AMENDED AND RESTATED FINANCING AGREEMENT Dated as of November 6, 2013 by and among MOTORCAR PARTS OF AMERICA, INC., as Borrower, THE LENDERS FROM TIME TO TIME PARTY HERETO, as Lenders, CERBERUS BUSINESS FINANCE, LLC, as Collateral Agent, and PNC BANK,...

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Exhibit 10.7

 

AMENDED AND RESTATED FINANCING AGREEMENT

Dated as of November 6, 2013

by and among

MOTORCAR PARTS OF AMERICA, INC.,

as Borrower,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

as Lenders,

CERBERUS BUSINESS FINANCE, LLC,

as Collateral Agent,

and

PNC BANK, NATIONAL ASSOCIATION

as Administrative Agent

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TABLE OF CONTENTS

 

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AMENDED AND RESTATED FINANCING AGREEMENT

 

Amended and Restated Financing Agreement, dated as of November 6, 2013, by and among Motorcar Parts of America, Inc., a New York corporation (the "Borrower"), the lenders from time to time party hereto (each a "Lender" and collectively, the "Lenders"), Cerberus Business Finance, LLC, a Delaware limited liability company ("Cerberus"), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the "Collateral Agent"), and PNC Bank, National Association ("PNC"), as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the "Administrative Agent" and together with the Collateral Agent, each an "Agent" and collectively, the "Agents").

RECITALS

The Borrower, the lenders signatory thereto immediately prior to the effectiveness of the amendment and restatement of the Existing Financing Agreement (the "Existing Lenders"), Cerberus, as the collateral agent for the Existing Lenders, and PNC, as the administrative agent for the Existing Lenders, are parties to the Financing Agreement, dated as of January 18, 2012 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Existing Financing Agreement"), pursuant to which the Existing Lenders extended credit to the Borrower consisting of (a) one or more term loans in the aggregate principal amount of $105,000,000 (the "Existing Term Loan") and (b) a revolving credit facility in an aggregate principal amount not to exceed $20,000,000 at any time outstanding, which included a subfacility for the issuance of letters of credit (the "Existing Revolving Loans" and together with the Existing Term Loan, the "Existing Loans").

The Existing Loans (together with all accrued and unpaid interest, fees, indemnities, costs and other payment obligations that are outstanding immediately prior to the date hereof) are owing as of the Restatement Effective Date (as hereinafter defined) without set-off, counterclaim, recoupment, deduction or other defense to the Agents and the Lenders.

Pursuant to the Existing Financing Agreement, the Loan Parties granted to the Collateral Agent, for the benefit of the Agents and the Existing Lenders, a continuing security interest in all of their right, title and interest in all then existing and thereafter acquired or arising Collateral (as such term is defined in the Existing Financing Agreement) in order to secure the repayment of any and all of the Obligations (as such term is defined the Existing Financing Agreement).

The Borrower has requested that the Agents and the Lenders amend and restate the Existing Financing Agreement in order to, among other things, (a) amend, restate, convert and continue $95,000,000 of the Existing Term Loan as the Term Loan (as hereinafter defined) and (b) increase the amount of the revolving credit facility by $10,000,000 to $30,000,000.  The proceeds of the term loans and the loans made under the revolving credit facility shall be used to (i) make the  Ninth Amendment Effective Date Prepayment, (ii) fund general working capital purposes of the Borrower and for other general corporate purposes and (iii) pay fees and expenses related to this Agreement.  The letters of credit will be used for general working capital purposes.  The Lenders are severally, and not jointly, willing to extend and/or maintain such credit to the Borrower subject to the terms and conditions hereinafter set forth.

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In connection with the amendment and restatement of the Existing Financing Agreement, the Loan Parties have agreed to continue, confirm and reaffirm the grant to the Collateral Agent, for the benefit of the Agents and the Lenders, of the security interest in the Collateral to secure the Obligations as more fully set forth herein and in the other Loan Documents

In consideration of the premises and the covenants and agreements contained herein, the parties hereto agree that the Existing Financing Agreement shall be amended and restated as follows:

1.

DEFINITIONS; CERTAIN TERMS

 

i.            Definitions.  As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

"Account Debtor" means each debtor, customer or obligor in any way obligated on or in connection with any Account Receivable.

"Account Receivable" means, with respect to any Person, any and all rights of such Person to payment for goods sold and/or services rendered, including accounts, general intangibles and any and all such rights evidenced by chattel paper, instruments or documents, whether due or to become due and whether or not earned by performance, and whether now or hereafter acquired or arising in the future, and any proceeds arising therefrom or relating thereto.

"Action" has the meaning specified therefor in Section 12.12.

"Additional Amount" has the meaning specified therefor in Section 2.09(a).

"Administrative Agent" has the meaning specified therefor in the preamble hereto.

"Administrative Agent's Account" means an account at a bank designated by the Administrative Agent from time to time as the account into which the Loan Parties shall make all payments to the Administrative Agent for the benefit of the Agents and the Lenders under this Agreement and the other Loan Documents.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the Equity Interests having ordinary voting power for the election of members of the Board of Directors of such Person or (b) direct or cause the direction of the management and policies of such Person whether by contract or otherwise.  Notwithstanding anything herein to the contrary, in no event shall any Agent, any Lender or any of their respective Affiliates be considered an "Affiliate" of any Loan Party.

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"Agent" has the meaning specified therefor in the preamble hereto.

 

"Agent Advances" has the meaning specified therefor in Section 10.08(a).

"Agreement" means this Amended and Restated Financing Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the Agreement as the same may be in effect at the time such reference becomes operative.

"Anti-Terrorism Laws" means any laws relating to terrorism or money laundering, including, without limitation, (a) the Money Laundering Control Act of 1986 (i.e., 18 U.S.C. §§ 1956 and 1957), as amended, and regulations promulgated thereunder, (b) the Bank Secrecy Act, as amended, and regulations promulgated thereunder, (c) the USA PATRIOT Act, as amended, and regulations promulgated thereunder, (d) the laws, regulations and Executive Orders administered by the United States Department of the Treasury's Office of Foreign Assets Control ("OFAC"), (e) the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 and implementing regulations by the United States Department of the Treasury, (f) any law prohibiting or directed against terrorist activities or the financing of terrorist activities (e.g., 18 U.S.C. §§ 2339A and 2339B), or (g) any similar laws enacted in the United States or any other jurisdictions in which the parties to this agreement operate, as any of the foregoing laws may from time to time be amended, renewed, extended, or replaced and all other present and future legal requirements of any Governmental Authority governing, addressing, relating to, or attempting to eliminate, terrorist acts and acts of war and any regulations promulgated pursuant thereto.

"Applicable EBITDA Multiple" means, 3.47, on and as of the Restatement Effective Date, which multiple will be subsequently adjusted as of the end of each fiscal quarter thereafter of the Borrower and its Subsidiaries as set forth below for the immediately succeeding fiscal quarter.

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"Applicable Margin" means, as of any date of determination, (a) with respect to the interest rate of a Revolving Loan that is (i) a Reference Rate Loan or any portion thereof, 1.00% and (ii) a Eurodollar Rate Loan or any portion thereof, 2.50% and (b) with respect to the interest rate of a Term Loan that is (i) a Reference Rate Loan or any portion thereof, 4.25% and (ii) a Eurodollar Rate Loan or any portion thereof, 5.25%.

"Applicable Prepayment Premium" means, as of any date of determination, an amount equal to (a) during the period of time from and after the Restatement Effective Date up to and including the date that is the second anniversary of the Effective Date (January 18, 2014), an amount equal to 3.00% times the sum of (i) the amount of the reduction of the Total Revolving Credit Commitment on such date plus (ii) the principal amount of any prepayment of the Term Loan on such date, (b) during the period of time after the date that is the second anniversary of the Effective Date up to and including the date that is the third anniversary of the Effective Date (January 18, 2015), an amount equal to 2.00% times the sum of (i) the amount of the reduction of the Total Revolving Credit Commitment on such date plus (ii) the principal amount of any prepayment of the Term Loan on such date, and (c) thereafter, zero.

"Assignment and Acceptance" means an assignment and acceptance entered into by an assigning Lender and an assignee, and accepted by the Collateral Agent, in accordance with Section 12.07 hereof and substantially in the form of Exhibit E hereto or such other form acceptable to the Collateral Agent.

"Authorized Officer" means, with respect to any Person, the chief executive officer, chief financial officer, chief accounting officer, president or vice president of such Person.

"Availability" means, as of any date of determination, the difference between (a) the lesser of (i) the Borrowing Base and (ii) the Total Revolving Credit Commitment, and (b) the sum of (i) the aggregate outstanding principal amount of all Revolving Loans and (ii) all Letter of Credit Obligations.

"Bank Product Agreements" means those certain cash management service agreements entered into from time to time between the Borrower, on the one hand, and a Bank Product Provider, on the other hand, in connection with any of the Bank Products, including, without limitation, any Lender-Provided Hedge Agreement with respect to the Borrower's interest rate exposure.

"Bank Product Provider" means any Lender or Affiliate thereof that provides Bank Products to the Borrower.

