UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 3, 2016
Manitowoc Foodservice, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-37548 | 47-4625716 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
2227 Welbilt Boulevard, New Port Richey, Florida 34655
(Address of principal executive offices, including ZIP code)
(727) 853-3079
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. §240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. §240.13e-4(c)) |
Item 1.01. | Entry Into a Material Definitive Agreement. |
Separation Agreements
On March 4, 2015 (the Distribution Date), The Manitowoc Company, Inc. (Manitowoc ParentCo) completed the previously announced spin-off (the Spin-Off) of its wholly owned subsidiary, Manitowoc Foodservice, Inc. (Manitowoc Foodservice, we, our or us). On the Distribution Date, Manitowoc ParentCo distributed all of the shares of our common stock, on a pro rata basis, to all of the Manitowoc ParentCo shareholders of record as of February 22, 2016 (the Record Date), with each shareholder receiving one share of our common stock for each share of Manitowoc ParentCo common stock held by the shareholder on the Record Date (the Distribution). Any fractional shares of our common stock otherwise issuable to Manitowoc ParentCo shareholders were aggregated into whole shares and sold on the open market, and the fractional shareholders will receive a pro rata share of the proceeds of the sale, after deducting any taxes required to be withheld and after deducting an amount equal to all brokerage fees and other costs attributed to the sale.
On the Distribution Date, we and Manitowoc ParentCo also entered into a master separation and distribution agreement (the Master Separation and Distribution Agreement), a transition services agreement (the Transition Services Agreement), a tax matters agreement (the Tax Matters Agreement), an employee matters agreement (the Employee Matters Agreement) and an intellectual property matters agreement (the Intellectual Property Matters Agreement, and collectively with the foregoing agreements, the Separation Agreements) to (i) legally and structurally separate us from Manitowoc ParentCo, (ii) govern the relationship between us and Manitowoc ParentCo from and after the completion of the Spin-Off and (iii) allocate between us and Manitowoc ParentCo various assets, liabilities and obligations, including, among other things, employee benefits, intellectual property and tax-related assets and liabilities.
The following descriptions of the Separation Agreements are not complete, and are qualified in their entirety by reference to the Master Separation and Distribution Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement and Intellectual Property Matters Agreement, which are attached to this report as Exhibits 2.1, 10.1, 10.2, 10.3 and 10.4, respectively, and are incorporated in this report by reference.
Master Separation and Distribution Agreement
We entered into the Master Separation and Distribution Agreement with Manitowoc ParentCo, pursuant to which we and Manitowoc ParentCo have legally and structurally separated. The Master Separation and Distribution Agreement identifies the assets that were transferred, the liabilities that were assumed and the contracts that were assigned to each party as part of the separation. Except as expressly set forth in the Master Separation and Distribution Agreement, neither we nor Manitowoc ParentCo made any representation or warranty as to the assets, businesses or liabilities transferred or assumed in the Spin-Off, as to any consents required in connection with the transfers, as to the value of or the freedoms from any security interests of any of the assets transferred, as to the absence or presence of any defenses or rights of setoff or freedom from counterclaim with respect to any claim or other asset of either party, or as to the legal sufficiency of any assignment, document or instrument to convey title to any asset or thing of value to be transferred in connection with the Spin-Off. All assets were transferred on an as-is, where-is basis, and the respective transferees bear the economic and legal risks that any conveyance will prove to be insufficient to vest in the transferee good and marketable title, free and clear of all security interests.
Under the Master Separation and Distribution Agreement:
| Generally, each party has assumed liability for all pending, threatened and unasserted legal matters related to its own business or its assumed or retained liabilities, and will indemnify the other party for any liability, to the extent arising out of or resulting from such assumed or retained legal matters. |
-2-
| Each party (together with its affiliates) has released and discharged the other party (and the other partys affiliates) from all liabilities existing or arising from acts occurring or failing to occur on or before the Distribution Date, including in connection with the implementation of the separation, except as set forth in the Master Separation and Distribution Agreement. The releases do not extend to obligations or liabilities under any agreements between the parties that remain in effect following the Spin-Off, including the Separation Agreements. |
| We have agreed to indemnify, defend and hold harmless Manitowoc ParentCo, Manitowoc ParentCos affiliates and the directors, officers and employees of Manitowoc ParentCo and its affiliates from and against all liabilities relating to, arising out of or resulting from (i) our failure to pay, perform or otherwise promptly discharge any of our liabilities or, (ii) any breach by us of the Master Separation and Distribution Agreement or any of the other Separation Agreements. |
| Manitowoc ParentCo has agreed to indemnify, defend and hold harmless us, our affiliates and our and our affiliates directors, officers and employees from and against all liabilities relating to, arising out of or resulting from (i) Manitowoc ParentCos failure to pay, perform or otherwise promptly discharge any of its liabilities, or (ii) any breach by Manitowoc ParentCo of the Master Separation and Distribution Agreement or any of the other Separation Agreements. |
| We and Manitowoc ParentCo have allocated the rights and obligations under existing insurance policies with respect to occurrences prior to the Distribution and established procedures for the administration of insured claims. |
| We and Manitowoc ParentCo have agreed to use commercially reasonable efforts to take all actions as the other party may reasonably request, consistent with the Separation Agreements, to effect the provisions and purposes of the Separation Agreements and the transactions contemplated therein. |
| We and Manitowoc ParentCo have agreed to procedures for the resolution of disputes that arise under the Separation Agreements related to the Spin-Off. Except as provided in the other Separation Agreements, we and Manitowoc ParentCo have agreed to attempt to resolve any disputes through good-faith discussions between our executives and Manitowoc ParentCos executives. If these efforts are not successful, either we or Manitowoc ParentCo may submit the dispute to nonbinding mediation or, if the nonbinding mediation is not successful, to binding alternative dispute resolution, subject to the provisions of the Master Separation and Distribution Agreement. |
| We and Manitowoc ParentCo have agreed that, under the Master Separation and Distribution Agreement, we, our affiliates and Manitowoc ParentCo and its affiliates will not be liable for any punitive, indirect, incidental, consequential or special damages. |
|
We and Manitowoc ParentCo have allocated responsibility for the costs, fees and expenses incurred in connection with the Spin-Off. We are responsible for any costs, |
-3-
fees and expenses incurred in connection with the financing transactions we undertook in connection with the Spin-Off and any other costs, fees and expenses specifically incurred by us prior to the Distribution, while Manitowoc ParentCo is responsible for all other costs, fees and expenses prior to the Distribution. Following the Distribution, each party is responsible for paying its own costs, fees and expenses. |
| We and Manitowoc ParentCo have agreed to certain other matters, including access to financial and other information, confidentiality and access to and provision of records. |
Transition Services Agreement
We entered into the Transition Services Agreement with Manitowoc ParentCo, pursuant to which we and Manitowoc ParentCo will, on an interim, transitional basis, provide each other with various services. Manitowoc ParentCo has agreed to provide us with certain services related to supply chain management, information technology, sales, administrative support for certain employees, access to certain shared facilities and shared office space, finance, treasury, accounting, tax, legal, audit and payroll. We have agreed to provide Manitowoc ParentCo with certain services related to information technology and finance. Under the Transition Services Agreement, we and Manitowoc ParentCo may also provide each other with certain other mutually agreed-upon services. In each case, the company providing the services will perform the services in a manner and on a basis that is substantially similar to that during the twelve-month period immediately prior to the date of the Transition Services Agreement.
The Transition Services Agreement specifies the term during which we and Manitowoc ParentCo will provide the services described above, which terms generally begin on the Distribution Date and expire no later than December 31, 2016 (and in some cases earlier). The Transition Services Agreement also specifies when and how a company receiving services may terminate different categories of service, the cost of the services to the party receiving the services, and certain additional obligations that we and Manitowoc ParentCo have to assist in transitioning services to each others control.
Under the Transition Services Agreement, each partys liability is generally limited to the aggregate amount of fees actually received for services provided under the agreement. The Transition Services Agreement also provides that we, our affiliates and Manitowoc ParentCo and its affiliates will not be liable for any punitive, indirect, incidental, consequential or special damages.
Tax Matters Agreement
We entered into the Tax Matters Agreement with Manitowoc ParentCo that governs each partys respective rights, responsibilities and obligations with respect to the allocation of tax liabilities, the preparation and filing of tax returns, tax payments, the parties entitlements to tax refunds, the parties maintenance of the tax-free status of the Spin-Off, the control of audits and other tax proceedings, assistance and cooperation with respect to tax matters, the maintenance of tax-related records and other tax-related activities.
In addition, the Tax Matters Agreement imposes certain restrictions on us and our subsidiaries (including restrictions on business combinations, sales of assets, liquidations, stock issuances or repurchases and modifications of the voting rights of our stock, among others). The Tax Matters Agreement provides special rules allocating tax liabilities in the event the Spin-Off, together with certain related transactions, is not treated as tax-free. In general, under the Tax Matters Agreement, we and Manitowoc ParentCo will each be responsible for taxes that arise from the failure of the Spin-Off to qualify as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355, 368 and related provisions of the Code, to the extent that such failure to qualify is attributable to the actions, events or transactions related to each partys respective stock, assets or business, or a breach of the relevant representations or covenants made by that party in the Tax Matters Agreement.
-4-
Employee Matters Agreement
We entered into the Employee Matters Agreement with Manitowoc ParentCo to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs, and other related matters. The Employee Matters Agreement governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each party.
The Employee Matters Agreement provides that, unless otherwise specified, Manitowoc ParentCo will be responsible for liabilities associated with employees who are employed by Manitowoc ParentCo following the Spin-Off and former employees whose last employment was with Manitowoc ParentCo, and we will be responsible for liabilities associated with employees who are employed by us following the Spin-Off and former employees whose last employment was with us.
In addition, the Employee Matters Agreement addresses the treatment of Manitowoc ParentCos outstanding equity-based incentive awards held by employees who will be employed by Manitowoc Foodservice in connection with the Spin-Off.
Intellectual Property Matters Agreement
We entered into the Intellectual Property Matters Agreement with Manitowoc ParentCo that confirms the ownership of our and Manitowoc ParentCos respective intellectual property assets, provides for licensing of certain intellectual property assets and includes consents to use certain intellectual property assets (subject to certain limitations regarding field of use or certain change-of-control events in which we or Manitowoc ParentCo are acquired by a competitor), steps to avoid any confusion in the marketplace with respect to the use of various trademarks and other arrangements of cooperation between Manitowoc ParentCo and us in implementing the terms of the Intellectual Property Matters Agreement.
Supplemental Indenture and Registration Rights Agreement Joinder
As previously reported, on February 18, 2016, our wholly owned subsidiary MTW Foodservice Escrow Corp. (the Escrow Issuer) entered into an indenture (the Indenture) with Wells Fargo Bank, National Association, pursuant to which the Escrow Issuer issued and sold $425 million in aggregate principal amount of the Escrow Issuers 9.500% senior notes due 2024 (the Notes). Following the issuance of the Notes, the Escrow Issuer deposited the proceeds into a segregated escrow account, to be released (the Escrow Release) upon the escrow agents receipt of an officers certificate from the Escrow Issuer certifying that certain conditions related to the Spin-Off had been satisfied. In connection with the issuance of the Notes, the Escrow Issuer also entered into a related exchange and registration rights agreement (the Registration Rights Agreement).
On March 3, 2016, the Escrow Issuer delivered the officers certificate to the escrow agent certifying that all of the conditions related to the Spin-Off had been satisfied, including that we and substantially all of our restricted U.S. subsidiaries (the Guarantors) had entered into a first supplemental indenture (the Supplemental Indenture), dated March 3, 2016, to the Indenture, under which we agreed to assume the obligations of the Escrow Issuer under the Notes and the Indenture, and each of the Guarantors, jointly and severally, agreed to fully and unconditionally guarantee, on a senior unsecured basis, our obligations under the Notes and the Indenture. Prior to our entry into the Supplemental Indenture, the Escrow Issuer merged with and into us.
-5-
In addition, and as a further condition to the Escrow Release, on March 3, 2016, we and the Guarantors also entered into a joinder agreement to the Registration Rights Agreement (the Joinder Agreement). A summary of the material terms of the Registration Rights Agreement is set forth under Item 1.01 of our Current Report on Form 8-K that was filed with the Securities and Exchange Commission on February 24, 2016, and is incorporated herein by reference.
Upon receipt of the officers certificate from the Escrow Issuer, the escrow agent released the net proceeds of the Notes to us, which we have used, together with other borrowings under the Term Loan Facility (as defined below), to (i) pay a one-time cash dividend to Manitowoc ParentCo of approximately $1.362 billion (the Dividend) and (ii) pay related fees and other expenses.
The foregoing descriptions of the Supplemental Indenture and the Joinder Agreement are not complete, and are qualified in their entirety by reference to the Supplemental Indenture and the Joinder Agreement, which are attached to this report as Exhibits 4.1 and 10.5, respectively, and are incorporated in this report by reference.
Credit Agreement
On March 3, 2016, in connection with the completion of the Spin-Off, we entered into a credit agreement (the Credit Agreement) with our U.K. subsidiary Enodis Holdings Limited (the U.K. Borrower), the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent. As previously reported, on February 5, 2016, the parties to the Credit Agreement had delivered executed signature pages, which were being held in escrow pending written authorization to release from us and the U.K. Borrower. On March 3, 2016, we and the U.K. Borrower delivered the notice, and the Credit Agreement became effective.
The Credit Agreement provides for a new senior secured revolving credit facility in an aggregate principal amount of $225 million (the Revolving Facility) and a senior secured term loan B facility in an aggregate principal amount of $975 million (the Term Loan Facility, and together with the Revolving Facility, the Credit Facilities) with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, J.P. Morgan Securities LLC, Goldman Sachs Bank USA, HSBC Securities (USA) Inc. and Citigroup Global Markets Inc., on behalf of certain of its affiliates, as joint lead arrangers and joint bookrunners, and certain lenders, as lenders. The Revolving Facility will include (i) a $20 million sublimit for the issuance of letters of credit on customary terms, and (ii) a $40 million sublimit for swingline loans on customary terms.
We expect to use the Revolving Facility for working capital and for general corporate purposes. The Revolving Facility was undrawn as of the consummation of the Spin-Off.
We used the proceeds from the Term Loan Facility in part to repay existing debt. Additionally, on March 3, 2016, we used the proceeds from the Term Loan Facility, together with the proceeds from the Notes, to pay the Dividend. We have allocated the remaining proceeds of the Term Loan Facility for use in general corporate purposes.
Incremental Facilities
Under the Credit Agreement, we have the right from time to time to increase the size or add certain incremental revolving or term loan facilities (the Incremental Facilities) in minimum amounts of $10 million and in integral multiples of $5 million in excess thereof. The aggregate principal amount of all the Incremental Facilities may not exceed an amount equal to the sum of (i) $225 million plus (ii) an additional amount, so long as, after giving effect to the incurrence of such additional amount, the pro forma senior secured leverage ratio does not exceed 3.75 to 1.
-6-
Interest Rate
Borrowings under the Credit Facilities bear interest at a rate per annum equal to, at our option, (i) LIBOR plus the applicable margin of approximately 4.75% for term loans subject to a 1.00% LIBOR floor and 1.50% to 2.75% for revolving loans, based on consolidated total leverage, or (ii) an alternate base rate plus the applicable margin, which will be 1.00% lower than for LIBOR loans.
Maturity and Amortization
The loans and commitments under the Revolving Facility mature on the fifth anniversary of the closing date of the Credit Agreement, or 2021. The loans and commitments under the Term Loan Facility mature on the seventh anniversary of the closing date of the Credit Agreement, or 2023, and will require quarterly principal payments at a rate of 0.25% of the original principal balance.
Mandatory Prepayments
Mandatory prepayments on the Term Loan Facility are required, subject to customary exceptions, (i) from the receipt of net cash proceeds by us or any of our restricted subsidiaries from certain asset dispositions and casualty events, in each case, to the extent such proceeds are not reinvested or committed to be reinvested in assets useful in our business of the business of any of our subsidiaries within twelve months of the date of such disposition or casualty event, (ii) following the receipt of net cash proceeds from additional debt issued or incurred by us or any of our subsidiaries, and (iii) in an amount equal to 50% of our excess cash flow or the excess cash flow of our subsidiaries with step-downs to 25% if the senior secured leverage ratio is less than or equal to 4.50 to 1 but greater than 4.00 to 1, and to 0% if the senior secured leverage ratio is less than or equal to 4.00 to 1.
Guarantees and Security
Our obligations under the Credit Facilities are jointly and severally guaranteed by certain of our existing and future direct and indirectly wholly owned U.S. subsidiaries (but excluding (i) unrestricted subsidiaries, (ii) immaterial subsidiaries, and (iii) special purpose securitization vehicles).
There is also a first-priority perfected lien on substantially all of our assets and property, substantially all of the assets and property of the guarantors and the proceeds therefrom, excluding certain excluded assets. The liens securing our obligations under the Revolving Facility and the Term Loan Facility will be pari passu.
Certain Covenants and Events of Default
The Credit Agreement contains customary financial covenants including (a) a maximum consolidated total leverage ratio of 6.25 to 1, with step-downs of 0.25 each fiscal quarter beginning with the fiscal quarter ending September 30, 2016 until the ratio reaches 4.00 to 1 in the fiscal quarter ending September 30, 2018, and (b) a minimum consolidated interest coverage ratio of 2.00 to 1, with increases of 0.25 every other fiscal quarter beginning with the fiscal quarter ending September 30, 2016 until the ratio reaches 3.00 to 1 in the fiscal quarter ending December 30, 2017. Only lenders holding at least a majority of the Revolving Facility may amend the financial covenants, waive a breach of the financial covenants or accelerate the Revolving Facility upon a breach of the financial covenants, and a breach of the financial covenants does not constitute an event of default with respect to the Term Loan Facility or trigger a cross-default under the Term Loan Facility until the date on which the Revolving Facility has been accelerated and terminated.
-7-
In addition, the Credit Agreement contains a number of covenants that, among other things and subject to certain exceptions, restricts our ability and the ability of our restricted subsidiaries to incur additional indebtedness; pay dividends and other distributions; make investments, loans and advances; engage in transactions with affiliates; sell assets or otherwise dispose of property or assets; alter the business that we conduct; merge and engage in other fundamental changes; prepay, redeem or repurchase certain debt; and incur liens. The Credit Agreement also contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default.
The foregoing description of the Credit Agreement and the Credit Facilities is not complete and is qualified in its entirety by reference to the Credit Agreement, which is attached to this report as Exhibit 10.6 and is incorporated in this report by reference.
Securitization Facility
Concurrently with our entry into the Credit Agreement, and in connection with the Spin-Off, we entered into a $110 million accounts receivable securitization program (the Securitization Facility) with Wells Fargo Bank, N.A., as purchaser and agent, whereby certain of our subsidiaries will sell their domestic trade accounts receivable to a wholly owned, bankruptcy-remote special purpose subsidiary and certain of their non-U.S. trade accounts receivable to a wholly owned, bankruptcy-remote foreign special purpose entity, which entities, in turn, will sell, convey, transfer and assign to a third-party financial institution (a Purchaser) all of the right, title and interest in and to their pool of receivables.
Along with certain of our subsidiaries, we will act as a servicer of the receivables and as such will administer, collect and otherwise enforce the receivables. The servicers will be compensated for doing so on terms that are generally consistent with what would be charged by an unrelated servicer. As servicers, we will initially receive payments made by obligors on the receivables but will be required to remit those payments in accordance with a receivables purchase agreement. The Purchaser will have no recourse for uncollectable receivables.
The Securitization Facility is subject to customary affirmative and negative covenants. Among other restrictions, these covenants require that we meet specified financial tests, including a consolidated interest coverage ratio and a consolidated total leverage ratio that are the same as the covenant ratios required under the Credit Agreement.
The foregoing description of the Securitization Facility is not complete, and is qualified in its entirety by reference to that certain Sixth Amended and Restated Receivables Purchase Agreement, dated March 3, 2016, by and among Manitowoc Cayman Islands Funding LTD., as seller, Manitowoc Foodservice and certain of its subsidiaries, as servicers, and Wells Fargo Bank, N.A., as purchaser and as agent, which is attached to this report as Exhibit 10.7 and is incorporated in this report by reference.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective as of March 4, 2016, the compensatory arrangements described below, in which one or more of Manitowoc Foodservices named executive officers participate, became effective.
-8-
Deferred Compensation Plan
Manitowoc Foodservices Deferred Compensation Plan (the Company DCP) is intended to provide benefits similar to The Manitowoc Company, Inc. Deferred Compensation Plan (the ParentCo DCP) to eligible participants of Manitowoc Foodservice following the Spin-Off. The accounts of our employees and directors under the ParentCo DCP, which we are assuming in connection with the Spin-Off, will also be subject to the terms of the Company DCP after the Spin-Off.
Under the Company DCP, eligible employee participants may elect to defer up to 40% of base salary and up to 100% of awards to be paid under our annual incentive compensation plan. Non-employee director participants may elect to defer all or any part of the directors annual retainer and meeting fees, as well as restricted stock unit awards. Credits to deferred compensation accounts for key employees may also include a contribution by us. Distributions may be made in a lump sum or installments following death, disability, separation from service or a specified date. The values, if any, of the accounts of our named executive officers under the ParentCo DCP (which will become their accounts under the Company DCP) were disclosed in our Registration Statement on Form 10 (the Form 10) under the caption Executive CompensationRetirement and Non-Qualified Deferred Compensation Plans.
Supplemental Executive Retirement Plan
Manitowoc Foodservices Supplemental Executive Retirement Plan (the Company SERP) is intended to provide benefits similar to The Manitowoc Company, Inc. Supplemental Executive Retirement Plan (the ParentCo SERP) to eligible participants of Manitowoc Foodservice following the Spin-Off. Of our named executive officers, only Maurice Jones is expected to be eligible for the Company SERP. The benefit of Mr. Jones under the ParentCo SERP, the liabilities of which we are assuming in connection with the Spin-Off, will be subject to the terms of the Company SERP after the Spin-Off. Benefits under the Company SERP are intended to provide a life annuity equal to 55% of a participants five-year final average pay (salary plus annual incentive plan awards). A participant may elect whether to receive distributions under the Company SERP in a single lump-sum or over a period not to exceed ten years. The value of Mr. Joness benefit under the ParentCo SERP (which will become the benefit under the Company SERP) was disclosed in the Form 10 under the caption Executive CompensationRetirement and Non-Qualified Deferred Compensation Plans.
Severance Pay Plan
Manitowoc Foodservices Severance Pay Plan (the Severance Pay Plan) establishes a discretionary severance program across Manitowoc Foodservice whereby all severance benefits will be provided at our sole discretion and will be designed to meet the specific facts and circumstances of each termination. Our board of directors has the sole authority to authorize any benefits under the Severance Pay Plan to any of our elected officers.
The foregoing summaries of the Company DCP, the Company SERP and the Severance Pay Plan are qualified in their entirety by reference to the full text of the plans, which are attached to this report as Exhibits 10.8, 10.9 and 10.10, respectively, and are incorporated in this report by reference.
Item 8.01. | Other Events. |
On March 4, 2016, we issued a press release announcing the completion of the Spin-Off. A copy of the press release is attached to this report as Exhibit 99.1, and is incorporated in this report by reference.
-9-
Item 9.01. | Financial Statements and Exhibits. |
(a) | Not applicable. |
(b) | Not applicable. |
(c) | Not applicable. |
(d) | Exhibits . The following exhibits are being filed herewith: |
(2.1) | Master Separation and Distribution Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. |
(4.1) | First Supplemental Indenture, dated March 3, 2016, by and among MTW Foodservice Escrow Corp., Manitowoc Foodservice, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee. |
(10.1) | Transition Services Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. |
(10.2) | Tax Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. |
(10.3) | Employee Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. |
(10.4) | Intellectual Property Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. |
(10.5) | Joinder Agreement to Exchange and Registration Rights Agreement, dated March 3, 2016, by Manitowoc Foodservice, Inc. and the guarantors party thereto. |
(10.6) | Credit Agreement, dated March 3, 2016, among Manitowoc Foodservice, Inc., the subsidiary borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Goldman Sachs Bank USA, as syndication agent, HSBC Bank USA, N.A., Citibank, N.A. and Coöperatieve Rabobank U.A., New York Branch, as co-documentation agents and J.P. Morgan Securities LLC, Goldman Sachs Bank USA, HSBC Securities (USA) Inc. and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunners. |
(10.7) | Sixth Amended and Restated Receivables Purchase Agreement, dated March 3, 2016, by and among Manitowoc Cayman Islands Funding LTD., as seller, Manitowoc Foodservice and certain of its subsidiaries, as servicers, and Wells Fargo Bank, N.A., as purchaser and as agent. |
(10.8) | Manitowoc Foodservice, Inc. Deferred Compensation Plan, as amended and restated through March 4, 2016. |
-10-
(10.9) | Manitowoc Foodservice, Inc. Supplemental Executive Retirement Plan, as amended and restated through March 4, 2016. |
(10.10) | Manitowoc Foodservice, Inc. Severance Pay Plan, effective as of March 4, 2016. |
(99.1) | Press release issued by Manitowoc Foodservice, Inc. on March 4, 2016, announcing the completion of the spin-off. |
-11-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MANITOWOC FOODSERVICE, INC. | ||||||
Date: March 9, 2016 | By: |
/s/ Maurice D. Jones |
||||
Maurice D. Jones | ||||||
Senior Vice President, General Counsel and Secretary |
-12-
MANITOWOC FOODSERVICE, INC.
EXHIBIT INDEX
TO
FORM 8-K CURRENT REPORT
Dated as of March 3, 2016
Exhibit Number |
Description |
|
(2.1) | Master Separation and Distribution Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. | |
(4.1) | First Supplemental Indenture, dated March 3, 2016, by and among MTW Foodservice Escrow Corp., Manitowoc Foodservice, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee. | |
(10.1) | Transition Services Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. | |
(10.2) | Tax Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. | |
(10.3) | Employee Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. | |
(10.4) | Intellectual Property Matters Agreement, dated March 4, 2016, between The Manitowoc Company, Inc. and Manitowoc Foodservice, Inc. | |
(10.5) | Joinder Agreement to Exchange and Registration Rights Agreement, dated March 3, 2016, by Manitowoc Foodservice, Inc. and the guarantors party thereto. | |
(10.6) | Credit Agreement, dated March 3, 2016, among Manitowoc Foodservice, Inc., the subsidiary borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Goldman Sachs Bank USA, as syndication agent, HSBC Bank USA, N.A., Citibank, N.A. and Coöperatieve Rabobank U.A., New York Branch, as co-documentation agents and J.P. Morgan Securities LLC, Goldman Sachs Bank USA, HSBC Securities (USA) Inc. and Citigroup Global Markets Inc., as joint lead arrangers and joint bookrunners. | |
(10.7) | Sixth Amended and Restated Receivables Purchase Agreement, dated March 3, 2016, by and among Manitowoc Cayman Islands Funding LTD., as seller, Manitowoc Foodservice and certain of its subsidiaries, as servicers, and Wells Fargo Bank, N.A., as purchaser and as agent. | |
(10.8) | Manitowoc Foodservice, Inc. Deferred Compensation Plan, as amended and restated through March 4, 2016. | |
(10.9) | Manitowoc Foodservice, Inc. Supplemental Executive Retirement Plan, as amended and restated through March 4, 2016. | |
(10.10) | Manitowoc Foodservice, Inc. Severance Pay Plan, effective as of March 4, 2016. | |
(99.1) | Press release issued by Manitowoc Foodservice, Inc. on March 4, 2016, announcing the completion of the spin-off. |
-13-
Exhibit 2.1
Execution Version
MASTER SEPARATION AND DISTRIBUTION AGREEMENT
THIS MASTER SEPARATION AND DISTRIBUTION AGREEMENT (this Agreement ) is made and entered into effective as of March 4, 2016 (the Effective Date ), by and among The Manitowoc Company, Inc., a Wisconsin corporation ( Manitowoc ParentCo ), and Manitowoc Foodservice, Inc., a Delaware corporation and wholly-owned subsidiary of Manitowoc ParentCo ( SpinCo ). Capitalized terms used and not otherwise defined in this Agreement have the meanings ascribed to such terms in Article 1 of this Agreement.
RECITALS
WHEREAS, Manitowoc ParentCo has determined that it would be appropriate, desirable and in the best interests of Manitowoc ParentCo and Manitowoc ParentCos shareholders to separate the Foodservice Business from Manitowoc ParentCo;
WHEREAS, on the Distribution Date and subject to the terms and conditions of this Agreement, Manitowoc ParentCo intends to distribute to holders of shares of Manitowoc ParentCo Common Stock all of the outstanding shares of SpinCo Common Stock (the Distribution );
WHEREAS, it is intended that the Contribution (defined below) and Distribution and certain related transactions will qualify as a reorganization for U.S. federal income tax purposes within the meaning of Sections 355 and 368(a)(1)(D) and related provisions of the Code; and
WHEREAS, the parties intend in this Agreement and the Ancillary Agreements to set forth the principal arrangements between them regarding the Separation and Distribution.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
The following terms, as used in this Agreement, have the following meanings:
2020 Notes refers to notes issued by Manitowoc ParentCo on October 18, 2010 with an outstanding principal of $600,000,000, bearing interest at a rate of 8.50% per annum payable semi-annually in May and November of each year, and due in 2020.
2022 Notes refers to notes issued by Manitowoc ParentCo on October 19, 2012 with an outstanding principal of $300,000,000, bearing interest at a rate of 5.875% per annum payable semi-annually in April and October of each year, and due in 2022.
Action means any suit, arbitration, inquiry, proceeding or investigation by or before any court, governmental or other regulatory or administrative agency or commission or any arbitration tribunal asserted by a Person.
ADR has the meaning set forth in Section 7.3(b) of this Agreement.
Affiliate of any specified Person means any other Person directly or indirectly controlling , controlled by , or under common control with (within the meaning of the Securities Act), such specified Person; provided , however , that for purposes of this Agreement, unless this Agreement expressly provides otherwise, the determination of whether a Person is an Affiliate of another Person will be made assuming that no member of the Manitowoc ParentCo Group is an Affiliate of the SpinCo Group.
Agreement has the meaning set forth in the preamble to this Agreement.
Ancillary Agreements means each of the Employee Matters Agreement, the Transition Services Agreement, the Intellectual Property Matters Agreement and the Tax Matters Agreement, including any exhibits, schedules, attachments, tables or other appendices thereto, and each agreement and other instrument contemplated herein or therein.
Annual Financial Statements means the financial statements for each of the years ended December 31, 2015 and December 31, 2016.
Annual Report has the meaning set forth in Section 4.9(c) of this Agreement.
Assets means assets, properties and rights (including goodwill and rights arising under Contracts or pursuant to any Action), wherever located (including in the possession of vendors, other Persons or elsewhere), whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person.
Audited Party has the meaning set forth in Section 4.9(b) this Agreement.
Borrowed Proceeds refers to the cash proceeds SpinCo receives from external borrowing prior to the Distribution to fund its operations and to make the Borrowed Proceeds Distribution.
Borrowed Proceeds Distribution refers to SpinCos transfer of all or a portion of the Borrowed Proceeds to Manitowoc ParentCo.
Business Day means a day other than a Saturday, a Sunday or a day on which banking institutions located in New York, New York are authorized or obligated by law or executive order to close.
Claimed Amount has the meaning set forth in Section 6.3(a) of this Agreement.
Claim Notice has the meaning set forth in Section 6.3(a) of this Agreement.
Code means the Internal Revenue Code of 1986, as amended.
Contracts means any contract, agreement, lease, license, sales order, purchase order, instrument or other commitment that is binding on any Person or any part of its property under applicable law.
2
Contribution refers to Manitowoc ParentCos contribution of the FoodService Business to SpinCo described in Section 2.2 of this Agreement.
Controlling Party has the meaning set forth in Section 6.3(d)(ii)) of this Agreement.
Corporate Litigation Matters means (i) all Litigation Matters listed on Schedule 5.3(c) hereto and (ii) all Litigation Matters, whether filed before, on or after the Distribution Date, to the extent they assert (a) securities class actions or shareholder derivative claims, which allege Wrongful Acts, and (b) certain Manitowoc Foodservice Benefit Liabilities and certain Manitowoc ParentCo Benefit Liabilities as set forth in Section 11.7 of the Employee Matters Agreement.
Covered Subsidiary means a corporation or other legal entity controlled or owned, directly or indirectly, by Manitowoc ParentCo or SpinCo, as applicable, that satisfies the definition of Subsidiary under a Manitowoc ParentCo insurance policy.
D&O Tail has the meaning set forth in Section 5.4(a) of this Agreement.
Damages means all losses, claims, demands, damages, Liabilities, judgments, dues, penalties, assessments, fines (civil, criminal or administrative), costs, liens, forfeitures, settlements, fees or expenses (including reasonable attorneys fees and expenses and any other expenses reasonably incurred in connection with investigating, prosecuting or defending a claim or Action), of any nature or kind, whether or not the same would properly be reflected on any financial statements or the footnotes thereto.
Dispute has the meaning set forth in Section 7.3(a) of this Agreement.
Dispute Resolution Committee has the meaning set forth in Section 7.3(a) of this Agreement.
Distribution has the meaning set forth in the Recitals to this Agreement.
Distribution Agent has the meaning set forth in Section 3.4(a) of this Agreement.
Distribution Date means the date on which the Distribution occurs.
Distribution Ratio means the number of shares of SpinCo Common Stock to be distributed in respect of each share of Manitowoc ParentCo Common Stock in the Distribution, which ratio shall be determined by the Manitowoc ParentCo Board prior to the Record Date.
Effective Date has the meaning set forth in the preamble to this Agreement.
Employee Matters Agreement means that certain Employee Matters Agreement entered into by and between Manitowoc ParentCo and SpinCo effective as of the Effective Date, as such Employee Matters Agreement may be amended from time to time.
Environmental Law means any federal, state, local, foreign or international statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, common law (including tort and environmental nuisance law), legal doctrine, order, judgment, decree, injunction, requirement or agreement with any governmental authority, now or hereafter in effect, relating to health, safety, pollution or the environment (including ambient air, surface water, groundwater, land
3
surface or subsurface strata) or to emissions, discharges, releases or threatened releases of any substance currently or at any time hereafter listed, defined, designated or classified as hazardous, toxic, waste, radioactive or dangerous, or otherwise regulated, under any of the foregoing, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of any such substances, including the Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and Reauthorization Act and the Resource Conservation and Recovery Act and comparable provisions in state, local, foreign or international law.
Environmental Liabilities means all Liabilities relating to, arising out of, or resulting from, any Environmental Law or Contract relating to environmental, health or safety matters (including all removal, remediation or cleanup costs, investigatory costs, response costs, natural resources damages, property damages, personal injury damages, costs of compliance with any product take back requirements under Environmental Laws or with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, together with the rules and regulations promulgated thereunder.
Existing Revolving Credit Facility refers to the 5 year revolving credit facility in an initial principal amount of up to $500,000,000 pursuant to a senior credit facility with JP Morgan Chase Bank, N.A. as administrative agent.
First Post-Distribution Report has the meaning set forth in Section 4.1(c) of this Agreement.
Foodservice Assets means (i) any and all Assets that are used exclusively or held for use exclusively in the Foodservice Business, (ii) all interests in the capital stock of, or any other equity interests in, the members of the SpinCo Group (other than SpinCo); (iii) any and all Assets that are expressly listed, scheduled or otherwise clearly described in this Agreement or any other Ancillary Agreement as Foodservice Assets or Assets to be transferred to SpinCo or any other member of the SpinCo Group, including, without limitation, those Assets set forth on Schedule 1 hereto, (iv) all rights of SpinCo under or pursuant to this Agreement, any Ancillary Agreement or any other instrument entered into in connection herewith or therewith, and (v) any and all Assets acquired by the SpinCo Group at any time after the Effective Date. Notwithstanding the foregoing, the Foodservice Assets shall not include any Assets (including tax attributes or claims for refund) allocated to Manitowoc ParentCo under the Tax Matters Agreement.
Foodservice Business means (i) the businesses and operations conducted by the Foodservice segment of Manitowoc ParentCo and its Affiliates (including, for purposes of this definition, SpinCo and its respective Affiliates) prior to the Effective Date, and (ii) except as otherwise expressly provided in this Agreement, any terminated, divested or discontinued businesses or operations that at the time of such termination, divestiture or discontinuation related to the Foodservice Business (as described in the foregoing clause (i)) as then conducted.
Foodservice Liabilities means (i) any and all Liabilities to the extent arising out of or relating to the Foodservice Business or the Foodservice Assets, in each case whether such Liabilities arise or accrue prior to, on or after the Effective Date (other than such Liabilities which
4
are specifically retained by Manitowoc ParentCo under this Agreement or any Ancillary Agreement), (ii) any and all Liabilities that are expressly listed, scheduled or otherwise clearly described in this Agreement or any other Ancillary Agreement as Liabilities to be assumed by SpinCo or any other member of the SpinCo Group, (iii) all obligations of SpinCo under or pursuant to this Agreement, any Ancillary Agreement or any other instrument entered into in connection herewith or therewith, and (iv) any and all Liabilities to the extent arising out of or relating to the operation of any business conducted by the SpinCo Group at any time after the Effective Date. Notwithstanding the foregoing, the Foodservice Liabilities shall not include any Liabilities for Taxes that are allocated to Manitowoc ParentCo by the Tax Matters Agreement.
Form 10 means the registration statement on Form 10 filed by SpinCo with the SEC to effect the registration of SpinCo Common Stock pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time, including any amendment or supplement thereto.
GAAP means U.S. generally accepted accounting principles, consistently applied.
Group means either the Manitowoc ParentCo Group or the SpinCo Group, as the context may require.
Indemnified Party has the meaning set forth in Section 6.3(a) of this Agreement.
Indemnifying Party has the meaning set forth in Section 6.3(a) of this Agreement.
Information means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.
Information Statement has the meaning set forth in Section 3.3(c) of this Agreement.
Insured has the meaning set forth in Manitowoc ParentCos applicable insurance policies in effect for the relevant period. By way of example and not limitation, the term is defined in Manitowoc ParentCos directors and officers liability insurance policy (Travelers Casualty and Surety Company of America Policy No. 105635635) as the Insured Persons and the Insured Organiztaions (each as defined therein).
Intellectual Property has the meaning set forth in the Intellectual Property Matters Agreement.
Intellectual Property Matters Agreement means that certain Intellectual Property Matters Agreement entered into by and between Manitowoc ParentCo and SpinCo effective as of the Effective Date, as such Intellectual Property Matters Agreement may be amended from time to time.
5
Interim Financial Statements means the interim financial statements for the quarterly periods of each of the years ended December 31, 2015 and December 31, 2016.
Internal Control Audit and Management Assessments has the meaning set forth in Section 4.9(a) of this Agreement.
Internal Reorganization means the transactions outlined in that certain plan of reorganization titled The Manitowoc Company, Inc. Proposed Foodservice Separation Steps, dated March 4, 2016.
Liabilities means debts, liabilities (including Environmental Liabilities), guarantees, assurances, commitments and obligations of any nature or description, whether fixed, contingent or absolute, asserted or unasserted, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including, without limitation, whether arising out of or under (i) any Contract, Action, tort based theory or any other legal theory, (ii) any act or failure to act by any past or present Representative, whether or not such act or failure to act was within such Representatives authority or (iii) any statute, ordinance, rule, regulation or code), and whether or not the same would be required by GAAP to be reflected in financial statements or disclosed in the notes thereto.
Litigation Matters means (i) any Action, (ii) any internal business investigation, and (iii) any Pre-Litigation Claims.
Manitowoc ParentCo has the meaning set forth in the preamble to this Agreement.
Manitowoc ParentCo Assets means all assets of the Manitowoc ParentCo Entities and Foodservice Entities as of the Effective Date, other than the Foodservice Assets, it being understood that the Manitowoc ParentCo Assets shall include: (i) any and all Assets that are used exclusively or held for use exclusively in the Manitowoc ParentCo Business, (ii) all interests in the capital stock of, or any other equity interests in, the members of the Manitowoc ParentCo Group (other than Manitowoc ParentCo); (iii) any and all Assets that are expressly listed, scheduled or otherwise clearly described in this Agreement or any other Ancillary Agreement as Manitowoc ParentCo Assets or Assets to be transferred to Manitowoc ParentCo or any other member of the Manitowoc ParentCo Group, (iv) all rights of Manitowoc ParentCo under or pursuant to this Agreement, any Ancillary Agreement or any other instrument entered into in connection herewith or therewith, and (v) any and all Assets acquired by the Manitowoc ParentCo Group at any time after the Effective Date.
Manitowoc ParentCo Board means the Board of Directors of Manitowoc ParentCo.
Manitowoc ParentCo Business means the businesses or operations of Manitowoc ParentCo other than the Foodservice Business.
Manitowoc ParentCo Common Stock means the common stock, par value $0.01 per share, of Manitowoc ParentCo.
Manitowoc ParentCo Entities means the members of the Manitowoc ParentCo Group.
6
Manitowoc ParentCo Exclusive Litigation Matters means (i) all Litigation Matters listed on Schedule 5.3(b) hereto, (ii) all Litigation Matters which are exclusively related to the Manitowoc ParentCo Business, and (iii) external investigations or internal investigations, in each case which are initiated or arising before, on or after the Effective Date which primarily involve the Manitowoc ParentCo Business or any employee of the Manitowoc ParentCo Business at the time the event that gave rise to such investigation took place.
Manitowoc ParentCo Group means Manitowoc ParentCo and its Affiliates, excluding any entity that is a member of the SpinCo Group.
Manitowoc ParentCo Indemnified Parties has the meaning set forth in Section 6.1 of this Agreement.
Manitowoc ParentCo Liabilities means the Liabilities of Manitowoc ParentCo and the other members of the Manitowoc ParentCo Group, other than the Foodservice Liabilities.
Manitowoc ParentCo Shared Contract means any Contract relating in part to the Foodservice Business not included in the Foodservice Assets.
Non-controlling Party has the meaning set forth in Section 6.3(d)(ii) of this Agreement.
Other Partys Auditors has the meaning set forth in Section 4.9(a) of this Agreement.
Owning Party has the meaning set forth in Section 4.2 of this Agreement.
Person means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity or any department, agency or political subdivision thereof.
Possessor has the meaning set forth in Section 4.3 of this Agreement.
Post-Distribution Date Wrongful Acts means Wrongful Acts that occur on or after the Distribution Date.
Pre-Distribution Date Wrongful Acts means Wrongful Acts that occur prior to the Distribution Date.
Pre-Litigation Claims means any claim, demand or assertion as to which SpinCo or Manitowoc ParentCo may later provide notice as a Third-Party Claim to the other party.
Privilege has the meaning set forth in Section 4.11(a) of this Agreement.
Record Date means the close of business on the date to be determined by the Manitowoc ParentCo Board as the record date for determining the shareholders of Manitowoc ParentCo entitled to receive shares of SpinCo Common Stock pursuant to the Distribution.
Regulation S-K means Regulation S-K of the General Rules and Regulations promulgated by the SEC pursuant to the Securities Act.
7
Representatives means, with respect to any Person, any of such Persons directors, officers, employees, agents, consultants, advisors, accountants or attorneys.
Requestor has the meaning set forth in Section 4.3 of this Agreement.
Restricted Information has the meaning set forth in Section 4.3 of this Agreement.
Retention Period has the meaning set forth in Section 4.4 of this Agreement.
SEC means the United States Securities and Exchange Commission or any successor agency.
Securities Act means the Securities Act of 1933, as amended from time to time, together with the rules and regulations promulgated thereunder.
Separation means (a) the Internal Reorganization, (b) the Contribution, (c) any other actions to be taken pursuant to Article II and (d) any other transfers of Assets and assumptions of Liabilities, in each case, between a member of one Group and a member of the other Group, provided for in this Agreement or any Ancillary Agreement.
Shared Litigation Matters means (i) all Litigation Matters listed on Schedule 5.3(e) hereto, (ii) all Litigation Matters which relate to both (a) the Manitowoc ParentCo Business, and (b) the Foodservice Business, but which are not SpinCo Exclusive Litigation Matters or Manitowoc ParentCo Exclusive Litigation Matters, and (iii) the Litigation Matters that involve Prior Corporate Function Liabilities, as set forth in the Employee Matters Agreement.
SpinCo has the meaning set forth in the preamble to this Agreement.
SpinCo Certificate of Incorporation has the meaning set forth in Section 3.2(d) of this Agreement.
SpinCo Common Stock means the common stock, par value $0.01 per share, of SpinCo.
SpinCo Entities means the members of the SpinCo Group.
SpinCo Exclusive Litigation Matters means (i) all Litigation Matters listed on Schedule 5.3(a) hereto, (ii) all Litigation Matters which are exclusively related to the Foodservice Business, and (iii) external investigations or internal investigations, in each case which are initiated or arising before, on or after the Effective Date which primarily involve the Foodservice Business or employees of the Foodservice Business at the time the event that gave rise to such investigation took place.
SpinCo Group means, as of any time of determination (whether before or after the Distribution), the group consisting of (i) SpinCo, (ii) each entity that is a Subsidiary of SpinCo as of the time of determination, (iii) each entity that is not a Subsidiary of SpinCo as of a time of determination before the Distribution but that later becomes a Subsidiary of SpinCo by the time of the Distribution, and (iv) each entity that becomes an Affiliate (other than a Subsidiary) of SpinCo after the Distribution.
8
SpinCo Indemnified Parties has the meaning set forth in Section 6.2 of this Agreement.
SpinCo Shared Contract means any Contract included in the Foodservice Assets relating in part to the Manitowoc ParentCo Business.
SpinCo Transfer Agent means the transfer agent and registrar for the SpinCo Common Stock.
Subsidiary means, with respect to a Person, any Entity that is controlled, directly or indirectly, by such Person.
Tax and Taxes have the meanings set forth in the Tax Matters Agreement.
Tax Advisor has the meaning set forth in the Tax Matters Agreement.
Tax Matters Agreement means that certain Tax Matters Agreement entered into by and between Manitowoc ParentCo and SpinCo effective as of the Effective Date, as such Tax Matters Agreement may be amended from time to time.
Tax-Related Losses has the meaning set forth in the Tax Matters Agreement.
Term Loan A refers to the 5 year term loan with a principal amount of $350,000,000 Manitowoc ParentCo borrowed pursuant to a senior credit facility with JPMorgan Chase Bank, N.A. as administrative agent.
Term Loan B refers to the 7 year term loan with a principal amount of $200,000,000 Manitowoc ParentCo borrowed pursuant to a senior credit facility with JPMorgan Chase Bank, N.A. as administrative agent.
Third-Party Claim has the meaning set forth in Section 6.3(d)(i) of this Agreement.
Transition Services Agreement means the Transition Services Agreement entered into by and between Manitowoc ParentCo and SpinCo effective as of the Effective Date, pursuant to which Manitowoc ParentCo will provide certain transition services for SpinCo, and pursuant to which SpinCo will provide certain transition services to Manitowoc ParentCo, as such Transition Services Agreement may be amended from time to time.
Wrongful Act has the meaning set forth in Manitowoc ParentCos applicable insurance policies in effect for the relevant period. By way of example and not limitation, the term is defined in Manitowoc ParentCos directors and officers liability insurance policy (Travelers Casualty and Surety Company of America Policy No. 105635635) as any actual or alleged: (1) error, misstatement, misleading statement, act, omission, neglect, or breach of duty committed or attempted: (a) by any Insured Person in their capacity as such, or in an Outside Position; or (b) with respect to Insuring Agreement C, by the Insured Organization; or (2) matter claimed against the Insured Person solely because of their serving in such capacity or in an Outside Position. Except as provided in Insuring Agreement E, Wrongful Act does not include any conduct committed or attempted by any Insured Person in their capacity as a director, officer, manager, trustee or employee of any entity other than the Insured Organization, or any functional equivalent position, even if service in such capacity is with the knowledge and consent of, at the director or request of, or part of
9
the duties regularly assigned to such Insured Person by the Insured Organization. The parties acknowledge that any determination as to the treatment of a particular matter under any such insurance policy ( i.e. , whether a particular matter would be covered by such policy or not) will not affect, reduce or otherwise be construed as a limitation of the scope of this definition.
ARTICLE 2
THE SEPARATION
Section 2.1 Internal Reorganization; Transfer of Assets and Assumption of Liabilities.
(a) Prior to the Distribution, the parties shall cause any remaining actions contemplated under the Internal Reorganization to be completed, and shall, and shall cause their respective Subsidiaries to, execute all such instruments, assignments, documents and other agreements necessary to fully effect the Internal Reorganization.
(b) Prior to the Distribution, the parties shall, and shall cause their respective Subsidiaries to, (i) execute such instruments of assignment and transfer and take such other corporate actions as are necessary to (A) transfer to one or more members of the SpinCo Group all of the right, title and interest of the Manitowoc ParentCo Group in and to all Foodservice Assets and (B) transfer to one or more members of the Manitowoc ParentCo Group all of the right, title and interest of the SpinCo Group in and to all Manitowoc ParentCo Assets and (ii) take all actions necessary to (A) cause one or more members of the SpinCo Group to assume all of the Foodservice Liabilities to the extent such Foodservice Liabilities would otherwise remain obligations of any member of the Manitowoc ParentCo Group and (B) cause one or more members of the Manitowoc ParentCo Group to assume all of the Manitowoc ParentCo Liabilities to the extent such Manitowoc ParentCo Liabilities would otherwise remain obligations of any member of the SpinCo Group. Notwithstanding anything to the contrary (x) neither party shall be required to transfer any Information except as required by Article IV and (y) this Agreement and the Ancillary Agreements do not purport to transfer any insurance policy.
Section 2.2 The Contribution . Manitowoc ParentCo will transfer the Foodservice Business to SpinCo prior to the Distribution in a transaction governed by Section 361(a) and (b) of the Code via the following steps:
(a) Manitowoc ParentCo will contribute all of the equity interests in Manitowoc FSG U.S. Holding, LLC to SpinCo;
(b) Manitowoc ParentCo will contribute all of the equity interests in Manitowoc Cayman Islands Funding Ltd. to SpinCo;
(c) Manitowoc ParentCo will contribute all of the equity interests in Manitowoc Foodservice Holding, Inc. to SpinCo; and
(d) Manitowoc ParentCo will transfer any portion of the Foodservice Business not described above via this Agreement, the Intellectual Property Matters Agreement or Employee Matters Agreement, including the Foodservice Assets and the Foodservice Liabilities.
(e) In exchange for all of the foregoing, SpinCo shall issue to Manitowoc ParentCo 137,016,612 shares of SpinCo Common Stock.
10
The foregoing steps shall be referred to as the Contribution .
Section 2.3 Borrowed Proceeds Distribution.
(a) Before the Borrowed Proceeds Distribution, MTW Foodservice Escrow Corp., a Delaware corporation and a direct wholly owned subsidiary of SpinCo, shall merge with and into SpinCo, with SpinCo being the surviving corporation, in a transaction governed by Section 332 of the Code.
(b) SpinCo shall make the Borrowed Proceeds Distribution to Manitowoc ParentCo before the Distribution as part of the Section 368(a)(1)(D) reorganization in a transaction governed by Section 361 of the Code.
(c) Manitowoc ParentCo will deposit the cash received from the Borrowed Proceeds Distribution in a segregated bank account and use the cash to repay its 2020 Notes, 2022 Notes, Term Loan A, Term Loan B and a portion of its Existing Revolving Credit Facility pursuant to Section 361(b)(3) of the Code.
Section 2.4 Governmental Approvals and Consents; Transfers, Assignments and Assumptions Not Effected Prior to the Distribution.
(a) To the extent that any of the transactions contemplated by this Agreement or any Ancillary Agreement requires any governmental approval or consent, the parties will use their reasonable best efforts to obtain such governmental approval or consent.
(b) To the extent that any transfer or assignment of Assets or assumption of Liabilities contemplated by this Agreement or any Ancillary Agreement shall not have been consummated prior to the Distribution, the parties shall use reasonable best efforts to effect, and shall cause the other members of their Group to effect, such transfers as soon after the Distribution as shall be practicable. Nothing in this Agreement shall be deemed to require the transfer of any Assets or the assumption of any Liabilities that by their terms or operation of law cannot or should not be transferred. In the event that any such transfer of Assets or assumption of Liabilities has not been consummated, from and after the Distribution until such time as such Asset is transferred or such Liability is assumed (i) the party retaining such Asset shall thereafter hold such Asset for the use and benefit of the party entitled to it (at the expense of the party entitled to it) and (ii) the party intended to assume such Liability shall, or shall cause the applicable member of its Group to, pay or reimburse the party retaining such Liability for all amounts paid or incurred in connection with the retention of such Liability. In addition, the party retaining such Asset or Liability shall, insofar as reasonably practicable and to the extent permitted by applicable Law, treat such Asset or Liability in the ordinary course of business consistent with past practice and take such other actions as may be reasonably requested by the party entitled to such Asset or by the party intended to assume such Liability in order to place such party, insofar as reasonably practicable, in the same position as if such Asset or Liability had been transferred or assumed as contemplated by this Agreement or by any Ancillary Agreement and so that all the benefits and burdens relating to such Asset or Liability, including possession, use, risk of loss, potential for gain, and control over such Asset or Liability, are to inure from and after the Distribution to the member or members of the Group entitled to such
11
Asset or intended to assume such Liability. In furtherance of the foregoing three sentences, the parties agree that, as of the Distribution, each party shall be deemed to have acquired beneficial ownership over all of the Assets, together with all rights and privileges incident thereto, and shall be deemed to have assumed all of the Liabilities, and all duties, obligations and responsibilities incident thereto, that such party is entitled to acquire or intended to assume pursuant to the terms of this Agreement or the applicable Ancillary Agreement.
(c) If and when the applicable consents, governmental approvals and/or conditions referred to in Section 2.4(b) are obtained or satisfied, the transfer or assumption of the applicable Asset or Liability shall be effected in accordance with and subject to the terms of this Agreement or the applicable Ancillary Agreement.
(d) The party retaining any Asset or Liability due to the deferral of the transfer of such Asset or the deferral of the assumption of such Liability pursuant to Section 2.4(b) or otherwise shall not be obligated, in connection with this Section 2.2, to expend any money or take any action that would require the expenditure of money unless the party entitled to such Asset or the party intended to assume such Liability advances the necessary funds.
(e) From and after the Distribution, the parties agree to treat, for U.S. federal, state, local and non-U.S. income tax purposes, any Asset or Liability that is not transferred prior to the Distribution and is subject to the provisions of Section 2.4(b) as owned by the member of the Group to which such Asset or Liability was intended to be transferred. The parties shall not take any position inconsistent with this Section 2.4(e) unless otherwise required by applicable Law.
Section 2.5 Termination of Agreements.
(a) Except as set forth in Section 2.5(b), the Manitowoc ParentCo Entities, on the one hand, and the FoodserviceCo Entities, on the other hand, hereby terminate any and all Intercompany Agreements, effective as of the Distribution. No terminated Intercompany Agreement (including any provision thereof that purports to survive termination) shall be of any further force or effect from and after the Distribution. Each party shall, at the reasonable request of any other party, take, or cause to be taken, such other actions as may be necessary to effect the provisions of this Section 2.5(a). The parties, on behalf of the members of their respective Groups, hereby waive any advance notice provision or other termination requirements with respect to any Intercompany Agreement.
(b) The provisions of Section 2.5(a) shall not apply to any of the following Intercompany Agreements (or to any of the provisions thereof):
(i) any Intercompany Agreement to which any non-wholly owned Subsidiary or non-wholly owned Affiliate of Manitowoc ParentCo or SpinCo, as the case may be, is a party (it being understood that directors qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned);
(ii) any other Intercompany Agreement that this Agreement or any Ancillary Agreement expressly contemplates will survive the Distribution; and
(iii) any Intercompany Agreement listed or described on Schedule 2.5(b)(iii) .
(c) Except as otherwise expressly and specifically provided in this Agreement or any Ancillary Agreement, the relevant members of the Manitowoc ParentCo Group and the SpinCo Group shall satisfy all intercompany receivables, payables, loans and other accounts between any Manitowoc ParentCo Entity, on the one hand, and any SpinCo Entity, on the other hand, in existence as of immediately prior to the Distribution and after giving effect to the Internal Reorganization no later than the Distribution by (i) forgiveness by the relevant obligee or (ii) one or a related series of repayments, distributions of and/or contributions to capital, in each case as agreed by Manitowoc ParentCo and SpinCo.
12
Section 2.6 No Representations or Warranties . Each of Manitowoc ParentCo (on behalf of itself and each other Manitowoc ParentCo Entity) and SpinCo (on behalf of itself and each other SpinCo Entity) understands and agrees that, except as expressly set forth in this Agreement or in any Ancillary Agreement, no party (including its Affiliates) to this Agreement, any Ancillary Agreement or any other agreement or document contemplated by this Agreement, any Ancillary Agreement or otherwise, makes any representations or warranties relating in any way to the Assets, businesses or Liabilities transferred or assumed as contemplated hereby or thereby, to any consent required in connection therewith, to the value or freedom from any Security Interests of, or any other matter concerning, any Assets of such party, or to the absence of any defenses or right of setoff or freedom from counterclaim with respect to any claim or other Asset, including any accounts receivable, of any party, or to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Asset or thing of value upon the execution, delivery and filing hereof or thereof. Except as may expressly be set forth in this Agreement or in any Ancillary Agreement, (a) the parties and the members of their respective Groups are transferring all such Assets on an as is, where is basis, (b) the parties are expressly disclaiming any implied warranty of merchantability, fitness for a specific purpose or otherwise, (c) the respective transferees shall bear the economic and legal risks that any conveyance shall prove to be insufficient to vest in the transferee good and marketable title, free and clear of any security interest, pledge, lien, charge, claim or other encumbrance, and (d) none of the Manitowoc ParentCo Entities or the SpinCo Entities (including their Affiliates) or any other Person makes any representation or warranty with respect to any information, documents or material made available in connection with the Separation or the Distribution, or the entering into of this Agreement or any Ancillary Agreement or the transactions contemplated hereby or thereby, except as expressly set forth in this Agreement or any Ancillary Agreement.
Section 2.7 Shared Contracts . Except as otherwise set forth in the Employee Matters Agreement, to the extent applicable, Manitowoc ParentCo and SpinCo agree as follows:
(a) Manitowoc ParentCo will, and will cause the other members of the Manitowoc ParentCo Group to, to the extent specifically permitted by the applicable Manitowoc ParentCo Shared Contract and applicable law, assign such Manitowoc ParentCo Shared Contract in part to SpinCo and the applicable members of the SpinCo Group so that each party or the applicable members of its Group will be entitled to the benefits and rights relating to its or their business and will assume its or their related portion of any Liabilities under the Manitowoc ParentCo Shared Contracts.
13
(b) If any Manitowoc ParentCo Shared Contract cannot be so partially assigned by its terms, each party will, and will cause the other members of its Group to, cooperate and use commercially reasonable efforts to enter into an arrangement with the counterparty to each Manitowoc ParentCo Shared Contract to amend such Contract so as to delete all obligations therefrom to the extent that such obligations relate to the Foodservice Business, and enter into a new Contract with the applicable counterparty which solely relates to the Foodservice Business, on substantially equivalent terms and conditions as are then in effect under such Manitowoc ParentCo Shared Contract; provided , however , that neither Manitowoc ParentCo nor SpinCo will be required to pay any consideration to any third Person in connection with implementing the arrangements contemplated by this Section 2.7. If and when such consents or approvals are obtained or such other required actions have been taken, the partial assignment of such Manitowoc ParentCo Shared Contract will be effected in accordance with the terms of this Agreement.
(c) With respect to each Manitowoc ParentCo Shared Contract for which the arrangements described in Section 2.7(b) could not be entered into prior to the Distribution Date, Manitowoc ParentCo and SpinCo will, and will cause the other members of its respective Group to, cooperate in any lawful and reasonable arrangement, to the extent so permitted under the terms of such Manitowoc ParentCo Shared Contract and applicable law, to provide the SpinCo Group members the benefits and obligations of any such Manitowoc ParentCo Shared Contract with respect to the Foodservice Business, including subcontracting, licensing, sublicensing, leasing or subleasing to the SpinCo Group members any or all of Manitowoc ParentCo Groups rights and obligations with respect to such Manitowoc ParentCo Shared Contract with respect to the Foodservice Business. In any such arrangement, SpinCo will (i) bear the sole responsibility for completion of the work or provision of goods and services, (ii) bear all Taxes with respect thereto or arising therefrom, (iii) be solely entitled to all benefits thereof, economic or otherwise, (iv) be solely responsible for any warranty or breach thereof, any repurchase, indemnity and service obligations thereof and any damages related to termination of such Manitowoc ParentCo Shared Contracts, and (v) promptly reimburse the reasonable costs and expenses of Manitowoc ParentCo and the other members of the Manitowoc ParentCo Group related to such SpinCo activities.
(d) The foregoing terms will apply mutatis mutandis to any SpinCo Shared Contract.
(e) The rights and obligations of Manitowoc ParentCo and SpinCo pursuant to this Section 2.7 will terminate 24 months after the Distribution Date.
ARTICLE 3
THE DISTRIBUTION
Section 3.1 The Distribution . The Board of Directors of Manitowoc ParentCo may, at any time and from time to time until the consummation of the Distribution, modify or change the terms of the Distribution, including, without limitation, by accelerating or delaying the timing of the consummation of all or part of the Distribution. SpinCo will cooperate with Manitowoc ParentCo in all respects to accomplish the Distribution and will, at Manitowoc ParentCos direction, promptly take any and all actions necessary or desirable to effect the Distribution.
14
Section 3.2 Actions Prior to the Distribution . In connection with the Distribution, Manitowoc ParentCo (subject to its rights of termination set forth in this Agreement) and SpinCo will take the actions set forth in this Section 3.2 and otherwise use commercially reasonable efforts to consummate the Distribution:
(a) Manitowoc ParentCo shall mail a notice of Internet availability of the Information Statement or the Information Statement to the Manitowoc ParentCo shareholders.
(b) Each of SpinCo and Manitowoc ParentCo will use its commercially reasonable efforts to take all such action as may be necessary or desirable under applicable state securities and blue sky laws of the United States (and any comparable laws under any foreign jurisdictions) in connection with the Distribution.
(c) SpinCo will prepare, file and use commercially reasonable efforts to seek to make effective, an application for listing of the SpinCo Common Stock to be distributed in the Distribution on the New York Stock Exchange, subject to official notice of issuance.
(d) Manitowoc ParentCo and SpinCo will, and will cause their Subsidiaries to, complete any remaining actions contemplated under the Internal Reorganization and the Contribution.
(e) Manitowoc ParentCo and SpinCo will each take all necessary action that may be required to provide for the adoption by SpinCo of the Restated Certificate of Incorporation of SpinCo (the SpinCo Certificate of Incorporation ) and the Bylaws of SpinCo, each in such form as may be reasonably determined by SpinCo and Manitowoc ParentCo, and SpinCo will file the SpinCo Certificate of Incorporation with the Secretary of State of the State of Delaware.
(f) Manitowoc ParentCo will enter into a distribution agent agreement with the Distribution Agent or otherwise provide instructions to the Distribution Agent regarding the Distribution.
(g) Prior to the Distribution, the existing directors of SpinCo shall duly elect the individuals listed as members of the SpinCo board of directors in the Information Statement, and such individual shall become the members of the SpinCo board of directors effective as of no later than immediately prior to the Distribution.
(h) Prior to the Distribution, each individual who will be an employee of any Manitowoc ParentCo Entity after the Distribution and who is a director or officer of any SpinCo Entity shall have resigned or been removed from each such directorship and office held by such individual, effective no later than immediately prior to the Distribution.
(i) Each of SpinCo and Manitowoc ParentCo will take all reasonable steps necessary or desirable to cause the conditions set forth in Section 3.3 to be satisfied and to effect the Distribution.
15
Section 3.3 Conditions to Distribution . The consummation of the Distribution will be subject to the satisfaction, or waiver by Manitowoc ParentCo in its sole and absolute discretion, of the conditions set forth in this Section 3.3. Any determination by Manitowoc ParentCo regarding the satisfaction or waiver of any of such conditions will be conclusive.
(a) The Manitowoc ParentCo Board shall, in its sole and absolute discretion, have authorized and approved the Separation and the Distribution and not withdrawn such authorization and approval.
(b) The Manitowoc ParentCo Board shall have declared the dividend of SpinCo Common Stock to the Manitowoc ParentCo shareholders.
(c) The SEC shall have declared the Form 10 effective under the Exchange Act, no stop order suspending the effectiveness of the Form 10 shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the SEC, and the Information Statement included therein (the Information Statement ) or a notice of Internet availability of the Information Statement will have been mailed to the Manitowoc ParentCo shareholders.
(d) The New York Stock Exchange or another national securities exchange approved by the Manitowoc ParentCo Board shall have accepted the SpinCo Common Stock for listing, subject to official notice of issuance.
(e) The Internal Reorganization and Contribution shall have been completed.
(f) Manitowoc ParentCo shall have received an opinion from its Tax Advisor, in form and substance satisfactory to Manitowoc ParentCo in its sole and absolute discretion, that, subject to the accuracy of and compliance with certain representations, assumptions and covenants, the Distribution and certain related transactions will qualify for non-recognition of gain or loss to Manitowoc ParentCo or its shareholders pursuant to Sections 355 and 368 and related provisions of the Code, except to the extent of cash received in lieu of fractional shares.
(g) No order, injunction or decree that would prevent the consummation of the Distribution shall be threatened, pending or issued (and still in effect) by any Governmental Authority of competent jurisdiction, no other legal restraint or prohibition preventing the consummation of the Distribution shall be in effect, and no other event outside the control of Manitowoc ParentCo shall have occurred or failed to occur that prevents the consummation of the Distribution.
(h) No other events or developments shall have occurred prior to the Distribution that, in the judgment of the Manitowoc ParentCo Board, would result in the Distribution having a material adverse effect on Manitowoc ParentCo or its shareholders.
(i) Each of the Ancillary Agreements will have been duly executed and delivered by the parties thereto.
(j) The SpinCo Certificate of Incorporation and Bylaws, in the form specified in Section 3.2(e), shall be in effect.
Each of the foregoing conditions is for the sole benefit of Manitowoc ParentCo and will not give rise to or create any duty on the part of Manitowoc ParentCo or its board of directors to waive or not to waive any such condition or to effect the Distribution, or in any way limit Manitowoc ParentCos rights of termination set forth in this Agreement.
16
Section 3.4 Certain Shareholder Matters .
(a) Subject to Section 3.3 and Section 3.4(c) hereof, on or prior to the Distribution Date, Manitowoc ParentCo will deliver to a distribution agent to be appointed by Manitowoc ParentCo (the Distribution Agent ) for the benefit of holders of record of Manitowoc ParentCo Common Stock on the Record Date, a single stock certificate, endorsed by Manitowoc ParentCo in blank, representing all of the outstanding shares of SpinCo Common Stock then owned by Manitowoc ParentCo, and Manitowoc ParentCo will instruct the Distribution Agent to deliver to the SpinCo Transfer Agent true, correct and complete copies of the stock and transfer records reflecting the holders of Manitowoc ParentCo Common Stock entitled to receive shares of SpinCo Common Stock in connection with the Distribution. Manitowoc ParentCo will cause its transfer agent to instruct the Distribution Agent to distribute electronically on the Distribution Date or as soon as reasonably practicable thereafter the appropriate number of shares of SpinCo Common Stock to each such holder or designated transferee(s) of such holder by way of direct registration in book-entry form. SpinCo will not issue paper stock certificates. Manitowoc ParentCo will cooperate, and will instruct the Distribution Agent to cooperate, with SpinCo and the SpinCo Transfer Agent, and SpinCo will cooperate, and will instruct the SpinCo Transfer Agent to cooperate, with Manitowoc ParentCo and the Distribution Agent, in connection with all aspects of the Distribution and all other matters relating to the issuance of the shares of SpinCo Common Stock to be distributed to the holders of Manitowoc ParentCo Common Stock in connection with the Distribution.
(b) Subject to Section 3.3, each holder of Manitowoc ParentCo Common Stock on the Record Date (or such holders designated transferee(s)) will be entitled to receive in the Distribution a number of whole shares of SpinCo Common Stock as determined according to the Distribution Ratio. No fractional shares will be distributed in connection with the Distribution.
(c) No fractional shares will be distributed or credited to book-entry accounts in connection with the Distribution. The SpinCo Transfer Agent will, as soon as practicable after the Distribution Date, (i) determine the number of whole shares and fractional shares of SpinCo Common Stock allocable to each holder of record or beneficial owner of Manitowoc ParentCo Common Stock as of the close of business on the Record Date, (ii) aggregate all fractional shares into whole shares and sell such whole shares in the open market at prevailing market prices on behalf of holders of Manitowoc ParentCo Common Stock who would otherwise be entitled to receive fractional shares in the Distribution and (iii) distribute the aggregate cash proceeds from the sale, net of brokerage fees and other costs, pro rata (reduced by any required Tax withholding) to each such holder of Manitowoc ParentCo Common Stock who would otherwise be entitled to receive a fractional share in the Distribution. Neither Manitowoc ParentCo, SpinCo nor the SpinCo Transfer Agent will be required to guarantee any minimum sale price for the fractional shares of SpinCo Common Stock. Neither Manitowoc ParentCo nor SpinCo will be required to pay any interest on the proceeds from the sale of fractional shares.
ARTICLE 4
ACCESS TO INFORMATION
Section 4.1 Restrictions on Disclosure of Information .
(a) Generally . Subject to Section 4.2, without limiting any rights or obligations under any other existing or future agreement among the parties and/or any other members of their respective Group relating to confidentiality, including any Ancillary Agreement, for five years after
17
the Effective Date each party will, and will cause its respective Group members and their Representatives to, hold in strict confidence, with at least the same degree of care that applies to Manitowoc ParentCos confidential and proprietary Information pursuant to policies in effect as of the Effective Date, all confidential and proprietary Information concerning the other Group that is either in its possession as of the Effective Date, obtained by it prior to the Distribution Date or furnished by the other Group or its respective Representatives at any time pursuant to this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby. Notwithstanding the foregoing, each party, its respective Group members and its Representatives may disclose such Information to the extent that such party can demonstrate that such Information is or was (i) in the public domain other than by the breach of this Agreement or by breach of any other agreement between or among the parties relating to confidentiality, (ii) lawfully acquired from a third Person on a non-confidential basis or independently developed by, or on behalf of, such party by Persons who do not have access to, or descriptions of, any such Information, provided that for purposes of this clause (ii) if such party refers to Manitowoc ParentCo it will be deemed a reference to the Manitowoc ParentCo Business and if such party refers to SpinCo it will be deemed a reference to the Foodservice Business, or (iii) permitted to be disclosed without consent, notice or any other obligation pursuant to an Ancillary Agreement. Each party will maintain, and will cause its respective Group members and Representatives to maintain, policies and procedures, and develop such further policies and procedures as will from time to time become necessary or appropriate, to ensure compliance with this Section 4.1.
(b) Disclosure of Third Person Information . SpinCo acknowledges that it may have in its possession confidential or proprietary Information of third Persons that was received under confidentiality or non-disclosure agreement with such third Person while it was an Affiliate of Manitowoc ParentCo. SpinCo will hold in strict confidence the confidential and proprietary Information of third Persons to which SpinCo has access, in accordance with the terms of any agreements entered into prior to the Effective Date between Manitowoc ParentCo (whether acting through, on behalf of, or in connection with, the Foodservice Business) and such third Persons. Manitowoc ParentCo will comply with the terms of any confidentiality or non-disclosure agreement with third Persons, notwithstanding that such agreements may have been assigned to SpinCo. SpinCo further acknowledges that Manitowoc ParentCo is or may be the subject to a variety of Actions, court orders or agreements covering confidentiality or non-disclosure of certain matters, and SpinCo will continue to be bound by such orders and agreements where otherwise applicable.
(c) Press Releases . Each of Manitowoc ParentCo and SpinCo will consult with the other prior to issuing, and will provide the other party the opportunity to review and comment upon, any press releases or other public statements in connection with the Distribution or any of the other transactions contemplated by this Agreement and prior to making any filings with the SEC or any other governmental authority or any national securities exchange with respect thereto (including the parties respective Quarterly Reports on Form 10-Q filed with respect to the fiscal quarter during which the Distribution Date occurs (each such Quarterly Report on Form 10-Q, a First Post-Distribution Report )). Each partys obligations pursuant to this Section 4.1(c) will terminate on the date on which such partys First Post-Distribution Report is filed with the SEC.
Section 4.2 Legally Required Disclosure of Information . If any party or any of its respective Group members or Representatives becomes legally required to disclose any Information (the Disclosing Party ) that it is otherwise obligated to hold in strict confidence pursuant to Section 4.1, such party will promptly notify the Person that owns the Information (the Owning Party ), and will use all commercially reasonable efforts to cooperate with the Owning Party so that the Owning
18
Party may seek a protective order or other appropriate remedy and/or waive compliance with this Section 4.2. All expenses reasonably incurred by the Disclosing Party in seeking a protective order or other remedy upon the written request of the Owning Party will be borne by the Owning Party. If such protective order or other remedy is not obtained, or if the Owning Party waives compliance with this Section 4.2, the Disclosing Party will (a) disclose only that portion of the Information which its legal counsel advises it is compelled to disclose or otherwise stand liable for contempt or suffer other similar significant corporate censure or penalty, (b) use all commercially reasonable efforts to obtain reliable assurance requested by the Owning Party that confidential treatment will be accorded such Information, and (c) promptly provide the Owning Party with a copy of the Information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such Information was disclosed.
