SECTION 3.06.  Litigation and Contingent Obligations.  Except as disclosed in Schedule 3.06, there is no litigation, arbitration, governmental investigation, proceeding or inquiry pending, or to the knowledge of any of their officers, threatened in writing against the Company or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay any Credit Event.

SECTION 3.07.  Compliance With ERISA.

(a)  The Company and each member of the Controlled Group (excluding Foreign Subsidiaries of the Company) have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance with the presently applicable provisions of ERISA and the Code, and have not incurred any liability to the PBGC, except to the extent the foregoing could not reasonably be expected to result in a Material Adverse Effect.

(b)  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  Each Plan complies with all applicable requirements of law and regulations, neither the Company nor any other member of the Controlled Group has withdrawn from any Plan or initiated steps to do so, and no steps have been taken to reorganize or terminate any Plan, except to the extent the foregoing could not reasonably be expected to result in a Material Adverse Effect.

(c)  Neither the Company nor any member of the Controlled Group (excluding Foreign Subsidiaries of the Company) is or ever has been obligated to contribute to any Multiemployer Plan, except to the extent the foregoing could not reasonably be expected to result in a Material Adverse Effect.

(d)  Each Foreign Subsidiary of the Company, except to the extent the following (or the failure to the following, as applicable) could not reasonably be expected to result in a Material Adverse Effect:  (i) has fulfilled its funding obligations under any and all applicable laws, regulations and similar requirements of governmental authorities with respect to each employee benefit or pension plan; (ii) is in compliance in all material respects with the presently applicable provisions of such laws, regulations and requirements; and (iii) except as disclosed in the financial statements referred to in Section 3.05, has not incurred any material liability, indebtedness or obligation under or in connection with any employee benefit or pension plan.

 

(e)  The Company is not an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), the Company is an “operating company” as defined in 29 C.F.R. § 2510-101(c), and neither the execution of this Agreement nor any Credit Event hereunder gives rise to a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code, except to the extent the failure of any of the foregoing to be true could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.08.  Taxes. There have been filed on behalf of the Company and its Subsidiaries all foreign, federal, state and local income, excise, property and other tax returns which are required to be filed by them and all taxes due pursuant to such returns or pursuant to any assessment received by or on behalf of the Company or any Subsidiary have been paid, except (a) such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with Agreement Accounting Principles and/or (b) where the failure to so file or pay could not reasonably be expected to result in a Material Adverse Effect.  No tax liens have been filed and no claims are being asserted with respect to any such taxes, to the extent the foregoing could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.09.  Subsidiaries.   Schedule 3.09 contains an accurate list of all Subsidiaries of the Company as of the Effective Date, setting forth their respective jurisdictions and forms of organization and the percentage of their respective capital stock or other ownership interests owned by the Company or other Subsidiaries.  All of the issued and outstanding shares of capital stock or other ownership interests of such Subsidiaries have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable.  Except as the result of transactions permitted by Section 6.06, each of the Company’s Subsidiaries is a corporation or other organization duly organized, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation or organization, is duly qualified to transact business in every jurisdiction where, by the nature of its business, such qualification is necessary (except where the failure to do so would not have a Material Adverse Effect), and has all corporate or organization powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted (except where the failure to do so would not have a Material Adverse Effect).

SECTION 3.10.  Not an Investment Company.  Neither the Company nor any Subsidiary is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

SECTION 3.11.  Ownership of Property.  Each of the Company and its Subsidiaries have good record and marketable title in fee simple to, or valid leasehold interests in or other rights to use, all property necessary or used in the ordinary conduct of their respective businesses, except for such defects in title or interest as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.12.  Material Agreements; Default. Neither the Company nor any of its Subsidiaries is in default under or with respect to any agreement, instrument or undertaking to which it is a party or by which it or any of its Property is bound which default could reasonably be expected to have a Material Adverse Effect.  No Default or Event of Default has occurred and is continuing.

 

SECTION 3.13. Full Disclosure. None of the statements or information contained in any exhibit, report, statement or certificate furnished in writing by or on behalf of the Company or any Subsidiary to the Administrative Agent or any Lender in connection with the Loan Documents (including statements or information concerning the Company and its Subsidiaries in the offering and disclosure materials delivered by or on behalf of the Company to the Lenders prior to the Effective Date), contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered (it being understood (a) that any projections and forecasts provided by the Company or any Subsidiary are based on good faith estimates and assumptions believed by the Company or such Subsidiary to be reasonable as of the date of the applicable projections or forecasts and that actual results during the periods covered by any such projections and forecasts may differ from projected or forecasted results) and (b) any information provided by the Company or any Subsidiary with respect to any Person or assets acquired or to be acquired by the Company or any Subsidiary shall, for all periods prior to the date of such Acquisition, be limited to the knowledge of the Company or the acquiring Subsidiary after reasonable inquiry).

SECTION 3.14. Environmental Matters. Except with respect to matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Company nor any of the other Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) is subject to any Environmental Liability or (iii) has received written notice of any claim with respect to any Environmental Liability.

SECTION 3.15.  Insolvency. After giving effect to the Transactions, neither the Company nor any Subsidiary will be “insolvent,” within the meaning of such terms as defined in § 101 of Title 11 of the United States Code or Section 2 of the Uniform Fraudulent Transfer Act, or any other applicable state law pertaining to fraudulent transfers or conveyances, as each may be amended from time to time, or be unable to pay its debts generally as such debts become due, or have an unreasonably small capital to engage in any business or transaction whether current or contemplated.

 

SECTION 3.16. Compliance with Laws; Sanctions and Regulations.  The Company, each of its Subsidiaries and each member of the Controlled Group has complied with all applicable laws (including but not limited to ERISA), regulations, rules, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof having jurisdiction over the conduct of their respective businesses or the ownership of their respective Property (including but not limited to PBGC), except where any failure to comply with any of the foregoing could not, alone or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has implemented and maintains in effect policies and procedures designed to promote and achieve compliance in all material respects by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Company, its Subsidiaries and their respective officers and employees and to the knowledge of the Company its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.  None of (a) the Company, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Company, any agent of the Company or any Subsidiary that will act in any capacity in connection with or directly benefit from the credit facility established hereby, is a Sanctioned Person.   No Credit Event or use of proceeds thereof by the Company or any Subsidiary will violate Anti-Corruption Laws or applicable Sanctions.  The representations and warranties in this Section 3.16 shall not be made by any German Borrower insofar as they would violate or expose any German Borrower or any of its Subsidiaries or any director, officer or employee thereof to any liability under any anti-boycott or blocking law, regulation or statute that is in force from time to time and applicable to such entity (including without limitation EU Regulation (EC) 2271/96 and Section 7 of the German Foreign Trade Ordinance (Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung – AWV)).  The representations and warranties in this Section 3.16 given by any Borrower to any Lender that qualifies as a resident party domiciled in Germany (Inländer) within the meaning of Section 2 paragraph 15 German Foreign Trade Act (Außenwirtschaftsgesetz) are made only to the extent that any Lender domiciled in Germany (Inländer) within the meaning of Section 2 paragraph 15 German Foreign Trade Act (Außenwirtschaftsgesetz) would be permitted to make such undertakings pursuant to EU Regulation (EC) 2271/96 and Section 7 of the German Foreign Trade Ordinance (Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung – AWV)).

 

SECTION 3.17.  Regulation U.  Margin stock (as defined in Regulation U) constitutes less than 25% of the value of those assets of the Company and its Subsidiaries which are subject to any limitation on sale, pledge, or other restriction hereunder.

SECTION 3.18.  Insurance.  The Company and each of its Subsidiaries maintains (either in the name of the Company or in such Subsidiary’s own name) insurance on its property in accordance with Section 5.06.

SECTION 3.19.  Senior Note Debt.  As of the Effective Date, the outstanding principal balance of the Senior Note Debt is $121,000,000 and all material Senior Note Purchase Documents in effect on the Effective Date have been delivered to the Lenders prior to the Effective Date.

SECTION 3.20.  Security Interest in Collateral.  The Collateral Documents, upon execution and delivery thereof by the parties thereto, will create in favor of the Collateral Agent, for the benefit of the Secured Parties, a valid and enforceable security interest in the Collateral covered thereby and (i) when the Collateral constituting certificated securities (as defined in the UCC) is delivered to the Administrative Agent, together with instruments of transfer duly endorsed in blank, the Liens under the Collateral Documents will constitute a fully perfected security interest in all right, title and interest of the respective Loan Parties thereunder in such Collateral, prior and superior in right to any other Person, except for Liens permitted by Section 6.04 and (ii) when financing statements in appropriate form are filed in the applicable filing offices, the security interest created under the Collateral Documents will constitute a fully perfected security interest in all right, title and interest of the respective Loan Parties in the remaining Collateral to the extent perfection can be obtained by filing UCC financing statements, prior and superior to the rights of any other Person, except for Liens permitted by Section 6.04.

SECTION 3.21.  Use of Proceeds.  The proceeds of the Revolving Loans will be used to finance the working capital needs and general corporate purposes of the Company and its Subsidiaries, including Transaction Costs and Permitted Acquisitions.  The proceeds of the Term Loans will be used (a) to finance the Luvata Acquisition and to pay Transaction Costs on, or within two (2) Business Days after, the Funding Date and (b) to finance the working capital needs and general corporate purposes of the Company and its Subsidiaries.

SECTION 3.22.  Works Council. There is no works council with jurisdiction over the transaction as envisaged by any Loan Document to which a Dutch Borrower is a party and there is no obligation for a Dutch Borrower to establish a works council pursuant to the Dutch Works Council Act (Wet op de Ondernemingsraden), or, if a  works council is established, such Dutch Borrower (or the Company on its behalf) has delivered to the Administrative Agent a confirmation that all consultation obligations in respect of such  works council have been complied with and that positive unconditional advice has been obtained, attaching a copy of such advice and a copy of the request for such advice.

SECTION 3.23.  EEA Financial Institutions.  No Loan Party is an EEA Financial Institution.

 

SECTION 4.01.  Effective Date.  The obligations of the Lenders to make Loans (other than the Term Loans) and of the Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)  The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents.

(b)  The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel for the Loan Parties, (ii) Eversheds LLP, special Dutch counsel for the Loan Parties and (iii) Eversheds LLP, special UK counsel for the Loan Parties, substantially in the form of Exhibits B-1 B-2 and B-3, respectively, and covering such other matters relating to the Loan Parties, this Agreement or the Transactions as the Administrative Agent shall reasonably request.  The Company hereby requests such counsel to deliver such opinion.

(c)  The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the initial Borrowers and the other initial Loan Parties, the authorization of the Transactions and any other matters relating to the initial Borrowers and the other initial Loan Parties, the Loan Documents or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E (excluding those items set forth in Parts F and G of such Exhibit E).

(e)  The Administrative Agent shall have received an amendment to, or amendment and restatement of, the Senior Note Purchase Agreement, effective simultaneously with this Agreement and conforming all applicable covenants and defaults thereunder to the applicable covenants and defaults hereunder and otherwise in form and substance satisfactory to the Administrative Agent.

(f)   The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced (in reasonable detail) at least one (1) Business Day prior to the Effective Date, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Company hereunder.

The Administrative Agent shall notify the Company and the Lenders of the Effective Date, and such notice shall be conclusive and binding.

 

SECTION 4.02.  Funding Date for the Term Loans.  The obligations of the Lenders to make the Term Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)  Each of the conditions set forth in Section 4.01 shall have been satisfied on the Effective Date (or waived in accordance with Section 9.02).

(b)  The Administrative Agent shall have received a certificate, dated the Funding Date and signed by the President, a Vice President or any other Authorized Officer of the Company certifying that the Luvata Acquisition Agreement Representations will be true and correct in all material respects (without duplication of any materiality qualifier contained therein) upon consummation of the Luvata Acquisition (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(c)  The Administrative Agent shall have received a certificate, dated the Funding Date and signed by the President, a Vice President or any other Authorized Officer of the Company certifying that the Specified Representations will be true and correct in all material respects (without duplication of any materiality qualifier contained therein) upon consummation of the Luvata Acquisition (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(d)  The Administrative Agent shall have received a certificate in the form of Exhibit I hereto, dated the Funding Date and signed by the chief financial officer of the Company, in respect of solvency, financial covenant compliance and the other matters specified therein.

(e)  The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Funding Date, including, to the extent invoiced (in reasonable detail) at least one (1) Business Day prior to the Funding Date, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Company hereunder.