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"Bank Product Obligations" means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Borrower to any Bank Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that the Borrower is obligated to reimburse to Administrative Agent or any Lender as a result of Administrative Agent or such Lender purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to the Borrower pursuant to the Bank Product Agreements.

"Bank Product Reserve" means, as of any date of determination, the amount of reserves that the Administrative Agent establishes from time to time (based upon the Administrative Agent's reasonable determination of the credit exposure in respect of the then outstanding Bank Products) in respect of Bank Products then provided or outstanding; provided that, the aggregate amount of such Bank Product Reserve shall not exceed $4,000,000 at any time.

"Bank Products" means any of the following services or facilities extended to the Borrower by any Bank Product Provider including:  (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled disbursement, accounts or services, and (g) Lender-Provided Hedge Agreements.

"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. § 101, et seq.), as amended, and any successor statute.

"Blocked Person" has the meaning assigned to such term in Section 6.01(hh).

"Board" means the Board of Governors of the Federal Reserve System of the United States.

"Board of Directors" means, (a) with respect to any corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (b) with respect to a partnership, the board of directors of the general partner of the partnership, (c) with respect to a limited liability company, the managing member or members or any controlling committee or board of directors of such company or the sole member or the managing member thereof, and (d) with respect to any other Person, the board or committee of such Person serving a similar function.

"Book Value" means, with respect to any Inventory of any Person, the lower of (a) cost (as reflected in the general ledger of such Person before customary (but not extraordinary) reserves established by such Person in good faith and in accordance with GAAP) and (b) market value, in each case, determined in accordance with GAAP calculated on a first-in first-out basis.

"Borrower" has the meaning specified therefor in the preamble hereto.

"Borrowing Base" means, as of any date of determination, the lesser of:

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"Borrowing Base Certificate" means a certificate signed by an Authorized Officer of the Borrower and setting forth the calculation of the Borrowing Base in compliance with Section 7.01(a)(vi), substantially in the form of Exhibit D.

"Business Day" means any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in Pittsburgh, Pennsylvania or New York City and, if the applicable Business Day relates to any Eurodollar Rate Loan, such day must also be a day on which dealings are carried on in the London interbank market.

"Capital Expenditures" means, with respect to any Person for any period, the sum of (a) the aggregate of all expenditures by such Person and its Subsidiaries during such period that in accordance with GAAP are or should be included in "property, plant and equipment" or in a similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or financed and including all Capitalized Lease Obligations paid or payable during such period, and (b) to the extent not covered by clause (a) above, the aggregate of all expenditures by such Person and its Subsidiaries during such period to acquire by purchase or otherwise the business or fixed assets of, or the Equity Interests of, any other Person; provided that, Capital Expenditures shall not include (i) any such expenditures made in connection with the replacement, substitution, repair or restoration of any assets to the extent financed (A) with insurance proceeds received by a Loan Party or any of its Subsidiaries on account of the loss of, or any damage to, the assets being replaced, substituted for, repaired or restored or (B) with the proceeds of any compensation awarded to a Loan Party or any of its Subsidiaries as a result of the taking, by eminent domain or condemnation, of the assets being replaced or substituted for, in each case of clauses (i)(A) and (i)(B), so long as such Loan Party is permitted to reinvest such proceeds pursuant to Section 2.05(c)(viii) (to the extent subject thereto), (ii) the purchase price of any equipment that is purchased simultaneously with the trade-in of any existing equipment by a Loan Party or any of its Subsidiaries to the extent that the gross amount of such purchase price is reduced by any credit granted by the seller of such equipment for the equipment being traded in, or (iii) the purchase price of any property, plant or equipment purchased within 180 days of the consummation of any disposition permitted under the terms of this Agreement by a Loan Party or any of its Subsidiaries of any other property, plant or equipment to the extent purchased with the Net Cash Proceeds of such disposition.

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"Capitalized Lease" means, with respect to any Person, any lease of real or personal property by such Person as lessee which is (a) required under GAAP to be capitalized on the balance sheet of such Person or (b) a transaction of a type commonly known as a "synthetic lease" (i.e., a lease transaction that is treated as an operating lease for accounting purposes but with respect to which payments of rent are intended to be treated as payments of principal and interest on a loan for Federal income tax purposes).

"Capitalized Lease Obligations" means, with respect to any Person, obligations of such Person and its Subsidiaries under Capitalized Leases, and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

"Cash Collateralize" means to deliver to the Administrative Agent an amount (whether in cash or in the form of a backstop letter of credit in form and substance reasonably satisfactory to, and issued by a U.S. commercial bank reasonably acceptable to, the Administrative Agent in its commercially reasonable discretion) equal to 105% of the sum of (a) the Maximum Undrawn Amount plus (b) the aggregate amount of all unreimbursed payments and disbursements on all such Letters of Credit which have not been converted to Revolving Loans plus (c) the amount of unpaid Letter of Credit Fees then accrued.  Derivatives of such term have corresponding meanings.

"Cash Equivalents" means (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case, maturing within six months from the date of acquisition thereof; (b) commercial paper, maturing not more than 270 days after the date of issue rated P‑1 by ▇▇▇▇▇'▇ or A‑1 by Standard & Poor's; (c) certificates of deposit maturing not more than 270 days after the date of issue, issued by commercial banking institutions and money market or demand deposit accounts maintained at commercial banking institutions, each of which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) repurchase agreements having maturities of not more than 90 days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause (c) above and which are secured by readily marketable direct obligations of the United States Government or any agency thereof; (e) money market accounts maintained with mutual funds having assets in excess of $2,500,000,000; and (f) marketable tax exempt securities rated A or higher by ▇▇▇▇▇'▇ or A+ or higher by Standard & Poor's, in each case, maturing within six months from the date of acquisition thereof.

"Cash Management Accounts" means the bank accounts of each Loan Party (other than accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Loan Party's employees) maintained at one or more Cash Management Banks listed on Schedule 8.01.

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"Cash Management Agreement" means, with respect to any deposit account, any securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance satisfactory to the Agents, among the Collateral Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account, effective to grant "control" (as defined under the applicable UCC) over such account to the Collateral Agent.

"Cash Management Bank" has the meaning specified therefor in Section 8.01(a).

"Cerberus" has the meaning specified therefor in the preamble hereto.

"CFC" means a "controlled foreign corporation" (as that term is defined in Section 957 of the Internal Revenue Code).

"Change in Law" means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case, pursuant to Basel III, shall, in each case, be deemed to be a "Change in Law," regardless of the date enacted, adopted or issued.

"Change of Control" means each occurrence of any of the following:

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"Collateral" means all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or purported to be granted by such Person as security for all or any part of the Obligations.

"Collateral Agent" has the meaning specified therefor in the preamble hereto.

"Collateral Records" means, to the extent relating to Accounts Receivable, Inventory, the other Revolver Priority Collateral or any Account Debtor or other Person obligated on or in connection with any of the Accounts Receivable, all of the Borrower's and all of each other Loan Party's present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of the Borrower and the other Loan Parties with respect to the foregoing maintained with or by any other Person).

"Collections" means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

"Commitments" means, with respect to each Lender, such Lender's Revolving Credit Commitment and Term Loan Commitment.

"Compliance Certificate" has the meaning assigned to such term in Section 7.01(a)(iv).

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"Consolidated EBITDA" means, with respect to any Person for any period, (a) the Consolidated Net Income of such Person and its Subsidiaries for such period, plus (b) without duplication, the sum of the following amounts of such Person and its Subsidiaries for such period and to the extent deducted in determining Consolidated Net Income of such Person for such period:  (i) Consolidated Net Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization expense, (v) the amount of all costs, fees and expenses incurred in connection with (A) the Transactions, (B) the Third Amendment and the Wanxiang Transaction Documents, (C) the Sixth Amendment and (D) liquidating the Excluded Subsidiaries in an aggregate amount not to exceed $2,000,000 and as approved in writing by the Required Lenders, (vi) severance charges in an aggregate amount not to exceed $100,000 for any Fiscal Year, (vii) the amount of all travel and other administrative costs, fees and expenses (including professional fees) incurred in connection with the management of the Excluded Subsidiaries in an aggregate amount not to exceed $75,000 for any fiscal quarter, (viii) any non-cash expenses incurred in connection with stock options and other equity-based compensation, (ix) non-cash charges reducing Consolidated Net Income (excluding any non-cash charge that results in an accrual of a reserve for cash charges in any future period) for such period, (x) standard inventory revaluation write-downs, (xi) non-cash losses on Hedging Agreements, (xii) commissions accrual adjustment, (xiii) losses from the Excluded Subsidiaries, (xiv) any expenses incurred in connection with stock offerings, (xv) for each fiscal quarter specified on Schedule 1.01(E), the expenses set forth on Schedule 1.01(E) in an aggregate amount not to exceed the amount set forth opposite such expenses for such fiscal quarter and (xvi) all Restricted Payments paid in cash during such period, if any, pursuant to clause (F) of the proviso in Section 7.02(h) minus (c) without duplication, the sum of the following amounts of such Person and its Subsidiaries for such period and to the extent included in determining Consolidated Net Income of such Person for such period: (i) non-cash items increasing Consolidated Net Income (other than the accrual of revenue or recording of Accounts Receivable in the ordinary course of business) for such period, (ii) non-cash gains on Hedging Agreements, and (iii) profits from the Excluded Subsidiaries, all as determined on a consolidated basis.