Section 4.3 Access to Information . During the Retention Period, each party will cooperate with and afford, and will cause its Group members and Representatives to cooperate with and afford, to the other party reasonable access upon reasonable advance written request to all Information (other than Information which is (a) protected from disclosure by attorney-client privilege or work product doctrine that is exclusive to that party, (b) proprietary in nature to such party, (c) the subject of a confidentiality agreement between such party and a third Person which prohibits disclosure to the other party, or (d) prohibited from disclosure under applicable law (collectively, the Restricted Information )) owned by such party or one of its Group members or within such partys or any of its Group members or Representatives possession which is created prior to the Distribution Date and which relates to the requesting partys (the Requestor ) business, assets or liabilities, and such access is reasonably required by the Requestor (i) to comply with requirements imposed on the Requestor by any governmental authority, (ii) for use in any Third-Party Claim or other proceeding (except for a Litigation Matter between the parties or any of their respective Group members), (iii) to satisfy audit, accounting or similar requirements, (iv) to obtain insurance, or (v) to comply with the Requestors obligations under this Agreement or any Ancillary Agreement. As used in this Agreement, access will mean the obligation of a party in possession of Information (the Possessor ) requested by the Requestor to exert its commercially reasonable efforts to locate all requested Information that is owned and/or possessed by Possessor or any of its Group members or Representatives. The Possessor will conduct a diligent search designed to identify all requested Information and will collect all such Information (other than Restricted Information) for inspection by the Requestor during normal business hours at the Possessors place of business, and all reasonable, documented out-of-pocket expenses incurred by the Possessor in complying with its obligations hereunder will be reimbursed by the Requestor promptly upon request by the Possessor. Subject to such confidentiality and/or security obligations as the Possessor may reasonably deem necessary, the Requestor may have all requested Information (other than Restricted Information) duplicated at Requestors expense. Alternatively, the Possessor may choose to deliver, at the Requestors expense, all requested Information (other than Restricted Information) to the Requestor in the form requested by the Requestor. The Possessor will notify the Requestor in writing at the time of delivery if such Information is to be returned to the Possessor. In such case, the Requestor will return such Information when no longer needed to the Possessor at the Requestors expense. In connection with providing Information pursuant to this Section 4.3, each party hereto will, upon the request of the other party and upon reasonable advance notice, make available during normal business hours its employees (and those employees of its Group members) to the extent that they are reasonably necessary to discuss and explain all requested Information with and to the Requestor.
Section 4.4 Record Retention . SpinCo will, and will cause each other SpinCo Entity to, adopt and comply with a record retention policy with respect to Information owned by or in
19
the possession of SpinCo and which is created prior to the Distribution Date that is substantially the same as Manitowoc ParentCos record retention policy in effect as of the Effective Date. Manitowoc ParentCo will, and will cause each other Manitowoc ParentCo Entity to, maintain and comply with its record retention policy substantially as currently in effect as of the Effective Date with respect to Information owned by or in the possession of Manitowoc ParentCo prior to the Distribution Date. Each party will, at its sole cost and expense, preserve and retain all Information in its respective possession or control that any other party has the right to access pursuant to Section 4.3 and that it is required to preserve and retain in accordance with such record retention policy or for any longer period as may be required by (a) any government agency, (b) any Litigation Matter, including in accordance with legal holds, (c) applicable law, or (d) any Ancillary Agreement (as applicable, the Retention Period ). Each party will use commercially reasonable efforts to cooperate with the other to enforce legal holds required to be enforced by any other party hereunder. If any party wishes to dispose of any Information which it is obligated to retain under this Section 4.4 prior to the expiration of the Retention Period, then that party will first provide 45 days written notice to the other party, and the other party will have the right, at its option but at the expense of the party that desires to dispose of such Information, upon prior written notice within such 45-day period, to take possession of such Information within 90 days after the date of the notice provided pursuant to this Section 4.4. Written notice of intent to dispose of such Information will include a description of the Information in detail sufficient to allow the other party to reasonably assess its potential need to retain such materials.
Section 4.5 Production of Witnesses . For no fewer than seven years after the Effective Date, each party will use commercially reasonable efforts to make available to each other, upon written request, its past and present Representatives as witnesses to the extent that any such Representatives may reasonably be required (giving consideration to the business demands upon such Representatives) in connection with any legal, administrative or other proceedings in which the requesting party may from time to time be involved. In the event of any proceeding between the parties, this Section 4.5 is not intended to supersede or replace the applicable rules of procedure that would otherwise be applicable to such proceedings.
Section 4.6 Reimbursement . Unless otherwise provided in this Article 4, each party providing access to Information or witnesses to the other party pursuant to Sections 4.3, 4.4 or 4.5 will be entitled to receive from the receiving party, upon the presentation of invoices therefor, payment for all reasonable, out-of-pocket costs and expenses (excluding allocated compensation, salary and overhead expenses) as may be reasonably incurred in providing such Information or witnesses.
Section 4.7 Other Agreements Regarding Access to Information . The rights and obligations of the parties under this Article 4 are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of Information set forth in this Agreement or any Ancillary Agreement.
Section 4.8 Acquisition by Another Person .
(a) For a period of three years after the Distribution Date, SpinCo covenants and agrees (i) that it will not sell all or any material portion of the Foodservice Business to any third Person unless such third Person expressly agrees in writing to be bound by all of SpinCos obligations under this Agreement and the Ancillary Agreements to the extent then applicable; and (ii) in the event SpinCo enters into an agreement with a third Person to sell all or any portion of the
20
Foodservice Business, SpinCo will not disclose any Information of Manitowoc ParentCo or relating to the Manitowoc ParentCo Business to such third Person without Manitowoc ParentCos express written consent which may be withheld in Manitowoc ParentCos sole discretion. In addition, Manitowoc ParentCo will have the right, in its sole discretion, to require SpinCo to destroy or return to Manitowoc ParentCo all or any portion of such Information prior to such disposition.
(b) For a period of three years after the Distribution Date, Manitowoc ParentCo covenants and agrees: (i) it will not sell all or any material portion of the Manitowoc ParentCo Business to any third Person unless such third Person expressly agrees in writing to be bound by all of Manitowoc ParentCos obligations under this Agreement and the Ancillary Agreements to the extent then applicable; and (ii) in the event Manitowoc ParentCo enters into an agreement with a third Person to sell all or any portion of the Manitowoc ParentCo Business, Manitowoc ParentCo will not disclose any Information of SpinCo or relating to the Foodservice Business to such third Person without SpinCos express written consent which may be withheld in SpinCos sole discretion. In addition, SpinCo will have the right, in its sole discretion, to require Manitowoc ParentCo to destroy or return to SpinCo all or any portion of such Information prior to such disposition.
Section 4.9 Financial Statements and Accounting . Each of Manitowoc ParentCo and SpinCo agrees to provide the assistance or access set forth in subsections (a), (b) and (c) of this Section 4.9 as follows: (i) during an initial period that shall expire upon the latest to occur of (x) 365 days following the Distribution Date, (y) the date that Manitowoc ParentCo files its Annual Financial Statement for the year ended December 31, 2016 with the SEC and (z) the date that SpinCo files its Annual Financial Statement for the year ended December 31, 2016 with the SEC, in connection with the preparation and audit of each partys Interim Financial Statements and Annual Financial Statements, the printing, filing and public dissemination of such Interim Financial Statements and Annual Financial Statements, the audit of each partys internal control over financial reporting and managements assessment thereof and managements assessment of each partys disclosure controls and procedures, if required, in each case made as of December 31, 2015 and December 31, 2016; (ii) following the initial period described in clause (i) of this paragraph, with the consent of the applicable party (not to be unreasonably withheld or delayed) for reasonable business purposes; (iii) in the event that any party changes its auditors within two years of the Distribution Date, then such party may request reasonable access on the terms set forth in this Section 4.9 for a period of up to 180 days from such change; and (iv) from time to time following the Distribution Date, to the extent reasonably necessary to respond (and for the limited purpose of responding) to any written request or official comment from a governmental authority, such as in connection with responding to a comment letter from the SEC.
(a) Financial Statements . Each party will provide or provide access to the other party on a timely basis all information reasonably required to meet its schedule for the preparation, printing, filing and public dissemination of its Interim Financial Statements and Annual Financial Statements and for managements assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K and, to the extent applicable to such party, its auditors audit of its internal control over financial reporting and managements assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the SECs and Public Company Accounting Oversight Boards rules and auditing standards thereunder, if required (such assessments and audit being referred to as the Internal Control Audit and Management Assessments ). Without limiting the generality of the foregoing, each such party will provide all required financial and other information with respect to itself to its auditors in a sufficient and reasonable time and in sufficient
21
detail to permit its auditors to take all steps and perform all reviews necessary to provide sufficient assistance to the other partys auditors (the Other Partys Auditors ) with respect to information to be included or contained in such other partys Annual Financial Statements and to permit the Other Partys Auditors and management to complete the Internal Control Audit and Management Assessments, if required.
(b) Access to Personnel and Records . Each party will authorize its respective auditors to make reasonably available to the Other Partys Auditors both the personnel who performed or are performing the annual audits of the audited party (each party with respect to its own audit, the Audited Party ) and work papers related to the annual audits of the Audited Party, in all cases within a reasonable time prior to the Audited Partys auditors opinion date, so that the Other Partys Auditors are able to perform the procedures they reasonably consider necessary to take responsibility for the work of the Audited Partys auditors as it relates to their auditors report on the other partys Annual Financial Statements, all within sufficient time to enable the other party to meet its timetable for the printing, filing and public dissemination of its Annual Financial Statements. Each party will make reasonably available to the Other Partys Auditors and management its personnel and records in a reasonable time prior to the Other Party Auditors opinion date and other partys managements assessment date so that the Other Partys Auditors and other partys management are able to perform the procedures they reasonably consider necessary to conduct the Internal Control Audit and Management Assessments.
(c) Annual Reports . Each party will deliver to the other party a substantially final draft, as soon as the same is prepared, of the first report to be filed with the SEC (or otherwise) that includes its Annual Financial Statements (in the form expected to be covered by the audit report of such partys independent auditors) (such reports, collectively, the Annual Reports ); provided , however , that each such party may continue to revise its respective Annual Report prior to the filing thereof, which changes will be delivered to the other party as soon as reasonably practicable; provided , further , that each partys personnel will actively consult with the other partys personnel regarding any material changes which they may consider making to its respective Annual Report and related disclosures prior to the anticipated filing with the SEC, with particular focus on any changes which could reasonably be expected to have an effect upon the other partys Annual Financial Statements or related disclosures.
Nothing in this Section 4.9 will require either party to violate any agreement with any third Person regarding the confidentiality of confidential and proprietary Information relating to that third Person or its business; provided , however , that in the event that a party is required under this Section 4.9 to disclose any such Information, such party will use commercially reasonable efforts to seek to obtain such third Persons written consent to the disclosure of such Information.
Section 4.10 Conflicts in Litigation . Each party acknowledges and recognizes that Manitowoc ParentCo and its Subsidiaries have used certain outside counsel for advice and counseling and that each party and the other members of each Group may continue to use such counsel after the Effective Date. Each party expressly waives any claim of conflict as a result of Manitowoc ParentCos prior use of such outside counsel and agrees that it will not, and will not allow the members of its Group to, assert after the Effective Date that any such counsel has a conflict that would preclude it from providing advice and counseling to any other party or other member of a Group; provided , however , that in the event of a threatened or actual conflict between Manitowoc ParentCo and SpinCo (and/or members of their respective Groups) after the date of the Distribution, such waiver will not apply and the laws governing such conflicts of interest will apply.
22
Section 4.11 Privilege .
(a) Each party recognizes that the members of its Group possess and will possess information and advice that has been previously developed but is legally protected from disclosure under legal privileges, such as the attorney-client privilege or work product exemption and other concepts of legal privilege ( Privilege ). Each party recognizes that, except as specified in this Section 4.11, it will be entitled to the Privilege with respect to such privileged information and that each will be entitled to maintain and use for its own benefit all such information and advice, but both parties will ensure that such information is maintained so as to protect the Privilege to the fullest extent. The parties agree that their respective rights and obligations to maintain, preserve, assert or waive any or all Privilege belonging to any party with respect to the Manitowoc ParentCo Business and the Foodservice Business will be governed by the provisions of this Section 4.11. With respect to matters relating to the Manitowoc ParentCo Business, Manitowoc ParentCo will have sole authority in perpetuity to determine whether to assert or waive any or all Privilege, and SpinCo will take no action that could reveal Privileged Information without the prior written consent of Manitowoc ParentCo. With respect to matters solely relating to the Foodservice Business, SpinCo will have sole authority in perpetuity to determine whether to assert or waive any or all Privilege, and Manitowoc ParentCo will take no action (and will not permit any of its Subsidiaries to take action) that could reveal Privileged Information without the prior written consent of SpinCo. The rights and obligations created by this Section 4.11 will apply to all Information as to which the parties or their respective Subsidiaries would be entitled to assert or has asserted a Privilege without regard to the effect, if any, of the Distribution ( Privileged Information ), except that upon request of a government enforcement agency investigating Manitowoc ParentCo, SpinCo or any of the respective Subsidiaries, then Manitowoc ParentCo will have the sole right to waive privilege regarding pre-Distribution Privileged Information, and the consent of SpinCo or its Subsidiary will not be required, but Manitowoc ParentCo will give advance written notice to SpinCo or its Subsidiaries. For the purposes hereof, Privileged Information of Manitowoc ParentCo will include the following: (i) any and all Privileged Information existing prior to the Distribution regarding the Manitowoc ParentCo Business but which after the Distribution is in the possession of SpinCo or any of its Subsidiaries; and (ii) all communications subject to a Privilege occurring prior to the Distribution, including but not limited to communications between counsel for Manitowoc ParentCo or any of its Subsidiaries (including in-house counsel and former in-house counsel who are employees of SpinCo) and any person who, at the time of the communication, was an employee of Manitowoc ParentCo or any of its Subsidiaries, or otherwise able to have a privileged communication or create a privileged document, regardless of whether such employee is or becomes an employee of SpinCo or any of its Subsidiaries. For the purposes hereof, Privileged Information of SpinCo will include the following: (i) any and all Privileged Information existing prior to the Distribution regarding the Foodservice Business but which after the Distribution is in the possession of Manitowoc ParentCo or any of its Subsidiaries; and (ii) all communications subject to a Privilege occurring prior to the Distribution, including but not limited to communications between counsel for SpinCo or any of its Subsidiaries (including in-house counsel and former in-house counsel who are employees of SpinCo) and any person who, at the time of the communication, was an employee of SpinCo or any of its Subsidiaries or otherwise able to have a privileged communication or create a privileged document, regardless of whether such employee is or becomes an employee of SpinCo or any of its Subsidiaries.
(b) Upon receipt by any party of any subpoena, discovery or other request from any third Person that actually or arguably calls for the production or disclosure of Privileged Information of any other party or if any party obtains knowledge that any current or former employee of such party has received any subpoena, discovery or other request from any third Person that
23
actually or arguably calls for the production or disclosure of Privileged Information of the other party, the receiving party will promptly notify the other party of the existence of the request to the extent permitted by law and will provide the other party a reasonable opportunity to review the Privileged Information and to assert any rights it may have under Section 4.2 or this Section 4.11 or otherwise to prevent the production or disclosure of Privileged Information. Unless otherwise required by law, no party will produce or disclose to any third Person any of the others Privileged Information under this Section 4.11 unless (i) the other party has provided its express written consent to such production or disclosure, (ii) no written objection is made within 14 days after notice upon the other party requesting such consent, in which case consent will be deemed to be granted, (iii) a court of competent jurisdiction has entered an order not subject to interlocutory appeal or review finding that the Privileged Information is not entitled to protection from disclosure under any applicable Privilege, doctrine or rule or otherwise requiring production of such Privileged Information, or (iv) or as otherwise provided in Section 4.11(a) relating to a government enforcement agency investigation.
ARTICLE 5
ADDITIONAL COVENANTS AND OTHER MATTERS
Section 5.1 Further Assurances . In addition to the Ancillary Agreements, the parties agree to execute and deliver, as appropriate, such other agreements, instruments and documents as may be necessary or desirable in order to effect the transactions contemplated by this Agreement and the Ancillary Agreements. Without limiting the foregoing sentence, prior to, on and after the Distribution Date, each party shall, and shall cause its Subsidiaries to, cooperate with the other party and its Subsidiaries, and without any further consideration, but at the expense of the requesting party, to (a) execute and deliver, or use its commercially reasonable efforts to cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such party may be reasonably requested to execute and deliver to the other party, (b) make, or cause to be made, all filings with, and obtain, or cause to be obtained, all consents, approvals or authorizations of, any governmental authority or any other Person under any permit, license, agreement, indenture or other instrument, (c) seek, obtain, or cause to be obtained, any governmental approvals or other consents required to effect the Separation or the Distribution and (iv) take all such other actions as such party may reasonably be requested to take by any other party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements, the transfers of the Foodservice Assets and the Manitowoc ParentCo Assets, the assignment and assumption of the Foodservice Liabilities and the Manitowoc ParentCo Liabilities and the other transactions contemplated hereby and thereby. Without limiting the first sentence of this Section 5.1, each party shall, and shall cause its Subsidiaries to, at the reasonable request, cost and expense of the other party, take such other actions as may be reasonably necessary to vest in such other party good and marketable title, if and to the extent it is practicable to do so.
Section 5.2 Performance . Manitowoc ParentCo will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Manitowoc ParentCo Group. SpinCo will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the SpinCo Group. Each party further agrees that it will cause its other Group members not to take any action or fail to take any such action where such action or failure to act would be inconsistent with such partys obligations under this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby.
24
Section 5.3 Litigation Matters .
(a) SpinCo and Manitowoc ParentCo agree that (i) the SpinCo Exclusive Litigation Matters listed on Schedule 5.3(a) constitute pre-existing Third-Party Claims, which were initiated prior to the Effective Date and for which proper notice has been given, (ii) any Liabilities incurred by any Manitowoc ParentCo Indemnified Party in connection therewith constitute Damages for the purposes of Article 6 hereof, and (iii) SpinCo will assume control of such SpinCo Exclusive Litigation Matters pursuant to Section 6.3(d)(i) as the Indemnifying Party. SpinCo and Manitowoc ParentCo further agree that the SpinCo Exclusive Litigation Matters will remain and be treated as Third-Party Claims after the Effective Date. Manitowoc ParentCo agrees that the outside legal counsel currently retained in the SpinCo Exclusive Litigation Matters may continue to represent the interests of both SpinCo and Manitowoc ParentCo, subject to Manitowoc ParentCos rights pursuant to Section 6.3(d)(ii) and Section 6.3(d)(iii)) below. Manitowoc ParentCo further agrees that it will use commercially reasonable efforts to cooperate and assist SpinCo in preserving and enforcing any third Person intellectual property indemnification protection rights available to Manitowoc ParentCo in connection with the SpinCo Exclusive Litigation Matters.
(b) SpinCo and Manitowoc ParentCo agree that (i) the Manitowoc ParentCo Exclusive Litigation Matters listed on Schedule 5.3(b) constitute pre-existing Third-Party Claims, which were initiated prior to the Effective Date and for which proper notice has been given, (ii) any Liabilities incurred by any SpinCo Indemnified Party in connection therewith constitute Damages for the purposes of Article 6 hereof, and (iii) Manitowoc ParentCo will assume control of such Manitowoc ParentCo Exclusive Litigation Matters pursuant to Section 6.3(d)(i) as the Indemnifying Party. SpinCo and Manitowoc ParentCo further agree that the Manitowoc ParentCo Exclusive Litigation Matters will remain and be treated as Third-Party Claims after the Effective Date. SpinCo agrees that the outside legal counsel currently retained by Manitowoc ParentCo in the Manitowoc ParentCo Exclusive Litigation Matters may continue to represent the interests of both Manitowoc ParentCo and SpinCo, subject to SpinCos rights pursuant to Section 6.3(d)(ii) and Section 6.3(d)(iii) below. SpinCo further agrees that it will use commercially reasonable efforts to cooperate and assist Manitowoc ParentCo in preserving and enforcing any third Person intellectual property indemnification protection rights available to SpinCo in connection with the Manitowoc ParentCo Exclusive Litigation Matters.
(c) SpinCo and Manitowoc ParentCo agree that (i) the Corporate Litigation Matters listed on Schedule 5.3(c) constitute pre-existing Third-Party Claims, which were initiated prior to the Effective Date and for which proper notice has been given, (ii) any Liabilities incurred by any SpinCo Indemnified Party in connection therewith constitute Damages for the purposes of Article 6 hereof, and will remain and be treated as Third-Party Claims after the Effective Date (such claims, for the purposes of this Section 5.3, are referred to as Indemnified Matters ), and (iii) Manitowoc ParentCo will assume control of such Corporate Litigation Matters pursuant to Section 6.3(d)(i) as the Indemnifying Party. As to Corporate Litigation Matters that are securities class actions or shareholder derivative claims or related Actions filed or commenced before, on or after the Distribution Date and that involve only alleged Pre-Distribution Date Wrongful Acts, Manitowoc ParentCo will treat them as Indemnified Matters. Notwithstanding the foregoing, as to Corporate Litigation Matters that are securities class actions or shareholder derivative claims or related Actions filed on or after the Distribution Date that (i) involve both alleged Pre-Distribution Date Wrongful
25
Acts and alleged Post-Distribution Date Wrongful Acts, Manitowoc ParentCo will treat Pre-Distribution Date Wrongful Acts as Indemnified Matters, and Manitowoc ParentCo and SpinCo will be responsible for their own liability as to that portion of any settlements, judgments, costs and expenses resulting from Post-Distribution Date Wrongful Acts; and (ii) do not involve Pre-Distribution Date Wrongful Acts, Manitowoc ParentCo will not indemnify SpinCo and SpinCo will not indemnify Manitowoc ParentCo.
(d) SpinCo agrees that the outside legal counsel currently retained by Manitowoc ParentCo in the Corporate Litigation Matters listed in Schedule 5.3(c) may continue to represent the interests of both SpinCo and Manitowoc ParentCo subject to SpinCos rights pursuant to Section 6.3(d)(ii)(iii) hereof. Manitowoc ParentCo will have sole authority with respect to insurance for the Corporate Litigation Matters that are, in whole or in part, Indemnified Matters, including the sole right to make, pursue and resolve any insurance claims, the right to separate and independent legal counsel, and the sole right to any proceeds from insurance claims. SpinCo will not have any right to separately assert an insurance claim for the Corporate Litigation Matters that are, in whole or in part, Indemnified Matters, nor to separately seek insurance proceeds or defense costs with respect to such Corporate Litigation Matters, but SpinCo will use commercially reasonable efforts to cooperate with Manitowoc ParentCo with respect to such Corporate Litigation Matters and insurance for the same, including with respect to Manitowoc ParentCos requests that assistance, information or support be provided in connection with any insurance or insurance claim regarding such matters.
(e) SpinCo and Manitowoc ParentCo agree that, as to Shared Litigation Matters listed on Schedule 5.3(e) , control of the Shared Litigation Matters and all Damages will be allocated as provided in Schedule 5.3(e) . The allocation of Damages and control of any Shared Litigation Matters not initially listed on Schedule 5.3(e) will be determined by good faith agreement based upon (i) the degree to which the parties anticipate liability is likely to be borne by the Manitowoc ParentCo Business and the Foodservice Business, (ii) the volume of sales of affected products or purchases (if applicable), and (iii) such other factors as the parties consider relevant or appropriate to the circumstances, except that in the case of employee matters, such allocation will be determined as provided in the Employee Matters Agreement and in the case of patent litigation, such allocation will be determined as set forth in the Intellectual Property Matters Agreement, in each case to the extent covered thereby.
(f) Notwithstanding anything to the contrary in this Section 5.3, nothing in this Section is intended to modify or affect (i) the allocation of financial responsibility for or the procedures for handling Third-Party Claims established under hereof (relating to Environmental Matters) or under the Tax Matters Agreement, the Employee Matters Agreement, the Transition Services Agreements or the Intellectual Property Matters Agreement.
(g) In the event that any Litigation Matter is filed after the Effective Date against Manitowoc ParentCo or any member of the Manitowoc ParentCo Group, and such Litigation Matter may be characterized as coming within the definition of SpinCo Exclusive Litigation Matters, Shared Litigation Matters or Corporate Litigation Matters to which SpinCo may have any potential Liability in accordance with Section 5.3(c) of this Agreement, Manitowoc ParentCo will notify SpinCo of such Litigation Matter and will take commercially reasonable steps to protect the rights and interests of SpinCo and members of the SpinCo Group in connection with the Litigation Matter. In the event that any Litigation Matter is filed after the Effective Date against SpinCo or any member of the SpinCo Group, and such Litigation Matter may be characterized as coming within the definition of
26
Manitowoc ParentCo Exclusive Litigation Matters, Corporate Litigation Matters or Shared Litigation Matters to which Manitowoc ParentCo may have any potential liability in accordance with Section 5.3(c) of this Agreement, SpinCo will notify Manitowoc ParentCo of such Litigation Matter and will take commercially reasonable steps to protect the rights and interests of Manitowoc ParentCo in connection with the Litigation Matter. In the event the interests of Manitowoc ParentCo and SpinCo are in conflict, each may in its sole discretion take such actions as it deems necessary to protect its interests to the extent permitted by and not otherwise in conflict with this Agreement. If a Litigation Matter is commenced after the Distribution Date naming Manitowoc ParentCo and SpinCo as defendants and one party is a nominal defendant, the other party will use commercially reasonable efforts to have the nominal defendant removed from the Litigation Matter.
(h) As to any Litigation Matter filed against Manitowoc ParentCo and/or SpinCo (or any member of their respective Groups) that is otherwise not listed on Schedules 5.3(a) , (b) , (c) and (e) despite the parties good faith efforts, (whether by mistake, inadvertence or design or because it arises subsequently) or is listed in error on the wrong Schedule, Manitowoc ParentCo and SpinCo will attempt to agree on the characterization of such Litigation Matter as coming within the definition of SpinCo Exclusive Litigation Matters, Manitowoc ParentCo Exclusive Litigation Matters, Corporate Litigation Matters or Shared Litigation Matters, or a matter that should be governed by the Employee Matters Agreement or other Ancillary Agreement. If such agreement is reached, the agreed upon characterization will control for all purposes under this Agreement. SpinCo and Manitowoc ParentCo will reasonably cooperate in this regard. In the event of a dispute over the appropriate allocation and if an agreement is not reached within 14 calendar days, the dispute resolution procedures set forth herein will apply.
(i) The Parties will update, as appropriate, Schedules 5.3(a) , (b) , (c) and (e) before the Distribution Date.
(j) In the event of a conflict in the procedures described in this Section 5.3 and the procedures set forth in Article 6, the terms of this Section 5.3 will control. In the event of a conflict between the subject matter set forth in this Section 5.3 and the Employee Matters Agreement, the Employee Matters Agreement will control, in the event of a conflict between the subject matter set forth in this Section 5.3 and the Intellectual Property Matters Agreement, the Intellectual Property Matters Agreement will control and in the event of a conflict between the subject matter set forth in this Section 5.3 and the Tax Matters Agreement, the Tax Matters Agreement will control.
Section 5.4 Insurance Matters .
(a) Directors and Officers Insurance . Effective on the Distribution Date, Manitowoc ParentCo will purchase an extended reporting period under its existing directors and officers liability insurance coverage, providing coverage for Manitowoc ParentCo, SpinCo, and each of their respective directors and officers (the D&O Tail ). The D&O Tail shall: (i) remain in force for a period of six (6) years following the Distribution Date; and (ii) provide coverage for claims made against Manitowoc ParentCo, SpinCo or their respective directors and officers, based on Pre-Distribution Date Wrongful Acts, in amounts and under substantially the same terms and conditions as were contained in Manitowoc ParentCos directors and officers liability insurance coverage that was in force immediately prior to the Distribution Date. SpinCo will promptly pay or reimburse Manitowoc ParentCo, as the case may be, for all costs and expenses associated with the D&O Tail that are allocated by Manitowoc ParentCo to SpinCo in accordance with Manitowoc ParentCos
27
practice with respect to the Foodservice Business as of the Effective Date. SpinCo further covenants and agrees that it will take appropriate steps to secure directors and officers liability insurance coverage for itself, its Subsidiaries and their respective directors and officers, effective as of the Distribution Date and covering claims arising from Post-Distribution Date Wrongful Acts.
(b) Other Insurance . Except as set forth in Section 5.4(a) with respect to directors and officers insurance, during the period from the Effective Date through the Distribution Date, Manitowoc ParentCo will, subject to insurance market conditions and other factors beyond Manitowoc ParentCos reasonable control, maintain, for the protection of SpinCo and its Covered Subsidiaries, policies of insurance that are comparable to those maintained generally for Manitowoc ParentCo and its Covered Subsidiaries during the same period. SpinCo will promptly pay or reimburse Manitowoc ParentCo, as the case may be, including payment or reimbursement after the Distribution Date, for all costs and expenses of any kind or nature, including retrospective premium charges associated with such insurance that are allocated by Manitowoc ParentCo to SpinCo and its Covered Subsidiaries in accordance with (i) Manitowoc ParentCos practice with respect to the Foodservice Business as of the Effective Date, or (ii) the terms of the Transition Services Agreement, as applicable. To the extent Manitowoc ParentCo purchases a new type of insurance, or an amount or level of insurance not previously purchased by Manitowoc ParentCo in order to protect, at least in part, SpinCo or any of its Subsidiaries, that portion of the costs and expenses of such insurance attributable to SpinCo or any of its Covered Securities, as determined in Manitowoc ParentCos reasonable discretion, will be reimbursed by SpinCo.
(c) Payments and Reimbursements . All payments and reimbursements by SpinCo pursuant to this Section 5.4 will be made within 30 days after SpinCos receipt of an invoice therefor from Manitowoc ParentCo.
(d) Changes in Costs or Expenses . The costs and expenses for which SpinCo is obligated to pay or reimburse Manitowoc ParentCo pursuant to this Section 5.4 will be based on Manitowoc ParentCos current insurance costs and expenses as of the Effective Date and will be appropriately adjusted as a result of any changes in those costs and expenses after the Effective Date, although the methodology upon which such costs and expenses is based will remain the same.
(e) Notification of Changes . Manitowoc ParentCo agrees to provide SpinCo not fewer than 60 days advance written notice in the event it elects (or any of its insurers notifies Manitowoc ParentCo in writing of such insurers election) to cancel or effect any non-administrative modification of the terms and conditions of any Manitowoc ParentCo insurance policy that provides coverage to SpinCo or any of its Covered Subsidiaries, which notice will include the anticipated date of cancellation or a description of such modification, as applicable.
(f) Historical Loss Data . For no fewer than seven years after the Effective Date, Manitowoc ParentCo will use commercially reasonable efforts to make available to SpinCo, upon written request, historical insurance loss Information relating to the Foodservice Business and any other Information relating to Manitowoc ParentCos historic insurance program with respect to the Foodservice Business. Any such Information provided to SpinCo pursuant to this provision will also be subject to the provisions of Section 4.3.
(g) Post Distribution Date . SpinCo acknowledges and agrees that from and after the Distribution Date (i) no member of the Manitowoc ParentCo Group will purchase or maintain, or cause to be purchased or maintained, any insurance policy for post-Distribution Date liabilities or
28
obligations of SpinCo, any member of the SpinCo Group or any of their respective directors and officers, and (ii) the SpinCo Group, including SpinCo and its Covered Subsidiaries, will purchase insurance coverage sufficient to protect its interests.
(h) Claims Procedure . To the extent that SpinCo desires to assert a first-party or third-party claim that may be covered by insurance pursuant to this Section 5.4, SpinCo will deliver a written notice to Manitowoc ParentCo, which notice must contain (A) a description of, and an estimated amount payable pursuant to, such claim, (B) the applicable insurance policy under which SpinCo is asserting such claim to the extent known, and (C) a reasonable explanation of the basis for the claim. Within 14 days after the receipt of such written notice from SpinCo, Manitowoc ParentCo will either (X) agree to assume the control of such claim with the applicable insurance carrier, or (Y) dispute that the claim is covered in whole or in part, in which case the parties will resort to the dispute resolution procedures set forth in Section 7.3, provided that in either event Manitowoc ParentCo will make reasonable efforts to give notice of claim to the insurer which maintains the insurance policy or policies identified by SpinCo in its notice to Manitowoc ParentCo, and SpinCo will at all times cooperate with reasonable requests for information by Manitowoc ParentCo or the insurers regarding any such claim. In the case of any first-party or third-party claim that may be covered by insurance as to which Manitowoc ParentCo assumes control, such control will be over the insurance claim and any matters reasonably necessary to preserve, present and prosecute such claim. In the case of claims involving directors and officers insurance or fiduciary insurance, Manitowoc ParentCo will, in addition, assert control of the underlying claim and/or litigation asserted against the Insureds.
Section 5.5 Conduct of Foodservice Business between Effective Date and Distribution Date . From the Effective Date through the Distribution Date, SpinCo will, and will cause each of the other SpinCo Entities to, conduct its operations in accordance with all of Manitowoc ParentCos applicable policies and procedures and consistent with past practice.
Section 5.6 Mail Handling; Receivables and Payables .
(a) To the extent that any member of the Manitowoc ParentCo Group receives any mail or packages relating to the Foodservice Business, the Foodservice Assets and/or the Foodservice Liabilities, Manitowoc ParentCo will, and will cause the applicable member of the Manitowoc ParentCo Group to, promptly deliver such mail or packages to SpinCo. After the Effective Date, to the extent that any member of the Manitowoc ParentCo Group receives cash or checks or drafts made payable to such member that constitutes a Foodservice Asset, Manitowoc ParentCo will, and will cause the applicable member of the Manitowoc ParentCo Group to, promptly forward such cash to, or deposit such checks or drafts and upon receipt of funds from such checks or drafts, forward such cash to SpinCo within five Business Days, or, if so requested by SpinCo, endorse such checks or drafts to SpinCo for collection. Manitowoc ParentCo may not assert any set off, hold back, escrow or other restriction against any payment described in this Section 5.6(a).
(b) To the extent that any member of the SpinCo Group receives any mail or packages relating to the Manitowoc ParentCo Business or the Manitowoc ParentCo Liabilities, SpinCo will, and will cause the applicable member of the SpinCo Group to, promptly deliver such mail or packages to Manitowoc ParentCo. After the Effective Date, to the extent that any member of the SpinCo Group receives cash or checks or drafts made payable to that member that constitutes a Manitowoc ParentCo Asset, SpinCo will, and will cause the applicable member of the SpinCo Group to, promptly forward such cash to, or deposit such checks or drafts and upon receipt of funds from
29
such checks or drafts, forward such cash to Manitowoc ParentCo within five Business Days, or, if so requested by Manitowoc ParentCo, endorse such checks or drafts to Manitowoc ParentCo for collection. SpinCo may not assert any set off, hold back, escrow or other restriction against any payment described in this Section 5.6(b).
ARTICLE 6
INDEMNIFICATION
Section 6.1 Indemnification by SpinCo Group . Subject to the provisions hereof, SpinCo will, and will cause its successors and assigns to, jointly and severally indemnify, defend and hold harmless Manitowoc ParentCo, each member of the Manitowoc ParentCo Group, each of their respective past and present officers, directors and employees, and each of their respective successors and assigns (collectively, the Manitowoc ParentCo Indemnified Parties ) from and against any and all Damages incurred or suffered by the Manitowoc ParentCo Indemnified Parties arising out of or in connection with the following, whether such Damages arise or accrue prior to, on or following the Effective Date:
(a) The failure of SpinCo or any other Person to pay, perform or otherwise properly discharge any of the Foodservice Liabilities in accordance with their respective terms; and
(b) Any breach by SpinCo of this Agreement or any Ancillary Agreement.
Section 6.2 Indemnification by Manitowoc ParentCo Group . Subject to the provisions hereof, effective at and after the Distribution, Manitowoc ParentCo will, and will cause its successors and assigns to, jointly and severally indemnify, defend and hold harmless SpinCo, each member of the SpinCo Group, each of their respective its past and present officers, directors and employees, and each of their respective successors and assigns (collectively, the SpinCo Indemnified Parties ) from and against any and all Damages incurred or suffered by the SpinCo Indemnified Parties arising out of or in connection with the following, whether such Damages arise or accrue prior to, on or following the Effective Date:
(a) The failure of Manitowoc ParentCo or any other Person to pay, perform or otherwise properly discharge any of the Manitowoc ParentCo Liabilities in accordance with their respective terms; and
(b) Any breach by Manitowoc ParentCo of this Agreement or any Ancillary Agreement.
Section 6.3 Claim Procedure .
(a) Claim Notice . A party that seeks indemnity under this Article 6 (an Indemnified Party ) will give written notice (a Claim Notice ) to the party from whom indemnification is sought (an Indemnifying Party ), whether the Damages sought arise from matters solely between the parties or from Third-Party Claims. The Claim Notice must contain (i) a description and, if known, estimated amount (the Claimed Amount ) of any Damages incurred or reasonably expected to be incurred by the Indemnified Party, (ii) a reasonable explanation of the basis for the Claim Notice to the extent of facts then known by the Indemnified Party, and (iii) a demand for payment of those Damages. No delay or deficiency on the part of the Indemnified Party in so notifying the Indemnifying Party will relieve the Indemnifying Party of any Liability or obligation hereunder except to the extent of any Damages caused by or arising out of such failure.
30
(b) Response to Notice of Claim . Within 30 days after delivery of a Claim Notice, the Indemnifying Party will deliver to the Indemnified Party a written response in which the Indemnifying Party will either: (i) agree that the Indemnified Party is entitled to receive all of the Claimed Amount or (ii) dispute that the Indemnified Party is entitled to receive all or any portion of the Claimed Amount.
(c) Undisputed and Disputed Claims .
(i) If (A) the Indemnifying Party fails to deliver to the Indemnified Party a written response to a Claim Notice within 30 days after delivery, or (B) agrees in a written response to a Claim Notice that the Indemnified Party is entitled to receive all of the Claimed Amount, then the Indemnifying Party shall, within 10 days, pay the Claimed Amount to the Indemnified Party in accordance with a payment and distribution method reasonably acceptable to the Indemnified Party.
(ii) In the event that the Indemnifying Party disputes the Claimed Amount, as soon as practicable but in no event later than 10 days after the receipt of the notice referenced in Section 6.3(b)(ii) hereof, the parties will begin the process to resolve the matter in accordance with the dispute resolution provisions of Section 7.3 hereof. Upon ultimate resolution thereof, the parties will take such actions as are reasonably necessary to comply with such terms of resolution.
(d) Third-Party Claims .
(i) In the event that the Indemnified Party receives written notice or otherwise learns of the assertion by a Person that is not a member of either Group of any claim or the commencement of any Action (collectively, a Third-Party Claim ) with respect to which the Indemnifying Party may be obligated to provide indemnification under this Article 6, the Indemnified Party will give written notice to the Indemnifying Party of the Third-Party Claim. Such notification will be given within 10 Business Days after receipt by the Indemnified Party of notice of such Third-Party Claim, will be accompanied by reasonable supporting documentation submitted by such third Person (to the extent then in the possession of the Indemnified Party) and will describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting the basis for such Third-Party Claim and the amount of the claimed Damages; provided , however , that no delay or deficiency on the part of the Indemnified Party in so notifying the Indemnifying Party will relieve the Indemnifying Party of any Liability or obligation hereunder except to the extent of any Damages caused by or arising out of such failure. Within 20 Business Days after delivery of such written notice, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Third-Party Claim with counsel reasonably satisfactory to the Indemnified Party. During any period in which the Indemnifying Party has not so assumed control of such defense, the Indemnified Party will control such defense.
31
(ii) The party not controlling such defense (the Non-controlling Party ) may participate therein at its own expense; provided , however , that if the Indemnifying Party assumes control of such defense and the Indemnified Party concludes, upon the written opinion of counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Third-Party Claim, the reasonable fees and expenses of counsel to the Indemnified Party will be considered Damages for purposes of this Agreement. The party controlling such defense (the Controlling Party ) will keep the Non-controlling Party reasonably advised of the status of such Third-Party Claim and the defense thereof and will consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party will furnish the Controlling Party with such Information as it may have with respect to such Third-Party Claim (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and will otherwise cooperate with and assist the Controlling Party in the defense of such Third-Party Claim.
(iii) The Indemnifying Party will not agree to any settlement of, or the entry of any judgment arising from, any such Third-Party Claim without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed; provided , however , that the consent of the Indemnified Party will not be required if (A) the Indemnifying Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment, and (B) such settlement or judgment includes a full, complete and unconditional release of the Indemnified Party from further Liability. The Indemnified Party will not agree to any settlement of, or the entry of any judgment arising from, any such Third-Party Claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld or delayed.
Section 6.4 Survival; Limitations .
(a) All covenants and agreements of the parties contained in this Agreement will survive the Contribution and Distribution. The rights and obligations of Manitowoc ParentCo, SpinCo and each of their respective Indemnified Parties under this Agreement will survive the sale, assignment or other transfer of (i) any Foodservice Assets or Foodservice Liabilities or (ii) any Manitowoc ParentCo Assets or Manitowoc ParentCo Liabilities.
(b) The amount of any Damages for which indemnification is provided under this Agreement will be net of any amounts actually recovered by the Indemnified Party from any third Person (including, without limitation, amounts actually recovered under insurance policies) with respect to such Damages. Any Indemnifying Party hereunder will be subrogated to the rights of the Indemnified Party upon payment in full of the amount of the relevant indemnifiable Damages. An insurer who would otherwise be obligated to pay any claim will not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provision hereof, have any subrogation rights with respect thereto. If any Indemnified Party recovers an amount from a third Person in respect of Damages for which indemnification is provided in this Agreement after the full
32
amount of such indemnifiable Damages has been paid by an Indemnifying Party or after an Indemnifying Party has made a partial payment of such indemnifiable Damages and the amount received from the third Person exceeds the remaining unpaid balance of such indemnifiable Damages, then the Indemnified Party will promptly remit to the Indemnifying Party the excess (if any) of (X) the sum of the amount theretofore paid by such Indemnifying Party in respect of such indemnifiable Damages plus the amount received from the third Person in respect thereof, less (Y) the full amount of such indemnifiable Damages.
(c) Notwithstanding anything to the contrary in this Article 6, but subject to Section 6.4(b) above, in the event that a SpinCo Group member is an Indemnifying Party, the initial presumption for purposes of calculating indemnity payments will be that there is no insurance coverage for any such Damages. The Indemnifying Party may at any time request that the Indemnified Party pursue insurance coverage from one or more insurers in connection with such Damages. If requested, the Indemnified Party will cooperate in good faith with the Indemnifying Party and use its commercially reasonable efforts to pursue insurance coverage, including, if necessary, the filing of coverage litigation, after consultation with the Indemnifying Party and the Indemnifying Party has provided written consent as to the initiation of coverage litigation (which consent will not be unreasonably withheld), all of which will be at the Indemnifying Partys sole cost and expense. The Indemnifying Party will pay directly or promptly reimburse the Indemnified Party for all such costs and expenses, as directed by the Indemnified Party. The Indemnified Party will retain full and exclusive control of all such matters (including, without limitation, the settlement of underlying covered claims and/or coverage claims against insurers), and the Indemnified Party will have the right to select counsel with the concurrence of Indemnifying Party, which concurrence will not be withheld unreasonably. The proceeds of any insurance recovery (after deducting the insurance indemnity payment for the settlement or judgment for which coverage was sought, and any costs and expenses that have not yet been paid or reimbursed by the Indemnifying Party) will be paid to the Indemnifying Party; provided, however, that the Indemnified Party shall not be required to pay any insurance proceeds to the Indemnifying Party in excess of the Indemnifying Partys costs of indemnification for the applicable matter(s). At all times, the Indemnifying Party will cooperate with the Indemnified Partys insurers and/or with the Indemnified Party in the pursuit of insurance coverage, as and when reasonably requested to do so by the Indemnified Party. It is not the intent of this Section 6.4(c) to absolve the Indemnifying Party of any responsibility to the Indemnified Party for those Damages in connection with which the Indemnified Party actually secures insurance coverage, but to allocate the costs of pursuing such coverage to the Indemnifying Party and to provide the Indemnified Party with a full, interim indemnity from the Indemnifying Party until such time as the extent of insurance coverage is determined and is obtained. It is also not the intention of this Section 6.4 that the indemnity obligations of the Indemnifying Party hereunder should be viewed as additional insurance by any insurer. Notwithstanding anything to the contrary in this Section 6.4(c), the Indemnified Party in its sole discretion may pursue insurance coverage for the benefit of Indemnifying Party before the Indemnifying Party has requested it to do so. In such event, the Indemnified Party may unilaterally take any steps it determines are necessary to preserve such insurance coverage, including, by way of example and not by way of limitation, tendering the defense of any claim or suit to an insurer or insurers of the Indemnified Party if the Indemnified Party concludes that such action may be required by the relevant insurance policy or policies. Any such actions by the Indemnified Party will not relieve Indemnifying Party of any of its obligations to the Indemnified Party under this Agreement, including the Indemnifying Partys obligation to pay directly or reimburse the Indemnified Party for costs and expenses. For purposes of this Section 6.4(c), the following will not be considered insurance that will be available to the Indemnifying Party: (i) any deductible payable by the Indemnified Party; (ii) any retention payable by the
33
Indemnified Party; (iii) any co-insurance payable by the Indemnified Party; and (iv) any coverage that ultimately will be payable or reimbursable by the Indemnified Party through any arrangement, including but not limited to an insurance-fronting arrangement or fronted insurance policy. It is the intention of this Section 6.4(c) to make insurance available to the Indemnifying Party only in those instances in which there has been a final transfer of the risk to a solvent third-party commercial insurer.
(d) Notwithstanding anything to the contrary in Section 6.1, Section 6.2 or Section 6.3, (i) indemnification with respect to Taxes and Tax-Related Losses will be governed exclusively by the Tax Matters Agreement, (ii) indemnification with respect to Third-Party Claims for infringement or misappropriation of Intellectual Property rights will be governed exclusively by the Intellectual Property Matters Agreement, and (iii) indemnification with respect to certain employee-related Liabilities will be governed by the Employee Matters Agreement. To the extent indemnification is not provided in such Ancillary Agreements, the terms of this Agreement will govern.
Section 6.5 Mutual Release of Pre-Distribution Claims .
(a) Except as provided in Section 6.5(c), as of the Distribution Date, Manitowoc ParentCo does hereby, for itself and each other member of the Manitowoc ParentCo Group, their respective Affiliates, successors and assigns, and all Persons who at any time prior to the Distribution Date have been shareholders, directors, officers, agents or employees of any member of the Manitowoc ParentCo Group (in each case, in their respective capacities as such), release and forever discharge SpinCo, each member of the SpinCo Group and their respective Affiliates, successors and assigns, and all stockholders, directors, officers, agents or employees of SpinCo (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever to Manitowoc ParentCo, and each other member of the Manitowoc Foodservice Group, their respective Affiliates, successors and assigns, and all Persons who at any time prior to the Distribution Date have been shareholders, directors, officers, agents or employees of any member of the Manitowoc ParentCo Group, whether at law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Distribution Date, including in connection with the transactions contemplated by this Agreement and the Ancillary Agreements and all other activities to implement the Separation and the Distribution.
(b) Except as provided in Section 6.5(c), as of the Distribution Date, SpinCo does hereby, for itself and each other member of the SpinCo Group, their respective Affiliates, successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), release and forever discharge Manitowoc ParentCo, each member of the Manitowoc ParentCo Group and their respective Affiliates, successors and assigns, and all shareholders, directors, officers, agents or employees of any member of the Manitowoc ParentCo Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever to SpinCo and each other member of the SpinCo Group, their respective Affiliates, successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of any member of the SpinCo Group, whether at law or in equity (including any
34
right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Distribution Date, including in connection with the transactions contemplated by this Agreement and the Ancillary Agreements and all other activities to implement the Separation and the Distribution.
(c) Nothing contained in Section 6.5(a) or (b) will impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in, or contemplated to continue pursuant to, this Agreement or any Ancillary Agreement. Without limiting the foregoing, nothing contained in Section 6.5(a) or (b) will release any Person from:
(i) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated such Person in accordance with this Agreement or any Ancillary Agreement;
(ii) any Liability that such Person may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement for claims brought against the parties by third Persons, which Liability will be governed by the provisions of Sections 6.1 through 6.4 and the applicable indemnification provisions of the Ancillary Agreements;
(iii) any Liability arising under a written Contract entered into between a member of each Group prior to the Distribution Date relating to the commercial sale of products or provision of services between such entities (including for such purpose, their respective Affiliates);
(iv) any indemnification obligation under such Persons articles or certificate of incorporation or bylaws or equivalent organizational document; or
(v) any Liability the release of which would result in the release of any third Person other than the Manitowoc ParentCo Indemnified Parties or the SpinCo Indemnified Parties.
(d) Manitowoc ParentCo will not make, and will not permit any member of the Manitowoc ParentCo Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against SpinCo, any member of the SpinCo Group or any other Person released pursuant to Section 6.5(a), with respect to any Liabilities released pursuant to Section 6.5(a). SpinCo will not make, and will not permit any member of the SpinCo Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Manitowoc ParentCo, any other member of the Manitowoc ParentCo Group or any other Person released pursuant to Section 6.5(b), with respect to any Liabilities released pursuant to Section 6.5(b).
(e) It is the intent of each of Manitowoc ParentCo and SpinCo by virtue of the provisions of this Section 6.5 to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed at or before the Distribution Date between or among any member of the Manitowoc ParentCo Group, on the one
35
hand, and any member of the SpinCo Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between any such members at or before the Distribution Date), except as expressly set forth in Section 6.5(c). At any time, at the reasonable request of a party, the other party will cause each member of its Group to execute and deliver releases reflecting the provisions hereof.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Governing Law . The internal laws of the State of Wisconsin (without reference to its principles of conflicts of law) govern the construction, interpretation and other matters arising out of or in connection with this Agreement and, unless expressly provided therein, each Ancillary Agreement, and each of the exhibits and schedules hereto and thereto (whether arising in contract, tort, equity or otherwise).
Section 7.2 Jurisdiction . If any Dispute arises out of or in connection with this Agreement or any Ancillary Agreement, except as expressly contemplated by another provision of this Agreement or any Ancillary Agreement, the parties irrevocably (a) consent and submit to the co-exclusive jurisdiction of federal and state courts located in Wisconsin and in Florida, (b) waive any objection to that choice of forum in Wisconsin or in Florida based on venue or to the effect that the forum is not convenient, and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.
Section 7.3 Dispute Resolution .
(a) Amicable Resolution . Manitowoc ParentCo and SpinCo mutually desire that friendly collaboration will continue between them. Accordingly, they will try, and they will cause their respective officers, directors, employees and other Group members to try, to resolve in an amicable manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement or any Ancillary Agreement, including any amendments hereto or thereto. In furtherance thereof, in the event of any dispute or disagreement (a Dispute ) between any Manitowoc ParentCo Group Member and any SpinCo Group member as to the interpretation of any provision of this Agreement or any Ancillary Agreement executed in connection herewith or therewith (or the performance of obligations hereunder or thereunder), then unless otherwise provided in any Ancillary Agreement, the matter, upon written request of either party, will be referred for resolution to a steering committee established on the Distribution Date pursuant to this Section 7.3(a) (the Dispute Resolution Committee ). The Dispute Resolution Committee will have four members, two of whom will be appointed by Manitowoc ParentCo and two of whom will be appointed by SpinCo. Each of Manitowoc ParentCo and SpinCo will use its good faith efforts to avoid replacing the initial members of the Dispute Resolution Committee for the first year after the Effective Date. Thereafter, Manitowoc ParentCo and SpinCo will, to the extent practicable, honor the other partys reasonable objections to any replacements of Dispute Resolution Committee members. While any person is serving as a member of the Dispute Resolution Committee, such person may not designate any substitute or proxy for purposes of attending or voting at a Dispute Resolution Committee meeting. The Dispute Resolution Committee will make a good faith effort to promptly resolve all Disputes referred to it. Dispute Resolution Committee decisions made with the consent of at least three members, including at least one SpinCo member and at least one Manitowoc ParentCo member, will be binding on Manitowoc ParentCo and SpinCo and their respective Group members. If the Dispute Resolution Committee does not agree to a resolution of a Dispute within 30
36
days after the referral of the matter to it, each of Manitowoc ParentCo and SpinCo will be free to exercise the remedies available to it under applicable law, subject to Section 7.3(b). Notwithstanding anything to the contrary in this Article 7, any amendment to the terms of this Agreement or any Ancillary Agreement may only be effected in accordance with Section 7.10.
(b) Mediation and Alternate Dispute Resolution . In the event any Dispute cannot be resolved in a friendly manner as set forth in Section 7.3(a), the parties intend that such Dispute be resolved by mediation (or some other mutually agreed upon alternative dispute resolution process ( ADR )). If the Dispute Resolution Committee is unable to resolve the Dispute as contemplated by Section 7.3(a), either Manitowoc ParentCo or SpinCo may demand mediation of the Dispute by written notice to the other in which case the two parties will select a mediator within ten (10) days after the demand. Neither party may unreasonably withhold consent to the selection of the mediator. The use of any ADR procedures will not be construed under the doctrines of laches, waiver or estoppel to affect adversely the rights of either party. Each of Manitowoc ParentCo and SpinCo will bear its own costs of mediation or other form of ADR, but both parties will equally share the costs of the mediator (or other neutral).
(c) Non-Exclusive Remedy . Nothing in this Section 7.3 will prevent either Manitowoc ParentCo or SpinCo from commencing formal litigation proceedings in any state or federal court in Wisconsin, which the parties hereby agree have jurisdiction over the parties and any disputes relating to this Agreement or seeking injunctive or similar relief if (i) the Dispute has not been resolved within 45 days after commencement of the applicable ADR process or (ii) any delay resulting from efforts to mediate such Dispute or otherwise resolve the dispute amicably or consensually could result in serious and irreparable injury to either Manitowoc ParentCo or SpinCo or any member of either Group.
(d) Commencement of Dispute Resolution Procedure . Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, Manitowoc ParentCo and SpinCo are the only members of their respective Groups entitled to commence a dispute resolution procedure under this Agreement, whether pursuant to Section 6.3(c), this Section 7.3 or otherwise, and each such party will cause its respective Group members not to commence any dispute resolution procedure other than through such party as provided in this Section 7.3.
37
Section 7.4 Notices . Each party giving any notice required or permitted under this Agreement or any Ancillary Agreement will give the notice in writing and use one of the following methods of delivery to the party to be notified, at the address set forth below or another address of which the sending party has been notified in accordance with this Section 7.4 as follows: (a) personal delivery; (b) facsimile or telecopy transmission with a reasonable method of confirming transmission; (c) commercial overnight courier with a reasonable method of confirming delivery; or (d) pre-paid, United States of America certified or registered mail, return receipt requested. Notice to a party is effective for purposes of this Agreement or any Ancillary Agreement only if given as provided in this Section 7.4(a) and will be deemed given on the date that the intended addressee actually receives the notice.
(a) | If to Manitowoc ParentCo: |
The Manitowoc Company, Inc.
2400 South 44th Street
Manitowoc, Wisconsin 54220
United States of America
Attention: General Counsel
Facsimile: (920) 652-9777
(b) | If to SpinCo: |
Manitowoc Foodservice, Inc.
2227 Welbilt Boulevard
New Port Richey, Florida 34655
United States of America
Attention: General Counsel
Facsimile: (727) 569-1271
Section 7.5 Binding Effect and Assignment . This Agreement and each Ancillary Agreement bind and benefit the parties and their respective successors and assigns. No party may assign any of its rights or delegate any of its obligations under this Agreement or any Ancillary Agreement without the written consent of the other party which consent may be withheld in such other partys sole and absolute discretion, and any assignment or attempted assignment in violation of the foregoing will be null and void.
Section 7.6 Severability . If any provision of this Agreement or any Ancillary Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement or such Ancillary Agreement, as the case may be, will remain in full force, if the essential terms and conditions of this Agreement or such Ancillary Agreement, as the case may be, for each party remain valid, binding and enforceable.
Section 7.7 Entire Agreement . This Agreement, together with the Ancillary Agreements and each of the exhibits and schedules appended hereto and thereto, constitutes the final agreement between the parties, and is the complete and exclusive statement of the parties agreement on the matters contained herein and therein. All prior and contemporaneous negotiations and agreements among the parties with respect to the matters contained herein and therein are superseded by this Agreement and the Ancillary Agreements, as applicable. In the event of any conflict between (a) any provision in this Agreement, on the one hand, and (b) any specific provision in the Employee Matters Agreement, Intellectual Property Matters Agreement or the Tax Matters Agreement, on the other hand, pertaining to the subject matter of any such Agreement, the specific provisions in the Employee Matters Agreement, Intellectual Property Matters Agreement or the Tax Matters Agreement, as the case may be, will control over the provisions in this Agreement, as applicable.
Section 7.8 Counterparts . The parties may execute this Agreement and any Ancillary Agreement in multiple counterparts, each of which constitutes an original as against the party that signed it, and all of which together constitute one agreement. The signatures of the parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission that includes a copy of the sending partys signature is as effective as signing and delivering the counterpart in person.
38
Section 7.9 Expenses; Interest Payment . Except as expressly set forth in this Agreement or in any Ancillary Agreement or as agreed by the parties hereto, (a) prior to the Distribution, (i) all fees, costs and expenses incurred by SpinCo related to any financing transactions, including the issuance of indebtedness, undertaken by SpinCo in connection with the Separation and Distribution, as well as any other fees, costs or expenses specifically incurred by SpinCo, shall be borne by SpinCo, and (ii) all other fees, costs and expenses incurred in connection with the preparation, execution, delivery and implementation of this Agreement and any other Ancillary Agreement, and with the consummation of the transactions contemplated hereby and thereby, shall be borne by Manitowoc ParentCo; and (b) following the Distribution, all fees, costs and expenses will be borne by the party incurring such fees, costs or expenses. To the extent that any amounts required to be paid under this Agreement or any Ancillary Agreement by any party is not timely paid pursuant to the terms of this Agreement or such Ancillary Agreement, such outstanding amount will bear interest at a per annum rate equal to the three month LIBOR, fixing such rate as of the date such payment was due (the Due Date ) or, if a holiday, the previous business day, plus four percent (4%). Interest will be calculated based on a 365-day year and the actual number of days elapsed from the Due Date. Notwithstanding the foregoing, to the extent any Ancillary Agreement specifically provides for a default interest rate, the terms of such Ancillary Agreement shall prevail. All payments required to be paid under this Agreement or any Ancillary Agreement shall be made in United States Dollars, and all interest on amounts not timely paid shall accrue in United States Dollars.
Section 7.10 Amendment . The parties may amend this Agreement or any Ancillary Agreement only by a written agreement signed by each party to be bound by the amendment and that identifies itself as an amendment to this Agreement or such Ancillary Agreement, as applicable.
Section 7.11 Waiver . The parties may waive a provision of this Agreement or an Ancillary Agreement only by a writing signed by the party intended to be bound by the waiver. A party is not prevented from enforcing any right, remedy or condition in the partys favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated and may not be construed as a waiver of any subsequent instance or occurrence of the same matter. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a partys rights and remedies in this Agreement or any Ancillary Agreement is not intended to be exclusive, and a partys rights and remedies are intended to be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.
Section 7.12 Authority . Each party represents to the other party that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement and each of the Ancillary Agreements to which it is a party, (b) the execution, delivery and performance of this Agreement and each of the Ancillary Agreements to which it is a party have been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement and each of the Ancillary Agreements to which it is a party, and (d) this Agreement and each of the Ancillary Agreements to which it is a party is a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors rights generally and general equity principles.
39
Section 7.13 Construction of Agreement .
(a) Where this Agreement or any Ancillary Agreement states that a party will or shall perform in some manner or otherwise act or omit to act, it means that the party is legally obligated to do so in accordance with this Agreement or such Ancillary Agreement, as applicable.
(b) The captions, titles and headings, and table of contents, included in this Agreement and the Ancillary Agreements are for convenience only, and do not affect this Agreements or such Ancillary Agreements construction or interpretation. When a reference is made in this Agreement or any Ancillary Agreement to an Article or a Section, exhibit or schedule, such reference will be to an Article or Section of, or an exhibit or schedule to, this Agreement unless otherwise indicated.
(c) The words including, includes, or include are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as without limitation or but not limited to are used in each instance.
(d) Any reference in this Agreement or any Ancillary Agreement to the singular includes the plural where appropriate. Any reference in this Agreement or any Ancillary Agreement to the masculine, feminine or neuter gender includes the other genders where appropriate. For purposes of this Agreement, after the Effective Date, the Foodservice Business will be deemed to be the business of SpinCo.
(e) This Agreement is not to be construed for or against any party based on which party drafted any of the provisions of this Agreement. The language used in this Agreement is the language chosen by the parties to express their mutual intent, and no provision of this Agreement will be interpreted for or against any party because that party or its attorney drafted the provision.
(f) Unless otherwise expressly specified in an Ancillary Agreement, all references in this Agreement or any Ancillary Agreement to dollars or $ means United States Dollars.
(g) Any reference in this Agreement or any Ancillary Agreement to a member of a Group or Group members means a party to this Agreement or another Person referred to in the definition of the SpinCo Group or Manitowoc ParentCo Group, as applicable.
(h) This Agreement and the Ancillary Agreements are for the sole benefit of the parties hereto and, except for the indemnification rights of the Manitowoc ParentCo Indemnified Parties and the SpinCo Indemnified Parties under this Agreement or as expressly provided in any Ancillary Agreement, do not, and are not intended to, confer any rights or remedies in favor of any Person (including any employee or shareholder of Manitowoc ParentCo or employee or stockholder of SpinCo) other than the parties signing this Agreement.
Section 7.14 Termination .
(a) This Agreement and any Ancillary Agreement may be terminated and the Distribution abandoned at any time prior to the Distribution Date by and in the sole discretion of the Manitowoc ParentCo Board without the approval of any Person, including SpinCo, in which case no party will have any liability of any kind to any other party by reason of this Agreement. After the Distribution Date, this Agreement may not be terminated except by an agreement in writing signed by each of the parties to this Agreement.
(b) The obligations of the parties under Article 3 (including the obligation to pursue or effect the Distribution) may be terminated by Manitowoc ParentCo if, at any time after the Effective Date, Manitowoc ParentCo determines, in its sole and absolute discretion, that the Distribution would not be in the best interests of Manitowoc ParentCo or its shareholders.
40
Section 7.15 Limitation on Damages . NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT TO THE CONTRARY, IN NO EVENT WILL ANY PARTY OR ANY OF ITS GROUP MEMBERS BE LIABLE UNDER ANY CIRCUMSTANCES OR LEGAL THEORY FOR DAMAGES RELATED TO INCONVENIENCE, DOWNTIME, INTEREST, COST OF CAPITAL, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOST PROFITS, LOST REVENUES, LOST SAVINGS, LOSS OF USE, TIME, DATA, OR GOOD WILL, OR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, COLLATERAL OR CONSEQUENTIAL DAMAGES, REGARDLESS OF WHETHER SUCH LOSSES ARE FORESEEABLE; PROVIDED , HOWEVER , THAT TO THE EXTENT AN INDEMNIFIED PARTY IS REQUIRED TO PAY ANY DAMAGES RELATED TO INCONVENIENCE, DOWNTIME, INTEREST, COST OF CAPITAL, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOST PROFITS, LOST REVENUES, LOST SAVINGS, LOSS OF USE, TIME, DATA, OR GOOD WILL, OR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, COLLATERAL OR CONSEQUENTIAL DAMAGES, TO A PERSON WHO IS NOT A MEMBER OF ANY GROUP IN CONNECTION WITH A THIRD-PARTY CLAIM, SUCH DAMAGES WILL CONSTITUTE DIRECT DAMAGES FOR THE PURPOSES OF THIS AGREEMENT NOT SUBJECT TO THE LIMITATION SET FORTH IN THIS SECTION 7.15. THIS SECTION SURVIVES THE TERMINATION OR EXPIRATION OF THIS AGREEMENT.
[Signature page follows]
41
IN WITNESS WHEREOF, each party has caused this Master Separation and Distribution Agreement to be executed on its behalf by a duly authorized officer effective as of the date first set forth above
MANITOWOC PARENTCO: | ||
THE MANITOWOC COMPANY, INC. | ||
By: |
/s/ Carl J. Laurino |
|
Name: | Carl J. Laurino | |
Title: | Senior Vice President and Chief Financial Officer | |
SPINCO: | ||
MANITOWOC FOODSERVICE, INC. | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Senior Vice President, General Counsel and Secretary |
[Signature page to Master Separation and Distribution Agreement]
Exhibit 4.1
Execution Version
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, (this Supplemental Indenture ), dated as of March 3, 2016, by and among MANITOWOC FOODSERVICE, INC., a Delaware corporation (the Company ), the other parties that are signatories hereto as Guarantors (each a New Guarantor ) and Wells Fargo Bank, National Association, as trustee (the Trustee ).
W I T N E S S E T H
WHEREAS MTW FOODSERVICE ESCROW CORP., a Delaware corporation (the Issuer ) and the Trustee have heretofore executed an indenture, dated as of February 18, 2016 (as amended, supplemented or otherwise modified, the Indenture ), providing for the issuance of the Issuers 9.500% Senior Notes due 2024 (the Notes ), initially in the aggregate principal amount of $425,000,000;
WHEREAS Sections 5.01 and 9.01 of the Indenture provide that under certain circumstances, the Company may execute and deliver to the Trustee a supplemental indenture pursuant to which the Company shall unconditionally assume all the Issuers Obligations under the Notes on the terms and conditions set forth herein;
WHEREAS Sections 4.12 and 11.22 of the Indenture provide that under certain circumstances the Issuer is required to cause the New Guarantors to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantors shall guarantee the Indenture Obligations; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Company and the New Guarantors are authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the New Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. The words herein, hereof and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.
(2) Agreement to Assume Obligations . The Company hereby agrees to unconditionally assume the Issuers Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in the Indenture and to be bound by all provisions of the Indenture and the Notes applicable to the Issuer and to perform all of the obligations and agreements of the Issuer under the Indenture and the Notes and may exercise every right and power of the Issuer.
(3) Agreement to Guarantee . Each of the New Guarantors hereby agrees to, jointly and severally with all existing Guarantors (if any), guarantee the Indenture Obligations on the terms and subject to the conditions set forth in Article Eleven of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of a Guarantor under the Indenture.
(4) Ratification of Indenture; Supplemental Indentures Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
(5) Liability . No director, officer, employee, incorporator, stockholder, member, manager or partner of the Company or any New Guarantor shall have any liability for any obligations of the Issuer or the Guarantors (including any New Guarantor) under the Notes, any Guarantees, the Indenture or any supplemental indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Guarantees.
(6) Notices . All notices or other communications to the Company and the Guarantors shall be given as provided in Section 13.01 of the Indenture.
(7) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company and the New Guarantors.
(8) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
(9) Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
(10) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.
[ Remainder of page intentionally left blank .]
2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.
MANITOWOC FOODSERVICE, INC., as the Company | ||||
By: |
/s/ Maurice D. Jones |
|||
Name: | Maurice D. Jones | |||
Title: | Senior Vice President, General Counsel and Secretary | |||
APPLIANCE SCIENTIFIC, INC. | ||||
BERISFORD PROPERTY DEVELOPMENT (USA) LTD. | ||||
CHARLES NEEDHAM INDUSTRIES INC. | ||||
CLEVELAND RANGE, LLC | ||||
THE DELFIELD COMPANY LLC | ||||
ENODIS CORPORATION | ||||
ENODIS GROUP HOLDINGS US, INC. | ||||
ENODIS HOLDINGS, INC. | ||||
ENODIS TECHNOLOGY CENTER, INC. | ||||
FRYMASTER L.L.C. | ||||
GARLAND COMMERCIAL INDUSTRIES LLC | ||||
KYSOR BUSINESS TRUST | ||||
KYSOR HOLDINGS, INC. | ||||
KYSOR INDUSTRIAL CORPORATION (MI) | ||||
KYSOR INDUSTRIAL CORPORATION (NV) | ||||
KYSOR NEVADA HOLDING CORP. | ||||
LANDIS HOLDINGS LLC | ||||
MANITOWOC EQUIPMENT WORKS, INC. | ||||
MANITOWOC FOODSERVICE COMPANIES, LLC | ||||
MANITOWOC FOODSERVICE HOLDING, INC. | ||||
MANITOWOC FP, INC. | ||||
MANITOWOC FSG INTERNATIONAL HOLDINGS, INC. | ||||
MANITOWOC FSG OPERATIONS, LLC | ||||
MANITOWOC FSG U.S. HOLDING, LLC | ||||
MCCANNS ENGINEERING & MANUFACTURING CO., LLC | ||||
MTW COUNTY LIMITED | ||||
WELBILT CORPORATION | ||||
WELBILT HOLDING COMPANY | ||||
WESTRAN CORPORATION | ||||
as Guarantors | ||||
By: |
/s/ Maurice D. Jones |
|||
Name: | Maurice D. Jones | |||
Title: | Vice President and Secretary |
[MTW Foodservice First Supplemental Indenture]
WELLS FARGO BANK, NATIONAL | ||||
ASSOCIATION, as Trustee | ||||
By: |
/s/ Stefan Victory |
|||
Name: | Stefan Victory | |||
Title: | Vice President |
[MTW Foodservice First Supplemental Indenture]
Exhibit 10.1
Execution Version
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this Agreement ) is effective as of March 4, 2016 (the Effective Date ) between The Manitowoc Company, Inc., a Wisconsin corporation ( Manitowoc ParentCo ), and Manitowoc Foodservice, Inc., a Delaware corporation ( Manitowoc Foodservice ).
WHEREAS, Manitowoc ParentCo and Manitowoc Foodservice are party to that certain Master Separation and Distribution Agreement, dated as of March 4, 2016 (the Separation Agreement ), pursuant to which the parties agreed to separate the business of Manitowoc Foodservice and its subsidiaries (collectively, the Manitowoc Foodservice Group ) from Manitowoc ParentCo; and
WHEREAS, after the consummation of the transactions contemplated by the Separation Agreement, Manitowoc Foodservice wishes to engage Manitowoc ParentCo to perform, and Manitowoc ParentCo wishes to perform or cause to be performed, on a transitional basis for the benefit of the Manitowoc Foodservices Group the services described in the attached Exhibit A , as it may be amended from time to time by the mutual written agreement of the Parties (the ParentCo Service Exhibit ), upon the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, after the consummation of the transactions contemplated by the Separation Agreement, Manitowoc ParentCo wishes to engage Manitowoc Foodservice to perform, and Manitowoc Foodservice wishes to perform or cause to be performed, on a transitional basis for the benefit of Manitowoc ParentCo and its Subsidiaries (collectively, the Manitowoc ParentCo Group ) the services described in the attached Exhibit B , as it may be amended from time to time by the mutual written agreement of the Parties (the Foodservice Service Exhibit ), upon the terms and subject to the conditions set forth in this Agreement
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants set forth below and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1 Capitalized Terms . As used in this Agreement:
(a) Affiliate of any specified Person means any other Person directly or indirectly controlling, controlled by, or under common control with (within the meaning of the Securities Act of 1933, as amended), such specified Person; provided, however, that for purposes of this Agreement, the determination of whether a Person is an Affiliate of another Person will be made assuming that no member of the Manitowoc ParentCo Group is an Affiliate of the Manitowoc Foodservice Group.
(b) Confidential Information means all information relating generally or specifically to the business of a Party or any of its Affiliates that is supplied to or obtained by the other Party or any of its Affiliates pursuant to or as a result of this Agreement and that is not generally known in the trade or industry. Notwithstanding the foregoing, Confidential Information shall not mean or include information of a Party or any of its Affiliates that
(i) is or becomes generally available to the public other than as a result of a disclosure by the other Party or any of its Affiliates in violation of this Agreement, (ii) was known to the other Party or any of its Affiliates on a nonconfidential basis prior to its disclosure by such disclosing party, provided that the source of such information was not, to the receiving partys knowledge, bound by any confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to such disclosing party, (iii) becomes available to the other Party or any of its Affiliates on a nonconfidential basis from a person other than the disclosing party who is not, to the receiving partys knowledge, bound by any confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the disclosing party or (iv) is independently developed by the receiving party without reference to any Confidential Information of the disclosing party.