SECTION 4.03.  Each Credit Event.  Other than with respect to any funding of the Term Loans on the Funding Date (which shall only be subject to the conditions set forth in Section 4.02 hereof), the obligation of each Lender to make a Loan, and of the Issuing Banks to issue, increase, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a)  The representations and warranties of the Borrowers set forth in this Agreement shall be true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of the date of such Loan (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date) or the date of issuance, amendment to increase, renewal or extension of such Letter of Credit, as applicable.

(b)  At the time of and immediately after giving effect to such Loan or the issuance, amendment to increase, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

Each Loan and each issuance, amendment to increase, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

SECTION 4.04.  Designation of a Subsidiary Borrower.  The designation of a Subsidiary Borrower pursuant to Section 2.23 is subject to the conditions precedent that:

 

(a)  The Company or such proposed Subsidiary Borrower shall have furnished or caused to be furnished to the Administrative Agent:

(i)  subject to clause (b) below, copies, certified by the Secretary or Assistant Secretary (or other appropriate officer, manager or director) of such Subsidiary, of its board of directors’ (or other applicable governing body’s) resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for the Administrative Agent) approving the Borrowing Subsidiary Agreement and any other Loan Documents to which such Subsidiary is becoming a party and such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of such Subsidiary;

(ii)  an incumbency certificate, executed by the Secretary or Assistant Secretary (or other appropriate officer, manager or director) of such Subsidiary, which shall identify by name and title and bear the signature of the officers or other representatives of such Subsidiary authorized to request Borrowings hereunder and sign the Borrowing Subsidiary Agreement and the other Loan Documents to which such Subsidiary is becoming a party, upon which certificate the Administrative Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Company or such Subsidiary;

(iii)  opinions of counsel to such Subsidiary (which may include inside counsel to such Subsidiary for certain matters), in form and substance reasonably satisfactory to the Administrative Agent and its counsel, with respect to the laws of its jurisdiction of organization and such other matters as are reasonably requested by counsel to the Administrative Agent and addressed to the Administrative Agent and the Lenders;

(iv)  any promissory notes requested by any Lender, and any other instruments and documents reasonably requested by the Administrative Agent or any Lender (including in connection with the Act defined in Section 9.13); and

(v)  any documentation and other information related to such Subsidiary reasonably requested by the Administrative Agent or any Lender under applicable “know your customer” or similar rules and regulations, including the Patriot Act (which documentation and information shall be subject to the approval (such approval not to be unreasonably withheld, conditioned or delayed) of each of the Revolving Lenders); and

(b)  In the event a Subsidiary Borrower is organized under the laws of Germany, (i) the following constitutional documents of such Subsidiary Borrower (and, if applicable, its general partner): an electronic commercial register excerpt (not older than two (2) Business Days), articles of association (certified by the competent commercial register), shareholders’ list (certified by the competent commercial register) and any by-laws, if applicable and (ii) a copy of a resolution of the shareholders’/partners’ and/or, if required by law or customary for such Subsidiary Borrower, resolutions of the management and/or supervisory board of such Subsidiary Borrower, partner’s/other competent corporate body’s (as applicable) meeting of each such Subsidiary Borrower approving the terms of, and the transactions contemplated by, the Borrowing Subsidiary Agreement, this Agreement and any other Loan Documents to which such Subsidiary Borrower is becoming a party and such documents and certificates as the Administrative Agent or its counsel may reasonably request and resolving that such Subsidiary executes any such documents to which it is a party.

 

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired, terminated, been collateralized or otherwise been covered by a letter of credit as permitted herein and all LC Disbursements shall have been reimbursed, the Company covenants and agrees with the Lenders that:

SECTION 5.01.  Information.  The Company shall deliver to the Administrative Agent for distribution to the Lenders:

(a)  within 90 days after the close of each of its Fiscal Years, an audit report (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) certified by PricewaterhouseCoopers LLP or another nationally recognized independent certified public accounting firm, prepared in accordance with Agreement Accounting Principles on a consolidated basis for itself and its Subsidiaries, including balance sheets as of the end of such period, related profit and loss and reconciliation of surplus statements, and a statement of cash flows, provided that such report may include references (excluding formal qualifications) regarding audits performed by other auditors as contemplated by AU Section 543, Part of Audit Performed by Other Independent Auditors (or any successor or similar standard under Agreement Accounting Principles);

(b)  within 45 days after the close of the first three quarterly periods of each of its Fiscal Years, for itself and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such period and consolidated profit and loss statements and a statement of cash flows for the period from the beginning of such Fiscal Year to the end of such quarter, all certified by an Authorized Officer;

(c)  within 90 days after the close of each of its Fiscal Years and within 45 days after the close of the first three quarterly periods of each of its Fiscal Years, a certificate in the form of Exhibit J attached hereto of an Authorized Officer of the Company (i) setting forth in reasonable detail the calculations required to establish whether the Company was in compliance with the requirements of Section 6.07 on the date of such financial statements and (ii) stating whether any Default or Event of Default exists on the date of such certificate and, if any Default or Event of Default then exists, setting forth the details thereof and the action which the Company is taking or proposes to take with respect thereto;

(d)  within five Business Days after the Company becomes aware of the occurrence of any Default or Event of Default or of the occurrence of any other development, financial or otherwise, that could reasonably be expected to have a Material Adverse Effect, a certificate of an Authorized Officer of the Company setting forth the details thereof and the action which the Company is taking or proposes to take with respect thereto;

(e)  promptly after becoming aware thereof, notice of the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to have a Material Adverse Effect;

(f)   promptly upon the execution and delivery thereof, notice of any waiver, consent, modification or amendment of or to the Senior Note Purchase Agreement, together with a copy of the documentation evidencing the foregoing;

 

(g)  promptly after their delivery to any Senior Note Holders, such projections delivered to any of the Senior Note Holders or their representatives pursuant to any Senior Note Purchase Document;

(h)  promptly upon receipt thereof, any notice of default received from any Senior Note Holder or agent or trustee therefor; and

(i)   such other information (including non‑financial information, such as information necessary to conduct flood due diligence and flood insurance compliance and information required under applicable “know your customer” and anti-money laundering rules and regulations) as the Administrative Agent or any Lender may from time to time reasonably request.

Notwithstanding the above, (i) if any report or other information required under this Section 5.01 is due on a day that is not a Business Day, then such report or other information shall be required to be delivered on the first day after such day that is a Business Day, and (ii) documents required to be delivered pursuant to Section 5.01(a) or (b) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which (x) such financial statements are filed for public availability on the SEC’s Electronic Data Gathering and Retrieval System (or any successor thereto) or (y) the Company notifies (which may be by facsimile or electronic mail) the Administrative Agent that such financial statements have been posted at a site (the address of which shall be contained in such notice) on the world wide web, which site is accessible by the Administrative Agent and the Lenders through a widely held nationally recognized web browser, from which such financial statements may be readily viewed and printed.  The Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

SECTION 5.02.  Inspection of Property, Books and Records.  The Company will maintain and will cause each Subsidiary to maintain proper books of record and account, in which full, true and correct entries sufficient to prepare financial statements in conformity with Agreement Accounting Principles, or applicable accounting procedures related to Foreign Subsidiaries, shall be made of all financial transactions and matters involving the assets and business of the Company and such Subsidiary.  The Company will permit, and will cause each Borrower, Guarantor and Significant Subsidiary to permit, representatives and independent contractors of the Administrative Agent and representatives of any Lender to visit and inspect any of their respective properties, to examine their respective organizational, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers, and, in the presence of the Company if the Company shall so request, independent public accountants, all at the expense of such Lender or, if applicable, the Administrative Agent and at such reasonable times during normal business hours, upon reasonable advance notice to the Company and on only one occasion during any fiscal year; provided that when an Event of Default exists, the Administrative Agent or any Lender may do any of the foregoing at the expense of the Company at any time during normal business hours, as often as may be reasonably desired and without advance notice.

SECTION 5.03.  Maintenance of Existence.  Except for transactions permitted by Section 6.06, the Company will, and will cause each other Borrower and each Significant Subsidiary to, remain duly incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a corporation or (in the case of such other Borrowers and Significant Subsidiaries) other form of organization in its jurisdiction of incorporation or organization and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted. The Company will cause (i) each other Borrower and each Significant Subsidiary incorporated or organized in an EU jurisdiction to cause its centre of main interest (as that term is used in Article 3(1) of the Insolvency Regulation) to be situated solely in its jurisdiction of incorporation and not to have an establishment (as that term is used in Article 2(h) of the Insolvency Regulation) situated outside its jurisdiction of incorporation or organization and (ii) each other Borrower and each Significant Subsidiary incorporated in England and Wales to cause its centre of main interest (as that term is used in Article 3(1) of the Insolvency Regulation) to be situated solely in England and Wales and not to have an establishment (as that term is used in Article 2(h) of the Insolvency Regulation) situated outside its jurisdiction of incorporation.

 

SECTION 5.04.  Use of Proceeds.  Each Borrower will use the proceeds of the Credit Events in accordance with Section 3.21.  No portion of the proceeds of the Credit Events will be used by the Company, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any “margin stock” (as defined in Regulation U) in violation of Regulation U, or for any other purpose in violation of any Regulations of the Board (including Regulations T, U and X).  None of the funds or assets of the Borrowers that are used to pay any amount due pursuant to the Credit Events shall constitute funds obtained from transactions with or relating to Designated Persons or Sanctioned Countries in any manner that would violate Sanctions or any other applicable laws, regulations, rules, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof.  The Borrowers will not request any Credit Event, and the Borrowers shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Credit Event (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person or in any Sanctioned Country, in each case, to the extent such activities, business or transaction would violate Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state, or (C) in any other manner that would result in the violation of any Sanctions applicable to any party hereto.  The covenants in the last sentence of this Section 5.04 shall not be made by any German Borrower insofar as they would violate or expose any German Borrower or any of its Subsidiaries or any director, officer or employee thereof to any liability under any anti-boycott or blocking law, regulation or statute that is in force from time to time and applicable to such entity (including without limitation EU Regulation (EC) 2271/96 and Section 7 of the German Foreign Trade Ordinance (Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung – AWV)).  The covenants in the last sentence of this Section 5.04 given by any Borrower to any Lender that qualifies as a resident party domiciled in Germany (Inländer) within the meaning of Section 2 paragraph 15 German Foreign Trade Act (Außenwirtschaftsgesetz) are made only to the extent that any Lender domiciled in Germany (Inländer) within the meaning of Section 2 paragraph 15 German Foreign Trade Act (Außenwirtschaftsgesetz) would be permitted to make such undertakings pursuant to EU Regulation (EC) 2271/96 and Section 7 of the German Foreign Trade Ordinance (Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung – AWV).

 

SECTION 5.05.  Compliance with Laws; Payment of Taxes and Other Claims.  The Company will, and will cause each Subsidiary to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation, all Environmental Laws, except where the failure to do so would not have a Material Adverse Effect.  Without limitation of the foregoing, the Company will, and will cause each of its Subsidiaries to, not be a Person described in Section 1 of the Anti-Terrorism Order, and not engage in any dealings or transactions, or otherwise be associated, with any such Person, in each case in violation of Sanctions, and will maintain in effect and enforce policies and procedures designed to promote and achieve compliance in all material respects by the Company, its Subsidiaries and their respective directors, officers, employees and agents with  Anti-Corruption Laws and applicable Sanctions.  The Company will, and will cause each of its Subsidiaries to, (x) timely file complete and correct United States federal and applicable foreign, state and local tax returns required by law and pay when due all Taxes and Tax liabilities payable by it or with respect to its income, profits or Property and (y) pay when due all claims for labor, supplies, rent and other obligations which, if unpaid, might become a lien against the property of the Company or any Subsidiary; except (a) those which are being contested in good faith by appropriate action and with respect to which adequate reserves have been set aside in accordance with Agreement Accounting Principles and/or (b) where the failure to so file or pay could not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.06.  Insurance.  The Company will maintain, and will cause each Subsidiary to maintain, with financially sound and reputable independent insurers (except to the extent that any insurance company insuring the Property of the Company and each Subsidiary ceases to be financially sound and reputable after the Effective Date, in which case, the Company shall promptly replace such insurance company with a financially sound and reputable insurance company), insurance with respect to its Property and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons; provided that the Company and its Subsidiaries may self-insure against such risks and in such amounts customary in the industry of the Company and its Subsidiaries.  With respect to each Mortgaged Property that is located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a “special flood hazard area” with respect to which flood insurance has been made available under Flood Insurance Laws, the applicable Loan Party (A) has obtained and will maintain, with financially sound and reputable insurance companies (except to the extent that any insurance company insuring the Property of the Company and each Subsidiary ceases to be financially sound and reputable after the Effective Date, in which case, the Company shall promptly replace such insurance company with a financially sound and reputable insurance company), such flood insurance in such reasonable total amount as the Collateral Agent and the Impacted Lender may from time to time reasonably require, and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and (B) promptly upon request of the Collateral Agent or the Impacted Lender, will deliver to the Collateral Agent or the Impacted Lender, as applicable, evidence of such compliance in form and substance reasonably acceptable to the Collateral Agent and the Impacted Lender, including, without limitation, evidence of annual renewals of such insurance.