"Consolidated Funded Indebtedness" means, with respect to any Person at any date, all Indebtedness of such Person for borrowed money, determined on a consolidated basis in accordance with GAAP, which by its terms matures more than one year after the date of calculation, and any such Indebtedness maturing within one year from such date which is renewable or extendable at the option of such Person to a date more than one year from such date, including, in any event, with respect to the Borrower and its Subsidiaries, the Revolving Loans, the Term Loans and all Capitalized Lease Obligations of the Borrower and its Subsidiaries.

"Consolidated Net Income" means, with respect to any Person for any period, the net income (loss) of such Person and its Subsidiaries for such period, determined on a consolidated basis and in accordance with GAAP, but excluding from the determination of Consolidated Net Income (without duplication) (a) any extraordinary or non recurring gains or losses or gains or losses from Dispositions, (b) non-cash restructuring charges, (c) any tax refunds, net operating losses or other net tax benefits and (d) gains or losses from currency fluctuations.

"Consolidated Net Interest Expense" means, with respect to any Person for any period, (a) gross interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis and in accordance with GAAP (including, without limitation, interest expense paid to Affiliates of such Person), less (b) interest income (including interest paid-in-kind) for such period.

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"Contingent Obligation" means, with respect to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (b) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, (c) any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term "Contingent Obligation" shall not include any product warranties extended in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

"Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

"Controlled Deposit Account" means each deposit account (including all funds on deposit therein) that is the subject of an effective Cash Management Agreement and that is maintained by any Loan Party with a financial institution approved by the Collateral Agent.

"Controlled Securities Account" means each securities account or commodity account (including all financial assets held therein and all certificates and instruments, if any, representing or evidencing such financial assets) that is the subject of an effective Cash Management Agreement and that is maintained by any Loan Party with a securities intermediary or commodity intermediary approved by the Collateral Agent.

"Current Value" has the meaning specified therefor in Section 7.01(o).

"Debtor Relief Law" means the Bankruptcy Code and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States or other applicable jurisdiction from time to time in effect.

 

"Default" means an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

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"Defaulting Lender" means any Revolving Loan Lender designated in writing by the Administrative Agent that (a) has failed to (i) fund all or any portion of its Loans within 1 Business Day of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender's determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within 1 Business Day of the date when due, (b) has notified the Borrower, the Administrative Agent or any L/C Issuer in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Revolving Loan Lender's obligation to fund a Loan hereunder and states that such position is based on such Revolving Loan Lender's determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within 3 Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Revolving Loan Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Revolving Loan Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Revolving Loan Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Revolving Loan Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Revolving Loan Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Revolving Loan Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower, each L/C Issuer and each Lender.

 

"Dilution" means a percentage, based upon the experience of the immediately prior ninety (90) consecutive days, that is the result of dividing the dollar amount of (a) discounts, advertising allowances, credits, or other similar items that are granted in the ordinary course of business with respect to the Borrower's Accounts Receivable during such period, by (b) the Borrower's ▇▇▇▇▇▇▇▇ with respect to Accounts Receivable during such period.

 

"Dilution Reserve" means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts Receivable by one (1) percentage point for each percentage point by which Dilution is in excess of five percent (5.0%).

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"Discharge Date" means the date on which all Obligations (other than contingent indemnification obligations as to which no claim has been made) are paid in full in cash, all Letters of Credit are Cash Collateralized and all Commitments have been terminated.

"Disposition" means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells, assigns, transfers or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person, excluding (a) any sales of Inventory and scrap in the ordinary course of business on ordinary business terms, (b) any loss of property in an insurance casualty event so long as the proceeds from such insurance casualty event are applied in accordance with Section 2.05(c)(vii) (to the extent required pursuant to such Section), (c) any sales of Specified Accounts pursuant to a Factoring Agreement to the applicable Factor; provided, that all payments due and owing to the Borrower under any such Factoring Agreement are deposited directly in a Controlled Deposit Account and (d) intercompany transfers of property or assets between or among Loan Parties in the ordinary course of business.

"Disqualified Equity Interests" means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date which is 91 days after the Final Maturity Date, (b) is convertible into or exchangeable for (i) debt securities or (ii) any Equity Interests referred to in clause (a) above, in each case at any time prior to the date which is 91 days after the Final Maturity Date, (c) contains any repurchase obligation that may come into effect either (i) prior to payment in full of all Obligations or (ii) prior to the date that is 91 days after the Final Maturity Date or (d) provides for scheduled payments or the payment of cash dividends or distributions prior to the date that is 91 days after the Final Maturity Date.

"Dollar," "Dollars" and the symbol "$" each means lawful money of the United States of America.

 

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"Eligible Accounts Receivable" means the Accounts Receivable of the Borrower which are, and at all times continue to be, acceptable to the Administrative Agent in the exercise of its reasonable business judgment.  In general, an Account Receivable would be deemed to be eligible if:  (a) delivery of the merchandise or the rendition of the services has been completed with respect to such Account Receivable; (b) no return, rejection, repossession or dispute has occurred with respect to such Account Receivable, the Account Debtor has not asserted any setoff, defense or counterclaim with respect to such Account Receivable, and there has not occurred any extension of the time for payment with respect to such Account Receivable beyond customary terms without the consent of the Administrative Agent, provided that, in the case of any dispute, setoff, defense or counterclaim with respect to an Account Receivable, the portion of such Account Receivable not subject to such dispute, setoff, defense or counterclaim will not be ineligible solely by reason of this clause (b); (c) such Account Receivable is lawfully owned by the Borrower free and clear of any Lien other than in favor of the Collateral Agent for the benefit of the Agents and the Lenders and otherwise continues to be in full conformity with all representations and warranties made by the Borrower to the Agents and the Lenders with respect thereto in the Loan Documents; (d) such Account Receivable is unconditionally payable in Dollars within 390 days from the invoice date with respect to Specified Core Receivables and within 120 days from the invoice date with respect to other Accounts Receivable and is not evidenced by a promissory note, chattel paper or any other instrument or other document unless the original of such document is in the possession of the Collateral Agent and contains all necessary endorsements in favor of the Collateral Agent; (e) no more than 30 days have elapsed from the invoice due date and no more than 120 days (or 390 days with respect to any Specified Core Receivable) have elapsed from the invoice date with respect to such Account Receivable; (f) such Account Receivable is not due from an Affiliate of the Borrower; (g) such Account Receivable does not constitute an obligation of the United States or any other Governmental Authority (unless all steps required by the Administrative Agent in connection therewith, including notice to the United States Government under the Federal Assignment of Claims Act or any action under any state statute comparable to the Federal Assignment of Claims Act, have been duly taken in a manner satisfactory to the Administrative Agent); (h) the Account Debtor (or the applicable office of the Account Debtor) with respect to such Account Receivable is located in the continental United States or any province or territory of Canada (provided that, at any time upon the Administrative Agent's request, the Borrower shall execute and deliver, or cause to be executed and delivered, such other agreements, documents and instruments as may be required by the Administrative Agent to perfect the security interests of the Collateral Agent in those accounts of an Account Debtor with its chief executive office or principal place of business in Canada in accordance with the applicable laws of the province or territory of Canada in which such chief executive office or principal place of business is located, and take, or cause to be taken, such other and further actions as the Administrative Agent may reasonably request to enable the Collateral Agent, as secured party with respect thereto, to collect such accounts under the applicable federal, provincial or territorial laws of Canada), unless such Account Receivable is supported by a letter of credit or other similar obligation satisfactory to the Administrative Agent; (i) the Account Debtor with respect to such Account Receivable is not also a supplier to or creditor of the Borrower, unless such Account Debtor has executed a no-offset letter satisfactory to the Administrative Agent; (j) not more than 50% of the aggregate amount of all Accounts Receivable of the Account Debtor with respect to such Account Receivable have remained unpaid 30 days past the invoice due date or 120 days (or 390 days with respect to any Specified Core Receivable) past the invoice date; (k) the Account Debtor with respect to such Account Receivable (i) has not filed a petition for bankruptcy or any other relief under any Debtor Relief Law, (ii) has not failed, suspended business operations, become insolvent or called a meeting of its creditors for the purpose of obtaining any financial concession or accommodation, (iii) has not had or suffered to be appointed a receiver or a trustee for all or a significant portion of its assets or affairs or (iv) in the case of an Account Debtor who is an individual, is not an employee of the Borrower or any of its Affiliates and has not died or been declared incompetent; and (l) the Administrative Agent is, and continues to be, satisfied with the credit standing of the Account Debtor in relation to the amount of credit extended and the Administrative Agent believes, in the exercise of its reasonable business judgment, that the prospect of collection of such Account Receivable is not impaired for any reason.