(c) Labor Cost for any period shall mean an amount equal to the costs paid or expenses accrued by Provider and any other Rendering Party during such period for the employment of those of their respective employees who perform (or terminate the performance of) the Services pursuant to this Agreement, as pro rated for the hours spent by such employees performing (or terminating the performance of) the Services. Such costs and expenses include (without limitation): (i) salaries, wages, bonuses and incentive, vacation, holiday and self-funded sick pay; (ii) social security taxes, Medicare taxes and other payroll taxes; (iii) premiums on behalf of such employees for coverage by any long-term disability insurance, insured short-term disability benefit, group term life insurance, accidental death and disability insurance, business travel accident insurance, and insured group health, dental or vision plans; (iv) other employee welfare benefits, fringe benefits and perquisites, including benefits under any employee welfare benefit plan, supplemental unemployment compensation plan benefits, expatriate compensation program costs and benefits and any other fringe benefit arrangements that do not constitute an employee benefit plan; (v) employer contributions to any tax-qualified defined contribution plan on behalf of such employees (other than employee pretax deferral amounts included in subclause (i) above as wages) and a proportionate share of employer paid administration costs; (vi) employer provided benefits under any tax-qualified defined benefit pension plan and a proportionate share of employer paid administration costs; (vii) employer provided self-funded group health, dental and vision benefits; (viii) employer costs for administration of any benefit plan, program or arrangement provided to or for the benefit of such employees; and (ix) any other government charges relating to the employment of such employees, including workers compensation claims. Notwithstanding the foregoing, Labor Cost shall not include costs paid or expenses accrued with respect to any part of the costs or expenses described above that are attributable to a change in the terms of employment or employee benefit plans or practices applicable to any such employee from those in effect on the Effective Date, other than changes that are consistent with changes applied to other employees in the same or similar positions and/or changes required under any existing or future collective bargaining agreement.
(d) Law shall mean any supranational, national, provincial, state, local or foreign statute, law (including common law), ordinance, rule or regulation
(e) Parties means Manitowoc ParentCo and Manitowoc Foodservice.
2
(f) Person means an individual and a corporation, a partnership, a limited liability company, an association, a trust and any other entity or organization, including a governmental entity or any department, agency or political subdivision thereof.
(g) Provider means (i) Manitowoc ParentCo with respect to the services described in the ParentCo Service Exhibit and (ii) Manitowoc Foodservice with respect to the services described in the Foodservice Service Exhibit.
(h) Recipient means (i) the Manitowoc ParentCo Group with respect to the services described in the Foodservice Service Exhibit and (ii) the Manitowoc Foodservice Group with respect to the services described in the ParentCo Service Exhibit.
(i) Receiving Party means the entity within Recipient for which the applicable Service is performed.
(j) Rendering Party means the entity that performs the applicable Service.
(k) Service Exhibit means (i) the Foodservice Service Exhibit in those circumstances in which Manitowoc Foodservice is responsible for performing services for the benefit of the Manitowoc ParentCo Group under this Agreement and (ii) the ParentCo Service Exhibit in those circumstances in which Manitowoc ParentCo is responsible for performing services for the benefit of the Manitowoc Foodservice Group under this Agreement.
(l) Services means (i) the services described on the ParentCo Service Exhibit in those circumstances in which Manitowoc ParentCo is responsible for performing services for the benefit of the Manitowoc Foodservice Group under this Agreement and (ii) the services described on the Foodservice Service Exhibit in those circumstances in which Manitowoc Foodservice is responsible for performing services for the benefit of the Manitowoc ParentCo Group under this Agreement.
(m) Subsidiary means, with respect to a Person, any entity that is controlled, directly or indirectly, by such Person.
(n) Taxes means supranational, national, state, provincial, municipal, local or foreign taxes, charges, fees, levies, or other assessments imposed by any governmental entity, including any interest and penalties (civil or criminal) on or additions to any such taxes, whether disputed or not.
(o) Third Party means any Person other than the Parties or any of their Affiliates.
(p) Third Party Cost means the aggregate amount that the Third Party Service Provider would charge to provide the Receiving Party with the applicable Service upon terms substantially similar to the terms set forth in this Agreement. If Provider is not reasonably able to identify a Third Party Service Provider for the applicable Service, then the Third Party Cost shall be deemed to mean an amount equal to the Labor Cost for the applicable Service multiplied by six.
(q) Third Party Service Provider means a Person identified by Provider that satisfies each of the following criteria: (i) the Person is not an Affiliate of Manitowoc ParentCo, Manitowoc Foodservice or any of their respective Affiliates; (ii) the Person is not a competitor of Manitowoc ParentCo, Manitowoc Foodservice or any of their respective Affiliates; and (iii) the Person is engaged in the business of providing the applicable Service to third parties comparable (in type and size) to the applicable Receiving Party.
3
Section 1.2 Other . Where any group or category of items or matters is defined collectively in the plural number, any item or matter within such definition may be referred to using such defined term in the singular number, and vice versa. Any reference in this Agreement to the masculine, feminine or neuter gender includes the other genders where appropriate.
ARTICLE 2
TRANSITION SERVICES
Section 2.1 Services .
Provider shall provide, or shall cause one or more of its Subsidiaries to provide, Recipient with the services described in the Service Exhibit for the periods set forth therein (collectively, the Services ). Recipient shall receive the Services only for the benefit of its business and not for the benefit of any other Person.
Section 2.2 Additional Services . If, during the period commencing on the Effective Date and ending on that date that is 180 days after the Effective Date, Recipient (a) identifies a service that Provider provided to Recipient during the 12-month period immediately preceding the Effective Date that Recipient reasonably needs in order for its business to continue to operate in substantially the same manner in which its business operated prior to the Effective Date but such service is not listed on the Service Exhibit (other than because the Parties agreed in writing that such service shall not be provided) and (b) submits a written request describing such service to Providers Service Manager, then Provider shall consider in good faith the request to provide such additional service (the Additional Service ). If the Parties agree on the Additional Service, then the Parties shall execute and deliver an amendment to the Service Exhibit to evidence the terms of the Additional Service and the associated Fees therefor and thereafter the Additional Service shall constitute a Service provided pursuant to this Agreement.
Section 2.3 Service Changes .
(a) Subject to Section 2.3(b) , Provider or any other Rendering Party may supplement, modify, substitute or otherwise alter the Services from time to time in a manner consistent with supplements, modifications, substitutions or alterations made with respect to similar services provided or otherwise made available by Provider or such Rendering Party to itself, its Affiliates or Third Parties; provided, however, that no change in the provision of Services that materially adversely affects the quality, timeliness or availability of the Services or materially increases the cost of using the Services shall be made without the prior written consent of Recipient (which consent shall not be unreasonably withheld, conditioned or delayed).
(b) Notwithstanding Section 2.3(a) and except as set forth on the Service Exhibit, if Provider is required to (i) increase staffing, (ii) acquire, lease or license additional facilities, equipment or software, (iii) engage in significant capital expenditures or (iv) apply for or obtain any approval, consent or waiver from Third Parties (other than renewals of any
4
preexisting permits, licenses or authorizations) (collectively, the Service Changes ) in order to accommodate an increase in the use of any Service beyond the level of use of such Service by Recipient during the 12-month period immediately prior to the Effective Date, including (A) as a result of a change in the manner in which Recipients business is being conducted after the Effective Date, but (B) excluding ordinary course expansion of the volume or geographic scope of such business (such as ordinary course increases in headcount, customers, suppliers and transaction volumes), then Provider shall provide Recipient with written notice of the Service Change and propose a plan for implementing the Service Change before incurring any costs or expenses resulting from the Service Change. Upon receipt of such written notice, the Parties shall negotiate in good faith to adjust or change the Services, including the Fees, as applicable, before Provider undertakes any Service Change. If the Parties determine that Provider shall undertake the Service Change, then the Parties shall document the Service Change, together with any other adjustments or changes to the Services, including to the Fees, in a written agreement, and the Parties shall amend the Service Exhibit to reflect such written agreement. Each amended section of the Service Exhibit shall be deemed part of this Agreement as of the date of such written agreement, and the Service Changes set forth in such amended Service Exhibit shall be deemed a part of the Services provided pursuant to this Agreement.
Section 2.4 Quality of Services . Provider warrants that (a) Services of the type that Provider or any of its Subsidiaries provided to Recipient prior to the Effective Date, as performed pursuant to this Agreement after the Effective Date, will be performed in substantially the same manner and on substantially the same basis (including with respect to timing and priority) as Provider or one of its Subsidiaries provided the Services to the Receiving Party, whether directly or indirectly, during the 12-month period immediately preceding the Effective Date and (b) Services not of the type that Provider or any of its Subsidiaries provided to Recipient prior to the Effective Date, as performed pursuant to this Agreement after the Effective Date, will be performed in a commercially reasonable manner consistent with the nature, quality, standard of care and service levels (including with respect to timing and priority) at which the same or similar services are performed by or on behalf of Provider or any of its Subsidiaries to Provider or any of its Subsidiaries. If the Services do not conform to the foregoing warranty, then Recipients (and the applicable Receiving Partys) sole and exclusive remedy shall be the right to require Provider or any other Rendering Party to perform the Services again, properly and at no additional expense to Recipient or the other applicable Receiving Party. Except as set forth in this Section 2.4 , there are no warranties with respect to the Services. PROVIDER (AND EACH OTHER RENDERING PARTY) DISCLAIMS ALL OTHER EXPRESS AND ALL IMPLIED WARRANTIES RELATING TO THE SERVICES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE .
Section 2.5 Excluded Services . Notwithstanding anything to the contrary, the Parties do not intend that Provider or any other Rendering Party will render to Recipient, or that Recipient will receive from Provider or any other Rendering Party, any professional advice or opinions, whether with regard to tax, legal, treasury, finance, employment or other business, technical and financial matters, and Recipient shall not rely on, or construe, any Service rendered by or on behalf of Provider or any other Rendering Party as any such professional advice or opinions.
Section 2.6 Cooperation . Recipient shall cooperate with Provider and any other Rendering Party by promptly providing all information that Provider or any other Rendering Party reasonably deems necessary for the performance of the Services and by accepting and using the Services in the ordinary course of business.
5
Section 2.7 Subcontracting . Provider may hire or engage one or more Third Parties to perform any or all of its obligations under this Agreement without the consent of Recipient; provided that (a) the hiring or engagement of such Third Party does not decrease the quality or level of services provided to Recipient to below that provided by Provider, (b) the use of such Third Party will not increase the sum of the Fees and Reimbursable Expenses payable by Recipient in connection with such Services, (c) the use of such Third Party will not change the manner in which the Services are delivered in a way that increases Recipients costs of receiving the Services (it being understood that, if such Third Party has been engaged by Provider to perform the same or similar services prior to the Effective Date, then subclauses (a) , (b) and (c) shall be deemed satisfied). Provider shall remain primarily responsible for all of its obligations under this Agreement, except that if a Third Party provides all or part of any Service pursuant to a written agreement with Recipient, Recipient agrees to be bound by, and to cause its Affiliates to comply with, those obligations that such agreement places on Recipient, and Provider shall not be responsible for its obligations under this Agreement that are specified in such agreement to be obligations of such Third Party. Subject to the confidentiality provisions set forth in Section 4.3 , Provider shall provide Recipient with any information within the possession of Provider or any of its Affiliates that Recipient reasonably requests in connection with any Services being provided to Recipient by a Third Party, including any applicable invoices, agreements documenting the arrangements between such Third Party and Provider and other supporting documentation.
Section 2.8 System Migration . The Parties acknowledge the transitional nature of the Services. Each Party shall use commercially reasonable efforts to cooperate with and assist the other Party in connection with the transition from the performance of the Services by Provider and the other Rendering Parties to the performance of the Services by Recipient or its designee (in any event prior to the expiration or termination of this Agreement), using commercially reasonable efforts to minimize both the cost of such transition and the disruption to the ongoing business activities of the parties.
Section 2.9 Reservation of Rights . Nothing in this Agreement shall be deemed to prohibit or otherwise restrict Provider or any other Rendering Party from performing, or engaging any Third Party to perform, any Service for the benefit of itself, its Affiliates or Third Parties.
ARTICLE 3
FEES; PAYMENT
Section 3.1 Fees . In consideration of the performance of the Services, Recipient shall pay Provider a fee (either one-time or recurring) for such Services or category of Services, as applicable, (each, a Fee and collectively, the Fees ). Until December 31, 2016, the Fee for each Service shall equal 105.0% of the Labor Cost for the applicable Service. If applicable due to an extension of the term of a Service in accordance with this Agreement, on and after January 1, 2017, the Fee for each Service shall equal 120.0% of the Third Party Cost for the applicable Service. During the Term, the amount of a Fee for any Service may be modified to the extent of (a) any adjustments mutually agreed to by the Parties and (b) any Service Change requested by Recipient and agreed upon by Provider pursuant to Section 2.3(b) . Together with any invoice for Fees, Provider shall provide Recipient with reasonable documentation to support the calculation of such Fees.
6
Section 3.2 Expense Reimbursement . Recipient shall reimburse Provider and any other Rendering Party for reasonable and documented out-of-pocket costs and expenses incurred by Provider or any other Rendering Party in connection with the performance or termination of the Services (including incremental license fees incurred by Provider or any other Rendering Party in connection with the performance or termination of the Services and reasonable travel-related expenses) to the extent that such costs and expenses are not reflected in the Fees for such Services (collectively, the Reimbursable Expenses ), provided that any such cost or expense in excess of one $1,000, in the aggregate, that is not consistent with the historical practice among the Parties during the 12-month period immediately prior to the Effective Date shall require advance written approval of Recipient. Any authorized travel-related expenses incurred in performing the Services shall be incurred and charged to Recipient in accordance with Recipients then-applicable business travel policies as provided to Provider from time to time.
Section 3.3 Invoices . Within 30 days after the last day of each month during the term of this Agreement (and the last day of the term of this Agreement), Provider shall submit one invoice to Recipient for the Fees and Reimbursable Expenses (listed separately) applicable to each Service performed during such month (each, an Invoice ). Each Invoice shall specify the amount of Fees and Reimbursable Expenses applicable to each separate type of performed Service during such month. All amounts shall be listed and payable in U.S. Dollars; provided, however, that in those instances where Manitowoc ParentCo and Manitowoc Foodservice agree, if the Services are performed by a Rendering Party outside the United States for a Receiving Party outside the United States, then the subject fees shall be billed and paid in the local currency of the Rendering Party.
Section 3.4 Payment . Subject to Section 3.5 , Recipient shall pay, or shall cause the applicable Receiving Party to pay, the amounts reflected on each Invoice within 30 days after its receipt thereof. If Recipient fails to pay, or fails to cause to be paid, any undisputed amounts reflected on an Invoice on or before the applicable due date, then such undisputed overdue amounts shall bear interest from the due date until received at the rate equal to the lesser of (a) the maximum rate permitted by applicable law and (b) 1.5% per month.
Section 3.5 Good Faith Disputes . If Recipient or any other Receiving Party in good faith disputes an amount reflected on an Invoice, then Recipient (and the applicable Receiving Party) may withhold payment of the amount subject to the good faith dispute, provided that (a) Recipient (or the applicable Receiving Party) provides Provider with written notice of the good faith dispute and the bases thereof prior to the date on which the subject amount would, but for the good faith dispute, be due pursuant to Section 3.4 and (b) Recipient (or the applicable Receiving Party) pays all undisputed amounts reflected on the Invoice in accordance with Section 3.4 .
Section 3.6 Taxes .
(a) The Parties agree that all Fees are exclusive of any value added, goods and services, sales, use, consumption, excise, service, transfer, stamp, documentary, filing, recordation taxes or similar Taxes (the Transaction Taxes ). Without limitation, Recipient shall be responsible for all Transaction Taxes imposed or assessed with respect to the provision of Services by Provider or any other Rendering Party. Provider shall issue proper Invoices usable by Recipient to recover (by way of credit or refund) Transaction Taxes in jurisdictions where they are recoverable. The Parties shall cooperate to minimize any Transaction Taxes, to obtain any refund, return or rebate relating to, and to apply for an exemption or zero-rating for Services giving rise to, any Transaction Taxes, including by filing
7
any exemption or other similar forms or providing valid tax identification number or other relevant registration numbers, certificates or other documents. The Parties shall cooperate regarding any requests for information, audit or similar request by any governmental entity concerning Transaction Taxes payable with respect to Services provided pursuant to this Agreement.
(b) Recipient shall be entitled to deduct and withhold Tax required by applicable Law to be withheld on payments made to Provider pursuant to this Agreement. To the extent any amounts are so withheld, Recipient shall timely remit such deducted and withheld amounts to the relevant governmental entity and promptly provide Provider with evidence of such payment. Provider agrees to complete and provide to Recipient or if required, to the relevant governmental entity, at least ten days prior to the payment due date, such forms, certifications or other documents as Recipient reasonably requests to reduce or exempt the withholding of any Tax with respect to payments made to Provider when and where applicable by Law. In addition, the Parties shall cooperate regarding any requests for information, audit, or similar request by any Taxing Authority concerning the withholding of any Tax payable with respect to Services.
(c) Recipient shall be responsible for any penalties or interest imposed with respect to any Transaction Taxes described in Section 3.6(a) and any Taxes described in Section 3.6(b) , except to the extent the penalties or interest result from an act or omission on the part of Provider or any other Rendering Party.
Section 3.7 Audit Rights . Recipient shall have the right, upon reasonable notice and during normal business hours, at its own expense, to inspect and audit the financial books and records of Provider and any other Rendering Party to the extent reasonably necessary to verify Providers calculation of the Fees and Reimbursable Expenses. If any such audit uncovers any excess in payments by Recipient, then Provider shall pay to Recipient the amount of such excess within ten days following receipt of the audit report together with interest on the amount of the excess for the period from the date such excess payment was made until the date of corrective payment in accordance with this Section 3.7 at the annual interest rate of 8.0%. If such excess is greater than 5.0% of the amount actually payable by Recipient, then Provider shall promptly pay to Recipient the cost of the audit. The audit rights pursuant to this Section 3.7 shall survive the expiration or termination of this Agreement for a period of six months thereafter.
ARTICLE 4
CERTAIN OTHER ARRANGEMENTS
Section 4.1 IT System Access .
(a) Eligible Employees . Each Party shall ensure that those of its and its Subsidiaries employees who have access to the other Partys computer network and associated computer applications (the Applicable Network ) during the term of this Agreement shall be limited to employees who meet the following criteria: (i) such employee is listed in its employee directory or any updates thereto; (ii) such employee has a legitimate business need to access the Applicable Network; and (iii) such employee is bound by a confidentiality agreement, in form and substance reasonably acceptable to the other Party, that the other Party has the right to enforce to protect its interests. Upon reasonable request,
8
each Party shall provide the other Party with written notice of the name of each of its and its Subsidiaries employees who has, or has had, access to the Applicable Network during the term of this Agreement.
(b) Compliance Requirements .
(i) Each Party shall cause those of its and its Subsidiaries employees who have access to the other Partys central processing unit, storage, server or other network systems (collectively, Network ) in connection with the delivery or receipt of a Service to comply with all security guidelines (including physical security, network access, internet security, confidentiality and personal data security guidelines) of such other Party that are made known or provided to such Party from time to time. Each Party shall ensure that any access to the other Partys Network described by this Section 4.1(b)(i) shall be used only for the purposes contemplated by, and subject to the terms of, this Agreement.
(ii) Each Party acknowledges that computing assets connected to the other Partys Network are subject to monitoring by intrusion detection instrumentation and are subject to routine vulnerability assessment scans that may occur during connect time. Upon a Partys reasonable request, the other Party shall cooperate with such Party in connection with any investigation of any apparent unauthorized access of such Partys Applicable Network.
(iii) Provider shall cause any other Rendering Party to, process personal data that it may receive from Recipient while performing the Services only (A) in such a manner that is necessary to perform such Services, (B) in accordance with (x) applicable instructions in the Service Exhibit and (y) instructions otherwise communicated by Recipient and not inconsistent with this Agreement and (C) using appropriate technical and organizational measures to prevent the unauthorized or unlawful processing of such personal data or the accidental loss or destruction of, or damage to, such personal data.
(c) Cost of Increased Use . If a Party or any of its Subsidiaries increases its use of the other Partys Applicable Network and such increased use contributes to the need for such Party to purchase additional computing capacity that such Party will not utilize following the expiration or termination of this Agreement, then such other Party shall pay for such increased capacity. Provider shall provide Recipient with written notice of capacity issues so that Recipient has a reasonable opportunity to respond and possibly discontinue use of certain Provider systems in advance of the purchase of any increased capacity for which Provider will seek payment from Recipient. For these purposes, usage consistent with recent past practice of Recipient shall serve as the basis from which to measure increases in usage.
Section 4.2 Proprietary Rights .
(a) Recipient shall be the sole and exclusive owner of all deliverables and other work product resulting from the performance of the Services (collectively, Work Product ). Provider, on behalf of itself and each other Rendering Party, hereby assigns all of its right, title and interest in and to all Work Product to Recipient. Provider shall execute, and shall cause each Rendering Party to execute, such additional documents as Recipient
9
reasonably requests to vest in Recipient any rights of Provider and the other Rendering Parties in Work Product. All Work Product shall constitute Confidential Information of Recipient under the provisions set forth in Section 4.3 .
(b) Neither Provider nor Recipient (or their respective Affiliates) shall use or have any rights to the trademarks or service marks of the other without prior written consent to such use, except to the extent otherwise set forth in that certain Intellectual Property Matters Agreement of even date herewith (the IP Matters Agreement ).
(c) The Parties agree that all know-how, designs, programs and other software (including all machine readable code, printed listings of code, documentation and related property and information), trade secrets, methodologies, processes and other intellectual property owned by Provider or any of its Affiliates that, during the term of this Agreement, is operated or used by Provider or any other Rendering Party (or Recipient) in connection with the performance of the Services shall remain the property of Provider and its Subsidiaries, and Recipient shall have no rights or interests therein, except to the extent otherwise set forth in the IP Matters Agreement.
Section 4.3 Confidential Information .
(a) Each Party shall not, and shall cause its Affiliates not to, directly or indirectly, (a) disclose any Confidential Information of the other Party or any of its Affiliates to any other Person, (b) use any Confidential Information of the other Party or any of its Affiliates for any purpose, (c) keep or make copies of any documents, records or property of any nature whatsoever containing any Confidential Information of the other Party or any of its Affiliates or (d) assist any Third Party in engaging in any of the foregoing, except to the extent necessary to comply with this Agreement or as approved in advance in writing by the other Party. Nothing in this Agreement shall reduce any Partys obligation to comply with all applicable Laws, including those relating to trade secrets, confidential information and unfair competition.
(b) Notwithstanding the provisions of Section 4.3(a) , each Party (and its Affiliates) may disclose the Confidential Information of the other Party and its Affiliates at such times, in such manner and to the extent required by applicable Law, provided that, in such circumstances, the disclosing Party (a) provides the other Party with prior written notice of such disclosure so as to permit such other Party to seek a protective order or other appropriate remedy, (b) limits such disclosure to what is required and (c) attempts (insofar as is permissible) to preserve the confidentiality of any such Confidential Information so disclosed.
Section 4.4 Data Privacy . Each Party shall comply, and shall cause its Subsidiaries to comply, with all applicable state, federal and foreign privacy and data protection Laws applicable to the provision of the Services under this Agreement.
ARTICLE 5
RESPONSIBLE EMPLOYEES
Section 5.1 Appointment . Each Party shall appoint one of its employees (each, a TSA Manager ) with overall responsibility for managing and coordinating the delivery and receipt
10
of the Services generally and one of its employees for each category of Service (each, a Service Manager ) with general responsibility for managing and coordinating the delivery and receipt of that particular category of Service. Each Party shall provide the other Party with written notice of the identity and title of its TSA Manager and Service Managers.
Section 5.2 Responsibilities . With respect to each Service, the TSA Manager shall have primary responsibility for coordinating and managing the delivery and use of that Service and shall have authority to act on the applicable appointing Partys behalf with respect to the provision and use of such Service. In overseeing its Service Managers, a Partys TSA Manager shall have all of the authority of each of such Partys Service Managers across all Services and shall be responsible for ensuring that each of such Partys Service Managers fulfills its responsibilities in connection with the Services and this ARTICLE 5 . All communications between the Parties regarding routine matters involving a Service pursuant to this Agreement shall be directed to the applicable Service Manager with a copy to the TSA Managers, and all other communications between the Parties pursuant to this Agreement (other than the negotiation and execution of any written agreement that amends this Agreement or the Service Exhibit) shall be directed to the applicable TSA Manager. Each Party shall provide the other Party with written notice of any change in the status of its TSA Manager or any of its Service Managers that would affect such TSA Managers or Service Managers ability to carry out the responsibilities set forth in this ARTICLE 5 at least ten days prior to such change.
Section 5.3 Dispute Resolution . Each Party shall cause its TSA Manager to meet as expeditiously as practical to resolve any dispute under this Agreement, and any dispute that is not so resolved within 30 days may be resolved in accordance with the dispute resolution procedures set forth in Section 7.3 of the Separation Agreement. Each Party may treat an act of the other Partys TSA Manager that is consistent with the provisions of this Agreement as being authorized by such other Party without further inquiry. Notwithstanding the foregoing, no TSA Manager (or Service Manager) shall have authority to amend this Agreement or the Service Exhibit.
ARTICLE 6
INDEMNIFICATION; LIMITATION OF LIABILITY
Section 6.1 Indemnification .
(a) By Provider . Subject to Section 6.2 , Provider shall indemnify, defend and hold harmless Recipient and its directors, officers, employees, agents and other representatives (collectively, the Recipient Indemnitees ) from and against all liabilities, losses, damages, penalties, judgments, suits, claims, grievances, costs and expenses of any kind whatsoever, including the reasonable fees and disbursements of counsel (collectively, Losses ), that they, or any of them, may sustain or incur as a result of (i) the breach of any covenant made by Provider in this Agreement or (ii) willful misconduct or actual fraud on the part of Provider or any of its Affiliates in connection with the performance of this Agreement.
(b) By Recipient . Subject to Section 6.2 , Recipient shall indemnify, defend and hold harmless Provider and its Affiliates and its and their respective directors, officers, employees, agents and other representatives (collectively, the Provider Indemnitees ) from and against all Losses that they, or any of them, may sustain or incur as a result of (i) the breach of any covenant made by Recipient in this Agreement or (ii) willful misconduct or actual fraud on the part of Recipient in connection with the performance of this Agreement.
11
Section 6.2 Limitation of Liability .
(a) THE AGGREGATE LIABILITY OF PROVIDER AND ITS AFFILIATES, COLLECTIVELY, FOR ANY ACT OR FAILURE TO ACT IN CONNECTION WITH THIS AGREEMENT (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE SALE, DELIVERY, PROVISION, USE OF OR FAILURE TO PROVIDE ANY SERVICES UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT EXCEED THE AGGREGATE FEES ACTUALLY RECEIVED BY PROVIDER FROM RECIPIENT PURSUANT TO THIS AGREEMENT THROUGHOUT ITS TERM.
(b) IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS AFFILIATES BE LIABLE UNDER ANY CIRCUMSTANCES OR LEGAL THEORY FOR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL, COLLATERAL OR CONSEQUENTIAL DAMAGES, REGARDLESS OF WHETHER SUCH LOSSES ARE FORESEEABLE .
(c) The limitations in Section 6.2(a) and Section 6.2(b) shall not apply in respect of any Losses arising out of or in connection with a Partys obligations under (i) subclause (i) of Section 6.1(a) or subclause (i) of Section 6.1(b) , in each case, to the extent the subject breach constitutes a breach of Section 4.3 or (ii) subclause (ii) of Section 6.1(a) or subclause (ii) of Section 6.1(b) .
Section 6.3 Liability for Payment Obligations . Nothing in this ARTICLE 6 shall be deemed to eliminate or limit either Partys obligation to pay Fees in accordance with this Agreement.
Section 6.4 Exclusion of Other Remedies . To the maximum extent permitted by applicable Law, the provisions of Section 6.1 shall be the sole and exclusive remedies of the Provider Indemnitees and the Recipient Indemnitees, as applicable, for any Losses, whether arising from statute, principle of common or civil law, principles of strict liability, tort, contract or otherwise under this Agreement; provided, however, that nothing in this ARTICLE 6 shall affect a Persons ability to seek equity relief.
Section 6.5 Force Majeure . Neither Party nor any of its Affiliates shall be liable for any failure to perform, or delay in performing, any obligations under this Agreement to the extent such failure or delay is due to fire, flood, earthquake, war (declared or undeclared), an occurrence commonly referred to as a terrorist attack and any armed hostilities associated therewith, embargo, riot, insurrection or other cause beyond the reasonable control of the party failing to perform or delaying the performance of such obligations, including any such failure or delay relating to computer, telephone, information system or similar service outage, interruption, disruption, downtime or similar failure. Subject to providing the other Party with written notice of the circumstances in question and to using commercially reasonable efforts to resume performance without undue delay and in a manner that is substantially similar to the manner in which such Party
12
responded to any similar event or circumstance affecting the same or substantially similar services during the 12-month period preceding the Effective Date, the Party so failing or delaying shall be entitled to a reasonable extension of time for the performance of such obligations; provided, however, that any delay by a supplier of the Party so failing or delaying shall not relieve that party from liability for such failure or delay unless such suppliers delay was attributable to analogous causes. Except to the extent such delay is caused by the wrongful act or omission of the other Party, any costs arising from such failure or delay, for which indemnification is not available hereunder, shall be borne by the Party incurring the costs.
Section 6.6 Legal Violations . Nothing in this Agreement shall require Provider to perform or cause to be performed any Service to the extent the manner of such performance would constitute a violation of any applicable Law or any contract with a Third Party. If Provider is or becomes aware of any potential violation on the part of Provider, Provider shall use commercially reasonable efforts to promptly advise Recipient of such potential violation, and Provider and Recipient shall mutually seek a reasonable alternative that addresses such potential violation. The Parties agree to cooperate in good faith and use commercially reasonable efforts to obtain any necessary approvals, consents or waivers of Third Parties required under any existing with a Third Party to allow Provider to perform, or cause to be performed, all Services to be provided by Provider in accordance with the standards set forth in this Section 6.6 ; provided, however, that neither Party shall be required to accept any terms or conditions, commit to pay any amount, incur any obligation in favor of or offer or grant any accommodation (financial or otherwise, regardless of any provision to the contrary in the existing contract or agreement) to any Third Party to obtain any such approvals, consents or waivers. Unless otherwise agreed in writing by the Parties, all reasonable and documented out-of-pocket costs and expenses (if any) incurred by any Party or any of its Affiliates in connection with obtaining any such consents, approvals or waivers (including, if agreed by the Parties, the amount paid, obligation incurred or accommodation granted to Third Parties to obtain such consents, approvals or waivers) that is required to allow Provider to perform or cause to be performed such Services shall be paid by Recipient. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required approval, consent or waiver of a Third Party, or the performance of such Service by Provider would constitute a violation of any applicable Law, then the Parties shall use commercially reasonable efforts to develop a reasonable alternative arrangement that enables Provider to perform or cause to be performed such Service or an analogous service without obtaining such required approval, consent or waiver of a Third Party or violating any applicable Law.
ARTICLE 7
TERM; TERMINATION
Section 7.1 Term . The term of this Agreement shall commence on the Effective Date and remain in full force and effect until terminated in accordance with this ARTICLE 7 . This Agreement shall terminate upon the earliest of the following to occur: (a) the last date on which either Party is obligated to provide any Service to the other Party in accordance with the terms of this Agreement; (b) the mutual written agreement of the Parties to terminate this Agreement in its entirety; or (c) the date that is 24 months after the Effective Date. Unless otherwise terminated pursuant to Section 7.2 , this Agreement shall terminate with respect to each Service as of the close of business on the last day of the period in which such Service is scheduled to be provided as specified in the Service Exhibit.
13
Section 7.2 Termination of Individual Services . Notwithstanding Section 7.1 :
(a) Termination by Recipient . Recipient shall have the right to terminate Providers (and any other Rendering Partys) performance of (i) all or any portion of the Services at such time or times as Recipient determines in its sole discretion, provided that Recipient provides Provider with written notice of such termination at least 30 days in advance or such shorter period as is reasonable under the circumstances, taking into account the time reasonably required by Provider (or any other Rendering Party) to discontinue the performance of the applicable Services without the incurrence of additional cost, or (ii) all, but not less than all, of the Services if Provider breaches its obligations under this Agreement and such breach is not cured within 30 days after Providers receipt of written notice thereof from Recipient. If Recipient terminates performance of all of the Services pursuant to this Section 7.2(a) , such termination shall constitute the termination of this Agreement.
(b) Termination by Provider . Provider shall have the right to terminate Providers (and any other Rendering Partys) performance of all, but not less than all, of the Services if Recipient breaches its obligations under this Agreement and such breach is not cured within 30 days after Recipients receipt of written notice thereof from Provider (it being understood that a good faith dispute described in Section 3.5 shall not be deemed a breach for purposes of this Section 7.2(b) ). If Provider terminates its performance of all of the Services pursuant to this Section 7.2(b) , such termination shall constitute the termination of this Agreement.
(c) Termination upon Bankruptcy . This Agreement shall terminate immediately without any action on the part of any Person if (i) either Party is adjudicated a bankrupt or files a petition or otherwise seeks relief under or pursuant to any bankruptcy, insolvency or reorganization statute or proceeding, (ii) unless cured within 30 days, a petition in bankruptcy is filed against either Party, a custodian, receiver or trustee is appointed for all or a substantial portion of the business or assets of either Party or either Party becomes insolvent (using either the equitable insolvency or balance sheet test) or makes an assignment for the benefit of its creditors, (iii) whether or not deemed enforceable by virtue of Section 365 of the U.S. Bankruptcy Code, an order for relief under the U.S. Bankruptcy Code is entered against either Party and becomes a final order at any time when such rights of termination may be enforceable or (iv) either Party as debtor-in-possession, or the trustee in any bankruptcy or reorganization or similar proceeding, rejects or fails to assume this Agreement. No assignee for the benefit of creditors, custodian, receiver, trustee in bankruptcy, sheriff or other officer of the court or official charged with taking over custody of the business or assets of either Party shall have any right to continue this Agreement if this Agreement terminates pursuant to this Section 7.2(c). Nothing set forth in this Section 7.2(c) shall be deemed to preclude or limit any rights that either Party (or any of their respective Subsidiaries) may have as a creditor in any proceeding referenced above.
Section 7.3 Interdependencies . The Parties agree that (a) there may be interdependencies among the Services provided under this Agreement, (b) upon the request of either Party, the Parties shall cooperate and act in good faith to determine whether (i) any such interdependencies exist with respect to the particular Service that a Party is seeking to terminate pursuant to Section 7.2 and (ii) in the case of such termination, Providers ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination of another Service, and (c) if the Parties have determined that such
14
interdependencies exist and, in the case of such termination, Providers ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination, the Parties shall negotiate in good faith to amend the Service Exhibit with respect to such termination of such impacted Service, which amendment shall be consistent with the terms of comparable Services.
Section 7.4 Non-Exclusive Rights . The expiration or termination of this Agreement (or the termination of all or any portion of the Services pursuant to Section 7.2 ) shall not affect the respective rights and obligations of the parties that accrued prior to such expiration or termination. The termination rights set forth in this ARTICLE 7 (including each partys right to terminate all or a portion of the Services pursuant to Section 7.2 ) shall be in addition, and without prejudice, to all other rights and remedies to which the terminating party may be entitled, including any right to specific performance or injunctive relief.
Section 7.5 Survival . Notwithstanding anything to the contrary in this Agreement, the provisions set forth in Section 2.9 , ARTICLE 3 , Section 4.2 , Section 4.3 , Section 6.1 , Section 6.2 , Section 6.3 , Section 6.4 , Section 7.4 and ARTICLE 8 shall survive the expiration or termination of this Agreement.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Rights and Obligations . Provider shall cause each Rendering Party to comply with those provisions of this Agreement that apply to a Rendering Party, and Recipient shall cause each Receiving Party to comply with those provisions of this Agreement that apply to a Receiving Party. Each Rendering Party and Receiving Party, together with each Provider Indemnitee and each Recipient Indemnitee, is a third-party beneficiary of this Agreement and shall have the right to enforce the provisions of this Agreement to protect its rights and interests. There are and shall be no other third-party beneficiaries of this Agreement.
Section 8.2 Independent Contractor . Neither Provider nor any other Rendering Party is an employee or agent of Recipient or any Receiving Party, and this Agreement does not create a joint venture or partnership between Provider or any Rendering Party and Recipient or any Receiving Party. Neither Provider nor any other Rendering Party is authorized to perform, assume or create any obligation or responsibility on behalf or in the name of Recipient or any Receiving Party.
Section 8.3 Governing Law . The internal laws of the State of Wisconsin (without reference to its principles of conflicts of law) govern the construction, interpretation and other matters arising out of or in connection with this Agreement and each of the exhibits hereto (whether arising in contract, tort, equity or otherwise).
Section 8.4 Jurisdiction . If any dispute arises out of or in connection with this Agreement, except as expressly contemplated by another provision of this Agreement, the Parties irrevocably (a) consent and submit to the co-exclusive jurisdiction of federal and state courts located in Wisconsin and in Florida, (b) waive any objection to that choice of forum in Wisconsin or in Florida based on venue or to the effect that the forum is not convenient, and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.
15
Section 8.5 Dispute Resolution . Each Party stipulates that, if there is any dispute or disagreement between the Parties as to the interpretation of any provision of, or the performance of obligations under, this Agreement, such dispute or disagreement shall be resolved in accordance with Section 7.3 of the Separation Agreement, the terms of which are incorporated by reference herein.
Section 8.6 Notices . Each Party giving any notice required or permitted under this Agreement will give the notice in writing and use one of the following methods of delivery to the party to be notified, at the address set forth below or another address of which the sending Party has been notified in accordance with this Section 8.6 as follows: (a) personal delivery; (b) facsimile or telecopy transmission with a reasonable method of confirming transmission; (c) commercial overnight courier with a reasonable method of confirming delivery; or (d) pre-paid, United States of America certified or registered mail, return receipt requested. Notice to a Party is effective for purposes of this Agreement only if given as provided in this Section 8.6 and will be deemed given on the date that the intended addressee actually receives the notice.
(a) | If to Manitowoc ParentCo: |
The Manitowoc Company, Inc.
2400 South 44th Street
Manitowoc, Wisconsin 54220
United States of America
Attention: General Counsel
Facsimile: (920) 652-9777
(b) | If to Manitowoc Foodservice: |
Manitowoc Foodservice, Inc.
2227 Welbilt Boulevard
New Port Richey, Florida 34655
United States of America
Attention: General Counsel
Facsimile: (727) 569-1271
Section 8.7 Binding Effect and Assignment . This Agreement binds and benefits the Parties and their respective successors and assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the written consent of the other Party which consent may be withheld in such other Partys sole and absolute discretion, and any assignment or attempted assignment in violation of the foregoing will be null and void.
Section 8.8 Severability . If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement will remain in full force, if the essential terms and conditions of this Agreement for each party remain valid, binding and enforceable.
Section 8.9 Entire Agreement . This Agreement constitutes the final agreement between the Parties, and is the complete and exclusive statement of the Parties agreement on the matters contained herein. All prior and contemporaneous negotiations and agreements between the
16
Parties with respect to the matters contained herein are superseded by this Agreement. In the event of any conflict between any provision in this Agreement and any specific provision in the Separation Agreement, the provision in this Agreement will control over the provisions in the Separation Agreement.
Section 8.10 Counterparts . The Parties may execute this Agreement in multiple counterparts, each of which constitutes an original as against the Party that signed it, and all of which together constitute one agreement. The
signatures of the Parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission that includes a copy of the sending Partys signature is as effective as signing and delivering the counterpart in person.
Section 8.11 Amendment . The Parties may amend this Agreement only by a written agreement signed by each Party to be bound by the amendment and that identifies itself as an amendment to this Agreement.
Section 8.12 Waiver . The Parties may waive a provision of this Agreement only by a writing signed by the Party intended to be bound by the waiver. A Party is not prevented from enforcing any right, remedy or condition in the Partys favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the Party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion.
Section 8.13 Construction of Agreement .
(a) Where this Agreement states that a Party will or shall perform in some manner or otherwise act or omit to act, it means that the Party is legally obligated to do so in accordance with this Agreement.
(b) The captions, titles and headings, and table of contents, included in this Agreement are for convenience only and do not affect this Agreements construction or interpretation. When a reference is made in this Agreement to an Article or a Section, exhibit or schedule, such reference will be to an Article or Section of, or an exhibit or schedule to, this Agreement unless otherwise indicated.
(c) The words including, includes, or include are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as without limitation or but not limited to are used in each instance.
(d) This Agreement is not to be construed for or against any Party based on which Party drafted any of the provisions of this Agreement. The language used in this Agreement is the language chosen by the Parties to express their mutual intent, and no provision of this Agreement will be interpreted for or against any Party because that Party or its attorney drafted the provision.
[Signature page follows]
17
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Transition Services Agreement as of the day and year first written above.
MANITOWOC PARENTCO: | ||
THE MANITOWOC COMPANY, INC. | ||
By: |
/s/ Carl J. Laurino |
|
Name: | Carl J. Laurino | |
Title: | Senior Vice President and Chief Financial | |
Officer | ||
MANITOWOC FOODSERVICE: | ||
MANITOWOC FOODSERVICE, INC. | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Senior Vice President, General Counsel and | |
Secretary |
[Signature page to Transition Services Agreement]
Exhibit 10.2
Executive Version
TAX MATTERS AGREEMENT
BY AND AMONG
THE MANITOWOC COMPANY, INC.
AND
MANITOWOC FOODSERVICE, INC.
MARCH 4, 2016
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS. |
1 | |||||
ARTICLE II ALLOCATION OF TAX LIABILITIES. |
10 | |||||
2.1. |
General Rule. | 10 | ||||
2.2. |
Allocation of Federal Income and Federal Other Taxes. | 11 | ||||
2.3. |
Allocation of State Income and State Other Taxes. | 11 | ||||
2.4. |
Allocation of Foreign Income and Foreign Other Taxes. | 12 | ||||
2.5. |
Certain Employment Taxes. | 13 | ||||
2.6. |
Determination of Tax Attributable to the Foodservice Business. | 13 | ||||
2.7. |
Proration of Taxes. | 14 | ||||
ARTICLE III PREPARATION AND FILING OF TAX RETURNS. |
14 | |||||
3.1. |
Manitowoc ParentCos Responsibility. | 14 | ||||
3.2. |
SpinCos Responsibility. | 14 | ||||
3.3. |
Tax Reporting Practices. | 14 | ||||
3.4. |
Consolidated or Combined Tax Returns. | 15 | ||||
3.5. |
Right to Review Tax Returns. | 15 | ||||
3.6. |
SpinCo Carrybacks and Claims for Refund. | 16 | ||||
3.7. |
Apportionment of Tax Attributes. | 16 | ||||
3.8. |
Signing of Returns Prepared by the Other Party. | 17 | ||||
ARTICLE IV TAX PAYMENTS. |
17 | |||||
4.1. |
Payment of Taxes With Respect to Certain Joint Returns. | 17 | ||||
4.2. |
Payment of Separate Company Taxes. | 18 | ||||
4.3. |
Indemnification Payments. | 18 | ||||
ARTICLE V TAX REFUNDS AND CORRELATIVE TAX BENEFITS AND SPINCO CARRYBACKS. |
19 | |||||
5.1. |
Tax Refunds. | 19 | ||||
5.2. |
Correlative Tax Benefits. | 19 | ||||
5.3. |
SpinCo Carrybacks. | 20 | ||||
ARTICLE VI TAX-FREE STATUS. |
20 | |||||
6.1. |
Restrictions on SpinCo. | 20 | ||||
6.2. |
Restrictions on Manitowoc ParentCo. | 23 | ||||
6.3. |
Procedures Regarding Opinions and Rulings. | 23 | ||||
6.4. |
Liability for Tax-Related Losses. | 25 | ||||
6.5. |
Representations. | 28 |
i
ARTICLE VII ASSISTANCE AND COOPERATION. |
28 | |||||
7.1. |
Assistance and Cooperation. | 28 | ||||
7.2. |
Income Tax Return Information. | 30 | ||||
7.3. |
Reliance by Manitowoc ParentCo. | 30 | ||||
7.4. |
Reliance by SpinCo. | 30 | ||||
ARTICLE VIII TAX RECORDS. |
30 | |||||
8.1. |
Retention of Tax Records. | 30 | ||||
8.2. |
Access to Tax Records. | 31 | ||||
8.3. |
Preservation of Privilege. | 31 | ||||
ARTICLE IX TAX CONTESTS. |
31 | |||||
9.1. |
Notice. | 31 | ||||
9.2. |
Control of Tax Contests. | 32 | ||||
ARTICLE X TREATMENT OF TAX INDEMNITY PAYMENTS. |
34 | |||||
10.1. |
Tax Characterization of Indemnity Payments. | 34 | ||||
10.2. |
Gross Up. | 34 | ||||
10.3. |
Interest Under This Agreement. | 34 | ||||
ARTICLE XI DISAGREEMENTS. |
34 | |||||
11.1. |
Discussion. | 34 | ||||
11.2. |
Escalation. | 34 | ||||
ARTICLE XII MISCELLANEOUS PROVISIONS. |
35 | |||||
12.1. |
Effectiveness. | 35 | ||||
12.2. |
Notices. | 35 | ||||
12.3. |
Authority. | 35 | ||||
12.4. |
Choice of Law and Severability. | 37 | ||||
12.5. |
Captions, Gender, References, and Number. | 37 | ||||
12.6. |
Counterparts. | 37 | ||||
12.7. |
Binding Effect. | 37 | ||||
12.8. |
Entire Agreement. | 38 | ||||
12.9. |
Further Assurances. | 38 | ||||
12.10. |
Waiver. | 38 | ||||
12.11. |
Expenses. | 38 | ||||
12.12. |
Late payments. | 38 | ||||
12.13. |
No Double Recovery. | 38 | ||||
12.14. |
Amendment. | 38 | ||||
12.15. |
Specific Performance. | 39 | ||||
12.16. |
Jurisdiction. | 39 |
ii
TAX MATTERS AGREEMENT
THIS TAX MATTERS AGREEMENT (the Agreement ) is entered into on March 4, 2016 (the Effective Date ), by and among The Manitowoc Company, Inc., a Wisconsin corporation ( Manitowoc ParentCo ), and Manitowoc Foodservice, Inc., a Delaware corporation ( SpinCo ) (Manitowoc ParentCo and SpinCo are sometimes collectively referred to herein as the Companies and, as the context requires, individually referred to herein as a Company ).
RECITALS
A. The Board of Directors of Manitowoc ParentCo has determined that it would be appropriate and desirable to separate the Foodservice Business (as defined below) from Manitowoc ParentCo. This Agreement is being entered into simultaneously with the distribution by Manitowoc ParentCo of all the outstanding shares of common stock of SpinCo (the Distribution ).
B. Manitowoc ParentCo is the common parent of an affiliated group of corporations that has elected to file consolidated federal income tax returns. Immediately prior to the Distribution, this affiliated group of which Manitowoc ParentCo is the common parent included SpinCo.
C. The Companies intend for the Contribution (as defined below) and the Distribution to qualify as a reorganization described in sections 355 and 368(a)(1)(D) of the Code (defined below) and the Separation Agreement to qualify as a plan of reorganization as described in Treas. Reg. § 1.368-2(g).
D. The Companies desire to provide for and agree upon the allocation between them of liabilities, and entitlements to refunds thereof, for certain Taxes arising prior to, at the time of, and subsequent to the Distribution, and to provide for and agree upon other matters relating to Taxes and to set forth certain covenants and indemnities relating to the Tax-Free Status of the Contribution and the Distribution.
NOW, THEREFORE, in consideration of the foregoing and the agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms, as used in this Agreement, have the following meanings:
Active Trade or Business means, (i) with respect to the Distribution, the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder, and taking into account the separate affiliated group rules of Section 355(b)(3)(B) of the Code) by SpinCo of the Foodservice Business as conducted immediately prior to the Distribution, and
(ii) with respect to any other Separation Transaction intended to qualify as tax-free pursuant to Section 355 of the Code or analogous provisions of state, local or foreign law, the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder, and taking into account the separate affiliated group rules of Section 355(b)(3)(B) of the Code, or the analogous provisions of state or local law) by the relevant SpinCo Entity of the Foodservice Business relating to such SpinCo Entity as conducted immediately prior to such Separation Transaction.
Adjustment Request means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, refund, or credit of Taxes, including (i) any amended Tax Return claiming adjustment to the Taxes as reported on the Tax Return or, if applicable, as previously adjusted, (ii) any claim for equitable recoupment or other offset, and (iii) any claim for refund or credit of Taxes previously paid.
Affiliate means, when used with respect to a specified Person and at a point in, or with respect to a period of, time, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person at such point in or during such period of time. For the purposes of this definition, control, when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise. Notwithstanding the two immediately preceding sentences, no member of the Manitowoc ParentCo Group shall be deemed to be an Affiliate of a member of the SpinCo Group solely by reason of having one or more directors in common or by reason of having been under the common control of Manitowoc ParentCo or Manitowoc ParentCos shareholders prior to (or, in case of Manitowoc ParentCos shareholders, after) the time of the Distribution.
Agreement means this Tax Matters Agreement.
Applicable Interest Rate means a per annum rate equal to the three month LIBOR fixing such rate as of the date such payment was due (the Due Date ) or if a holiday the previous business day, plus four percent (4%). Interest will be calculated based on a 365 day year and the actual number of days elapsed from the Due Date.
Board Certificate has the meaning set forth in Section 6.1(d).
Business Day has the meaning set forth in the Separation Agreement.
CFC means a controlled foreign corporation as defined in Section 957(a) of the Code.
Code means the U.S. Internal Revenue Code of 1986, as amended.
Company has the meaning set forth in the first paragraph of this Agreement.
Contribution means the steps set forth in Section 2.2 of the Separation Agreement.
2
Controlling Party has the meaning set forth in Section 9.2(c).
DGCL means the Delaware General Corporation Law.
Distribution has the meaning set forth in the recitals to this Agreement.
Distribution Date means the date on which the Distribution occurs.
Due Date has the meaning set forth in the definition of Applicable Interest Rate.
Effective Date has the meaning set forth in the first paragraph of this Agreement.
Employee Matters Agreement means the Employee Matters Agreement, dated as of March 4, 2016, by and among Manitowoc ParentCo and SpinCo, as amended from time to time.
Employment Tax means any Tax the liability or responsibility for which is allocated pursuant to the Employee Matters Agreement.
Entity means a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, an estate, a cooperative, a joint venture, an unincorporated organization, a governmental unit, or other type of entity, without regard to whether any entity is treated as disregarded for U.S. federal income tax purposes.
Federal Income Tax means any Tax imposed by Subtitle A of the Code (other than an Employment Tax), and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Federal Other Tax means any Tax imposed by the Code other than any Federal Income Taxes or Employment Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Fifty-Percent or Greater Interest has the meaning ascribed to such term for purposes of Sections 355(d) and (e) of the Code.
Filing Date has the meaning set forth in Section 6.4(d).
Final Determination means the final resolution of liability for any Tax, which resolution may be for a specific issue or adjustment or for a taxable period: (i) by IRS Form 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the laws of a State, local, or foreign taxing jurisdiction, except that a Form 870-AD or comparable form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund or the right of the Tax Authority to assert a further deficiency in respect of such issue or adjustment or for such taxable period (as the case may be); (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (iii) by a closing agreement or accepted offer in compromise under Sections 7121
3
or 7122 of the Code, or a comparable agreement under the laws of a State, local, or foreign taxing jurisdiction; (iv) by any allowance of a refund or credit in respect of an overpayment of a Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing such Tax; (v) by a final settlement resulting from a treaty-based competent authority determination; or (vi) by any other final disposition, including by reason of the expiration of the applicable statute of limitations, the execution of a pre-filing agreement with the IRS or other Tax Authority, or by mutual agreement of the parties.
Foodservice Business has the meaning set forth in the Separation Agreement.
Foreign Income Tax means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign country or United States possession, which is an income tax as defined in Treasury Regulation Section 1.901-2, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Foreign Other Tax means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign country or United States possession other than any Foreign Income Taxes or Employment Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Gain Recognition Agreement means a gain recognition agreement as described in Treasury Regulation Section 1.367(a)-8.
Internal Reorganization has the meaning set forth in the Separation Agreement.
Group means the Manitowoc ParentCo Group or the SpinCo Group, or both, as the context requires.
Income Tax means any Federal Income Tax, State Income Tax, or Foreign Income Tax.
Indemnitee has the meaning set forth in Section 10.3.
Indemnitor has the meaning set forth in Section 10.3.
Internal Reorganization Step Plan means that certain plan of reorganization titled The Manitowoc Company, Inc. Proposed Foodservice Separation Steps, dated March 4, 2016.
Internal Restructuring has the meaning set forth in Section 6.1(e).
IRS means the U.S. Internal Revenue Service.
Joint Return means any Tax Return that actually includes, by election or otherwise, one or more members of the Manitowoc ParentCo Group together with one or more members of the SpinCo Group. For the avoidance of doubt, a German organschaft consisting of at least one member of the Manitowoc ParentCo Group and one member of the SpinCo Group
4
shall be considered a Joint Return. The fact that a member of one Group may elect to surrender losses to a member of another Group under the United Kingdoms rules regarding loss surrender shall not cause those members to be considered to have filed a Joint Return, however.
Manitowoc ParentCo has the meaning set forth in the first paragraph of this Agreement.
Manitowoc ParentCo Affiliated Group means the affiliated group (as that term is defined in Section 1504 of the Code and the regulations thereunder) of which Manitowoc ParentCo is the common parent.
Manitowoc ParentCo Federal Consolidated Income Tax Return means any U.S. federal Income Tax Return for the Manitowoc ParentCo Affiliated Group.
Manitowoc ParentCo Group means Manitowoc ParentCo and its Affiliates, excluding any Entity that is a member of the SpinCo Group.
Manitowoc ParentCo Separate Return means any Tax Return of or including any member of the Manitowoc ParentCo Group (including any consolidated, combined or unitary return) that does not include any member of the SpinCo Group.
Non-Controlling Party has the meaning set forth in Section 9.2(c).
Notified Action has the meaning set forth in Section 6.3(a).
Past Practices has the meaning set forth in Section 3.3(a).
Payment Date means (i) with respect to any Manitowoc ParentCo Federal Consolidated Income Tax Return, (A) the due date for any required installment of estimated taxes determined under Section 6655 of the Code, (B) the due date (determined without regard to extensions) for filing the return determined under Section 6072 of the Code, or (C) the date the return is filed, as the case may be, and (ii) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.
Payor has the meaning set forth in Section 4.3(a).
Person means an individual or an Entity.
Post-Distribution Period means any Tax Period beginning after the Distribution Date and, in the case of any Straddle Period, the portion of such Tax Period beginning on the day after the Distribution Date.
Pre-Distribution Period means any Tax Period ending on or before the Distribution Date and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Distribution Date.
Privilege means any privilege that may be asserted under applicable law, including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege, and any privilege relating to internal evaluation processes.
5
Proposed Acquisition Transaction means a transaction or series of transactions (or any agreement, understanding, or arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulation Section 1.355-7, to enter into a transaction or series of transactions), whether such transaction is supported by SpinCo management or shareholders, is a hostile acquisition, or otherwise, as a result of which SpinCo would merge or consolidate with any other Person and/or as a result of which any Person or any group of related Persons would (directly or indirectly) acquire, or have the right to acquire, from SpinCo or one or more holders of outstanding shares of SpinCo Capital Stock, a number of shares of SpinCo Capital Stock that would, when combined with any other changes in ownership of SpinCo Capital Stock pertinent for purposes of Section 355(e) of the Code, comprise 40% or more of (i) the value of all outstanding shares of stock of SpinCo as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (ii) the total combined voting power of all outstanding shares of voting stock of SpinCo as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series. Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (i) the adoption by SpinCo of a shareholder rights plan, or (ii) issuances by SpinCo that satisfy Safe Harbor VIII (relating to acquisitions in connection with a Persons performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d). For purposes of determining whether a transaction constitutes an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders. This definition and the application thereof are intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code shall be incorporated in this definition and its interpretation.
Related Agreement means any Ancillary Agreement (as defined in the Separation Agreement), other than this Tax Matters Agreement.
Representation Letters means any representations, officers certificates, representation letters, or other materials delivered or deliverable by Manitowoc ParentCo, its Affiliates, or representatives thereof or SpinCo, its Affiliates, or representatives thereof in connection with the Tax Opinion.
Required Party has the meaning set forth in Section 4.3(a).
Responsible Company means, with respect to any Tax Return, the Company having responsibility for preparing and filing such Tax Return under this Agreement.
Retention Date has the meaning set forth in Section 8.1.
Ruling means a private letter ruling issued by the IRS to Manitowoc ParentCo in connection with the Contribution and Distribution.
6
Ruling Request means any letter filed by Manitowoc ParentCo with the IRS or other Tax Authority requesting a ruling regarding certain tax consequences of the Separation Transactions (including all attachments, exhibits, and other materials submitted with such ruling request letter) and any amendment or supplement to such ruling request letter.
Section 336(e) Election means an election made pursuant to Section 336(e) of the Code.
Section 6.1(d) Acquisition Transaction means any transaction or series of transactions that is not a Proposed Acquisition Transaction but would be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were 25% instead of 40%.
Separate Return means a Manitowoc ParentCo Separate Return or a SpinCo Separate Return, as the case may be.
Separation Agreement means the Master Separation and Distribution Agreement, dated as of March 4, 2016, by and among Manitowoc ParentCo and SpinCo, as amended from time to time.
Separation Transaction means any transaction forming part of the Internal Reorganization, the Contribution or the Distribution.
SpinCo has the meaning set forth in the first paragraph of this Agreement.
SpinCo Capital Stock means all classes or series of capital stock of SpinCo, including (i) the SpinCo Common Stock, (ii) all options, warrants and other rights to acquire such capital stock, and (iii) all instruments properly treated as stock in SpinCo for U.S. federal income tax purposes.
SpinCo Carryback means any net operating loss, net capital loss, excess tax credit, or other similar Tax item of any member of the SpinCo Group which may or must be carried from one Tax Period to another prior Tax Period under the Code or other applicable Tax Law.
SpinCo Common Stock means the common stock, par value $0.01 per share, of SpinCo.
SpinCo Entity means an Entity that is a member of the SpinCo Group.
SpinCo Group means, as of any time of determination (whether before or after the Distribution), the group consisting of (i) SpinCo, (ii) each Entity that is a Subsidiary of SpinCo as of the time of determination, (iii) each Entity that is not a Subsidiary of SpinCo as of a time of determination before the Distribution but that later becomes a Subsidiary of SpinCo by the time of the Distribution, and (iv) each Entity that becomes an Affiliate (other than a Subsidiary) of SpinCo after the Distribution.
7
SpinCo Separate Return means any Tax Return of or including any member of the SpinCo Group (including any consolidated, combined or unitary return) that does not include any member of the Manitowoc ParentCo Group.
State Income Tax means any Tax imposed by any State of the United States, or by any political subdivision of any such State, which is imposed on or measured by net income, including state or local franchise or similar Taxes measured by net income, as well as any state or local franchise, capital or similar Taxes imposed in lieu of a tax imposed on or measured by net income, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
State Other Tax means any Tax imposed by any State of the United States, or by any political subdivision of any such State, other than any State Income Taxes or Employment Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Straddle Period means any Tax Period that begins on or before and ends after the Distribution Date.
Subpart F Income means, collectively, (i) subpart F income, as defined in Section 952 of the Code and (ii) any investment in United States property, as defined in Section 956 of the Code; to the extent that such amount is recognized under section 951(a)(1)(A) or (B) of the Code.
Subsidiary means, with respect to a Person, any Entity that is controlled, directly or indirectly, by such Person.
Tax or Taxes means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, unemployment, disability, property, ad valorem, value added, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, escheat, alternative minimum, estimated or other tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax), imposed by any governmental entity or political subdivision thereof, and any interest, penalty, additions to tax, or additional amounts in respect of the foregoing.
Tax Advisor means a tax counsel or accountant, in each case of recognized national standing.
Tax Attribute means a net operating loss, net capital loss, unused investment credit, unused foreign tax credit, excess charitable contribution, general business credit, research and development credit, earnings and profits, basis, or any other Tax Item that could reduce a Tax or create a Tax Benefit.
Tax Authority means, with respect to any Tax, the governmental entity or political subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision.
8
Tax Benefit means any refund, credit, or other reduction in otherwise required liability for Taxes.
Tax Contest means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes (including any administrative or judicial review of any claim for refund).
Tax-Free Status means the qualification of the Contribution and the Distribution, taken together, (i) as a reorganization described in Sections 355(a) and 368(a)(1)(D) of the Code, (ii) as a transaction in which the stock distributed thereby is qualified property for purposes of Sections 355(d), 355(e), and 361(c) of the Code, and (iii) as a transaction in which Manitowoc ParentCo, SpinCo and the shareholders of Manitowoc ParentCo recognize no income or gain for U.S. federal income tax purposes pursuant to Sections 355, 361, and 1032 of the Code; other than: (i) in the case of Manitowoc ParentCo and SpinCo, intercompany items or excess loss accounts taken into account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code, and (ii) in the case of shareholders of Manitowoc ParentCo, cash received in lieu of fractional shares.
Tax Item means, with respect to any Income Tax, any item of income, gain, deduction, loss, or credit.
Tax Law means the law of any governmental entity or political subdivision thereof relating to any Tax.
Tax Opinion means the opinion of Baker & McKenzie LLP deliverable to Manitowoc ParentCo in connection with the Contribution and the Distribution.
Tax Period means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.
Tax Records means any (i) Tax Returns, (ii) Tax Return workpapers, (iii) documentation relating to any Tax Contests, and (iv) any other books of account or records (whether or not in written, electronic, or other tangible or intangible forms and whether or not stored on electronic or any other medium) required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any Tax Authority, in each case filed with respect to or otherwise relating to Taxes.
Tax-Related Losses means (i) all Taxes (including interest and penalties thereon) imposed pursuant to any settlement, Final Determination, judgment or otherwise; (ii) all accounting, legal and other professional fees, and court costs incurred in connection with such Taxes, as well as any other out-of-pocket costs incurred in connection with such Taxes; and (iii) all costs, expenses and damages associated with stockholder litigation or controversies and any amount paid by Manitowoc ParentCo (or any Manitowoc ParentCo Affiliate) or SpinCo (or any SpinCo Affiliate) in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority, in each case, resulting from the failure of the Contribution or the Distribution to have Tax-Free Status or from the failure of a Separation Transaction to have the tax treatment described in the Tax Opinion or Internal Reorganization Step Plan.
9
Tax Return means any report of Taxes due, any claim for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document required to be filed under the Code or other Tax Law with respect to Taxes, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
Transfer Pricing Adjustment means any proposed or actual allocation by a Tax Authority of any Tax Item between or among any member of the Manitowoc ParentCo Group and any member of the SpinCo Group with respect to any Tax Period ending prior to or including the Distribution Date.
Treasury Regulations means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period.
UK Loss Surrender Filings means any returns, claims or filings required to enable the surrender of losses under United Kingdom tax law from a member of the SpinCo Group (or member of the Manitowoc ParentCo Group) to a member of the Manitowoc ParentCo Group (or a member of the SpinCo Group) including but not limited to the preparation and filing of Her Majestys Custom & Revenues Form CT600c.
Unqualified Tax Opinion means an unqualified will opinion of a Tax Advisor, which Tax Advisor is acceptable to Manitowoc ParentCo, on which Manitowoc ParentCo may rely to the effect that a transaction will not affect the Tax-Free Status. Any such opinion must assume that the Contribution and the Distribution would have qualified for Tax-Free Status if the transaction in question did not occur.
ARTICLE II
ALLOCATION OF TAX LIABILITIES
2.1. General Rule .
(a) Manitowoc ParentCo Liability . Manitowoc ParentCo shall be liable for, and shall indemnify and hold harmless the SpinCo Group from and against:
(i) any liability for Taxes which are allocated to Manitowoc ParentCo under this Article II;
(ii) any liability for German real estate transfer tax imposed with respect to the Separation Transactions;
(iii) any liability for Tax-Related Losses that Manitowoc ParentCo is liable for under Section 6.4;
(iv) any liability for Taxes as a result of Manitowoc ParentCos breach of a warranty or covenant in the Separation Agreement or any Ancillary Agreement (as that term is defined in the Separation Agreement)
10
(b) SpinCo Liability . SpinCo shall be liable for, and shall indemnify and hold harmless the Manitowoc ParentCo Group from and against:
(i) any liability for Taxes which are allocated to SpinCo under this Article II;
(ii) any liability for Tax-Related Losses that SpinCo is liable for under Section 6.4; and
(iii) any liability for Taxes as a result of SpinCos breach of a warranty or covenant in the Separation Agreement or any Ancillary Agreement (as that term is defined in the Separation Agreement).
2.2. Allocation of Federal Income and Federal Other Taxes .
Except as provided in Section 2.5, Federal Income Tax and Federal Other Tax shall be allocated as follows:
(a) Allocation of Federal Income Tax and Federal Other Tax Relating to Joint Returns . With respect to any Joint Return, Manitowoc ParentCo shall be responsible for any and all Federal Income Taxes or Federal Other Taxes due with respect to or required to be reported on any such Joint Return (including any increase in such Tax as a result of a Final Determination) for all Pre-Distribution Periods.
(b) Allocation of Federal Income Tax and Federal Other Tax Relating to Separate Returns .
(i) Manitowoc ParentCo shall be responsible for any and all Federal Income Taxes or Federal Other Taxes due with respect to or required to be reported on any Manitowoc ParentCo Separate Return (including any increase in such Tax as a result of a Final Determination) for all Tax Periods.
(ii) SpinCo shall be responsible for any and all Federal Income Taxes or Federal Other Taxes due with respect to or required to be reported on any SpinCo Separate Return (including any increase in such Tax as a result of a Final Determination) for all Tax Periods. For the avoidance of doubt, this shall include any liability for Taxes imposed with respect to Subpart F Income accrued by a CFC that is a member of the SpinCo Group even if the Subpart F Income accrued in a Straddle Period for that CFC.
2.3. Allocation of State Income and State Other Taxes . Except as provided in Section 2.5, State Income Tax and State Other Tax shall be allocated as follows:
(a) Allocation of State Income Tax and State Other Tax Relating to Joint Returns . Manitowoc ParentCo shall be responsible for any and all State Income Taxes or State Other Taxes due with respect to or required to be reported on any Joint Return (including any increase in such Tax as a result of a Final Determination) for all Pre-Distribution Periods.
11
(b) Allocation of State Income Tax and State Other Tax Relating to Separate Returns .
(i) Manitowoc ParentCo shall be responsible for any and all State Income Taxes or State Other Taxes due with respect to or required to be reported on any Manitowoc ParentCo Separate Return (including any increase in such Tax as a result of a Final Determination) for all Tax Periods.
(ii) SpinCo shall be responsible for any and all State Income Taxes or State Other Taxes due with respect to or required to be reported on any SpinCo Separate Return (including any increase in such Tax as a result of a Final Determination) for all Tax Periods.
2.4. Allocation of Foreign Income and Foreign Other Taxes . Except as provided in Section 2.5, Foreign Income Tax and Foreign Other Tax shall be allocated as follows:
(a) Allocation of Foreign Income Tax and Foreign Other Tax Relating to Joint Returns .
(i) Allocation to SpinCo for Pre-Distribution Periods . SpinCo shall be responsible for any and all Foreign Income Taxes or Foreign Other Taxes due with respect to or required to be reported on any Joint Return (including any increase in such Tax as a result of a Final Determination) which Taxes are attributable to the SpinCo Group for all Pre-Distribution Periods, as determined pursuant to Section 2.6.
(ii) Allocation to Manitowoc ParentCo for Pre-Distribution Periods . Manitowoc ParentCo shall be responsible for any and all Foreign Income Taxes or Foreign Other Taxes due with respect to or required to be reported on any Joint Return (including any increase in such Tax as a result of a Final Determination) other than those Foreign Income Taxes described in Section 2.4(a)(i) for all Pre-Distribution Periods.
(b) Allocation of Foreign Income Tax and Foreign Other Tax Relating to Separate Returns .
(i) Manitowoc ParentCo shall be responsible for any and all Foreign Income Taxes or Foreign Other Taxes due with respect to or required to be reported on any Manitowoc ParentCo Separate Return, including any Foreign Income Tax of Manitowoc ParentCo or any member of the Manitowoc ParentCo Group imposed by way of withholding by a member of the SpinCo Group (and including any increase in such Tax as a result of a Final Determination) for all Tax Periods.
12
(ii) SpinCo shall be responsible for any and all Foreign Income Taxes or Foreign Other Taxes due with respect to or required to be reported on any SpinCo Separate Return, including any Foreign Income Tax of SpinCo or any member of the SpinCo Group imposed by way of withholding by a member of the Manitowoc ParentCo Group (and including any increase in such Tax as a result of a Final Determination) for all Tax Periods.
(iii) Notwithstanding the fact that the Tax Returns reflecting the UK Income Tax liability of the UK members of the Manitowoc ParentCo Group and the SpinCo Group are considered Separate Returns, SpinCo (or Manitowoc ParentCo) agrees to surrender losses that a UK member of the SpinCo Group (or Manitowoc ParentCo) may have to a UK member of the Manitowoc ParentCo Group (or SpinCo Group) for any Pre-Distribution Periods in the event the Tax Return for that member has not yet been filed. Moreover, in the event that: (a) the UK Tax Authority audits a UK member of the Manitowoc ParentCo Group for the Pre-Distribution Period and proposes an increase in the taxable income of that member; and (b) a UK SpinCo Group member has losses that it is allowed to surrender to offset that increase in the year to which that adjustment relates; then that UK member of the SpinCo Group will be obligated to cooperate with Manitowoc ParentCo to surrender those losses to the extent permitted under UK law.
2.5. Certain Employment Taxes . Notwithstanding anything contained herein to the contrary, this Agreement, including Article II, shall not apply with respect to Employment Taxes. Employment Taxes shall be allocated as provided in the Employee Matters Agreement.
2.6. Determination of Tax Attributable to the Foodservice Business .
(a) Foreign Income Tax . For purposes of Section 2.4(a)(i), the amount of Foreign Income Taxes attributable to the SpinCo Group shall be as determined by Manitowoc ParentCo on a pro forma SpinCo Group return prepared:
(i) including only Tax Items of members of the SpinCo Group that were included in the relevant Joint Return;
(ii) using all elections, accounting methods and conventions used on such Joint Return for such period; and
(iii) applying the highest statutory marginal corporate Income Tax rate in effect for such Tax Period.
(b) Limitation . The amount of Foreign Income Taxes attributable to the Foodservice Business for any Tax Period shall not be less than zero.
13
2.7. Proration of Taxes : In the event that it becomes necessary to apportion Taxes to the Pre-Distribution Period:
(a) Taxes imposed on income or gains shall be apportioned to the Pre-Distribution Period based on a hypothetical closing of the books as of the close of business on the Distribution Date, provided that a mid-month proration in accordance with Treasury Regulation Section 1.1502-76 may be used as necessary and in Manitowoc ParentCos discretion; and
(b) Taxes imposed on a periodic basis (e.g., property taxes) shall be apportioned on a per diem basis.
ARTICLE III
PREPARATION AND FILING OF TAX RETURNS
3.1. Manitowoc ParentCos Responsibility . Manitowoc ParentCo has the exclusive obligation and right to prepare and file, or to cause to be prepared and filed:
(a) All Joint Returns; and
(b) Manitowoc ParentCo Separate Returns.
3.2. SpinCos Responsibility . SpinCo shall prepare and file, or shall cause to be prepared and filed, all Tax Returns required to be filed by or with respect to members of the SpinCo Group other than those Tax Returns which Manitowoc ParentCo is required to prepare and file under Section 3.1. The Tax Returns required to be prepared and filed by SpinCo under this Section 3.2 shall include any SpinCo Separate Returns. For the avoidance of doubt, SpinCo shall have responsibility for preparing and filing the UK Loss Surrender Filings for the Pre-Distribution Period.
3.3. Tax Reporting Practices .
(a) Manitowoc ParentCo General Rule . Except as provided in Section 3.3(c), Manitowoc ParentCo shall prepare any Tax Return for a Pre-Distribution Period which it has the obligation and right to prepare and file, or cause to be prepared and filed, under Section 3.1, using past practices, accounting methods, elections or conventions (Past Practices) used with respect to the Tax Returns in question (unless there is no reasonable basis for the use of such Past Practices), and to the extent any items are not covered by Past Practices (or in the event that there is no reasonable basis for the use of such Past Practices), in accordance with reasonable Tax accounting practices selected by Manitowoc ParentCo.
(b) SpinCo General Rule . Except as provided in Section 3.3(c), with respect to any Tax Return that SpinCo has the obligation and right to prepare and file, or cause to be prepared and filed for a Pre-Distribution Period, under Section 3.2, such Tax Return shall be prepared in accordance with Past Practices used with respect to the Tax Returns in question (unless there is no reasonable basis for the use of such Past Practices), and to the extent any items are not covered by Past
14
Practices (or in the event that there is no reasonable basis for the use of such Past Practices), in accordance with reasonable Tax accounting practices selected by SpinCo.
(c) Reporting of Separation Transactions . The Tax treatment of the Separation Transactions reported on any Tax Return shall be consistent with the treatment thereof in the Tax Opinion and Internal Reorganization Step Plan, taking into account the jurisdiction in which such Tax Returns are filed, unless there is no reasonable basis for such Tax treatment. Such treatment reported on any Tax Return for which SpinCo is the Responsible Company shall be consistent with that on any Tax Return filed or to be filed by Manitowoc ParentCo or any member of the Manitowoc ParentCo Group or caused or to be caused to be filed by Manitowoc ParentCo, unless there is no reasonable basis for such Tax treatment. In the event that a Company shall determine that there is no reasonable basis for the Tax treatment described in either of the preceding two sentences, such Company shall notify the other Company twenty (20) Business Days prior to filing the relevant Tax Return and the Companies shall attempt in good faith to agree on the manner in which the relevant portion of the Separation Transactions shall be reported.