SECTION 5.07. Change in Fiscal Year.  The Company will not change its Fiscal Year (including any of its Fiscal Quarters) without (a) providing the Lenders with prior written notice of such change; and (b) executing and delivering to the Lenders, prior to such change, such amendments to this Agreement and the other Loan Documents as the Required Lenders may reasonably deem necessary and appropriate as a result of such change in Fiscal Year.

SECTION 5.08.  Maintenance of Property.  The Company will, and will cause each Subsidiary to, maintain all of its Property and assets in good condition, repair and working order (ordinary wear and tear excepted), and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times, except, in each case, to the extent the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

(a)  The Company will cause (i) each Subsidiary that delivers a guarantee, or otherwise, directly or indirectly,  incurs a Contingent Obligation, in respect of obligations under the Senior Note Purchase Documents, or otherwise becomes liable as a borrower, co-borrower or other obligor under the Senior Note Purchase Documents, to concurrently execute and deliver to the Administrative Agent a Guaranty with respect to the Secured Obligations and (ii) each Material Domestic Subsidiary to execute and deliver to the Administrative Agent a Guaranty with respect to all Secured Obligations.  The Company will cause each Subsidiary of any Foreign Subsidiary Borrower, other than Modine Holding GmbH, that delivers a guarantee, or otherwise incurs a Contingent Obligation, to any Person (other than to another Subsidiary or the Company) in respect of any Material Indebtedness to concurrently execute and deliver to the Administrative Agent a Guaranty with respect to all Secured Obligations of such Foreign Subsidiary Borrower, if requested by the Administrative Agent and subject to the exceptions set forth in Section 5.09(d), solely to the extent that (i) such Subsidiary is legally permitted to do so, (ii) such Subsidiary is not rendered insolvent by such Guaranty, (iii) such Guaranty will not result in adverse tax consequences or a default under any other agreement of the Company or its Subsidiaries, (iv) the cost of obtaining such Guaranty justifies the benefits to the Lenders from obtaining such Guaranty as reasonably determined by the Administrative Agent, (v) the Company and the Administrative Agent do not otherwise determine to exclude such Subsidiary from this Guaranty requirement and (vi) such Guaranty is not prohibited, impractical or disproportionately expensive under applicable law or the applicable joint venture agreement for any Foreign Subsidiary that is a joint venture.  Notwithstanding any provision of this Agreement to the contrary, no Excluded Subsidiary shall be required to deliver a Guaranty pursuant to this Section 5.09.  If the foregoing clause (ii) requires the addition of one or more Domestic Subsidiaries as Guarantors based on assets as of the end of a fiscal quarter and/or revenues during the period of four fiscal quarters ended as of the end of a fiscal quarter, then the addition of such Domestic Subsidiary or Domestic Subsidiaries as a Guarantor or Guarantors shall be consummated on or prior to the date upon which the Company’s delivery of financial statements under Section 5.01 after the end of such fiscal quarter is due.

 

(b)  The Company will cause each Subsidiary required to deliver a Guaranty hereunder to also deliver, together with the delivery of such Guaranty, such other documents, opinions and information as the Administrative Agent may reasonably require regarding such Subsidiary and the enforceability of such Guaranty.

(c)  Without limiting any other right to release provided by this Agreement or any other Loan Document, the Collateral Agent shall, and the Lenders hereby authorize the Collateral Agent to, discharge and release any Subsidiary from a Guaranty to which it is a party pursuant to the written request of the Company; provided that (i) such Guarantor has been, or is being simultaneously, released and discharged as an obligor and guarantor under and in respect of all Material Indebtedness (or is otherwise not an obligor or guarantor with respect to any Material Indebtedness) and the Company so certifies to the Lenders in a certificate which accompanies such request for release and discharge, (ii) such Guaranty is not required under Section 5.09(a) and (iii) at the time of such release and discharge, the Company shall deliver a certificate to the Collateral Agent the effect that no Default or Event of Default exists.

(d)  Notwithstanding the foregoing, the Company shall not be obligated to cause certain Foreign Subsidiaries to deliver the Guaranties required under this Section 5.09 or cause the pledge of the Capital Stock of certain Foreign Subsidiaries to the extent that all such Subsidiaries (other than Excluded Subsidiaries) that have not delivered the Guaranties required under this Section 5.09 and all such Foreign Subsidiaries (excluding all Foreign Subsidiaries organized under the laws of India or China) that do not have 65% or more of their Capital Stock pledged under Section 5.11(a)(i) would not constitute a Significant Subsidiary as of the end of any Fiscal Year if considered as one Subsidiary.

SECTION 5.10. Most Favored Lender Status.  If the Company enters into, assumes or otherwise is or becomes bound or obligated under, or amends, restates or otherwise modifies, any agreement creating or evidencing any Material Indebtedness of the Company, or any refinancing or extension of all or any portion thereof (including without limitation all Senior Note Purchase Documents in existence on the date hereof and as amended, restated, supplemented, modified or replaced from time to time), to include one or more Additional Covenants or Additional Defaults, the terms of this Agreement shall, without any further action on the part of the Company or any of the Lenders, be deemed to be amended automatically and immediately to include each Additional Covenant and each Additional Default contained in such agreement and including such notice, grace or cure periods as are applicable to such Additional Covenant or Additional Default under such agreements; provided that such Additional Covenants and Additional Defaults shall automatically and immediately be deemed to be modified or cease to apply, as applicable, as and when the applicable provisions of such Material Indebtedness originally giving rise to such Additional Covenants or Additional Defaults, as applicable, are modified or cease to apply (including, without limitation, as a result of the repayment in full and irrevocable termination of such Indebtedness), it being understood that any Default or Event of Default existing hereunder in respect of such an Additional Covenant or Additional Default at the time of such modification or cessation shall survive such modification or cessation until cured or waived in accordance with the provisions of this Agreement.  The Company further covenants to promptly execute and deliver at its expense (including the reasonable fees and expenses of one counsel for the Administrative Agent) an amendment to this Agreement in form and substance reasonably satisfactory to the Required Lenders evidencing the amendment of this Agreement to include or exclude (as the case may be) such Additional Covenants and Additional Defaults, provided that the execution and delivery of such amendment shall not be a precondition to the effectiveness of such amendment as provided for in this Section 5.10, but shall merely be for the convenience of the parties hereto.

 

SECTION 5.11.  Collateral Security; Further Assurances.

(a)  To secure the payment when due of the Secured Obligations (subject to the Intercreditor Agreement), the Company shall execute and deliver, or cause to be executed and delivered, to the Collateral Agent, Collateral Documents granting or providing for the following:

(i)    Security Agreements granting a legal, valid and enforceable Lien, subject to the Liens permitted by this Agreement and subject to the Intercreditor Agreement, on all collateral under and as defined in the Collateral Documents, subject to any exclusions described in the Intercreditor Agreement, the applicable Collateral Documents or otherwise approved by the Administrative Agent.  Notwithstanding the foregoing, with respect to Liens granted by the Company or any such Guarantor on the Capital Stock of any Foreign Subsidiary such Lien (i) shall not exceed 65% (or such greater percentage that, due to a change in an applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s U.S. parent and (2) could not reasonably be expected to cause any adverse tax consequences) of the issued and outstanding shares of each class of Capital Stock in each Foreign Subsidiary directly owned by the Company or any such Guarantor, (ii) shall be subject to the terms of Section 5.09(d), and (iii) shall not be required with respect to the Capital Stock of any Foreign Subsidiary organized under the laws of India or China.

(ii)   Mortgages (accompanied by Mortgage Instruments in respect thereof) granting a Lien on all present and future real property with a fair market value of $5,000,000 or more of the Company and of each Guarantor that is a Domestic Subsidiary to the extent such Liens are required by or on behalf of the Collateral Agent, the Required Lenders or any Senior Note Holder (it being understood and agreed, for the avoidance of doubt, that Mortgages in effect prior to the Effective Date shall not be released or terminated as a result of any real property encumbered by any such mortgage having a fair market value less than $5,000,000).

(iii)  Security interests in any other Collateral required under the Senior Note Purchase Documents.

 

(b)  As a condition to approval of any Foreign Subsidiary Borrower other than Modine Holding GmbH, the Collateral Agent may require such Foreign Subsidiary Borrower and each Foreign Subsidiary required to be a Guarantor with respect to such Foreign Subsidiary Borrower to execute and deliver, or cause to be executed and delivered, Collateral Documents reasonably requested by the Collateral Agent from each such Foreign Subsidiary Borrower and each of such Guarantors, granting a legal, valid and enforceable Lien, subject to the Liens permitted by this Agreement and securing the Obligations owing by such Foreign Subsidiary Borrower, on all collateral under and as defined in the Collateral Documents, subject to any exclusions described in the Intercreditor Agreement, the applicable Collateral Documents or otherwise approved by the Administrative Agent.

(c)  On or before the Effective Date (or, in the case of Collateral acquired in the Luvata Acquisition, on or within two (2) Business Days after the Funding Date) or such later date as may be agreed to by the Collateral Agent (provided that the Company shall use commercially reasonable efforts to complete such Collateral Documents as soon as practical, including without limitation such matters with respect to the existing pledges of 65% of the Capital Stock of Foreign Subsidiaries), but in any event subject to the Specified Collateral Limitation Provision, the Company shall cause all Collateral Documents as reasonably requested by the Collateral Agent, in each case duly executed and delivered on behalf of the Company and the Guarantors, as the case may be, granting to the Collateral Agent, for the benefit of the Secured Parties, the support specified in this Section 5.11, together with: (v) such resolutions, certificates, Mortgage Instruments and opinions of counsel as are reasonably requested by the Collateral Agent; (w) the recordation, filing and other action (including payment of any applicable taxes or fees) in such jurisdictions as the Collateral Agent may deem necessary or appropriate with respect to the Collateral Documents, including the filing of financing statements, Mortgages and other filings which the Collateral Agent may deem necessary or appropriate to create, preserve or perfect the Liens granted to the Collateral Agent thereunder, together with UCC record searches and other Lien searches in such offices as the Collateral Agent may reasonably request; (x) evidence that the casualty and other insurance (including, without limitation, flood insurance) required pursuant to the Loan Documents is in full force and effect; (y) originals of all instruments and certificates representing all of the outstanding shares of Capital Stock and other securities and instruments required to be pledged thereunder, with appropriate stock powers, endorsements and other powers duly executed in blank; and (z) such other evidence that Liens, subject to the Intercreditor Agreement and Liens permitted under this Agreement, in the Collateral shall have been created and perfected as required and the satisfaction of all other conditions in connection with the Collateral and the Collateral Documents as reasonably requested by the Collateral Agent, including without limitation all opinions of counsel, title work, surveys, environmental reports and other documents and requirements reasonably requested by the Collateral Agent, provided that it is acknowledged that the Collateral Agent is not requiring mortgagee title insurance, new surveys or new environmental reports in respect of any Mortgaged Property existing prior to the Effective Date.  Notwithstanding the foregoing, the Collateral Agent shall not enter into any Mortgage in respect of any real property acquired by the Company or any Loan Party after the Effective Date until (1) the date that occurs fourteen (14) days after the Collateral Agent has delivered to the Lenders (which may be delivered electronically on an Electronic System) the following documents in respect of such real property: (i) a completed flood hazard determination from a third party vendor; (ii) if such real property is located in a “special flood hazard area”, (A) a notification to the Company of that fact and (if applicable) notification to the Company that flood insurance coverage is not available and (B) evidence of the receipt by the Company of such notice; and (iii) if such notice is required to be provided to the Company and flood insurance is available in the community in which such real property is located, evidence of required flood insurance and (2) the Collateral Agent shall have received written confirmation from the Impacted Lender that flood insurance due diligence and flood insurance compliance has been completed by the Impacted Lender (such written confirmation not to be unreasonably conditioned, withheld or delayed). Notwithstanding the foregoing or any other provision of this Agreement to the contrary, (i) no Mortgages (or any amendments or other modifications to any existing Mortgages) or Mortgage Instruments are required to be delivered hereunder until the date that is one hundred twenty (120) days after the Effective Date (or, in the case of real property acquired in the Luvata Acquisition, on or within one hundred twenty (120) days after the Funding Date) or such later date as the Collateral Agent may agree in the exercise of its reasonable discretion with respect thereto, (ii) no pledge agreement in respect of the Capital Stock (or other security agreement in respect of any asset) of a Foreign Subsidiary (or any amendments or other modifications to any such existing pledge agreement) shall be required hereunder until the date that is one hundred twenty (120) days after the Effective Date (or, in the case of Capital Stock acquired in the Luvata Acquisition, on or within one hundred twenty (120) days after the Funding Date) or such later date as the Administrative Agent may agree in the exercise of its reasonable discretion with respect thereto and (iii) the Collateral Agent may elect to not pursue Mortgages with respect to particular real estate where the Collateral Agent reasonably determines, in consultation with the Company, that obtaining such Mortgages cannot reasonably be accomplished without undue effort or expense or is otherwise impracticable in light of the value of such real estate or such real estate is located in a “special flood hazard area”.