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"Eligible Inventory" means all finished goods and raw materials (including cores and core components) Inventory of the Borrower that meets all of the following specifications:  (a) such Inventory is lawfully owned by the Borrower free and clear of any existing Lien other than Liens in favor of the Collateral Agent for the benefit of the Agents and the Lenders and otherwise continues to be in full conformity with all representations and warranties made by the Borrower to the Agents and the Lenders with respect thereto in the Loan Documents; (b) such Inventory is not held on consignment and may be lawfully sold; (c) the Borrower has the right to grant Liens on such Inventory; (d) such Inventory arose or was acquired in the ordinary course of the business of the Borrower and does not represent damaged, obsolete or unsalable goods; (e) no Account Receivable or document of title has been created or issued with respect to such Inventory; (f) such Inventory is located in one of the locations in the continental United States, any province or territory of Canada or Mexico listed on Schedule 6.01(ee) or such other locations in the continental United States, any province or territory of Canada or Mexico as the Agents may approve in writing from time to time; (g) if such Inventory consists of finished goods Inventory sold under a licensed trademark or if such Inventory contains or uses a medium subject to a copyright, the Agents shall be satisfied, in their reasonable discretion, that the Collateral Agent has rights to sell or dispose of such Inventory; (h) the Inventory is not work-in-process, supplies or packaging; and (i) such Inventory is and at all times shall continue to be acceptable to the Administrative Agent in the exercise of its reasonable business judgment.

"Employee Plan" means an employee benefit plan (other than a Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was maintained at any time during the six (6) calendar years preceding the date of any borrowing hereunder) for employees of any Loan Party or any of its ERISA Affiliates.

"Environmental Actions" means any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication from any Person or Governmental Authority involving violations of Environmental Laws or Releases of Hazardous Materials (a) from any assets, properties or businesses owned or operated by any Loan Party or any of its Subsidiaries or any predecessor in interest; (b) from adjoining properties or businesses; or (c) onto any facilities which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries or any predecessor in interest.

"Environmental Laws" means the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Federal Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), as such laws may be amended or otherwise modified from time to time, and any other present or future federal, state, local or foreign statute, ordinance, rule, regulation, order, judgment, decree, permit, license or other binding determination of any Governmental Authority imposing liability or establishing standards of conduct for protection of the environment or other government restrictions relating to the protection of the environment or the Release, deposit or migration of any Hazardous Materials into the environment.

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"Environmental Liabilities and Costs" means all liabilities, monetary obligations, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigations and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any environmental condition or a Release of Hazardous Materials from or onto (i) any property presently or formerly owned by any Loan Party or any of its Subsidiaries or (ii) any facility which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries.

"Environmental Lien" means any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs.

"Equity Interests" means (a) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable.

"Equity Issuance" means either (a) the sale or issuance by any Loan Party or any of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by the Borrower of any cash capital contributions.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case, as in effect from time to time.  References to sections of ERISA shall be construed also to refer to any successor sections.

"ERISA Affiliate" means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a "controlled group" within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.

"Eurodollar Notice" means a written notice in the form of Exhibit C.

"Eurodollar Option" has the meaning specified therefor in Section 2.07(a).

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"Eurodollar Rate" means, (a) with respect to any Revolving Loan to which the Eurodollar Option applies for any Interest Period applicable thereto, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or, if such rate is not available, the rate which is quoted by another source selected by the Administrative Agent which has been approved by the British Bankers' Association as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an "Alternate Source"), at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the London interbank offered rate for U.S. Dollars for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error), by (ii) a number equal to 1.00 minus the Eurodollar Rate Reserve Percentage and (b) with respect to any Term Loan to which the Eurodollar Option applies for any Interest Period applicable thereto, the greater of (i) 1.50% per annum and (ii) the interest rate described in clause (a) above.

The Eurodollar Rate shall be adjusted with respect to any Loan to which the Eurodollar Option applies that is outstanding on the effective date of any change in the Eurodollar Rate Reserve Percentage as of such effective date.  The Administrative Agent shall give prompt notice to the Borrower and the Lenders of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

"Eurodollar Rate Loan" means any Loan at any time that bears interest based on the Eurodollar Rate.

"Eurodollar Rate Reserve Percentage" means as of any day the maximum percentage in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to Eurocurrency funding (currently referred to as "Eurocurrency Liabilities").

"Event of Default" means any of the events set forth in Section 9.01.

"Excess Cash Flow" means, with respect to any Person for any period, (a) Consolidated EBITDA of such Person and its Subsidiaries for such period, less (b) the sum of (i) all scheduled cash principal payments (excluding any principal payments made pursuant to Section 2.05(c)(iv)) on the Term Loans made during such period, and all cash principal payments on Indebtedness (other than Indebtedness incurred under this Agreement) of such Person or any of its Subsidiaries during such period to the extent such other Indebtedness is permitted to be incurred, and such payments are permitted to be made, under this Agreement (but, in the case of revolving loans, only to the extent that the revolving credit commitment in respect thereof is permanently reduced by the amount of such payments), (ii) all Consolidated Net Interest Expense to the extent paid or payable in cash during such period, (iii) the cash portion of Capital Expenditures made by such Person and its Subsidiaries during such period to the extent permitted to be made under this Agreement (excluding Capital Expenditures to the extent financed through the incurrence of Indebtedness or through an Equity Issuance), (iv) all scheduled loan servicing fees and other similar fees in respect of Indebtedness of such Person or any of its Subsidiaries paid in cash during such period, to the extent such Indebtedness is permitted to be incurred, and such payments are permitted to be made, under this Agreement, (v) taxes paid in cash by such Person and its Subsidiaries for such period, (vi) the excess, if any, of Working Investment at the end of such period over Working Investment at the beginning of such period (or minus the excess, if any, of Working Investment at the beginning of such period over Working Investment at the end of such period), (vii) the cash portion of Permitted Investments made by such Person and its Subsidiaries during such period to the extent permitted to be made under this Agreement, (viii) all Applicable Prepayment Premium (as defined in the Existing Financing Agreement) paid in cash on or prior to the Restatement Effective Date during such period, if any, (ix) all Applicable Prepayment Premium paid in cash during such period, if any, (x) all amounts included in the calculation of Consolidated EBITDA pursuant to clause (b) of the definition of Consolidated EBITDA paid in cash during such period and (xi) the amount of interest paid in cash pursuant to the Wanxiang Guaranty for the fiscal quarter ended (A) June 30, 2013 in an aggregate amount not to exceed $190,000 and (B) September 30, 2013 in an aggregate amount not to exceed $464,000.

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

"Excluded Taxes" has the meaning specified therefor in Section 2.09(e).

"Excluded Subsidiaries" means Fenwick, Introcan, Fapco and each of their respective Subsidiaries.

"Executive Order No. 13224" means the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

"Existing Financing Agreement" has the meaning specified therefor in the recitals hereto.

"Existing Lenders" has the meaning specified therefor in the recitals hereto.

"Existing Loans" has the meaning specified therefor in the recitals hereto.

"Existing Revolving Loans" has the meaning specified therefor in the recitals hereto.

"Existing Term Loan" has the meaning specified therefor in the recitals hereto.

"Extraordinary Receipts" means any cash received by the Borrower or any of its Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.05(c)(v) or (vi) hereof), including, without limitation, (a) foreign, United States, state or local tax refunds, (b) pension plan reversions, (c) proceeds of insurance, (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (e) condemnation awards (and payments in lieu thereof), (f) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not an Affiliate of the Borrower or any of its Subsidiaries or (ii) received by the Borrower or any of its Subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person), (g) any purchase price adjustment received in connection with any purchase agreement and (h) any payments from the Borrower's or any of its Subsidiaries' customers in connection with the termination of any applicable customer contract.

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"Facility" means any real property, including, without limitation, the land on which such facility is located, all buildings and other improvements thereon, all fixtures located at or used in connection with such facility, all whether now or hereafter existing, owned, leased, operated or used by any Loan Party, including any New Facility.

"Factor" means a factor designated by the Borrower and reasonably acceptable to the Agents (it being agreed that the Factors party to the Factoring Agreements listed on Schedule 1.01(C) are reasonably acceptable to the Agents).

"Factoring Agreement" means the agreements listed on Schedule 1.01(C) and such other factoring agreements as are entered into by the Borrower in the ordinary course of business.

"Fapco" means Fapco, S.A. de C.V., a "Sociedad Anonima de Capital Variable" duly organized and existing under the laws of Mexico.

"FASB ASC" means the Accounting Standards Codification of the Financial Accounting Standards Board.

"FATCA" means Section 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

"Federal Funds Effective Rate" means, for any day, the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

"Fee Letter" means the amended and restated fee letter, dated as of the Restatement Effective Date, among the Borrower and the Collateral Agent.

"Fenco Insolvency Proceeding" means the Insolvency Proceeding of the Excluded Subsidiaries commenced in the U.S. Bankruptcy Court for the District of Delaware on June 10, 2013.

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"Fenwick" means Fenwick Automotive Products Limited, a corporation incorporated under the laws of Ontario.

"Final Maturity Date" means the earliest of (a) November 6, 2018, (b) the date on which all Loans shall become due and payable pursuant to Section 9.01 and, (c) the payment in full of all Obligations and the termination of all Commitments.