3.4. Consolidated or Combined Tax Returns . SpinCo shall elect and join, and shall cause its respective Affiliates to elect and join, in filing any Joint Returns that Manitowoc ParentCo determines are required to be filed or that Manitowoc ParentCo elects to file pursuant to Section 3.1(a).
3.5. Right to Review Tax Returns .
(a) General . The Responsible Company with respect to any material Tax Return shall make the portion of such Tax Return and related workpapers which are relevant to the determination of the other Companys rights or obligations under this Agreement available for review by the other Company, if requested, to the extent: (i) such Tax Return relates to Taxes for which the requesting party would reasonably be expected to be liable, (ii) such Tax Return relates to Taxes and the requesting party would reasonably be expected to be liable in whole or in part for any additional Taxes owing as a result of adjustments to the amount of such Taxes reported on such Tax Return, (iii) such Tax Return relates to Taxes for which the requesting party would reasonably be expected to have a claim for Tax Benefits under this Agreement, or (iv) the requesting party reasonably determines that it must inspect such Tax Return to confirm compliance with the terms of this Agreement. The Responsible Company shall: (i) notify the non-responsible party of the Tax Return at least fifteen (15) days before the filing date, and (ii) use reasonable efforts to have such Tax Return modified before filing, taking into account the person responsible for payment of the Tax (if any) reported on such Tax Return and whether the amount of Tax liability allocable to the requesting party with respect to such Tax Return is material. The Companies shall attempt in good faith to resolve any issues arising out of the review of such Tax Return.
15
(b) Material Tax Returns . For purposes of Section 3.5(a), a Tax Return is material if it could reasonably be expected to reflect (i) Tax liability equal to or in excess of $500,000, (ii) a credit or credits equal to or in excess of $500,000 or (iii) a loss or losses equal to or in excess of $1.5 million, in each case with respect to the requesting party.
3.6. SpinCo Carrybacks and Claims for Refund . SpinCo hereby agrees that, unless Manitowoc ParentCo consents in writing, (i) no Adjustment Request with respect to any Tax Return for a pre-Distribution Period or Straddle Period shall be filed, and (ii) any available elections to waive the right to claim in any Pre-Distribution Period with respect to any Tax Return any SpinCo Carryback arising in a Post-Distribution Period shall be made, and no affirmative election shall be made to claim any such SpinCo Carryback.
3.7. Apportionment of Tax Attributes .
(a) Except as provided in paragraph (b), Manitowoc ParentCo may in good faith advise SpinCo in writing of the amount, if any, of any Tax Attributes, which Manitowoc ParentCo determines, in its sole and absolute discretion, shall be allocated or apportioned to the SpinCo Group under applicable law, or may provide SpinCo relevant information for making such determination on an as-is basis, provided that this Section 3.7(a) shall not be construed as obligating Manitowoc ParentCo to undertake any such determination or provide any such information. For the avoidance of doubt, Manitowoc ParentCo makes no representation or warranty as to the accuracy or completeness of any such determination or information. SpinCo and all members of the SpinCo Group shall prepare all Tax Returns in accordance with any such determination. SpinCo may request that Manitowoc ParentCo undertake a determination of the portion, if any, of any particular Tax Attribute to be allocated or apportioned to the SpinCo Group under applicable law; to the extent that Manitowoc ParentCo determines, in its sole and absolute discretion, not to undertake such determination, or does not otherwise advise SpinCo of its intention to undertake such determination within twenty (20) Business Days of the receipt of such request, SpinCo shall be permitted to undertake such determination at its own cost and expense and shall notify Manitowoc ParentCo of its determination, which determination shall not be binding upon Manitowoc ParentCo. In the event that Manitowoc ParentCo does determine a Tax Attribute and SpinCo disagrees with the determination, the dispute shall be addressed by Article XI with the proviso that if SpinCo disagrees with Manitowoc ParentCos calculation and wants to pursue its rights under Section 11.2, it must provide written notice within forty-five days of its receipt of Manitowoc ParentCos calculation. SpinCo agrees that if it does not exercise its rights under Article XI, it shall not subsequently dispute or take a position contrary to Manitowoc ParentCos allocation or apportionment of Tax Attributes. Notwithstanding anything to the contrary contained herein, for the avoidance of doubt, Manitowoc ParentCo shall bear no liability to SpinCo for determinations made by Manitowoc ParentCo pursuant to this Section 3.7(a) if any such determination shall be found or asserted to be inaccurate.
16
(b) Manitowoc ParentCo shall provide SpinCo with a calculation of any overall foreign loss (within the meaning of Section 904(f)(2) of the Code) or separate limitation loss (within the meaning of Section 904(f)(5)(E)(iii) of the Code) allocable to any member of the SpinCo Group within six (6) months following the month in which the Distribution occurs or November 30, 2016, whichever is later. SpinCo shall have thirty (30) days to review and comment on Manitowoc ParentCos computation. Any dispute shall be addressed by Article XI, with the proviso that if SpinCo disagrees with Manitowoc ParentCos calculation and wants to pursue its rights under Section 11.2, it must provide written notice within forty-five days of its receipt of Manitowoc ParentCos calculation.
3.8. Signing of Returns Prepared by the Other Party . In the event that a Company is legally required to sign a Tax Return but is not the Responsible Company, the Company shall nevertheless sign the Tax Return prepared by the Responsible Company unless a material position taken on such Tax Return does not have substantial authority as that term is defined under Section 6662 of the Code.
ARTICLE IV
TAX PAYMENTS
4.1. Payment of Taxes With Respect to Certain Joint Returns . In the case of any Joint Return:
(a) Computation and Payment of Tax Due . At least three Business Days prior to any Payment Date for any such Tax Return, the Responsible Company shall compute the amount of Tax required to be paid to the applicable Tax Authority (taking into account the requirements of Section 3.4 relating to consistent accounting practices, as applicable) with respect to such Tax Return on such Payment Date. The Responsible Company shall pay such amount to such Tax Authority on or before such Payment Date (and provide notice and proof of payment to the other Company).
(b) Computation and Payment of Liability With Respect To Tax Due . Within twenty (20) Business Days following the earlier of (i) the due date (including extensions) for filing any such Tax Return (excluding any Tax Return with respect to payment of estimated Taxes or Taxes due with a request for extension of time to file) or (ii) the date on which such Tax Return is filed, if Manitowoc ParentCo is the Responsible Company, then SpinCo shall pay to Manitowoc ParentCo the amount allocable to the SpinCo Group under the provisions of Article II, and if SpinCo is the Responsible Company, then Manitowoc ParentCo shall pay to SpinCo the amount allocable to the Manitowoc ParentCo Group under the provisions of Article II, in each case, plus interest computed at the Applicable Interest Rate on the amount of the payment based on the number of days from the earlier of (i) the due date of the Tax Return (including extensions) or (ii) the date on which such Tax Return is filed, to the date of payment.
17
(c) Adjustments Resulting in Underpayments . In the case of any adjustment pursuant to a Final Determination with respect to any such Tax Return, the Responsible Company shall pay to the applicable Tax Authority when due any additional Tax due with respect to such Return required to be paid as a result of such adjustment pursuant to a Final Determination. The Responsible Company shall compute the amount attributable to the SpinCo Group in accordance with Article II and SpinCo shall pay to Manitowoc ParentCo any amount due Manitowoc ParentCo (or Manitowoc ParentCo shall pay SpinCo any amount due SpinCo) under Article II within twenty (20) Business Days from the later of (i) the date the additional Tax was paid by the Responsible Company or (ii) the date of receipt of a written notice and demand from the Responsible Company for payment of the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. Any payments required under this Section 4.1(c) shall include interest computed at the Applicable Interest Rate based on the number of days from the date the additional Tax was paid by the Responsible Company to the date of the payment under this Section 4.1(c).
4.2. Payment of Separate Company Taxes . Each Company shall pay, or shall cause to be paid, to the applicable Tax Authority when due all Taxes owed by such Company or a member of such Companys Group with respect to a Separate Return.
4.3. Indemnification Payments .
(a) If any Company (the Payor ) is required under applicable Tax Law to pay to a Tax Authority a Tax that another Company (the Required Party ) is liable for under this Agreement, the Required Party shall reimburse the Payor within twenty (20) Business Days of delivery by the Payor to the Required Party of an invoice for the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. The reimbursement shall include interest on the Tax payment computed at the Applicable Interest Rate based on the number of days from the date of the payment to the Tax Authority to the date of reimbursement under this Section 4.3.
(b) All indemnification payments under this Agreement shall be made by Manitowoc ParentCo directly to SpinCo and by SpinCo directly to Manitowoc ParentCo; provided, however, that if the Companies mutually agree with respect to any such indemnification payment, any member of the Manitowoc ParentCo Group, on the one hand, may make such indemnification payment to any member of the SpinCo Group, on the other hand, and vice versa. All indemnification payments shall be treated in the manner described in Section 10.1.
18
ARTICLE V
TAX REFUNDS AND CORRELATIVE TAX BENEFITS AND SPINCO CARRYBACKS
5.1. Tax Refunds . Manitowoc ParentCo shall be entitled to any refund (and any interest thereon received from the applicable Tax Authority) of Taxes for which Manitowoc ParentCo is liable hereunder, SpinCo shall be entitled (subject to the limitations provided in Section 3.6) to any refund (and any interest thereon received from the applicable Tax Authority) of Taxes for which SpinCo is liable hereunder and a Company receiving a refund to which another Company is entitled hereunder shall pay over such refund to such other Company within twenty (20) Business Days after such refund is received (together with interest computed at the Applicable Interest Rate based on the number of days from the date the refund was received to the date the refund was paid over).
5.2. Correlative Tax Benefits .
(a) If: (i) a member of the SpinCo Group realizes an increase in a Tax Attribute as a result of an adjustment pursuant to a Final Determination that increases Taxes for which a member of the Manitowoc ParentCo Group is liable hereunder (or reduces any Tax Attribute of a member of the Manitowoc ParentCo Group), or (ii) if a member of the Manitowoc ParentCo Group realizes an increase in a Tax Attribute as a result of an adjustment pursuant to a Final Determination that increases Taxes for which a member of the SpinCo Group is liable hereunder (or reduces any Tax Attribute of a member of the SpinCo Group); and such Tax Attribute would not have arisen but for such adjustment or reporting (determined on a with and without basis), SpinCo or Manitowoc ParentCo, as the case may be, shall make a payment to either Manitowoc ParentCo or SpinCo, as appropriate, within 90 days following notice of such Final Determination, in an amount equal to the estimated cash Tax Benefit resulting from the realization of the Tax Attribute, based on the forecasted realization of the increased Tax Attribute, calculated at a reasonable Federal and state tax rate and present valued at the Applicable Interest Rate. The intention of this provision is to reduce the administration associated with reporting the realization of the cash Tax Benefit described in Section 5.2(b) for an increase in a Tax Attribute resulting from a Final Determination.
(b) If: (i) a member of the SpinCo Group actually realizes in cash any Tax Benefit as a result of an adjustment pursuant to a Final Determination that increases Taxes for which a member of the Manitowoc ParentCo Group is liable hereunder (or reduces any Tax Attribute of a member of the Manitowoc ParentCo Group), or (ii) if a member of the Manitowoc ParentCo Group actually realizes in cash any Tax Benefit as a result of an adjustment pursuant to a Final Determination that increases Taxes for which a member of the SpinCo Group is liable hereunder (or reduces any Tax Attribute of a member of the SpinCo Group); and such Tax Benefit would not have arisen but for such adjustment or reporting (determined on a with and without basis) and has not already been addressed under Section 5.2(a), SpinCo or Manitowoc ParentCo, as
19
the case may be, shall make a payment to either Manitowoc ParentCo or SpinCo, as appropriate, within 90 days following such actual realization of the Tax Benefit, in an amount equal to such Tax Benefit actually realized in cash (including any Tax Benefit actually realized as a result of the payment), plus interest on such amount computed at the Applicable Interest Rate based on the number of days from the date of such actual realization of the Tax Benefit to the date of payment of such amount under this section.
(c) In no event shall one Group be required to pay an amount equal to the correlative Tax Benefit to the other Group under this Section 5.2 that exceeds the actual Tax that gave rise to the correlative Tax Benefit.
5.3. SpinCo Carrybacks . SpinCo shall be entitled to any refund that is attributable to, and would not have arisen but for, a SpinCo Carryback permitted pursuant to Section 3.6; provided, however, SpinCo shall indemnify and hold the members of the Manitowoc ParentCo Group harmless from and against any and all collateral Tax consequences resulting from or caused by any such Carryback, including (but not limited to) the loss or postponement of any benefit from the use of Tax Attributes generated by a member of the Manitowoc ParentCo Group or an Affiliate thereof if (i) such Tax Attributes expire unutilized, but would have been utilized but for such Carryback, or (ii) the use of such Tax Attributes is postponed to a later Tax Period than the Tax Period in which such Tax Attributes would have been utilized but for such Carryback. Any such payment of such refund made by Manitowoc ParentCo to SpinCo pursuant to this section shall be recalculated in light of any Final Determination (or any other facts that may arise or come to light after such payment is made, such as a carryback of a Manitowoc ParentCo Group Tax Attribute to a Tax Period in respect of which such refund is received) that would affect the amount to which SpinCo is entitled, and an appropriate adjusting payment shall be made by SpinCo to Manitowoc ParentCo such that the aggregate amount paid pursuant to this section equals such recalculated amount (with interest computed at the Applicable Interest Rate).
ARTICLE VI
TAX-FREE STATUS
6.1. Restrictions on SpinCo .
(a) Compliance with Tax Opinion and Representation Letters . SpinCo shall not take or fail to take, and shall not permit any SpinCo Affiliate to take or fail to take, any action where such action or failure to act would be inconsistent with or cause to be untrue any statement, representation, or covenant in any Representation Letters or the Tax Opinion. SpinCo shall not take or fail to take, and shall not permit any SpinCo Affiliate to take or fail to take, any action which adversely affects or could reasonably be expected to adversely affect (i) the Tax-Free Status of the Contribution and the Distribution, or (ii) the qualification of any Separation Transaction (including, but not limited to, those transactions described in the Tax Opinion or Internal Reorganization Step Plan) under U.S. federal, state, local or non-U.S. Tax Law as wholly or partially tax-free or tax-deferred.
(b) Preservation of Active Trade or Business . From the Distribution Date until the first Business Day after the two-year anniversary of the Distribution
20
Date, SpinCo shall (i) maintain its status as a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code; (ii) not engage in any transaction that would result in it ceasing to be a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code; (iii) cause each SpinCo Affiliate, whose activities are relied upon in the Tax Opinion for purposes of qualifying a transaction as tax-free pursuant to Section 355 of the Code or other Tax Law, to maintain its status as a company engaged in such Active Trade or Business for purposes of Section 355(b)(2) of the Code and any such other applicable Tax Law; (iv) not engage in any transaction or permit a SpinCo Affiliate to engage in any transaction that would result in them ceasing to be engaged in the relevant Active Trade or Business for purposes of Section 355(b)(2) of the Code or such other applicable Tax Law, taking into account Section 355(b)(3) of the Code for purposes of clauses (i) through (iv); (v) not dispose of or permit a SpinCo Affiliate to dispose of, directly or indirectly, any interest in a SpinCo Affiliate described in clause (iii), or permit any such SpinCo Affiliate to make or revoke any election under Treasury Regulation Section 301.7701-3, and (vi) except as provided in Section 6.1(c) or 6.1(d), not sell, transfer or dispose of any stock or assets constituting more than 25% of the gross assets of the SpinCo Group (measured as of the Distribution Date) to a Person that is not part of SpinCos separate affiliated group as defined in Section 355(b)(3) of the Code. The foregoing shall not prevent SpinCo from using its cash or cash equivalents to repay debt, acquire an unrelated company or make distributions to its shareholders.
(c) Proposed Acquisition Transaction . From the Distribution Date until the first Business Day after the two-year anniversary of the Distribution Date, SpinCo shall not, and shall not permit any SpinCo Affiliate to, (i) enter into any Proposed Acquisition Transaction or, to the extent SpinCo has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (a) redeeming rights under a shareholder rights plan, (b) finding a tender offer to be a permitted offer under any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition Transaction, (c) approving any Proposed Acquisition Transaction, whether for purposes of Section 203 of the DGCL or any similar corporate statute, any fair price or other provision of SpinCos charter or bylaws, (d) amending its certificate of incorporation to declassify its Board of Directors or approving any such amendment, or otherwise), (ii) merge or consolidate with any other Person or liquidate or partially liquidate, (iii) in a single transaction or series of transactions sell or transfer (other than sales or transfers of inventory in the ordinary course of business) all or substantially all of the assets that were transferred to SpinCo pursuant to the Contribution or sell or transfer 25% or more of the gross assets of any Active Trade or Business or 25% or more of the consolidated gross assets of SpinCo and its Affiliates (the denominator of such percentages to be measured based on fair market value of SpinCos assets as of the Distribution Date), (iv) redeem or otherwise repurchase (directly or through a SpinCo Affiliate) any SpinCo stock, or rights to acquire stock, except to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue
21
Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48), (v) amend its certificate of incorporation (or other organizational documents), or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of SpinCo Capital Stock (including, without limitation, through the conversion of one class of SpinCo Capital Stock into another class of SpinCo Capital Stock), or (vi) take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Representation Letters or the Tax Opinion) which in the aggregate (and taking into account any other transactions described in this Section 6.1(c)) would be reasonably likely to have the effect of causing or permitting one or more Persons (whether or not acting in concert) to acquire directly or indirectly stock representing a Fifty-Percent or Greater Interest in SpinCo or otherwise jeopardize the Tax-Free Status, unless prior to taking any such action set forth in the foregoing clauses (i) through (vi), (A) SpinCo shall have requested that Manitowoc ParentCo obtain a Ruling in accordance with Section 6.3(b) and Section 6.3(d) to the effect that such transaction will not affect the Tax-Free Status and Manitowoc ParentCo shall have received such a Ruling in form and substance satisfactory to Manitowoc ParentCo in its sole and absolute discretion, or (B) SpinCo shall provide Manitowoc ParentCo with an Unqualified Tax Opinion in form and substance satisfactory to Manitowoc ParentCo in its sole and absolute discretion (and in determining whether an opinion is satisfactory, Manitowoc ParentCo may consider, among other factors, the appropriateness of any underlying assumptions and managements representations if used as a basis for the opinion, and Manitowoc ParentCo may determine that no opinion would be acceptable to Manitowoc ParentCo), or (C) Manitowoc ParentCo shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion. Manitowoc ParentCo shall not be required to take any action related to obtaining a Ruling unless and until SpinCo has provided to Manitowoc ParentCo an opinion reasonably acceptable to Manitowoc ParentCo from a Tax Advisor to the effect that the outcome of the ruling process should be favorable. In all events, prior to obtaining either the Ruling or Unqualified Tax Opinion referred to herein, SpinCo shall consult with Manitowoc ParentCo.
(d) Certain Acquisitions of SpinCo Capital Stock . If SpinCo proposes to enter into any Section 6.1(d) Acquisition Transaction or, to the extent SpinCo has the right to prohibit any Section 6.1(d) Acquisition Transaction, proposes to permit any Section 6.1(d) Acquisition Transaction to occur, in each case, during the period from the Effective Date until the first Business Day after the two-year anniversary of the Distribution Date, SpinCo shall provide Manitowoc ParentCo, no later than ten Business Days following the signing of any written agreement with respect to the Section 6.1(d) Acquisition Transaction, with a written description of such transaction (including the type and amount of SpinCo Capital Stock to be issued in such transaction) and a certificate of the Board of Directors of SpinCo to the effect that the Section 6.1(d) Acquisition Transaction is not a Proposed Acquisition Transaction or any other transaction to which the requirements of Section 6.1(c) apply (a Board Certificate ).
22
(e) SpinCo Internal Restructuring . SpinCo shall not engage in, and shall not cause or permit, any internal restructuring (including by making or revoking any election under Treasury Regulation Section 301.7701-3) involving a member of the SpinCo Group including any contribution, sale, or other transfer (not including sales in the ordinary course of business) of any of the assets contributed to SpinCo as described in the Separation Agreement (any such action, an Internal Restructuring ), during or with respect to any Tax Period (or portion thereof) ending on or prior to the two-year anniversary of the Distribution Date unless SpinCo first consults with Manitowoc ParentCo regarding any such proposed actions reasonably in advance of taking any such proposed actions and considers in good faith any comments from Manitowoc ParentCo relating thereto.
(f) Gain Recognition Agreements . SpinCo shall not (i) take any action (including, but not limited to, the sale or disposition of any stock, securities, or other assets), (ii) permit any member of the SpinCo Group to take any such action, (iii) fail to take any action, or (iv) permit any member of the SpinCo Group to fail to take any action, in each case that would cause Manitowoc ParentCo or any member of the Manitowoc ParentCo Group to recognize gain under any Gain Recognition Agreement. In addition, SpinCo shall file, and shall cause any member of the SpinCo Group to file, any Gain Recognition Agreement reasonably requested by Manitowoc ParentCo which Gain Recognition Agreement is determined by Manitowoc ParentCo to be necessary so as to (i) allow for or preserve the tax-free or tax-deferred nature, in whole or part, of any Separation Transaction, or (ii) avoid Manitowoc ParentCo or any member of the Manitowoc ParentCo Group recognizing gain under any Gain Recognition Agreement.
6.2. Restrictions on Manitowoc ParentCo . Manitowoc ParentCo shall not take or fail to take, and shall not permit any Manitowoc ParentCo Affiliate to take or fail to take, any action (i) where such action or failure to act would be inconsistent with or cause to be untrue any statement, information, covenant or representation in any Representation Letters or the Tax Opinion, or (ii) which adversely affects or could reasonably be expected to adversely affect (A) the Tax-Free Status of the Contribution and the Distribution, or (B) the qualification of any Separation Transaction under U.S. federal, state, local, or non-U.S. Tax Law as tax free from so qualifying; provided, however, that this Section 6.2 shall not be construed as obligating Manitowoc ParentCo to consummate the Distribution nor shall it be construed as preventing Manitowoc ParentCo from terminating the Separation Agreement pursuant to the terms of the Separation Agreement. For the avoidance of doubt, SpinCos sole recourse for violations of this Section 6.2 shall be as set forth in Section 6.4(b).
6.3. Procedures Regarding Opinions and Rulings .
(a) Notified Actions . If SpinCo notifies Manitowoc ParentCo that it desires to take one of the actions described in clauses (i) through (vi) of Section 6.1(c) (a Notified Action ), Manitowoc ParentCo and SpinCo shall reasonably cooperate to attempt to obtain the Ruling or Unqualified Tax Opinion referred to in Section 6.1(c), unless Manitowoc ParentCo shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion.
23
(b) Rulings or Unqualified Tax Opinions at SpinCos Request . Manitowoc ParentCo agrees that at the reasonable request of SpinCo pursuant to Section 6.1(c), Manitowoc ParentCo shall cooperate with SpinCo and use reasonable efforts to seek to obtain, as expeditiously as possible, a Ruling from the IRS or an Unqualified Tax Opinion for the purpose of permitting SpinCo to take the Notified Action. Further, in no event shall Manitowoc ParentCo be required to file any Ruling Request under this Section 6.3(b), and Manitowoc ParentCo shall not file any Ruling Request under this Section 6.3(b), unless SpinCo represents that (A) it has read the Ruling Request, and (B) all information and representations, if any, relating to any member of the SpinCo Group, contained in the Ruling Request documents are (subject to any qualifications therein) true, correct, and complete. Within ten Business Days after receiving an invoice from Manitowoc ParentCo therefor, SpinCo shall reimburse Manitowoc ParentCo for all reasonable costs and expenses, including expenses relating to the utilization of Manitowoc ParentCo personnel, incurred by the Manitowoc ParentCo Group in obtaining a Ruling or Unqualified Tax Opinion requested by SpinCo.
(c) Rulings or Unqualified Tax Opinions at Manitowoc ParentCos Request . Manitowoc ParentCo shall have the right to obtain a Ruling or an Unqualified Tax Opinion at any time in its sole and absolute discretion. If Manitowoc ParentCo determines to obtain a Ruling or an Unqualified Tax Opinion, SpinCo shall (and shall cause each Affiliate of SpinCo to) cooperate with Manitowoc ParentCo and take any and all actions reasonably requested by Manitowoc ParentCo in connection with obtaining the Ruling or Unqualified Tax Opinion (including, without limitation, by making any representation or covenant or providing any materials or information requested by the IRS or Tax Advisor; provided that SpinCo shall not be required to make (or cause any Affiliate of SpinCo to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). Within ten Business Days after receiving an invoice from SpinCo therefor, Manitowoc ParentCo shall reimburse SpinCo for all reasonable costs and expenses, including expenses relating to the utilization of SpinCo personnel, incurred by the SpinCo Group in connection with such cooperation.
(d) Ruling Process . SpinCo hereby agrees that Manitowoc ParentCo shall have sole and exclusive control over the process of obtaining any Ruling, and that only Manitowoc ParentCo shall apply for a Ruling. In connection with obtaining a Ruling pursuant to Section 6.3(b): (i) Manitowoc ParentCo shall keep SpinCo informed in a timely manner of all material actions taken or proposed to be taken by Manitowoc ParentCo in connection therewith; (ii) Manitowoc ParentCo shall (1) reasonably in advance of the submission of any Ruling Request documents provide SpinCo with a draft copy thereof, (2) reasonably consider SpinCos comments on such draft copy, and (3) provide SpinCo with a final copy;
24
and (iii) Manitowoc ParentCo shall provide SpinCo with notice reasonably in advance of, and SpinCo shall have the right to attend, any formally scheduled meetings with the IRS (subject to the approval of the IRS) that relate to such Ruling. Neither SpinCo nor any SpinCo Affiliate directly or indirectly controlled by SpinCo shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) at any time concerning the Contribution or the Distribution (including the impact of any transaction on the Contribution or the Distribution).
6.4. Liability for Tax-Related Losses .
(a) SpinCo Liability . Notwithstanding anything in this Agreement or the Separation Agreement to the contrary (and in each case regardless of whether a Ruling, Unqualified Tax Opinion, or waiver described in clause (A), (B), or (C) of Section 6.1(c) may have been provided, regardless of whether Manitowoc ParentCo may have consented to an Internal Restructuring, and regardless of whether an action may be required by law), subject to Section 6.4(c), SpinCo shall be responsible for, and shall indemnify and hold harmless Manitowoc ParentCo and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of any Tax-Related Losses that are attributable to or result from any one or more of the following: (A) the acquisition (other than pursuant to the Contribution or the Distribution) of all or a portion of SpinCos stock and/or its or its subsidiaries assets by any means whatsoever by any Person; (B) any negotiations, understandings, agreements, or arrangements by SpinCo with respect to transactions or events (including, without limitation, stock issuances, pursuant to the exercise of stock options or otherwise, option grants, capital contributions or acquisitions, or a series of such transactions or events) that cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly stock of SpinCo representing a Fifty-Percent or Greater Interest therein; (C) any action or failure to act by SpinCo after the Distribution (including, without limitation, any amendment to SpinCos certificate of incorporation (or other organizational documents), whether through a stockholder vote or otherwise) affecting the voting rights of SpinCo stock (including, without limitation, through the conversion of one class of SpinCo Capital Stock into another class of SpinCo Capital Stock); (D) any act or failure to act by SpinCo or any SpinCo Affiliate described in Section 6.1 (regardless whether such act or failure to act may be required by law or may be covered by a Ruling, Unqualified Tax Opinion, or waiver described in clause (A), (B) or (C) of Section 6.1(c), a Board Certificate described in Section 6.1(d), a consent described in Section 6.1(e)); or (E) any breach by SpinCo of its agreement and representation set forth in Section 6.1(a) or its representations set forth in Section 6.5.
(b) Manitowoc ParentCo Liability . Notwithstanding anything in this Agreement or the Separation Agreement to the contrary, subject to Section 6.4(c), Manitowoc ParentCo shall be responsible for, and shall indemnify and hold harmless SpinCo and its Affiliates and each of their respective officers, directors
25
and employees from and against, one hundred percent (100%) of any Tax-Related Losses that are attributable to, or result from any one or more of the following: (A) the acquisition (other than pursuant to the Contribution or the Distribution) of all or a portion of Manitowoc ParentCos stock and/or its assets by any means whatsoever by any Person; (B) any negotiations, agreements, or arrangements by Manitowoc ParentCo with respect to transactions or events (including, without limitation, stock issuances, pursuant to the exercise of stock options or otherwise, option grants, capital contributions or acquisitions, or a series of such transactions or events) that cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly stock of Manitowoc ParentCo representing a Fifty-Percent or Greater Interest therein; (C) any act or failure to act by Manitowoc ParentCo or a member of the Manitowoc ParentCo Group described in Section 6.2 or any breach by Manitowoc ParentCo of its agreement and representation set forth in Section 6.2, limited, in each case, to Tax-Related Losses arising from Taxes of the Manitowoc ParentCo Group for which a SpinCo Entity is found jointly, severally, or secondarily liable pursuant to the provisions of Treasury Regulation Section 1.1502-6 (or similar provisions of state, local or foreign Tax law).
(c) Computation of Liability .
(i) To the extent that any Tax-Related Loss is subject to indemnity under both Section 6.4(a) and Section 6.4(b), responsibility for such Tax-Related Loss shall be shared by Manitowoc ParentCo and SpinCo according to relative fault.
(1) Notwithstanding Section 6.4(b) or 6.4(c)(i), with respect to (I) any Tax-Related Loss resulting from Section 355(e) of the Code (other than as a result of an acquisition of a Fifty Percent or Greater Interest in Manitowoc ParentCo) and (II) any other Tax-Related Loss resulting (for the avoidance of doubt, in whole or in part) from an acquisition after the Distribution of any stock or assets of SpinCo (or any SpinCo Affiliate) by any means whatsoever by any Person or any action or failure to act by SpinCo affecting the voting rights of SpinCo stock, SpinCo shall be responsible for, and shall indemnify and hold harmless Manitowoc ParentCo and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Losses.
(2) Notwithstanding anything to the contrary in Section 6.4(a) or Section 6.4(c)(i), with respect to (I) any Tax-Related Loss resulting from Section 355(e) of the Code (other than as a result of an acquisition of a Fifty Percent or Greater Interest in SpinCo) and (II) any other Tax-Related Loss resulting (for the avoidance of doubt, in whole or in part) from an acquisition after the Distribution of any stock or assets of Manitowoc ParentCo (or any
26
Manitowoc ParentCo Affiliate) by any means whatsoever by any Person, Manitowoc ParentCo shall be responsible for, and shall indemnify and hold harmless SpinCo and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Losses.
(ii) For purposes of calculating the amount and timing of any Tax-Related Loss for which a Company is responsible under this Section 6.4, Tax-Related Losses shall be calculated by assuming that Tax is paid at the highest marginal corporate Tax rates in effect for the relevant entity in each relevant taxable year and there are no Tax Attributes available in any relevant taxable year. Each Company shall have the right to review the computation of any Tax-Related Losses prepared by the other Company.
(d) Payment of Tax-Related Losses . SpinCo shall pay Manitowoc ParentCo the amount of any Tax-Related Losses for which SpinCo is responsible under this Section 6.4: (A) in the case of Tax-Related Losses described in clause (i) of the definition of Tax-Related Losses, no later than two Business Days prior to the date Manitowoc ParentCo files, or causes to be filed, the applicable Tax Return for the year of the Contribution or Distribution, as applicable (the Filing Date ) (provided that if such Tax-Related Losses arise pursuant to a Final Determination described in clause (i), (ii) or (iii) of the definition of Final Determination, then SpinCo shall pay Manitowoc ParentCo no later than two Business Days after the later of the date of such Final Determination or the date Manitowoc ParentCo provides notice of such determination to SpinCo) , and (B) in the case of Tax-Related Losses described in clause (ii) or (iii) of the definition of Tax-Related Losses, no later than two Business Days after the later of the date Manitowoc ParentCo pays such Tax-Related Losses or the date that Manitowoc provides notice of payment to SpinCo. Manitowoc ParentCo shall pay SpinCo the amount of any Tax-Related Losses described in clause (ii) or (iii) of the definition of Tax-Related Loss for which Manitowoc ParentCo is responsible under this Section 6.4 no later than two Business Days after the later of the date that SpinCo pays such Tax-Related Losses or the date that SpinCo provides notice of payment to Manitowoc ParentCo.
(e) Section 336(e) Election . If Manitowoc ParentCo determines, in its sole discretion, that a Section 336(e) Election shall be made with respect to the Distribution, SpinCo shall (and shall cause the relevant member of the SpinCo Group to) join with Manitowoc ParentCo or the relevant member of the Manitowoc ParentCo Group in the making of such election and shall take any action reasonably requested by Manitowoc ParentCo or that is otherwise necessary to give effect to such election (including making any other related election). If a Section 336(e) Election is made with respect to the Distribution, then, in the event the Contribution and Distribution fail to have Tax-Free Status and Manitowoc ParentCo is not entitled to indemnification for the Tax-Related Losses arising from such failure, SpinCo shall pay to Manitowoc ParentCo any Tax Benefits actually realized in cash by the SpinCo Group or any member of the
27
SpinCo Group arising from the step-up in Tax basis resulting from the Section 336(e) Election; provided, such amounts payable shall be reduced by all reasonable costs incurred by SpinCo to amend any Tax Returns or other governmental filings related to such Section 336(e) Election.
6.5. Representations .
(a) Each of Manitowoc ParentCo and SpinCo hereby represents and warrants that: (A) it has reviewed the Representation Letters, and (B) subject to any qualifications therein, all information, representations and covenants contained in such Representation Letters that relate to such Company or any member of its Group are true, correct and complete.
(b) SpinCo hereby represents and warrants as of the date of this Agreement and at the Distribution Date that it has no plan or intention of taking any action, or failing to take any action (or causing or permitting any member of its Group to take or fail to take any action), in each case, from and after the Distribution Date that could reasonably be expected to cause any representation or factual statement made in this Agreement, the Separation Agreement, the Representation Letters or any of the Ancillary Agreements to be untrue.
(c) SpinCo hereby represents and warrants that, during the two-year period ending on the Distribution Date, there was no agreement, understanding or arrangement, substantial negotiations or discussions (as such terms are defined in Treasury Regulations Section 1.355-7(h)) by any one or more officers or directors of any member of the SpinCo Group or by any other person or persons with the implicit or explicit permission of one or more of such officers or directors regarding an acquisition of all or a significant portion of the SpinCo Capital Stock (or any predecessor), provided however, that no representation is made regarding any such agreement, understanding, arrangement, substantial negotiations or discussions (as such terms are defined in Treasury Regulations Section 1.355-7(h)) by any one or more officers, directors, or controlling shareholders of any member of the Manitowoc ParentCo Group (or another person with the implicit or explicit permission of one or more of such persons).
ARTICLE VII
ASSISTANCE AND COOPERATION
7.1. Assistance and Cooperation .
(a) The Companies shall cooperate (and cause their respective Affiliates to cooperate) with each other and with each others agents, including accounting firms and legal counsel, in connection with Tax matters relating to the Companies and their Affiliates including (i) preparation and filing of Tax Returns, (ii) determining the liability for and amount of any Taxes due (including estimated Taxes) or the right to and amount of any refund of Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or judicial proceeding in
28
respect of Taxes assessed or proposed to be assessed. Such cooperation shall include making all information and documents in their possession relating to the other Company and its Affiliates available to such other Company as provided in Article VIII. Each of the Companies shall also make available to the other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Companies or their respective Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes. In the event that a member of the Manitowoc ParentCo Group, on the one hand, or a member of the SpinCo Group, on the other hand, suffers a Tax detriment as a result of a Transfer Pricing Adjustment, the Companies shall cooperate pursuant to this Article VII to seek any competent authority relief that may be available with respect to such Transfer Pricing Adjustment. SpinCo shall cooperate with Manitowoc ParentCo and take any and all actions reasonably requested by Manitowoc ParentCo in connection with obtaining the Tax Opinion (including, without limitation, by making any new representation or covenant, confirming any previously made representation or covenant or providing any materials or information requested by any Tax Advisor; provided that SpinCo shall not be required to make or confirm any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control).
(b) Any information or documents provided under this Article VII shall be kept confidential by the Company receiving the information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Taxes. Notwithstanding any other provision of this Agreement or any other agreement, (i) neither Manitowoc ParentCo nor any Manitowoc ParentCo Affiliate shall be required to provide SpinCo or any SpinCo Affiliate or any other Person access to or copies of any information, documents, or procedures (including the proceedings of any Tax Contest) other than information, documents, or procedures that relate to SpinCo, or the business or assets of SpinCo or any SpinCo Affiliate, and (ii) in no event shall Manitowoc ParentCo or any Manitowoc ParentCo Affiliate be required to provide SpinCo, any SpinCo Affiliate, or any other Person access to or copies of any information or documents if such action could reasonably be expected to result in the waiver of any Privilege. In this regard, the parties shall, where appropriate, discuss entering into a joint defense or common interest agreement to preserve privilege in the event of an exchange of otherwise privileged information. In addition, in the event that Manitowoc ParentCo determines that the provision of any information or documents to SpinCo or any SpinCo Affiliate could be commercially detrimental, violate any law or agreement, or waive any Privilege, the parties shall use reasonable best efforts to permit compliance with its obligations under this Article VII in a manner that avoids any such harm or consequence.
29
7.2. Income Tax Return Information . SpinCo and Manitowoc ParentCo acknowledge that time is of the essence in relation to any request for information, assistance, or cooperation made by Manitowoc ParentCo or SpinCo pursuant to Section 7.1 or this Section 7.2. SpinCo and Manitowoc ParentCo acknowledge that failure to conform to the reasonable deadlines set by Manitowoc ParentCo or SpinCo could cause irreparable harm. Each Company shall provide to the other Company information and documents relating to its Group required by the other Company to prepare Tax Returns, including, but not limited to, any pro forma returns required by the Responsible Company for purposes of preparing such Tax Returns. Any information or documents the Responsible Company requires to prepare such Tax Returns shall be provided in such form as the Responsible Company reasonably requests and at or prior to the time reasonably specified by the Responsible Company so as to enable the Responsible Company to file such Tax Returns on a timely basis.
7.3. Reliance by Manitowoc ParentCo . If any member of the SpinCo Group supplies information to a member of the Manitowoc ParentCo Group in connection with a Tax liability and an officer of a member of the Manitowoc ParentCo Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Manitowoc ParentCo Group identifying the information being so relied upon, the chief financial officer of SpinCo (or any officer of SpinCo as designated by the chief financial officer of SpinCo) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete.
7.4. Reliance by SpinCo . If any member of the Manitowoc ParentCo Group supplies information to a member of the SpinCo Group in connection with a Tax liability and an officer of a member of the SpinCo Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the SpinCo Group identifying the information being so relied upon, the chief financial officer of Manitowoc ParentCo (or any officer of Manitowoc ParentCo as designated by the chief financial officer of Manitowoc ParentCo) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete.
ARTICLE VIII
TAX RECORDS
8.1. Retention of Tax Records .
Each Company shall preserve and keep all Tax Records exclusively relating to the assets and activities of its Group for Pre-Distribution Periods, and Manitowoc ParentCo shall preserve and keep all other Tax Records relating to Taxes of the Groups for Pre-Distribution Tax Periods, for so long as the contents thereof may become material in the administration of any matter under the Code or other applicable Tax Law, but in any event until the later of (i) the expiration of any applicable statutes of limitations, or (ii) seven years after the Distribution Date (such later date, the Retention Date ). After the Retention Date, each Company may dispose of such Tax Records upon 60 Business Days prior written notice to the other Company. If, prior to the Retention Date, (a) a Company reasonably determines that any Tax Records which it would otherwise be required to preserve and keep under this Article VIII are no longer material in the administration of any matter under the Code
30
or other applicable Tax Law and the other Company agrees, then such first Company may dispose of such Tax Records upon 60 Business Days prior notice to the other Company. Any notice of an intent to dispose given pursuant to this Section 8.1 shall include a list of the Tax Records to be disposed of describing in reasonable detail each file, book, or other record accumulation being disposed. The notified Company shall have the opportunity, at its cost and expense, to copy or remove, within such 60 Business Day period, all or any part of such Tax Records. If, at any time prior to the Retention Date, SpinCo determines to decommission or otherwise discontinue any computer program or information technology system used to access or store any Tax Records, then SpinCo may decommission or discontinue such program or system upon 90 days prior notice to Manitowoc ParentCo and Manitowoc ParentCo shall have the opportunity, at its cost and expense, to copy, within such 90-day period, all or any part of the underlying data relating to the Tax Records accessed by or stored on such program or system.
8.2. Access to Tax Records . The Companies and their respective Affiliates shall make available to each other for inspection and copying during normal business hours upon reasonable notice all Tax Records (and, for the avoidance of doubt, any pertinent underlying data accessed or stored on any computer program or information technology system) in their possession and shall permit the other Company and its Affiliates, authorized agents and representatives and any representative of a Taxing Authority or other Tax auditor direct access, at the cost and expense of such other Company, during normal business hours upon reasonable notice to any computer program or information technology system used to access or store any Tax Records, in each case to the extent reasonably required by the other Company in connection with the preparation of Tax Returns or financial accounting statements, audits, litigation, or the resolution of items under this Agreement.
8.3. Preservation of Privilege . No member of the SpinCo Group shall provide access to, copies of, or otherwise disclose to any Person any documentation relating to Taxes existing prior to the Distribution Date to which Privilege may reasonably be asserted without the prior written consent of Manitowoc ParentCo, such consent not to be unreasonably withheld.
ARTICLE IX
TAX CONTESTS
9.1. Notice . Each of the Companies shall provide prompt notice to the other Company of any written communication from a Tax Authority regarding any pending Tax audit, assessment or proceeding, or other material Tax Contest of which it becomes aware related to Taxes for Tax Periods for which it is indemnified by the other Company hereunder or for which it may be required to indemnify the other Company hereunder. Such notice shall attach copies of the pertinent portion of any written communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters. If an indemnified party has knowledge of an asserted Tax liability with respect to a matter for which it is to be indemnified hereunder and such party fails to give the indemnifying party prompt notice of such asserted Tax liability and the indemnifying party is entitled under this Agreement to contest the asserted Tax liability, then (i) if the indemnifying party is precluded from contesting the asserted Tax liability in any forum as a result of the failure to give prompt notice, the indemnifying party shall have no obligation to
31
indemnify the indemnified party for any Taxes arising out of such asserted Tax liability, and (ii) if the indemnifying party is not precluded from contesting the asserted Tax liability in any forum, but such failure to give prompt notice results in a material monetary detriment to the indemnifying party, then any amount which the indemnifying party is otherwise required to pay the indemnified party pursuant to this Agreement shall be reduced by the amount of such detriment. For purposes of the foregoing, a Tax Contest shall be considered material if it could reasonably be expected to result in: (i) a liability equal to or in excess of $500,000; (ii) a loss of credit or credits equal to or in excess of $500,000; or (iii) a loss or losses equal to or in excess of $1.5 million.
9.2. Control of Tax Contests .
(a) Separate Returns . In the case of any Tax Contest with respect to any Separate Return, the Company having liability for the Tax pursuant to Article II shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Section 9.2(c) and Section 9.2(d).
(b) Joint Return . In the case of any Tax Contest with respect to any Joint Return, Manitowoc ParentCo shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Section 9.2(c) and Section 9.2(d).
(c) Settlement Rights . The Controlling Party shall have the sole right to contest, litigate, compromise and settle any Tax Contest without obtaining the prior consent of the Non-Controlling Party. Unless waived by the parties in writing, in connection with any potential adjustment in a Tax Contest as a result of which adjustment the Non-Controlling Party may reasonably be expected to become liable to make any indemnification payment to the Controlling Party under this Agreement: (i) the Controlling Party shall keep the Non-Controlling Party informed in a timely manner of all actions taken or proposed to be taken by the Controlling Party with respect to such potential adjustment in such Tax Contest; (ii) the Controlling Party shall timely provide the Non-Controlling Party copies of any written materials relating to such potential adjustment in such Tax Contest received from any Tax Authority; (iii) the Controlling Party shall timely provide the Non-Controlling Party with copies of any correspondence or filings submitted to any Tax Authority or judicial authority in connection with such potential adjustment in such Tax Contest; (iv) the Controlling Party shall consult with the Non-Controlling Party and offer the Non-Controlling Party a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such potential adjustment in such Tax Contest; and (v) the Controlling Party shall defend such Tax Contest diligently and in good faith. The failure of the Controlling Party to take any action specified in the preceding sentence with respect to the Non-Controlling Party shall not relieve the Non-Controlling Party of any liability and/or obligation which it may have to the Controlling Party under this Agreement except to the extent that the Non-Controlling Party was actually harmed by such failure, and in no event shall such
32
failure relieve the Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party. In the case of any Tax Contest described in Section 9.2(a) or Section 9.2(b), Controlling Party means the Company entitled to control the Tax Contest under such Section and Non-Controlling Party means the other Company.
(d) Tax Contest Participation . Unless waived by the parties in writing, the Controlling Party shall provide the Non-Controlling Party with written notice reasonably in advance of, and the Non-Controlling Party shall have the right to attend, any formally scheduled meetings with Tax Authorities or hearings or proceedings before any judicial authorities in connection with any potential adjustment in a Tax Contest pursuant to which the Non-Controlling Party may reasonably be expected to become liable to make any indemnification payment to the Controlling Party under this Agreement. The failure of the Controlling Party to provide any notice specified in this Section 9.2(d) to the Non-Controlling Party shall not relieve the Non-Controlling Party of any obligation which it may have to the Controlling Party under this Agreement except to the extent that the Non-Controlling Party was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party.
(e) Consultation in the Absence of Indemnification Obligation . In the event that one Group has responsibility for a Tax Contest that could reasonably be expected to have a correlative tax liability of $1 million or more to the other Group, the Group having responsibility for that Tax Contest shall consult with the other Group with respect to the resolution of that Tax Contest even if the other Group may not be obligated to indemnify the Group having control over the Tax Contest. In no event, however, shall the Group having responsibility for handling the Tax Contest be required to accept recommendations from the other Group with respect to the resolution of the Tax Contest.
(f) Power of Attorney . Each member of the SpinCo Group shall execute and deliver to Manitowoc ParentCo (or such member of the Manitowoc ParentCo Group as Manitowoc ParentCo shall designate) any power of attorney or other similar document reasonably requested by Manitowoc ParentCo (or such designee) in connection with any Tax Contest (as to which Manitowoc ParentCo is the Controlling Party) described in this Article IX. Each member of the Manitowoc ParentCo Group shall execute and deliver to SpinCo (or such member of the SpinCo Group as SpinCo shall designate) any power of attorney or other similar document requested by SpinCo (or such designee) in connection with any Tax Contest (as to which SpinCo is the Controlling Party) described in this Article IX.
33
ARTICLE X
TAX TREATMENT OF INDEMNITY PAYMENTS
10.1. Tax Characterization of Indemnity Payments . In the absence of any change in Tax treatment under the Code or except as otherwise required by other applicable Tax Law, any indemnity payments made by a Company under this Agreement, the Separation Agreement or the Ancillary Agreements shall be reported for Tax purposes by the Payor and the recipient as distributions or capital contributions, as appropriate, occurring immediately before the Distribution (but only to the extent the payment does not relate to a Tax allocated to the Payor in accordance with Section 1552 of the Code or the Treasury Regulations thereunder or Treasury Regulation Section 1.1502-33(d) (or under corresponding principles of other applicable Tax Laws)) or as payments of an assumed or retained liability.
10.2. Gross Up . If notwithstanding the manner in which payments described in Section 10.1 were reported, there is an adjustment to the Tax liability of a Company as a result of its receipt of a payment pursuant to this Agreement or the Separation Agreement or the Ancillary Agreements, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes), shall equal the amount of the payment which the Company receiving such payment would otherwise be entitled to receive.
10.3. Interest Under This Agreement . Anything herein to the contrary notwithstanding, to the extent one Company ( Indemnitor ) makes a payment of interest to another Company ( Indemnitee ) under this Agreement with respect to the period from the date that the Indemnitee made a payment of Tax to a Tax Authority to the date that the Indemnitor reimbursed the Indemnitee for such Tax payment, the interest payment shall be treated as interest expense to the Indemnitor (deductible to the extent provided by law) and as interest income by the Indemnitee (includible in income to the extent provided by law). The amount of the payment shall not be adjusted to take into account any associated Tax Benefit to the Indemnitor or increase in Tax to the Indemnitee.
ARTICLE XI
DISAGREEMENTS
11.1. Discussion . The Companies mutually desire that friendly collaboration will continue between them. Accordingly, they will try, and they will cause their respective Group members to try, to resolve in an amicable manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereto. In furtherance thereof, in the event of any dispute between any member of the Manitowoc ParentCo Group and any member of the SpinCo Group as to the interpretation of any provision of this Agreement or the performance of obligations hereunder, the Tax departments of the Companies shall negotiate in good faith to attempt to resolve the dispute.
11.2. Escalation . Either Company may, at any time, terminate any negotiations between the Tax departments of the Companies and may make a written request to refer the
34
matter to the Dispute Resolution Committee (as defined in the Separation Agreement) pursuant to Section 7.3 of the Separation Agreement. In that event, the provisions of Section 7.3 of the Separation Agreement shall govern the process for resolving the dispute.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1. Effectiveness . This Agreement is effective as of the Effective Date. The representations, warranties, covenants, and agreements set forth in this Agreement shall be unconditional and absolute and shall remain in effect without limitation as to time.
12.2. Notices . Any notice, consent, request, authorization, or approval permitted or required under this Agreement shall make specific reference to the fact that the notice is pursuant to this Agreement, shall be in writing, shall be delivered in person, by facsimile transmission (fax), by email, by overnight air courier, or by registered or certified mail, and shall be directed to the parties at the addresses described below in this Section (or at such other address as shall be given in writing by a party hereto). Any such notice shall be deemed to have been duly given and to have become effective (i) in the case of personal delivery, when delivered, (ii) in the case of facsimile, when received by the recipient in legible form and the sender has received an electronic confirmation of receipt of the transmission (provided, however, that such transmission and confirmation are received by 5:00 p.m., local time, on a Business Day; otherwise, such transmission shall be deemed to have been received on the next Business Day), (iii) in the case of email, upon the senders receipt of written confirmation of receipt from the recipient of such electronic mail (which, for purposes of this Section, shall not include an automated response), (iv) in the case of delivery by overnight courier, upon the date of delivery indicated in the records of such courier, and (v) three (3) Business Days after having been deposited in the mails as certified or registered matter, all fees prepaid.
Any notice to Manitowoc ParentCo shall be sent to it at:
The Manitowoc Company, Inc.
2400 South 44th Street
Manitowoc, WI 54221
Attention: Vice-President Taxes
Facsimile: (920) 652-9777
Any notice to SpinCo shall be sent to it at:
Manitowoc Foodservice, Inc.
2227 Welbilt Blvd.
New Port Richey, FL 34655
Attention: Vice-President, Tax
Facsimile: 920-652-9779
12.3. Authority . Each of the parties represents to the other that (a) it has the corporate or other requisite power and authority to execute, deliver, and perform this Agreement, (b) the execution, delivery, and performance of this Agreement have been duly authorized by all
35
necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid, and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors rights generally and general equity principles.
12.4. Choice of Law and Severability . This Agreement shall be construed, interpreted, and enforced in accordance with the internal laws and decisions of the State of Wisconsin. If any provision of this Agreement shall be contrary to the laws of the State of Wisconsin or any other applicable law, at the present time or in the future, such provision shall be deemed null and void, but this shall not affect the legality of the remaining provisions of this Agreement. This Agreement shall be deemed to be modified and amended so as to be in compliance with applicable law, and this Agreement shall then be construed in such a way as will best serve the intention of the parties at the time of the execution of this Agreement.
12.5. Captions, Gender, References, and Number . The captions in this Agreement are inserted only as a matter of convenience and in no way affect the terms or intent of any provision of this Agreement. The words such as herein, hereinafter, hereof, and hereunder refer to this Agreement as a whole and not merely to a subdivision in which such words appear. The singular shall include the plural, and the masculine gender shall include the feminine and neuter, and vice versa, unless the context otherwise requires. The terms including and include shall mean including without limitation and include without limitation, respectively. Unless the context otherwise clearly requires: (i) any references herein to Articles, Sections, or Exhibits mean the Articles and Sections of, and the Exhibits attached to, this Agreement; (ii) any references to an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted by the provisions thereof and by this Agreement; (iii) any references to a statute means such statute as amended from time to time, and includes any successor legislation thereto; and (iv) any reference to a Person includes a reference to any predecessor or successor. The Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
12.6. Counterparts . The parties may execute this Agreement in multiple counterparts, each of which constitutes an original as against the party that signed it, and all of which together constitute one agreement. This Agreement is effective upon delivery of one executed counterpart from each party hereto to the other party. The signatures of the parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission that includes a copy of the sending partys signature is as effective as signing and delivering the counterpart in person.
12.7. Binding Effect . This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors and assigns. Nothing in this Agreement shall be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to provisions of this Agreement.
36
12.8. Entire Agreement . This Agreement, the Separation Agreement, and the Employee Matters Agreement contain the entire agreement between the Companies with respect to the subject matter hereof and supersedes all other agreements, whether or not written, in respect of any Tax between or among any member or members of the Manitowoc ParentCo Group, on the one hand, and any member or members of the SpinCo Group, on the other hand. All such other agreements shall be of no further effect between the Companies and any rights or obligations existing thereunder shall be fully and finally settled, calculated as of the Effective Date. In the event of any inconsistency between this Agreement and the Separation Agreement, or any other agreements relating to the transactions contemplated by the Separation Agreement, with respect to Taxes, the provisions of this Agreement shall control.
12.9. Further Assurances . The Companies shall execute and deliver such further instruments and do such further acts and things as may be required to carry out the intent and purposes of this Agreement.
12.10. Waiver . No failure on the part of any party hereto to object to or complain of any breach or default by another party under this Agreement or to take any other action with respect thereto, irrespective of how long such failure may continue, shall constitute or be deemed a waiver of that or of any other breach or default. No waiver by any party hereto of any breach or default on the part of another party hereto shall be effective unless set forth in writing and executed by the waiving party, and any such waiver shall operate only as a waiver of the particular breach or default specified in such written waiver, and shall not be effective as a waiver of any other subsequent breach or default on the part of another party hereto.
12.11. Expenses . Except as otherwise provided in this Agreement, each party and its Affiliates shall bear their own expenses incurred in connection with preparation of Tax Returns, Tax Contests, and other matters related to Taxes under the provisions of this Agreement.
12.12. Late Payments . Any amount owed by one party to another party under this Agreement which is not paid when due shall bear interest at the Applicable Interest Rate, compounded semiannually, from the due date of the payment to the date paid. To the extent interest required to be paid under this Section 12.12 duplicates interest required to be paid under any other provision of this Agreement, interest shall be computed at the higher of the interest rate provided under this Section 12.12 or the interest rate provided under such other provision.
12.13. No Double Recovery . No provision of this Agreement shall be construed to provide an indemnity or other recovery for any costs, damages, or other amounts for which the damaged party has been fully compensated under any other provision of this Agreement or under any other agreement or action at law or equity. Unless expressly required in this Agreement, a party hereto shall not be required to exhaust all remedies available under other agreements or at law or equity before recovering under the remedies provided in this Agreement.
12.14. Amendment . This Agreement may not be amended except by the written agreement of all the parties to this Agreement.
37
12.15. Specific Performance . The parties acknowledge that irreparable damage would occur in the event that any of the provisions of this Agreement, including Section 6.1, were not performed in accordance with its specific terms or were otherwise breached. The parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement, including Section 6.1, and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity.
12.16. Jurisdiction . If any dispute arises out of or in connection with this Agreement, except as expressly contemplated by another provision of this Agreement, the parties irrevocably (and the parties shall cause each other member of their respective Group to irrevocably) (i) consent and submit to the co-exclusive jurisdiction of federal and state courts located in the State of Wisconsin and in the State of Florida, (ii) waive any objection to that choice of forum in Wisconsin or in Florida based on venue or to the effect that the forum is not convenient, and (iii) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
38
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the Effective Date.
THE MANITOWOC COMPANY, INC. | ||
By: |
/s/ Carl J. Laurino |
|
Name: | Carl J. Laurino | |
Title: | Senior Vice President and Chief | |
Financial Officer | ||
MANITOWOC FOODSERVICE, INC. | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Senior Vice President, General Counsel and Secretary |
[Signature page to Tax Matters Agreement]
Exhibit 10.3
Execution Version
EMPLOYEE MATTERS AGREEMENT
THIS EMPLOYEE MATTERS AGREEMENT (this Agreement ) is effective as of March 4, 2016 between The Manitowoc Company, Inc., a Wisconsin corporation ( Manitowoc ParentCo ), and Manitowoc Foodservice, Inc., a Delaware corporation ( Manitowoc Foodservice ).
WHEREAS , Manitowoc ParentCo and Manitowoc Foodservice are party to that certain Master Separation and Distribution Agreement, dated as of March 4, 2016 (the Separation Agreement ), pursuant to which the parties agreed to separate the business of Manitowoc Foodservice and its subsidiaries from Manitowoc ParentCo; and
WHEREAS , certain individuals who work in or are assigned to the business of Manitowoc Foodservice and its subsidiaries and are directly employed by Manitowoc ParentCo or its affiliates will receive offers of employment from, or will otherwise become employees of, Manitowoc Foodservice or its subsidiaries pursuant to this Agreement or by operation of applicable local laws; and
WHEREAS , the parties hereto wish to set forth their agreement as to certain matters regarding the treatment of, and the compensation and employee benefits provided to, those former employees of Manitowoc ParentCo and its affiliates who become employees of Manitowoc Foodservice or its subsidiaries as described above, pursuant to the terms of this Agreement or by operation of applicable local laws.
NOW, THEREFORE , in consideration of the foregoing and the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the definitions set forth below apply. Capitalized terms used in this Agreement and not defined below have the meanings set forth elsewhere in this Agreement.
Affiliate of any specified person means any other person directly or indirectly controlling, controlled by, or under common control with (within the meaning of the Securities Act of 1933, as amended), such specified person; provided that for purposes of this Agreement, unless this Agreement expressly provides otherwise, the determination of whether a person is an Affiliate of another person will be made assuming that no member of the Manitowoc ParentCo Group is an Affiliate of any member of the Manitowoc Foodservice Group.
Applicable Transfer Date means the date on which a Delayed Transfer Employee actually commences employment with the Manitowoc Foodservice Group or the Manitowoc ParentCo Group (as applicable).
Business Day means a day other than a Saturday, a Sunday or a day on which banking institutions located in New York, New York are authorized or obligated by law or executive order to close.
Code means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations promulgated under such provision.
Contractor means a person, other than an employee, who works in or is assigned to the businesses of Manitowoc ParentCo, Manitowoc Foodservice or any of their Affiliates.
Controlled Group Member means, as to Manitowoc ParentCo or Manitowoc Foodservice, any other entity which either is part of a controlled group of corporations which includes that party or is a trade or business under common control with that party, as defined in Sections 414(b), (c), and (m) of the Code.
Cranes Equity Compensation Award means each Cranes Stock Option, Cranes Restricted Share and Cranes Time-Based RSU.
Cranes Price means the Option Exercise Price multiplied by a fraction, (a) the numerator of which is the simple average of the volume-weighted average price of a share of Manitowoc ParentCo Common Stock solely on the New York Stock Exchange (on the ex-Distribution market to the extent applicable) on each of the first twenty (20) full trading sessions beginning with the first full trading session in which the Manitowoc ParentCo Common Stock began trading on the ex-Distribution market as reported by Bloomberg L.P. or any successor thereto and (b) the denominator of which is the simple average of the volume-weighted average price of a share of Manitowoc ParentCo Common Stock solely on the New York Stock Exchange on each of the last twenty (20) full trading sessions immediately prior to the effective time of the Distribution as reported by Bloomberg L.P. or any successor thereto.
Cranes Restricted Share means a restricted share of Manitowoc ParentCo Common Stock relating to Manitowoc ParentCo Restricted Shares described in Section 9.1(a)(ii)(1).
Cranes Stock Option means an option to acquire Manitowoc ParentCo Common Stock relating to a Manitowoc ParentCo Stock Option described in Section 9.1(a)(i).
Cranes Time-Based RSU means a restricted stock unit award with respect to Manitowoc ParentCo Common Stock relating to Manitowoc ParentCo Time-Based RSUs described in Section 9.1(a)(ii)(2) that vests based solely on the passage of time.
Delayed Transfer Employee has the meaning given in Section 7.3.
Distribution means the distribution of all of the outstanding shares of Manitowoc Foodservice Common Stock to holders of shares of Manitowoc ParentCo Common Stock.
2
Distribution Date means the date on which the Distribution occurs.
Effective Date means March 4, 2016.
Eligible Inactive Employees means those U.S. Employees and Non-U.S. Employees who are on an approved leave of absence at the time of the Manitowoc Foodservice Employment Date and who the parties agree will not transfer their employment on the Manitowoc Foodservice Employment Date unless legally required. Eligible Inactive Employees will be separately identified as such on Schedules 1(a) and 1(b). Notwithstanding the foregoing, if any such U.S. Employee or Non-U.S. Employee would fall within this definition of Eligible Inactive Employee but has otherwise been expressly designated prior to the Manitowoc Foodservice Employment Date to immediately participate in the corollary Manitowoc Foodservice Employee Benefit Plan which governs such leave of absence immediately as of such Manitowoc Foodservice Employment Date (instead of the Manitowoc ParentCo Employee Benefit Plan which would normally govern such leave of absence), then such U.S. Employee or Non-U.S. Employee will not be considered an Eligible Inactive Employee but instead will qualify as a Transferred Employee and otherwise not be identified on Schedule 1(a) or Schedule 1(b).
Employee Benefit Plan means:
(a) any plan, fund, or program which provides health, medical, drug, surgical, hospital or dental care or other welfare benefits, or benefits in the event of sickness, accident or disability, or death benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services;
(b) any plan, fund, or program which provides retirement income to employees or results in a deferral of income by employees for periods extending to the termination of covered employment or beyond;
(c) any plan, fund or program which provides severance, unemployment, vacation or fringe benefits (including dependent and health care spending accounts);
(d) any incentive compensation plan, deferred compensation plan, stock option or stock-based incentive or compensation plan, or stock purchase plan; or
(e) any other employee pension benefit plan (as defined in Section 3(2) of ERISA) (or plans having similar effect under non-U.S. law), any other employee welfare benefit plan (as defined in Section 3(1) of ERISA) (or plans having similar effect under non-U.S. law), and any other written or oral plan, agreement or arrangement involving direct or indirect compensation including, without limitation, insurance coverage, severance benefits, disability benefits, fringe benefits, pension or retirement plans, profit sharing, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement compensation.
3
ERISA means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder. Any reference to a specific provision of ERISA includes any successor provision and the regulations promulgated under such provision.
Former Foodservice Business Employee means any individual (i) who on or before the close of business on December 31, 2015 retired or otherwise separated from service from Manitowoc ParentCo and its Affiliates, and (ii) whose last day worked with Manitowoc ParentCo and its Affiliates prior to the close of business on December 31, 2015 was with the Transferred Businesses.
Former Manitowoc ParentCo Business Employee means any individual (i) who on or before the close of business on December 31, 2015 retired or otherwise separated from service from Manitowoc ParentCo and its Affiliates, and (ii) whose last day worked with Manitowoc ParentCo and its Affiliates prior to the close of business on December 31, 2015 was with the Manitowoc ParentCo Business.
Manitowoc Foodservice Common Stock means the common stock, par value $0.01 per share, of Manitowoc Foodservice.
Manitowoc Foodservice Employment Date means (i) with respect to any country and any Transferred Employee, the date that Manitowoc Foodservice or one of its Affiliates will become the employer of the Transferred Employees in that country pursuant to Articles 2 or 3 below, as applicable, or (ii) with respect to any Other U.S. Manitowoc Foodservice Employee or Other Non-U.S. Manitowoc Foodservice Employee, the date that Manitowoc Foodservice or one of its Affiliates becomes the employer of the Other U.S. Manitowoc Foodservice Employee or Other Non-U.S. Manitowoc Foodservice Employee. Manitowoc ParentCo and Manitowoc Foodservice expect that the Manitowoc Foodservice Employment Date will be December 20, 2015 for U.S. Transferred Employees and January 1, 2016 for Non-U.S. Transferred Employees.
Manitowoc Foodservice Equity Compensation Award means each Manitowoc Foodservice Stock Option, Manitowoc Foodservice Restricted Share, Manitowoc Foodservice Time-Based RSU or any other outstanding equity-based award relating to Manitowoc Foodservice Common Stock granted under a Manitowoc Foodservice LTIP.
Manitowoc Foodservice Group means Manitowoc Foodservice and each subsidiary of Manitowoc Foodservice as of the Effective Date and each other person that becomes an Affiliate of Manitowoc Foodservice after the Effective Date.
Manitowoc Foodservice Group Employees means all U.S. Transferred Employees, Non-U.S. Transferred Employees, Other U.S. Manitowoc Foodservice Employees and Other Non-U.S. Manitowoc Foodservice Employees.
Manitowoc Foodservice LTIP means the Manitowoc Foodservice 2016 Omnibus Incentive Plan and any stock-based or other incentive plan identified by Manitowoc Foodservice before the Distribution Date.
4
Manitowoc Foodservice Non-U.S. Plans means Manitowoc Foodservices or one of its Affiliates Employee Benefit Plans under which any of the Non-U.S. Transferred Employees will be eligible to participate as of the Manitowoc Foodservice Employment Date or a later date.
Manitowoc Foodservice Price means the Option Exercise Price multiplied by a fraction, (a) the numerator of which is the simple average of the volume-weighted average price of a share of Manitowoc Foodservice Common Stock solely on the New York Stock Exchange (on a when-issued basis to the extent applicable) on each of the first twenty (20) full trading sessions beginning with the first full trading session in which the Manitowoc Foodservice Common Stock began trading on a when issued basis as reported by Bloomberg L.P. or any successor thereto and (b) the denominator of which is the simple average of the volume-weighted average price of a share of Manitowoc ParentCo Common Stock solely on the New York Stock Exchange on each of the last twenty (20) full trading sessions immediately prior to the effective time of the Distribution as reported by Bloomberg L.P. or any successor thereto.
Manitowoc Foodservice Restricted Share means a restricted share of Manitowoc Foodservice Common Stock granted by Manitowoc Foodservice as of the Distribution under a Manitowoc Foodservice LTIP pursuant to Section 9.1(a)(ii)(1).
Manitowoc Foodservice Shared Employee Contract means any agreements entered into by (i) Manitowoc ParentCo with current or former employees of Manitowoc ParentCo or subsidiaries of Manitowoc ParentCo or (ii) Manitowoc Foodservice with any Transferred Employee as a replacement or conversion of the agreements described in clause (i) of this definition, in each case, that relate to the protection of trade secrets, intellectual property, confidential information, customer relationships and goodwill of the Manitowoc ParentCo Business and any such agreements that limit or restrict the activities of employees during or following termination of employment, including, without limitation, non-competition agreements, confidentiality agreements and agreements relating to patents.
Manitowoc Foodservice Stock Option means an option to acquire shares of Manitowoc Foodservice Common Stock granted by Manitowoc Foodservice as of the Distribution under a Manitowoc Foodservice LTIP pursuant to Section 9.1(a)(i)(2).
Manitowoc Foodservice Time-Based RSU means a restricted stock unit award with respect to Manitowoc Foodservice Common Stock granted by Manitowoc Foodservice as described in Section 9.1(a)(ii)(2) that vests based solely on the passage of time.
Manitowoc Foodservice U.S. Benefit Plans means Manitowoc Foodservices or one of its Affiliates Employee Benefit Plans under which any of the U.S. Transferred Employees will be eligible to participate as of January 1, 2016, or as of the Distribution Date, as specified herein.
Manitowoc ParentCo Business means the businesses or operations of the Manitowoc ParentCo Group other than the Transferred Businesses.
Manitowoc ParentCo Common Stock means the common stock, par value $0.01 per share, of Manitowoc ParentCo.
5
Manitowoc ParentCo Equity Compensation Award means each Manitowoc ParentCo Stock Option, Manitowoc ParentCo Performance Share, Manitowoc ParentCo Restricted Share, Manitowoc ParentCo Time-Based RSU or any other outstanding equity-based award relating to Manitowoc ParentCo Common Stock granted under a Manitowoc ParentCo LTIP.
Manitowoc ParentCo Group means Manitowoc ParentCo and each person that is or becomes an Affiliate of Manitowoc ParentCo (other than any member of the Manitowoc Foodservice Group).
Manitowoc ParentCo Group Employees means all U.S. Employees and Non-U.S. Employees.
Manitowoc ParentCo LTIP means each of the Manitowoc ParentCo 2013 Omnibus Incentive Plan, the Manitowoc ParentCo 2003 Incentive Stock and Awards Plan and the Manitowoc ParentCo 2004 Non-Employee Director Stock and Awards Plan, as amended from time to time.
Manitowoc ParentCo Non-U.S. Plans means Manitowoc ParentCos and its Affiliates Employee Benefit Plans (i) in which any of the Non-U.S. Transferred Employees have been eligible to participate immediately prior to the Manitowoc Foodservice Employment Date or (ii) with respect to which any of the Non-U.S. Transferred Employees constituted an employee group covered thereunder immediately prior to the Manitowoc Foodservice Employment Date even if not yet participating thereunder until completion of all applicable eligibility requirements.
Manitowoc ParentCo Performance Share means a performance share award granted by Manitowoc ParentCo under a Manitowoc ParentCo LTIP before the Distribution Date.
Manitowoc ParentCo Restricted Share means a restricted share of Manitowoc ParentCo Common Stock granted by Manitowoc ParentCo under a Manitowoc ParentCo LTIP before the Distribution Date.
Manitowoc ParentCo Shared Employee Contract means any agreements entered into by Manitowoc ParentCo or one of its Affiliates with current or former employees and not included in the Transferred Assets that relate to the protection of trade secrets, intellectual property, confidential information, customer relationships and goodwill of the Transferred Businesses and any such agreements that limit or restrict the activities of employees during or following termination of employment.
Manitowoc ParentCo Stock Option means an option to acquire Manitowoc ParentCo Common Stock granted by Manitowoc ParentCo under a Manitowoc ParentCo LTIP before the Distribution Date.
Manitowoc ParentCo Time-Based RSU means a time-based restricted stock unit award granted by Manitowoc ParentCo under a Manitowoc ParentCo LTIP before the Distribution Date, and includes Manitowoc ParentCo Performance Share awards that are converted into Manitowoc ParentCo Time-Based RSUs pursuant to Section 9.1(a)(ii)(4).
6
Manitowoc ParentCo U.S. Plans means Manitowoc ParentCos and its Affiliates Employee Benefit Plans (i) in which any of the U.S. Transferred Employees have been eligible to participate immediately prior to the Manitowoc Foodservice Employment Date or (ii) with respect to which any of the U.S. Transferred Employees constituted an employee group covered thereunder immediately prior to the Manitowoc Foodservice Employment Date even if not yet participating thereunder until completion of all applicable eligibility requirements.
Non-U.S. Employee means each employee of Manitowoc ParentCo or of any Affiliate of Manitowoc ParentCo on a non-U.S. payroll immediately prior to the Manitowoc Foodservice Employment Date who works in or is assigned to the Transferred Businesses and is listed on Schedule 1(a). Schedule 1(a) will be completed by Manitowoc ParentCo in cooperation with Manitowoc Foodservice; an initial version was agreed between Manitowoc ParentCo and Manitowoc Foodservice within a reasonable period of time prior to the Manitowoc Foodservice Employment Date, and an updated version thereof will be agreed between Manitowoc ParentCo and Manitowoc Foodservice within a reasonable period of time after the Distribution Date.
Non-U.S. Transferred Employee means each Non-U.S. Employee who accepts an offer of employment from, or otherwise by the operation of applicable local law becomes an employee of, Manitowoc Foodservice or one of its Affiliates, as contemplated by Article 8. Each such person will be separately identified as such on each version of Schedule 1(a) following the applicable Manitowoc Foodservice Employment Date.
Option Exercise Price means the pre-adjustment exercise price of the applicable Manitowoc ParentCo Stock Option.
Other Non-U.S. Manitowoc Foodservice Employee means each employee of Manitowoc Foodservice or one of its Affiliates on a non-U.S. payroll as of the Distribution Date other than a Non-U.S. Transferred Employee.
Other U.S. Manitowoc Foodservice Employee means each employee of Manitowoc Foodservice or one of its Affiliates on a U.S. payroll as of the Distribution Date other than a U.S. Transferred Employee.
Plan Payee means, as to an individual who participates in an Employee Benefit Plan, such individuals dependents, beneficiaries, alternate payees and alternate recipients, as applicable under such Employee Benefit Plan.
Plan Split Date means January 1, 2016.
Transferred Assets means the assets of the Manitowoc Foodservice Group.