 

(d)  The Company agrees that it will promptly notify the Collateral Agent of the formation, acquisition or existence of any Subsidiary that is required to be a Guarantor or the acquisition of any assets on which a Lien is required to be granted and that is not covered by existing Collateral Documents.  The Company agrees that it will execute and deliver, and cause each Guarantor to execute and deliver, promptly upon the request of the Collateral Agent, such additional Collateral Documents, Guaranties and other agreements, documents and instruments, each in form and substance reasonably satisfactory to the Collateral Agent (and in any event not inconsistent with this Agreement), sufficient to grant the Guaranties and Liens contemplated by this Agreement and the Collateral Documents.

(e)  Notwithstanding any provision hereof to the contrary, (i) in no event shall the Company or any of its Subsidiaries be required to pledge all or any portion of the Capital Stock of any Excluded Subsidiary as collateral in connection with the credit facilities contemplated by this Agreement (other than 65% of the voting Capital Stock of a FSHCO), and (ii) in no event shall any Foreign Subsidiary that is a CFC be required to pledge all or any portion of the Capital Stock of any other Foreign Subsidiary as collateral to secure any Secured Obligations of the Company or any Domestic Subsidiary.

 

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees  payable hereunder have been paid in full and all Letters of Credit have expired, terminated, been collateralized or otherwise been covered by a letter of credit as permitted herein and all LC Disbursements shall have been reimbursed, the Company covenants and agrees with the Lenders that:

SECTION 6.01.  Restricted Payments.  The Company will not issue any Disqualified Stock.  The Company will not, nor will it permit any Subsidiary to, declare or make any Restricted Payment, except:

(a)  the Company may declare and pay dividends with respect to its Capital Stock payable solely in additional shares of its common stock or in rights or options to acquire such common stock;

(b)  Subsidiaries may declare and make Restricted Payments to the Company and to Subsidiaries of the Company (including, without limitation, the Luvata Transactions that constitute Restricted Payments) (provided, that Restricted Payments made by a non-Wholly-Owned Subsidiary must be made on a pro rata basis (or more favorable basis from the perspective of the Company or the Subsidiary which is the parent of such Subsidiary) based on its ownership interests in such non-Wholly-Owned Subsidiary);

 

(c)  Restricted Payments may be made to purchase or redeem the Capital Stock of the Company (including related stock appreciation rights or similar securities) held by present or former directors, consultants, officers or employees of the Company or any Subsidiaries upon any such Person’s death, disability, retirement or termination of employment or under the terms of any benefit plan or any other agreement under which such shares of stock or related rights were issued; provided, that the aggregate amount of such purchases or redemptions under this clause (c) shall not exceed in any calendar year $2,500,000 (with unused amounts in any period permitted to be carried over to succeeding periods until used in full; provided, that the total amount of such purchases or redemptions under this clause (c) in any calendar year shall not exceed $5,000,000) plus (i) the amount of net proceeds contributed to the Company that were received by the Company during such calendar year from sales of the Company’s Capital Stock (but not including any Disqualified Stock) to directors, consultants, officers or employees of the Company or any Subsidiaries in connection with permitted compensation and incentive arrangements, and (ii) the amount of net proceeds of any key-man life insurance policies received during such calendar year, which, if not used in any year, may be carried forward to any subsequent calendar year; and provided, further, that cancellation of Indebtedness owing to the Company or any Subsidiaries from present or former directors, consultants, officers or employees in connection with a repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment for purposes of this Section 6.01;

(d)  non-cash repurchases of Capital Stock deemed to occur upon the exercise or settlement of stock options, stock appreciation rights, restricted stock units, warrants or other convertible or exchangeable securities or other Capital Stock if such Capital Stock represents a portion of the exercise price of, or withholding obligation with respect to, such options, stock appreciation rights, restricted stock units, warrants or other convertible or exchangeable securities or other Capital Stock;

(e)  Restricted Payments to make payments, in cash, in lieu of the issuance of fractional shares, upon the exercise of warrants or upon the conversion or exchange of Capital Stock of any such Person;

(f)  withholding tax payments made on behalf of present or former directors, consultants, officers or employees in connection with the exercise by such Persons of stock options or other rights to purchase Capital Stock or the vesting of restricted Capital Stock (including any repurchase of restricted Capital Stock representing the holder’s tax liability in connection with the vesting thereof);

 

 

In determining whether Restricted Payments may be made at any time, the Leverage Ratio shall be determined as of the most recently ended Fiscal Quarter of the Company (after giving pro forma effect to such Restricted Payments).  Notwithstanding the above, if the Leverage Ratio is greater than or equal to 3.00 to 1.00 as of the end of any Fiscal Year and the aggregate amount of Restricted Payments exceeded the limit set forth above for a Fiscal Year as to which the Leverage Ratio is greater than or equal to 3.00 to 1.00, then the amount of permitted Restricted Payments for the subsequent Fiscal Year (but not for any Fiscal Year after such subsequent Fiscal Year) shall be reduced by such excess, provided that such amount shall not be reduced to less than $1,000,000.

 

Notwithstanding anything in this Agreement to the contrary, the foregoing provisions of this Section 6.01 will not prohibit any Restricted Payment within sixty (60) days after the date of declaration thereof or the giving of notice with respect thereto, as applicable, if at the date of declaration or the giving of such notice such Restricted Payment would have complied with the provisions of this Section 6.01 (it being understood that such Restricted Payment shall be deemed to have been made on the date of declaration or notice for purposes of such provision).

 

SECTION 6.02.  Loans or Advances.  Neither the Company nor any of its Subsidiaries shall make loans or advances to any Person except:

(a)  deposits required by government agencies or public utilities;

(b)  loans or advances from any Foreign Subsidiaries to the Company or any Guarantor, provided that such loans and advances are subordinated to all Obligations on customary terms;

(c)  (i) loans and advances between and among the Company and the Guarantors that are Domestic Subsidiaries and (ii) loans and advances between any Foreign Subsidiary Borrower and the Foreign Subsidiaries that are Guarantors in respect of such Foreign Subsidiary Borrower;

(d)  loans and advances between members of the Modine Netherlands Consolidated Group;

(e)  other loans and advances between Foreign Subsidiaries, provided that, if such loans and advances are owing by a Foreign Subsidiary Borrower or any Foreign Subsidiary guaranteeing the Obligations of such Foreign Subsidiary Borrower, then such loans and advances are subordinated to all Obligations owing by such Foreign Subsidiary on customary terms;

(f)  other loans and advances made in the ordinary course of business or otherwise to facilitate transactions permitted under this Agreement not exceeding $150,000,000 in the aggregate at any time outstanding, provided that (i) not more than $125,000,000 of such $150,000,000 may be owing by Foreign Subsidiaries that do not have 65% or more of their Capital Stock pledged under Section 5.11(a)(i), and (ii) after giving effect to the making of any such loans or advances no Default or Event of Default shall have occurred and be continuing.  For purposes hereof, Foreign Subsidiaries organized under the laws of India or China shall be deemed to be Foreign Subsidiaries that do not have 65% or more of their Capital Stock pledged under Section 5.11(a)(i);

(g)  Investments permitted by Section 6.03;

(h)  loans and advances to officers, directors, employees or consultants of the Company or any Subsidiaries (i) in the ordinary course of business in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any write-downs or write-offs thereof) not to exceed $2,500,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or (iii) in connection with any such Person’s purchase of Capital Stock of the Company;

 

(i)   accounts receivable, security deposits and prepayments, trade credit and bank acceptance drafts and similar instruments delivered by customers, in each case, in the ordinary course of business; and

(j)   loans and advances constituting Luvata Transactions.

For purposes of determining compliance with this Section 6.02, (A) any loan or advance need not be permitted solely by reference to one category of permitted loans and advances (or any portion thereof), but may be permitted in part under any relevant combination thereof, (B) in the event that any loan or advance (or any portion thereof) meets the criteria of one or more of the categories of permitted loans and advances (or any portion thereof), the Company may, in its sole discretion, classify or divide such loan or advance (or any portion thereof) in any manner that complies with this Section 6.02 and will be entitled to only include the amount and type of such loan or advance (or any portion thereof) in one or more (as relevant) of the above clauses (or any portion thereof) and such loan or advance (or any portion thereof) shall be treated as having been made or existing pursuant to only such clause or clauses (or any portion thereof) and (C) notwithstanding any re-characterization for tax purposes of any loan or advance as equity, such loan or advance shall continue to be treated as a loan or advance.

 

SECTION 6.03.  Investments and Acquisitions.  The Company will not, nor will it permit any Subsidiary to, make or suffer to exist any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or to make any Acquisition of any Person, except:

(a)  Cash Equivalent Investments and Investments that were Cash Equivalent Investments when made;

(b)  (i)(A) Investments by any Borrower or Guarantor in the Company or any Guarantor that is a Domestic Subsidiary, (B) Investments by any Foreign Subsidiary Borrower in any Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower and (C) Investments by any Foreign Subsidiary that is a Guarantor in the Foreign Subsidiary Borrower with respect to which it is a Guarantor or in any other Foreign Subsidiary that is a Guarantor with respect to such Foreign Subsidiary Borrower, (ii) Investments by any Subsidiary that is neither a Borrower nor a Guarantor in any Borrower or Guarantor or in any other Subsidiary that is neither a Borrower nor a Guarantor, (iii) other intercompany liabilities amongst the Company and any Subsidiaries (or solely amongst the Subsidiaries) in the ordinary course of business in connection with the cash management operations of the Company and any Subsidiaries, and (iv) Investments by any Borrower or any Guarantor in any Subsidiary that is neither a Borrower nor a Guarantor consisting solely of (A) the contribution or other disposition of Capital Stock or Indebtedness of any other Subsidiary that is not a Borrower or Guarantor held directly by any Borrower or Guarantor in exchange for Indebtedness, Capital Stock (or additional share premium or paid in capital in respect of Capital Stock) or a combination thereof of the Subsidiary to which such contribution or other disposition is made, (B) an exchange of Capital Stock of any other Subsidiary that is neither a Borrower nor Guarantor for Indebtedness of such Subsidiary, or (C) transfers of previously made Investments in the form of loans or other Indebtedness of, advances to, purchases of Capital Stock in, or contributions of cash or Cash Equivalent Investments to, any other Subsidiary that is neither a Borrower nor Guarantor; provided, that immediately following the consummation of an Investment pursuant to the preceding clauses (A) or (B), the Subsidiary whose Capital Stock or Indebtedness are the subject of such Investment remains a Subsidiary of the Company;

 

(c)  Investments comprised of capital contributions (whether in the form of cash, a note, or other assets) to a Subsidiary or other special-purpose entity created solely to engage in a Qualified Receivables Transaction and to the extent required in connection with such Qualified Receivables Transaction;

(d)  Rate Management Transactions permitted by Section 6.09 and guaranties by the Company and its Subsidiaries of such Rate Management Obligations; provided, that any transaction under any Rate Management Transaction complies with Section 6.09;

(e)  loans and advances permitted by Section 6.02;

(f)   the creation of any new Domestic Subsidiaries that become Guarantors and any Investments therein or in any other Domestic Subsidiary that is a Guarantor;

(g)  the creation of any new Subsidiaries of Modine Netherlands Holding B.V. and any Investments therein or in any other member of the Modine Netherlands Consolidated Group, provided that all such Investments are made solely by another member of the Modine Netherlands Consolidated Group;

(h)  the creation of any other new Foreign Subsidiaries not permitted above and that are not Subsidiaries of Modine Holding GmbH and any Investments therein, provided that all such Investments are otherwise permitted under the terms of Section 6.03(y);

(i)   the Luvata Acquisition and other Permitted Acquisitions and Investments constituting Luvata Transactions;

(j)   Investments in Foreign Subsidiaries organized under the laws of the People’s Republic of China (“PRC”) solely to the extent required under any guaranty permitted under Section 6.05 hereof as may be necessary to ensure that the difference between (i) such Subsidiary’s registered capital and (ii) the total investment in such Subsidiary that is approved by the government of the PRC, as stated in the applicable Approval Certificate for Establishment of Enterprises with Foreign Investment in the PRC, is sufficient to cover all sums that the beneficiary of such guaranty is demanding or could demand under such guaranty if such Subsidiary were in default under any of the guaranteed obligations; provided that concurrently with, or from the proceeds of, such Investment, the Company shall cause such Subsidiary to repay in full such guaranteed obligations;

(k)  Investments arising out of the receipt of non-cash consideration for the disposition of any assets permitted under Section 6.06;

 

(y)  any other Investments, provided that:  (i) no Default or Event of Default exists at the time such Investment is made or would be caused thereby, and (ii) the aggregate amount of all such Investments plus the Acquisition Consideration paid or incurred in respect of Permitted Acquisitions (other than the Luvata Acquisition) in any Fiscal Year shall not exceed $50,000,000; provided that the foregoing dollar limitation shall not apply if the pro forma Leverage Ratio after giving effect (including pro forma effect) to such Investment or Acquisition is less than or equal to a ratio equal to 3.00 to 1.00.