"Financial Statements" means (a) the audited consolidated balance sheet of the Borrower and its Subsidiaries and the Excluded Subsidiaries for the Fiscal Year ended March 31, 2013, and the related consolidated statement of operations, shareholders' equity and cash flows for the Fiscal Year then ended, (b) the unaudited consolidating balance sheet of the Borrower and its Subsidiaries for the Fiscal Year ended March 31, 2013, and the related consolidating statement of operations and cash flows for the Fiscal Year then ended, and (c) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries for the 5 months ended August 30, 2013 and the related consolidating statement of operations and cash flows for the 5 months then ended.

"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries ending on March 31 of each calendar year.

 

"Fixed Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of (a) Consolidated EBITDA of such Person and its consolidated Subsidiaries for such period, to (b) the sum of (i) all principal of Indebtedness of such Person and its Subsidiaries scheduled to be paid or prepaid during such period (other than mandatory prepayments made pursuant to Section 2.05(c)) to the extent there is an equivalent permanent reduction in the commitments thereunder, plus (ii) Consolidated Net Interest Expense of such Person and its Subsidiaries for such period (excluding (A) the non-cash portions of Consolidated Net Interest Expense and (B) interest paid pursuant to the Wanxiang Guaranty for the fiscal quarter ended (1) June 30, 2013 in an aggregate amount not to exceed $190,000 and (2) September 30, 2013 in an aggregate amount not to exceed $464,000), plus (iii) income taxes paid or payable by such Person and its Subsidiaries during such period, plus (iv) cash dividends or distributions paid, or the purchase, redemption or other acquisition or retirement for value (including in connection with any merger or consolidation), by such Person or any of its Subsidiaries, in respect of the Equity Interests of such Person or any of its Subsidiaries (other than dividends or distributions paid by a Loan Party to any other Loan Party) during such period, plus (v) non-financed Capital Expenditures made by such Person and its Subsidiaries during such period; provided that for the fiscal quarter ending December 31, 2013, solely for the purposes of clause (b)(i) of this definition, the principal amount of the Existing Term Loan paid on October 1, 2013 pursuant to Section 2.03(b) of the Existing Financing Agreement shall be $1,350,000.

 

"Funding Losses" has the meaning specified therefor in Section 2.07(e).

"GAAP" means generally accepted accounting principles in effect from time to time in the United States, applied on a consistent basis, provided that for the purpose of Section 7.03 hereof and the definitions used therein, "GAAP" shall mean generally accepted accounting principles in effect on the date hereof and consistent with those used in the preparation of the Financial Statements, provided, further, that if there occurs after the date of this Agreement any change in GAAP that affects in any respect the calculation of any covenant contained in Section 7.03 hereof, the Agents and the Borrower shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant with the intent of having the respective positions of the Lenders and the Borrower after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the covenants in Section 7.03 hereof shall be calculated as if no such change in GAAP has occurred.

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"Governing Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the operating agreement; (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture agreement, declaration or other applicable agreement or documentation evidencing or otherwise relating to its formation or organization; and (d) with respect to any of the entities described above, any other agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization.

"Governmental Acts" has the meaning specified therefor in Section 3.09.

"Governmental Authority" means any nation or government, any Federal, state, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

"Guarantor" means each Person which guarantees, pursuant to Section 7.01(b) or otherwise, all or any part of the Obligations.

"Guaranty" means each guaranty, substantially in the form of Exhibit G, made by a Guarantor in favor of the Collateral Agent for the benefit of the Agents and the Lenders guaranteeing all or part of the Obligations.

"Hazardous Material" means (a) any element, compound or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous substance or chemical, hazardous waste, special waste, or solid waste under Environmental Laws or that is likely to cause immediately, or at some future time, harm to or have an adverse effect on, the environment or risk to human health or safety, including, without limitation, any pollutant, contaminant, waste, hazardous waste, toxic substance or dangerous good which is defined or identified in any Environmental Law and which is present in the environment in such quantity or state that it contravenes any Environmental Law; (b) petroleum and its refined products; (c) polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste characteristic, including, without limitation, corrosivity, ignitability, toxicity or reactivity as well as any radioactive or explosive materials; and (e) any raw materials, building components (including, without limitation, asbestos-containing materials) and manufactured products containing hazardous substances listed or classified as such under Environmental Laws.

 

"Hedge Liabilities" means the liabilities of the Borrower under any Hedging Agreement as calculated on a marked-to-market basis in accordance with GAAP.

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"Hedging Agreement" means any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.

"Highest Lawful Rate" means, with respect to any Agent or any Lender, the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Obligations under laws applicable to such Agent or such Lender which are currently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow.

"Holdout Lender" has the meaning specified therefor in Section 12.02(b).

"Indebtedness" means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables, accounts payable incurred to core suppliers in the ordinary course of such Person's business or other accounts payable incurred in the ordinary course of such Person's business, in each case, not outstanding for more than 60 days after the due date thereof); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or upon which interest payments are customarily made; (d) all reimbursement, payment or other obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder may be limited to repossession or sale of such property; (e) all Capitalized Lease Obligations of such Person; (f) all obligations and liabilities, contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities; (g) all obligations and liabilities, calculated on a basis satisfactory to the Agents and in accordance with accepted practice, of such Person under Hedging Agreements; (h) all monetary obligations under any receivables factoring, receivable sales or similar transactions and all monetary obligations under any synthetic lease, tax ownership/operating lease, off-balance sheet financing or similar financing; (i) all Contingent Obligations in respect of obligations that otherwise constitute Indebtedness; (j) all Disqualified Equity Interests; and (k) all obligations referred to in clauses (a) through (j) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness (but limited to the value of the asset subject to such Lien).  The Indebtedness of any Person shall include the Indebtedness of any partnership of or joint venture in which such Person is a general partner or a joint venturer, except to the extent that such Person is not liable for such Indebtedness.

 

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"Indemnitees" has the meaning specified therefor in Section 12.15.

"Insolvency Proceeding" means any proceeding commenced by or against any Person under any provision of any Debtor Relief Law.

"Intercompany Subordination Agreement" means the Intercompany Subordination Agreement, dated as of the Effective Date, made by the Borrower and its Subsidiaries in favor of the Collateral Agent for the benefit of the Agents and the Lenders.

"Interest Payment Date" means (a) as to any Reference Rate Loan, the first day of each month, (b) as to any Eurodollar Rate Loan, the last day of such Interest Period, and (c) as to any mandatory prepayment required pursuant to this Agreement, the date of such prepayment.

"Interest Period" means, as to any Eurodollar Rate Loan, the period commencing on the date such Loan is borrowed or continued as, or converted into, a Eurodollar Rate Loan and ending on the date one, two or three months thereafter, as selected by the Borrower; provided that:

 

"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended (or any successor statute thereto), and the regulations thereunder.

"Introcan" means Introcan Inc., a Delaware corporation.

"Inventory" means, with respect to any Person, all goods and merchandise of such Person, including, without limitation, all raw materials, work-in-process, packaging, supplies, materials and finished goods of every nature used or usable in connection with the shipping, storing, advertising or sale of such goods and merchandise, whether now owned or hereafter acquired.

 

"Investment" means, with respect to any Person, (a) any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances or other extensions of credit (excluding Accounts Receivable arising in the ordinary course of business), capital contributions or acquisitions of Indebtedness (including, any bonds, notes, debentures or other debt securities), Equity Interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), (b) the purchase or ownership of any futures contract or liability for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or (c) any investment in any other items that are or would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP.

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"ISP98 Rules" has the meaning specified therefor in Section 3.02(b).

 

"L/C Issuer" means PNC or such other bank as the Administrative Agent may select in its sole and absolute discretion.

"Lease" means any lease of real property to which any Loan Party or any of its Subsidiaries is a party as lessor or lessee.

"Lender" has the meaning specified therefor in the preamble hereto.

"Lender-Provided Hedge Agreement" means a Hedging Agreement which is provided by any Lender, Agent or any affiliate thereof.  The Hedge Liabilities of the Borrower to the provider of any Lender-Provided Hedge Agreement shall be "Obligations" hereunder, guaranteed obligations under any Guaranty and secured obligations under any Security Agreement and otherwise treated as Obligations for purposes of each of the Loan Documents. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Loan Documents, but the Persons to whom such Hedge Liabilities are owed shall not have any right to vote or take any other actions under this Agreement and the other Loan Documents.

"Letter of Credit Application" has the meaning specified therefor in Section 3.02(a).

"Letter of Credit Borrowing" has the meaning specified therefor in Section 3.04(d).

"Letter of Credit Fees" has the meaning specified therefor in Section 2.06(b).

 

"Letter of Credit Guaranty" means one or more guaranties by the Administrative Agent in favor of the L/C Issuer guaranteeing or relating to the Borrower's obligations to the L/C Issuer under a reimbursement agreement, Letter of Credit Application or other like document in respect of any Letter of Credit.

 

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"Lien" means any mortgage, deed of trust, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature, including, without limitation, any conditional sale or title retention arrangement, any Capitalized Lease and any assignment, deposit arrangement or financing lease intended as, or having the effect of, security.