Transferred Businesses means the businesses of the Manitowoc Foodservice Group.
7
Transferred Contractor means each Contractor who works in or is assigned to the Transferred Businesses as of the Manitowoc Foodservice Employment Date in each country where the Contractor is engaged.
Transferred Employee means any U.S. Transferred Employee and any Non-U.S. Transferred Employee.
Transition Services Agreement means that Transition Services Agreement, dated as of March 4, 2016, between Manitowoc ParentCo and Manitowoc Foodservice.
U.S. Employee means each employee of Manitowoc ParentCo or any Affiliate of Manitowoc ParentCo on a U.S. payroll immediately prior to the Manitowoc Foodservice Employment Date who works in or is assigned to the Transferred Businesses and is listed on Schedule 1(b), as such Schedule 1(b) will be amended between the Manitowoc Foodservice Employment Date and the Distribution Date to reflect changes which the parties agree have occurred in the ordinary course of business. Schedule 1(b) will be completed by Manitowoc ParentCo in cooperation with Manitowoc Foodservice; an initial version was agreed between Manitowoc ParentCo and Manitowoc Foodservice within a reasonable period of time prior to the Manitowoc Foodservice Employment Date; and an updated version thereof will be agreed between Manitowoc ParentCo and Manitowoc Foodservice within a reasonable period of time after the Distribution Date.
U.S. Transferred Employee means each U.S. Employee transferred to employment with Manitowoc Foodservice or one of its Affiliates as provided in Article 2. Each such person will be separately identified as such on each version of Schedule 1(b) following the applicable Manitowoc Foodservice Employment Date.
ARTICLE 2
U.S. TRANSFERRED EMPLOYEE MATTERS
2.1 U.S. Transferred Employees .
(a) Effective as of the Manitowoc Foodservice Employment Date, Manitowoc Foodservice or one of its Affiliates will become the employer of each U.S. Employee who is transferred on the Manitowoc Foodservice Employment Date and elects to continue in his or her employment thereafter.
(b) If any Eligible Inactive Employee on the U.S. payroll becomes eligible to return to active work status after the Manitowoc Foodservice Employment Date and at a time when he or she would be entitled to reemployment under either applicable law or Manitowoc ParentCos policies and procedures in existence immediately prior to the Manitowoc Foodservice Employment Date, Manitowoc Foodservice or one of its Affiliates will extend an offer of employment to such person within five (5) Business Days after Manitowoc Foodservices first being notified in writing by the Eligible Inactive Employee, or Manitowoc ParentCo on his/her behalf, of such persons becoming eligible to work, and any such person who accepts such an offer will be treated as a U.S. Transferred Employee as of his or her date of hire with Manitowoc Foodservice or one of its Affiliates (which date of hire will be specified in the written offer from Manitowoc
8
Foodservice or one of its Affiliates to the Eligible Inactive Employee and will be substituted for the Manitowoc Foodservice Employment Date as to that U.S. Transferred Employee for all purposes of this Agreement). Manitowoc Foodservice agrees that its (or its Affiliates) offer of employment will meet whatever requirements may exist for reinstating the Eligible Inactive Employee under applicable law or Manitowoc ParentCos policies and procedures in existence immediately prior to the Manitowoc Foodservice Employment Date.
(c) If any U.S. Transferred Employee is hired by any Affiliate of Manitowoc Foodservice, then that Affiliate will be bound by (and Manitowoc Foodservice will cause that Affiliate to honor) all of the provisions of this Agreement that would have applied to Manitowoc Foodservice with respect to that U.S. Transferred Employee, for such period as Manitowoc Foodservice would have been bound by such provisions.
(d) Manitowoc ParentCo and Manitowoc Foodservice acknowledge and agree that the Distribution and the transfer or employment of Employees as contemplated by this Section 2.1 shall not be deemed a severance of employment of any U.S. Transferred Employee for purposes of this Agreement or any Employee Benefit Plan of any member of the Manitowoc ParentCo Group or any member of the Manitowoc Foodservice Group.
2.2 Compensation . At the time of the Manitowoc Foodservice Employment Date, Manitowoc Foodservice will compensate each U.S. Transferred Employee (other than U.S. Transferred Employees whose scope of duties is changed in connection with their transfer):
(a) at a base wage or base salary rate and any applicable variable pay rate (e.g., shift differential pay) which will not be less than that provided to the U.S. Transferred Employee by Manitowoc ParentCo immediately prior to the Manitowoc Foodservice Employment Date; and
(b) with target incentive pay or other additional compensation opportunities substantially comparable in the aggregate to the target incentive pay or other compensation opportunities for which the U.S. Transferred Employee was eligible immediately prior to the Manitowoc Foodservice Employment Date.
Nothing herein shall preclude Manitowoc Foodservice from changing any employees base wage or base salary rate or any applicable variable pay rate, or from amending or terminating any other employee benefit or other compensation arrangements, after the Manitowoc Foodservice Employment Date.
2.3 Severance . Effective on the Distribution Date, Manitowoc Foodservice will create a severance program (the Manitowoc Foodservice Severance Plan ) which provides severance allowances and benefits which are no less favorable than the severance allowance and benefits that would have been provided with respect to any U.S. Transferred Employee who would have been severed under The Manitowoc Company, Inc. Severance Pay Plan as in effect on the date hereof. The Manitowoc Foodservice Severance Plan will credit all U.S. Transferred Employees with their service with Manitowoc ParentCo and its Affiliates prior to the Manitowoc Foodservice Employment Date in accordance with Section 2.5.
9
2.4 Paid Time Off . During the period from the Manitowoc Foodservice Employment Date through 11:59 p.m. on the day preceding the Distribution Date, Manitowoc Foodservice will adopt and adhere to a paid time off policy no less favorable than the policy of Manitowoc ParentCo as in effect immediately prior to the Manitowoc Foodservice Employment Date for the benefit of all U.S. Transferred Employees and Other U.S. Manitowoc Foodservice Employees, and will be responsible for paying or providing all accrued leave thereunder with respect to such U.S. Transferred Employees and Other U.S. Manitowoc Foodservice Employees. On and after the Distribution Date, U.S. Transferred Employees and Other U.S. Manitowoc Foodservice Employees entitlement to paid time off or vacation time will be accrued and used only in accordance with Manitowoc Foodservices own paid time off or vacation policy.
2.5 Service Credit . Manitowoc Foodservice will provide each U.S. Transferred Employee or Other U.S. Manitowoc Foodservice Employee with full credit for all purposes under the Manitowoc Foodservice U.S. Benefit Plans (including, without limitation, any Manitowoc Foodservice paid time off and severance plans or policies), for pre-Distribution Date (i) service with Manitowoc ParentCo and its Affiliates and Controlled Group Members (including Manitowoc Foodservice), and (ii) service credited under the comparable Manitowoc ParentCo U.S. Plans for employment other than with Manitowoc ParentCo and its Affiliates and Controlled Group Members; provided that in no event will Manitowoc Foodservice be required to provide any service credit to any U.S. Transferred Employee or Other U.S. Manitowoc Foodservice Employee to the extent Manitowoc Foodservice determines in its discretion that the provision of such credit would result in any duplication of benefits or unusual or unintended increase in benefits.
ARTICLE 3
TAX-QUALIFIED DEFINED BENEFIT PLANS
3.1 Manitowoc Foodservice Spinoff DB Plans .
(a) Effective as of the Plan Split Date, Manitowoc Foodservice or another member of the Manitowoc Foodservice Group will establish and adopt certain defined benefit plans that are intended to qualify under Code Section 401(a), along with a related master trust or trusts that is exempt under Code Section 501(a) (such plans and trusts, the Manitowoc Foodservice Spinoff DB Plans ). On the Plan Split Date, each Manitowoc Foodservice Spinoff DB Plan will have terms and features (including benefit accrual provisions) that are substantially similar to one of the Employee Benefit Plans listed on Schedule 3.1(a) (such Employee Benefit Plans, the Split DB Plans ), such that (for the avoidance of doubt) each Split DB Plan is substantially replicated by a corresponding Manitowoc Foodservice Spinoff DB Plan. Each Manitowoc Foodservice Spinoff DB Plan shall assume liability for all benefits accrued or earned (whether or not vested) by Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their respective Plan Payees under the corresponding Split DB Plan as of the Plan Split Date. As of or prior to the Plan Split Date, Manitowoc Foodservice or a member of the Manitowoc Foodservice Group is solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the Manitowoc Foodservice Spinoff DB Plans to the Internal Revenue Service for a determination of their tax-qualified status) to establish, maintain and administer the Manitowoc
10
Foodservice Spinoff DB Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. The portion of liabilities relating to Manitowoc ParentCo Group Employees and Former Manitowoc ParentCo Business Employees and their respective Plan Payees will cease to be liabilities of the applicable Split DB Plan, and will be assumed by the corresponding Manitowoc Foodservice Spinoff DB Plan in accordance with this Section and Section 414(l) of the Code, Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA.
(b) Manitowoc ParentCo has caused or will cause its actuary to determine the estimated value, as of the Plan Split Date, of the assets required to be held on behalf of each Manitowoc Foodservice Spinoff DB Plan in accordance with the assumptions and methodologies set forth in Treasury Regulation Section 1.414(l)-1 and ERISA Section 4044 (the Estimated Retirement Plan Transfer Amount for each such plan). Within thirty (30) days after the Plan Split Date, Manitowoc ParentCo shall cause the trust for each Split DB Plan to transfer to the trust of each Manitowoc Foodservice Spinoff DB Plan an amount in cash or in-kind equal to 95% of the Estimated Retirement Plan Transfer Amount for such plan.
(c) Within three (3) months after the Plan Split Date, Manitowoc ParentCo will cause its actuary to provide Manitowoc Foodservice with a revised calculation of the value, as of the Plan Split Date, of the assets to be transferred to each Manitowoc Foodservice Spinoff DB Plan determined in accordance with the assumptions and methodologies set forth in Treasury Regulation Section 1.414(l)-1 and ERISA Section 4044 and reflecting any demographic updates (the Final Retirement Plan Transfer Amount for each such Manitowoc Foodservice Spinoff DB Plan). Within one hundred twenty (120) days after the Plan Split Date, Manitowoc ParentCo will cause each Split DB Plan to transfer to the corresponding Manitowoc Foodservice Spinoff DB Plan an amount in cash or in kind equal to (i) the Final Retirement Plan Transfer Amount, minus (ii) any amounts previously transferred from such Split DB Plan (A) directly to the corresponding Manitowoc Foodservice Spinoff DB Plan or (B) to a third party on behalf of the corresponding Manitowoc Foodservice Spinoff DB Plan (such amount, the True-Up Amount ). If the True-Up Amount is a negative number with respect to any Manitowoc Foodservice Spinoff DB Plan, Manitowoc Foodservice will cause each such Manitowoc Foodservice Spinoff DB Plan to transfer back to the corresponding Split DB Plan an amount, in cash or in kind, by which the amounts described in clause (ii) in the preceding sentence exceed the Final Retirement Plan Transfer Amount. The parties hereto acknowledge that the Split DB Plans transfer of the True-Up Amount (if any) to the corresponding Manitowoc Foodservice Spinoff DB Plans will be in full settlement and satisfaction of the obligations of Manitowoc ParentCo and the Split DB Plans to transfer assets to the Manitowoc Foodservice Spinoff DB Plans pursuant to this Section. Any amounts transferred between a Split DB Plan and a Manitowoc Foodservice Spinoff DB Plan pursuant to Section 3.1(b) or 3.1(c), or otherwise to effectuate this Article 3, will be adjusted for earnings in a manner to be determined by mutual agreement of Manitowoc ParentCo and Manitowoc Foodservice.
(d) From and after the Plan Split Date, Manitowoc Foodservice and the members of the Manitowoc Foodservice Group shall be solely and exclusively
11
responsible for all obligations and liabilities with respect to, or in any way related to, the Manitowoc Foodservice Spinoff DB Plans, whether accrued before, on or after the Plan Split Date. For the avoidance of doubt, the Manitowoc Foodservice Spinoff DB Plans will have the sole and exclusive obligation to the extent required by law and the terms of the applicable Manitowoc Foodservice Spinoff DB Plan to restore the unvested accrued benefits attributable to any Former Manitowoc ParentCo Business Employee who becomes employed by a member of the Manitowoc Foodservice Group and whose employment with Manitowoc ParentCo or any of its Affiliates terminated on or before the Plan Split Date at a time when such individuals benefits under the Split DB Plan were not fully vested. Furthermore, the Manitowoc Foodservice Spinoff DB Plans will have the sole obligation to restore accrued benefits attributable to any lost participants who were formerly employed in the Transferred Business to the extent required by applicable law.
3.2 Continuation of Elections . As of the Plan Split Date, Manitowoc Foodservice (acting directly or through a member of the Manitowoc Foodservice Group) will cause the Manitowoc Foodservice Spinoff DB Plans to recognize and maintain all existing elections, including beneficiary designations, payment form elections and rights of alternate payees under qualified domestic relations orders with respect to Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their respective Plan Payees under the corresponding Split DB Plan.
3.3 Delayed Transfer Employees . Notwithstanding any provision of this Agreement to the contrary, for purposes of this Article 3, neither the term Manitowoc ParentCo Group Employees nor the term Manitowoc Foodservice Group Employees will include Delayed Transfer Employees. Manitowoc ParentCo and Manitowoc Foodservice will cooperate in good faith to address any loss a Delayed Transfer Employee experiences under a Split DB Plan or Manitowoc Foodservice Spinoff DB Plan by reason of such employees transfer described in Section 7.3.
ARTICLE 4
U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS
4.1 Manitowoc Foodservice Spinoff DC Plans .
(a) Effective as of the Plan Split Date, Manitowoc Foodservice or another member of the Manitowoc Foodservice Group will adopt and establish certain defined contribution plans that are intended to qualify under Code Section 401(a), and a related master trust or trusts exempt under Code Section 501(a) (such plans and trusts, the Manitowoc Foodservice Spinoff DC Plans ). Each Manitowoc Foodservice Spinoff DC Plan will have terms and features (including employer contribution provisions) that are substantially similar to one of the Employee Benefit Plans listed on Schedule 4.1(a) (such Employee Benefit Plans, the Split DC Plans ) such that (for the avoidance of doubt) each Split DC Plan is substantially replicated by a corresponding Manitowoc Foodservice Spinoff DC Plan. Manitowoc Foodservice or a member of the Manitowoc Foodservice Group will be solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the Manitowoc Foodservice Spinoff DC Plans to the
12
Internal Revenue Service for a determination of their tax-qualified status) to establish, maintain and administer the Manitowoc Foodservice Spinoff DC Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. Each Manitowoc Foodservice Spinoff DC Plan will assume liability for all benefits accrued or earned (whether or not vested) by Manitowoc Foodservice Group Employees and Former Foodservice Business Employees under the corresponding Split DC Plan as of the Plan Split Date or Applicable Transfer Date to the extent the Applicable Transfer Date occurs on or before the first anniversary of the Distribution Date.
(b) On or as soon as reasonably practicable following the Plan Split Date or Applicable Transfer Date (but not later than thirty (30) days thereafter), Manitowoc ParentCo or another member of the Manitowoc ParentCo Group will cause each Split DC Plan to transfer to the applicable Manitowoc Foodservice Spinoff DC Plan, and Manitowoc Foodservice or another member of the Manitowoc Foodservice Group will cause such Manitowoc Foodservice Spinoff DC Plan to accept the transfer of, the accounts, liabilities and related assets in such Split DC Plan attributable to Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their respective Plan Payees. The transfer of assets will be in cash or in kind (as determined by the transferor) and include outstanding loan balances and amounts forfeited by Former Foodservice Business Employees that have not yet been reallocated or applied to the payment of contributions or expenses and be conducted in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA.
(c) On or as soon as reasonably practicable following the Applicable Transfer Date (but not later than thirty (30) days thereafter), Manitowoc Foodservice or a member of the Manitowoc Foodservice Group will cause the accounts, related liabilities, and related assets in the corresponding Manitowoc Foodservice Spinoff DC Plan(s) attributable to any Delayed Transfer Employees from the Manitowoc Foodservice Group and their respective Plan Payees (including any outstanding loan balances) to be transferred in cash or in-kind (as determined by the transferor) in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA to the applicable Split DC Plan(s). Manitowoc ParentCo or another member of the Manitowoc ParentCo Group will cause the applicable Split DC Plan(s) to accept such transfer of accounts, liabilities and assets.
(d) From and after the Distribution Date, except as specifically provided in paragraph (c) above, Manitowoc Foodservice and the Manitowoc Foodservice Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the Manitowoc Foodservice Spinoff DC Plans, whether accrued before, on or after the Distribution Date. For the avoidance of doubt, the Manitowoc Foodservice Spinoff DC Plans will, to the extent required by Law and the terms of the applicable Manitowoc Foodservice Spinoff DC Plans, have the sole and exclusive obligation to restore the unvested portion of any account attributable to any individual who becomes employed by a member of the Manitowoc Foodservice Group and whose employment with Manitowoc ParentCo or any of its Affiliates, or a member of the Manitowoc ParentCo Group, terminated on or before the Distribution at a time when such
13
individuals benefits under the Split DC Plans were not fully vested. Furthermore, the Manitowoc Foodservice Spinoff DC Plans will have the sole obligation to restore accounts attributable to any lost participants who were formerly employed in the Transferred Business to the extent required by applicable law.
4.2 Continuation of Elections . As of the Distribution Date, or Applicable Transfer Date, Manitowoc Foodservice (acting directly or through a member of the Manitowoc Foodservice Group) will cause the Manitowoc Foodservice Spinoff DC Plans to recognize and maintain all elections, including payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their respective Plan Payees under the corresponding Split DC Plan.
4.3 Assumed DC Plans .
(a) Effective no later than the Distribution Date, Manitowoc Foodservice or another member of the Manitowoc Foodservice Group will assume and be solely responsible for the defined contribution plans listed on Schedule 4.3 (the Assumed DC Plans ), if any, and the Manitowoc ParentCo Group will have no liabilities with respect thereto. From and after the Distribution Date, Manitowoc Foodservice or a member of the Manitowoc Foodservice Group will be solely responsible for taking all necessary, reasonable, and appropriate actions to maintain and administer the Assumed DC Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. From and after the Distribution Date, Manitowoc Foodservice and the Manitowoc Foodservice Group will assume and be solely and exclusively responsible for all assets, obligations, and liabilities associated with, or in any way related to, the Assumed DC Plans, whether accrued before, on or after the Distribution Date.
(b) As of the Distribution Date, Manitowoc Foodservice (acting directly or through a member of the Manitowoc Foodservice Group) will cause the Assumed DC Plans to recognize and maintain all elections, including payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders that were in effect with respect to Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their respective Plan Payees under the Assumed DC Plans immediately prior to the Distribution Date.
4.4 Contributions Due . All amounts payable to the Split DC Plans and Assumed DC Plans with respect to employee deferrals, matching contributions and employer contributions for Manitowoc Foodservice Group Employees relating to a time period ending on or prior to the Distribution Date, determined in accordance with the terms and provisions of the Split DC Plans, the Assumed DC Plans, ERISA and the Code, will be paid by Manitowoc ParentCo or another member of the Manitowoc ParentCo Group to the appropriate Split DC Plan or Assumed DC Plan prior to the date of any asset transfer described in Section 4.1(b) or Section 4.3(a).
14
ARTICLE 5
WELFARE PLANS
5.1 Manitowoc Foodservice Spinoff Welfare Plans .
(a) Effective as of the Plan Split Date, Manitowoc Foodservice or another member of the Manitowoc Foodservice Group will establish the Manitowoc Foodservice Corporation Welfare Benefit Plan for Retirees and the Manitowoc Foodservice Corporation Bargaining Unit Welfare Benefit Plan for Retirees (together, the Manitowoc Foodservice Spinoff Retiree Welfare Plans ). Each Manitowoc Foodservice Spinoff Retiree Welfare Plan will have terms and features (including benefit coverage options, employer contribution provisions and retiree medical coverage) that are substantially similar to one of the Manitowoc ParentCo Employee Benefit Plans listed on Schedule 5.1(a) (such Manitowoc ParentCo Benefit Plans, the Split Retiree Welfare Plans ) such that (for the avoidance of doubt) each Split Retiree Welfare Plan is substantially replicated by a Manitowoc Foodservice Spinoff Retiree Welfare Plan, except as otherwise provided on Schedule 5.1(a). As of the Plan Split Date, each Manitowoc Foodservice Spinoff Retiree Welfare Plan shall cover those Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their Plan Payees who immediately prior to the Plan Split Date were participating in, or entitled to present or future benefits under, the corresponding Split Retiree Welfare Plan. The Manitowoc Foodservice Group and the Manitowoc Foodservice Spinoff Retiree Welfare Plans are solely responsible for all claims incurred by Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their Plan Payees under the Manitowoc Foodservice Spinoff Retiree Welfare Plans and Split Retiree Welfare Plans ( Manitowoc Foodservice Retiree Welfare Claims ) before, on and after the Plan Split Date, but only to the extent such claims are not payable under an insurance policy held by the Manitowoc ParentCo Group. To the extent any Manitowoc Foodservice Retiree Welfare Claims are payable under an insurance policy held by the Manitowoc ParentCo Group, Manitowoc ParentCo will take all commercially reasonable actions necessary to process such claim and obtain payment under the applicable insurance policy. Effective as of the Plan Split Date, Manitowoc Foodservice Group Employees and their Plan Payees will cease to be covered by the Split Retiree Welfare Plans. The Manitowoc ParentCo Group and the Split Retiree Welfare Plans will remain solely responsible for all claims incurred by Manitowoc ParentCo Employees and Former Manitowoc ParentCo Employees and their Plan Payees, whether incurred before, on, or after the Plan Split Date.
(b) Effective as of the Plan Split Date, Manitowoc Foodservice or a member of the Manitowoc Foodservice Group will establish certain other welfare benefit plans (such plans, the Manitowoc Foodservice Spinoff Welfare Plans ) with terms and features (including benefit coverage options, employer contribution provisions and retiree medical coverage) that are substantially similar to one of the Manitowoc ParentCo Group Employee Benefit Plans listed on Schedule 5.1(b) (such Manitowoc ParentCo Group Employee Benefit Plans, the Split Welfare Plans ) such that (for the avoidance of doubt) each Split Welfare Plan is substantially replicated by a Manitowoc Foodservice Spinoff Welfare Plan, except as otherwise provided on Schedule 5.1(b). From and after the Plan
15
Split Date or Applicable Transfer Date, Manitowoc Foodservice will cause each Manitowoc Foodservice Spinoff Welfare Plan to cover those Manitowoc Foodservice Group Employees and their Plan Payees who immediately prior to the Plan Split Date or Applicable Transfer Date were participating in, or entitled to present or future benefits under, the corresponding Split Welfare Plan, except as otherwise provided in the Transition Services Agreement. With respect to any severance benefits owed to any (i) Manitowoc ParentCo Group Employee or any Former Manitowoc ParentCo Business Employee as a result of a termination of employment occurring before, on or after the Plan Split Date or (ii) Manitowoc Foodservice Group Employee or Former Foodservice Business Employee as a result of a termination of employment occurring prior to the Plan Split Date (the Retained Severance Benefits ), the Manitowoc ParentCo Group and the applicable Manitowoc ParentCo Group Welfare Plans (including the Split Welfare Plans) will be solely responsible for all such Retained Severance Benefits. The Manitowoc Foodservice Group and the Manitowoc Foodservice Spinoff Welfare Plans will be solely responsible for all claims incurred by Manitowoc Foodservice Group Employees and Former Foodservice Business Employees and their Plan Payees under the Manitowoc Foodservice Spinoff Welfare Plans and Split Welfare Plans (except with respect to Retained Severance Benefits or as otherwise provided in the Transition Services Agreement) ( Manitowoc Foodservice Welfare Claims ) on and after the Plan Split Date or Applicable Transfer Date. Effective as of the Plan Split Date or Applicable Transfer Date, Manitowoc ParentCo will cause Manitowoc Foodservice Group Employees and their Plan Payees to cease to be covered by the Manitowoc ParentCo Group Welfare Plans (including the Split Welfare Plans), except as otherwise provided in the Transition Services Agreement. The Manitowoc ParentCo Group and the Manitowoc ParentCo Group Welfare Plans will remain solely responsible for all claims incurred by Manitowoc ParentCo Group Employees and Former Manitowoc ParentCo Business Employees and their Plan Payees, whether incurred before, on, or after the Plan Split Date.
(c) For purposes of this Section 5.1, a claim will be deemed incurred on the date that the event that gives rise to the claim occurs (for purposes of life insurance, severance, sickness, accident and disability programs) or on the date that treatment or services are provided (for purposes of health care programs).
5.2 Continuation of Elections .
(a) As of or prior to the Plan Split Date, Manitowoc Foodservice will cause the Manitowoc Foodservice Spinoff Retiree Welfare Plans to recognize elections and designations (including, without limitation, all coverage and contribution elections and beneficiary designations, all continuation coverage and conversion elections, and all qualified medical child support orders and other orders issued by courts of competent jurisdiction) in effect with respect to Former Foodservice Business Employees prior to the Plan Split Date under the corresponding Split Retiree Welfare Plan, to the extent such elections and designations and orders are applicable to such Split Retiree Welfare Plan, and will continue to apply and maintain in force comparable elections and designations and orders under the Manitowoc Foodservice Spinoff Retiree Welfare Plans for the remainder of the period or periods for which such elections or designations are by their terms effective.
16
(b) As of the Plan Split Date, or Applicable Transfer Date, Manitowoc Foodservice will cause the Manitowoc Foodservice Spinoff Welfare Plans to recognize elections and designations (including, without limitation, all coverage and contribution elections and beneficiary designations, all continuation coverage and conversion elections, and all qualified medical child support orders and other orders issued by courts of competent jurisdiction) in effect with respect to Manitowoc Foodservice Group Employees and Former Foodservice Business Employees prior to the Plan Split Date, or Applicable Transfer Date, under the corresponding Split Welfare Plan, to the extent such elections and designations and orders are applicable to such Split Welfare Plan, and apply and maintain in force comparable elections and designations and orders under the Manitowoc Foodservice Spinoff Welfare Plans for the remainder of the period or periods for which such elections or designations are by their original terms effective.
5.3 Deductibles and Other Cost-Sharing Provisions .
(a) As of the Plan Split Date, Manitowoc Foodservice has caused the Manitowoc Foodservice Spinoff Retiree Welfare Plans to recognize all amounts applied to deductibles, co-payments and out-of-pocket maximums with respect to Manitowoc Foodservice Group Employees and Former Foodservice Business Employees under the corresponding Split Retiree Welfare Plan during the plan year in which the Plan Split Date occurs, and the Manitowoc Foodservice Spinoff Retiree Welfare Plans have not imposed any limitations on coverage for preexisting conditions other than such limitations as were applicable under the corresponding Split Retiree Welfare Plan prior to the Plan Split Date.
(b) As of the Plan Split Date, or Applicable Transfer Date, Manitowoc Foodservice will cause the Manitowoc Foodservice Spinoff Welfare Plans to recognize all amounts applied to deductibles, co-payments and out-of-pocket maximums with respect to Manitowoc Foodservice Group Employees and Former Foodservice Business Employees under the corresponding Split Welfare Plan during the plan year in which the Distribution or Applicable Transfer Date occurs, and the Manitowoc Foodservice Spinoff Welfare Plans will not impose any limitations on coverage for preexisting conditions other than such limitations as were applicable under the corresponding Split Welfare Plan prior to the Plan Split Date or Applicable Transfer Date.
5.4 Flexible Spending Account Treatment . The Manitowoc ParentCo Group and the portion of a Split Welfare Plan that consists of medical and dependent care flexible spending accounts (the Manitowoc ParentCo Flexible Account Plan ) shall be solely responsible for any liabilities for reimbursement of medical and dependent care claims ( Flexible Spending Claims ) that are (i) incurred under the Manitowoc ParentCo Flexible Account Plan prior to the Plan Split Date or Applicable Transfer Date by Manitowoc Foodservice Group Employees or (ii) incurred under the Manitowoc ParentCo Flexible Account Plan prior to, on or after the Plan Split Date or Applicable Transfer Date by Former Foodservice Business Employees. The Manitowoc Foodservice Group and the portion of a Manitowoc Foodservice Spinoff Welfare Plan that consists of medical and dependent care flexible spending accounts (the Manitowoc Foodservice Flexible Account Plan ) shall be solely responsible for any liabilities for Flexible Spending Claims incurred on or after the Plan Split Date or Applicable Transfer Date by Manitowoc
17
Foodservice Group Employees. The applicable Manitowoc Foodservice Flexible Account Plan will, as required under Section 5.2, give effect to the elections of Manitowoc Foodservice Group Employees that were in effect under the corresponding Split Welfare Plan as of the Plan Split Date or Applicable Transfer Date.
5.5 Workers Compensation . The Manitowoc ParentCo Group will be solely responsible for all United States (including its territories) workers compensation claims of Manitowoc ParentCo Group Employees and Former Manitowoc ParentCo Business Employees, regardless of when the Workers Compensation Events to which such claims relate occur. The Manitowoc ParentCo Group will have sole authority for administering, making decisions with respect to, and paying all United States (including its territories) workers compensation claims of Manitowoc Foodservice Group Employees and Former Foodservice Business Employees with respect to Workers Compensation Events occurring before the Manitowoc Foodservice Employment Date or Applicable Transfer Date ( Manitowoc Foodservice Workers Compensation Claims ), subject to the prior consent of Manitowoc Foodservice, which consent shall not be unreasonably withheld. The consent described in the immediately preceding sentence will be evidenced in writing with respect to any decision relating to (a) the settlement of a Manitowoc Foodservice Workers Compensation Claim, (b) the designation of a condition as reimbursable, or (c) the administration of ongoing litigation. Manitowoc Foodservice will, and will cause any other member of the Manitowoc Foodservice Group (and each of their respective successors and assigns) to, jointly and severally indemnify, defend and hold harmless Manitowoc ParentCo and each member of the Manitowoc ParentCo Group and each of their respective successors and assigns from and against any and all damages incurred by Manitowoc ParentCo arising out of or in connection with a Manitowoc Foodservice Workers Compensation Claim, whether such damages arise or accrue prior to, on or following the Manitowoc Foodservice Employment Date, but only to the extent such damages are not payable under an insurance policy (other than self insurance) held by the Manitowoc ParentCo Group. To the extent any such damages are payable under an insurance policy held by the Manitowoc ParentCo Group, Manitowoc ParentCo will take all commercially reasonable actions necessary to obtain payment of such damages under the applicable insurance policy. The Manitowoc Foodservice Group will be solely responsible for all workers compensation claims of Manitowoc Foodservice Group Employees with respect to Workers Compensation Events occurring on or after the Manitowoc Foodservice Employment Date. Notwithstanding anything to the contrary in the foregoing, Manitowoc Foodservice shall assume or indemnify Manitowoc ParentCo against a portion of the letter of credit collateral obligation to the State of Wisconsin incurred by Manitowoc ParentCo in connection with the Wisconsin self-insured workers compensation program in which Manitowoc ParentCo participates. The portion of such obligation that Manitowoc Foodservice assumes or indemnifies Manitowoc ParentCo against shall be determined on the basis of actuarial projections prepared by Manitowoc ParentCos actuarial firm, as consented to by Manitowoc Foodservice, provided that such consent shall not be unreasonably withheld.
5.6 COBRA . Effective as of the Plan Split Date or Applicable Transfer Date, Manitowoc Foodservice or a member of the Manitowoc Foodservice Group will assume or will cause the Manitowoc Foodservice Spinoff Welfare Plans to assume sole responsibility for compliance with COBRA after the Plan Split Date or Applicable Transfer Date for all Manitowoc Foodservice Group Employees, Former Foodservice Business Employees and their qualified beneficiaries for whom a qualifying event occurs before, on or after the Plan Split
18
Date or the Applicable Transfer Date. Manitowoc ParentCo, the Manitowoc ParentCo Group, or a Split Welfare Plan will remain solely responsible for compliance with COBRA before, on and after the Plan Split Date or Applicable Transfer Date for Manitowoc ParentCo Group Employees, Former Manitowoc ParentCo Business Employees and their qualified beneficiaries. The terms qualified beneficiaries and qualifying event will have the meanings given to them under Code Section 4980B and ERISA Sections 601-608. For the avoidance of doubt, Section 5.1(b) will govern whether the Manitowoc Foodservice Spinoff Welfare Plans or Split Welfare Plans are responsible for claims incurred by Manitowoc Foodservice Group Employees, Former Foodservice Business Employees, or their qualified beneficiaries, while receiving continuation coverage under COBRA.
ARTICLE 6
NONQUALIFIED DEFERRED COMPENSATION PLANS
6.1 Kysor SERPs . Effective on or prior to the Distribution Date, Manitowoc ParentCo shall (or shall cause its Affiliates to) assign, and Manitowoc Foodservice will assume, each Supplemental Executive Retirement Plan sponsored by Kysor Industrial Corporation, the Supplemental Executive Retirement Plan established for the benefit of Emanuele Lanzani (collectively, the Foodservice SERPs ) and any related trust or similar funding arrangement dedicated to such Foodservice SERPs. Following such assignment and assumption, Manitowoc Foodservice shall be solely responsible for, and Manitowoc ParentCo shall have no obligation with respect to, benefits payable under such Foodservice SERPs.
6.2 Supplemental Executive Retirement Plan . On or prior to the Distribution Date, Manitowoc Foodservice or another member of the Manitowoc Foodservice Group shall establish and adopt a supplemental executive retirement plan (the Manitowoc Foodservice SERP ) to provide each Manitowoc Foodservice Group Employee who was a participant in the Manitowoc ParentCo Supplemental Executive Retirement Plan (the Manitowoc ParentCo SERP ) as of immediately prior to the Distribution Date (the Manitowoc Foodservice SERP Beneficiaries ) benefits accrued in respect of service with, and compensation from, Manitowoc ParentCo and Manitowoc Foodservice through the Distribution Date. After the Distribution Date, the Manitowoc Foodservice SERP shall provide benefits to Manitowoc Foodservice SERP Beneficiaries who were participants in the Manitowoc ParentCo SERP as of immediately prior to the Distribution Date that are substantially similar in form, timing and amount to those to which such Manitowoc Foodservice SERP Beneficiary would have been entitled to under the Manitowoc ParentCo SERP had such persons employment with Manitowoc ParentCo or its Affiliates continued without interruption during the period of such persons employment with Manitowoc Foodservice or its Affiliates. As of the Distribution Date, the Manitowoc Foodservice Group Employees shall no longer participate in the Manitowoc ParentCo SERP and shall instead be eligible to participate in the Manitowoc Foodservice SERP. On or prior to the Distribution Date, Manitowoc ParentCo shall pay to Manitowoc Foodservice an amount equal to the benefit accrued under the Manitowoc ParentCo SERP as of the Distribution Date with respect to the Manitowoc Foodservice SERP Beneficiaries.
19
6.3 Deferred Compensation Plan .
(a) On or prior to the Distribution Date, Manitowoc Foodservice or another member of the Manitowoc Foodservice Group shall establish and adopt deferred compensation plans for its key employees and directors (the Manitowoc Foodservice Deferred Compensation Plan ) to provide each Manitowoc Foodservice Group Employee who was a participant in the Manitowoc ParentCo Deferred Compensation Plan (the Manitowoc ParentCo DCP ) as of immediately prior to the Distribution Date (the Manitowoc Foodservice Deferred Compensation Beneficiaries ) benefits accrued in respect of service and compensation following the Distribution Date substantially similar to those accrued with respect to such person under the Manitowoc ParentCo DCP as of immediately prior to the Distribution Date. As of the Distribution Date, the Manitowoc Foodservice Group Employees shall no longer participate in the Manitowoc ParentCo DCP.
(b) The liabilities in respect of Manitowoc Foodservice Deferred Compensation Beneficiaries under the Manitowoc ParentCo DCP shall be assumed by the member of the Manitowoc Foodservice Group which sponsors the Manitowoc Foodservice Deferred Compensation Plan, effective as of the Effective Date; provided that such liabilities in respect of each such Manitowoc Foodservice Deferred Compensation Beneficiary who is a Delayed Transfer Employee shall be assumed by such member of the Manitowoc Foodservice Group effective as of close of business on the Applicable Transfer Date. Manitowoc ParentCo shall have sole responsibility for the administration of the Manitowoc ParentCo DCP and the payment of benefits thereunder to or on behalf of Manitowoc ParentCo Group Employees, and no member of the Manitowoc Foodservice Group shall have any liability or responsibility therefor. Manitowoc Foodservice Group shall have sole responsibility for the administration of the Manitowoc Foodservice Deferred Compensation Plan and the payment of benefits thereunder to or on behalf of Manitowoc Foodservice Group Employees and Former Foodservice Business Employees, and no member of the Manitowoc ParentCo Group shall have any liability or responsibility therefor.
(c) Each share unit relating to Manitowoc ParentCo Common Stock credited to Program A of the Manitowoc ParentCo DCP and the Manitowoc Foodservice Deferred Compensation Plan (a ParentCo Share Unit ) on the Distribution Date shall be converted into, upon the Distribution being made, an adjusted ParentCo Share Unit and an equal number of share units relating to Manitowoc Foodservice Common Stock (the Foodservice Share Units ). The adjusted ParentCo Share Units and the Foodservice Share Units held in the Manitowoc ParentCo DCP and the Manitowoc Foodservice Deferred Compensation Plan shall continue to be subject to the same terms and conditions as apply to ParentCo Share Units immediately prior to the Effective Date; provided that the ParentCo Share Unit may be settled in cash or stock rather than solely in stock.
(d) On or prior to the Effective Date, Manitowoc Foodservice or another member of the Manitowoc Foodservice Group shall establish a rabbi trust in a form that is substantially comparable to the rabbi trust maintained by Manitowoc ParentCo with
20
respect to the Manitowoc Foodservice SERP and the Manitowoc ParentCo DCP in effect immediately prior to the Effective Date. In connection with the assumption of the liabilities under the Manitowoc Foodservice SERP and the Manitowoc ParentCo DCP in respect of Manitowoc Foodservice SERP Beneficiaries and Manitowoc Foodservice Deferred Compensation Beneficiaries, Manitowoc ParentCo shall (or shall cause a Manitowoc ParentCo Group entity to), as soon as reasonably practicable after the Effective Date, transfer assets from the Manitowoc ParentCo rabbi trust relating to the accrued benefit of such Manitowoc Foodservice SERP Beneficiaries under the Manitowoc ParentCo SERP and the Manitowoc ParentCo DCP accounts of such Manitowoc Foodservice Deferred Compensation Beneficiaries in an amount equal to the funded percentage of such liabilities (as determined by Manitowoc ParentCos actuary) as of the Effective Date to the rabbi trust established by Manitowoc Foodservice with respect to the Manitowoc Foodservice SERP and the Manitowoc Foodservice Deferred Compensation Plan as of the Effective Date.
ARTICLE 7
OTHER TRANSFERRED EMPLOYEE MATTERS
7.1 Certain Foreign National Employees . The parties recognize that certain of the U.S. Transferred Employees and possibly Other U.S. Manitowoc Foodservice Employees are in nonimmigrant visa status or have applications for lawful permanent residence pending with the relevant governmental authorities (the Affected Foreign National Employees ). The parties further recognize that new or amended petitions with respect to such Affected Foreign National Employees may be required in certain of these cases, unless Manitowoc Foodservice is deemed the successor-in-interest to Manitowoc ParentCo (as such term is used in pronouncements by the U.S. Citizenship and Immigration Service ( USCIS )) with respect to such Affected Foreign National Employees. Accordingly, Manitowoc Foodservice hereby expressly agrees to assume, and Manitowoc ParentCo hereby assigns, in each case effective as of the Manitowoc Foodservice Employment Date, all of the immigration related liabilities of the Affected Foreign National Employees (including, without limitation, any obligations, liabilities and undertakings arising from or under attestations made in each certified and still effective Labor Condition Application filed by Manitowoc ParentCo with respect to any such Affected Foreign National Employees). The parties each agree to take such actions as may reasonably be requested at and following the Manitowoc Foodservice Employment Date to document to the USCIS or such other governmental agency, as the case may be, the successor-in-interest relationship with respect to any Affected Foreign National Employees.
7.2 Workers Compensation . The U.S. Transferred Employees and Other U.S. Manitowoc Foodservice Employees will be covered under Manitowoc ParentCos workers compensation insurance until 11:59 p.m. on the day preceding the Manitowoc Foodservice Employment Date. On and after the Manitowoc Foodservice Employment Date, the U.S. Transferred Employees and Other U.S. Manitowoc Foodservice Employees will be covered under the workers compensation insurance of Manitowoc Foodservice.
7.3 Delayed Transfer Employees . Upon mutual agreement of Manitowoc Foodservice and Manitowoc ParentCo, any employee whose employment transfers within 6 months after the Distribution Date from the Manitowoc ParentCo Group to the Manitowoc
21
Foodservice Group or from the Manitowoc Foodservice Group to the Manitowoc ParentCo Group because such employee was inadvertently and erroneously treated as employed by the wrong employer on the Distribution Date and who was continuously employed by a member of the Manitowoc Foodservice Group or the Manitowoc ParentCo Group (as applicable) from the Distribution Date through the date such employee commences employment with a member of the Manitowoc ParentCo Group or Manitowoc Foodservice Group (as applicable) will be a Delayed Transfer Employee ; provided that no employee of either Group who is covered by a collective bargaining agreement at the time such employee transfers to the other Group will be a Delayed Transfer Employee. Notwithstanding anything herein to the contrary, no employee will be considered a Delayed Transfer Employee unless the mutual agreement with respect to, and Applicable Transfer Date of, any Delayed Transfer Employee occurs on or before the date that is 6 months after the Distribution Date.
ARTICLE 8
NON-U.S. TRANSFERRED EMPLOYEE MATTERS
8.1 Non-U.S. Transferred Employees .
(a) Subject to Section 7.3 herein, effective as of the Manitowoc Foodservice Employment Date, Manitowoc Foodservice agrees to employ, or cause one of its applicable Affiliates to employ, the Non-U.S. Employees who accept offers of employment from the applicable Affiliate of Manitowoc Foodservice or who otherwise become employees of the applicable Affiliate of Manitowoc Foodservice by operation of law (other than any Eligible Inactive Employee). Where a transfer of employment is necessary, such transfer will be carried out in compliance with applicable transfer laws and regulations, including, without limitation, the European Union Acquired Rights Directive (as amended and as implemented from country to country from time to time) or any such similar transfer law or regulation in other countries that provides for the transfer of employment by operation of law (such transfer laws and regulations collectively, the Transfer Laws ). Where a transfer of employment is necessary and the Transfer Laws are not applicable, Manitowoc Foodservice agrees that the employment of each Non-U.S. Employee will be transferred to Manitowoc Foodservice or one of its Affiliates by substitution of employer, three-party contract, assignment, subjective novation, or as may otherwise reasonably be required or permitted to obtain the consent of the Non-U.S. Employee to the transfer and to the extent possible without triggering the obligation to pay severance or other termination liabilities. The parties agree to cooperate fully and timely in the transition activities and also to comply (and cause their applicable Affiliates to comply) with the Transfer Laws.
(b) In the event that, within thirty (30) days after the Manitowoc Foodservice Employment Date, a Non-U.S. Employee is found not to have transferred to Manitowoc Foodservice or its applicable Affiliate (when such transfer was contemplated by the Separation Agreement or this Agreement), then Manitowoc Foodservice, in consultation with Manitowoc ParentCo, will as soon as practicable, but in any event within ten (10) days that are business days in the relevant jurisdiction of being so requested by Manitowoc ParentCo, make or cause an Affiliate to make to each such Non-U.S. Employee an offer in writing meeting the requirements of Section 8.1(a) to employ him
22
or her effective immediately. As of acceptance of the offer made pursuant to this Section 8.1(b), the employment of the Non-U.S. Employee will terminate with Manitowoc ParentCo or its applicable Affiliate.
(c) If within thirty (30) days after the Manitowoc Foodservice Employment Date, any employee of Manitowoc ParentCo or any Manitowoc ParentCo Affiliate (other than a Non-U.S. Employee) is found to have transferred to Manitowoc Foodservice or one of its Affiliates (when such transfer was not contemplated by the Separation Agreement or this Agreement), (i) Manitowoc ParentCo in consultation with Manitowoc Foodservice will as soon as practicable, but in any event within ten (10) days that are business days in the relevant jurisdiction of being so requested by Manitowoc Foodservice, make or cause one of its Affiliates to make to each such person an offer in writing to employ him or her effective immediately and (ii) Manitowoc ParentCos offer will be for terms and conditions of employment that are substantially comparable to the corresponding provisions of the employees contract of employment as existing immediately prior to the Manitowoc Foodservice Employment Date. As of acceptance of the offer made pursuant to this Section 8.1(c), the employment of the employee will terminate with Manitowoc Foodservice or one of its Affiliates, as applicable.
(d) If any Eligible Inactive Employee on a non-U.S. payroll becomes eligible to return to active work status after the Manitowoc Foodservice Employment Date and at a time when he or she would be entitled to reemployment under either applicable law or Manitowoc ParentCos policies and procedures in existence immediately prior to the Manitowoc Foodservice Employment Date, Manitowoc Foodservice or one of its Affiliates will immediately take such steps as may be necessary to employ the Eligible Inactive Employee. Such employment will satisfy the requirements of applicable law and Manitowoc ParentCos policies and procedures in existence immediately prior to the Manitowoc Foodservice Employment Date. In addition, the termination of the Eligible Inactive Employee from Manitowoc ParentCo or its Affiliate and the employment of such Eligible Inactive Employee by Manitowoc Foodservice or one of its Affiliates will, if possible, be conducted in such a manner as to avoid triggering the obligation to pay the Eligible Inactive Employee severance or other termination liabilities. Any Eligible Inactive Employee who becomes employed by Manitowoc Foodservice or one of its Affiliates pursuant to this Section 8.1(d) will be treated as a Non-U.S. Transferred Employee as of his or her date of hire with Manitowoc Foodservice or one of its Affiliates (which date of hire will be substituted for the Manitowoc Foodservice Employment Date as to that Non-U.S. Transferred Employee for all purposes of this Agreement).
8.2 Non-U.S. Employee Benefits .
(a) Manitowoc Foodservice will, or will cause its Affiliates to, establish or maintain the Manitowoc Foodservice Non-U.S. Plans and such other employee benefit plans outside of the United States as may be required by applicable law and Section 8.1(a).
23
(b) As of 11:59 p.m. on the day preceding the Plan Split Date (or such later date as provided in Schedule 8.2 or in subsequent written agreements between the parties for the adoption of the Manitowoc Foodservice Non-U.S. Plan of the same type), Manitowoc ParentCo and/or its Affiliates will cease all responsibility or liability with respect to coverage for any Non-U.S. Transferred Employee and any Other Non-U.S. Manitowoc Foodservice Employee under any Employee Benefit Plans maintained by Manitowoc ParentCo or any of its Affiliates. To the extent such coverages are permitted to cease under applicable law and are not continued by Manitowoc ParentCo or its Affiliates in accordance with the immediately following sentence, the coverages will so cease immediately prior to the Plan Split Date. To the extent (i) such coverages are required to continue on or beyond said applicable date under applicable law or (ii) Manitowoc ParentCo and Manitowoc Foodservice agree in writing that any such coverages will continue after said applicable date for other purposes not inconsistent with applicable law, Manitowoc ParentCo and/or its Affiliates will continue to provide coverage for any Non-U.S. Transferred Employee and any Other Non-U.S. Manitowoc Foodservice Employee under any benefit plans, programs or policies maintained by Manitowoc ParentCo or any of its Affiliates on and after the aforesaid date to the extent so required or agreed, and Manitowoc Foodservice and its Affiliates will indemnify Manitowoc ParentCo and its Affiliates and reimburse them for any and all expenses (as defined in Section 8.2(a) above) incurred under such plans in respect of such continuation of coverage on and after the aforesaid date. Reimbursement under this Section 8.2(b) will be made within thirty (30) days after Manitowoc Foodservice or its applicable Affiliate receives from Manitowoc ParentCo or its applicable Affiliate an itemized statement setting forth the types and amounts of such expenses. Schedule 8.2 sets forth the Manitowoc ParentCo Non-U.S. Plans, if any, in which Non-U.S. Transferred Employees and any Other Non-U.S. Manitowoc Foodservice Employees will continue to participate on and after the Plan Split Date or such other applicable date, as well as the anticipated date on which their participation in such plans will cease.
(c) During the period from the Manitowoc Foodservice Employment Date through 11:59 p.m. on the day preceding the Plan Split Date, Manitowoc Foodservice will assume and fulfill, and will cause its Affiliates to assume and fulfill, in a timely manner, all of the accrued obligations and liabilities relating to the vacation, annual leave, and holiday policies (collectively, Paid Leave Days ) of Manitowoc ParentCo and its Affiliates immediately prior to the Plan Split Date with regard to Non-U.S. Transferred Employees and any Other Non-U.S. Manitowoc Foodservice Employees, including allowing Non-U.S. Transferred Employees and Other Non-U.S. Manitowoc Foodservice Employees to use and be paid for their accrued but unused Paid Leave Days. On and after the Plan Split Date and subject to Section 8.3 below and the requirements of applicable law, Non-U.S. Transferred Employees and Other Non-U.S. Manitowoc Foodservice Employees will be entitled to accrue and use Paid Leave Days only in accordance with the policies and procedures of Manitowoc Foodservice or its Affiliates applicable to similarly situated employees.
8.3 Service Credit . Without limiting anything in Section 8.1 above and consistent therewith, Manitowoc Foodservice and its Affiliates will provide each Non-U.S. Transferred Employee with full credit for service recognized by Manitowoc ParentCo and its Affiliates for all
24
purposes (but not for any defined benefit pension plan or retiree medical plan purpose unless either a plan-to-plan transfer of assets and liabilities has occurred or applicable law requires the recognition of such service); provided that in no event will Manitowoc Foodservice or any of its Affiliates be required to provide any service credit to any Non-U.S. Transferred Employee to the extent Manitowoc Foodservice or its applicable Affiliate determines in its discretion that the provision of such credit would result in any duplication of benefits or unusual or unintended increase in benefits. To the extent that a Non-U.S. Transferred Employee is paid severance as a result of his transfer of employment to Manitowoc Foodservice or one of its Affiliates, and to the extent permitted by applicable law, neither Manitowoc Foodservice nor its applicable Affiliate will be required to provide that Non-U.S. Transferred Employee with full credit for service recognized by Manitowoc ParentCo or Manitowoc ParentCos Affiliate, for purposes of any future severance or severance-like payments.
8.4 Immigration and Visa Matters . Where legally permissible and unless the parties agree otherwise, Manitowoc Foodservice or one of its Affiliates will assume, in each case effective as of the Manitowoc Foodservice Employment Date, any work permits, visas or other immigration documents relating to any Non-U.S. Transferred Employee. The employing entity of the Non-U.S. Transferred Employee will be solely responsible for the costs associated with the transfer of these documents, including, if necessary, the costs of third-party attorneys or consultants. Where permitted by law and/or applicable regulation, Manitowoc ParentCo will assign to Manitowoc Foodservice or one of its Affiliates, and will cause its applicable Affiliate to assign to Manitowoc Foodservice or one of its Affiliates, in each case effective as of the Manitowoc Foodservice Employment Date, such work permits, visas or other immigration documents and all immigration-related liabilities.
ARTICLE 9
EQUITY AWARDS AND INCENTIVE COMPENSATION
9.1 Outstanding ParentCo Equity Compensation Awards .
(a) Each Manitowoc ParentCo Equity Compensation Award that is outstanding as of the Distribution will be adjusted as described below, so that each holder of a Manitowoc ParentCo Equity Compensation Award will hold adjusted equity awards comprised of a Manitowoc Foodservice Equity Compensation Award and a Cranes Equity Compensation Award unless otherwise provided in this Section 9.1(a); provided that, effective immediately prior to the Distribution, the Manitowoc ParentCo Compensation Committee may provide for different adjustments with respect to some or all of a holders Manitowoc ParentCo Equity Compensation Awards. For greater certainty, any adjustments made by the Manitowoc ParentCo Compensation Committee will be deemed incorporated by reference herein as if fully set forth below and will be binding on the parties hereto and their respective subsidiaries.
(i) Each Manitowoc ParentCo Stock Option generally will be adjusted in the manner described below, effective as of the Distribution Date and immediately prior to the Distribution, so that immediately following the Distribution each Manitowoc ParentCo Stock Option holder will hold Cranes Stock Options and Manitowoc Foodservice Stock Options in lieu of the
25
Manitowoc ParentCo Stock Options previously held. The following procedure will generally be applied to each Manitowoc ParentCo Stock Option with the same grant date and exercise price held by each Manitowoc ParentCo Stock Option holder as of the Distribution Date:
(1) The Cranes Stock Option will have an exercise price equal to the applicable Cranes Price. The number of Cranes Stock Options will equal the number of Manitowoc ParentCo Stock Options to which they relate. Such Cranes Stock Options will be subject to the same vesting requirements and dates and other terms and conditions as the Manitowoc ParentCo Stock Options to which they relate.
(2) The Manitowoc Foodservice Stock Option will have an exercise price equal to the applicable Manitowoc Foodservice Price. The number of Manitowoc Foodservice Stock Options will equal the number of Manitowoc ParentCo Stock Options. Such Manitowoc Foodservice Stock Options will be subject to the same vesting requirements and dates and other terms and conditions as the Manitowoc ParentCo Stock Options to which they relate.
(ii) With respect to Manitowoc ParentCo Restricted Shares, Manitowoc ParentCo Time-Based RSUs and Manitowoc ParentCo Performance Shares:
(1) Each holder of Manitowoc ParentCo Restricted Shares will generally receive from Manitowoc Foodservice, as of the time of the Distribution Date and immediately prior to the Distribution, Manitowoc Foodservice Restricted Shares determined in the same manner as for other shareholders of Manitowoc ParentCo Common Stock. Such Manitowoc Foodservice Restricted Shares will be subject to the same vesting requirements and dates and other terms and conditions as the Manitowoc ParentCo Restricted Shares to which they relate (including the right to receive dividends or other distributions). Each Manitowoc ParentCo Restricted Share will continue to be one Cranes Restricted Share which will be subject to the same vesting requirements and dates and other terms and conditions as the Manitowoc ParentCo Restricted Shares to which it relates.
(2) Each holder of Manitowoc ParentCo Time-Based RSUs will generally receive from Manitowoc Foodservice, as of the time of the Distribution Date and immediately prior to the Distribution, Manitowoc Foodservice Time-Based RSUs, determined in the same manner as for shareholders of Manitowoc ParentCo Common Stock. All Manitowoc Foodservice Time-Based RSUs will be subject to the same vesting requirements and dates and other terms and conditions as the Manitowoc ParentCo Time-Based RSUs to which they relate. Each Manitowoc ParentCo Time-Based RSU will continue to be a Cranes Time-Based RSU
26
which will be subject to the same vesting requirements and dates and other terms and conditions as the Manitowoc ParentCo Time-Based RSU to which it relates.
(3) All Manitowoc ParentCo Performance Share awards for which the performance period has ended on or prior to the Distribution Date will be earned or forfeited based on the achievement of the applicable performance objectives as of the end of such performance period and will have been settled (or will be deemed to have been settled for purposes of determining the amount and type of equity received by the award holders in connection with the Distribution) in unrestricted shares of Manitowoc ParentCo Common Stock prior to the Distribution Date. The determination of whether any portion of the Manitowoc ParentCo Performance Shares has been earned based on the achievement of the applicable performance objectives will be made by the Manitowoc ParentCo Compensation Committee in accordance with the applicable Manitowoc ParentCo LTIP.
(4) All Manitowoc ParentCo Performance Share awards for which the performance period has not ended on or prior to the Distribution Date will be earned at the target performance level and will be converted immediately prior to the Distribution into a number of Manitowoc ParentCo Time-Based RSUs equal to the target number of Manitowoc ParentCo Performance Shares subject to the award, without pro ration for the partial performance period. Such Manitowoc ParentCo Time-Based RSUs shall be adjusted in accordance with Section 9.1(a)(ii)(2), and shall remain subject to a requirement of continued service until the end of the original performance period, subject to earlier vesting upon death, disability, an involuntary termination without cause or a voluntary termination with good reason, in each case to the extent provided in the applicable award agreement.
(b) In the event a change in control (as defined in the applicable equity incentive plan or award agreement) occurs with respect to Manitowoc ParentCo, then (i) any accelerated vesting and/or exercisability applicable to Cranes Equity Compensation Awards held by Cranes Employees and Former Cranes Business Employees shall apply to the Manitowoc Foodservice Equity Compensation Awards then held by such individuals, subject to any double trigger or similar requirement in the applicable equity incentive plan or award agreement, and (ii) any accelerated vesting and/or exercisability applicable to Cranes Equity Compensation Awards then held by Manitowoc Foodservice Group Employees and Former Foodservice Business Employees shall apply, subject to any double trigger or similar requirement in the applicable equity incentive plan or award agreement. In the event a change in control (as defined in the applicable equity incentive plan or award agreement) occurs with respect to Manitowoc Foodservice, then (x) any accelerated vesting and/or exercisability applicable to Manitowoc Foodservice Equity Compensation Awards held by Manitowoc Foodservice Group Employees and Former Foodservice Business Employees shall apply to the Cranes
27
Equity Compensation Awards then held by such individuals, subject to any double trigger or similar requirement in the applicable equity incentive plan or award agreement, and (y) any accelerated vesting and/or exercisability applicable to Manitowoc Foodservice Equity Compensation Awards then held by Manitowoc ParentCo Group Employees and Former Manitowoc ParentCo Business Employees shall apply, subject to any double trigger or similar requirement in the applicable equity incentive plan or award agreement. Notwithstanding the foregoing, this Section 9.1(b) will not apply to the extent that it would cause adverse tax consequences under Code Section 409A.
(c) Prior to the Distribution Date, Manitowoc Foodservice will establish an equity compensation plan (subject to approval by the Manitowoc Foodservice Board of Directors or the Compensation Committee thereof), so that upon the Distribution, Manitowoc Foodservice will have in effect an equity compensation plan that allows grants of equity compensation awards subject to substantially the same terms as those that apply to the corresponding Manitowoc ParentCo Equity Compensation Awards. From and after the Distribution Date, each Manitowoc Foodservice Equity Compensation Award will be subject to the terms of the Manitowoc Foodservice equity compensation plan, the award agreement governing such Manitowoc Foodservice Equity Compensation Award and any Employment Agreement to which the applicable holder is a party. From and after the Distribution Date, Manitowoc Foodservice will retain, pay, perform, fulfill and discharge all liabilities arising out of or relating to the Manitowoc Foodservice Equity Compensation Awards. Manitowoc ParentCo will retain, pay, perform, fulfill and discharge all liabilities arising out of or relating to the Cranes Equity Compensation Awards.
(d) In all events, the adjustments provided for in this Section 9.1 will be made in a manner that, as determined by Manitowoc ParentCo, avoids adverse tax consequences to holders under Code Section 409A.
9.2 Conformity with Non-U.S. Laws . Notwithstanding anything to the contrary in this Agreement, (a) to the extent any of the provisions in this Article 9 (or any equity award described herein) do not conform with applicable non-U.S. laws (including provisions for the collection of withholding taxes), such provisions shall be modified to the extent necessary to conform with such non-U.S. laws in such manner as is equitable and to preserve the intent hereof, as determined by the parties in good faith, and (b) the provisions of this Article 9 may be modified to the extent necessary to avoid undue cost or administrative burden arising out of the application of this Article 9 to awards subject to non-U.S. laws.
9.3 Tax Withholding and Reporting .
(a) Except as otherwise required by applicable non-U.S. law, the appropriate member of the Manitowoc ParentCo Group will be responsible for all income and payroll taxes, withholding and reporting with respect to Cranes Equity Compensation Awards and Manitowoc Foodservice Equity Compensation Awards held by Manitowoc ParentCo Employees and Former Cranes Business Employees. Except as otherwise required by applicable non-U.S. law, the appropriate member of the Manitowoc Foodservice Group will be responsible for all income and payroll taxes, withholding and reporting with
28
respect to Cranes Equity Compensation Awards and Manitowoc Foodservice Equity Compensation Awards held by Manitowoc Foodservice Group Employees and Former Foodservice Business Employees. Manitowoc ParentCo and Manitowoc Foodservice hereby designate the other party as an agent for withholding pursuant to IRS Revenue Procedure 70-6 and to accept such designation to effectuate the intent of this Section 9.3(a). Manitowoc ParentCo or Manitowoc Foodservice, as applicable, shall facilitate performance by the other party to this Agreement (each a Party ) of its obligations hereunder by promptly remitting amounts or shares withheld in conjunction with a transfer of shares or cash, either (as mutually agreed by the Parties) directly to the applicable taxing authority or to the other Party for remittance to such taxing authority. The Parties will cooperate and communicate with each other and with third-party providers to effectuate withholding and remittance of taxes, as well as required tax reporting, in a timely, efficient and appropriate manner. Manitowoc ParentCo and Manitowoc Foodservice shall, to the extent practicable, (i) treat Manitowoc Foodservice as a successor employer and Manitowoc ParentCo as a predecessor, within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to Transferred Employees for purposes of taxes imposed under the United States Federal Unemployment Tax Act or the United States Federal Insurance Contributions Act, and (ii) cooperate with each other to avoid, to the extent possible, the filing of more than one IRS Form W-2 with respect to each Manitowoc Foodservice Group Employee for the year in which the Manitowoc Foodservice Employment Date for such Manitowoc Foodservice Group Employee occurs. The obligations to cooperate and support the other in respect of such tax withholding and remittance shall not continue beyond the tenth (10 th ) anniversary of the Distribution Date.
(b) If Manitowoc ParentCo or Manitowoc Foodservice determines in its reasonable judgment that any action required under this Article 9 will not achieve the intended tax, accounting and legal results, including, without limitation, the intended results under Code Section 409A or FASB ASC Topic 718 Stock Compensation, then at the request of Manitowoc ParentCo or Manitowoc Foodservice, as applicable, Manitowoc ParentCo and Manitowoc Foodservice will mutually cooperate in taking such actions as are necessary or appropriate to achieve such results, or most nearly achieve such results if the originally-intended results are not fully attainable.
9.4 Employment Treatment .
(a) Continuous employment with the Manitowoc Foodservice Group and the Cranes Group following the Distribution Date will be deemed to be continuing service for purposes of vesting and exercisability for the Manitowoc Foodservice Equity Compensation Awards and the Cranes Equity Compensation Awards. However, in the event that a Manitowoc Foodservice Group Employee terminates employment after the Distribution Date and becomes employed by the Cranes Group, for purposes of Article 9, the Manitowoc Foodservice Group Employee will be deemed terminated and the terms and conditions of the applicable performance incentive plan under which grants were made will apply. Similarly, in the event that a Cranes Employee terminates employment after the Distribution Date and becomes employed by the Manitowoc Foodservice Group, for purposes of Article 9, the Cranes Employee will be deemed terminated and the terms
29
and conditions of the performance incentive plan under which grants were made will apply. Notwithstanding the foregoing, for purposes of this Article 9 only, if an individual is a Delayed Transfer Employee, such individual will not be considered to have terminated on his or her Applicable Transfer Date. In addition, a non-employee member of the board of directors of Manitowoc ParentCo or Manitowoc Foodservice will be treated in a similar manner to that described in this Section 9.4(a).
(b) If, after the Distribution Date, Manitowoc ParentCo or Manitowoc Foodservice identifies (i) an administrative error in the individuals identified as holding Cranes Equity Compensation Awards and Manitowoc Foodservice Equity Compensation Awards, the amount of such awards so held or the vesting level of such awards; or (ii) any other error, then Manitowoc ParentCo and Manitowoc Foodservice will mutually cooperate in taking such actions as are necessary or appropriate to place, as nearly as reasonably practicable, the individual and Manitowoc ParentCo and Manitowoc Foodservice in the position in which they would have been had the error not occurred.
9.5 Payment of Option Exercise Prices . Upon the exercise of a Cranes Stock Option or a Manitowoc Foodservice Stock Option, the exercise price of such stock option will be remitted in cash by the option administrator to the issuer of the option (the appropriate member of the Manitowoc ParentCo Group or the Manitowoc Foodservice Group, as applicable) and the applicable withholding taxes will be remitted in cash by the option administrator to the entity (the appropriate department at the appropriate entity within the Manitowoc ParentCo Group or the Manitowoc Foodservice Group, as applicable) responsible for payroll taxes, withholding and reporting with respect to the option pursuant to Section 9.3. Upon vesting or payment, as applicable, of restricted shares, restricted stock units, performance shares or deferred shares, the applicable withholding will be remitted in cash by the administrator to the entity (the appropriate member of the Manitowoc ParentCo Group or the Manitowoc Foodservice Group, as applicable) responsible for payroll taxes, withholding and reporting with respect to such awards pursuant to Section 9.3. To the extent necessary to provide the withholding amount in cash to the entity responsible for payroll taxes, withholding, and reporting, the issuer of the applicable award will provide the withholding amount in cash. Notwithstanding the foregoing, the method of remittance of the exercise price of any stock option or any applicable withholding taxes may vary for legal or administrative reasons.
9.6 Dividends/Dividend Equivalents . With respect to dividends on Manitowoc Foodservice Restricted Shares or dividend equivalents on Manitowoc Foodservice Time-Based RSUs payable by Manitowoc Foodservice to Manitowoc ParentCo Group employees or service providers (including former Manitowoc Parent Group employees or service providers who did not become Manitowoc Foodservice Group employees or service providers), Manitowoc Foodservice will make such payments to Manitowoc ParentCo, and Manitowoc ParentCo, as an agent for Manitowoc Foodservice, will make such payments to such Manitowoc ParentCo employee or service provider and will be responsible for any applicable payroll taxes, withholding and reporting in accordance with Section 9.3(a). With respect to dividends on Cranes Restricted Shares or dividend equivalents on Cranes Time-Based RSUs payable by Manitowoc ParentCo to Manitowoc Foodservice Group employees or service providers (including former Manitowoc Foodservice Group employees or service providers), Manitowoc ParentCo will make such payments to Manitowoc Foodservice, and Manitowoc Foodservice, as
30
an agent for Manitowoc ParentCo, will make such payments to such Manitowoc Foodservice Group employees or service providers and will be responsible for payroll taxes, withholding and reporting in accordance with Section 9.3(a).
9.7 Equity Award Administration . Manitowoc Foodservice and Manitowoc ParentCo agree that Charles Schwab will be the administrator and recordkeeper for the Manitowoc Foodservice and Cranes Equity Compensation Awards outstanding as of the Distribution for the life of the relevant awards, unless the parties mutually agree otherwise.
9.8 Registration . As soon as reasonably practicable after the Distribution Date and subject to applicable law, Manitowoc Foodservice will use commercially reasonable efforts to register the Manitowoc Foodservice Common Stock relating to the Manitowoc Foodservice Equity Compensation Awards and make any necessary filings with the appropriate Governmental Authorities as required under U.S. and foreign securities laws. Manitowoc Foodservice will use commercially reasonable efforts to cause any registration statement relating to the Manitowoc Foodservice Equity Compensation Awards to be kept effective (and the current status of the prospectus or prospectuses required thereby to be maintained) as long as any Manitowoc Foodservice Equity Compensation Awards remain outstanding. Manitowoc ParentCo will use commercially reasonable efforts to cause a registration statement relating to the Cranes Equity Compensation Awards to be kept effective (and the current status of the prospectus or prospectuses required thereby to be maintained) as long as any Cranes Equity Compensation Awards remain outstanding.
9.9 Short-Term Incentive Plan . The transfer of employment of any Manitowoc ParentCo Group Employee to the Manitowoc Foodservice Group shall not be considered a termination of employment for purposes of any then-completed performance period under the Manitowoc ParentCo Short-Term Incentive Plan, and Manitowoc ParentCo will be responsible for paying any amounts to which such transferred employees become entitled under such Short-Term Incentive Plan.
ARTICLE 10
OTHER EMPLOYMENT MATTERS
10.1 Notification of Organizing Activity . Each party agrees to provide the other, to the extent permitted by applicable law, with prompt notice of and information about any effort by any union to organize any of its employees at any facility or property shared by Manitowoc Foodservice or one of its Affiliates with Manitowoc ParentCo. Such obligation will cease on the date Manitowoc Foodservice or its Affiliate and Manitowoc ParentCo no longer share the facility or property.
10.2 Contractors . As of the Manitowoc Foodservice Employment Date, in each country and where legally permissible, Manitowoc ParentCo or its applicable Affiliate will assign to Manitowoc Foodservice or its applicable Affiliate the engagements of Transferred Contractors and Manitowoc Foodservice or its applicable Affiliate will accept such assignments. Where not legally permissible to assign such engagements, Manitowoc ParentCo or its applicable Affiliate will terminate the engagements of each Transferred Contractor as of the applicable Manitowoc Foodservice Employment Date, and immediately thereafter Manitowoc Foodservice or its applicable Affiliate will offer to engage such Transferred Contractor.
31
10.3 Expatriates . Manitowoc Foodservice will assume and honor, or will cause its applicable Affiliate to assume and honor, any agreements, obligations and liabilities relating to any Transferred Employee who is an expatriate, including, without limitation, agreements, obligations and liabilities relating to repatriation, relocation, equalization of taxes and living standards in the host country. For purposes of this Section 10.3, the term expatriate will refer to any employee who was hired in one country by Manitowoc ParentCo or one of its Affiliates, designated as an expatriate, and sent to work in another country on a temporary basis.
10.4 Shared Employee Contracts .
(a) At the written request of Manitowoc Foodservice, Manitowoc ParentCo will, and will cause other members of the Manitowoc ParentCo Group to, to the extent permitted by the applicable Manitowoc ParentCo Shared Employee Contract and applicable law, make available to Manitowoc Foodservice or applicable members of the Manitowoc Foodservice Group the benefits and rights under the Manitowoc ParentCo Shared Employee Contracts, including, but not limited to, the investigation, prosecution, and/or defense of litigation to enforce a Manitowoc ParentCo Shared Employee Contract on behalf of Manitowoc Foodservice, which are substantially comparable to the benefits and rights enjoyed by the Manitowoc ParentCo Group under each Manitowoc ParentCo Shared Employee Contract for which such request is made by Manitowoc Foodservice to the extent such benefits and rights relate to the Transferred Businesses; provided that the applicable members of the Manitowoc Foodservice Group will assume and discharge (or promptly reimburse Manitowoc ParentCo for) the obligations and liabilities under the relevant Manitowoc ParentCo Shared Employee Contracts associated with the benefits and rights so made available to them.
(b) At the written request of Manitowoc ParentCo, Manitowoc Foodservice will, and will cause other members of the Manitowoc Foodservice Group to, to the extent permitted by the applicable Manitowoc Foodservice Shared Employee Contract and applicable law, make available to Manitowoc ParentCo or applicable members of the Manitowoc ParentCo Group the benefits and rights under the Manitowoc Foodservice Shared Employee Contracts, including, but not limited to, the investigation, prosecution, and/or defense of litigation to enforce a Manitowoc Foodservice Shared Employee Contract on behalf of the Manitowoc ParentCo Group, which are substantially comparable to the benefits and rights enjoyed by the Manitowoc Foodservice Group under each Manitowoc Foodservice Shared Employee Contract for which such request is made by Manitowoc ParentCo, to the extent such benefits and rights relate to the Manitowoc ParentCo Business; provided that the applicable members of the Manitowoc ParentCo Group will assume and discharge (or promptly reimburse Manitowoc Foodservice) the obligations and liabilities under the relevant Manitowoc Foodservice Shared Employee Contracts associated with the benefits and rights so made available to them.
32
10.5 Restrictions on Hiring of Current and Former Employees After Distribution Date .
(a) For a period of twelve (12) months after the Distribution Date (the Restriction Period), to the extent permitted by applicable law, Manitowoc ParentCo and its Affiliates will not, directly or indirectly, solicit for hire or hire employees of Manitowoc Foodservice or any of its Affiliates, and Manitowoc Foodservice and its Affiliates will not solicit for hire or hire employees of Manitowoc ParentCo or any of its Affiliates, unless written approval for such hiring is given by the senior Human Resources officers of Manitowoc ParentCo and of Manitowoc Foodservice prior to any offer of employment being extended either verbally or in writing; provided that such prohibition shall not apply in the case of employment transfers that the parties agree were made in error. Manitowoc ParentCo and Manitowoc Foodservice will be responsible for implementing appropriate internal procedures to ensure compliance with this Section 10.5(a). For purposes of the foregoing, the retention by one company of the services of any such employee or former employee of the other company through a temporary employment agency or through a contract with a third party or by or through any other similar arrangement, shall be deemed a violation of the foregoing non-solicitation and non-hire provisions.
(b) Nothing in Section 10.5(a) will prevent Manitowoc ParentCo and its Affiliates from hiring a former employee of Manitowoc Foodservice or one of its Affiliates, or Manitowoc Foodservice and its Affiliates from hiring a former employee of Manitowoc ParentCo or one of its Affiliates (the entity engaging in such hiring will be referred to as the Hiring Entity and the entity for whom the employee formerly worked will be referred to as the Former Employer ), provided that the former employee was involuntarily terminated by the Former Employer and such involuntary termination was not due to any act or omission by the former employee undertaken by such former employee with any intent or design to circumvent the restrictions set forth in Section 10.5(a).