 

For purposes of determining compliance with this Section 6.03, (A) an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof), but may be permitted in part under any relevant combination thereof, (B) in the event that an Investment (or any portion thereof) meets the criteria of one or more of the categories of permitted Investments, the Company may, in its sole discretion, classify or divide such Investment (or any portion thereof) in any manner that complies with this Section 6.03 and will be entitled to only include the amount and type of such Investment (or any portion thereof) in one or more (as relevant) of the above clauses (or any portion thereof) and such Investment (or any portion thereof) shall be treated as having been made or existing pursuant to only such clause or clauses (or any portion thereof), (C) the amount of any Investment by any Person outstanding at any time shall be the amount actually invested (measured at the time invested), net of any returns or distributions of capital or repayment of principal actually received in cash by such Person with respect thereto from time to time and (D) notwithstanding any re-characterization for tax purposes of any loan or advance as equity, such loan or advance shall continue to be treated as a loan or advance.

 

SECTION 6.04.  Liens.  The Company will not, nor will it permit any Subsidiary to, create, incur or suffer to exist any Lien in, of or on any of the Property of the Company or any of its Subsidiaries, except for:

 

(a)  Permitted Encumbrances;

(b)  any Lien on any Property of the Company or any Subsidiary (including Liens relating to build-to-suit leases) existing, or applicable to committed obligations, or anticipated to exist in the future, on the Effective Date and set forth in Schedule 6.04, provided that (i) such Lien shall not apply to any other Property of the Company or any Subsidiary (other than after-acquired property that is affixed or incorporated into the Property covered by such Lien and proceeds and products thereof), and (ii) such Lien shall secure only those obligations which it secures (or is intended to secure) on the Effective Date and extensions, renewals and replacements thereof to the extent that they do not increase the outstanding principal amount thereof;

(c)  Liens in favor of the Collateral Agent securing the Secured Obligations and subject to the Intercreditor Agreement;

(d)  Liens in favor of the Administrative Agent securing the Obligations;

(e)  any Lien existing on any property or asset prior to the acquisition thereof by the Company or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided  that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Company or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and amendments, modifications, extensions, refinancings, renewals and replacements thereof to the extent they do not increase the outstanding principal amount thereof;

(f)   Liens incurred in connection with any transfer of an interest in accounts or notes receivable or related assets as part of any Permitted Factoring, Qualified Receivables Transaction, Off-Balance Sheet Liability or Supply Chain Finance Program permitted hereunder;

 

(g)  to the extent such transactions create a Lien thereunder, liens in favor of lessors securing Permitted Sale and Leaseback Transactions on the asset subject to such Permitted Sale and Leaseback Transactions;

(h)  Liens securing obligations permitted by Section 6.05(p) with respect to assets described in such Section and products and proceeds thereof;

(i)   Liens on up to $20,000,000 of cash and/or Cash Equivalent Investments to secure Rate Management Obligations;

(j)  pledges and deposits and other Liens securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Company or any Subsidiary;

(k)  deposits and other Liens to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capitalized Lease Obligations), statutory obligations, surety and appeal bonds, performance and return of money bonds, bids, leases, government contracts, trade contracts, agreements with utilities, and other obligations of a like nature (including letters of credit in lieu of any such bonds or to support the issuance thereof), in each case to the extent such deposits and other Liens are incurred in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;

(l)   non-consensual Liens securing judgments that do not constitute an Event of Default under clause (j) of Article VII;

(m) any interest or title of a ground lessor or any other lessor, sublessor or licensor under any ground leases or any other leases, subleases or licenses entered into by the Company or any Subsidiary in the ordinary course of business, and all Liens suffered or created by any such ground lessor or any other lessor, sublessor or licensor (or any predecessor in interest) with respect to any such interest or title in the real property which is subject thereof;

(n)  Liens securing obligations in respect of letters of credit, bank guarantees, warehouse receipts or similar obligations permitted under this Agreement and incurred in the ordinary course of business or consistent with past practice or industry practices and not supporting obligations in respect of Indebtedness for borrowed money;

(o)  Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(p)  Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by the Company or any Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Investment or Acquisition permitted hereunder;

(q)  Liens with respect to Property of any Subsidiary that is neither a Borrower nor a Guarantor securing Indebtedness of any such Subsidiary, which Indebtedness is permitted under Section 6.05;

(r)   Liens on any amounts held by a trustee or other escrow agent under any indenture or other debt agreement issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture or other debt agreement pursuant to customary discharge, redemption or defeasance provisions;

 

(s)  Liens arising from precautionary UCC financing statements regarding operating leases or other obligations not constituting Indebtedness;

(t)   Liens on Capital Stock in joint ventures that are not Subsidiaries (i) securing obligations of such joint venture or (ii) pursuant to the relevant joint venture agreement or arrangement;

(u)  Liens on securities that are the subject of repurchase agreements constituting Investments permitted under Section 6.03;

(v)  leases or subleases, and licenses or sublicenses (including with respect to any fixtures, furnishings, equipment, vehicles or other personal property, or any intellectual property rights), granted to others in the ordinary course of business not interfering in any material respect with the business of the Company and its Subsidiaries, taken as a whole;

(w) subordination, non-disturbance and/or attornment agreements with any ground lessor, lessor or any mortgagor of any of the foregoing, with respect to any ground lease or other lease or sublease entered into by the Company or any Subsidiary;

(x)   Liens securing insurance premium financing arrangements, provided that such Liens are limited to the applicable unearned insurance premiums;

(y)  Liens securing Indebtedness (i) of the Company or any Subsidiary in favor of the Company or any Guarantor that is a Domestic Subsidiary, (ii) of any Foreign Subsidiary Borrower to any Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower, (iii) of any Foreign Subsidiary that is a Guarantor to the Foreign Subsidiary Borrower in respect of which it is a Guarantor or to any other Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower and (iv) of any Subsidiary that is neither a Borrower nor a Guarantor in favor of any other Subsidiary that is neither a Borrower nor a Guarantor;

(z)  Liens on goods or inventory the purchase, shipment or storage price of which is financed by a documentary letter of credit or bank guarantee issued or created for the account of the Company or any Subsidiary in the ordinary course of business; provided, that such Lien secures only the obligations of the Company or such Subsidiaries in respect of such letter of credit, bank guarantee or banker’s acceptance to the extent permitted under Section 6.05;

(aa)  Liens securing Indebtedness under tax-favored or government-sponsored financing permitted under Section 6.05, provided that such Liens do not at any time encumber any Collateral unless approved by the Administrative Agent;

(bb)  in addition to Liens otherwise described in the foregoing clauses, Liens securing an aggregate amount of Indebtedness and other obligations outstanding of no more than the greater of $30,000,000 and 3.0% of the Company’s Consolidated Tangible Assets (determined as of the last day of the most recent fiscal quarter for which financial statements shall have been delivered pursuant to Section 5.01(a) or Section 5.01(b) (or, prior to the delivery of any such financial statements, the last day of the last fiscal quarter included in the financial statements referred to in Section 3.05(a)) at the time of creation thereof; and

 

(cc)  any extensions, refinancings, renewals, substitutions or replacements of or for any of the foregoing Liens to the extent that the aggregate principal amount of the Indebtedness or other obligations or liabilities secured by the applicable Lien shall not be increased; provided that the Lien securing such Indebtedness or other obligation or liability shall not extend to or cover additional assets (it being understood that a Lien covering all assets of a particular type, such as “all inventory”, may cover additional assets of the relevant type).

Any Indebtedness described above is not in addition to Indebtedness permitted under Section 6.05, and any Indebtedness of the Company or any of its Subsidiaries must be in compliance with Section 6.05.

 

For purposes of determining compliance with this Section 6.04, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens (or any portion thereof), but may be permitted in part under any combination thereof and (B) in the event that a Lien securing any obligation (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof), the Company may, in its sole discretion, classify or divide such Lien securing such obligation (or any portion thereof) in any manner that complies with this Section 6.04 and will be entitled to only include the amount and type of such Lien or such obligation secured by such Lien (or any portion thereof) in one of the above clauses and such Lien securing such obligation (or portion thereof) will be treated as being incurred or existing pursuant to only such clause or clauses (or any portion thereof).

 

Any Lien permitted above on any Property may extend to the identifiable proceeds thereof.

 

SECTION 6.05.  Indebtedness.  The Company will not, nor will it permit any Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

(a)  The Obligations;

(b)  Intercompany Indebtedness among the Company and its Subsidiaries to the extent permitted under Section 6.03, provided that any such Indebtedness owing by the Company or any Guarantor to any Subsidiary (other than to a Guarantor or, in the case of Indebtedness owing by a Foreign Subsidiary, to any Foreign Subsidiary Borrower in respect of which it is a Guarantor or to any other Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower) are subordinated to all Obligations on customary terms);

(c)  the Senior Note Debt in an aggregate principal amount not to exceed $200,000,000;

(d)  Receivables/Factoring/SCF Indebtedness not to exceed $100,000,000 in aggregate principal amount outstanding at any time, if no Default or Event of Default exists at the time of, or would be caused by, the incurrence of any such Indebtedness;

(e)  Subordinated Debt, if no Default or Event of Default exists at the time of, or would be caused by, the incurrence of any such Subordinated Debt;

(f)  Indebtedness assumed in connection with a Permitted Acquisition;

(g)  Indebtedness of Foreign Subsidiaries, provided that (i) the aggregate outstanding amount of all Indebtedness of all Foreign Subsidiaries (excluding any Indebtedness permitted under any other subsection of this Section 6.05, Rate Management Obligations, and Banking Services Obligations) shall not at any time exceed a Dollar Amount of $125,000,000, and (ii) no Default or Event of Default exists at the time of, or would be caused by, the incurrence of any such Indebtedness;

 

(h)  Indebtedness consisting of Rate Management Obligations permitted under Section 6.03(d) and Section 6.09 hereof and Indebtedness arising in connection with Banking Services Obligations;

(i)  Indebtedness consisting of Contingent Obligations of the Company with respect to Indebtedness of its Subsidiaries permitted under this Section 6.05; provided that the aggregate maximum amount of such Contingent Obligations with respect to Indebtedness of its Subsidiaries (other than Guarantors that are Domestic Subsidiaries) permitted under this Section 6.05 at any time outstanding (based on the maximum amount of such Contingent Obligations, net of any cash collateral or letter of credit provided with respect to such Contingent Obligations or the related Indebtedness) shall not exceed $150,000,000;

(j)   Indebtedness under the following Sale and Leaseback Transactions: (i) Sale and Leaseback Transactions existing as of the Effective Date where the liability is less than $10,000,000 in the aggregate, (ii) the Sale and Leaseback Transaction with respect to the Company’s facility located in Kottingbrunn, Austria in an amount not to exceed €30,000,000, and (iii) other Sale and Leaseback Transactions entered into after the Effective Date where the liability is less than $75,000,000 in the aggregate (in each case as determined by aggregating the present value, applying an appropriate discount rate, as reasonably determined by the Company, from the date on which each fixed lease payment is due under such lease to such date of determination) for all such Sale and Leaseback Transactions under this clause (iii);