"Loan" means the Term Loan or any Revolving Loan made by an Agent or a Lender to the Borrower pursuant to ARTICLE II hereof.

"Loan Account" means an account maintained hereunder by the Administrative Agent on its books of account at the Payment Office, and with respect to the Borrower, in which the Borrower will be charged with all Loans made to, and all other Obligations incurred by, the Borrower.

"Loan Document" means this Agreement, any Bank Product Agreement, any Cash Management Agreement, the Fee Letter, any Guaranty, the Intercompany Subordination Agreement, any joinder agreement, any Letter of Credit Application, any Mortgage, any collateral access agreement, any landlord waiver, any Perfection Certificate, the Pledge Agreement, any Security Agreement, the Wanxiang Subordination Agreement and any other agreement, instrument, certificate, report and other document executed and delivered pursuant hereto or thereto or otherwise evidencing or securing any Loan, any Letter of Credit Obligation or any other Obligation.

"Loan Party" means the Borrower and any Guarantor.

"Material Adverse Effect" means a material adverse effect on any of (a) the operations, business, assets, properties, liabilities or condition (financial or otherwise) of the Loan Parties taken as a whole, (b) the ability of any Loan Party to fully and timely perform any of its payment or other material obligations under any Loan Document to which it is a party, (c) the legality, validity or enforceability of this Agreement or any other Loan Document, (d) the rights and remedies of any Agent or any Lender under any Loan Document, or (e) the value of the Collateral or the validity, perfection or priority of a Lien in favor of the Collateral Agent for the benefit of the Agents and the Lenders on any of the Collateral; provided that, notwithstanding the foregoing, the lack of perfection or priority of any Liens granted to the Collateral Agent solely in respect of Collateral with an aggregate value not in excess of $250,000 (valued at fair market value on Collateral other than cash) shall not be deemed a Material Adverse Effect.

 

"Material Contract" means, with respect to any Person, (a) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $1,000,000 or more in any Fiscal Year (other than (i) purchase orders in the ordinary course of the business of such Person or such Subsidiary and (ii) contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days' notice without penalty or premium) and (b) all other contracts or agreements material to the business, operations, condition (financial or otherwise), performance, prospects or properties of such Person or such Subsidiary.

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"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor thereto.

"Mortgage" means a mortgage, deed of trust or deed to secure debt, in form and substance satisfactory to the Collateral Agent, made by a Loan Party in favor of the Collateral Agent for the benefit of the Agents and the Lenders, securing the Obligations and delivered to the Collateral Agent.

"Motorcar Mexico" means Motorcar Parts de Mexico, S.A. de C.V., a "Sociedad Anonima de Capital Variable" duly organized and existing under the laws of Mexico.

"Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has contributed to, or has been obligated to contribute, at any time during the preceding six (6) years.

"Net Amount of Eligible Accounts Receivable" means the aggregate unpaid invoice amount of Eligible Accounts Receivable less, without duplication, sales, excise or similar taxes, returns, discounts, chargebacks, claims, advance payments, credits and allowances of any nature at any time issued, owing, granted, outstanding, available or claimed with respect to such Eligible Accounts Receivable.

"Net Cash Proceeds" means, (a) with respect to any Disposition or the receipt of Extraordinary Receipts consisting of insurance proceeds or condemnation awards by any Person or any of its Subsidiaries, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Person or such Subsidiary, in connection therewith after deducting therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection therewith (other than Indebtedness under this Agreement), (ii) reasonable expenses related thereto incurred by such Person or such Subsidiary in connection therewith, (iii) transfer and other taxes (other than net income taxes) paid to any taxing authorities by such Person or such Subsidiary in connection therewith, and (iv) net income taxes to be paid in connection therewith (after taking into account any tax credits or deductions and any tax sharing arrangements) and (b) with respect to the issuance or incurrence of any Indebtedness, an Equity Issuance or the receipt of Extraordinary Receipts (other than insurance proceeds or condemnation awards) by any Person or any of its Subsidiaries, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Person or such Subsidiary in connection therewith, after deducting therefrom only (i) reasonable expenses related thereto incurred by such Person or such Subsidiary in connection therewith, (ii) transfer and other taxes (other than net income taxes) paid by such Person or such Subsidiary in connection therewith and (iii) net income taxes to be paid in connection therewith (after taking into account any tax credits or deductions and any tax sharing arrangements); in each case of clause (a) and (b) to the extent, but only to the extent, that the amounts so deducted are (x) actually paid to a Person that, except in the case of reasonable out-of-pocket expenses, is not an Affiliate of such Person or any of its Subsidiaries and (y) properly attributable to such transaction or to the asset that is the subject thereof.

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"Net Liquidation Percentage" shall mean, as of any date of determination, the percentage of the book value of the Borrower's Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of all associated costs and expenses of such liquidation, such percentage to be as determined from time to time by an appraisal company selected by the Agents.  The Net Liquidation Percentage shall be calculated for (a) finished goods located in the United States, (b) all other Inventory located in the United States on a blended rate basis, (c) finished goods located in Mexico and (d) all other Inventory located in Mexico on a blended rate basis.

"New Facility" has the meaning specified therefor in Section 7.01(o).

"New Lending Office" has the meaning specified therefor in Section 2.09(d).

"Ninth Amendment" means the Ninth Amendment and Waiver to the Existing Financing Agreement, dated as of November 6, 2013, among the Borrower, the Agents, the Existing Lenders and the Lenders.

"Ninth Amendment Effective Date" means the date on which the Ninth Amendment shall become effective in accordance with its terms.

"Ninth Amendment Effective Date Prepayment" has the meaning specified therefor in the Ninth Amendment.

"Non-U.S. Lender" has the meaning specified therefor in Section 2.09(d).

"Notice of Borrowing" has the meaning specified therefor in Section 2.02(a).

"Obligations" means all present and future indebtedness, obligations, and liabilities of each Loan Party to the Agents and the Lenders arising under or in connection with this Agreement or any other Loan Document, whether or not the right of payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 9.01.  Without limiting the generality of the foregoing, the Obligations of each Loan Party under the Loan Documents include (a) the obligation (irrespective of whether a claim therefor is allowed in an Insolvency Proceeding) to pay principal, interest, charges, costs, expenses, fees, the Applicable Prepayment Premium, attorneys' fees and disbursements, indemnities and other amounts payable by such Person under the Loan Documents, (b) the obligation of such Person to reimburse any amount in respect of any of the foregoing that any Agent or any Lender (in its sole discretion) may elect to pay or advance on behalf of such Person pursuant to the Loan Documents and (c) all Bank Product Obligations.

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"OFAC Sanctions Programs" means the laws, regulations and Executive Orders administered by OFAC, including but not limited to, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as it has been or shall thereafter be renewed, extended, amended, or replaced, and the list of Specially Designated Nationals and Blocked Persons administered by OFAC, as such list may be amended from time to time.

"Operating Lease Obligations" means all obligations for the payment of rent for any real or personal property under leases or agreements to lease, other than Capitalized Lease Obligations.

 

 

"Other Taxes" has the meaning specified therefor in Section 2.09(b).

"Participant Register" has the meaning specified therefor in Section 12.07(g).

"Participation Commitment" means each Revolving Loan Lender's obligation to buy a participation of the Letters of Credit issued hereunder.

"Participation Revolving Loan" has the meaning specified therefor in Section 3.04(c) hereof.

"Payment Office" means PNC's office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or at such other office or offices of PNC as may be designated in writing from time to time by the Administrative Agent to the Collateral Agent and the Borrower.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto.

"Perfection Certificate" means a certificate in form and substance satisfactory to the Collateral Agent providing information with respect to the property of each Loan Party.

"Permitted Indebtedness" means:

 

(b)            any other Indebtedness listed on Schedule 7.02(b), and the extension of maturity, refinancing or modification of the terms thereof; provided, however, that (i) such extension, refinancing or modification is pursuant to terms that are not less favorable to the Loan Parties and the Lenders than the terms of the Indebtedness being extended, refinanced or modified and (ii) after giving effect to such extension, refinancing or modification, the amount of such Indebtedness is not greater than the amount of Indebtedness outstanding immediately prior to such extension, refinancing or modification (other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto);

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"Permitted Intercompany Advances" means:

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"Permitted Investments" means:

 

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"Permitted Liens" means:

 

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"Permitted Specified Liens" means Permitted Liens under clauses (a), (b) and (c) of the definition of Permitted Liens, and, solely in the case of Section 7.01(b)(i), including clauses (g), (h) and (i) of the definition of Permitted Liens.

"Person" means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority.

"Plan" means any Employee Plan or Multiemployer Plan.

"Pledge Agreement" means the Pledge Agreement, dated as of the Effective Date, by and among the Borrower, Motorcar Mexico and the Collateral Agent (as amended, restated, supplemented or otherwise modified from time to time).

"PNC" has the meaning specified therefor in the preamble hereto.