(c) Notwithstanding anything else in Sections 10.5(a) or (b) and to the extent permitted by applicable law, for the period beginning on the Manitowoc Foodservice Employment Date and ending on the first anniversary of the Distribution Date, none of Manitowoc ParentCo, Manitowoc Foodservice or their respective Affiliates will solicit for employment or employ (or engage as an independent contractor or consultant) any employee who refuses a transfer of employment contemplated by Sections 2.1(a) or 8.1(a).
(d) The provisions of this Section 10.5 of this Agreement are severable. In the event that any provision of this Section 10.5 is deemed unenforceable, a court of competent jurisdiction shall reform such provision to the extent necessary to cause it to be enforceable to the maximum extent permitted by law. The parties agree that they desire the court to reform such provision, and therefore agree that the court will have jurisdiction to do so and that they will abide by what the court determines.
33
ARTICLE 11
RESPONSIBILITY FOR EMPLOYEES AND CONTRACTORS
11.1 Responsibility for Manitowoc Foodservice Group Employees . Except as expressly provided otherwise herein and subject to Section 11.7 hereof, Manitowoc Foodservice, to the exclusion of the Manitowoc ParentCo Group, will and will cause its applicable Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge, any and all employment, compensation, employee benefit, and benefit plan fiduciary liabilities relating to any U.S. Employee, U.S. Transferred Employee, Non-U.S. Employee, Non-U.S. Transferred Employee, Other U.S. Manitowoc Foodservice Employee, Other Non-U.S. Manitowoc Foodservice Employee, and future employees of Manitowoc Foodservice and its Affiliates or of the Transferred Businesses (in the case of an employee who terminated employment prior to the preparation of the initial versions of Schedules 1(a) and 1(b), such employee will be considered to have been an employee of the Transferred Businesses if he or she was employed in or provided a majority of his or her services to the Transferred Business as of the date of such termination, or if his or her claim relates exclusively to the provision of services to the Transferred Businesses, regardless of whether or to what degree he or she also provided services to other businesses) (all such employees, the Manitowoc Foodservice Group Employees ), which arise before, on or after the Distribution Date, including, without limitation:
(a) those arising from any claim that Manitowoc ParentCo or any of its Manitowoc ParentCo Group Affiliates is the actual employer, co-employer or joint employer of any of the Manitowoc Foodservice Group Employees;
(b) any and all employment-related claims under any national or local law or ordinance, all as they may have been or may in the future be amended;
(c) all liabilities relating to or arising out of any alleged failure to comply with the Transfer Laws with respect to the Manitowoc Foodservice Group Employees; and
(d) all termination and severance liabilities; claims for lost wages, compensation, and benefits; claims for damages; claims for breach of fiduciary duty without regard to whether such claims might also be deemed to be in any sense claims for benefits; and claims for unfair or wrongful dismissal; together with all costs and expenses (including but not limited to attorneys fees) associated therewith,
(collectively, and with the other liabilities for which any member of the Manitowoc Foodservice Group is explicitly responsible under the terms of this Agreement, the Manitowoc Foodservice Employment Liabilities ); provided that the Manitowoc ParentCo Benefit liabilities, as defined in Section 11.6(a) below, will not be Manitowoc Foodservice Employment Liabilities.
11.2 Responsibility for Manitowoc Foodservice Group Contractors . Except as expressly provided otherwise herein and subject to Section 11.7 hereof, Manitowoc Foodservice, to the exclusion of the Manitowoc ParentCo Group, will and will cause their applicable Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge, any and all liabilities relating to any Transferred Contractor and any other past, present, and future Contractor of Manitowoc Foodservice or its Affiliates or of the Transferred Businesses (such Contractor will
34
be considered to have been engaged by the Transferred Businesses if he or she provided a majority of his or her services to the Transferred Businesses or if his or her claim relates exclusively to the provision of services to the Transferred Businesses, regardless of whether or to what degree he or she also provided services to other businesses) (the Manitowoc Foodservice Group Contractors ) which arise before, on or after the Effective Date, including, without limitation, all Liabilities relating to or arising out of the assignment or termination by Manitowoc ParentCo or its Affiliates of the engagements of such Manitowoc Foodservice Group Contractors (the Manitowoc Foodservice Contractor Liabilities ).
11.3 Responsibility for Certain Corporate Function Employees . Effective at and after the Distribution Date and except as expressly provided otherwise herein or in Schedule 1 of the Separation Agreement, and subject to Section 11.7 hereof, in the case of employment, compensation, employee benefit, and benefit plan fiduciary liabilities relating to employees whose principal responsibilities were to provide corporate services to the corporation as a whole (even though their work on given projects may have benefited one business unit more than another), who are not Manitowoc Foodservice Group Employees or Manitowoc ParentCo Group Employees and whose employment terminated, such liabilities will be borne by the entity that employed such employees immediately prior to their termination of employment ( Prior Corporate Function Liabilities ).
11.4 Responsibility for Manitowoc ParentCo Group Employees . Effective at and after the Distribution Date and except as expressly provided otherwise herein or in the Transition Services Agreement, and subject to Section 11.7 hereof, Manitowoc ParentCo, to the exclusion of the Manitowoc Foodservice Group, will and will cause its applicable Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge, any and all employment, compensation, employee benefit, and benefit plan fiduciary liabilities relating to the current, former and future employees of the Manitowoc ParentCo Group business other than the Transferred Business ( the Manitowoc ParentCo Group Businesses ) and the former employees (prior to the Manitowoc Foodservice Employment Date) of Manitowoc Foodservice and its Affiliates (in the case of an employee who terminated employment prior to the preparation of the initial versions of Schedules 1(a) and 1(b), such employee will be considered to have been an employee of the Manitowoc ParentCo Group Businesses if he or she was employed in or provided a majority of his or her services to the Manitowoc ParentCo Group Businesses as of the date of such termination, or if his or her claim relates exclusively to the provision of services to the Manitowoc ParentCo Group Businesses, regardless of whether or to what degree he or she also provided services to other businesses), but excluding the Manitowoc Foodservice Group Employees (the Manitowoc ParentCo Group Employees ), including, without limitation:
(a) those arising from any claim that Manitowoc Foodservice or any of its Manitowoc Foodservice Group Affiliates is the actual employer, co-employer or joint employer of any of the Manitowoc ParentCo Group Employees;
(b) any and all employment-related claims under any national or local law or ordinance, all as they may have been or may in the future be amended;
(c) all liabilities relating to or arising out of any alleged failure to comply with the Transfer Laws with respect to the Manitowoc ParentCo Group Employees; and
(d) all termination and severance liabilities; claims for lost wages, compensation, and benefits; claims for damages; claims for breach of fiduciary duty without regard to whether such claims might also be deemed to be in any sense claims for benefits; and claims for unfair or wrongful dismissal; together with all costs and expenses (including but not limited to attorneys fees) associated therewith,
35
(collectively and with the other liabilities for which any member of the Manitowoc ParentCo Group is explicitly responsible under the terms of this Agreement, the Manitowoc ParentCo Employment Liabilities ); provided , further , that Manitowoc Foodservice Benefit Liabilities, as defined in Section 11.6(b) below, will not be Manitowoc ParentCo Employment Liabilities or Manitowoc ParentCo Benefit Liabilities.
11.5 Responsibility for Manitowoc ParentCo Group Contractors . Effective at and after the Distribution Date and except as expressly provided otherwise herein, and subject to Section 11.7 hereof, Manitowoc ParentCo, to the exclusion of the Manitowoc Foodservice Group, will and will cause its applicable Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge, any and all liabilities relating to past, present, and future Contractors of Manitowoc ParentCo or its Affiliates, other than the Manitowoc Foodservice Group Contractors (the Manitowoc ParentCo Group Contractors ), including, without limitation, all liabilities relating to or arising out of the assignment or termination by Manitowoc Foodservice or members of the Manitowoc Foodservice Group of the engagements of such Manitowoc ParentCo Group Contractors (the Manitowoc ParentCo Contractor Liabilities ).
11.6 Responsibility for Certain Benefits Matters .
(a) Notwithstanding any provision of Sections 11.1 to 11.5 of this Agreement and effective at and after the Distribution Date, and subject to Sections 11.6(b) and 11.7 hereof, Manitowoc ParentCo, to the exclusion of the Manitowoc Foodservice Group, will and will cause its applicable Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge, any and all liabilities incurred in connection with respect to legal actions for benefits under any Employee Benefit Plan of Manitowoc ParentCo or legal actions alleging breach of fiduciary duty in connection with any Employee Benefit Plan of Manitowoc ParentCo, as follows: (A) as to liabilities arising from such actions filed on or commenced before, on or after the Distribution Date that involve only pre-Distribution acts or omissions, Manitowoc ParentCo will indemnify Manitowoc Foodservice and its employees, directors, fiduciaries or agents, (B) as to liabilities arising from such actions filed on or commenced before, on or after the Distribution Date that involve pre-Distribution acts or omissions and post-Distribution acts or omissions, Manitowoc ParentCo and Manitowoc Foodservice will be responsible for their own liabilities, including those of their employees, directors, fiduciaries and agents, as to that portion of any settlement, judgment, costs and expenses resulting from such post-Distribution acts or omissions, and (C) as to liabilities arising from such actions filed on or commenced before, on or after the Distribution Date that do not involve alleged pre-Distribution acts or omissions, Manitowoc ParentCo will not indemnify Manitowoc Foodservice, nor will Manitowoc Foodservice indemnify Manitowoc ParentCo, and neither will indemnify the employees, directors, fiduciaries or agents of the other (such liabilities as are to be indemnified by Manitowoc ParentCo, Manitowoc ParentCo Benefit Liabilities ).
36
(b) Notwithstanding any provision of Sections 11.1 to 11.5 of this Agreement, and subject to Section 11.7 hereof, Manitowoc Foodservice, to the exclusion of the Manitowoc ParentCo Group, will and will cause its applicable Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge, any and all liabilities: (i) to the extent provided in Sections 11.6(a)(iii)(B) and (C) above; (ii) relating in any way to any Manitowoc Foodservice Employee Benefit Plan; (iii) arising from any post-Distribution act or omission by Manitowoc Foodservice or by an employee, director, fiduciary or agent of Manitowoc Foodservice relating in any way to any Manitowoc ParentCo Employee Benefit Plan; (iv) under Section 510 of ERISA, or otherwise, relating to the absence following the Distribution Date of a Manitowoc Foodservice U.S. or U.K. defined benefit pension plan or U.S. retiree medical plan; and (v) arising from any change in terms and conditions of employment by Manitowoc Foodservice in the terms and conditions of employment of any Manitowoc Foodservice Group Employees in comparison with their terms and conditions of employment as of the date immediately preceding their Manitowoc Foodservice Employment Date ( Manitowoc Foodservice Benefit Liabilities ).
11.7 Reimbursement and Indemnification .
(a) Damages incurred by Manitowoc Foodservice, Manitowoc ParentCo, and/or their applicable Affiliates or their respective Employee Benefit Plans or plan fiduciaries relating to employment, compensation, employee benefit, and benefit plan fiduciary damages and liabilities will be paid to the maximum extent available under applicable insurance. In no respect shall Manitowoc Foodservice, Manitowoc ParentCo, or their Affiliates or their respective Employee Benefit Plans or plan fiduciaries be deemed to indemnify, assume, or agree to share insured losses. To the extent that any such damages are not fully indemnified or reimbursed by applicable insurance, then Manitowoc Foodservice and Manitowoc ParentCo (or the applicable Affiliates of Manitowoc Foodservice and Manitowoc ParentCo) will be responsible for payment of such amounts (including amounts within retentions, deductibles, co-insurance, retrospective premiums and amounts in excess of insurance or not covered by insurance), whether by reimbursement, indemnification or otherwise, in the proportion to and according to whether such damages relate to Manitowoc Foodservice Employment Liabilities, Manitowoc Foodservice Contractor Liabilities, Manitowoc ParentCo Employment Liabilities, Manitowoc ParentCo Contractor Liabilities, Prior Corporate Function Liabilities, Manitowoc ParentCo Benefit Liabilities, or Manitowoc Foodservice Benefit Liabilities, as set forth in this Article 11. For purpose of clarification, if pursuant to the provisions in this Article 11 Manitowoc ParentCo, to the exclusion of the Manitowoc Foodservice Group, will or will cause its applicable Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge any liability, then Manitowoc ParentCo or its applicable Affiliate will be deemed the Indemnifying Party and the Manitowoc Foodservice Group will be deemed the Indemnified Party for purposes of Section 6.2 of the Separation Agreement in the event the Manitowoc Foodservice Group incurs any damages related to such liability. Similarly, if pursuant to the provisions in this Article 11 Manitowoc Foodservice, to the exclusion of the Manitowoc ParentCo Group, will or will cause their Affiliates to assume, be responsible for, and pay, perform, satisfy and discharge any liability, then Manitowoc Foodservice or its applicable Affiliate will
37
be deemed the Indemnifying Party and the Manitowoc ParentCo Group will be deemed the Indemnified Party for purposes of Section 6.1 of the Separation Agreement in the event the Manitowoc ParentCo Group incurs any damages related to such liability.
(b) Claims for breach of this Agreement or for indemnification or reimbursement or with respect to insurance under this Agreement shall be resolved as set forth in, and shall be subject to the terms of, Article VI of the Separation Agreement. This shall in no way limit the applicability of other provisions of the Separation Agreement.
(c) For the avoidance of doubt, it is understood and agreed that (i) Manitowoc Foodservice Employment Liabilities and Manitowoc Foodservice Contractor Liabilities will arise in connection with Manitowoc Foodservice Exclusive Litigation Matters or Shared Litigation Matters, as defined in the Separation Agreement, (ii) Manitowoc ParentCo Employment Liabilities and Manitowoc ParentCo Contractor Liabilities will arise in connection Manitowoc ParentCo Exclusive Litigation Matters or Shared Litigation Matters, as defined in the Separation Agreement, (iii) Prior Corporate Function Liabilities will arise in connection with Shared Litigation Matters, as defined in the Separation Agreement, except as provided in Schedule 1 therein, (iv) Manitowoc Foodservice Benefit Liabilities will arise in connection with Manitowoc Foodservice Exclusive Litigation Matters or Corporate Litigation Matters, as defined in the Separation Agreement, and (v) Manitowoc ParentCo Benefit Liabilities will arise in connection with Manitowoc ParentCo Exclusive Litigation Matters or Corporate Litigation Matters, as defined in the Separation Agreement.
ARTICLE 12
TERMINATION
12.1 Termination of Agreement . This Agreement will terminate automatically and without need for further action by either party in the event that the Separation Agreement is terminated in accordance with its respective terms.
12.2 Effect of Termination . Upon termination of this Agreement pursuant to this Article 12, this Agreement and the rights and obligations of the parties under this Agreement automatically end without any liability against any party or its Affiliates, except as otherwise provided in the Separation Agreement.
ARTICLE 13
MISCELLANEOUS
13.1 Entire Agreement . This Agreement is an integral part of, is subject to, and is to be interpreted consistently with, the Separation Agreement, and the provisions of the Separation Agreement that do not conflict with the provisions of this Agreement are hereby incorporated by reference; in all other respects this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior written and oral (and all contemporaneous oral) agreements and understandings with respect to the express subject matter hereof. The provisions of Article 7 of the Separation Agreement not otherwise expressly covered
38
in this Article 13 are hereby incorporated by reference into this Agreement. For purposes of this Section 13.1 only, references herein to this Agreement will include the Schedules and Exhibits to this Agreement, the employee matters section of any countrys ancillary agreement, and any annex of the Transition Services Agreement addressing Employee Matters.
13.2 Cooperation . Manitowoc ParentCo and Manitowoc Foodservice agree to, and to cause their Affiliates to, cooperate and use reasonable efforts to promptly (i) comply with all requirements of this Agreement, ERISA, the Code and other laws and regulations which may be applicable to the matters addressed herein, and (ii) subject to applicable law, provide each other with such information reasonably requested by the other party to assist the other party in administering its Employee Benefit Plans and complying with applicable law and regulations and the terms of this Agreement.
13.3 Third Party Beneficiaries . This Agreement will not confer third-party beneficiary rights upon any Transferred Employee or any other person or entity. Nothing in this Agreement will be construed as giving to any Transferred Employee or other person any legal or equitable right against Manitowoc ParentCo, Manitowoc Foodservice or their Affiliates. This Agreement will not constitute a contract of employment and will not give any Transferred Employee a right to be retained in the employ of either Manitowoc ParentCo, Manitowoc Foodservice or any of their Affiliates, unless the Transferred Employee would otherwise have that right under applicable law. With regard to any Transferred Employee who was an employee-at-will prior to becoming a Transferred Employee, this Agreement will not be deemed to change that at-will status in any way. Furthermore, no provision in this Agreement modifies or amends or creates any employee benefit plan, program, or document ( Intended Benefit Plan ) unless this Agreement explicitly states that the provision amends or creates (or words to similar effect) that Intended Benefit Plan. This shall not prevent the parties to this Agreement from enforcing any provision in this Agreement, but no other party shall be entitled to enforce any provision in this Agreement on the grounds that it is an amendment to, or a creation of, an Intended Benefit Plan, unless the provision explicitly states that such enforcement rights are being conferred. If a party not entitled to enforce this Agreement brings a lawsuit or other action to enforce any provision in this Agreement as an amendment to, or creation of, an Intended Benefit Plan, and that provision is construed to be such an amendment or creation despite not being explicitly designated as one in this Agreement, that provision shall lapse retroactively, thereby precluding it from having any effect.
13.4 Employment Records . The parties agree that on or within a reasonable time period after the Distribution Date, the party transferring employees (the Transferor ) agrees to provide the party receiving the employees (the Transferee ) with all employment records for the employees required to be kept under applicable law or necessary for the conduct of the Transferees business, provided (a) that such records will not include any records to the extent such a transfer would violate applicable law or cause the Transferor to breach any agreement with a third party, and (b) that such records are in the possession of the Transferor. The Transferor may make, at its expense, and keep copies of such records.
13.5 Not a Change in Control . The Parties acknowledge and agree that the transactions contemplated by the Separation Agreement and this Agreement do not constitute a change in control or a change of control for purposes of any benefit plan maintained by the Parties or their Affiliates.
39
13.6 Effect if Distribution Does Not Occur . If the Distribution does not occur, then all actions and events that are to be taken under this Agreement, or otherwise in connection with the Distribution, shall not be taken or occur, except to the extent specifically provided by Manitowoc ParentCo.
13.7 Disputes . The Parties agree to use commercially reasonable efforts to resolve in an amicable manner any and all controversies, disputes and claims between them arising out of or related in any way to this Agreement. The Parties agree that any controversy, dispute or claim (whether arising in contract, tort or otherwise) arising out of or related in any way to this Agreement that cannot be amicably resolved informally will be resolved pursuant to the dispute resolution procedures set forth in Article VII of the Separation Agreement.
(This space intentionally left blank)
40
IN WITNESS WHEREOF , each party has caused this Employee Matters Agreement to be executed on its behalf by a duly authorized officer effective as of the date first set forth above.
Manitowoc ParentCo | Manitowoc Foodservice | |||||||
The Manitowoc Company, Inc., a Wisconsin corporation | Manitowoc Foodservice, Inc., a Delaware corporation | |||||||
By: |
/s/ Carl J. Laurino |
By: |
/s/ Maurice D. Jones |
|||||
Name: | Carl J. Laurino | Name: | Maurice D. Jones | |||||
Title: | Senior Vice President and Chief Financial Officer | Title: | Senior Vice President, General Counsel and Secretary |
[Signature page to Employee Matters Agreement]
Exhibit 10.4
Execution Version
INTELLECTUAL PROPERTY MATTERS AGREEMENT
THIS INTELLECTUAL PROPERTY MATTERS AGREEMENT (this IP Agreement ) is made and entered into effective as of March 4, 2016 (the Effective Date ), by and among The Manitowoc Company, Inc., a Wisconsin corporation ( Manitowoc ParentCo ), and Manitowoc Foodservice, Inc., a Delaware corporation and wholly-owned subsidiary of Manitowoc ParentCo ( SpinCo ). Capitalized terms used and not otherwise defined in this IP Agreement have the meanings ascribed to such terms in Article 1 of the Separation Agreement (defined below).
RECITALS
WHEREAS, Manitowoc ParentCo has determined that it would be appropriate, desirable and in the best interests of Manitowoc ParentCo and Manitowoc ParentCos shareholders to separate the Foodservice Business from Manitowoc ParentCo;
WHEREAS, Manitowoc ParentCo and SpinCo are entering simultaneously herewith into a Master Separation and Distribution Agreement to implement the separation of the business operations of SpinCo from Manitowoc ParentCo (the Separation Agreement );
WHEREAS, Manitowoc ParentCo and the Foodservice Business both make use of various elements of intellectual property and this IP Agreement is intended to set forth the principal arrangements between them regarding the distribution of, rights to and use of certain such intellectual property.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth below, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
The following terms, as used in this IP Agreement, have the following meanings:
Acquired Party has the meaning set forth in Section 3.2(f) of this IP Agreement.
Common Mark means the graphical representation of a solid circle (both colored red and black and white) with the letter M of the word MANITOWOC superimposed thereon printed in the font as seen below:
|
and |
|
Disclosing Party has the meaning set forth in Section 3.5 of this IP Agreement.
Distribution means the distribution to holders of shares of Manitowoc ParentCo common stock all of the outstanding shares of SpinCo common stock held by Manitowoc ParentCo.
Effective Date has the meaning set forth in the preamble to this IP Agreement.
IP Agreement means this Intellectual Property Matters Agreement, entered into by and between Manitowoc ParentCo and SpinCo and effective as of the Effective Date, as such may be amended from time to time.
Manitowoc ParentCo has the meaning set forth in the preamble to this IP Agreement.
Manitowoc ParentCo Domains means the domain name/uniform resource locator manitowoccranes.com
Manitowoc ParentCo Facebook Account has the meaning set forth in Section 5.2 of this IP Agreement.
Manitowoc ParentCo Fields of Use means the design, manufacture, promotion and sale of industrial cranes, tower cranes, mobile hydraulic cranes, telescoping cranes, lattice-boom crawler cranes, vehicles, boom trucks and equipment, parts and accessories for the foregoing, and repair, maintenance and refurbishing services for the foregoing.
Manitowoc ParentCo Google+ Account has the meaning set forth in Section 5.7 of this IP Agreement.
Manitowoc ParentCo LinkedIn Account has the meaning set forth in Section 5.3 of this IP Agreement.
Manitowoc ParentCo Patents means patents and patent applications identified in Schedule A which represents the patent assets around the world of the parties for innovations generally in the Manitowoc ParentCo Fields of Use.
Manitowoc ParentCo Trademarks means trademarks and trademark registration applications identified in Schedule B which represent marks around the world of the parties generally used in the promotion and sale of products and services within the Manitowoc ParentCo Fields of Use.
Manitowoc ParentCo Twitter Accounts has the meaning set forth in Section 5.1 of this IP Agreement.
Manitowoc ParentCo Works means works of authorship (a) related to the Manitowoc ParentCo Fields of Use; and (b) subject to protection under the Copyright laws of at least one country around the world.
Manitowoc ParentCo YouTube Accounts has the meaning set forth in Section 5.6 of this IP Agreement.
Objecting Party has the meaning set forth in Section 3.2(f) of this IP Agreement.
Other Party has the meaning set forth in Section 3.5 of this IP Agreement.
2
Separation Agreement has the meaning set forth in the recitals to this IP Agreement.
Shared Domain Name means the domain name/uniform resource locator Manitowoc.com
SpinCo has the meaning set forth in the preamble to this IP Agreement.
SpinCo Domain means the domain name/uniform resource locator manitowocfoodservice.com
SpinCo Facebook Accounts has the meaning set forth in Section 5.2 of this IP Agreement.
SpinCo Fields of Use means the design, manufacture, promotion, sale, repair and engineering design services for commercial and industrial food equipment including (i) food preparation equipment, (ii) primary cooking and warming equipment, (iii) refrigeration and freezing equipment and ice machines, (iv) food serving equipment, (v) beverage dispensing equipment, (vi) kitchen tools and cookware, (vii) food holding, storage and handling equipment, (viii) tabletop food service items and servingware, (ix) furnishings and décor for food serving establishments (x) custom fabrication services for food preparation and serving equipment and accessories and (xi) food merchandizing and display coolers and freezers; parts and accessories for the foregoing, and repair, maintenance and refurbishing services for the foregoing.
SpinCo Google+ Account has the meaning set forth in Section 5.7 of this IP Agreement.
SpinCo Group means, as of any time of determination (whether before or after the Distribution), the group consisting of (i) SpinCo, (ii) each entity that is a subsidiary of SpinCo as of the time of determination, (iii) each entity that is not a subsidiary of SpinCo as of a time of determination before the Distribution but that later becomes a subsidiary of SpinCo by the time of the Distribution, and (iv) each entity that becomes an affiliate (other than a subsidiary) of SpinCo after the Distribution.
SpinCo Instagram Account has the meaning set forth in Section 5.5 of this IP Agreement.
SpinCo LinkedIn Accounts has the meaning set forth in Section 5.3 of this IP Agreement.
SpinCo Patents means patents and patent applications identified in Schedule C which represents the patent assets around the world of the parties for innovations generally in the SpinCo Fields of Use.
SpinCo Pinterest Account has the meaning set forth in Section 5.4 of this IP Agreement.
SpinCo Trademarks means trademarks and trademark registration applications identified in Schedule D which represent marks around the world of the parties generally used in the promotion and sale of products and services within SpinCo Fields of Use.
3
SpinCo Twitter Accounts has the meaning set forth in Section 5.1 of this IP Agreement.
SpinCo Use Term has the meaning set forth in Section 3.2(c) of this IP Agreement.
SpinCo Works means works of authorship (a) related to the SpinCo Fields of Use; and (b) subject to protection under the Copyright laws of at least one country around the world.
SpinCo YouTube Accounts has the meaning set forth in Section 5.6 of this IP Agreement.
ARTICLE 2
PATENTS
Section 2.1 Patents . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is believed to be the owner of record for the Manitowoc ParentCo Patents. Similarly, SpinCo Group is believed to be the owner of record for the SpinCo Patents. Therefore, the parties believe that ownership of the patent assets relevant to the Distribution have already been allocated to the respective parties. The parties also believe that there is no current practical business need for Manitowoc ParentCo to practice the inventions protected by SpinCo Patents and similarly no current practical business need for SpinCo to practice the inventions protected by the Manitowoc ParentCo Patents.
Section 2.2 Assignment by SpinCo Group . To the extent that SpinCo Group owns or has any right or interest in any Manitowoc ParentCo Patent, SpinCo Group hereby assigns and agrees to assign to Manitowoc ParentCo, any and all rights it possesses in the Manitowoc ParentCo Patent(s). SpinCo Group agrees to execute and cause its employees and agents to execute any and all documents reasonably necessary to implement the terms of this Section.
Section 2.3 Assignment by Manitowoc ParentCo . To the extent that Manitowoc ParentCo owns or has any right or interest in any SpinCo Patent, Manitowoc ParentCo hereby assigns and agrees to assign to SpinCo, any and all rights it possesses in the SpinCo Patent(s). Manitowoc ParentCo agrees to execute and cause its employees and agents to execute any and all documents reasonably necessary to implement the terms of this Section.
Section 2.4 Cross Licensing . If after the Effective Date of this IP Agreement, it is determined that one party does in fact have a reasonable business need to practice the patented invention of the other party, then the parties agree to cooperate with one another to put in place a commercially reasonable royalty-free, perpetual, worldwide license agreement permitting use of the patented innovation within the fields of use of the licensing party. Any license agreement entered into pursuant to this Section 2.4: (a) shall have the same effective date as the effective date of the Separation Agreement and (b) shall provide for a term of use that ends on or before the second anniversary of the effective date of the Separation Agreement.
ARTICLE 3
TRADEMARKS
Section 3.1 Trademarks . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is believed to be the owner of record for the Manitowoc ParentCo Trademarks. Similarly, SpinCo
4
Group is believed to be the owner of record for the SpinCo Trademarks. Therefore, the parties believe that ownership of the vast majority of the trademarks assets relevant to the Distribution have already been allocated to the respective parties. The parties also believe that, except as expressly provided herein, there is no current practical business need for Manitowoc ParentCo to use the SpinCo Trademarks and similarly no current practical business need for SpinCo to use the Manitowoc ParentCo Trademarks.
Section 3.2 Common Mark .
(a) Use of Common Mark . For the past several years, Manitowoc ParentCo has made use of the Common Mark in conjunction with products and services falling within the scope of the Manitowoc ParentCo Fields of Use and, similarly, SpinCo Group has made use of the Common Mark in conjunction with products and services falling within the scope of the SpinCo Fields of Use. Following the execution of this IP Agreement, it is anticipated that for a limited period of time both Manitowoc ParentCo and SpinCo will continue to make use of the Common Mark in their respective Fields of Use in accordance with this IP Agreement. Due to the appreciable differences between the goods and services of the respective Fields of Use, the different consumer base for the respective Fields of Use, the different trade channels for promotion and use of the Common Mark in the respective Fields of Use, the sophistication of the respective consumers in each of the Fields of Use, along with other factors, the Parties believe that they can each continue to use the Common Mark in their respective Fields of Use, subject to the terms of this IP Agreement, without the potential for any consumer confusion.
(b) Ownership . Notwithstanding anything else in this IP Agreement, the Parties hereby acknowledge and agree that Manitowoc ParentCo (or one of its subsidiaries) is the sole owner of the Common Mark, and to the extent that any member of SpinCo Group may have acquired any ownership or other rights to the Common Mark anywhere in the world and at any point in the past, that SpinCo Group member hereby assigns and agrees to assign to Manitowoc ParentCo (or one of its subsidiaries) any and all rights it may have in the Common Mark and all goodwill and rights related thereto immediately prior to the date the SpinCo Group member is contributed to SpinCo. In exchange, Manitowoc ParentCo grants to SpinCo and the members of SpinCo Group a royalty-free license to use the Common Mark within the SpinCo Fields of Use and for the duration of the SpinCo Use Term (as set forth in Section 3.2(c) below).
(c) License . Manitowoc ParentCo hereby grants to SpinCo a royalty-free license to use the Common Mark in conjunction with promotion, marketing, sale and distribution of products within the SpinCo Fields of Use. The term of this license shall extend to the anniversary of the Effective Date in the year 2018 (the SpinCo Use Term ). In using the Common Mark, SpinCo shall maintain the high level of quality of goods and services already associated with the Common Mark in the SpinCo Fields of Use.
5
(d) Future Use . The Parties agree that it is not in their best interests for both Parties to continue to use the Common Mark indefinitely. Therefore, subject to Section 3.2(f) below, SpinCo agrees that it will cease any and all use of the Common Mark, regardless of the goods or services of use, no later than the end of the SpinCo Use Term. After this date, SpinCo will cease all use of the Common Mark and will take no further action to renew, prosecute or otherwise maintain any trademark application or registration for the Common Mark or any mark incorporating the distinctive graphical elements thereof. Notwithstanding this section:
(i) SpinCo shall not be liable for, and shall not be required to take any action with respect to, any products or packaging manufactured by SpinCo and bearing the Common Mark that were sold or distributed by SpinCo prior to the end of the SpinCo Use Term even though such products may remain in the stream of commerce following the end of the SpinCo Use Term; and
(ii) SpinCo shall not be required to cease use of the Common Mark at the end of the SpinCo Use Term, and shall be entitled to continue use of the Common Mark following the end of the SpinCo Use Term pursuant to a continuing royalty-free license, if, prior to the end of the SpinCo Use Term, Manitowoc ParentCo is required to cease use of the Common Mark pursuant to Section 3.2(f) below.
(e) Cooperation . To the extent necessary, the Parties agree to cooperate with one another to implement the terms of this Section 3.2, including but not limited to executing commercially reasonable letters of consent or coexistence agreements.
(f) Revocation of Rights of Use . In the event that a Party (the Acquired Party ) is acquired by, merges with, or otherwise comes under the direct control of an entity which the other Party (the Objecting Party ) determines, using its reasonable discretion, to be a competitor of the Objecting Party, then the Acquired Party agrees that it shall cease any and all use of the Common Mark. Within thirty (30) days after the public announcement of the consummation of an acquisition, merger or the like, the Acquired Party shall provide written notice to the Objecting Party of the public details of the transaction. Within thirty (30) days after receipt of the written notice from the Acquired Party, the Objecting Party shall provide written notice to Acquired Party if the Objecting Party objects to the continued use of the Common Mark under this Section 3.2(f). If the Objecting Party does not timely provide such written notice, the Objecting Party will be conclusively deemed not to object. No more than nine (9) months after receipt of the written notice from the Objecting Party, the Acquired Party will cease any and all use of the Common Mark and will take no further action to prosecute, maintain or renew any registration around the world for the Common Mark.
Section 3.3 Exclusivity .
(a) SpinCo Exclusive Fields of Use . For the SpinCo Use Term (subject to Section 3.2), SpinCo has the exclusive right throughout the world to use the Common Mark in connection with the SpinCo Fields of Use. Manitowoc ParentCo shall not use for itself, or grant a right to or otherwise license any third party to use, the Common Mark and/or a confusingly similar likeness or variation thereof in connection with the SpinCo Fields of Use, except as otherwise permitted in this IP Agreement or otherwise agreed upon in writing by the parties.
(b) Manitowoc ParentCo Exclusive Fields of Use . Manitowoc ParentCo has the exclusive right throughout the world to use the Common Mark in connection with the Manitowoc ParentCo Fields of Use. SpinCo shall not use for itself, or grant a right to or otherwise license any third party to use, the Common Mark and/or a confusingly similar likeness or variation thereof in connection with the Manitowoc ParentCo Fields of Use, except as otherwise permitted in this IP Agreement or otherwise agreed upon in writing by the parties.
6
Section 3.4 Conflicting Registrations . SpinCo agrees not to adopt, seek or file for registration of any new trademarks incorporating distinctive graphical elements of the Common Mark.
Section 3.5 Enforcement of Rights . Each Party (the Disclosing Party ) agrees to use reasonable efforts to inform the other (the Other Party ) if the Disclosing Party learns of any proposed or actual adoption, use or registration of any trademark, trade name or corporate name which could infringe or impair the Other Partys rights in the Common Mark. The Disclosing Party agrees to provide, at the Other Partys expense, any and all information and assistance reasonably requested concerning such infringements. As the owner of the Common Mark, Manitowoc ParentCo shall have the first right and opportunity to bring action against an alleged infringer of the Common Mark and SpinCo agrees to fully cooperate in this regard. Should Manitowoc ParentCo elect not to take action against an alleged infringer, SpinCo may conduct, at its own expense, and with the right to all recoveries, such litigation as SpinCo deems necessary to challenge the alleged infringement, provided that Manitowoc ParentCo is first given thirty (30) days written notice of SpinCos intention to initiate litigation. In the event that SpinCo initiates litigation after providing such notice, Manitowoc ParentCo agrees to be named as a party to the action, but only to the extent legally required in order to provide a basis for the action. SpinCo may not settle such action or enter into any other agreement affecting the Common Mark and/or Manitowoc ParentCos rights in the Common Mark without Manitowoc ParentCos written approval.
Section 3.6 Cooperation . The parties, being familiar with the marketplace in which their respective marks are used and will be used, believe that the use of their respective marks and the Common Mark have not and are not likely to cause any confusion, mistake or deception. The parties agree to cooperate and consult with one another in good faith should future conditions or developments create confusion or a likelihood of confusion arising from use of the Common Mark. The parties further agree to cooperate with each other and take reasonable steps to (a) avoid confusion that may arise in the future and (b) put in place limited alternative arrangements to facilitate the registration and use of their respective marks in relation to their respective goods and services solely in jurisdictions where trademark laws may frustrate the parties intentions, including commercially reasonable royalty-free, perpetual licenses in those jurisdictions where trademark laws do not permit multiple parties to own the same mark for use on potentially similar or related goods and services.
Section 3.7 Consent . Each party consents to the other partys use of the term MANITOWOC in trademarks, service marks, domain names, trade names or social media identifiers used by such other party in such other partys Fields of Use. Each consenting party further agrees not to challenge, oppose or object to the use and registration within the other partys Fields of Use of any trademark, service mark, domain name, trade name or social media identifier based upon the use of graphical elements of the Common Mark and/or the term MANITOWOC.
ARTICLE 4
DOMAIN NAMES/UNIFORM RESOURCE LOCATORS
Section 4.1 Parties Domains . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is the owner of record for the Manitowoc ParentCo Domain. Similarly, SpinCo Group is the owner of record for the SpinCo Domain. Therefore, ownership of the domain name assets relevant to the Distribution has already been allocated to the respective parties.
7
Section 4.2 Ownership of Shared Domain . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is the owner of record for the Shared Domain and Manitowoc ParentCo shall remain the sole owner of the Shared Domain. To the extent that SpinCo Group has any ownership or control over the Shared Domain, it hereby assigns and agrees to assign to Manitowoc ParentCo all right, title and interest in the Shared Domain. SpinCo Group agrees to cooperate with Manitowoc ParentCo to implement the terms of this Section.
Section 4.3 Use of Shared Domain. As the owner of the Shared Domain, Manitowoc ParentCo shall have the right to control the content and formatting of the content appearing on the Shared Domain. Notwithstanding the foregoing, for a term of two (2) years from the Effective Date, Manitowoc ParentCo agrees to maintain on the Shared Domain a direct link to the SpinCo Domain or another domain supplied by SpinCo. In the event that the content of the materials accessible on the linked SpinCo domain name is, at the sole but reasonable discretion of Manitowoc ParentCo, commercially inappropriate or unprofessional or may reflect adversely on Manitowoc ParentCo or the consumer goodwill inherent in any of the Manitowoc ParentCo Trademarks, Manitowoc ParentCos obligation to maintain such link shall terminate.
ARTICLE 5
SOCIAL MEDIA
Section 5.1 Twitter . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is the owner of record for and currently has control over the Twitter accounts having the Twitter handles @ManitowocCo and @MTWCoCareers (collectively, the Manitowoc ParentCo Twitter Accounts ). SpinCo Group is the owner of record for and currently has control over the Twitter accounts having the Twitter handles @MTWFS, @MTWFSCulinary, @MTWFSsocial, @MTWFSTrends, @MTWFSMarketing, @Convotherm, @MerrychefMTWFS, @FrymasterMTWFS, @IceMTWFS, @DelfieldMTWFS, @Cleveland MTWFS, @KolpakMTWFS, @LincolnMTWFS, @GarlandMTWFS and @MercoMTWFS (collectively, the SpinCo Twitter Accounts ). The foregoing Twitter account information represents the only Twitter accounts and handles owned or used by the parties. Therefore, ownership of the Twitter account assets relevant to the Distribution has already been allocated to the respective parties. The parties agree that, following the Distribution, there is (a) no current practical business need for Manitowoc ParentCo to use or have access to the SpinCo Twitter Accounts and, similarly, (b) no current practical business need for SpinCo to use or have access to the Manitowoc ParentCo Twitter Accounts.
Section 5.2 Facebook . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is the owner of record for and currently has control over the Facebook account having the name Manitowoc Company (the Manitowoc ParentCo Facebook Account ). SpinCo Group is the owner of record for and currently has control over the Facebook accounts having the names Manitowoc Foodservice, Convotherm, Merrychef, Frymaster, and Manitowoc Ice (collectively, the SpinCo Facebook Accounts ). The foregoing Facebook account information represents the only Facebook accounts and account names owned or used by the parties. Therefore, ownership of the Facebook account assets relevant to the Distribution has already been allocated to the respective parties. The parties agree that, following the Distribution, there is (a) no current practical business need for Manitowoc ParentCo to use or have access to the SpinCo Facebook Accounts and, similarly, (b) no current practical business need for SpinCo to use or have access to the Manitowoc ParentCo Facebook Account.
8
Section 5.3 LinkedIn . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is the owner of record for and currently has control over the LinkedIn account having the name The Manitowoc Company (the Manitowoc ParentCo LinkedIn Account ). SpinCo Group is believed to be the owner of record for and currently has control over the LinkedIn accounts having the names Manitowoc Foodservice, Convotherm Elektrogeräte and Merrychef Ltd./Manitowoc (collectively, the SpinCo LinkedIn Accounts ). The foregoing LinkedIn account information represents the only LinkedIn accounts and account names owned or used by the parties. Therefore, ownership of the LinkedIn account assets relevant to the Distribution has already been allocated to the respective parties. The parties agree that, following the Distribution, there is (a) no current practical business need for Manitowoc ParentCo to use or have access to the SpinCo LinkedIn Accounts and, similarly, (b) no current practical business need for SpinCo to use or have access to the Manitowoc ParentCo LinkedIn Account.
Section 5.4 Pinterest . Manitowoc ParentCo does not own or maintain any Pinterest accounts. SpinCo Group is the owner of record for and currently has control over the Pinterest account having the name Manitowoc FS (the SpinCo Pinterest Account ). The foregoing Pinterest account information represents the only Pinterest accounts and account names owned or used by the parties. Therefore, ownership of the Pinterest account assets relevant to the Distribution has already been allocated to the respective parties. The parties agree that, following the Distribution, there is no current practical business need for Manitowoc ParentCo to use or have access to the SpinCo Pinterest Account.
Section 5.5 Instagram . Manitowoc ParentCo does not own or maintain any Instagram accounts. SpinCo Group is the owner of record for and currently has control over the Instagram account having the name MTWFS (the SpinCo Instagram Account ). The foregoing Instagram account information represents the only Instagram accounts and account names owned or used by the parties. Therefore, ownership of the Instagram account assets relevant to the Distribution has already been allocated to the respective parties. The parties agree that, following the Distribution, there is no current practical business need for Manitowoc ParentCo to use or have access to the SpinCo Instagram Account.
Section 5.6 YouTube . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is the owner of record for and currently has control over the YouTube accounts having the user names Manitowoc2400 and manitowoccranes (collectively, the Manitowoc ParentCo YouTube Accounts ). SpinCo Group is the owner of record for and currently has control over the YouTube accounts having the user names manitowocfs and MerrychefTV and the YouTube channel having the name Convotherm (collectively, the SpinCo YouTube Accounts ). The foregoing YouTube account information represents the only YouTube accounts and account names owned or used by the parties. Therefore, ownership of the YouTube account assets relevant to the Distribution has already been allocated to the respective parties. The parties agree that, following the Distribution, there is (a) no current practical business need for Manitowoc ParentCo to use or have access to the SpinCo YouTube Accounts and, similarly, (b) no current practical business need for SpinCo to use or have access to the Manitowoc ParentCo YouTube Accounts.
Section 5.7 Google+ . Manitowoc ParentCo (or a subsidiary of Manitowoc ParentCo) is the owner of record for and currently has control over the Google+ account having the name Manitowoc Cranes (the Manitowoc ParentCo Google+ Account ). SpinCo Group is the owner of record for and currently has control over the Google+ account having the name ManitowocFS (the SpinCo Google+ Account ). The foregoing Google+ account information represents the only
9
Google+ accounts and account names owned or used by the parties. Therefore, ownership of the Google+ account assets relevant to the Distribution have already been allocated to the respective parties. The parties agree that, following the Distribution, there is (a) no current practical business need for Manitowoc ParentCo to use or have access to the SpinCo Google+ Account and, similarly, (b) no current practical business need for SpinCo to use or have access to the Manitowoc ParentCo Google+ Account.
ARTICLE 6
COPYRIGHTS
Section 6.1 Copyrights . Because neither Manitowoc ParentCo nor SpinCo own any registered copyrights, there is no assignment or distribution of registered copyright rights necessary as part of the Distribution. The parties also agree that there is no current practical business need for Manitowoc ParentCo to copy or use any of the SpinCo Works and similarly no current practical business need for SpinCo Group to copy or use any of the Manitowoc ParentCo Works.
Section 6.2 Assignment by SpinCo Group . To the extent that SpinCo Group owns or has any right or interest in any Manitowoc ParentCo Work, SpinCo Group hereby assigns to Manitowoc ParentCo any and all rights it possesses in the Manitowoc ParentCo Work(s). SpinCo Group agrees to execute and cause its employees and agents to execute any and all documents reasonably necessary to implement the terms of this Section.
Section 6.3 Assignment by Manitowoc ParentCo . To the extent that Manitowoc ParentCo owns or has any right or interest in any SpinCo Work, Manitowoc ParentCo hereby assigns to SpinCo, any and all rights it possesses in the SpinCo Work(s). Manitowoc ParentCo agrees to execute and cause its employees and agents to execute any and all documents reasonably necessary to implement the terms of this Section.
Section 6.4 Cross Licensing . If after the Effective Date of this IP Agreement, either party reasonably determines it has a business need to copy, use or distribute the Works of the other party, then the parties will cooperate with one another to put in place a commercially reasonable royalty-free, perpetual license agreement permitting such use of the Work within the fields of use of the applicable party.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Governing Law . The internal laws of the State of Wisconsin (without reference to its principles of conflicts of law) govern the construction, interpretation and other matters arising out of or in connection with this IP Agreement and each of the exhibits and schedules hereto (whether arising in contract, tort, equity or otherwise).
Section 7.2 Jurisdiction . If any Dispute (as defined in the Separation Agreement) arises out of or in connection with this IP Agreement, except as expressly contemplated by another provision of this IP Agreement, the parties irrevocably (a) consent and submit to the co-exclusive jurisdiction of federal and state courts located in Wisconsin and in Florida, (b) waive any objection to that choice of forum in Wisconsin or in Florida based on venue or to the effect that the forum is not convenient, and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.
10
Section 7.3 Dispute Resolution . Each party stipulates that, if any Dispute (as defined in the Separation Agreement) arises out of or in connection with this IP Agreement, such dispute or disagreement shall be resolved in accordance with Section 7.3 of the Separation Agreement, the terms of which are incorporated by reference herein.
Section 7.4 Notices . Each party giving any notice required or permitted under this IP Agreement will give the notice in writing and use one of the following methods of delivery to the party to be notified, at the address set forth below or another address of which the sending party has been notified in accordance with this Section 7.4 as follows: (i) personal delivery; (ii) facsimile or telecopy transmission with a reasonable method of confirming transmission; (iii) commercial overnight courier with a reasonable method of confirming delivery; or (iv) pre-paid, United States of America certified or registered mail, return receipt requested. Notice to a party is effective for purposes of this IP Agreement only if given as provided in this Section 7.4 and will be deemed given on the date that the intended addressee actually receives the notice.
(a) If to Manitowoc ParentCo:
The Manitowoc Company, Inc.
2400 South 44th Street
Manitowoc, Wisconsin 54220
United States of America
Attention: General Counsel
Facsimile: (920) 652-9777
(b) If to SpinCo:
Manitowoc Foodservice, Inc.
2227 Welbilt Boulevard
New Port Richey, Florida 34655
United States of America
Attention: General Counsel
Facsimile: (727) 569-1271
Section 7.5 Binding Effect and Assignment . This IP Agreement shall bind and benefit the parties and their respective successors and assigns. No party may assign any of its rights or delegate any of its obligations under this IP Agreement without the written consent of the other party which consent may be withheld in such other partys sole and absolute discretion, and any assignment or attempted assignment in violation of the foregoing will be null and void.
Section 7.6 Severability . If any provision of this IP Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this IP Agreement will remain in full force, if the essential terms and conditions of this IP Agreement for each party remain valid, binding and enforceable.
Section 7.7 Entire Agreement . This IP Agreement, together with the Separation Agreement and each of the exhibits and schedules appended hereto and thereto, constitutes the final agreement between the parties, and is the complete and exclusive statement of the parties agreement on the matters contained herein and therein. All prior and contemporaneous negotiations and agreements among the parties with respect to the matters contained herein and therein are superseded
11
by this IP Agreement and the Separation Agreement, as applicable. In the event of any conflict between (a) any provision in this Separation Agreement, on the one hand, and (b) any subject matter specific provision in this IP Agreement, on the other hand, the subject matter specific provisions in the IP Agreement will control over the provisions in the Separation Agreement, as applicable.
Section 7.8 Counterparts . The parties may execute this IP Agreement in multiple counterparts, each of which constitutes an original as against the party that signed it, and all of which together constitute one agreement. The signatures of the parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission that includes a copy of the sending partys signature is as effective as signing and delivering the counterpart in person.
Section 7.9 Amendment . The parties may amend this IP Agreement only by a written agreement signed by each party to be bound by the amendment and that identifies itself as an amendment to this IP Agreement.
Section 7.10 Waiver . The parties may waive a provision of this IP Agreement only by a writing signed by the party intended to be bound by the waiver. A party is not prevented from enforcing any right, remedy or condition in the partys favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a partys rights and remedies in this IP Agreement is not intended to be exclusive, and a partys rights and remedies are intended to be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.
Section 7.11 Authority . Each party represents to the other party that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this IP Agreement, (b) the execution, delivery and performance of this IP Agreement have been duly authorized by all necessary corporate or other action, (c) this IP Agreement has duly and validly executed and delivered, and (d) this IP Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors rights generally and general equity principles.
Section 7.12 Construction of Agreement .
(a) Where this IP Agreement states that a party will or shall perform in some manner or otherwise act or omit to act, it means that the party is legally obligated to do so in accordance with this IP Agreement, as applicable.
(b) The captions, titles and headings included in this IP Agreement are for convenience only, and do not affect this IP Agreements construction or interpretation. When a reference is made in this IP Agreement to an Article or a Section, exhibit or schedule, such reference will be to an Article or Section of, or an exhibit or schedule to, this IP Agreement unless otherwise indicated.
12
(c) The words including, includes, or include are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as without limitation or but not limited to are used in each instance.
(d) Any reference in this IP Agreement to the singular includes the plural where appropriate. Any reference in this IP Agreement to the masculine, feminine or neuter gender includes the other genders where appropriate.
(e) This IP Agreement is not to be construed for or against any party based on which party drafted any of the provisions of this IP Agreement. The language used in this IP Agreement is the language chosen by the parties to express their mutual intent, and no provision of this IP Agreement will be interpreted for or against any party because that party or its attorney drafted the provision.
(f) This IP Agreement is for the sole benefit of the parties hereto and, does not, and is not intended to, confer any rights or remedies in favor of any person other than the parties signing this IP Agreement.
Section 7.13 Termination . This IP Agreement may be terminated at any time prior to the Distribution by and in the sole discretion of the Manitowoc ParentCo Board of Directors without the approval of any person or entity, including SpinCo, in which case no party will have any liability of any kind to any other party by reason of this IP Agreement. After the Distribution, this IP Agreement may not be terminated except by an agreement in writing signed by each of the parties to this IP Agreement.
[Signature page follows]
13
IN WITNESS WHEREOF, each party has caused this Intellectual Property Matters Agreement to be executed on its behalf by a duly authorized officer effective as of the date first set forth above.
MANITOWOC PARENTCO: | ||
THE MANITOWOC COMPANY, INC. | ||
By: |
/s/ Carl J. Laurino |
|
Name: | Carl J. Laurino | |
Title: | Senior Vice President and Chief Financial Officer | |
SPINCO: | ||
MANITOWOC FOODSERVICE, INC. | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Senior Vice President, General Counsel and Secretary |
[Signature page to IP Matters Agreement]
Exhibit 10.5
Execution Version
JOINDER AGREEMENT TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
March 3, 2016
WHEREAS, reference is hereby made to (i) the Exchange and Registration Rights Agreement, dated as of February 18, 2016 (the Registration Rights Agreement ), by and between MTW Foodservice Escrow Corp. ( Escrow Issuer ) and Goldman, Sachs & Co., on behalf of itself and as representative of the other Initial Purchasers and (ii) the Purchase Agreement, dated as of February 5, 2016 (the Purchase Agreement ), by and among the Escrow Issuer, Manitowoc Foodservice, Inc. (the Company ), the guarantors party thereto and Goldman, Sachs & Co., on behalf of itself and as representative of the other Initial Purchasers;
WHEREAS, the Purchase Agreement contemplates that immediately prior to the Escrow Release on the Escrow Release Date, (i) the Escrow Issuer will merge with and into the Company, with the Company continuing as the surviving corporation in the merger and assuming all obligations of the Escrow Issuer under the Purchase Agreement and the Registration Rights Agreement, (ii) the Company will agree to join the Registration Rights Agreement as the Issuer pursuant to this agreement (this Joinder Agreement ) and (iii) each subsidiary of the Company that is a signatory hereto (each, a Guarantor ) will agree to join the Registration Rights Agreement as a Guarantor pursuant to this Joinder Agreement; and
WHEREAS, this Joinder Agreement is being executed on the Escrow Release Date by the Company and each of the Guarantors (each a Joinder Party and collectively, the Joinder Parties ) in order for such party to become party to the Registration Rights Agreement.
Unless otherwise defined herein, terms defined in the Registration Rights Agreement and used herein shall have the meanings given them in the Registration Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing, each Joinder Party agrees for the benefit of the Initial Purchasers as follows:
1. Joinder . Each Joinder Party hereby agrees to (i) join and become a party to the Registration Rights Agreement as indicated by its signature below, (ii) be bound by all covenants, agreements, representations, warranties and acknowledgments attributable to such Joinder Party under the Registration Rights Agreement, as if such Joinder Party was a party thereto as of the date of the Registration Rights Agreement and (iii) perform all obligations and duties as are required of it (including those obligations and duties of an indemnifying party) pursuant to the Registration Rights Agreement.
2. Representations and Warranties of each Joinder Party . Each Joinder Party hereby acknowledges that it has received a copy of the Registration Rights Agreement. Each Joinder Party, jointly and severally, hereby represents, warrants and covenants to each Initial Purchaser that it has all the requisite corporate, limited partnership or limited liability company power and authority to execute, deliver and perform its obligations under this Joinder Agreement and the consummation of the transaction contemplated hereby. Each Joinder Party hereby represents and warrants that the representations and warranties set forth in the Registration Rights Agreement applicable to such party are true and correct on and as of the date hereof. This Joinder Agreement has been duly authorized, executed and delivered by each Joinder Party.
3. Governing Law . This Joinder Agreement, and any claim, controversy or dispute arising under or related to this Joinder Agreement, shall be governed by and construed in accordance with the laws of the State of New York.
4. Counterparts . This agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Joinder Agreement by facsimile, email or other electronic transmission ( e.g ., pdf) shall be effective as delivery of a manually executed counterpart of this Joinder Agreement.
5. Amendments. No amendment or waiver of any provision of this Joinder Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
6. Headings . The headings in this Joinder Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
[Signature Page Follows]
2
IN WITNESS WHEREOF, the undersigned have executed this Joinder Agreement as of the date first written above.
MANITOWOC FOODSERVICE, INC., as the Company | ||||
By: |
/s/ Maurice D. Jones |
|||
Name: | Maurice D. Jones | |||
Title: | Senior Vice President, General | |||
Counsel and Secretary | ||||
APPLIANCE SCIENTIFIC, INC. | ||||
BERISFORD PROPERTY DEVELOPMENT (USA) LTD. |
||||
CHARLES NEEDHAM INDUSTRIES INC. | ||||
CLEVELAND RANGE, LLC | ||||
THE DELFIELD COMPANY LLC | ||||
ENODIS CORPORATION | ||||
ENODIS GROUP HOLDINGS US, INC. | ||||
ENODIS HOLDINGS, INC. | ||||
ENODIS TECHNOLOGY CENTER, INC. | ||||
FRYMASTER L.L.C. | ||||
GARLAND COMMERCIAL INDUSTRIES LLC | ||||
KYSOR BUSINESS TRUST | ||||
KYSOR HOLDINGS, INC. | ||||
KYSOR INDUSTRIAL CORPORATION (MI) | ||||
KYSOR INDUSTRIAL CORPORATION (NV) | ||||
KYSOR NEVADA HOLDING CORP. | ||||
LANDIS HOLDINGS LLC | ||||
MANITOWOC EQUIPMENT WORKS, INC. | ||||
MANITOWOC FOODSERVICE COMPANIES, LLC |
||||
MANITOWOC FOODSERVICE HOLDING, INC. | ||||
MANITOWOC FP, INC. | ||||
MANITOWOC FSG INTERNATIONAL HOLDINGS, INC. |
||||
MANITOWOC FSG OPERATIONS, LLC | ||||
MANITOWOC FSG U.S. HOLDING, LLC | ||||
MCCANNS ENGINEERING & MANUFACTURING CO., LLC | ||||
MTW COUNTY LIMITED | ||||
WELBILT CORPORATION | ||||
WELBILT HOLDING COMPANY | ||||
WESTRAN CORPORATION | ||||
as Guarantors | ||||
By: |
/s/ Maurice D. Jones |
|||
Name: | Maurice D. Jones | |||
Title: | Vice President and Secretary |
[Joinder to Registration Rights Agreement]
Exhibit 10.6
EXECUTION VERSION
$1,200,000,000
CREDIT AGREEMENT
dated as of March 3, 2016
among
MANITOWOC FOODSERVICE, INC.
The Subsidiary Borrowers Party Hereto
The Lenders Party Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
GOLDMAN SACHS BANK USA,
as Syndication Agent
HSBC BANK USA, N.A.,
CITIBANK, N.A. and
COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH,
as Co-Documentation Agents
JPMORGAN CHASE BANK, N.A.,
GOLDMAN SACHS BANK USA,
HSBC SECURITIES (USA) INC. and
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page | ||||||
ARTICLE I Definitions |
1 | |||||
SECTION 1.01. |
Defined Terms | 1 | ||||
SECTION 1.02. |
Classification of Loans and Borrowings | 38 | ||||
SECTION 1.03. |
Terms Generally | 38 | ||||
SECTION 1.04. |
Accounting Terms; GAAP | 39 | ||||
SECTION 1.05. |
Foreign Currency Calculations | 39 | ||||
SECTION 1.06. |
Limited Condition Transactions | 40 | ||||
SECTION 1.07. |
Redenomination of Certain Foreign Currencies | 40 | ||||
ARTICLE II The Credits |
41 | |||||
SECTION 2.01. |
Commitments | 41 | ||||
SECTION 2.02. |
Loans and Borrowings | 41 | ||||
SECTION 2.03. |
Requests for Borrowings | 42 | ||||
SECTION 2.04. |
Swingline Loans | 43 | ||||
SECTION 2.05. |
Letters of Credit | 45 | ||||
SECTION 2.06. |
Funding of Borrowings | 49 | ||||
SECTION 2.07. |
Interest Elections | 50 | ||||
SECTION 2.08. |
Termination and Reduction of Commitments; Increase of Commitments | 51 | ||||
SECTION 2.09. |
Repayment of Loans; Evidence of Debt | 54 | ||||
SECTION 2.10. |
Amortization of Term B Loans | 55 | ||||
SECTION 2.11. |
Prepayment of Loans | 55 | ||||
SECTION 2.12. |
Fees | 57 | ||||
SECTION 2.13. |
Interest | 58 | ||||
SECTION 2.14. |
Alternate Rate of Interest | 59 | ||||
SECTION 2.15. |
Increased Costs | 60 | ||||
SECTION 2.16. |
Break Funding Payments | 61 | ||||
SECTION 2.17. |
Taxes | 62 | ||||
SECTION 2.18. |
Payments Generally; Pro Rata Treatment; Sharing of Set-offs | 71 | ||||
SECTION 2.19. |
Mitigation Obligations; Replacement of Lenders | 73 | ||||
SECTION 2.20. |
Subsidiary Borrowers | 74 | ||||
SECTION 2.21. |
Defaulting Lenders | 75 | ||||
ARTICLE III Representations and Warranties |
76 | |||||
SECTION 3.01. |
Organization; Powers | 76 | ||||
SECTION 3.02. |
Authorization; Enforceability | 77 | ||||
SECTION 3.03. |
Governmental Approvals; No Conflicts | 77 | ||||
SECTION 3.04. |
Financial Condition; No Material Adverse Change | 77 | ||||
SECTION 3.05. |
Properties | 78 | ||||
SECTION 3.06. |
Litigation and Environmental Matters | 78 |
i
SECTION 3.07. |
Compliance with Laws and Agreements | 78 | ||||
SECTION 3.08. |
Investment Company Status | 79 | ||||
SECTION 3.09. |
Taxes | 79 | ||||
SECTION 3.10. |
ERISA; Foreign Pension Plans | 79 | ||||
SECTION 3.11. |
Disclosure | 80 | ||||
SECTION 3.12. |
The Security Documents | 80 | ||||
SECTION 3.13. |
Subsidiaries | 81 | ||||
SECTION 3.14. |
Indebtedness | 81 | ||||
SECTION 3.15. |
Insurance | 81 | ||||
SECTION 3.16. |
Regulation U | 82 | ||||
SECTION 3.17. |
Solvency | 82 | ||||
SECTION 3.18. |
Anti-Corruption Laws and Sanctions | 82 | ||||
SECTION 3.19. |
Centre of Main Interest | 82 | ||||
SECTION 3.20. |
Registration | 83 | ||||
SECTION 3.21. |
Preferred Creditors | 83 | ||||
ARTICLE IV Conditions |
83 | |||||
SECTION 4.01. |
Funding Date | 83 | ||||
SECTION 4.02. |
Each Credit Event | 86 | ||||
ARTICLE V Affirmative Covenants | 87 | |||||
SECTION 5.01. |
Financial Statements and Other Information | 87 | ||||
SECTION 5.02. |
Notices of Material Events | 89 | ||||
SECTION 5.03. |
Existence; Conduct of Business | 90 | ||||
SECTION 5.04. |
Payment of Obligations | 90 | ||||
SECTION 5.05. |
Maintenance of Properties; Insurance | 90 | ||||
SECTION 5.06. |
Books and Records; Inspection Rights | 90 | ||||
SECTION 5.07. |
Compliance with Laws and Material Contractual Obligations | 90 | ||||
SECTION 5.08. |
Use of Proceeds and Letters of Credit | 91 | ||||
SECTION 5.09. |
Compliance with Environmental Laws | 91 | ||||
SECTION 5.10. |
Further Assurances; etc | 92 | ||||
SECTION 5.11. |
Ownership of Subsidiaries; etc | 93 | ||||
SECTION 5.12. |
Margin Regulations | 93 | ||||
SECTION 5.13. |
Additional Guarantors and Collateral | 94 | ||||
SECTION 5.14. |
Maintenance of Ratings | 95 | ||||
SECTION 5.15. |
Pensions | 95 | ||||
SECTION 5.16. |
Centre of Main Interests | 96 | ||||
SECTION 5.17. |
Designation of Restricted Subsidiaries | 96 | ||||
SECTION 5.18. |
Post-Closing Obligations | 96 | ||||
ARTICLE VI Negative Covenants | 97 | |||||
SECTION 6.01. |
Indebtedness | 97 | ||||
SECTION 6.02. |
Liens | 100 | ||||
SECTION 6.03. |
Merger, Purchase or Sale of Assets, Change in Business | 102 |
ii
SECTION 6.04. |
Restricted Payments | 105 | ||||
SECTION 6.05. |
Advances, Investments and Loans | 106 | ||||
SECTION 6.06. |
Transactions with Affiliates | 109 | ||||
SECTION 6.07. |
Use of Proceeds | 110 | ||||
SECTION 6.08. |
Limitations on Payments and Prepayments of Certain Indebtedness; Modifications of Certain Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements, etc | 110 | ||||
SECTION 6.09. |
Restrictive Agreements | 112 | ||||
SECTION 6.10. |
End of Fiscal Years; Fiscal Quarters | 112 | ||||
SECTION 6.11. |
Limitation on Issuance of Equity Interests | 112 | ||||
SECTION 6.12. |
Limitation on Creation of Subsidiaries | 113 | ||||
SECTION 6.13. |
[Reserved] | 113 | ||||
SECTION 6.14. |
Swap Agreements | 113 | ||||
SECTION 6.15. |
UK Borrower | 113 | ||||
SECTION 6.16. |
Financial Covenants | 114 | ||||
ARTICLE VII Events of Default |
114 | |||||
ARTICLE VIII The Administrative Agent |
117 | |||||
SECTION 8.01. |
The Administrative Agent | 117 | ||||
SECTION 8.02. |
Administrative Agent as UK Security Trustee | 120 | ||||
ARTICLE IX Miscellaneous |
121 | |||||
SECTION 9.01. |
Notices | 121 | ||||
SECTION 9.02. |
Waivers; Amendments | 123 | ||||
SECTION 9.03. |
Expenses; Indemnity; Damage Waiver | 125 | ||||
SECTION 9.04. |
Successors and Assigns | 127 | ||||
SECTION 9.05. |
Survival | 131 | ||||
SECTION 9.06. |
Counterparts; Integration; Effectiveness | 131 | ||||
SECTION 9.07. |
Severability | 132 | ||||
SECTION 9.08. |
Right of Set-off | 132 | ||||
SECTION 9.09. |
Governing Law; Jurisdiction; Consent to Service of Process | 132 | ||||
SECTION 9.10. |
WAIVER OF JURY TRIAL | 133 | ||||
SECTION 9.11. |
Headings | 133 | ||||
SECTION 9.12. |
Confidentiality | 133 | ||||
SECTION 9.13. |
Interest Rate Limitation | 135 | ||||
SECTION 9.14. |
USA PATRIOT Act; KYC | 135 | ||||
SECTION 9.15. |
Conversion of Currencies | 136 | ||||
SECTION 9.16. |
Administrative Agent, Syndication Agent, Documentation Agents and Arrangers | 136 | ||||
SECTION 9.17. |
Release of Liens and Guarantees | 137 | ||||
ARTICLE X Collection Action Mechanism | 137 | |||||
SECTION 10.01. |
Implementation of CAM | 137 |
iii
SCHEDULES :
Schedule 1.01 | Pricing Schedule | |
Schedule 1.02 | Existing Intercompany Notes | |
Schedule 2.01 | Commitments | |
Schedule 2.06 | Existing Letters of Credit | |
Schedule 3.01 | Good Standing | |
Schedule 3.05 | Real Property | |
Schedule 3.10 | ERISA | |
Schedule 3.13 | Subsidiaries | |
Schedule 3.15 | Insurance | |
Schedule 5.18 | Mortgaged Real Property | |
Schedule 6.01 | Existing Indebtedness | |
Schedule 6.02 | Existing Liens | |
Schedule 6.05 | Existing Investments | |
Schedule 6.09 | Existing Restrictions |
EXHIBITS :
Exhibit A | Form of Assignment and Assumption | |
Exhibit B | Form of Designation Letter | |
Exhibit C | Form of Intercompany Note | |
Exhibit D | Form of Termination Letter | |
Exhibit E | Forms of U.S. Tax Compliance Certificates | |
Exhibit F | Form of Perfection Certificate | |
Exhibit G | Form of Parent Guaranty | |
Exhibit H | Form of Subsidiary Guaranty | |
Exhibit I | Form of UK Security Agreement | |
Exhibit J | Form of US Pledge Agreement | |
Exhibit K | Form of US Security Agreement |
iv
CREDIT AGREEMENT dated as of March 3, 2016, among MANITOWOC FOODSERVICE, INC., the SUBSIDIARY BORROWERS party hereto, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The parties hereto agree as follows:
R E C I T A L S
WHEREAS, the Borrowers have requested that the Lenders provide (i) Revolving Commitments hereunder in an initial aggregate principal amount of $225,000,000 (the Revolving Facility ) and (ii) Term B Commitments hereunder in an initial aggregate principal amount of $975,000,000 (the Term B Facility ); and
WHEREAS, the Borrowers, the Lenders and the Administrative Agent have agreed to enter into this Agreement in order to set forth the terms and conditions under which the Lenders will, from time to time, provide the Commitments and make loans and extend other financial accommodations thereunder to or for the benefit of the Borrowers.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
ABR , when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans comprising such Borrowing are, bearing interest at a rate determined by reference to the Alternate Base Rate.
Acquired Entity or Business means either (a) the assets constituting a business, division or product line of any Person not already a Subsidiary of the Borrower or (b) 100% of the Equity Interests of any such Person, which Person shall, as a result of such stock acquisition, become a Wholly-Owned Subsidiary of the Borrower (or shall be merged with and into the Borrower or a Subsidiary Guarantor, with the Borrower or such Subsidiary Guarantor being the surviving Person).
Additional Security Documents means security documents executed by a Credit Party pursuant to Section 2.20(a) , Section 5.10 or Section 5.13 .
Adjusted Benchmark Rate means, with respect to any Eurocurrency Borrowing (or, as applicable, for purposes of determining the Alternate Base Rate with respect to any ABR Borrowing) for any Interest Period, an interest rate per annum equal to (a) the Benchmark Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided that, with respect to any Eurocurrency Borrowing denominated in a Foreign Currency, the Adjusted Benchmark Rate shall mean the Benchmark Rate.
Administrative Agent means, collectively, JPMorgan, in its capacity as administrative agent for the Lenders hereunder, and, solely with respect to Loans denominated in a Foreign Currency, J. P. Morgan Europe Limited, in its capacity as administrative agent with respect to such Loans.
Administrative Questionnaire means an Administrative Questionnaire in a form supplied by the Administrative Agent.
Advance means any Loan or any Letter of Credit.
Affiliate means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power (a) to vote 10% or more of the securities having ordinary voting power for the election of directors (or equivalent governing body) of such Person or (b) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; provided , however , that neither the Administrative Agent nor any Lender (nor any Affiliate thereof) shall be considered an Affiliate of the Borrower or any Subsidiary thereof.
Agreement means this Credit Agreement as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
Agreement Currency has the meaning provided in Section 9.15(b) .
All-in Yield means for any Indebtedness the yield of such Indebtedness on any date of determination, whether in the form of interest rate, margin, commitment or ticking fees, original issue discount, upfront fees, index floors or otherwise, in each case payable generally to lenders; provided that original issue discount and upfront fees shall be equated to interest rate assuming a four-year life to maturity, and shall not include arrangement fees, structuring fees and other fees not paid to the applicable lenders generally.
Alternate Base Rate means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the FRBNY Rate in effect on such day plus 1 ⁄ 2 of 1% and (c) the Adjusted Benchmark Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, the Adjusted Benchmark Rate for any day shall be based on the Benchmark Rate for loans in Dollars at approximately 11:00 a.m. London time on such day, subject to any applicable interest rate floors set forth therein. Any change in the Alternate Base Rate due to a change in the Prime Rate, the FRBNY Rate or the Adjusted Benchmark Rate shall be effective from and including the effective date of such change in the Prime Rate, the FRBNY Rate or the Adjusted Benchmark Rate, respectively.
2
Anti-Corruption Laws means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.
Applicable Borrower means, with respect to any Loan or other amount owing hereunder or any matter pertaining to such Loan or other amount, whichever of the Borrowers is the primary obligor on such Loan or other amount and, with respect to any Letter of Credit, whichever of the Borrowers is the account party with respect thereto.
Applicable Creditor has the meaning provided in Section 9.15(b) .
Applicable Lending Installation has the meaning provided in Section 2.02(e) .
Applicable Prepayment Percentage means (a) in the case of a prepayment required by Section 2.11(d) , a percentage equal to (i) 50% at any time when the Consolidated Total Leverage Ratio is greater than 4.50:1.00, (ii) 25% at any time when the Consolidated Total Leverage Ratio is less than or equal to 4.50:1.00 but greater than 4.00:1.00 and (iii) 0% at any other time and (b) in the case of any other Prepayment Event, 100%.
Applicable Rate means, for any day, (a) with respect to any ABR Loan or Eurocurrency Loan (other than the Term B Loan), or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth in Schedule 1.01 under the caption ABR Spread, Eurocurrency Spread or Commitment Fee Rate, as the case may be, based upon the Consolidated Total Leverage Ratio and (b) with respect to the Term B Loan, (i) 4.75% per annum with respect to Eurocurrency Loans and (ii) 3.75% per annum with respect to ABR Loans.
Applicable Revolver Percentage means, with respect to any Lender, the percentage of the total Revolving Commitments represented by such Lenders Revolving Commitment. If the Revolving Commitments have terminated or expired, the Applicable Revolver Percentages shall be determined based upon the Revolving Credit Exposure of the Lenders.
Approved Fund has the meaning provided in Section 9.04(b) .
Arrangers means JPMorgan, GSB, HSBC Securities (USA) Inc. and Citigroup Global Markets Inc., each in their capacity as joint lead arrangers of this credit facility.
Assignment and Assumption means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04 ), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
Available Amount means, as of any date of determination, an amount not less than zero, determined on a cumulative basis equal to, without duplication:
(a) $25,000,000, plus
3
(b) 50.0% of Consolidated Net Income for the period commencing on the Funding Date and ending on the applicable date of determination, plus
(c) the cumulative amount of net cash proceeds received by the Borrower (other than from a Restricted Subsidiary) from the sale of Equity Interests of the Borrower after the Funding Date and on or prior to the applicable date of determination (including upon exercise of warrants or options), minus
(d) Declined Proceeds, minus
(e) any amount of the Available Amount used to make Investments pursuant to Section 6.05(p) after the Funding Date and prior to the applicable date of determination, minus
(f) any amount of the Available Amount used to make Restricted Payments pursuant to Section 6.04(f) after the Funding Date and prior to the applicable date of determination, minus
(g) any amount of the Available Amount used to make payments in respect of Indebtedness pursuant to Section 6.08(b)(vi) after the Funding Date and prior to the date of determination.
Availability Period means with respect to Revolving Loans, the period from and including the Funding Date to but excluding the earlier of the Revolving Maturity Date and the date of termination of the Revolving Commitments.