(k)  Indebtedness (including obligations relating to build-to-suit leases) existing or committed or anticipated in the future to be outstanding on the Effective Date (provided, that any Indebtedness incurred pursuant to this clause (k) in respect of any Indebtedness with an aggregate principal amount outstanding and/or committed thereunder that exceeds $5,000,000 or any Indebtedness that is anticipated on the Effective Date to be outstanding in the future, shall, in each such case, be set forth on Schedule 6.05); provided, that any Indebtedness outstanding pursuant to this clause (k) which is owed by a Borrower or a Guarantor to any Subsidiary that is neither a Borrower nor a Guarantor shall be subordinated in right of payment to the Obligations under this Agreement on customary terms;

(l)   Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Company or any Subsidiary, pursuant to reimbursement or indemnification obligations to such Person, in each case in the ordinary course of business or consistent with past practice or industry practices;

(m)  Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds, completion guarantees, performance guarantees and similar obligations, in each case provided in the ordinary course of business or consistent with past practice or industry practices, including those incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice or industry practices;

(n)  Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services, in each case incurred in the ordinary course of business;

(o)  [intentionally omitted];

 

(p)  Capitalized Lease Obligations (including obligations relating to build-to-suit leases), mortgage financings and other Indebtedness and obligations relating to conditional sale and/or title retention agreements, in each case, incurred by the Company or any Subsidiary prior to or within 180 days after the acquisition, lease, construction, repair, replacement or improvement of the respective Property (whether through the direct purchase of the Property or the Capital Stock of any Person owning such Property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this clause (p), would not exceed the greater of $30,000,000 and 3.0% of the Company’s Consolidated Tangible Assets (determined as of the last day of the most recent fiscal quarter for which financial statements shall have been delivered pursuant to Section 5.01(a) or Section 5.01(b) (or, prior to the delivery of any such financial statements, the last day of the last fiscal quarter included in the financial statements referred to in Section 3.05(a)) when incurred, created or assumed;

(q)  guarantees (i) by any Borrower or Guarantor of any Indebtedness of any other Borrower or Guarantor permitted to be incurred under this Agreement, (ii) by any Borrower or Guarantor of Indebtedness otherwise permitted hereunder of any Subsidiary that is neither a Borrower nor a Guarantor to the extent such guarantees are permitted by Section 6.03 or (iii) by any Subsidiary that is neither a Borrower nor a Guarantor of Indebtedness of any other Subsidiary that is neither a Borrower nor a Guarantor; provided, that guarantees by any Borrower or Guarantor under this clause (q) of any other Indebtedness of a Person that is subordinated in right of payment to other Indebtedness of such Person shall be expressly subordinated in right of payment to the Obligations under this Agreement to at least the same extent as such underlying Indebtedness is subordinated in right of payment;

(r)  Indebtedness arising from agreements of the Company or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the Luvata Acquisition or any Permitted Acquisition, other Investments or the disposition of any business, assets or any Subsidiary not prohibited by this Agreement;

(s)  Indebtedness in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued in the ordinary course of business or consistent with past practice or industry practices and not supporting obligations in respect of Indebtedness for borrowed money;

(t)   Indebtedness incurred in the ordinary course of business in respect of obligations of the Company or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money;

(u)  Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Company or any Subsidiary incurred in the ordinary course of business;

(v)  obligations in respect of (i) Banking Services Agreements (or similar agreements provided by Persons other than Lenders and their Affiliates) or (ii) agreements to provide to the Company or any Subsidiary letters of credit, guarantees or other credit support provided in respect of trade payables of the Company or any Subsidiary, in each case issued for the benefit of any bank, financial institution or other Person that has acquired such trade payables pursuant to “supply chain” or other similar financing for vendors and suppliers of the Company or any Subsidiaries, so long as (A) such Indebtedness is unsecured, except as otherwise permitted in this Section 6.05, (B) the terms of such trade payables shall not have been extended in connection with such “supply chain” or other similar financing, and (C) such Indebtedness represents amounts not in excess of those which the Company or any Subsidiary would otherwise have been obligated to pay to its vendor or supplier in respect of the applicable trade payables;

 

(w) Indebtedness issued by the Company or any Subsidiary to current or former directors, officers, employees or consultants or their respective estates, spouses or former spouses to finance the purchase or redemption of Capital Stock of the Company permitted by Section 6.01;

(x)  Indebtedness under tax-favored or government-sponsored financing transactions, provided that the net proceeds of such Indebtedness shall be used to (i) prepay Term Loans in accordance with this Agreement or (ii) prepay, repay or refinance other Indebtedness incurred under other tax-favored or government-sponsored financing transactions;

(y)  Indebtedness consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements or (iii) surety bonds and similar instruments, in each case, incurred in the ordinary course of business;

(z)   [intentionally omitted];

(aa)  Indebtedness constituting Luvata Transactions;

(bb)  other Indebtedness in an aggregate amount at any time outstanding not to exceed the greater of $30,000,000 and 3.0% of the Company’s Consolidated Tangible Assets (determined as of the last day of the most recent fiscal quarter for which financial statements shall have been delivered pursuant to Section 5.01(a) or Section 5.01(b) (or, prior to the delivery of any such financial statements, the last day of the last fiscal quarter included in the financial statements referred to in Section 3.05(a)) at the time of incurrence thereof;

(cc)  other unsecured Indebtedness issued by the Company upon customary terms as reasonably determined by the Administrative Agent if no Default or Event of Default exists at the time of, or would be caused by, the incurrence of any such Indebtedness;

(dd)  Permitted Refinancing Indebtedness in respect of any Indebtedness permitted under the foregoing clauses (c), (f), (j)(i), (j)(ii), (k) and/or this clause (dd) (including extensions, renewals or replacements of the guarantees in respect of the Indebtedness replaced by such Permitted Refinancing Indebtedness); and

(ee)  refinancings, extensions or renewals of any of the foregoing Indebtedness (other than any Indebtedness permitted under the foregoing clauses (c), (f), (j)(i), (j)(ii), (k) and/or (dd)) or any Indebtedness under this clause (ee) to the extent the principal amount thereof is not increased (including extensions, renewals or replacements of guarantees in respect of such Indebtedness as so refinanced, extended or renewed) and so long as the material terms applicable to such refinanced Indebtedness are no less favorable to the Company or any Subsidiary, as applicable, taken as a whole, than the material terms in effect immediately prior to such refinancing.

For purposes of determining compliance with this Section 6.05, (A) Indebtedness need not be permitted solely by reference to one category of permitted Indebtedness (or any portion thereof), but may be permitted in part under any relevant combination thereof, and (B) in the event that an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness (or any portion thereof), the Company may, in its sole discretion, classify or divide such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 6.05 and will be entitled to only include the amount and type of such item of Indebtedness (or any portion thereof) in one of the above clauses (or any portion thereof) and such item of Indebtedness (or any portion thereof) shall be treated as having been incurred or existing pursuant to only such clause or clauses (or any portion thereof).  In addition, with respect to any Indebtedness that was permitted to be incurred hereunder on the date of such incurrence, any increases to such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness or in the form of common stock of the Company, the accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall also be permitted hereunder after the date of such incurrence.

 

For the avoidance of doubt, this Agreement will not treat (1) unsecured Indebtedness as subordinated or junior in right of payment to secured Indebtedness merely because it is unsecured or (2) senior Indebtedness as subordinated or junior in right of payment to any other senior Indebtedness merely because it has a junior priority with respect to the same collateral.

 

SECTION 6.06.  Consolidations, Mergers and Sales of Assets. The Company will not, nor will it permit any Subsidiary to, consolidate or merge with or into, or sell, lease or otherwise transfer all or any of its assets to, any other Person, or liquidate or dissolve, except for the following:

(a)  any Subsidiary may merge or consolidate with or into the Company or any Wholly-Owned Subsidiary of the Company so long as: (i) in any merger or consolidation involving the Company, the Company shall be the surviving or continuing entity, (ii) in any merger or consolidation involving one or more Foreign Subsidiary Borrowers, a Foreign Subsidiary Borrower shall be the surviving or continuing entity, and (iii) in any merger or consolidation involving a Wholly-Owned Subsidiary of the Company (and not a Borrower), a Wholly-Owned Subsidiary of the Company shall be the surviving or continuing entity;

(b)  (i) any Subsidiary may merge or consolidate with or into, or transfer all or substantially all of its assets to, the Company or a Guarantor that is a Domestic Subsidiary (or a Person that, in connection with such transaction, becomes a Guarantor that is a Domestic Subsidiary) in a transaction in which the Company or a Guarantor that is a Domestic Subsidiary (or a Person that, in connection with such transaction, becomes a Guarantor that is a Domestic Subsidiary) is the surviving, continuing or transferee entity, (ii) any Foreign Subsidiary Borrower may merge or consolidate with any Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower in a transaction in which a Foreign Subsidiary Borrower is the surviving or continuing entity and (iii) any Foreign Subsidiary that is a Guarantor may merge or consolidate with or into, or transfer all or substantially all of its assets to, the Foreign Subsidiary Borrower in respect of which it is a Guarantor or any other Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower (or a Person that, in connection with such transaction, becomes a Guarantor in respect of such Foreign Subsidiary Borrower) in a transaction in which such Foreign Subsidiary Borrower or any Guarantor in respect of such Foreign Subsidiary Borrower (or a Person that, in connection with such transaction, becomes a Guarantor in respect of such Foreign Subsidiary Borrower) is the surviving, continuing or transferee entity;

(c)  any Subsidiary that is neither a Borrower nor a Guarantor may merge or consolidate with or into, or transfer all or substantially all of its assets to, any other Subsidiary that is neither a Borrower nor a Guarantor;

(d)  any merger or consolidation involving a Subsidiary to effectuate an Investment permitted under Section 6.03 or any sale or other disposition of Property otherwise permitted under this Section 6.06 so long as, in the case of such an Investment, the continuing or surviving Person shall also be a Subsidiary and shall also be a Loan Party if the merging or consolidating Subsidiary was a Loan Party and which together with each of its Subsidiaries shall have complied with the applicable requirements of Sections 5.09 and 5.11;

 

(e)  any Permitted Acquisition (including any merger or consolidation to effectuate a Permitted Acquisition) and the Luvata Transactions;

(f)  any sale, lease or other transfer of assets (whether upon voluntary liquidation or otherwise) (i) to the Company or any Guarantor that is a Domestic Subsidiary, (ii) by any Foreign Subsidiary Borrower to any Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower or (iii) by any Foreign Subsidiary that is a Guarantor to the Foreign Subsidiary Borrower in respect of which it is a Guarantor or to any other Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower;

(g)  sales of inventory in the ordinary course of business;

(h)  leases, sales or other dispositions of Property that, together with all other Property of the Company and its Subsidiaries previously leased, sold or disposed of as permitted by this clause (h) during any Fiscal Year do not constitute a Substantial Portion of the Property of the Company and its Subsidiaries, provided that, after giving effect to any such lease, sale or other disposition, no Default or Event of Default shall have occurred and be continuing;

(i)   any sale, conveyance, transfer or other disposition of any interest in accounts or notes receivable and related assets in respect of (i) the sale or assignment of accounts for collection purposes in the ordinary course of business or (ii) the sale or assignment of trade notes receivable or accounts receivable in connection with any Permitted Factoring, any Qualified Receivables Transactions or any Supply Chain Finance Program to the extent the aggregate amount of Indebtedness thereunder is permitted under Section 6.05;

(j)   (A) any sale, conveyance, transfer or other disposition of Property pursuant to an Investment permitted under Section 6.03, and (B) any transfer of the ownership of the Capital Stock of any Domestic Subsidiary to the Company or to another Domestic Subsidiary that is a Wholly-Owned Subsidiary of the Company and any transfer of the ownership of the Capital Stock of any Foreign Subsidiary to the Company or to a Wholly-Owned Subsidiary of the Company; provided that with respect to any such transfer ownership of Capital Stock, the Company shall comply with Section 5.11 hereof and no Default or Event of Default exists at the time thereof or would be caused thereby;

(k)  the dissolution or liquidation of any Subsidiary if its assets are transferred to the Company or a Guarantor that is a Domestic Subsidiary or, in the case of any Foreign Subsidiary, if its assets are transferred to any Foreign Subsidiary Borrower in respect of which it is a Guarantor or any other Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower, and any other transfer of assets from any Subsidiary to a Borrower or a Guarantor that is a Domestic Subsidiary or, in the case of any Foreign Subsidiary, to any Foreign Subsidiary Borrower in respect of which it is a Guarantor or any other Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower;

(l)  the dissolution or liquidation of any Subsidiary of Modine Netherlands Holding B.V. if its assets are transferred to any other Subsidiary, and any other transfer of assets from any Subsidiary of Modine Netherlands Holding B.V. to the Company or any Subsidiary;

(m)  any sale, conveyance, transfer or other disposition of Property subject to a Permitted Sale and Leaseback Transaction;

 

(y)  the disposition of any Investment acquired by virtue of any Bail-in Action with respect to any Lender;

(aa)  any sale, conveyance, transfer or other disposition of any interest in any bank acceptance draft or similar instrument delivered by a customer in the ordinary course of business.