"Post-Default Rate" means a rate of interest per annum equal to the rate of interest otherwise in effect from time to time pursuant to the terms of this Agreement plus 2.00%, or, if a rate of interest is not otherwise in effect, interest at the highest rate specified herein for any Loan then outstanding prior to an Event of Default plus 2.00%.

"Pro Rata Share" means:

 

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"Proceeds" means (a) all "proceeds" (as defined in Article 9 of the Uniform Commercial Code) with respect to the Collateral and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

 

"Qualified Cash" means, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of the Loan Parties that is subject to a Cash Management Agreement.

"Qualified Equity Interests" means, with respect to any Person, all Equity Interests of such Person that are not Disqualified Equity Interests.

"Real Property Deliverables" means each of the following agreements, instruments and other documents in respect of each Facility:

 

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"Reference Bank" means PNC, its successors or any other commercial bank designated by the Administrative Agent to the Borrower from time to time.

"Reference Rate" means (a) in the case of Revolving Loans, the greatest of (i) the Federal Funds Effective Rate plus 0.50% per annum, (ii) the Eurodollar Rate (which rate shall be calculated based upon an Interest Period of 1 month and shall be determined on a daily basis) plus 1.00% per annum and (iii) the rate of interest publicly announced by the Reference Bank in New York, New York from time to time as its reference rate, base rate or prime rate and (b) in the case of the Term Loan, the greatest of (i) 3.00% per annum, (ii) the Federal Funds Effective Rate plus 0.50% per annum, (iii) the Eurodollar Rate (which rate shall be calculated based upon an Interest Period of 1 month and shall be determined on a daily basis) plus 1.00% per annum and (iv) the rate of interest publicly announced by the Reference Bank in New York, New York from time to time as its reference rate, base rate or prime rate.  The reference rate, base rate or prime rate is determined from time to time by the Reference Bank as a means of pricing some loans to its borrowers and neither is tied to any external rate of interest or index nor necessarily reflects the lowest rate of interest actually charged by the Reference Bank to any particular class or category of customers.  Each change in the Reference Rate shall be effective from and including the date such change is publicly announced as being effective.

 

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"Regulation T", "Regulation U" and "Regulation X" mean, respectively, Regulations T, U and X of the Board or any successor, as the same may be amended or supplemented from time to time.

"Reimbursement Obligations" has the meaning specified therefor in Section 3.04(b).

"Related Fund" means, with respect to any Person, an Affiliate of such Person, or a fund or account managed by such Person or an Affiliate of such Person.

"Related Party Assignment" has the meaning specified therefor in Section 12.07(b).

"Related Party Register" has the meaning specified therefor in Section 12.07(d).

"Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through or in the ambient air, soil, surface or ground water, or property.

"Remedial Action" means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the indoor or outdoor environment; (b) prevent or minimize a Release or threatened Release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (c) perform pre-remedial studies and investigations and post-remedial operation and maintenance activities; or (d) perform any other actions authorized by 42 U.S.C. § 9601.

"Replacement Lender" has the meaning specified therefor in Section 12.02(b).

"Reportable Event" means an event described in Section 4043 of ERISA (other than an event not subject to the provision for 30-day notice to the PBGC under the regulations promulgated under such Section).

 

"Required Lenders" means the Required Revolving Loan Lenders and the Required Term Loan Lenders.

 

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"Requirements of Law" means, with respect to any Person, collectively, the common law and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

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"Revolver Priority Collateral Proceeds" means the Proceeds of Revolver Priority Collateral.

 

"Revolving Credit Commitment" means, with respect to each Lender, the commitment of such Lender to make Revolving Loans to the Borrower in the amount set forth opposite such Lender's name in Schedule 1.01(A) hereto  or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amount may be terminated or reduced from time to time in accordance with the terms of this Agreement.

"Revolving Loan" means a loan made by a Revolving Loan Lender to the Borrower pursuant to Section 2.01(a)(i).

"Revolving Loan Lender" means a Lender with a Revolving Credit Commitment.

"Revolving Loan Obligations" means any Obligations with respect to the Revolving Loans (including without limitation, the principal thereof, the interest thereon, and the fees and expenses specifically related thereto).

"Sale and Leaseback Transaction" shall mean, with respect to any Loan Party or any of its Subsidiaries, any arrangement, directly or indirectly, with any Person whereby such Loan Party or such Subsidiary shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

"SEC" means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.

"Securities Act" means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time.

"Securitization" has the meaning specified therefor in Section 12.07(j).

 

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"Settlement Period" has the meaning specified therefor in Section 2.02(d)(i) hereof.

"Seventh Amendment" means the Seventh Amendment to the Existing Financing Agreement, dated as of August 26, 2013, among the Borrower, the Agents and the Existing Lenders.

"Sixth Amendment" means the Sixth Amendment to the Existing Financing Agreement, dated as of June 14, 2013, among the Borrower, the Agents and the Existing Lenders.

"Solvent" means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is not less than the total amount of the liabilities of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its existing debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

"Specified Accounts" means the Accounts Receivable of the Borrower with the payment terms and owed by the Account Debtors listed on Schedule 1.01(B).

"Specified Core Receivables" means the Accounts Receivable from the Borrower's customers listed on Schedule 1.01(D) (as such Schedule may be supplemented in writing by the Borrower from time to time with the consent of the Administrative Agent), which have extended payment terms of up to 360 days from the invoice date.

"Standard & Poor's" means Standard & Poor's Ratings Services, a division of The McGraw‑Hill Companies, Inc. and any successor thereto.

 

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"Taxes" has the meaning specified therefor in Section 2.09(a).

"Termination Event" means (a) a Reportable Event with respect to any Employee Plan, (b) any event that causes any Loan Party or any of its ERISA Affiliates to incur liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Internal Revenue Code, (c) the filing of a notice of intent to terminate an Employee Plan or the treatment of an Employee Plan amendment as a termination under Section 4041(c) of ERISA, (d) the institution of proceedings by the PBGC to terminate an Employee Plan, or (e) any other event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Employee Plan.

"Term Loan" has the meaning specified therefor in Section 2.01(a)(ii).

"Term Loan Commitment" means, with respect to each Lender, the commitment of such Lender to make the Term Loan to the Borrower pursuant to the Existing Financing Agreement (or the applicable assignment date) in the amount set forth in Schedule 1.01(A) and Schedule 1.01(G) to the Existing Financing Agreement or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as the same may be terminated or reduced from time to time in accordance with the terms of this Agreement.

"Term Loan Lender" means a Lender with a Term Loan Commitment (or a Lender that holds all or any portion of the unpaid principal amount of the Term Loan).

 

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"TTM Consolidated EBITDA" means, with respect to any period, the Consolidated EBITDA of the Borrower and its Subsidiaries for the twelve-month period then ended.

"UCP 600" has the meaning specified therefor in Section 3.02(b).

"Uniform Commercial Code" has the meaning specified therefor in Section 1.04(b).

 

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"Wanxiang Guaranty" means that certain Guaranty, dated as of August 22, 2012, by the Borrower in favor of Wanxiang.

"Wanxiang Subordination Agreement" means the Subordination Agreement, dated as of August 22, 2012, by the Subordinated Creditors (as defined therein) and the Borrower in favor of the Collateral Agent, as supplemented by the consent set forth in Section 5 of the Seventh Amendment and as amended by the First Amendment to Subordination Agreement, dated as of the Restatement Effective Date, by the Subordinated Creditors and the Borrower in favor of the Collateral Agent.

"Wanxiang Transaction Documents" means the Wanxiang Credit Agreement, Wanxiang Guaranty and the Wanxiang Warrant.

"Wanxiang Warrant" means the Warrant (as defined in the Wanxiang Credit Agreement).

"WARN" has the meaning specified therefor in Section 6.01(z).

"Warrant" means the warrant certificate covering the purchase of shares of common stock of the Borrower substantially in the form of Exhibit H hereto, together with the rights to purchase such common stock of the Borrower provided thereby and all warrant certificates covering such common stock issued upon transfer, division or combination of, or in substitution for, any thereof.  For the avoidance of doubt, the Warrant is not a "Loan Document" and the Borrower's obligations thereunder shall not constitute "Obligations.

"Working Investment" means, at any date of determination thereof, (a) the sum, for any Person and its Subsidiaries, of (i) the unpaid face amount of all Accounts Receivable of such Person and its Subsidiaries as at such date of determination, plus (ii) the aggregate amount of long-term core inventory and long-term core inventory deposits of such Person and its Subsidiaries as at such date of determination, plus (iii) the aggregate amount of Inventory and unreturned Inventory of such Person and its Subsidiaries as at such date of determination, plus (iv) the aggregate amount of prepaid expenses and other current assets (other than cash and Cash Equivalents that are not described in clauses (a)(i) through (a)(iii) above) of such Person and its Subsidiaries as at such date of determination, minus (b) the sum, for such Person and its Subsidiaries, of (i) the unpaid amount of all accounts payable of such Person and its Subsidiaries as at such date of determination, plus (ii) the aggregate amount of all accrued expenses of such Person and its Subsidiaries as at such date of determination (but, excluding from accounts payable and accrued expenses, the current portion of long-term debt, Capitalized Leases and all accrued interest and taxes), plus (iii) the aggregate amount of deferred core revenue of such Person and its Subsidiaries as at such date of determination, plus (iv) the aggregate amount of income tax payable of such Person and its Subsidiaries as at such date of determination, plus (v) the aggregate amount of customer finished goods returns accrual of such Person and its Subsidiaries as at such date of determination, plus (vi) the aggregate amount of other current liabilities (not described in clauses (b)(i) through (b)(v) above) of such Person and its Subsidiaries as at such date of determination, in each case, as reflected in the consolidated statements of cash flow delivered to the Agents and the Lenders pursuant to Section 7.01(a)(iii).