Bankruptcy Event means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided , further , that such ownership interest does not result in or provide such Person 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 Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
Benchmark Rate means, with respect to (a) any Eurocurrency Borrowing for any applicable currency (other than Canadian Dollars) and for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for the relevant currency for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion) (in each case, the LIBO Screen Rate )) at
4
approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period (or on the date of utilization for Loans denominated in Pounds Sterling), (b) any Eurocurrency Borrowing denominated in Canadian Dollars (other than with respect to any Swingline Foreign Currency Loan denominated in Canadian Dollars) and for any applicable Interest Period, the CDOR Rate and (c) with respect to any Swingline Foreign Currency Loan denominated in Canadian Dollars, the CABROVE Rate; provided that if the LIBO Screen Rate or the CDOR Rate, as applicable, shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the LIBO Screen Rate or the CDOR Rate, as applicable, shall not be available at such time for such Interest Period (an Impacted Interest Period ) with respect to the applicable currency then the Benchmark Rate shall be the Interpolated Rate; provided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. Notwithstanding the foregoing, in no event shall the Benchmark Rate with respect to the Term B Loan at any time be less than 1.00% per annum.
Board means the Board of Governors of the Federal Reserve System of the United States.
Borrower means Manitowoc Foodservice, Inc., a Delaware corporation.
Borrowers means the Borrower and each Subsidiary Borrower.
Borrowing means (a) Revolving Loans of the same Type and the same currency, made, converted or continued on the same date to the same Applicable Borrower and, in the case of Eurocurrency Loans (or Revolving Foreign Currency Loans), as to which a single Interest Period is in effect, (b) Term B Loans of the same Type made, converted or continued on the same date to the same Applicable Borrower or (c) a Swingline Loan.
Borrowing Request means a request by the Borrower for a Borrowing in accordance with Section 2.03 .
Business Day means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurocurrency Loan, the term Business Day shall also exclude (a) if such Eurocurrency Loan is denominated in Dollars, any day on which banks are not open for dealings in Dollar deposits in the London interbank market and (b) if such Eurocurrency Loan is denominated in a Foreign Currency, any day on which commercial banks and the London foreign exchange market do not settle payments in the principal financial center where such Foreign Currency is cleared and settled as reasonably determined by the Administrative Agent and (c) if such Eurocurrency Loan is denominated in Euros, which is not a Target Day.
CABROVE Rate means The Bank of Canada Overnight Lending Rate which is available on or about 10:15 am Toronto time.
CAM means the mechanism for the allocation and exchange of interests in the Loans and collections thereunder established under Article X .
5
CAM Exchange means the exchange of the Lenders interests provided for in Section 10.1 .
CAM Exchange Date means the first date after the Funding Date on which there shall occur any event described in paragraph (h) or (i) of Article VII with respect to any of the Borrowers.
CAM Percentage means, as to each Lender, a fraction, of which (a) the numerator shall be the aggregate Designated Obligations owed to such Lender immediately prior to the CAM Exchange Date and (b) the denominator shall be the aggregate Designated Obligations owed to all the Lenders immediately prior to the CAM Exchange Date. For purposes of computing each Lenders CAM Percentage, (a) all Designated Obligations which shall be denominated in a Foreign Currency shall be translated into Dollars at the Exchange Rate in effect on the CAM Exchange Date and (b) each Lender shall be deemed to hold its Applicable Revolver Percentage of all outstanding Swingline Loans, Revolving Foreign Currency Loans and LC Disbursements.
Canadian Dollar means the lawful currency of Canada.
Capital Expenditures means, without duplication, any expenditure or commitment to expend money for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries prepared in accordance with GAAP, but in no event shall Capital Expenditures include operating leases.
Capital Lease Obligations of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the recorded capitalized amount thereof determined in accordance with GAAP.
Cash Equivalents means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moodys;
(c) investments in certificates of deposit, bankers acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;
6
(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and
(e) money market funds that comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940 and are rated AAA by S&P and Aaa by Moodys.
CDOR Rate means, with respect to any Eurocurrency Borrowing in Canadian Dollars and for any applicable Interest Period, the average rate for bankers acceptances as administered by the Investment Industry Regulatory Organization of Canada (or any other Person that takes over the administration of that rate) with a tenor equal to the relevant period displayed on CDOR01 page of the Reuters Monitor Service (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen or service that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion) at or about 10:15 a.m. (Toronto, Ontario time) on the Quotation Day for such Interest Period.
Change in Control means an event or a series of events by which:
(a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the Funding Date) of Interests representing more than 30% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower,
(b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated,
(c) the acquisition of direct or indirect Control of the Borrower by any Person or group, or
(d) a Change of Control (or similar term) as defined in the Senior Note Documents.
Change in Law means the occurrence, after the Escrow Date (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption of any law, rule, regulation or treaty after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b) , by any lending office of such Lender or by such Lenders or the Issuing Banks holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement, provided however , that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in
7
implementation thereof, and (ii) all requests, rules, guidelines, requirements and 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 a Change in Law regardless of the date enacted, adopted, issued or implemented.
Class means, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term B Loans or Swingline Loans.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Collateral means all property with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document, including, without limitation, all US Pledge Agreement Collateral, all US Security Agreement Collateral, all UK Security Agreement Collateral and all cash and Cash Equivalents delivered as collateral pursuant to Section 2.05(j) .
Collateral Agent means the Administrative Agent acting as collateral agent for the Secured Creditors pursuant to the Security Documents, including as collateral agent under the US Security Agreement and the US Pledge Agreement, as UK Security Trustee under the UK Security Agreement and in a similar capacity under other Security Documents.
Commitment means either a Revolving Commitment or a Term B Commitment.
Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
Consolidated Capital Expenditures means, for any Person, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all Capital Lease Obligations but excluding any capitalized interest with respect thereto) by such Person and its subsidiaries during that period that, in conformity with GAAP, are or are required to be included in the property, plant or equipment reflected in the consolidated balance sheet of such Person.
Consolidated Current Assets means, with respect to any Person as at any date of determination, the total assets of such Person and its consolidated subsidiaries which should properly be classified as current assets on a consolidated balance sheet of such Person and its consolidated subsidiaries in accordance with GAAP.
Consolidated Current Liabilities means, with respect to any Person as at any date of determination, the total liabilities of such Person and its consolidated subsidiaries which should properly be classified as current liabilities (other than the current portion of any Loans) on a consolidated balance sheet of such Person and its consolidated subsidiaries in accordance with GAAP.
8
Consolidated Domestic Net Assets means, at any time, the amount, without duplication, of the net book value of the consolidated assets of the Borrower and its Restricted Subsidiaries that are Domestic Subsidiaries.
Consolidated EBIT means, for any period, Consolidated Net Income from continuing operations for such period before deducting therefrom Consolidated Interest Expense for such period (to the extent deducted in arriving at Consolidated Net Income for such period) and provision for taxes based on income (including foreign withholding taxes imposed on interest or dividend payments and state single business, unitary or similar taxes imposed on net income) that were included in arriving at Consolidated Net Income for such period and without giving effect, without duplication, to (a) any extraordinary gains, extraordinary losses or other extraordinary non-cash charges or benefits, (b) any gains or charges arising out of prepayments of the Senior Notes, (c) any gains or losses from sales of assets other than from sales of inventory in the ordinary course of business, (d) fees, expenses and charges incurred or recorded in connection with the Transactions, (e) non-recurring cash charges permitted by this Agreement in connection with any restructuring, recapitalization, Investment, Permitted Acquisition or incurrence of Indebtedness (other than in connection with the Transactions); provided that the cash portion of such charges added back pursuant to this clause (e) shall not exceed $15,000,000 during any period of twelve consecutive months, (f) the implied interest component of any Permitted Securitization, (g) any non-cash charges attributable to the expensing of the grant of stock, stock options or other equity-based awards, (h) any non-cash charges attributable to asset impairments, write-offs and write-downs associated with any restructuring or the sale or discontinuance of assets, products, or business lines (other than those representing the accrual or reserve for a future cash expense), (i) any non-cash charges attributable to long-term incentive plan changes and employee benefit and pension plan changes, (j) restructuring and severance adjustments incurred or recorded during the period from January 1, 2016 through March 31, 2016 in an aggregate amount not to exceed $20,000,000, (k) any net Cost Savings incurred or recorded after the Funding Date (but not to exceed $15,000,000 in the aggregate for the period from the Funding Date through the first anniversary thereof) and projected by the Borrower to result from actions taken during such period that (i) are reasonably expected to be realized within twelve (12) months of the applicable action as set forth in reasonable detail on a certificate of a Senior Officer delivered to the Administrative Agent, (ii) are calculated on a basis consistent with GAAP and are, in each case, reasonably identifiable, factually supportable, and expected to have a continuing impact on the operations of the Borrower and its Restricted Subsidiaries and (iii) are either (x) permitted as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act or (y) represent, when aggregated with any amounts added back pursuant to clause (e) above, less than 10.0% of Consolidated EBITDA for such period (determined (1) prior to giving effect to any adjustment pursuant to clauses (e) or (k) above and (2) net of the amount of actual benefits realized from such actions during such period from such actions) and (l) non-recurring non-cash charges or expenses (less, even if it results in a negative number, non-cash gains or income) deducted (or included) in the determination of Consolidated Net Income for the relevant period and for which no cash outlay (or cash receipt) is foreseeable prior to the Term B Maturity Date or, if later, the final scheduled installment in respect of the Term B Loans; provided that, with respect to clause (l) , if notwithstanding such foreseeability any such amount is paid in cash in a subsequent period, such amount shall be deducted from Consolidated Net Income to arrive at Consolidated EBIT in such subsequent period; provided that Consolidated EBIT shall be calculated so as to exclude the effect of any gain or loss that represents after-tax gains or losses attributable to any sale, transfer or other disposition of assets by the Borrower or any Restricted Subsidiary, other than dispositions in the ordinary course of business.
9
Consolidated EBITDA means, for any period, Consolidated EBIT for such period, adjusted by adding thereto the amount of all amortization and depreciation that was deducted in arriving at Consolidated Net Income for such period; it being understood that in determining the Consolidated Senior Secured Leverage Ratio and the Consolidated Total Leverage Ratio only, Consolidated EBITDA for any period shall be calculated on a Pro Forma Basis to give effect to (i) any Acquired Entity or Business acquired during such period pursuant to a Permitted Acquisition and not subsequently sold or otherwise disposed of by the Borrower or any of its Restricted Subsidiaries during such period and (ii) any Restricted Subsidiary or business disposed of during such period by the Borrower or any of its Restricted Subsidiaries.
Notwithstanding anything herein to the contrary, Consolidated EBITDA shall be deemed to be $38,100,000 for the fiscal quarter ended on March 31, 2015, $68,600,000 for the fiscal quarter ended on June 30, 2015, $75,600,000 for the fiscal quarter ended on September 30, 2015 and $75,700,000 for the fiscal quarter ended on December 31, 2015.
Consolidated Indebtedness means, at any time, an amount equal to (a) the sum of (without duplication) (i) the aggregate stated balance sheet amount of all Indebtedness of the Borrower and its Restricted Subsidiaries as would be required to be reflected on the liability side of a balance sheet of such Person at such time in accordance with GAAP as determined on a consolidated basis, (ii) all Indebtedness of the Borrower and its Restricted Subsidiaries of the type described in clauses (b) and (g) of the definition of Indebtedness contained herein, (iii) the aggregate amount of all Receivables Indebtedness of the Borrower and its Restricted Subsidiaries or any SPC outstanding at such time and (iv) all Guarantees by the Borrower and its Restricted Subsidiaries in respect of Indebtedness of any third Person of the type referred to in preceding clauses (i) , (ii) and (iii) of this definition (including, without limitation, all Indebtedness of the Borrower and its Restricted Subsidiaries described in Section 6.01(m) ), minus (b) the Offsetting Cash Amount.
Consolidated Interest Coverage Ratio means, (i) as of the last day of the fiscal quarter ended March 31, 2016, the ratio of (A) Consolidated EBITDA for such fiscal quarter to (B) Consolidated Interest Expense for such fiscal quarter, (ii) as of the last day of the period of two consecutive fiscal quarters ended June 30, 2016 to (B) Consolidated Interest Expense for such period, (iii) as of the last day of the three fiscal quarter period ended September 30, 2016, the ratio of (A) Consolidated EBITDA for such period of three consecutive fiscal quarters to (B) Consolidated Interest Expense for such period and (iv) as of the last day of any period of four consecutive fiscal quarters ending on or after December 31, 2016, the ratio of (A) Consolidated EBITDA for the period of four consecutive fiscal quarters then ended, to (B) Consolidated Interest Expense for such period.
Consolidated Interest Expense means, for any period, the total consolidated cash interest expense of the Borrower and its Restricted Subsidiaries for such period (calculated without regard to any limitations on the payment thereof, but net of any interest income of the Borrower and its Restricted Subsidiaries for such period) plus, without duplication, that portion of Capital Lease Obligations of the Borrower and its Restricted Subsidiaries representing the
10
interest factor for such period; provided that Consolidated Interest Expense shall be deemed to include any discount and/or interest component in respect of any sale of accounts receivable or related rights by the Borrower or a Restricted Subsidiary regardless of whether such discount or interest would constitute interest under GAAP, in each case, on a consolidated basis.
Consolidated Net Income means, for any period, the net income (or loss) from continuing operations of the Borrower and its Restricted Subsidiaries for such period, determined on a consolidated basis (after any deduction for minority interests), provided that in determining Consolidated Net Income, (a) the net income of any other Person (other than the Borrower) which is not a Restricted Subsidiary of the Borrower or is accounted for by the Borrower by the equity method of accounting shall be included only to the extent of the payment of cash dividends or cash distributions by such other Person to the Borrower or a Restricted Subsidiary thereof during such period, (b) the net income of any Restricted Subsidiary of the Borrower shall be excluded to the extent that the declaration or payment of cash dividends or similar cash distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted by operation of its charter or any agreement, instrument or law applicable to such Restricted Subsidiary and (c) for any period, any interest income of the Borrower and its Restricted Subsidiaries for such period shall be excluded.
Consolidated Senior Indebtedness means, at any time, the amount of all Consolidated Indebtedness at such time, less the aggregate principal amount of all such Indebtedness outstanding at such time which is subordinated to the Obligations on customary market subordination terms reasonably satisfactory to the Administrative Agent.
Consolidated Senior Secured Indebtedness means, at any time, the amount of all Consolidated Senior Indebtedness at such time, less the aggregate principal amount of all such Indebtedness outstanding at such time which is not secured (with Indebtedness of the kind described in clause (j) of Indebtedness being deemed secured).
Consolidated Senior Secured Leverage Ratio means, at any time, the ratio of (a) Consolidated Senior Secured Indebtedness at such time to (b) Consolidated EBITDA for the four fiscal quarters of the Borrower then most recently ended.
Consolidated Total Leverage Ratio means, at any time, the ratio of (a) Consolidated Indebtedness at such time to (b) Consolidated EBITDA for the four fiscal quarters of the Borrower then most recently ended.
Consolidated Total Net Assets means, at any time, the amount, without duplication, of the net book value of the consolidated assets of the Borrower and its Restricted Subsidiaries .
Contribution Notice means a contribution notice issued by the Pensions Regulator under Section 38 or Section 47 of the Pensions Act 2004 of (U.K.).
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
11
Cost Savings means cost savings in connection with cost saving initiatives, including, without limitation, consolidation initiatives and related severance costs, inventory optimization programs, closure or consolidation of facilities, reduction in force initiatives, product line terminations or discontinuations, and other similar customer related initiatives.
Credit Documents means this Agreement (including schedules and exhibits hereto) and, after the execution and delivery thereof pursuant to the terms of this Agreement, each promissory note, the Subsidiary Guaranty, the Parent Guaranty, each Security Document, the Escrow Agreement, any Incremental Term B Loan Amendment, any letter of credit applications and any agreements between the Borrower and the Issuing Bank regarding the Issuing Banks Letter of Credit Fronting Sublimit or the respective rights and obligations between the Borrower and the Issuing Bank in connection with the issuance of Letters of Credit.
Credit Party means the Borrower, each Subsidiary Guarantor and each Subsidiary Borrower.
Customer Financing means third party financing provided to customers of the Borrower or any of its Restricted Subsidiaries to finance such customers purchase of equipment and related products and services from the Borrower or a Restricted Subsidiary thereof.
Declined Proceeds has the meaning provided in Section 2.11(e) .
Default means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
Defaulting Lender means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lenders good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Specified Party in writing, or has made a public statement to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lenders good faith determination that a condition precedent (specifically identified and including the particular default, if any), to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, the Issuing Bank or the Swingline Lender, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt by the Administrative Agent, the Issuing Bank or the Swingline Lender (as applicable) of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.
12
Designated Obligations means all Obligations of the Credit Parties in respect of accrued and unpaid (a) principal of and interest on the Loans, (b) unreimbursed L/C Disbursements and interest thereon and (c) fees pursuant to Section 2.12 , whether or not the same shall at the time of any determination be due and payable under the terms of the Credit Documents.
Designation Letter means a letter in substantially the form of Exhibit B hereto.
Disregarded Entity means an entity that, pursuant to Treas. Reg. § 301.7701-2(c)(2), is disregarded for U.S. federal income Tax purposes as an entity separate from its owner.
Documentation Agents means HSBC Bank USA, N.A., Citibank, N.A. and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., Rabobank Nederland, New York Branch, each in their capacity as co-documentation agents of this credit facility.
Dollars or $ means the lawful currency of the United States.
Dollar Equivalent means, on any date of determination (a) with respect to any amount in Dollars, such amount, and (b) with respect to any amount in any Foreign Currency, the equivalent in Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.05 using the Exchange Rate with respect to such Foreign Currency at the time in effect under the provisions of such Section.
Domestic Credit Party means a Credit Party which is not a Foreign Subsidiary.
Domestic Subsidiary means, as to any Person, each Subsidiary of such Person that is incorporated under the laws of the United States, any State thereof or the District of Columbia.
Electronic Signature means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.
Electronic System means any electronic system, including e-mail, e-fax, Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.
EMU Legislation means the legislative measures of the European Union for the introduction of, changeover to or operation of the Euro in one or more member states of the European Union.
Enodis Holdings means Enodis Holdings Limited, a corporation organized under the laws of the United Kingdom.
13
Environmental Laws means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
Environmental Liability means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Equity Interests means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
ERISA Event means (a) any reportable event, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived), (b) the existence with respect to any Plan of an accumulated funding deficiency (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
Escrow Agreement means the escrow agreement among the Borrowers, JPMorgan, in its capacities as a prospective Lender and Administrative Agent hereunder and the
14
escrow agent thereunder and the other prospective Lenders with Revolving Commitments listed on Schedule 2.01 as of the Funding Date, pursuant to which the executed signature pages to the Agreement shall be delivered into escrow.
Escrow Date means the effective date of the Escrow Agreement, which date is February 5, 2016.
Euro or means the single lawful currency of the European Union as constituted by the treaty establishing the European Community being the Treaty of Rome, as amended from time to time and as referred to in the EMU Legislation.
Eurocurrency means when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans comprising such Borrowing are, bearing interest at a rate determined by reference to the Adjusted Benchmark Rate.
European Commission means the institution responsible for regulating competition in Europe.
Event of Default has the meaning provided in Article VII .
Excess Availability means, as of any time the same is to be determined, the amount (if any) by which (a) the aggregate Revolving Commitment as then in effect, exceeds (b) the aggregate Revolving Credit Exposure then outstanding.
Excess Cash Flow means, without duplication, for the Borrower and its Restricted Subsidiaries for any period for which such amount is being determined:
(a) Consolidated Net Income of the Borrower and its Restricted Subsidiaries adjusted to exclude any amount of gain that both (i) is included in Consolidated Net Income and (ii) results in Net Proceeds actually applied to the prepayment of the Loans pursuant to Section 2.11(c) , plus
(b) the amount of depreciation, amortization of intangibles, deferred taxes and other non-cash expenses (other than any deductions which (or should) represent the accrual of a reserve for the payment of cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period) which, pursuant to GAAP, were deducted in determining such Consolidated Net Income of the Borrower and its Restricted Subsidiaries, plus
(c) the amount by which working capital for such period decreased (i.e., the decrease in Consolidated Current Assets (excluding cash, Cash Equivalents and Foreign Cash Equivalents) of the Borrower and its Restricted Subsidiaries minus Consolidated Current Liabilities (excluding (i) changes in current liabilities for borrowed money and (ii) cash, Cash Equivalents or Foreign Cash Equivalents which are Net Proceeds required to be applied to the prepayment of the Loans pursuant to Section 2.11(c) ) of the Borrower and its Restricted Subsidiaries from the beginning to the end of such period), minus
(d) the amount by which working capital for such period increased (i.e., the increase in Consolidated Current Assets (excluding cash, Cash Equivalents and Foreign Cash
15
Equivalents) of the Borrower and its Restricted Subsidiaries minus Consolidated Current Liabilities (excluding (i) changes in current liabilities for borrowed money and (ii) cash, Cash Equivalents or Foreign Cash Equivalents which are Net Proceeds required to be applied to the prepayment of the Loans pursuant to Section 2.11(c) ) of the Borrower and its Restricted Subsidiaries from the beginning to the end of such period), minus
(e) the amount of Consolidated Capital Expenditures of the Borrower and its Restricted Subsidiaries that are paid other than from the proceeds of Borrowings in such period, minus
(f) scheduled repayments of principal under the Term B Loans pursuant to Section 2.10 made during such period.
For purposes of the foregoing and without duplication, Consolidated Net Income will exclude (x) all losses on the sale of capital assets or losses which are out of the ordinary course of business and (y) all write-downs of capital assets.
Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars at the time of determination on such day on the Reuters Currency pages, if available, for such currency. In the event that such rate does not appear on any Reuters Currency pages, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrowers, or, in the absence of such an agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about such time as the Administrative Agent shall elect after determining that such rates shall be the basis for determining the Exchange Rate, on such date for the purchase of Dollars for delivery two Business Days later; provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
Exchange Rate Date means, if on such date any outstanding Loan (other than a Term B Loan) is (or any Loan that has been requested at such time would be) denominated in a currency other than Dollars, each of:
(a) the last Business Day of each calendar month,
(b) if an Event of Default has occurred and is continuing, any Business Day designated as an Exchange Rate Date by the Administrative Agent in its sole discretion, and
(c) each date (with such date to be reasonably determined by the Administrative Agent) that is on or about the date of (i) a Borrowing Request or an Interest Election Request with respect to any Revolving Borrowing or (ii) each request for the making, issuance, amendment, renewal or extension of any Letter of Credit or Swingline Loan.
16
Excluded Swap Obligation means, with respect to any Subsidiary Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Subsidiary Guarantor of, or the grant by such Subsidiary Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Subsidiary Guarantors failure for any reason to constitute an eligible contract participant as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Subsidiary Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.
Excluded Taxes means, with respect to any payment made by any Credit Party under any Credit Document, any of the following Taxes imposed on or with respect to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Non U.S. Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b) ), any U.S. Federal withholding Taxes resulting from any law in effect on the date such Non U.S. Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Non U.S. Lenders failure to comply with Section 2.17(f) , except to the extent that such Non U.S. Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding Taxes pursuant to Section 2.17(a) , and (c) any U.S. Federal withholding Taxes imposed under FATCA.
Existing Credit Agreement means the Third Amended and Restated Credit Agreement dated as of January 3, 2014, among Manitowoc, the subsidiary borrowers party thereto, the financial institutions party thereto as lenders and JPMorgan in its capacity as administrative agent thereunder, as the same has been amended or otherwise modified prior to the Funding Date.
Existing Letters of Credit means such letters of credit as may be outstanding under the Existing Credit Agreement on the Funding Date that are listed on Schedule 2.06 and are designated on such date as Existing Letters of Credit hereunder by the Borrower with the consent of the Administrative Agent and the issuer thereof.
External Subsidiary means a Wholly-Owned Subsidiary of the Borrower which is not a Credit Party.
FATCA means Sections 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), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
17
Federal Funds Effective Rate means, for any day, the rate calculated by the FRBNY based on such days federal funds transactions by depository institutions (as determined in such manner as the New York Fed shall set forth on its public website from time to time) and published on the next succeeding Business Day by the FRBNY as the federal funds effective rate.
FIN 46 Subsidiary means any variable interest entity which qualifies as a subsidiary of the Borrower only by virtue of being required by FASB Staff Position No. FIN 46(R)-6 Determining the Variability to be Considered in Applying FASB Interpretation No. 46(R) or any related subsequent accounting standard to be consolidated with the Borrower for financial accounting purposes.
Financial Officer means the chief financial officer, vice president of finance, principal accounting officer, treasurer, assistant treasurer, or controller of the Borrower.
Financial Support Direction means a financial support direction issued by the Pensions Regulator under Section 43 of the Pensions Act 2004 (U.K.).
Foreign Cash Equivalents means certificates of deposit or bankers acceptances of any bank organized under the laws of Canada or any country that is a member of the European Economic Community, whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moodys is at least P-1 or the equivalent thereof, in each case with maturities of not more than six months from the date of acquisition.
Foreign Credit Party means a Credit Party which is a Foreign Subsidiary.
Foreign Currency means (a) with respect to any Revolving Loan, Canadian Dollars, Euros, Sterling, and any other currency acceptable to the Administrative Agent and each of the Revolving Lenders that is freely available, freely transferable and freely convertible into Dollars and in which dealings in deposits are carried on in the London interbank market, (b) with respect to any Letter of Credit, Canadian Dollars, Euros, Sterling, and any other acceptable to the Administrative Agent that is freely available, freely transferable and freely convertible into Dollars, and agreed to by the Issuing Bank issuing such Letter of Credit and (c) with respect to any Swingline Foreign Currency Loan, Canadian Dollars, Euros, Sterling, and any other currency acceptable to the Administrative Agent that is freely available, freely transferable and freely convertible into Dollars, and agreed to by the Swingline Lender.
Foreign Pension Plan means any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination or severance of employment, and which plan is not subject to ERISA or the Code.
18
Foreign Subsidiary means, as to any Person, each subsidiary of such Person which is not a Domestic Subsidiary. For the avoidance of doubt, MTW County Limited shall for all purposes hereof be considered a Foreign Subsidiary.
FRBNY means the Federal Reserve Bank of New York.
FRBNY Rate means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day; provided that if both such rates are not so published for any day that is a Business Day, the term FRBNY Rate means the rate quoted for such day for a federal funds transaction at 11:00 a.m. on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further , that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
Funding Date means the date on which the conditions precedent specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02 ) on which the Term B Loans are advanced and Revolving Loans may be advanced and/or Letters of Credit may be issued hereunder, which shall not be later than July 1, 2016.
Funding Date Dividend means the one-time dividend on the Funding Date made to Manitowoc in connection with the Separation, the proceeds of which shall be used immediately upon receipt solely to repay, in part, Indebtedness owing under the Existing Credit Agreement and certain senior notes previously issued by Manitowoc.
GAAP means generally accepted accounting principles in the United States of America.
GSB means Goldman Sachs Bank USA.
Governmental Authority means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
Guarantee of or by any Person (the guarantor ) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the primary obligor ) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any property constituting direct or indirect security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor or to advance or supply funds for the foregoing so as to enable the primary obligor to pay such Indebtedness or other obligation, (d) as an account party in respect of any letter of credit or letter of guarantee issued to support such Indebtedness or obligation or (e) otherwise to assure or hold
19
harmless the owner of such Indebtedness or other obligation against loss in respect thereof; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business or any guarantee by the Borrowers or any Subsidiary Guarantor of the obligations of any Restricted Subsidiary in respect of intra-day overdrafts incurred by such Restricted Subsidiary in accordance with customary practices and in the ordinary course of business of such Restricted Subsidiary. The amount of any Guarantee made by any guarantor shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made and (b) the maximum amount for which such guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee, unless (in the case of a primary obligation that is not Indebtedness) such primary obligation and the maximum amount for which such guarantor may be liable are not stated or determinable, in which case the amount of such Guarantee shall be such guarantors maximum reasonably anticipated contingent liability in respect thereof as determined by the Borrower in good faith.
HMRC means Her Majestys Revenue and Customs.
Hazardous Materials means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
HMRC DT Treaty Passport scheme means the Board of H.M. Revenue and Customs Double Taxation Treaty Passport scheme.
Incremental Term B Loan means a Term B Loan made by a Lender to the Borrower pursuant to Sections 2.08(d) and (e) .
Incremental Term B Loan Amendment has the meaning assigned to it in Section 2.08(e) .
Ineligible Institution has the meaning assigned to it in Section 9.04(b) .
Impacted Interest Period has the meaning assigned to it in the definition of Benchmark Rate.
Indebtedness means, as to any Person, without duplication, (a) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services, (b) the maximum amount available to be drawn under all letters of credit, bankers acceptances and similar obligations issued for the account of such Person and all unpaid drawings in respect of such letters of credit, bankers acceptances and similar obligations, (c) all indebtedness of the types described in clause (a) , (b) , (d) , (e) , (f) , (g) , (h) or (i) of this definition secured by any Lien (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by any Lien) on any property owned by such Person, whether or not such indebtedness has been assumed by such Person ( provided that, if the Person has not assumed or otherwise become liable in respect of such indebtedness, such indebtedness shall not be deemed to exceed an amount equal to the fair market value of the
20
property to which such Lien relates as determined in good faith by such Person), (d) the aggregate amount of all Capital Lease Obligations of such Person, (e) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take-or-pay and similar obligations, (f) all Guarantees by such Person, (g) all obligations under any Swap Agreement or under any similar type of agreement, (h) all indebtedness of such Person evidenced by bonds, debentures, notes or similar interests, (i) all indebtedness of such Person under conditional sale or other title retention agreements relating to property acquired by such Person and (j) all Receivables Indebtedness. Notwithstanding the foregoing, Indebtedness shall not include intra-day overdrafts or trade payables, deferred compensation obligations, customer advances and other accrued expenses incurred by any Person in accordance with customary practices and in the ordinary course of business of such Person. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Persons ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such person is not liable therefor.
Indemnified Taxes means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Credit Document and (b) Other Taxes.
Information Memorandum means, collectively, the Confidential Information Memoranda relating to the Borrower and the Transactions to be prepared and distributed to prospective Lenders prior to the Escrow Date in connection with the syndication of the Loans.
Insolvency Regulation means the Council Regulation (EC) No.1346/2000 29 May 2000 on insolvency proceedings.
Intercompany Loan has the meaning provided in Section 6.05(i) .
Intercompany Note means each of the existing intercompany notes listed on Schedule 1.02 and each promissory note issued on or after the Funding Date, in the form of Exhibit C , evidencing Intercompany Loans.
Interest Election Request means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.07 .
Interest Payment Date means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December, (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months duration, each day prior to the last day of such Interest Period that occurs at intervals of three months duration after the first day of such Interest Period and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.
Interest Period means (a) with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months (or, with the consent of each
21
Lender, twelve months) thereafter, as the Borrower may elect; and (b) as to any Swingline Foreign Currency Loan, the period commencing on the date of such Loan and ending on the day that is designated in the notice delivered pursuant to Section 2.04 with respect to such Swingline Foreign Currency Loan, which shall not be later than thirty days thereafter; provided , that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurocurrency Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurocurrency Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
Interpolated Rate means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the applicable Screen Rate determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error)) to be equal to the rate that results from interpolating on a linear basis between: (a) the applicable Screen Rate (for the longest period for which the applicable Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period and (b) the applicable Screen Rate for the shortest period (for which such Screen Rate is available for the applicable currency) that exceeds the Impacted Interest Period, in each case, at such time.
Investment has the meaning assigned to such term in Section 6.05 .
IRS means the United States Internal Revenue Service.
Issuing Bank means each of JPMorgan and HSBC Bank USA, N.A., and such additional Lenders as may be designated as such by the Borrower with the consent of the Administrative Agent and which agree to act in such capacity, each as the issuer of Letters of Credit hereunder, and their respective successors in such capacity as provided in Section 2.05(i) . The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term Issuing Bank shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. With respect to any Letter of Credit, Issuing Bank shall mean the issuer thereof and each reference herein to the Issuing Bank shall be deemed to be a reference to the relevant Issuing Bank.
JPMorgan means JPMorgan Chase Bank, N.A., a national banking association, and solely with respect to Loans denominated in a Foreign Currency, J.P. Morgan Europe Limited, relative to such Loans, and their respective successors.
LC Disbursement means a payment made by the Issuing Bank pursuant to a Letter of Credit.
LC Exposure means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC
22
Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Revolver Percentage of the total LC Exposure at such time.
Lender Parent means, with respect to any Lender, any Person as to which such Lender is directly or indirectly, a subsidiary.
Lenders means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto (a) pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption, (b) in connection with an increase of Commitments pursuant to and accordance with Section 2.08 and the other terms hereof. Unless the context otherwise requires, the term Lenders includes the Swingline Lender.
Letter of Credit means any letter of credit (or any bank guarantee) issued pursuant to this Agreement, including the Existing Letters of Credit.
Letter of Credit Fronting Sublimit means, for each Issuing Bank, the amount set forth on Schedule 2.01 of this Agreement opposite its name thereon under the heading Letter of Credit Fronting Sublimit or if an Issuing Bank has entered into an Assignment and Assumption, the amount set forth for such Issuing Bank as its Letter of Credit Fronting Sublimit in the Register maintained by the Administrative Agent.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Limited Condition Transaction shall have the meaning assigned to such term in Section 1.06 .
Liquidity means the sum of (a) the aggregate stated balance sheet amount of cash, Cash Equivalents and Foreign Cash Equivalents of the Borrower and its Wholly-Owned Domestic Subsidiaries that are Restricted Subsidiaries (excluding any portion thereof which is subject to a Lien in favor of a Person other than the Collateral Agent or is otherwise restricted) plus (b) Excess Availability.
Loans means the loans made by the Lenders to the Borrowers pursuant to this Agreement.
Local Time means (a) with respect to a Loan or Borrowing denominated in Dollars, New York City time and (b) with respect to a Loan or Borrowing denominated in any Foreign Currency, London time.
Manitowoc means The Manitowoc Company, Inc., a Wisconsin corporation.
23
Margin Stock shall have the meaning provided in Regulation U.
Material Adverse Effect means a material adverse effect on (a) the business, assets, operations or financial condition, of the Borrower and its Restricted Subsidiaries taken as a whole, (b) the ability of the Borrower or of the Credit Parties taken as a whole to perform any of their repayment or other material obligations under the Credit Documents or (c) the rights or remedies of the Administrative Agent, the Collateral Agent or the Lenders under the Credit Documents.
Material Indebtedness means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Restricted Subsidiaries in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Indebtedness, the principal amount of the obligations of the Borrower or any Restricted Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting rights or netting agreements) that the Borrower or such Restricted Subsidiary would be required to pay if such Swap Agreement were terminated at such time.
Material Subsidiary means a Restricted Subsidiary of the Borrower (a) which has or acquires assets constituting more than the greater of (i) 1.00% of the consolidated assets of the Borrower and its consolidated subsidiaries and (ii) $20,000,000 or (b) which generated more than 5.00% of Consolidated Net Income over the four fiscal quarter period most recently ended prior to the time of computation; it being understood that in calculating Consolidated Net Income for the purposes of this definition, Consolidated Net Income shall be calculated on a Pro Forma Basis to give effect to (1) any Acquired Entity or Business acquired during or after such period pursuant to a Permitted Acquisition and not subsequently sold or otherwise disposed of by the Borrower or any of its Restricted Subsidiaries during or after such period and (2) any Restricted Subsidiary or business disposed of during or after such period by the Borrower or any of its Restricted Subsidiaries.
Moodys means Moodys Investors Service, Inc., and any successor to its rating agency business.
Mortgages means, individually and collectively, one or more mortgages, leasehold mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a Borrower or Subsidiary Guarantor thereof in favor of the Collateral Agent, for the benefit of the Secured Creditors (including, without limitation, those delivered pursuant to Section 5.18 ), as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
Net Proceeds means, with respect to any event, (a) the cash proceeds received in respect of such event, including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment or earn-out, but excluding any
24
reasonable interest payments), but only as and when received, (ii) in the case of a casualty, cash insurance proceeds, and (iii) in the case of a condemnation or similar event, cash condemnation awards and similar payments received in connection therewith, minus (b) the sum of (i) all fees and expenses (including commissions and legal, accounting and other professional and transactional fees) paid by the Borrowers and the Restricted Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments that are permitted hereunder and are made by the Borrowers and the Restricted Subsidiaries as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all taxes paid (or reasonably estimated to be payable) by the Borrowers and the Restricted Subsidiaries, and the amount of any reserves established by the Borrowers and the Restricted Subsidiaries to fund contingent liabilities reasonably estimated to be payable, that are directly attributable to such event (as determined reasonably and in good faith by their respective Financial Officers), provided that any reduction at any time in the amount of any such reserves (other than as a result of payments made in respect thereof) shall be deemed to constitute the receipt by Borrower at such time of Net Proceeds in the amount of such reduction.
Non-U.S. Lender means (a) a Lender that is neither a Disregarded Entity nor a U.S. Person, and (b) a Lender that is a Disregarded Entity and that is treated for U.S. federal income Tax purposes as having as its sole member a Person that is not a U.S. Person.
Obligations means all liabilities and obligations, whether actual or contingent, of any Credit Party to the Administrative Agent, the Collateral Agent, the Issuing Bank, the Swingline Lender, any Lender or any indemnified party hereunder or under any other Credit Document, in each case arising under any Credit Document; provided , however , that the definition of Obligations shall not create any guarantee by any Subsidiary Guarantor of (or grant of security interest by any Subsidiary Guarantor to support, as applicable) any Excluded Swap Obligations of such Subsidiary Guarantor for purposes of determining any obligations of any Subsidiary Guarantor.
Offsetting Cash Amount means the aggregate stated balance sheet amount of cash, Cash Equivalents and Foreign Cash Equivalents of the Borrower, its Wholly-Owned Domestic Subsidiaries that are Restricted Subsidiaries and its Wholly-Owned Subsidiaries that are incorporated under the laws of the United Kingdom or Canada, in each case, that are Restricted Subsidiaries (and in each case excluding any portion thereof which is subject to a Lien in favor of a Person other than the Collateral Agent or is otherwise restricted), but shall not exceed $100,000,000; provided , however , in no event shall the Offsetting Cash Amount attributable to Wholly-Owned Subsidiaries that are incorporated under the laws of the United Kingdom or Canada, in each case, that are Restricted Subsidiaries exceed the aggregate outstanding principal amount of Borrowings by the UK Borrower.
OID shall have the meaning provided in Section 2.08(e) .
Other Connection Taxes means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction
25
imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Credit Document, or sold or assigned an interest in any Credit Document).
Other Taxes means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to any Credit Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment under Section 2.19(b) ).
Overnight Bank Funding Rate means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.managed banking offices of depository institutions (as such composite rate shall be determined by the FRBNY as set forth on its public website from time to time) and published on the next succeeding Business Day by the FRBNY as an overnight bank funding rate (from and after such date as the New York Fed shall commence to publish such composite rate).
Parent Guaranty means that certain guaranty to be dated as of the Funding Date made by the Borrower in favor of the Secured Creditors, substantially in the form of Exhibit G hereto, as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
Participant has the meaning provided in Section 9.04(c) .
Participant Register has the meaning provided in Section 9.04(c) .
PBGC means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
Perfection Certificate means a certificate in the form of Exhibit F or any other form approved by the Administrative Agent.
Pensions Regulator means the body corporate called the Pensions Regulator established under Part I of the Pensions Act 2004 (U.K.).
Permitted Acquisition means the acquisition by the Borrower or a Wholly-Owned Subsidiary thereof that is a Restricted Subsidiary of an Acquired Entity or Business (including by way of merger of such Acquired Entity or Business with and into the Borrower (so long as the Borrower is the surviving corporation) or a Wholly-Owned Subsidiary thereof that is a Restricted Subsidiary (so long as the survivor of such merger is a Wholly-Owned Subsidiary that is a Restricted Subsidiary)); provided that, in each case, (a) the consideration paid or to be paid by the Borrower or such Wholly-Owned Subsidiary consists solely of cash (including proceeds of Revolving Loans or Swingline Loans), the issuance or incurrence of Indebtedness otherwise permitted by Section 6.01 , the issuance of common stock of the Borrower or Qualified Preferred Stock of the Borrower in each case to the extent no Default or Event of Default exists
26
pursuant to clause (m) of Article VII or would result therefrom and the assumption/acquisition of any Indebtedness (calculated at face value) which is permitted to remain outstanding in accordance with the requirements of Section 6.01 , (b) in the case of the acquisition of 100% of the Equity Interests of any Person (including by way of merger), such Person shall own no Equity Interests of any other Person (excluding de minimis amounts) unless either (i) such Person owns 100% of the Equity Interests of such other Person or (ii) (x) such Person and its Wholly-Owned Subsidiaries own at least 80% of the consolidated assets of such other Person and its Subsidiaries and (y) any non-Wholly-Owned Subsidiary of such Person was a non-Wholly-Owned Subsidiary prior to the date of such Permitted Acquisition of such Person, (c) the Acquired Entity or Business acquired pursuant to the respective Permitted Acquisition is in a business permitted by Section 6.03(b) and (d) all applicable requirements of Sections 6.03 and 6.05(m) applicable to Permitted Acquisitions are satisfied.
Permitted Liens has the meaning provided in Section 6.02 .
Permitted Securitization means any receivables financing program providing for the sale of accounts receivable and related rights by the Borrower or its Restricted Subsidiaries to an SPC for cash in transactions purporting to be sales (and treated as sales for GAAP purposes), which SPC shall finance the purchase of such assets by the sale, transfer, conveyance, lien or pledge of such assets to one or more limited purpose financing companies, special purpose entities and/or other financial institutions, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent.
Permitted Transactions means transactions entered into to facilitate corporate restructurings or lawful tax planning, in either event, otherwise permitted by this Agreement, which transactions are comprised of either (a) loans, capital contributions, or other transfers (in each case consisting exclusively of book entries, cash (by wire or otherwise) or intercompany obligations and not any other type of asset) by Credit Parties to External Subsidiaries but only if the amount of such transfers is returned to a Domestic Credit Party (if the initial Credit Party transferor was a Domestic Credit Party) or to any Credit Party (if the initial Credit Party transferor was a Foreign Credit Party) in the same form as made (i.e., a cash capital contribution shall be returned in cash) promptly, but in no event later than the Business Day next following the date of the initial transfer or (b) loans, capital contributions, or other transfers (in each case consisting exclusively of book entries, cash (by wire or otherwise) or intercompany obligations and not any other type of asset) by External Subsidiaries to Credit Parties but only if the amount of such transfers is returned to an External Subsidiary in the same form as made (i.e., a cash capital contribution shall be returned in cash) promptly, but in no event later than the Business Day next following the date of the initial transfer; provided , however , that (A) if any of the foregoing transactions shall involve transfers of funds from the Borrower or a Subsidiary to the Borrower or any other Subsidiary, such transfers shall be accomplished by (i) book entries on the accounts of the Borrower or such Subsidiary maintained with the Administrative Agent or (ii) wire transfers to accounts of the Borrower or such Subsidiary maintained with the Administrative Agent or its Affiliates; (B) such transactions shall not be detrimental to the interests of the Lenders and shall occur at a time when no Default shall have occurred and be continuing; and (C) the Borrower has given the Administrative Agent at least 10 days (or such lesser number of days as the Administrative Agent may agree) prior written notice of its intent to engage in or cause such transactions, accompanied by a reasonably detailed description of same.
27
Person means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
Plan means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Platform means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.
Prepayment Event means:
(a) any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction (other than such a transaction, the purpose of which is to finance the asset sold) and by way of merger or consolidation in which neither the Borrower nor any Restricted Subsidiary is the surviving entity) of any property or asset of any Borrower or any Restricted Subsidiary, other than (i) sales and/or rentals of inventory in the ordinary course of business, (ii) sales of Cash Equivalents and Foreign Cash Equivalents in the ordinary course of business, (iii) sales of accounts receivable to the extent permitted by Section 6.03(a)(vii) or (xiv) , (iv) dispositions to the Borrower or any Restricted Subsidiary and (v) dispositions resulting in aggregate Net Proceeds not exceeding $25,000,000 for all such transactions during any fiscal year of Borrower;
(b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of, any Borrower or any Restricted Subsidiary resulting in Net Proceeds equal to or greater than $10,000,000; or
(c) the incurrence by any Borrower or any Restricted Subsidiary of any Indebtedness for borrowed money, other than Indebtedness permitted under Section 6.01 .
Prime Rate means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its office located at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
Pro Forma Basis means, in connection with any calculation of compliance with any financial covenant or financial term, the calculation thereof after giving effect on a pro forma basis to (a) the incurrence of any Indebtedness (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) after the first day of the relevant calculation period as if such Indebtedness had been incurred (and the proceeds thereof applied) on the first day of the relevant calculation period, (b) the permanent repayment of any Indebtedness (other than revolving Indebtedness) after the first day of the relevant calculation period as if such Indebtedness had been retired or redeemed on the first day of the relevant calculation period and (c) the Permitted Acquisition, if any, then being consummated as well as any other Permitted Acquisition consummated after the first day
28
of the relevant calculation period and on or prior to the date of the respective Permitted Acquisition then being effected, as the case may be, with the following rules to apply in connection therewith:
(i) all Indebtedness (x) (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) incurred or issued after the first day of the relevant calculation period (whether incurred to finance a Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of the respective calculation period and remain outstanding through the date of determination and (y) (other than revolving Indebtedness) permanently retired or redeemed after the first day of the relevant calculation period shall be deemed to have been retired or redeemed on the first day of the respective calculation period and remain retired through the date of determination;
(ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) the rate applicable thereto, in the case of fixed rate indebtedness or (y) the rates which would have been applicable thereto during the respective period when same was deemed outstanding, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while same was actually outstanding); and
(iii) in making any determination of Consolidated EBITDA, pro forma effect shall be given to any Permitted Acquisition consummated during the periods described above, with such Consolidated EBITDA to be determined as if such Permitted Acquisition was consummated on the first day of the relevant calculation period, taking into account factually supportable and identifiable cost savings and expenses or which would otherwise be permitted to be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act, as if such cost savings or expenses were realized on the first day of the respective calculation period.
Public-Sider means a Lender whose representatives may trade in securities of the Borrower or its controlling person or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement.
Qualified Preferred Stock means any preferred stock of the Borrower so long as the terms of any such preferred stock (a) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision, (b) do not require the cash payment of dividends or distributions, (c) do not contain any covenants, (d) do not grant the holders thereof any voting rights except for (i) voting rights required to be granted to such holders under applicable law and (ii) limited customary voting rights on fundamental matters such as mergers, consolidations, sales of all or substantially all of the assets of the Borrower, or liquidations involving the Borrower and (e) are otherwise reasonably satisfactory to the Administrative Agent.
29
Quotation Day means, with respect to any Eurocurrency Borrowing or Swingline Foreign Currency Borrowing and any Interest Period, the day on which it is market practice in the relevant interbank market for prime banks to give quotations for deposits in the currency of such Borrowing for delivery on the first day of such Interest Period. If such quotations would normally be given by prime banks on more than one day, the Quotation Day will be the last of such days.
Real Property of any Person means all the right, title and interest of such Person in and to land, improvements and fixtures.
Receivables Indebtedness means, at any time, the aggregate amount of outstanding obligations incurred by the Borrower and its Restricted Subsidiaries (including any SPC) in connection with a Permitted Securitization that would be characterized as principal if such Permitted Securitization in its entirety were structured as a secured lending transaction rather than a purchase (regardless, in either case, of whether any liability of the Borrower or any Restricted Subsidiary thereof in respect of related accounts receivable would be required to be reflected on a balance sheet of such Person in accordance with generally accepted accounting principles).
Recipient means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) the Issuing Bank.
Register has the meaning provided in Section 9.04(b)(iv) .
Regulation T means Regulation T of the Board as from time to time in effect and any successor to all or a portion thereof.
Regulation U means Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof.
Regulation X means Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof.
Related Parties means, with respect to any specified Person, such Persons Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Persons Affiliates.
Release means the active or passive disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping, migrating or the like, into or upon any land or water or air, or otherwise entering into the environment.
Relevant Date has the meaning assigned to it in Section 2.17(s) .
Repricing Event means (i) any prepayment, repayment or replacement of the Term B Loans, in whole or in part, with the proceeds of indebtedness (or commitments in respect of Indebtedness) with an All-in Yield less than the All-in Yield applicable to such portion of the Term B Loans (as such comparative yields are determined in the reasonable judgment of the Administrative Agent consistent with GAAP) and (ii) any amendment with respect to the Term B
30
Loans which reduces the All-in Yield applicable to the Term B Loans, but in each case excluding any repayment, replacement or amendment occurring in connection with a Change of Control or an Acquisition or other Investment not permitted under this Agreement.
Required Lenders means, at any time, Lenders having Revolving Credit Exposures, unused Revolving Commitments, unused Term B Commitments and outstanding Term B Loans representing at least 50.1% of the sum of the total Revolving Credit Exposures, unused Revolving Commitments, unused Term B Commitments and outstanding Term B Loans at such time; provided that for purposes of declaring the Loans to be due and payable pursuant to Article VII , and for all purposes after the Loans become due and payable pursuant to Article VII or the Commitments expire or terminate, then, as to each Lender, its Swingline Exposure shall only be applicable for purposes of determining its Revolving Credit Exposure to the extent such Lender shall have funded its participation in the outstanding Swingline Loans; provided further that for the purpose of determining the Required Lenders needed for any waiver, amendment, modification or consent, any Lender that is the Borrower, or any Affiliate of the Borrower shall be disregarded.
Required Revolving Lenders means, at any time, Lenders having Revolving Credit Exposures and unused Revolving Commitments representing at least 50.1% of the sum of the total Revolving Credit Exposures and Unused Revolving Commitments at such time; provided that for purposes of declaring the Loans to be due and payable pursuant to Article VII , and for all purposes after the Loans become due and payable pursuant to Article VII or the Commitments expire or terminate, then, as to each Lender, its Swingline Exposure shall only be applicable for purposes of determining its Revolving Credit Exposure to the extent such Lender shall have funded its participation in the outstanding Swingline Loans; provided further that for the purpose of determining the Required Revolving Lenders needed for any waiver, amendment, modification or consent, any Lender that is the Borrower, or any Affiliate of the Borrower shall be disregarded.
Restricted Payment means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower.
Restricted Subsidiary means any Subsidiary of the Borrower other than an Unrestricted Subsidiary.
Revolving Borrowing means a Borrowing comprised of Revolving Loans.
Revolving Commitment means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit, Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lenders Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or increased from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04 . The
31
initial amount of each Lenders Revolving Commitment is set forth on Schedule 2.01 , or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Lenders Revolving Commitments is $225,000,000.
Revolving Credit Exposure means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lenders Revolving Loans, LC Exposure and Swingline Exposure at such time.
Revolving Facility has the meaning provided in the Recitals hereto.
Revolving Lender means a Lender holding a Revolving Commitment.
Revolving Loan means a loan made pursuant to Section 2.01(a) .
Revolving Foreign Currency Loan means a Revolving Loan denominated in a Foreign Currency.
Revolving Maturity Date means the fifth anniversary of the Funding Date.
S&P means Standard & Poors Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.
Sale-Leaseback Transaction means any sale or other transfer of any property or asset by any Person with the intent to lease such property or asset as lessee.
Sanctioned Country means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).
Sanctioned Person means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b) .
Sanctions means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majestys Treasury of the United Kingdom.
Screen Rate means each of the LIBOR Screen Rate and the CDOR Rate.
Secured Creditors shall have the meaning assigned that term in the respective Security Documents.
32
Security Documents means and includes each of the US Security Agreement, the US Pledge Agreement, the UK Security Agreement, the Mortgages, after the execution and delivery thereof, each Additional Security Document and each other document or instrument pursuant to which security is granted to the Collateral Agent for the benefit of any of the Secured Creditors pursuant hereto.
Senior Note Documents means the Senior Note Indenture and all other documents executed and delivered with respect to the Senior Notes or Senior Note Indenture, in each case, as in effect on the Funding Date and as the same may be amended, restated, amended and restated, modified or supplemented from time to time in accordance with the terms hereof and thereof.
Senior Note Indenture means the Indenture, dated as of February 18, 2016, among the Borrower and the other parties thereto, as in effect on the Funding Date and as the same may be amended, restated, amended and restated, modified or supplemented from time to time in accordance with the terms hereof and thereof.
Senior Notes means the Borrowers 9.500% senior notes due 2024 issued pursuant to the Senior Note Indenture, as in effect on the Funding Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.
Senior Officer means the chief executive officer, chief financial officer or treasurer of the Borrower.
Separation has the meaning provided in the definition of Spin Transaction.
Separation Obligations means indemnification obligations of the Borrower and/or its Restricted Subsidiaries in favor of Manitowoc and/or its subsidiaries in connection with the Spin Transaction.
SPC means a special purpose, bankruptcy-remote Person formed for the sole and exclusive purpose of engaging in activities in connection with the purchase, sale and financing of accounts receivable and related rights in connection with and pursuant to a Permitted Securitization.
Specified Indebtedness means the Senior Notes and any Indebtedness permitted by Section 6.01 (other than the Obligations and refinancings thereof) that is not secured on a first priority basis.
Specified Party means the Administrative Agent, the Issuing Bank, the Swingline Lender and each other Lender.
Spin Transaction the internal legal reorganization of Manitowoc separating its cranes and foodservice businesses into two independent, publicly-traded companies (the Separation ) to consist of (i) the Borrower, which will be the spun-off entity that will own and operate Manitowocs foodservice business, and (ii) Manitowoc, which will own and operate the other business, it being understood and agreed that the spin-off transaction related to the
33
foregoing shall be as described in the Form 10 filed by the Manitowoc with the United States Securities and Exchange Commission on September 1, 2015, as amended by Amendment 1 thereto filed October 6, 2015 and Amendment 2 thereto filed November 9, 2015 (as amended by the foregoing and pursuant to any other filings made by Manitowoc with the United States Securities and Exchange Commission prior to the Escrow Date to the extent such amendments are acceptable to the Administrative Agent), the Form 10 ) and in accordance with the separation agreement described therein.
Statutory Reserve Rate means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted Benchmark Rate, for eurocurrency funding (currently referred to as Eurocurrency Liabilities in Regulation D of the Board). Such reserve percentage shall include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
Sterling or £ means the lawful currency of the United Kingdom of Great Britain and Northern Ireland.
subsidiary means, with respect to any Person (the parent ) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parents consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
Subsidiary means any subsidiary of the Borrower other than a FIN 46 Subsidiary.
Subsidiary Borrower means UK Borrower and each Wholly-Owned Foreign Subsidiary (excluding any Unrestricted Subsidiary) designated as such by the Borrower pursuant to Section 2.20 .
Subsidiary Guarantor means each Subsidiary of the Borrower which is a party to the Subsidiary Guaranty.
Subsidiary Guaranty means the Subsidiary Guaranty to be dated as of the Funding Date made by the Subsidiaries party thereto in favor of the Secured Creditors,
34
substantially in the form of Exhibit H hereto, as the same may be amended, restated, amended and restated, modified or supplemented from time to time. The Subsidiary Guarantors party to the Subsidiary Guaranty as of the Funding Date are so designated on Schedule 3.13 hereto.
Swap Agreement means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
Swap Obligation means, with respect to any Subsidiary Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a swap within the meaning of section 1a(47) of the Commodity Exchange Act.
Swingline Dollar Loan means a Swingline Loan denominated in Dollars.
Swingline Exposure means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be the sum of (a) its Applicable Revolver Percentage of the total Swingline Exposure at such time other than with respect to any Swingline Loans made by such Lender in its capacity as a Swingline Lender and (b) the aggregate principal amount of all Swingline Loans made by such Lender as a Swingline Lender outstanding at such time (less the amount of participations funded by the other Lenders in such Swingline Loans).
Swingline Foreign Currency Loan means a Swingline Loan denominated in a Foreign Currency.
Swingline Lender means JPMorgan, in its capacity as lender of Swingline Loans hereunder.
Swingline Loan means a loan made pursuant to Section 2.04 .
Syndication Agent means GSB in its capacity as syndication agent of this credit facility.
TARGET means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes interlinked national real time gross settlement systems and the European Central Banks payment mechanism and which began operations on 4 January 1999.
TARGET2 means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on 19 November 2007.
35
Target Day means:
(a) until such time as TARGET is permanently closed down and ceases operations any day on which both TARGET and TARGET2 are; and
(b) following such time as TARGET is permanently closed down and ceased operations, any day on which TARGET2 is, open for the settlement of payments in Euro.
Tax Sharing Agreements means all tax sharing, tax allocation and other similar agreements entered into by the Borrower or any of its Subsidiaries.
Taxes means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority (including any interest, penalties or additions to tax).
Term B Borrowing means a Borrowing comprised of Term B Loans or Incremental Term B Loans, as applicable.
Term B Commitment means, with respect to each Lender, the commitment of such Lender to make Term B Loans hereunder, expressed as an amount representing the maximum aggregate principal amount of such Lenders Term B Loans. The amount of each Lenders Term B Commitment is set forth on Schedule 2.01 or set forth in an Incremental Term B Loan Amendment, as applicable. The initial aggregate amount of the Lenders Term B Commitment is $975,000,000.
Term B Facility has the meaning provided in the Recitals hereto.
Term B Loan means, with respect to each Lender, such Lenders pro-rata portion of the Term B Borrowings made by the Lenders pursuant to Sections 2.01(b) and 2.08(d) and, with respect to all Lenders, the aggregate of all such pro-rata portions.
Term B Maturity Date means the seventh anniversary of the Funding Date.
Termination Letter means a letter in substantially the form of Exhibit D hereto.
Total Revolving Credit Exposure means, the sum of the outstanding principal amount of all Lenders Revolving Loans, their LC Exposure and their Swingline Exposure at such time; provided , that clause (a) of the definition of Swingline Exposure shall only be applicable to the extent Lenders shall have funded their respective participations in the outstanding Swingline Loans.
Transaction Documents means the Credit Documents and the documents and agreements entered into in connection with the consummation of the Spin Transaction.
Transactions means the execution, delivery and performance by the Credit Parties of the Credit Documents, the borrowing of Loans, the use of the proceeds thereof, the issuance of Letters of Credit hereunder and the other transactions contemplated by the Credit Documents (including without limitation the granting of Liens to secure the Obligations), and the consummation of the Spin Transaction.
36
Type , when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted Benchmark Rate or the Alternate Base Rate.
UCC means the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction.
UK Borrower means Enodis Holdings and any other Borrower (i) that is organized or formed under the laws of the United Kingdom or (ii) payments from which under this Agreement or any other Credit Document are subject to withholding Taxes imposed by the laws of the United Kingdom.
UK Security Agreement means the Security Agreement to be dated as of the Funding Date made by Manitowoc FSG UK Limited, Manitowoc Foodservice UK Holding Limited and the UK Borrower, in favor of the UK Security Trustee for the benefit of the Secured Creditors, substantially in the form of Exhibit I hereto, as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
UK Security Agreement Collateral means all Security Assets as defined in the UK Security Agreement.
UK Security Trustee means the Administrative Agent acting as trustee pursuant to the UK Security Agreement.
United States means the United States of America.
Unrestricted Subsidiary means any Subsidiary of the Borrower designated by the Board of Directors of the Borrower as an Unrestricted Subsidiary pursuant to and in accordance with Section 5.17 subsequent to the Funding Date.
U.S. Person means a United States person within the meaning of Section 7701(a)(30) of the Code.
US Pledge Agreement means the Pledge Agreement to be dated as of the Funding Date made by certain of the Credit Parties in favor of the Collateral Agent for the benefit of the Secured Creditors, substantially in the form of Exhibit J hereto, as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
US Pledge Agreement Collateral means all Collateral as defined in the US Pledge Agreement.
US Security Agreement means the Security Agreement to be dated as of the Funding Date made by the Credit Parties in favor of the Collateral Agent for the benefit of the Secured Creditors, substantially in the form of Exhibit K hereto, as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
US Security Agreement Collateral means all Collateral as defined in the US Security Agreement.
37
U.S. Tax Certificate has the meaning provided in Section 2.17(f)(ii)(D)(2) .
Weighted Average Life to Maturity means, when applied to any Indebtedness, at any date, the quotient obtained by dividing:
(i) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness multiplied by the amount of such payment, by
(ii) the sum of all such payments.
Wholly-Owned Domestic Subsidiary means each Domestic Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower.
Wholly-Owned Foreign Subsidiary means each Foreign Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower.
Wholly-Owned Subsidiary means, as to any Person, (a) any corporation 100% of whose Equity Interests is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time (other than, in the case of a Foreign Subsidiary with respect to preceding clauses (a) and (b) , directors qualifying shares and/or other nominal amount of shares required to be held by Persons other than the Borrower and its Subsidiaries under applicable law).
Withdrawal Liability means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Withholding Agent means any Credit Party and the Administrative Agent.
SECTION 1.02. Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class ( e.g. , a Revolving Loan) or by Type ( e.g. , a Eurocurrency Loan) or by Class and Type ( e.g. , a Eurocurrency Revolving Loan). Borrowings also may be classified and referred to by Class ( e.g. , a Revolving Borrowing) or by Type ( e.g. , a Eurocurrency Borrowing) or by Class and Type ( e.g. , a Eurocurrency Revolving Borrowing).
SECTION 1.03. 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, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
38
modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Persons successors and 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 and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Escrow Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at fair value, as defined therein.
SECTION 1.05. Foreign Currency Calculations . (a) For purposes of determining the Dollar Equivalent of any Advance denominated in a Foreign Currency or any related amount, the Administrative Agent shall determine the Exchange Rate as of the applicable Exchange Rate Date with respect to each Foreign Currency in which any requested or outstanding Advance is denominated and shall apply such Exchange Rates to determine such amount (in each case after giving effect to any Advance to be made or repaid on or prior to the applicable date for such calculation).
(b) For purposes of any determination under Article VI or Article VII , all amounts incurred, outstanding or proposed to be incurred or outstanding in currencies other than Dollars shall be translated into Dollars at the currency exchange rates in effect on the date of such determination; provided that no Default shall arise as a result of any limitation set forth in Dollars in Section 6.01 or 6.02 being exceeded solely as a result of changes in currency exchange rates from those rates applicable at the time or times Indebtedness or Liens were initially consummated in reliance on the exceptions under such Sections. For purposes of any determination under Section 6.03 or 6.05 , the amount of each investment, asset disposition or other applicable transaction denominated in a currency other than Dollars shall be translated into Dollars at the currency exchange rate in effect on the date such investment, disposition or other transaction is consummated. Such currency exchange rates shall be determined in good faith by the Borrower.
39
SECTION 1.06. Limited Condition Transactions . Notwithstanding anything to the contrary in this Agreement, to the extent that the terms of this Agreement require (a) compliance with any financial ratio or test and/or the amount of Consolidated EBITDA or Consolidated Total Net Assets or (b) the absence of a Default or Event of Default (or any type of default or event of default) in each case as a condition to the consummation of any transaction in connection with any Permitted Acquisition or similar Investment whose consummation is not conditioned on the availability of, or on obtaining, third party financing (including the assumption or incurrence of Indebtedness in connection therewith, including without limitation, Indebtedness incurred pursuant to Section 2.08(d) ) (any such action, a Limited Condition Transaction ), the determination of whether the relevant condition is satisfied may be made, at the election of the Borrower (a LCT Election ), in the case of any Limited Condition Transaction, at the time of (or on the basis of the financial statements for the most recently ended fiscal quarter at the time of) either (x) the execution of the definitive agreement with respect to such Permitted Acquisition or Investment or (y) the consummation of such Permitted Acquisition or Investment (such applicable date, the LCT Test Date ), in each case, after giving effect to the relevant Limited Condition Transaction on a Pro Forma Basis. If the Borrower has made a LCT Election for any Limited Condition Transaction, then in connection with any subsequent determination of compliance with any financial ratio or test and/or the amount of Consolidated EBITDA or Consolidated Total Net Assets with respect to the incurrence of Indebtedness or Liens on or following the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, compliance with any such financial ratio or test and/or the amount of Consolidated EBITDA or Consolidated Total Net Assets shall be tested by calculating the availability under such financial ratio or test and/or the amount of Consolidated EBITDA or Consolidated Total Net Assets, as applicable, on a Pro Forma Basis assuming such Limited Condition Transaction and any other transactions in connection therewith have been consummated (including any incurrence of Indebtedness and the use of proceeds thereof).
SECTION 1.07. Redenomination of Certain Foreign Currencies . (a) Each obligation of any party to this Agreement to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the Escrow Date shall be redenominated into Euro at the time of such adoption (in accordance with the EMU Legislation). If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London Interbank Market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at the end of the then current Interest Period.
(b) Without prejudice and in addition to any method of conversion or rounding prescribed by any EMU Legislation and (i) without limiting the liability of any Borrower for any amount due under this Agreement and (ii) without increasing any Commitment of any Lender, all references in this Agreement to minimum amounts (or integral multiples thereof) denominated in the national currency unit of any member state of the European Union
40
that adopts the Euro as its lawful currency after the Escrow Date shall, immediately upon such adoption, be replaced by references to such minimum amounts (or integral multiples thereof) as shall be specified herein with respect to Borrowings denominated in Euros.
(c) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro or any other Foreign Currency.
ARTICLE II
The Credits
SECTION 2.01. Commitments . (a) Subject to the terms and conditions set forth herein, each Lender with a Revolving Commitment severally agrees to make revolving Loans denominated in Dollars and Foreign Currencies to the Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lenders Revolving Credit Exposure exceeding such Lenders Revolving Commitment, (ii) the sum of the total Revolving Credit Exposures exceeding the total Revolving Commitments, (iii) the Dollar Equivalent of the aggregate amount of all Revolving Loans, Letters of Credit and Swingline Loans denominated in a Foreign Currency exceeding $100,000,000 or (iv) the Dollar Equivalent of the aggregate amount of all Revolving Loans and Letters of Credit made to or issued for the account of Subsidiary Borrowers exceeding $100,000,000. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.
(b) Subject to the terms and conditions set forth herein, each Lender with a Term B Commitment agrees to make a Term B Loan denominated entirely in Dollars to the Borrower on the Funding Date in an aggregate principal amount that will not result in (i) such Lenders Term B Loan exceeding such Lenders Term B Commitment or (ii) the sum of the Term B Loans exceeding the total Term B Commitments. No amount of the Term B Loan which is repaid or prepaid by the Borrower may be reborrowed hereunder.
SECTION 2.02. Loans and Borrowings . (a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Revolving Commitments. Each Term B Loan shall be made as part of a Borrowing consisting of Term B Loans made by the Lenders ratably in accordance with their respective Term B Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lenders failure to make Loans as required.
(b) Subject to Section 2.14 , (i) each Borrowing denominated in Dollars shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith and (ii) each Revolving Borrowing denominated in a Foreign Currency shall be comprised entirely of Eurocurrency Loans. Each Swingline Dollar Loan shall be an ABR Loan and each Swingline Foreign Currency Loan shall bear interest at such rate agreed to
41
between the Borrower and the Swingline Lender. Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurocurrency Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $250,000 and not less than $1,000,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) . Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $500,000 (or in the case of a Swingline Loan denominated in Euros not less than $1,000,000). Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of 8 Eurocurrency Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, (i) the Borrower may not select a Eurocurrency Borrowing for the Term B Borrowing on the Funding Date, and (ii) the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Term B Maturity Date or Revolving Maturity Date, as applicable.
(e) Notwithstanding any other provision of this Agreement, each Lender at its option may make any ABR Loan or Eurocurrency Loan by causing any domestic or foreign office, branch or Affiliate of such Lender (an Applicable Lending Installation ) to make such Loan that has been designated by such Lender to the Administrative Agent. All terms of this Agreement shall apply to any such Applicable Lending Installation of such Lender and the Loans and any Notes issued hereunder shall be deemed held by each Lender for the benefit of any such Applicable Lending Installation. Each Lender may, by written notice to the Administrative Agent and the Borrower, designate replacement or additional Applicable Lending Installations through which Loans will be made by it and for whose account Loan payments are to be made.
SECTION 2.03. Requests for Borrowings . To request a Borrowing (other than a Swingline Loan), the Borrower shall notify the Administrative Agent of such request in writing (a) in the case of a Eurocurrency Borrowing denominated in Dollars, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing, (b) in the case of a Eurocurrency Borrowing denominated in a currency other than Dollars, not later than 12:00 noon, New York City time, four Business Days before the date of the proposed Borrowing or (c) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and shall be in a form approved by the Administrative Agent and signed by the Borrower. Each such written Borrowing Request shall specify the following information in compliance with Section 2.02 :
(i) the identity of the Applicable Borrower;
42
(ii) the aggregate amount of the requested Borrowing;
(iii) the Class of such Borrowing;
(iv) the currency (which may be Dollars or, if applicable, a Foreign Currency) in which such Borrowing is to be denominated;
(v) the date of such Borrowing, which shall be a Business Day;
(vi) in the case of a Borrowing denominated in Dollars, whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
(vii) in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by clause (a) of the definition of the term Interest Period; and
(viii) the location and number of the Applicable Borrowers account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06 .
If no election as to the Type of such Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing, unless such Borrowing is denominated in a Foreign Currency, in which case such Borrowing shall be a Eurocurrency Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one months duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lenders Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans . (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to, with respect to an aggregate $10,000,000 portion of the Swingline Loans, and may, in its sole discretion, with respect to any amount in excess of such $10,000,000 aggregate portion of the Swingline Loans, make Swingline Loans in Dollars or in a Foreign Currency to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the Dollar Equivalent of the aggregate principal amount of outstanding Swingline Loans exceeding $40,000,000, (ii) the sum of the total Revolving Credit Exposures exceeding the total Revolving Commitments, (iii) the Dollar Equivalent of the aggregate amount of all Revolving Loans, Letters of Credit and Swingline Loans denominated in a Foreign Currency exceeding $100,000,000 or (iv) the Swingline Lenders Revolving Credit Exposure exceeding its Revolving Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.
43
(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request in writing, not later than 2:00 p.m., New York City time, on the day of a proposed Swingline Loan in the case of Swingline Loans denominated in Dollars and not later than 10:00 a.m., Local Time on the day of any other proposed Swingline Loan. Each such notice shall be irrevocable and shall specify (i) the requested date (which shall be a Business Day), (ii) whether such Swingline Loan is to be denominated in Dollars or in a Foreign Currency, (iii) the amount of the requested Swingline Loan, and (iv) in the case of a Swingline Borrowing denominated in a Foreign Currency, the Interest Period requested to be applicable thereto, which shall be a period contemplated by clause (b) of the definition of the term Interest Period. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender and the Borrower shall agree upon the interest rate applicable to any Swingline Foreign Currency Loan, provided that if such agreement cannot be reached prior to 1:00 p.m., Local Time, on the day of such Swingline Foreign Currency Loan then such Swingline Foreign Currency Loan shall not be made. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of (x) a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) , by remittance to the Issuing Bank or (y) a Swingline Foreign Currency Loan, to such deposit account as the Borrower shall identify to the Swingline Lender) by 3:00 p.m., Local Time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., Local Time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate, and such amount of Swingline Loans, if denominated in Foreign Currency, shall be converted to Dollars and shall bear interest at the Alternate Base Rate (or such lower rate to which the Borrower and Swingline Lender may agree). Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lenders Applicable Revolver Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lenders Applicable Revolver Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein
44
shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof. Notwithstanding the foregoing, a Lender shall not have any obligation to acquire a participation in a Swingline Loan pursuant to this paragraph if an Event of Default shall have occurred and be continuing at the time such Swingline Loan was made and such Lender shall have notified the Swingline Lender in writing, at least one Business Day prior to the time such Swingline Loan was made, that such Event of Default has occurred and that such Lender will not acquire participations in Swingline Loans made while such Event of Default is continuing.
SECTION 2.05. Letters of Credit . (a) General . Subject to the terms and conditions set forth herein, the Borrower may request the issuance by an Issuing Bank of Letters of Credit in Dollars or in a Foreign Currency for its own account or that of a Subsidiary Borrower, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Applicable Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. Notwithstanding anything herein to the contrary, the Issuing Bank shall have no obligation hereunder to issue, and shall not issue, any Letter of Credit the proceeds of which would be made available to any Person (i) to fund any activity or business of or with any Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of any Sanctions or (ii) in any manner that would result in a violation of any Sanctions by any party to this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension, but in any event no less than three Business Days) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying which of the Borrowers shall be the account party with respect thereto, the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Applicable Borrower also shall submit a letter of credit application on the Issuing Banks standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance,
45
amendment, renewal or extension (i) the LC Exposure shall not exceed $20,000,000, (ii) no Lenders Revolving Credit Exposure shall exceed its Revolving Commitment, (iii) the sum of the total Revolving Credit Exposures shall not exceed the total Revolving Commitments, (iv) the Dollar Equivalent of the aggregate amount of all Revolving Loans, Letters of Credit and Swingline Loans denominated in a Foreign Currency shall not exceed $100,000,000, (v) the Dollar Equivalent of the amount of all LC Exposure with respect to Letters of Credit issued for the account of Subsidiary Borrowers shall not exceed $7,500,000 and (vi) the Dollar Equivalent of the aggregate LC Exposure associated with the Letters of Credit issued by the applicable Issuing Bank shall not exceed such Issuing Banks Letter of Credit Fronting Sublimit (as set forth on Schedule 2.01 ) without the consent of such Issuing Bank. The Borrower may, at any time and from time to time, reduce the Letter of Credit Fronting Sublimit of any Issuing Bank with the consent of the applicable Issuing Bank; provided that the Borrower shall not reduce the Letter of Credit Fronting Sublimit of any Issuing Bank if, after giving effect to such reduction, the conditions set forth in clauses (i) through (vi) above shall not be satisfied.