 

SECTION 6.07.  Financial Covenants.

 

(a)  Leverage Ratio.  The Company will not permit the Leverage Ratio to be greater than 3.25 to 1.00 as of the end of any Fiscal Quarter, provided that, upon the written election by the Company not later than the last day of the Fiscal Quarter in which (A) the Luvata Acquisition or (B) a Permitted Acquisition with a cash purchase price exceeding $50,000,000 (any such Permitted Acquisition described in the foregoing clause (B), a “Specified Acquisition”) is consummated (any such Fiscal Quarter, a “Specified Quarter”), the Leverage Ratio may be greater than 3.25 to 1.00 but not greater than: (i) in the case of the Luvata Acquisition (such election relating to the Luvata Acquisition, the “Luvata Leverage Holiday”) (x) 3.75 to 1.00 for the applicable Specified Quarter and the three Fiscal Quarters immediately following such Specified Quarter, (y) 3.50 to 1.00 for the fourth, fifth and sixth Fiscal Quarters immediately following such Specified Quarter and (z) 3.25 to 1.00 on the last day of any Fiscal Quarter thereafter (provided that the Company may elect to terminate the Luvata Leverage Holiday by giving written notice to the Administrative Agent and upon such termination, the Company will not permit, subject to clause (ii) below, the Leverage Ratio to be greater than 3.25 to 1.00 for the Fiscal Quarter immediately following the Fiscal Quarter in which such notice of termination is given and each Fiscal Quarter thereafter) and (ii) in the case of any Specified Acquisition (x) 3.75 to 1.00 for the applicable Specified Quarter and the Fiscal Quarter immediately following such Specified Quarter, (y) 3.50 to 1.00 for the second and third Fiscal Quarters immediately following such Specified Quarter and (z) 3.25 to 1.00 on the last day of any Fiscal Quarter thereafter.  After any such election is made by the Company, the Company shall be prohibited from making any additional election until after the maximum Leverage Ratio returns to 3.25 to 1.00 for at least two consecutive Fiscal Quarters. Once the Company makes such an election permitted under this Section 6.07(a), it shall be in effect for the periods described in the foregoing clause (i) or (ii), as applicable.

(b)  Interest Expense Coverage Ratio.  The Company will not permit the Interest Expense Coverage Ratio to be less than 3.00 to 1.0 as of the end of any Fiscal Quarter.

SECTION 6.08.  [Intentionally Omitted].

 

SECTION 6.09.  Rate Management Transactions.  The Company will not, nor will it permit any Subsidiary to, enter into or remain liable under any Rate Management Transactions, except for Rate Management Transactions that are entered into in the ordinary course of business of the Company or such Subsidiary for the purpose of hedging a risk exposure of the Company or a Subsidiary and not for speculative purposes.

 

SECTION 6.10.  Lines of Business.  Neither the Company nor any of its Subsidiaries shall engage to any material extent in any business substantially different from businesses of the type conducted by the Company and its Subsidiaries on the Effective Date and businesses reasonably related, ancillary, similar, complementary or synergistic thereto or reasonable extensions, development or expansion thereof.

SECTION 6.11.  Environmental Matters. The Company will not, and will not permit any other Person to, conduct its operations or keep or maintain its property in non-compliance with any applicable Environmental Laws, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.12.  Transactions with Affiliates.  The Company will not, and will not permit any Subsidiary to, enter into any transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate (other than any Wholly-Owned Subsidiary, including any Person that becomes a Wholly-Owned Subsidiary as a result of such transaction), except upon fair and reasonable terms no less favorable, when taken as a whole, to the Company or such Subsidiary than the Company or such Subsidiary would obtain in a comparable arms-length transaction with a Person not an Affiliate of the Company or such Subsidiary, except for the following:

 

(a)  transactions between the Company or any Subsidiary, on the one hand, and any Subsidiary or other special-purpose entity created to engage solely in a Qualified Receivables Transaction;

(b)  transactions among one or more of the Borrowers, the Guarantors and any Wholly-Owned Subsidiaries;

(e)  transactions with Affiliates for the purchase, sale, or lease of goods in the ordinary course of business for less than fair market value, but for not less than cost;

(f)  any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, equity purchase agreements, stock options and stock ownership plans approved by the board of directors of the Company or any Subsidiary;

(g)  the payment of fees, advances, reasonable out-of-pocket costs and indemnities to directors, officers, consultants and employees of the Company and any Subsidiaries in the ordinary course of business;

(h)  the Company or any Subsidiary may make equity contributions, and/or intercompany loans that have below market interest rates, to any Subsidiary, so long as any such intercompany loan is payable upon demand and this Agreement does not otherwise prohibit any such equity contribution or intercompany loan;

(i)   (A) any employment agreements entered into by the Company or any Subsidiaries in the ordinary course of business, (B) any subscription agreement or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with employees, officers or directors, and (C) any employee compensation, benefit plan or arrangement, any health, disability or similar insurance plan which covers employees, and any reasonable employment contract and transactions pursuant thereto;

(j)   transactions between the Company or any Subsidiaries and any Person, a director of which is also a director of the Company or any Subsidiary of the Company; provided, however, that (i) such director abstains from voting as a director of the Company or the applicable Subsidiary on any matter involving such other Person and (ii) such Person is not an Affiliate of the Company or any Subsidiary for any reason other than such director’s acting in such capacity;

(k)  transactions, agreements and arrangements in existence or committed, or anticipated to exist in the future, on the Effective Date and set forth on Schedule 6.12, and, in each case, any amendment thereto or replacement thereof or similar arrangement to the extent such amendment, replacement or arrangement is not adverse to the Lenders when taken as a whole in any material respect (as determined by the Company in good faith);

(l)   intercompany transactions undertaken in good faith for the purpose of improving the consolidated tax efficiency of the Company and its Subsidiaries and not for the purpose of circumventing any covenant set forth herein; and

 

(m) the Luvata Transactions.

SECTION 6.13.  Optional Payments and Modifications of Debt.  The Company will not, nor will it permit any Subsidiary to, make any optional payment, defeasance (whether a covenant defeasance, legal defeasance or other defeasance), optional prepayment, optional repurchase (including without limitation any optional offer to repurchase) or other optional redemption (collectively, “Optional Payments”) of any Material Indebtedness, provided that (a) the Company or any of its Subsidiaries may do any of the foregoing with respect to any Material Indebtedness (other than Subordinated Debt) if after giving effect to any of the foregoing on a pro forma basis each of the following conditions is satisfied:  (i) Liquidity is equal to or greater than $50,000,000 and (ii) no Default or Event of Default exists at such time or would be caused thereby, (b) any Foreign Subsidiary may do any of the foregoing with respect to any of its Material Indebtedness if (x) such amount paid is from its own cash on hand and (y) after giving effect to any of the foregoing on a pro forma basis, no Default or Event of Default exists, (c) the foregoing shall not apply to transactions owed to the Company or any Guarantor that is a Domestic Subsidiary or, in the case of any Foreign Subsidiary, that are owed to any Foreign Subsidiary Borrower in respect of which it is a Guarantor or to any other Foreign Subsidiary that is a Guarantor in respect of such Foreign Subsidiary Borrower and (d) the foregoing shall not apply to Permitted Refinancing Indebtedness of any Material Indebtedness with the proceeds of Indebtedness permitted under Section 6.05 or the proceeds of issuances of Capital Stock (excluding Disqualified Stock).

SECTION 6.14.  Restrictive Agreements.  The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability of (i) any Subsidiary to pay dividends or other distributions with respect to any shares of its Capital Stock or to make or repay loans or advances to the Company or any Domestic Subsidiary or (ii) the Company or any Subsidiary to grant liens pursuant to the Collateral Documents (to the extent required by this Agreement); provided that the foregoing shall not apply to any prohibition, restriction or condition:

(a)  imposed on the Modine Netherlands Consolidated Group in connection with Indebtedness permitted under Section 6.05;

(b)  imposed in connection with a material economic benefit provided to any Foreign Subsidiary by a Governmental Authority;

(e)  imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock of a Subsidiary or the Property of the Company or any Subsidiary pending the closing of such sale or disposition;

(f)  that is a customary provision in a joint venture agreement or other similar agreement applicable to a joint venture entered into in the ordinary course of business;

(g)  imposed by any agreement relating to Indebtedness permitted under Section 6.05, to the extent such restrictions are not materially more restrictive, taken as a whole, than the restrictions contained in this Agreement (in each case, as determined in good faith by the Company);

 

(h)  imposed by any agreement relating to Indebtedness permitted under Section 6.05 of a Subsidiary that is neither a Borrower nor a Guarantor that applies only to such Subsidiary and its Subsidiaries that are neither Borrowers nor Guarantors;

(i)   that constitutes a customary net worth or similar provision contained in a real property lease, so long as the Company has determined in good faith that such provision would not reasonably be expected to impair the ability of the Company and its Subsidiaries to meet their ongoing obligations under this Agreement;

(j)   imposed by any agreement in effect at the time such Person becomes a Subsidiary or assumed in connection with the Luvata Acquisition or any other Permitted Acquisition, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary or such Acquisition;

(k)  imposed by any agreement relating to any Qualified Receivables Transaction;

(l)   imposed by any agreement relating to secured Indebtedness permitted by this Agreement to the extent that such restrictions apply only to the specific property or assets securing such Indebtedness and proceeds thereof;

(m) constituting a customary provision contained in a lease or license of intellectual property or other similar agreement entered into in the ordinary course of business;

(n)  constituting a customary provision restricting subletting or assignment of any lease governing a leasehold interest;

(o)  constituting a customary provision restricting assignment, mortgaging or hypothecation of any agreement entered into in the ordinary course of business;

(p)  constituting a Lien permitted hereunder and customary restrictions and conditions contained in the document relating thereto, so long as (1) such restrictions or conditions relate only to the specific asset subject to such Lien, and (2) such restrictions and conditions are not created for the purpose of avoiding the restrictions imposed by this Section 6.14;

(q)  constituting a customary restriction contained in a lease, sublease, license or Capital Stock or an asset sale agreement otherwise permitted hereby as long as such restriction relates to the Capital Stock and assets subject thereto;

(r)  constituting a restriction on cash or other deposits imposed by a customer under a contract entered into in the ordinary course of business; and

(s)  imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing of or similar arrangements to the contracts, instruments or obligations referred to in the foregoing clauses; provided that (i) in the case of the refinancing of Indebtedness, the new Indebtedness constitutes Permitted Refinancing Indebtedness in respect of the refinanced Indebtedness, and (ii) such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement, refinancing or similar arrangement is, in the good faith judgment of the Company, no more restrictive with respect to such prohibition, restriction or condition than those in effect immediately prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement, refinancing or similar arrangement.