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ii.            Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation."  The word "will" shall be construed to have the same meaning and effect as the word "shall."  Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, amendments and restatements, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and permitted assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

iii.            Certain Matters of Construction.  References in this Agreement to "determination" by any Agent include good faith estimates by such Agent (in the case of quantitative determinations) and good faith beliefs by such Agent (in the case of qualitative determinations).  A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall "continue" or be "continuing" until such Event of Default has been waived in writing by the Required Lenders or by each Lender affected thereby, as applicable.  Any Lien referred to in this Agreement or any other Loan Document as having been created in favor of any Agent, any agreement entered into by any Agent pursuant to this Agreement or any other Loan Document, any payment made by or to or funds received by any Agent pursuant to or as contemplated by this Agreement or any other Loan Document, or any act taken or omitted to be taken by any Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of the Agents and the Lenders. Wherever the phrase "to the knowledge of any Loan Party" or words of similar import relating to the knowledge or the awareness of any Loan Party are used in this Agreement or any other Loan Document, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any Loan Party or (ii) the knowledge that a senior officer would have obtained if such officer had engaged in good faith and diligent performance of such officer's duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Loan Party and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists.  In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.

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iv.            Accounting and Other Terms.

v.             Time References.  Unless otherwise indicated herein, all references to time of day refer to Eastern Standard Time or Eastern daylight saving time, as in effect in New York City on such day.  For purposes of the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding"; provided, however, that with respect to a computation of fees or interest payable to any Agent, any Lender or the L/C Issuer, such period shall in any event consist of at least one full day.

 

2.

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ii.              Making the Loans.  ii)  The Borrower shall give the Administrative Agent prior telephonic notice (immediately confirmed in writing, in substantially the form of Exhibit B hereto (a "Notice of Borrowing")), not later than 1:00 p.m. (New York time) on the date which is 3 Business Days prior to the date of the proposed Loan (in the case of a Eurodollar Rate Loan), or not later than 1:00 p.m. (New York time) on the date that is 1 Business Day prior to the date of the proposed Loan (in the case of a Reference Rate Loan) (or such shorter period as the Administrative Agent is willing, in its sole discretion, to accommodate from time to time).  The Notice of Borrowing shall be irrevocable and shall specify (i) the principal amount and type (either a Revolving Loan or a Term Loan) of the proposed Loan, (ii) the proposed borrowing date, which must be a Business Day, (iii) whether the proposed Loan is to be a Reference Rate Loan or a Eurodollar Rate Loan, and (iv) in the case of a Eurodollar Rate Loan, the initial Interest Period applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period."  If no Interest Period is specified with respect to any requested Eurodollar Rate Loan, then the Borrower shall be deemed to have selected an Interest Period of one month's duration.  If no election as to the type of Loan is specified, then the requested Loan shall be a Reference Rate Loan.  The Administrative Agent and the Lenders may act without liability upon the basis of written, telecopied or telephonic notice believed by the Administrative Agent in good faith to be from the Borrower (or from any Authorized Officer thereof designated in writing purportedly from the Borrower to the Administrative Agent).  The Borrower hereby waives the right to dispute the Administrative Agent's record of the terms of any such telephonic Notice of Borrowing.  The Administrative Agent and each Lender shall be entitled to rely conclusively on any Authorized Officer's authority to request a Loan on behalf of the Borrower until the Administrative Agent receives written notice to the contrary.  The Administrative Agent and the Lenders shall have no duty to verify the authenticity of the signature appearing on any written Notice of Borrowing.

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iv.            Interest.

 

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v.              Reduction of Commitment; Prepayment of Loans.

 

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(v)            Within 2 Business Days following payment for any Disposition by any Loan Party or its Subsidiaries, the Borrower shall prepay the outstanding principal amount of the Loans in accordance with clause (d) below in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such Disposition to the extent that the aggregate amount of Net Cash Proceeds received by all Loan Parties and their Subsidiaries (and not paid to the Administrative Agent as a prepayment of the Loans) shall exceed for all such Dispositions (excluding Net Cash Proceeds from Dispositions of Accounts Receivable) $500,000 in any Fiscal Year.  Nothing contained in this Section 2.05(c)(v) shall permit any Loan Party or any of its Subsidiaries to make a Disposition of any property other than in accordance with Section 7.02(c)(ii).

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Period	Capital Expenditure
Fiscal Year ended March 31, 2013	$2,500,000
Fiscal Year ended March 31, 2014	$3,000,000
Fiscal Year ended March 31, 2015	$3,000,000
Fiscal Year ended March 31, 2016	$2,500,000
Fiscal Year ended March 31, 2017	$2,500,000
Fiscal Year ended March 31, 2018	$2,500,000

Fiscal Quarter End	Senior Leverage Ratio
September 30, 2013	3.55:1.00
December 31, 2013	3.30:1.00
March 31, 2014	3.30:1.00
June 30, 2014	3.30:1.00
September 30, 2014	3.30:1.00
December 31, 2014	3.05:1.00
March 31, 2015	3.05:1.00

Fiscal Quarter End	Fixed Charge Coverage Ratio
September 30, 2013 and each fiscal quarter ended thereafter	1.05:1.00

Fiscal Quarter End	Consolidated EBITDA
September 30, 2013	$31,000,000
December 31, 2013	$31,250,000
March 31, 2014	$31,500,000
June 30, 2014	$31,750,000
September 30, 2014	$32,000,000
December 31, 2014	$32,000,000
March 31, 2015	$32,500,000
June 30, 2015	$33,000,000
September 30, 2015	$33,000,000
December 31, 2015	$33,000,000
March 31, 2016 and each fiscal quarter ended thereafter	$33,000,000

xiv.                            Collateral Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law the Collateral Agent (irrespective of whether the principal of any Loan or Reimbursement Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether any Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Agent, each Lender and the L/C Issuer 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 Agents, the Lenders and the L/C Issuer, to pay to the Collateral Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Collateral Agent and its agents and counsel, and any other amounts due the Collateral Agent hereunder and under the other Loan Documents.

xv.                              Subordination Agreement. Each Lender hereby grants to the Collateral Agent all requisite authority to enter into or otherwise become bound by the Wanxiang Subordination Agreement and to bind the Lenders thereto by the Collateral Agent's entering into or otherwise becoming bound thereby, and no further consent or approval on the part of any Lender is or will be required in connection with the performance by the Collateral Agent of the Wanxiang Subordination Agreement

 

11.

INTENTIONALLY OMITTED

 

 

12.

MISCELLANEOUS

 i.                                      Notices, Etc.

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	Motorcar Parts of America, Inc.
	▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
	▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
	Attention:	▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
	Telecopy:	(▇▇▇) ▇▇▇-▇▇▇▇
	Telephone:	(▇▇▇) ▇▇▇-▇▇▇▇
	if to the Administrative Agent, to it at the following address:
	PNC Bank, National Association
	▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
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	▇▇▇▇▇▇▇▇, ▇▇  ▇▇▇▇▇
	Attn:	▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
	Telephone:	▇▇▇-▇▇▇-▇▇▇▇
	Telecopy:	▇▇▇-▇▇▇-▇▇▇▇
	With a copy to:
	PNC Bank, National Association
	PNC Agency Services
	PNC Firstside Center
	▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
	▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
	Attention:	▇▇▇▇▇ ▇▇▇▇▇▇▇
	Telephone:	▇▇▇-▇▇▇-▇▇▇▇
	Facsimile:	▇▇▇-▇▇▇-▇▇▇▇
	and
	▇▇▇▇ & Hessen LLP
	▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
	▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
	Attention:	▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
	Telephone:	▇▇▇-▇▇▇-▇▇▇▇
	Telecopier:	212-478-7400
	if to the Collateral Agent, to it at the following address:
	Cerberus Business Finance, LLC
	▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
	▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
	Attention:	▇▇▇▇▇▇ ▇▇▇▇
	Telephone:	▇▇▇-▇▇▇-▇▇▇▇
	Telecopier:	▇▇▇-▇▇▇-▇▇▇▇

	with a copy to:
	Cerberus California, LLC
	▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
	▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
	Attention:	▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
	Telephone:	▇▇▇-▇▇▇-▇▇▇▇
	Telecopier:	▇▇▇-▇▇▇-▇▇▇▇
	and
	▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
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	▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇  ▇▇▇▇▇
	Attention:	▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
	Telephone:	▇▇▇-▇▇▇-▇▇▇▇
	Telecopier:	▇▇▇-▇▇▇-▇▇▇▇