 

If any of the following events (“Events of Default”) shall occur:

(a)  Any Borrower shall fail to pay when due any principal of any Loan, shall fail to pay within one (1) Business Day of when due any LC Disbursement, or shall fail to pay within three (3) Business Days of when due any interest on any Loan or any fee or other amount payable hereunder; or

(b)  The Company shall fail to (i) observe or perform any covenant contained in Section 5.01(d), Section 5.03, Section 5.04, Section 5.09, Section 5.11, Sections 6.01 through 6.10, inclusive, Section 6.12, Section 6.13 or Section 6.14 or any Additional Covenant (but only after giving effect to any notice, grace or cure period as may be applicable to such Additional Covenant) or (ii) consummate the Luvata Acquisition on or within two (2) Business Days after the Funding Date; or

(c)  The Company shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a) or (b) of this Article VII above), or the Company or any Subsidiary shall fail to observe or perform any covenant or agreement contained in any other Loan Document, for thirty (30) days after the earlier of (i) the first day on which a responsible officer of the Company or Subsidiary has knowledge of such failure, or (ii) written notice thereof has been given to the Company or Subsidiary by a Lender; or

(d)  Any representation or warranty made or deemed made by or on behalf of the Company in Article III or by or on behalf of the Company or any Subsidiary in, under or in connection with any Loan Document, or any certificate, financial statement or other document delivered pursuant to any Loan Document, shall prove to have been incorrect in any material respect when made (or deemed made); or

(e)  The Company or any Subsidiary shall fail to make any payment in respect of Significant Obligations outstanding (other than the Loans) when due and such failure continues after any applicable grace or notice period; or

(f)   Any event or condition shall occur which results in the acceleration of the maturity of Significant Obligations or the purchase of Significant Obligations by the Company (or its designee) or such Subsidiary (or its designee) prior to the scheduled maturity thereof or enables (or, with the giving of notice or lapse of time or both, would enable) the holders of Significant Obligations or any Person acting on such holders’ behalf to accelerate the maturity thereof or require the purchase thereof by the Company (or its designee) or such Subsidiary (or its designee) prior to the scheduled maturity thereof, without regard to whether such holders or other Person shall have exercised or waived their right to do so, or any Significant Obligations shall be declared to be due and payable or required to be prepaid or repurchased (other than by a regularly scheduled payment) prior to the stated maturity thereof (provided that, notwithstanding the foregoing, none of the following events shall constitute an Event of Default under this this clause (f) unless such event results in the acceleration of other Significant Obligations of the Company or any Subsidiary:  (i) any secured Indebtedness becoming due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, (ii) any change of control offer made within 60 days after an acquisition with respect to, and effectuated pursuant to, Indebtedness of an acquired business, (iii) any default under Indebtedness of an acquired business if such default is cured, or such Indebtedness is repaid, within 60 days after the acquisition of such business so long as no other creditor accelerates or commences any kind of enforcement action in respect of such Indebtedness or (iv) mandatory prepayment requirements arising from the receipt of net cash proceeds from debt, dispositions (including casualty losses, governmental takings and other involuntary dispositions), equity issues or excess cash flow, in each case pursuant to Indebtedness of an acquired business); or

 

(g)  Any Borrower, any Guarantor or any Significant Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any Substantial Portion of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay, or shall admit in writing its inability to pay, its debts as they become due, or shall take any corporate action to authorize any of the foregoing, or shall fail to contest in good faith any appointment or proceeding described in clause (h) of this Article VII; or

(h)  An involuntary case or other proceeding shall be commenced against any Borrower, any Guarantor or any Significant Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any Substantial Portion of its property, and, except if a bankruptcy is declared (faillissement is uitgesproken) under the Dutch Bankruptcy Act (Faillissementswet) or a bankruptcy of a Borrower or Guarantor incorporated in England and Wales is declared, such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 45 days; or an order for relief shall be entered against any Borrower, any Guarantor or any Significant Subsidiary under the federal bankruptcy laws or any other applicable insolvency laws as now or hereafter in effect; or

(i)   An ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; or

(j)   One or more judgments or orders for the payment of money in an aggregate amount in excess of $30,000,000 (to the extent not covered by indemnification or independent third-party insurance as to which the insurer does not dispute coverage), shall be rendered and finally adjudicated against the Company or any Subsidiary, and such judgment(s) or order(s) shall continue unsatisfied and unstayed for a period of 45 days; or

(k)  Without prejudice to any other provisions of this Article VII, with respect to a Subsidiary Borrower, a Significant Subsidiary or a Subsidiary that is a Guarantor, in each case having its center of main interest (in the meaning of section 3 of the German Insolvency Code (Insolvenzordnung) or article 3 para. 1 of Council Regulation (EC) ▇▇. ▇▇▇▇/▇▇▇▇ ▇▇ ▇▇▇ ▇▇, ▇▇▇▇ (▇▇ amended or superseded from time to time, e.g., pursuant to Regulation (EU) No 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings))) in Germany, also (A) a Person making an application for the opening of insolvency proceedings for the reasons set out in sections 17 to 19 of the German Insolvency Code (Insolvenzordnung) (Antrag auf Eröffnung eines Insolvenzverfahrens) or any competent court taking actions pursuant to section 21 of the German Insolvency Code (Insolvenzordnung) (Anordnung von Sicherungsmaßnahmen) unless, in case of an application for the opening of insolvency proceedings by any Person (other than the Company or any of its Subsidiaries or the Company’s direct or indirect shareholders), such application is dismissed by the competent court (for any reason other than for lack of assets (▇▇▇▇▇▇▇ ▇▇▇▇▇)) or successfully withdrawn by such Person, in each case within 21 days after such application; (B) such Subsidiary Borrower, Significant Subsidiary or Subsidiary that is a Guarantor is unable to pay its debts as they fall due (Zahlungsunfähigkeit), or is over indebted (Überschuldung), or is threatened with insolvency (drohende Zahlungsunfähigkeit) within the meaning of Sections 17 to 19 (inclusive) of the German Insolvency Code (Insolvenzordnung); or

 

(l)   Any Change in Control shall occur; or

(m) Any Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Guaranty (in each case other than in accordance with the terms hereof or thereof), or any Guarantor shall fail to comply with any of the terms or provisions of any Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under any Guaranty to which it is a party (other than in accordance with the terms hereof or thereof), or shall give notice to such effect; or

(n)  Any Collateral Document shall for any reason (other than solely as the result of an act or omission of any Agent or a Lender) fail to create a valid and perfected Lien, subject to the Intercreditor Agreement, in any Collateral purported to be covered thereby, except as permitted by the terms of this Agreement or any Collateral Document, or, due to any action by the Company or any of its Subsidiaries not consented to by the Required Lenders, any Collateral Document shall fail to remain in full force or effect (other than in accordance with its terms) or any action shall be taken by the Company or any of its Subsidiaries not consented to by the Required Lenders to discontinue or to assert the invalidity or unenforceability of any Collateral Document (other than in accordance with its terms);

then, and in every such event (other than an event with respect to any Borrower not incorporated in England and Wales described in clause (g), (h) or (k) of this Article VII), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Company, take either or both of the following actions, at the same or different times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the Borrowers accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to any Borrower not incorporated in England and Wales described in clause (g), (h) or (k) of this Article VII, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers.  Upon the occurrence and during the continuance of an Event of Default, any Agent may, in accordance with and subject to the terms of the Intercreditor Agreement, and at the request of the Required Lenders shall, exercise any rights and remedies provided to the Collateral Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

 

Each of the Lenders and the Issuing Banks, on behalf of itself and any of its Affiliates that are Secured Parties, hereby irrevocably (i) appoints JPMCB as Administrative Agent and the Collateral Agent hereunder and under each other Loan Document and (ii) authorizes each of the Agents to take such actions on its behalf, including execution of the other Loan Documents, and on behalf of the Secured Parties to exercise such powers as are delegated to the Agents by the terms hereof and the terms of the other Loan Documents, together with such actions and powers as are reasonably incidental thereto.  Further, each of the Lenders and the Issuing Banks, on behalf of itself and any of its Affiliates that are Secured Parties, hereby irrevocably (i) empower and authorize JPMCB (in its capacity as Administrative Agent and/or as Collateral Agent) to execute and deliver the Collateral Documents and all related documents or instruments as shall be necessary or appropriate to effect the purposes of the Collateral Documents and (ii) empower and authorize JPMCB (in its capacity as Administrative Agent and/or as Collateral Agent) to execute and deliver on their behalf the Intercreditor Agreement and all related documents or instruments as shall be necessary or appropriate to effect the purposes of the Intercreditor Agreement.  Each Lender shall be bound by the terms and provisions of the Intercreditor Agreement, (and the Intercreditor Agreement is hereby approved by the Lenders), so executed by the Collateral Agent, and by any further amendments thereto executed by the Agent on behalf of the Lenders provided that any such further amendment has been approved by the Required Lenders.

 

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Company or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

No Agent shall have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) no Agent shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) no Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that such Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or as otherwise set forth in the Intercreditor Agreement, and (c) except as expressly set forth in the Loan Documents, no Agent shall have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Subsidiaries that is communicated to or obtained by the bank serving as either Agent or any of its Affiliates in any capacity.  No Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct as determined by a final nonappealable judgment of a court of competent jurisdiction.  No Agent shall be deemed to have knowledge of any Default unless and until written notice thereof is given to such Agent by the Company or a Lender, and neither Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document (other than the Intercreditor Agreement) or other instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to such Agent.

Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  Each Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

Either Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by such Agent; provided, no such delegation shall serve as a release of such Agent or waiver by any Borrower of any rights hereunder.  Each Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Agents and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as an Agent.

Subject to the appointment and acceptance of a successor Administrative Agent or Collateral Agent, as the case may be, as provided in this paragraph and subject (in the case of the Collateral Agent) to the terms of the Intercreditor Agreement, each Agent may resign at any time by notifying the Lenders, the Issuing Banks and the Company.  Upon any such resignation, the Required Lenders shall have the right, in consultation with (and, so long as no Default shall then exist, the consent of, such consent not to be unreasonably withheld) the Company, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative Agent or Collateral Agent, as the case may be, hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder.  The fees payable by any Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between such Borrower and such successor.  After any Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent or Collateral Agent, as the case may be.

Each Lender acknowledges and agrees that the extensions of credit made hereunder are commercial loans and letters of credit and not investments in a business enterprise or securities.  Each Lender further represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and  has, independently and without reliance upon either Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder.  Each Lender shall, independently and without reliance upon either Agent or any other Lender and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Company and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document, any related agreement or any document furnished hereunder or thereunder and in deciding whether or to the extent to which it will continue as a lender or assign or otherwise transfer its rights, interests and obligations hereunder.

None of the Lenders, if any, identified in this Agreement as a Syndication Agent or Senior Managing Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender.  Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in their respective capacities as Syndication Agent or Senior Managing Agent, as applicable, as it makes with respect to the Agents in the preceding paragraph.

 

The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in the case of the Agents) authorized to act for, any other Lender.  The Agents shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.

In its capacity, the Collateral Agent is a “representative” of the Secured Parties within the meaning of the term “secured party” as defined in the New York UCC.  Each Lender agrees that no Secured Party (other than the Collateral Agent) shall have the right individually to seek to realize upon the security granted by any Collateral Document, it being understood and agreed that such rights and remedies may be exercised solely by the Collateral Agent for the benefit of the Secured Parties upon the terms of the Collateral Documents.  In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Collateral Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Collateral Agent on behalf of the Secured Parties.  The Lenders hereby authorize the Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by the Collateral Agent upon any Collateral (i) as described in Section 9.02(d) and/or Section 9.18; (ii) as permitted by, but only in accordance with, the terms of the applicable Loan Document; or (iii) if approved, authorized or ratified in writing by the Required Lenders, unless such release is required to be approved by all of the Lenders hereunder.  Upon request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant hereto.  Upon any sale or transfer of assets constituting Collateral which is permitted pursuant to the terms of any Loan Document, or consented to in writing by the Required Lenders or all of the Lenders, as applicable, and upon at least five (5) Business Days’ prior written request (or such shorter period as the Collateral Agent may permit) by the Company to the Collateral Agent, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent for the benefit of the Secured Parties herein or pursuant hereto upon the Collateral that was sold or transferred; provided, however, that (i) the Collateral Agent shall not be required to execute any such document on terms which, in the Collateral Agent’s opinion, would expose the Collateral Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Secured Obligations or any Liens upon (or obligations of the Company or any Subsidiary in respect of) all interests retained by the Company or any Subsidiary, including (without limitation) the proceeds of the sale, all of which shall continue to constitute part of the Collateral.  Any execution and delivery by the Collateral Agent of documents in connection with any such release shall be without recourse to or warranty by the Collateral Agent.

In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Collateral Agent (irrespective of whether the principal of any Loan or any LC Disbursement shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Collateral Agent shall have made any demand on the Company) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a)   to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Exposure and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Collateral Agent (including any claim under Sections 2.12, 2.13, 2.15, 2.16, 2.17 and 9.03) allowed in such judicial proceeding; and

 

(b)   to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Collateral Agent and, in the event that the Collateral Agent shall consent to the making of such payments directly to the Lenders, the Issuing Banks or the other Secured Parties, to pay to the Collateral Agent any amount due to it, in its capacity as the Collateral Agent, under the Loan Documents (including under Section 9.03).

The Secured Parties hereby irrevocably authorize the Collateral Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Secured Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Secured Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Credit Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Collateral Agent (whether by judicial action or otherwise) in accordance with any applicable law.  In connection with any such credit bid and purchase, the Secured Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Collateral Agent at the direction of the Required Lenders on a ratable basis (with Secured Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase).  In connection with any such bid (i) the Collateral Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’ ratable interests in the Secured Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Collateral Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Collateral Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Collateral Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Secured Obligations which were credit bid, interests, whether as equity, partnership, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Secured Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Secured Obligations assigned to the acquisition vehicle exceeds the amount of Secured Obligations credit bid by the acquisition vehicle or otherwise), such Secured Obligations shall automatically be reassigned to the Secured Parties pro rata and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Secured Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.  Notwithstanding that the ratable portion of the Secured Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Collateral Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

 

 

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(b)  Notices and other communications to the Lenders and the Issuing Banks hereunder may be delivered or furnished by using Electronic Systems pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

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