(c) Expiration Date . Each Letter of Credit shall expire (or be subject to termination by notice from the Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Revolving Maturity Date (or for up to two years thereafter if cash collateralized in a manner reasonably satisfactory to the Issuing Bank in accordance with Section 2.05(j) ).
(d) Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lenders Applicable Revolver Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lenders Applicable Revolver Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Applicable Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Applicable Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement . If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on (i) the Business Day that the Borrower receives
46
such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Applicable Borrower fails to make such payment when due, such amount, if denominated in Foreign Currency, shall be converted to Dollars and shall bear interest as provided in Section 2.05(h) and the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Applicable Borrower in respect thereof and such Lenders Applicable Revolver Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Revolver Percentage of the payment then due from the Applicable Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Applicable Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Applicable Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute . The Applicable Borrowers obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Applicable Borrowers obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank
47
from liability to the Applicable Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Applicable Borrower to the extent permitted by applicable law) suffered by the Applicable Borrower that are caused by the Issuing Banks failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures . The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Applicable Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h) Interim Interest . If the Issuing Bank shall make any LC Disbursement, then, unless the Applicable Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Applicable Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.
(i) Replacement of an Issuing Bank . An Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b) . From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term Issuing Bank shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.
48
(j) Cash Collateralization . If (i) any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50.1% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the applicable Issuing Bank and the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII or (ii) any Letter of Credit shall have an expiration date after the Revolving Maturity Date, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the applicable Issuing Bank and the Lenders, an amount in cash equal to 105% of the face amount of such Letter of Credit on the date five Business Days prior to the Revolving Maturity Date. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrowers risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50.1% of the total LC Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.
(k) Existing Letters of Credit . On the Funding Date each Existing Letter of Credit shall be deemed to be a Letter of Credit issued hereunder on such date and governed in all respects by the terms and conditions of this Agreement (including without limitation Section 2.05(d) ).
SECTION 2.06. Funding of Borrowings . (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, Local Time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.04 . The Administrative Agent will make such Loans available to the Applicable Borrower by promptly crediting the amounts so received, in like funds, to an account of the Applicable Borrower or, in the case of Subsidiary Borrowers or
49
Loans denominated in a Foreign Currency, in another account, in each case as designated by the Borrower in the applicable Borrowing Request and acceptable to the Administrative Agent; in accordance with Section 2.03(viii) and this Section 2.06 , provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lenders share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, (x) the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation (in the case of a Borrowing denominated in Dollars) or (y) the rate reasonably determined by the Administrative Agent to be the cost to it of funding such amount (in the case of a Borrowing denominated in a Foreign Currency) or (ii) in the case of the Applicable Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lenders Loan included in such Borrowing.
SECTION 2.07. Interest Elections . (a) Each Revolving Borrowing and Term B Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type, in the case of Borrowings denominated in Dollars, or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Foreign Currency Borrowings or Swingline Dollar Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type and denominated in the Foreign Currency resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower (and, with respect to UK Borrower, any written request shall be irrevocable and in a form approved by the Administrative Agent and signed by UK Borrower).
50
(c) Each written Interest Election Request shall specify the following information in compliance with Section 2.02 :
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term Interest Period.
If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one months duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lenders portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing (unless such Borrowing is denominated in a Foreign Currency, in which case such Borrowing shall be continued as a Eurocurrency Borrowing with an Interest Period of one months duration commencing on the last day of such Interest Period). Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurocurrency Borrowing, (ii) unless repaid, each Eurocurrency Borrowing denominated in Dollars shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto, and (iii) unless repaid, each Eurocurrency Borrowing denominated in a Foreign Currency shall be continued as a Eurocurrency Borrowing with an Interest Period of one months duration.
SECTION 2.08. Termination and Reduction of Commitments; Increase of Commitments . (a) Unless previously terminated, the Revolving Commitments shall terminate on the Revolving Maturity Date. Unless previously terminated, the Term B Commitment shall terminate on the making of the Term B Loans on the Funding Date.
51
(b) The Borrower may at any time terminate, or from time to time reduce, the Revolving Commitments; provided that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11 , the sum of the Total Revolving Credit Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Revolving Commitments shall be permanent. Each reduction of the Revolving Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.
(d) Subject to clause (e) below, the Borrower may elect, at its option, on up to five (5) occasions after the Funding Date, to increase the Revolving Commitments and/or the Term B Commitments, in each case in minimum amounts of $10,000,000 and in integral multiples of $5,000,000 in excess thereof, so long as, after giving effect thereto, the aggregate amount of such increases does not exceed (i) the sum of (a) $225,000,000 and (b) the aggregate principal amount of any voluntary prepayments of the Term B Loans and/or any Incremental Term B Loans; provided, that the relevant prepayment is not funded with long-term Indebtedness, plus (ii) an additional amount, so long as, after giving effect to the incurrence of any such additional amount, the Consolidated Senior Secured Leverage Ratio calculated on a Pro Forma Basis is no greater than 3.75 to 1.00; provided , that for the purposes of calculating such Consolidated Senior Secured Leverage Ratio, (x) any such increase to the Revolving Commitments shall be assumed to be fully drawn and shall be included in the numerator of such ratio and (y) the proceeds of any such increase to the Revolving Commitments or the Term B Commitments shall not be netted from Indebtedness. Any such election shall be made upon at least three (3) Business Days prior written notice to the Administrative Agent, which notice shall (A) specify (x) the amount of any such increase and (y) whether such increase is in the Revolving Commitments, the Term B Commitments or a combination of any thereof, (B) if any Indebtedness under the Senior Note Documents is then outstanding, certify that incurrence by the Borrower of Indebtedness under this Agreement in the full amount of the proposed increased Commitments (and the securing thereof by the Collateral) is permitted by the Senior Note Documents, (C) be delivered at a time when no Default has occurred and is continuing (subject to Section 1.06 , solely in connection with any increase of the Term B Commitments, the proceeds of which are being used to finance a Limited Condition Transaction), and (D) specify the effective date of any Revolving Commitments or Term B Commitments and the effective date of any incremental Term B Loans to be made pursuant thereto. The Borrower may, after giving such notice, offer the increase (which may be declined by any Lender in its sole discretion) in the Commitments on either a ratable basis to the Lenders or on a non pro-rata basis
52
to one or more Lenders and/or to other Lenders or entities reasonably acceptable to the Administrative Agent. No increase in the total Commitments shall become effective until the existing or new Lenders extending such incremental Commitment amount and the Borrower shall have delivered to the Administrative Agent a document in form and substance reasonably satisfactory to the Administrative Agent pursuant to which (i) any such existing Lender agrees to the amount of its Commitment increase, (ii) any such new Lender agrees to its Commitment amount and agrees to assume and accept the obligations and rights of a Lender hereunder, (iii) the Borrower accepts such incremental Commitments, (iv) the effective date of any increase in the Commitments is specified, (v) any terms specific to any incremental Term B Loans (and consistent with Section 2.08(e) ) are specified, and (vi) the Borrower certifies that on such date the conditions for a new Loan set forth in Section 4.02 are satisfied; provided , that notwithstanding anything to the contrary set forth in Section 4.02 , in connection with any increase of the Term B Commitments, the proceeds of which are being used to finance a Limited Condition Transaction, any such increase shall be subject to Section 1.06 and the Lenders providing such increase shall be permitted to waive or limit (or not require the satisfaction of) in full or in part any of the conditions set forth in Section 4.02(a) (other than the accuracy of customary specified representations). Upon the effectiveness of any increase in the Revolving Commitments pursuant hereto, (i) each Lender with a Revolving Commitment (new or existing) shall be deemed to have accepted an assignment from the existing Lenders with Revolving Commitments, and the existing Lenders with Revolving Commitments shall be deemed to have made an assignment to each new or existing Lender with Revolving Commitments accepting a new or increased Revolving Commitment, of an interest in each then outstanding Revolving Loan (in each case, on the terms and conditions set forth in the Assignment and Assumption) and (ii) the Swingline Exposure and LC Exposure of the existing and new Lenders with Revolving Commitments shall be automatically adjusted such that, after giving effect to such assignments and adjustments, all Revolving Credit Exposure hereunder is held ratably by the Lenders with Revolving Commitments in proportion to their respective Revolving Commitments. Assignments pursuant to the preceding sentence shall be made in exchange for the principal amount assigned plus accrued and unpaid interest and shall not be subject to the assignment fee set forth in Section 9.04(b)(ii)(C) . The Borrower shall make any payments under Section 2.16 resulting from such assignments. In the event of an increase in the Term B Commitments pursuant to this Section, each Lender accepting a portion of such increased Term B Commitments shall, on the effective date of the increase in such Term B Commitments, make a loan to the Borrower in the amount of its portion of such increase. Any such increase of the Revolving Commitments or Term B Commitments shall be subject to receipt by the Administrative Agent from the Borrower of such supplemental opinions, resolutions, certificates and other documents as the Administrative Agent may reasonably request. From and after the making of an incremental Term B Loan or Revolving Loan pursuant to this Section, such Loan shall be deemed a Term B Loan or Revolving Loan, as applicable, hereunder for all purposes hereof, and shall be subject to the same terms and conditions as each other Term B Loan or Revolving Loan made pursuant to this Agreement (except as otherwise permitted by this Agreement).
(e) Any incremental Term B Loan made pursuant to clause (d) above (i) shall rank pari passu in right of payment and of security with the Term B Loans made on the Funding Date, (ii) shall not mature earlier than the Term B Maturity Date or have a weighted average life (if applicable) which is shorter than the then remaining average life of the Term B Loans, and
53
(iii) shall otherwise be on terms and pursuant to documentation to be determined by the Borrower and the Persons willing to provide such Incremental Facility (such documentation referred to herein as, an Incremental Term B Loan Amendment ), provided that (A) such terms and documentation shall not contain amortization schedules more favorable to the Lenders providing such loans or commitments, than those set forth in this Agreement and (B) if the Applicable Rate (which term for purposes of this Section 2.08(e) shall include any original issue discount ( OID ) or upfront fees (which shall be deemed to constitute like amounts of OID) payable by any Credit Party to the lenders under the Term B Loan or the incremental Term B Loan, as applicable, in the primary syndication thereof (with OID being equated to interest based on assumed four-year life to maturity)) relating to any incremental Term B Loans exceeds the Applicable Rate relating to the Term B Loans immediately prior to the effectiveness of the applicable incremental amendment by more than 0.50%, the Applicable Rate relating to the Term B Loans shall be increased to the extent necessary so that the Applicable Rate for the incremental Term B Loans is not more than 0.50% higher than the Applicable Rate for the Term B Loans.
SECTION 2.09. Repayment of Loans; Evidence of Debt . (a) Each Applicable Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each of its Revolving Loans on the Revolving Maturity Date and (ii) to the Administrative Agent for the account of each applicable Lender the unpaid principal amount of the Term B Loan of such Lender as provided in Section 2.10 and (iii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of (x) the Revolving Maturity Date and (y) a date that is no more than seven (7) Business Days after such Swingline Loan is made; provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lenders share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Applicable Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such
54
Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04 ) be represented by one or more promissory notes in such form payable to the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
(f) In the event and on such occasion that the aggregate Revolving Credit Exposure of the Lenders exceeds the aggregate Revolving Commitments of the Lenders, the Borrower immediately shall prepay the Loans in the amount of such excess.
(g) The Administrative Agent will determine the aggregate LC Exposure and the Dollar Equivalent of each Loan (other than Term B Loans) on each Exchange Rate Date. If at any time the sum of such amounts exceeds 105% of the aggregate Revolving Commitments of the Lenders, the Borrower shall (or shall cause one or more Subsidiary Borrowers to) immediately prepay the Loans (other than Term B Loans) in the amount of such excess. To the extent that, after the prepayment of all Loans (other than Term B Loans) an excess of the sum of such amounts over the aggregate Revolving Commitments still exists, the Borrower shall (or shall cause one or more Subsidiary Borrowers to) promptly cash collateralize the Letters of Credit in the manner described in Section 2.05(j) in an amount sufficient to eliminate such excess.
SECTION 2.10. Amortization of Term B Loans . (a) Subject to adjustment pursuant to paragraph (b) of this Section, the Borrower shall repay Term B Borrowings on the last Business Day of each calendar quarter beginning with the fiscal quarter ending June 30, 2016 in an aggregate amount equal to 0.25% of the initial aggregate principal amount of the Term B Loan (and in addition, to the extent that any Incremental Term B Loans shall be made pursuant to Section 2.08(d) , in the additional agreed amortization amount for such incremental Term B Loans based on the initial aggregate principal amount of such incremental Term B Loans on the last Business Day of each calendar quarter from and including the calendar quarter immediately succeeding the calendar quarter in which such incremental Term B Loans are made as set forth in the applicable Term B Loan Amendment). The Borrower shall pay the entire remaining unpaid principal amount of the Term B Loan on the Term B Maturity Date (or in the case of any Incremental Term B Loan, on such other maturity date applicable thereto as set forth in the applicable Incremental Term B Loan Amendment).
(b) Any optional prepayment of a Term B Borrowing shall be applied as directed by the Borrower. Any mandatory prepayment of a Term B Borrowing shall be applied (i) first , in direct order of maturity to the scheduled repayments of the Term B Borrowings occurring in the twelve months following the date of such prepayment and (ii) second , ratably to the remaining scheduled repayments of such Term B Borrowings.
SECTION 2.11. Prepayment of Loans . (a) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (b) of this Section and, in the case of prepayments of the Term B Loan, subject to compliance with Section 2.12(c) .
55
(b) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time (or in the case of a Swingline Foreign Currency Loan, 12:00 noon, London time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.08 , then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08 . Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02 , except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13 . Prepayments shall be applied first , to any ABR Borrowings comprising all or a part of the Class being prepaid and second , if (or once) no ABR Borrowings of such Class remain outstanding, to outstanding Eurocurrency Borrowings of such Class with the shortest Interest Periods remaining.
(c) In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Restricted Subsidiary in respect of any Prepayment Event following the Funding Date, the Borrower shall (subject to the following sentence, including the provisos thereto), within ten Business Days after such Net Proceeds are received, prepay Term B Borrowings in the manner set forth in Section 2.10(b) . The prepayments required pursuant to this Section 2.11(c) shall be made in each case in an aggregate amount equal to the Applicable Prepayment Percentage of the amount of such Net Proceeds, provided that in the case of any such event described in clause (a) or (b) of the definition of the term Prepayment Event, if any Borrower or any Restricted Subsidiary applies (or commits to apply) the Net Proceeds from such event (or a portion thereof) within twelve months after receipt of such Net Proceeds and at a time when no Event of Default has occurred and is continuing to pay all or a portion of the purchase price in connection with a Permitted Acquisition or to acquire, restore, replace, rebuild, develop, maintain or upgrade real property, equipment or other tangible assets useful or to be used in the business of the Borrower and the Restricted Subsidiaries, provided that, in each case, the Borrower has delivered to the Administrative Agent within ten days after such Net Proceeds are received a certificate of its Financial Officer stating its intention to do so and certifying that no Event of Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds in respect of such event (or the portion of such Net Proceeds specified in such certificate, if applicable) except (x) to the extent of any such Net Proceeds therefrom that have not been so applied (or committed to be so applied) by the end of such twelve-month period, (or if committed to be so applied within such twelve-month period, have not been so applied within 18 months after receipt), or (y) if an Event of Default shall
56
thereafter occur and such Net Proceeds have not yet been so applied or committed to be so applied, at which time a prepayment shall be required in an amount equal to such Net Proceeds that have not been so applied (or committed to be so applied) prior to the expiration of such period or the occurrence of such Event of Default. The Borrower shall provide to the Administrative Agent any such evidence reasonably requested by the Administrative Agent with respect to any commitment of any Borrower or any Restricted Subsidiary to apply Net Proceeds in accordance with this Section 2.11(c) .
(d) Following the end of each fiscal year of Borrower (commencing with the fiscal year ending December 31, 2016), the Borrower shall prepay the Term B Borrowings in an aggregate amount equal to (i) Excess Cash Flow for such fiscal year multiplied by the Applicable Prepayment Percentage, less (ii) the amount of optional prepayments of principal under the Term B Loans made during such fiscal year, less (iii) the amount of any optional or mandatory payments of the Senior Notes, in each case, except to the extent such prepayments are financed with the proceeds of long-term Indebtedness. Each prepayment pursuant to this paragraph shall be made before the date that is ten Business Days after the date on which financial statements are delivered pursuant to Section 5.01 with respect to the fiscal year for which Excess Cash Flow is being calculated (and in any event within 95 days after the end of such fiscal year).
(e) Notwithstanding the foregoing, any Lender holding a Term B Loan may elect, by notice to the Administrative Agent by telephone (confirmed by hand delivery or facsimile) at least one Business Day (or such shorter period as may be established by the Administrative Agent) prior to the required prepayment date, to decline all or any portion of any prepayment of its Term B Loan pursuant to this Section 2.11 (other than an optional prepayment pursuant to paragraph (a) of this Section or a prepayment pursuant to clause (c) of the definition of Prepayment Event, which may not be declined), in which case the aggregate amount of the payment that would have been applied to prepay Loans but was so declined may be retained by the Borrower and shall constitute Declined Proceeds .
(f) Prior to any optional prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (b) of this Section.
SECTION 2.12. Fees . (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the average daily difference between the Revolving Commitment of such Lender and the Revolving Credit Exposure (excluding Swingline Exposure) of such Lender during the period from and including the Funding Date to but excluding the date on which such Revolving Commitment terminates. Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the applicable Commitments terminate, commencing on the first such date to occur after the Funding Date. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to
57
Eurocurrency Revolving Loans on the average daily amount of such Lenders LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Funding Date to but excluding the later of the date on which such Lenders Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate or rates per annum separately agreed upon between the Borrower and the Issuing Bank on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Funding Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Banks standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Funding Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c) In the event that, on or prior to the twelve month anniversary of the Funding Date, the Borrower (i) makes any prepayment of Term B Loans in connection with any Repricing Event or (ii) effects any amendment of this Agreement resulting in a Repricing Event, the Borrower agrees to pay to the Administrative Agent, for the ratable account of each of the applicable Lenders, (x) a prepayment premium of 1.00% of the principal amount of the Term B Loans being prepaid in connection with such Repricing Event and (y) in the case of clause (ii) , an amount equal to 1.00% of the aggregate amount of the Term B Loans outstanding immediately prior to such amendment.
(d) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.
(e) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to such Person) for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. Interest . (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted Benchmark Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
58
(c) Each Swingline Dollar Loan shall bear interest at a rate agreed to between the Administrative Agent and the Borrower. Each Swingline Foreign Currency Loan shall bear interest as determined in Section 2.04 .
(d) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by any of the Borrowers hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan, upon the final maturity thereof and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year of 360 days, except that (i) interest on Borrowings denominated in Sterling shall be computed on the basis of a year of 365 days, (ii) interest on Borrowings denominated in any other Foreign Currency for which it is required by applicable law or customary to compute interest on the basis of a year of 365 days or, if required by applicable law or customary, 366 days in a leap year, shall be computed on such basis, and (iii) interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted Benchmark Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Eurocurrency Borrowing denominated in any currency:
(A) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including, without limitation, by means of an Interpolated Rate) do not exist for ascertaining the Adjusted Benchmark Rate for such Interest Period; or
(B) the Administrative Agent is advised by the Required Lenders that the Adjusted Benchmark Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;
59
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurocurrency Borrowing denominated in such currency shall be ineffective and (ii) such Borrowing shall be converted to or continued as on the last day of the Interest Period applicable thereto (A) if such Borrowing is denominated in Dollars, an ABR Borrowing or (B) if such Borrowing is denominated in a Foreign Currency, as a Borrowing bearing interest at such rate as the Administrative Agent determines adequately reflects the costs to the Lenders of making or maintaining such Borrowing, and (ii) if any Borrowing Request requests a Eurocurrency Borrowing in such currency, such Borrowing shall be made as an ABR Borrowing (if such Borrowing is requested to be made in Dollars) or shall be made as a Borrowing bearing interest at such rate as the Administrative Agent determines adequately reflects the costs to the Lender of making or maintaining such Borrowing.
SECTION 2.15. Increased Costs . (a) If any Change in Law by a Governmental Authority having regulatory jurisdiction over the relevant Recipient shall:
(i) impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (including the U.K. bank levy as set out in the Finance Act 2011) (except any such reserve requirement reflected in the Adjusted Benchmark Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein; or
(iii) subject any Recipient to any Taxes on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Indemnified Taxes and (B) Other Connection Taxes on gross or net income, profits or revenue (including value-added or similar Taxes));
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
60
(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lenders or the Issuing Banks capital or on the capital of such Lenders or the Issuing Banks holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lenders or the Issuing Banks holding company could have achieved but for such Change in Law (taking into consideration such Lenders or the Issuing Banks policies and the policies of such Lenders or the Issuing Banks holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lenders or the Issuing Banks holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lenders or the Issuing Banks right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lenders or the Issuing Banks intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(b) and is revoked in accordance therewith) or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19 , then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted Benchmark Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the
61
Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the applicable currency of a comparable amount and period from other banks in the eurocurrency market. A certificate of any Lender setting forth in reasonable detail any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes . (a) Withholding of Taxes; Gross-Up . Each payment by or on account of any Credit Party under any Credit Document shall be made without withholding for any Taxes, unless such withholding is required by any law. If any Withholding Agent determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Withholding Agent may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by such Credit Party shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the applicable Recipient receives the amount it would have received had no such withholding been made.
(b) Payment of Other Taxes by Borrower . Each Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Evidence of Payments . Except as provided in Section 2.17(l) below, as soon as practicable after any payment of Indemnified Taxes by any Credit Party to a Governmental Authority, such Credit Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(d) Indemnification by the Borrower . Except and to the extent that Section 2.17(i) does not require an increased payment for a UK Tax Deduction to a Recipient, the Credit Parties shall jointly and severally indemnify each Recipient for any Indemnified Taxes that are withheld or deducted on payments to, or paid or payable by, such Recipient in connection with any Credit Document (including amounts paid or payable under this Section 2.17(d) ) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.17(d) shall be paid within 10 days after the Recipient delivers to any Credit Party a certificate stating the amount of any Indemnified Taxes so paid or payable by such Recipient and describing the basis for the indemnification claim. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. Such Recipient shall deliver a copy of such certificate to the Administrative Agent.
(e) Indemnification by the Lenders . Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Credit Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so) attributable
62
to such Lender (including Taxes attributable to such Lenders failure to comply with the provisions of Section 9.04 relating to the maintenance of a Participant Register) that are paid or payable by the Administrative Agent in connection with any Credit Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.17(e) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Credit Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e) .
(f) Status of Lenders . (i) Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Credit Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding. In addition, any Lender, if requested by any Borrower or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by any Borrower or the Administrative Agent as will enable any Borrower or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements. Except as provided in Section 2.17(n) below, and notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A) through (F) below) shall not be required if in the Lenders judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. Upon the reasonable request of such Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.17(f) . If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly upon request from the Borrower or the Administrative Agent (other than in the case of inaccuracy, in which case, immediately upon such Lender becoming aware of the inaccuracy) notify such Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.
(ii) Without limiting the generality of the foregoing, if any Borrower is a U.S. Person, any Lender with respect to such Borrower shall, if it is legally eligible to do so, deliver to such Borrower and the Administrative Agent (in such number of copies reasonably requested by such Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:
(A) in the case of a Lender that is other than a Non-U.S. Lender, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;
63
(B) in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Credit Document, IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the interest article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN-E or IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the business profits or other income article of such tax treaty;
(C) in the case of a Non-U.S. Lender for whom payments under this Agreement constitute income that is effectively connected with the conduct of a trade or business in the United States by such Lender (or, in the event that such Lender is a Disregarded Entity, by the owner of such Lender), IRS Form W-8ECI;
(D) in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN-E or IRS Form W-8BEN and (2) a certificate substantially in the form of Exhibit E (a U.S. Tax Compliance Certificate ) to the effect that such Lender (or, in the event that such Lender is a Disregarded Entity, the owner of such Lender) is not (a) a bank within the meaning of Section 881(c)(3)(A) of the Code, (b) a 10 percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a controlled foreign corporation described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;
(E) in the case of a Non-U.S. Lender (or, in the event that the Non-U.S. Lender is a Disregarded Entity, the owner of such Non-U.S. Lender) that (for U.S. federal income Tax purposes) is not the beneficial owner of payments made under a Credit Document (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A) , (B) , (C) , (D) and (F) of this paragraph (f)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided , however , that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or
(F) any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable any Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.
(iii) If a payment made to a Lender under any Credit Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to
64
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lenders obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f)(iii) (but, for the avoidance of doubt, not for the purposes of the definition of Excluded Taxes), FATCA shall include any amendments made to FATCA after the Escrow Date, whether or not such amendments are included in the definition set forth in Article I .
(g) Treatment of Certain Refunds . If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including additional amounts paid pursuant to this Section 2.17 ), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.17(g) , in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this Section 2.17(g) if such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 2.17(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.
(h) Each of the Borrowers that is either resident in the United Kingdom for United Kingdom tax purpose or that otherwise makes payments under this Agreement that have a United Kingdom source (in each case, a UK Borrower ) must make all payments hereunder without any deduction or withholding for or on account of United Kingdom Taxes ( UK Tax Deduction ), unless a UK Tax Deduction is required by law. If such a UK Tax Deduction is required by law, the amount of the payment due from the UK Borrower in question will be increased by an amount which (after making all UK Tax Deductions) leaves an amount equal to the payment which would have been due had no UK Tax Deduction been required.
(i) A UK Borrower is not required to make an increased payment under paragraph (a) or (h) above for a UK Tax Deduction if on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender without a UK Tax Deduction if it was, or had not ceased to be, a Qualifying Lender, but on that date that Lender is not, or has ceased to be, a Qualifying Lender in respect of that UK Borrower;
65
(ii) if the relevant Lender is a Treaty Lender and the UK Borrower making the payment is able to demonstrate that the UK Tax Deduction would not have been required if the Lender had complied with its obligations under paragraph 2.17(f) above; or
(iii) (A) the relevant Lender is a Qualifying Lender solely under sub-paragraphs (ii) and (iii) of the definition of UK Lender; and (B) an officer of HM Revenue & Customs has given (and not revoked a direction) (a Direction) under section 931 of the Income Tax Act 2007 (as that provision has effect on the date on which the relevant Lender became a party to this Agreement) which relates to that payment and that Lender has received from that UK Borrower a certified copy of that Direction; and (C) the payment could have been made to the Lender without any Tax Deduction in the absence of that Direction; or
(iv) the relevant Lender is a Qualifying Lender solely under sub-paragraphs (ii) and (iii) of the definition of UK Lender and it has not, other than by reason of any change after the date of this Agreement in (or in the interpretation, administration or application of) any law, or any published practice or concession of any relevant taxing authority, given a Tax Confirmation to the Borrowers.
(j) Paragraph (i)(i) above will not apply if the relevant Lender has ceased to be a Qualifying Lender in respect of that UK Borrower by reason of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration or application of) any law or treaty or any published practice or concession of any relevant taxing authority.
(k) If a UK Borrower is required to make a UK Tax Deduction, that UK Borrower must make the minimum UK Tax Deduction allowed by law and must make any payment required in connection with that UK Tax Deduction within the time allowed by law.
(l) Within 30 days of making either a UK Tax Deduction or a payment required in connection with a UK Tax Deduction, the UK Borrower making that UK Tax Deduction or payment must deliver to the Administrative Agent a statement under section 975 of the United Kingdom Income Tax Act 2009 or other evidence satisfactory to that Lender (acting reasonably) that the UK Tax Deduction has been made or (as applicable) the appropriate payment has been paid to HMRC.
(m) If a Lender is a UK Lender then it shall confirm to the Borrowers that it is a UK Lender by entering into this Agreement. Where applicable, entering into this Agreement shall also be considered to be a Tax Confirmation by a UK Lender to the Borrowers. UK Lender must promptly notify the Borrower if it ceases to be a UK Lender.
66
(n) HMRC Authorization .
(i) Subject to paragraph (ii) below, a Treaty Lender and each UK Borrower which makes a payment to which that Treaty Lender is entitled shall co-operate in promptly completing any procedural formalities necessary for that UK Borrower to obtain authorization from HMRC to make that payment without UK Tax Deduction.
(ii) Nothing in this Section 2.17 shall require a Treaty Lender receiving payments hereunder or under any other Credit Document from a UK Borrower, to:
(A) | register under the HMRC DT Treaty Passport scheme; or |
(B) | apply the HMRC DT Treaty Passport scheme to any Loan if it has so registered; or |
(C) | file any forms or documentation pursuant to Section 2.17(f) relating to exemption from tax imposed by the United Kingdom on interest, if it has: |
(1) | included an indication that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph (o) or (s) below; or |
(2) | notified the Borrower or Administrative Agent of its scheme reference number and its jurisdiction of tax residence pursuant to paragraph (q) or (s) below, |
and the UK Borrower making that payment has not complied with its obligations under paragraphs (p) , (r) or (t) below.
(o) A Treaty Lender which becomes a party to this Agreement on the date on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall make an indication to that effect (for the benefit of the Administrative Agent and without any liability to the Borrowers) by providing its scheme reference number and its jurisdiction of residence to the Administrative Agent or the Borrower on or before the date of this Agreement.
(p) Where a Treaty Lender provides the indication described in paragraph (o) above:
(i) each Borrower and initial Subsidiary Borrower shall, to the extent that Lender is making a Commitment available to that UK Borrower file a duly completed form DTTP2 in respect of such Lender with HMRC within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing; and
(ii) each Subsidiary Borrower that becomes a UK Borrower after the date of this Agreement, shall to the extent that Lender is making a Commitment available to that UK Borrower, file a duly completed form DTTP2 in respect of such Lender with HMRC within 30 days of such UK Borrower becoming a party to this Agreement and shall promptly provide the Lender with a copy of that filing.
67
(q) A Treaty Lender which has not provided the indication referred to in paragraph (o) above but which holds a passport under the HMRC DT Treaty Passport scheme and subsequently wishes that scheme to apply to this Agreement shall notify the Borrower or the Administrative Agent (for the benefit of the Administrative Agent and without liability to the Borrowers) of its scheme number and its jurisdiction of tax residence.
(r) Where a Lender notifies the Borrower or the Administrative Agent of its scheme reference number and its jurisdiction of tax residence pursuant to paragraph (q) above:
(i) each UK Borrower which is a Subsidiary Borrower at the date on which that notice becomes effective in accordance with Section 9.01 shall, to the extent that that Lender is a Lender under Commitments made available to that UK Borrower, file a duly completed form DTTP2 in respect of such Lender with HMRC within 30 days of that date and shall promptly provide the Lender with a copy of that filing; and
(ii) each Subsidiary Borrower which becomes a UK Borrower after the date on which such notice becomes effective in accordance with Section 9.01 , shall to the extent that Lender is making a Loan available to that UK Borrower, file a duly completed form DTTP2 in respect of such Lender with HMRC within 30 days of such Borrower becoming a party to this Agreement and shall promptly provide the Lender with a copy of that filing.
(s) A Lender that becomes a party to this Agreement after the date of this Agreement (the Relevant Date ) and is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes for that scheme to apply to this Agreement shall include an indication to that effect (for the benefit of the Administrative Agent and without liability to the Borrowers) in the documents which it executes by including its scheme reference number and its jurisdiction of tax residence.
(t) Where a Lender includes the indication described in paragraph (s) :
(i) each UK Borrower which is a Subsidiary Borrower as at the Relevant Date shall, to the extent that Lender becomes a Lender under Commitments made available to that UK Borrower, file a duly completed form DTTP2 with HMRC within 30 days of that Relevant Date and shall promptly provide the Lender with a copy of that filing; and
(ii) each Subsidiary Borrower that becomes a UK Borrower after the Relevant Date, shall to the extent that Lender is making a Commitment available to that UK Borrower, file a duly completed form DTTP2 in respect of such Lender with HMRC within 30 days of such Borrower becoming a party to this Agreement and shall promptly provide the Lender with a copy of that filing.
68
(u) If a Lender has not:
(i) included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph (o) or (s) above; or
(ii) notified the Borrower or Administrative Agent of its scheme reference number and its jurisdiction of tax residence pursuant to paragraph (q) above,
the Borrowers shall not file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lenders Commitment(s) or its participation in any Loan.
(v) Lender Status Confirmation . Each Lender which becomes a party to this Agreement after the date of this Agreement shall indicate, in the Assignment and Assumption which it executes on becoming a party which of the following categories it falls in:
(i) not a Qualifying Lender;
(ii) a Qualifying Lender (other than a Treaty Lender); or
(iii) a Treaty Lender.
If such a Lender fails to indicate its status in accordance with this Section 2.17(v) then such Lender shall be treated for the purposes of this Agreement (including by each Borrower) as if it is not a Qualifying Lender until such time as it notifies the Administrative Agent which category applies (and the Administrative Agent, upon receipt of such notification, shall inform the Borrower). For the avoidance of doubt, the Assignment and Assumption shall not be invalidated by any failure of a Lender to comply with this Section 2.17(v) .
(w) For the purposes of this Section 2.17 :
Qualifying Lender means a Lender which is:
(i) a UK Lender; or
(ii) a Treaty Lender;
Tax Confirmation means a confirmation by a UK Lender that the person beneficially entitled to interest payable to that UK Lender in respect of a Loan is either:
(i) | a company resident in the United Kingdom for United Kingdom tax purposes; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (for the purposes of section 19 of the United Kingdom Corporation Tax Act 2009) of that company. |
69
Treaty Lender means, in respect of a UK Borrower, a Lender which:
(i) is treated as resident of a Treaty State for the purposes of a double taxation agreement with the United Kingdom;
(ii) does not carry on a business in the United Kingdom through a permanent establishment with which that Lenders participation in the Loan is effectively connected; and
(iii) meets all other conditions in the relevant double taxation agreement for full exemption from tax imposed by the United Kingdom on interest, except that for this purpose it shall be assumed that the following are satisfied:
(A) | any condition which relates (expressly or by implication) to there being a special relationship between the UK Borrower and a Lender or between both of them and another person, or to the amounts or terms of any Loan or the Credit Documents, or to any other matter that is outside the exclusive control of that Lender; and |
(B) | any necessary procedural formalities. |
Treaty State means a jurisdiction having a double taxation agreement with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.
UK Lender means a Lender which is:
(iv) within the charge to United Kingdom corporation tax in respect of, and beneficially entitled to, a payment of interest on a Loan made by a person that was a bank for the purposes of section 879 of the United Kingdom Income Tax Act 2007 at the time the Loan was made;
(v) a company resident in the United Kingdom for United Kingdom tax purposes; or
(vi) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and is required to bring into account interest paid to it under this Agreement in computing its chargeable profits (for the purposes of section 19 of the United Kingdom Corporation Tax Act 2009).
(x) Survival . Each partys obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other obligations under any Credit Document.
(y) Issuing Bank . For purposes of Section 2.17(e) and (f) , the term Lender includes any Issuing Bank.
70
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs . (a) Each of the Borrowers shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15 , 2.16 or 2.17 , or otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made as follows: (i) for payments made to the Administrative Agent, at its offices at 270 Park Avenue, New York, New York; (ii) for payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein; and (iii) payments made pursuant to Sections 2.15 , 2.16 , 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder of (i) principal or interest in respect of any Loan shall be made in the currency in which such Loan is denominated, (ii) reimbursement obligations shall be made in the currency in which the Letter of Credit in respect of which such reimbursement obligation exists is denominated or (iii) any other amount due hereunder or under another Credit Document shall be made in Dollars. Any payment required to be made by the Administrative Agent hereunder shall be deemed to have been made by the time required if the Administrative Agent shall at or before such time, have taken the necessary steps to make such payment in accordance with the regulations or operating procedures of the clearing or settlement system used by the Administrative Agent to make such payment.
(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set off or counterclaim or otherwise, obtain payment in respect of (i) any obligations due and payable to such Lender hereunder or under the other Credit Documents at such time in excess of its ratable share (according to the proportion of (A) the amount of such obligations due and payable to such Lender at such time to (B) the aggregate amount of obligations due and payable to all Lenders hereunder and under the other Credit Documents at such time) of payments on account of obligations due and payable to all Lenders hereunder and under the other Credit Documents at such time obtained by all the Lenders at such time or (ii) any obligations owing (but not due and payable) to such Lender hereunder and under the other Credit Documents at such time in excess
71
of its ratable share (according to the proportion of (A) the amount of such obligations owing (but not due and payable) to such Lender at such time to (B) the aggregate amount of obligations owing (but not due and payable) to all Lenders hereunder and under the other Credit Documents at such time) of payments on account of obligations owing (but not due and payable) to all Lenders hereunder and under the other Credit Documents at such time obtained by all the Lenders at such time, then the Lender receiving such greater proportion shall notify the Administrative Agent of such fact and shall purchase (for cash at face value) participations in the Term B Loans, Revolving Loans and participations in LC Disbursements and Swingline Loans of other Lenders, as applicable, or make such other adjustments as shall be equitable, to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by any of the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each of the Borrowers consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Applicable Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Applicable Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the Applicable Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Applicable Borrower will not make such payment, the Administrative Agent may assume that the Applicable Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Applicable Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, (i) at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation (in the case of an amount denominated in Dollars) and (ii) the rate reasonably determined by the Administrative Agent to be the cost to it of funding such amount (in the case of an amount denominated in a Foreign Currency).
(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c) , 2.05(d) or (e) , 2.06(b) , 2.18(d) or 9.03(c) , then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lenders obligations under such Sections until all such unsatisfied obligations are
72
fully paid, and/or (ii) hold such amounts in a segregated account over which the Administrative Agent shall have exclusive control as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clause (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders . (a) If any Lender requests compensation under Section 2.15 , or if any Credit Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17 , then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The applicable Credit Party hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15 , or if any Credit Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17 , or if any Lender becomes a Defaulting Lender, then the applicable Credit Party may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04 ), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) such Credit Party shall have received the prior written consent of the Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Bank and Swingline Lenders), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or such Credit Party (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17 , such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling such Credit Party to require such assignment and delegation cease to apply.
(c) If, in connection with any proposed amendment, modification or waiver pursuant to Section 9.02 (a Proposed Change ) requiring the consent of all or all affected Lenders, the consent of the Required Lenders is obtained, but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in this clause (c) being referred to as a Non-Consenting Lender ), then, so long as the Administrative Agent is not a Non-Consenting Lender, at the Borrowers request and at its sole cost and expense, the Administrative Agent, or a Person or Persons reasonably acceptable to the Administrative Agent, shall have the right with the Administrative Agents consent (but shall
73
have no obligation) to purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree that they shall, upon the Administrative Agents request, sell and assign to the Administrative Agent or such Person, all of the Loans and Commitments of such Non-Consenting Lenders for an amount equal to the principal balance of all Loans held by the Non-Consenting Lenders and all accrued interest, fees and other amounts with respect thereto through the date of the sale, such purchase and sale to be consummated at par pursuant to an Assignment and Assumption (with the Borrower or the assignee paying any applicable assignment fee). Any such required sale and assignment shall be treated as a prepayment for purposes of Section 2.16 and the Borrower shall be liable for any amounts payable thereunder as a result of such sale and assignment.
SECTION 2.20. Subsidiary Borrowers .
(a) The Borrower may, at any time or from time to time, designate one or more Wholly-Owned Foreign Subsidiaries of the Borrower as a Subsidiary Borrower hereunder by furnishing to the Administrative Agent and the Lenders at least five Business Days before such designation is to take effect a Designation Letter in duplicate, duly completed and executed by the Borrower and such Wholly-Owned Foreign Subsidiary, together with (i) the items described in paragraphs (c) and (d) of Section 4.01 relating to such Subsidiary Borrower in form and substance satisfactory to the Administrative Agent, (ii) such security agreements and similar documents as the Administrative Agent shall reasonably request to accomplish the pledge by such Subsidiary Borrower of substantially all of its assets (other than Real Property) and such immaterial assets as may be agreed upon between the Administrative Agent and the Borrower) to secure the obligations of such Subsidiary Borrower hereunder and under the Designation Letter, and (iii) such other documents and information (including information relating to know your customer rules and regulations) as the Administrative Agent shall reasonably request. Upon any such designation of a Wholly-Owned Foreign Subsidiary and the consent of each of the Lenders with a Revolving Commitment, which will not be unreasonably withheld, such Subsidiary shall be a Subsidiary Borrower hereunder (with the related rights and obligations) and shall be entitled to request Revolving Loans.
(b) So long as all Loans made to any Subsidiary Borrower and any related obligations have been paid in full, the Borrower may terminate the status of such Subsidiary Borrower as a Subsidiary Borrower hereunder by furnishing to the Administrative Agent a Termination Letter in duplicate, duly completed and executed by the Borrower and such Subsidiary. Any Termination Letter furnished hereunder shall be effective upon receipt by the Administrative Agent, which shall promptly notify the Lenders. Notwithstanding the foregoing, the delivery of a Termination Letter with respect to any Subsidiary Borrower shall not terminate (i) any obligation of such Subsidiary Borrower that remains unpaid at the time of such delivery or (ii) the obligations of the Borrower under the Parent Guaranty with respect to any such unpaid obligations.
(c) The UK Borrower as the initial Subsidiary Borrower, hereby agrees to be bound by the provisions of the second sentence of the third paragraph of the attached form of Designation Letter as if the same were fully set forth herein.
74
SECTION 2.21. Defaulting Lenders .
Notwithstanding any provision of this Agreement to the contrary, if any Lender with a Revolving Commitment or Revolving Credit Exposure becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) fees shall cease to accrue on the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12 ;
(b) the Revolving Commitments, LC Exposure and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders or Required Revolving Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02 ), provided that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby;
(c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting Lender then, so long as no Event of Default has occurred and is continuing:
(i) all or any part of such Swingline Exposure or LC Exposure shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Revolver Percentages but only to the extent the sum of all non-Defaulting Lenders Revolving Credit Exposures plus such Defaulting Lenders Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders Revolving Commitments;
(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the Issuing Bank only the Borrowers obligations corresponding to such Defaulting Lenders LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.05(j) for so long as such LC Exposure is outstanding;
(iii) if the Borrower cash collateralizes any portion of such Defaulting Lenders LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lenders LC Exposure during the period such Defaulting Lenders LC Exposure is cash collateralized;
(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(a) shall be adjusted in accordance with such non-Defaulting Lenders Applicable Revolver Percentages; or
(v) if all or any portion of such Defaulting Lenders LC Exposure is neither cash collateralized nor reallocated pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender
75
hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lenders Revolving Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lenders LC Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or reallocated; and
(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit unless, in each case, such person is satisfied that the related exposure and the Defaulting Lenders then outstanding LC Exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.19(c) , and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.19(c)(i) (and such Defaulting Lender shall not participate therein).
If (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur following the Funding Date and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless, in each case, the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.
In the event that the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lenders Revolving Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Revolver Percentage. The Borrower shall make any payments under Section 2.16 to any assignor resulting from such assignments.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants as follows to each Lender and the Administrative Agent as of the Funding Date and thereafter on each date as required by Section 4.02 that:
SECTION 3.01. Organization; Powers . Except as set forth on Schedule 3.01 , each of the Borrower and its Restricted Subsidiaries is duly organized, validly existing and
76
in good standing under the laws of the jurisdiction of its organization (except, with respect to Restricted Subsidiaries that are not Subsidiary Guarantors, where the failure to be in good standing under the laws of their respective jurisdiction of incorporation could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect), has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.
SECTION 3.02. Authorization; Enforceability . The Transactions are within the Credit Parties corporate or limited liability company or other organizational powers and have been duly authorized by all necessary corporate and, if required, stockholder or similar action. This Agreement has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts . The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Restricted Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under (i) the Senior Note Documents or (ii) any other indenture, agreement or other instrument binding upon the Borrower or any of its Restricted Subsidiaries or its assets, other than (in the case of such other indentures, agreements or instruments referred to in clause (ii) ) such violations or defaults which could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Restricted Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Restricted Subsidiaries, other than Permitted Liens.
SECTION 3.04. Financial Condition; No Material Adverse Change . (a) The Borrower has heretofore furnished to the Lenders Manitowocs consolidated balance sheet and statements of income, stockholders equity and cash flows as of and for the fiscal year ended December 31, 2014, reported on by Pricewaterhouse Coopers LLP, independent public accountants. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of Manitowoc and its consolidated Subsidiaries as of such date and for such period in accordance with GAAP. The Borrower has heretofore furnished to the Lenders the unaudited pro forma combined financial statements of the Borrower as of and for the fiscal year ended December 31, 2014 and the nine months ended September 30, 2015 (the Combined Financial Statements ). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Restricted Subsidiaries as of such date and for such period in accordance with GAAP.
77
(b) Since September 30, 2015 (determined by reference to the Combined Financial Statements for and as of the nine months ended September 30, 2015), there has been no material adverse change in the business, assets, operations or financial condition of the Borrower and its Restricted Subsidiaries, taken as a whole.
SECTION 3.05. Properties . (a) Each of the Borrower and its Restricted Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes, and free and clear of all Liens, other than Permitted Liens. All Real Property having a fair market value in excess of $5,000,000 owned by the Borrower or any of the Subsidiary Guarantors as of the Funding Date is set forth on Schedule 3.05 . Schedule 3.05 also sets forth (i) the locations of all leased Real Property of the Borrower or any Subsidiary Guarantor where equipment and/or inventory having a fair market value in excess of $1,000,000 in the aggregate (as determined at any time during the immediately preceding four fiscal quarters) is held as of the Funding Date, and (ii) the locations where such equipment and/or inventory is held pursuant to bailment arrangements as of the Funding Date.
(b) Each of the Borrower and its Restricted Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Restricted Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters . (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Restricted Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve the Credit Documents or the Transactions.
(b) Except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
(c) This Section 3.06 and Section 3.04(b) contain the Borrowers sole and exclusive representations with respect to Environmental Laws.
SECTION 3.07. Compliance with Laws and Agreements . Each of the Borrower and its Restricted Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.
78
SECTION 3.08. Investment Company Status . Neither the Borrower nor any of its Restricted Subsidiaries is an investment company as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09. Taxes . Each of the Borrower and its Subsidiaries (or, solely with respect to any period prior to the consummation of the Spin Transaction, Manitowoc and its Subsidiaries) has timely filed or caused to be filed all Tax returns and reports required to have been filed (including the filing of extensions in respect thereof) and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary (or, solely with respect to any period prior to the consummation of the Spin Transaction, Manitowoc or such Subsidiaries), as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA; Foreign Pension Plans . (a) No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. Except as set forth on Schedule 3.10 , the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements prior to the Funding Date reflecting such amounts, exceed by more than $25,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements prior to the Funding Date reflecting such amounts, exceed by more than $25,000,000 the fair market value of the assets of all such underfunded Plans.
(b) Each Foreign Pension Plan has been maintained in substantial compliance with its terms and in substantial compliance with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities. All contributions required to be made with respect to a Foreign Pension Plan have been timely made. Neither the Borrower nor any of its Subsidiaries has incurred any material obligation in connection with the termination of or withdrawal from any Foreign Pension Plan. Except as set forth on Schedule 3.10 , the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrowers most recently ended fiscal year prior to the Funding Date on the basis of actuarial assumptions, each of which is reasonable, did not exceed by more than $25,000,000 the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.
(c) Other than in relation to the Grove Europe Pension Scheme and the Berisford (1948) Pension Scheme, no UK Borrower is or has at any time been: (A) an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004 (U.K.)) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pensions Schemes Act 1993 (U.K.)); or (B) connected with or an associate (as those terms are used in
79
sections 38 and 43 of the Pensions Act 2004 (U.K.)) of such an employer. No UK Borrower has been issued a Financial Support Direction or Contribution Notice in respect of any pension scheme. To the Borrowers knowledge, (i) there are no grounds to expect that the Pensions Regulator would have the power to issue a Financial Support Direction or a Contribution Notice to Enodis Holdings and its Subsidiaries as a result of the consummation of the Transactions or, if the Pensions Regulator had such a power, it would not be reasonable for it to exercise such a power, in each case with respect to any of the UK defined benefit pension schemes operated by or maintained for the benefit of Enodis Holdings and its Subsidiaries; and (ii) there is no requirement (and no requirement will arise) to notify, or, in consequence of clause (i) above, the Borrower does not consider it necessary to seek any clearance from, the Pensions Regulator as a result of the consummation of the Transactions. Under the terms of the UK defined benefit pension schemes operated by or maintained for the benefit of Enodis Holdings and its Subsidiaries, the pension trustees do not have the power to unilaterally wind up those schemes or to unilaterally increase the contributions required to be made by Enodis Holdings and its Subsidiaries.
SECTION 3.11. Disclosure . The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains or will contain any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. The Security Documents . (a) The provisions of the Security Documents are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the US Security Agreement Collateral and UK Security Agreement Collateral described therein, and the Collateral Agent, for the benefit of the Secured Creditors, will have, (i) upon its taking all actions required of it under the UCC, a fully perfected security interest in all right, title and interest in all of the US Security Agreement Collateral described therein (to the extent that such security interest can be perfected by filing a UCC financing statement or, to the extent required by the US Security Agreement, by taking possession of (or taking certain other actions with respect to) the respective US Security Agreement Collateral), subject to no other Liens other than Permitted Liens and (ii) when all filings in appropriate form are filed and recorded in the appropriate offices, a fully perfected security interest in all right, title and interest in all of the UK Security Agreement Collateral described therein (to the extent that such security interest can be perfected by filing appropriate forms or, to the extent required by the UK Security Agreement, by taking possession of (or taking certain other actions with respect to) the respective UK Security Agreement Collateral), subject to no other Liens other than Permitted Liens. In addition, the recordation of (x) the Grant of Security Interest in U.S.
80
Patents and (y) the Grant of Security Interest in U.S. Trademarks in the respective forms attached to the US Security Agreement, in each case in the United States Patent and Trademark Office, together with UCC filings made pursuant to the US Security Agreement, will create, as may be perfected by such filings and recordation, a perfected security interest in the United States trademarks and patents covered by the US Security Agreement, and the recordation of the Grant of Security Interest in U.S. Copyrights in the form attached to the US Security Agreement with the United States Copyright Office, together with UCC filings made pursuant to the US Security Agreement, will create, as may be perfected by such filings and recordation, a perfected security interest in the United States copyrights covered by the US Security Agreement.
(b) The security interests created in favor of the Collateral Agent, as pledgee, for the benefit of the Secured Creditors, under the US Pledge Agreement constitute perfected security interests in the US Pledge Agreement Collateral described in the US Pledge Agreement, subject to no security interests of any other Person. No filings or recordings are required in order to perfect (or maintain the perfection or priority of) the security interests created in the US Pledge Agreement Collateral under the US Pledge Agreement other than with respect to that portion of the US Pledge Agreement Collateral constituting a general intangible under the UCC.
SECTION 3.13. Subsidiaries . (a) As of the Funding Date, the Borrower has no Subsidiaries other than those Subsidiaries listed on Schedule 3.13 . Schedule 3.13 correctly sets forth, as of the Funding Date, (i) the percentage ownership (direct or indirect) of the Borrower in each class of Equity Interests of its Subsidiaries and also identifies the direct owner thereof, and (ii) the jurisdiction of organization of each such Subsidiary. Each Subsidiary which was, as of the Funding Date, a Material Subsidiary is identified as such on Schedule 3.13 .
(b) To the actual knowledge of a Senior Officer of the Borrower, there is no Tax, levy, impost, duty, fee, assessment or other governmental charge, or any deduction or withholding imposed by any Governmental Authority in or of the jurisdiction in which a Subsidiary Borrower is organized and existing (or otherwise resident for tax purposes) either (i) on or by virtue of the execution or delivery of the applicable Credit Documents or (ii) on any payment to be made by such Subsidiary Borrower pursuant to any Loan made to such Subsidiary Borrower, except as has been disclosed in writing to the Administrative Agent.
SECTION 3.14. Indebtedness . Schedule 6.01 sets forth a true and complete list of all Indebtedness (including Guarantees (other than Guarantees otherwise permitted under Section 6.01 )) of the Borrower and its Restricted Subsidiaries which is to remain outstanding after giving effect to the Transactions (excluding the Loans and the Letters of Credit), in each case showing the aggregate principal amount thereof and the name of the respective borrower and any Credit Party or any of its Restricted Subsidiaries which directly or indirectly guarantees such debt.
SECTION 3.15. Insurance . Schedule 3.15 sets forth a true and complete listing of all insurance maintained by the Borrower and its Restricted Subsidiaries as of the Funding Date, with the amounts insured (and any deductibles) set forth therein.
81
SECTION 3.16. Regulation U . Margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System) constitutes less than 25% of the value of those assets of the Borrower and its Restricted Subsidiaries which are subject to any limitation on sale, pledge, or other restriction hereunder. Neither the making of any Loan or issuance of any Letters of Credit hereunder nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.
SECTION 3.17. Solvency . On the Funding Date, after giving effect to the consummation of the Transactions and the payment of all fees, costs and expenses payable by the Borrower with respect thereto, (a) on a going concern basis the fair market value of the assets of the Borrower and its Restricted Subsidiaries, on a consolidated basis, will exceed their debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of the Borrower and its Restricted Subsidiaries, on a consolidated basis, will be greater than the amount that will be required to pay their debts and other liabilities, subordinated, contingent or otherwise, as such debts or other liabilities become absolute and matured in the ordinary course, (c) the Borrower and its Restricted Subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured in the ordinary course, and (d) the Borrower and its Restricted Subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct the business in which they are engaged as such business is now conducted and is proposed to be conducted following the Funding Date. The amount of contingent liabilities at any time shall be computed as the amount that can reasonably be expected to become an actual and matured liability.
SECTION 3.18. Anti-Corruption Laws and Sanctions . The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and employees and to the knowledge of the Borrower its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects, and are not engaged in any activity that would reasonably be expected to result in any such Subsidiary Borrower being designated as a Sanctioned Person. None of (a) the Borrower, any Subsidiary or, to the knowledge of the Borrower or such Subsidiary, any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by this Agreement will violate any Anti-Corruption Law or applicable Sanctions.
SECTION 3.19. Centre of Main Interest . For the purposes of the Insolvency Regulation, each of UK Borrowers centre of main interest (as that term is used in Article 3(1) of the Insolvency Regulation) is situated in its jurisdiction of incorporation and none of them have an establishment (as that term is used in Article 2(h) of the Insolvency Regulation) in any other jurisdiction.
82
SECTION 3.20. Registration . It is not necessary to ensure the legality, validity, enforceability, priority or admissibility in evidence of any Credit Documents to which the UK Borrower or any Credit Party is a party that such documents be filed, registered or recorded with, or executed or notarized before, any court or other authority in the jurisdiction in which such UK Borrower or such other Credit Party is organized and existing or that any registration charge or stamp or similar tax be paid on or in respect of such documents or any other document, except for (i) any such filing, registration, recording, execution or notarization as has been made or is not required to be made until such document or any other document is sought to be enforced (ii) registration of particulars of the UK Security Agreement at Companies House in England and Wales in accordance with Part 25 (Company Charges) of the Companies Act 2006 (UK) or any regulations relating to the registration of charges made under, or applying the provisions of, the Companies Act 2006 (UK) and payment of associated fees and (iii) any charge or tax as has been timely paid.
SECTION 3.21. Preferred Creditors . Each UK Borrowers payment obligations under the UK Security Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
ARTICLE IV
Conditions
SECTION 4.01. Funding Date . This Agreement shall become effective upon, and only upon, the satisfaction of each of the following conditions precedent and the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02 ):
(a) The Administrative Agent (or its counsel) shall have received from each Credit Party and each financial institution identified on Schedule 2.01 either (i) a counterpart hereof signed on behalf of such Credit Party or financial institution (and to each other Credit Document to which it is a party, including, without limitation, the Collateral Agreement and such other Credit Documents as the Administrative Agent or its counsel may have reasonably requested) or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement or such other Credit Document) that such party has signed a counterpart of each document referenced in the foregoing clause (i) to which it is a party.
(b) The Administrative Agent shall have received documents and certificates relating to the authorization of this Agreement and the transactions contemplated hereby by the Borrowers and each Subsidiary Guarantor in form and substance satisfactory to the Administrative Agent.
(c) The Administrative Agent shall have received an executed legal opinion (addressed to the Administrative Agent and the Lenders) from (i) Foley & Lardner LLP, U.S. counsel for the Credit Parties, and (ii) Bond Dickinson LLP, UK counsel for Manitowoc FSG UK Limited and the UK Borrower, in each case in form and substance satisfactory to the Administrative Agent. The Borrower hereby requests such counsel to deliver such opinions.
83
(d) The Administrative Agent shall have received documents and certificates relating to the organization, existence and good standing of each Borrower and each Subsidiary Guarantor and the authorization of the Transactions in form and substance satisfactory to the Administrative Agent and its counsel.
(e) The Borrower shall have caused to be delivered to the Administrative Agent insurance certificates or binders naming the Collateral Agent, on behalf of the Secured Creditors, as loss payee for any property insurance policies and additional insured for any general, excess or umbrella, automobile, marine or other similar liability policies, in form and substance acceptable to the Administrative Agent.
(f) The Administrative Agent shall have received a certificate, dated the Funding Date and signed by a Senior Officer of the Borrower, (i) confirming compliance as of such date with the conditions set forth in paragraphs (a) , (b) and (c) of Section 4.02 , (ii) certifying as to the occurrence of the Spin Transaction (or certify that it shall occur substantially concurrently with the transactions contemplated hereby) and (iii) certifying that attached thereto is a true, correct and complete copy of the material Senior Note Documents.
(g) A completed Perfection Certificate, dated the Funding Date and signed by a Senior Officer of the Borrower.
(h) Receipt by the Administrative Agent of updated Schedules 2.06 , 3.01 , 3.05 , 3.10 , 3.13 , 3.15 , 6.01 , 6.02 and 6.05 to replace the corresponding Schedules attached hereto as of the Escrow Date in form and substance reasonably satisfactory to the Administrative Agent and the Lenders, provided that the Lenders agree that such updated schedules shall be deemed to be satisfactory if such updated Schedules (i) do not differ from the corresponding Schedules attached hereto as of the Escrow Date in a manner that is material and adverse to the Lenders or (ii) are otherwise satisfactory to the Required Lenders (and any references to any such Schedules in this Credit Agreement shall thereafter refer to such Schedules as the same may have been updated pursuant to this Section 4.01(h) .
(i) The Lenders, the Administrative Agent and the Arrangers shall have received all fees and other amounts due and payable on or prior to the Funding Date, including, to the extent invoiced, reimbursement or payment of all out of pocket expenses required to be reimbursed or paid by the Borrower hereunder.
(j) The Administrative Agent shall have received evidence satisfactory to it that the Spin Transaction has occurred (or shall occur substantially concurrently with the transactions contemplated hereby).
(k) All principal, interest, fees and other amounts owing under the Existing Credit Agreement (other than contingent obligations in respect of letters of credit continuing under separate credit facilities of Manitowoc or the Existing Letters of Credit continuing hereunder) and under the Borrowers and Manitowocs existing senior notes shall have been (or shall substantially contemporaneously herewith be) repaid in full, all commitments thereunder
84
shall have been terminated, and the Administrative Agent shall have received payoff or paydown documentation and guarantees and Liens releases (as applicable) with respect to the Borrower, Manitowoc and their Subsidiaries, in each case, in form and substance acceptable to the Administrative Agent.
(l) The Escrow Date shall have occurred.
(m) The Administrative Agent shall have received evidence satisfactory to it that the Borrower or a Restricted Subsidiary (or a SPV) has entered into a Permitted Securitization with Wells Fargo Bank, N.A. evidencing Receivables Indebtedness in an amount of $110,000,000 pursuant to documentation (including, without limitation, an intercreditor agreement between the Administrative Agent and Wells Fargo Bank, N.A.) acceptable to the Arrangers.
(n) The Administrative Agent shall have received evidence satisfactory to it that all conditions precedent to the issuance by the Borrower of the Senior Notes shall have been satisfied, and the Borrower shall have received (or shall contemporaneously herewith receive) proceeds thereof in an amount of $425,000,000, which proceeds shall be held in escrow and on the Funding Date be contemporaneously applied in a manner, and pursuant to documentation, acceptable to the Arrangers.
(o) The Administrative Agent shall have received evidence satisfactory to it that all conditions precedent to the issuance by Manitowoc of its Senior Secured Notes due 2021 shall have been satisfied, and Manitowoc shall have received (or shall contemporaneously herewith receive) proceeds thereof in an amount of $260,000,000, which proceeds shall be held in escrow and on the Funding Date be substantially contemporaneously applied in a manner, and pursuant to documentation, acceptable to the Arrangers.
(p) The Administrative Agent shall have received evidence satisfactory to it that all conditions precedent to the closing of Manitowocs senior secured revolving credit facility agented by Wells Fargo Bank, National Association, and certain other financial institutions shall have been satisfied.
(q) All governmental and third party approvals necessary or, in the reasonable discretion of the Administrative Agent, advisable in connection with the financing contemplated hereby and the continuing operations of the Borrower and their Restricted Subsidiaries shall have been obtained and be in full force and effect.
(r) The Administrative Agent, in its capacity as Collateral Agent, shall have confirmed that it has Liens creating a first priority security interest in the Collateral, subject to Permitted Liens.
(s) The Lenders shall have received satisfactory financial projections of the Borrowers for fiscal years 2015 through 2020.
(t) The Borrowers shall have delivered a solvency certificate in form and substance satisfactory to the Administrative Agent.
85
(u) The Borrower shall have delivered a Borrowing Request to the Administrative Agent for all Borrowings to be made on the Funding Date.
(v) The Lenders shall have received all documentation and other information required by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including without limitation, the PATRIOT Act.
(w) The Borrowers shall have provided such other corporate and other certificates, opinions, documents, instruments and agreements as the Lenders may reasonably request.
The first date upon which all of the foregoing conditions shall have been satisfied is referred to as the Funding Date. The Administrative Agent shall notify the Borrower and the Lenders promptly of the occurrence of the Funding Date and such notice shall be conclusive and binding on all parties hereto. In the event the Funding Date has not occurred on or before July 1, 2016, this Agreement shall not become operative and shall be of no force or effect ((it being understood and agreed that to the extent the Funding Date does not occur on or prior to July 1, 2016, this Agreement and the Commitments of the Lenders (to the extent not already terminated) shall automatically terminate without any further action by the Borrower, the Administrative Agent or any other Person). Without limiting the generality of the provisions of Section 8.01 , (i) for purposes of determining compliance with the conditions specified in this Section 4.01 , each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Funding Date specifying its objection thereto.
SECTION 4.02. Each Credit Event . The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:
(a) The representations and warranties of each Credit Party set forth in the Credit Documents shall be true and correct in all material respects (except that any representation or warranty which is already qualified as to materiality or by reference to Material Adverse Effect shall be true and correct in all respects) on and as of the date of such Borrowing (other than representations and warranties that relate solely to an earlier date) or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.
(c) The requested extension of credit (and the securing thereof by the Collateral) is permitted by the Senior Note Documents.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by each Borrower on the date thereof as to the matters specified in paragraphs (a) , (b) and (c) of this Section.
86
ARTICLE V
Affirmative Covenants
From the Funding Date until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated, in each case, without any pending draw, and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information . The Borrower will furnish to the Administrative Agent and each Lender, including their Public-Siders:
(a) within 90 days after the end of each fiscal year of the Borrower, its audited consolidated (and solely to the extent that, during such year, the Borrower had any Unrestricted Subsidiaries, unaudited consolidating financial statements of the Restricted Subsidiaries, taken as a whole) balance sheet and related statements of operations, stockholders equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of recognized national standing (without a going concern or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Restricted Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated (and solely to the extent that, during such quarter, the Borrower had any Unrestricted Subsidiaries, consolidating balance sheet and income statement of the Restricted Subsidiaries, taken as a whole) balance sheet and related statements of operations, stockholders equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Restricted Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations (x) of the amount of Permitted Indebtedness (as described in Section 4.03(b)(2) of the Senior Note Indenture) then outstanding and then permitted to be incurred by the terms of the Senior Note Indenture and (y) demonstrating compliance with Section 6.16 , (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate (iv) if the
87
assets, liabilities or results of operations of any FIN 46 Subsidiary are reflected in such financial statements, attaching such additional information, all certified by a Financial Officer of the Borrower and in form and detail satisfactory to the Administrative Agent, as may be necessary to permit computation of all amounts relevant to the determination of the Borrowers compliance with this Agreement (taking into account the fact that FIN 46 Subsidiaries and their respective assets, liabilities and results of operations are excluded from all computations made on a consolidated basis for the Borrower and its Restricted Subsidiaries hereunder) and (v) providing a schedule of all Unrestricted Subsidiaries as of the date of such certificate and, if there are any Unrestricted Subsidiaries, setting forth financial information in detail reasonably satisfactory to the Administrative Agent for the applicable period for such Unrestricted Subsidiaries;
(d) concurrently with any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of all periodic reports (including reports on Form 8-K), proxy statements and other financial materials filed by the Borrower or any Restricted Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be;
(f) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Restricted Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request;
(g) no later than 60 days following the first day of each fiscal year of the Borrower, a budget in form reasonably satisfactory to the Administrative Agent (including budgeted statements of income, sources and uses of cash and balance sheets) for the Borrower and its Restricted Subsidiaries on a consolidated basis prepared by the Borrower for each of the four fiscal quarters of such fiscal year prepared in detail, setting forth, with appropriate discussion, the principal assumptions upon which such budgets are based;
(h) promptly after the delivery thereof, copies of all financial information, proxy materials and reports which the Borrower or any of its Restricted Subsidiaries shall deliver to holders (or any trustee, agent or representative therefor) of any of its other Material Indebtedness in each case pursuant to the terms of the documentation governing such Material Indebtedness;
(i) upon the request of the Administrative Agent or the Required Lenders, within 30 days after the end of each fiscal month of the Borrower (other than a fiscal month ending as of the end of a fiscal quarter of the Borrower), its consolidated balance sheet and related statements of operations, stockholders equity and cash flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in
88
comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Restricted Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; and
(j) the Borrower represents and warrants that it, its controlling Person and any Restricted Subsidiary, in each case, if any, either (i) has no registered or publicly traded securities outstanding, or (ii) files its financial statements with the SEC and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, the Borrower hereby (x) authorizes the Administrative Agent to make the financial statements to be provided under Section 5.01(a)(i) and (ii) above, along with the Credit Documents, available to Public-Siders and (y) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Borrower will not request that any other material be posted to Public-Siders without expressly representing and warranting to the Administrative Agent in writing that such materials do not constitute material non-public information within the meaning of the federal securities laws or that the Borrower has no outstanding publicly traded securities, including 144A securities.
Any financial statement or other material required to be delivered pursuant to this Section 5.01 shall be deemed to have been furnished to the Lenders on the date that an electronic copy of such financial statement or other material is provided to the Administrative Agent or is available to the Lenders on the website of the Securities and Exchange Commission at http://www.sec.gov ; provided that the Borrower will furnish paper copies of such financial statements and other materials to any Lender that requests, by notice to the Borrower, that the Borrower do so, until the Borrower receives notice from such Lender to cease delivering such paper copies.
SECTION 5.02. Notices of Material Events . The Borrower will furnish to the Administrative Agent and each Lender written notice of the following promptly upon an officer of the Borrower obtaining knowledge thereof:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $10,000,000; and
(d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
89
SECTION 5.03. Existence; Conduct of Business . The Borrower will, and will cause each of its Material Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any sale of assets, merger, consolidation, liquidation or dissolution permitted under Section 6.03 .
SECTION 5.04. Payment of Obligations . The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance . The Borrower will, and will cause each of its Material Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations and (c) cause all insurance policies or certificates, as requested by the Administrative Agent, to be endorsed to the benefit of the Administrative Agent (including, without limitation, by naming the Administrative Agent as loss payee and/or additional insured). If the Borrower or any of its Material Subsidiaries shall fail to maintain insurance in accordance with this Section 5.05 , or if the Borrower or any of its Material Subsidiaries shall fail to so endorse and deliver all policies or certificates with respect thereto, the Administrative Agent shall have the right (but shall be under no obligation) to procure such insurance and the Borrower agrees to reimburse the Administrative Agent for all reasonable costs and expenses of procuring such insurance.
SECTION 5.06. Books and Records; Inspection Rights . The Borrower will, and will cause each of its Restricted Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Restricted Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws and Material Contractual Obligations . The Borrower will, and will cause each of its Subsidiaries to, comply with (a) all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, and (b) all material contractual obligations, except in each case, where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
90
Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
SECTION 5.08. Use of Proceeds and Letters of Credit .
(a) The proceeds of the Revolving Loans provided on the Funding Date shall be used to (i) refinance existing Indebtedness of Manitowoc and is Subsidiaries (including, without limitation, Indebtedness under the Existing Credit Agreement) in an amount not to exceed $50,000,000 and (ii) fund fees and expenses associated with the Separation and the refinancing of existing Indebtedness described in clause (i) . The proceeds of any Revolving Loans provided after the Funding Date (including pursuant to Section 2.08(d) ) will be used for general corporate purposes of the Borrower and its Restricted Subsidiaries, including to refinance existing Indebtedness of the Borrower and its Subsidiaries and to pay related fees and expenses. Letters of Credit will be issued only to support the ordinary course of business operations of the Borrower and its Restricted Subsidiaries.
(b) The proceeds of the Term B Loans shall be used for general corporate purposes of the Borrower and its Restricted Subsidiaries and to finance a portion of the Funding Date Dividend. The proceeds of Incremental Term B Loans shall be used for general corporate purposes and as set forth in the applicable Incremental Term B Loan Amendment.
(c) No part of the proceeds of any Loan will be used, whether directly or indirectly, to purchase or carry Margin Stock or for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a corporation in the United States or in an European Union member state, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.
SECTION 5.09. Compliance with Environmental Laws . (a) The Borrower will comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws and permits applicable to, or required by, the ownership, lease or use of its Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and will promptly pay or cause to be paid all costs and expenses incurred in connection with such compliance, and will keep or cause to be kept all such Real Property free and clear of any Liens imposed pursuant to such Environmental Laws. Neither the Borrower nor any of its Subsidiaries will generate, use, treat, store, Release or dispose of, or permit the generation, use, treatment, storage, Release or disposal of Hazardous Materials on any Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any such
91
Real Property, except for Hazardous Materials generated, used, treated, stored, Released or disposed of at any such Real Properties in compliance in all material respects with all applicable Environmental Laws and as required in connection with the normal operation, use and maintenance of the business or operations of the Borrower or any of its Subsidiaries and which could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) (i) After the receipt by the Administrative Agent or any Lender of any notice of material non-compliance with any Environmental Law by the Borrower or any of its Subsidiaries or with respect to any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries, (ii) at any time that the Borrower or any of its Subsidiaries are not in compliance with Section 5.09(a) or (iii) in the event that the Administrative Agent or the Lenders have exercised any of the remedies pursuant to Article VII , the Borrower will (in each case) provide, at the sole expense of the Borrower and at the request of the Administrative Agent, an environmental site assessment report concerning such Real Property (or, in the case of clause (iii) above, any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries), prepared by an environmental consulting firm reasonably approved by the Administrative Agent, indicating the presence or absence of Hazardous Materials and the potential cost of any removal or remedial action in connection with such Hazardous Materials on such Real Property. If the Borrower fails to provide the same within 30 days after such request was made, the Administrative Agent may order the same, the cost of which shall be borne by the Borrower, and the Borrower shall grant and hereby grants to the Administrative Agent and the Lenders and their respective agents access to such Real Property and specifically grants the Administrative Agent and the Lenders an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment at any reasonable time upon reasonable notice to the Borrower, all at the sole expense of the Borrower.
SECTION 5.10. Further Assurances; etc . (a) The Borrower will, and will cause each of its Restricted Subsidiaries to, at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or use commercially reasonable efforts to deliver to the Collateral Agent from time to time such schedules, confirmatory assignments, financing statements, transfer endorsements, certificates, reports, landlord waivers, flood zone determinations, flood insurance and related borrower notices, and other assurances or instruments and take such further steps relating to the Collateral covered by any of the Security Documents as the Collateral Agent may reasonably require and as are generally consistent with the terms of this Agreement and the Security Documents and are necessary to effectuate the intent of said agreements.
(b) The Borrower agrees that each action required by clause (a) of this Section 5.10 shall be completed as soon as possible, but in no event later than 60 days after such action is requested to be taken by the Administrative Agent or the Required Lenders (or, if the Borrower is diligently pursuing such action, such longer period of time as the Administrative Agent may reasonably specify); provided that in no event will the Borrower or any of its Restricted Subsidiaries be required to take any action, other than using its commercially reasonable best efforts, to obtain consents from third parties with respect to its compliance with this Section 5.10 .
(c) If, following a change in the relevant sections of the Code or the regulations, rules, rulings, notices or other official pronouncements issued or promulgated
92
thereunder, the Borrower does not within 30 days after a request from the Administrative Agent or the Required Lenders deliver evidence, in form and substance reasonably satisfactory to the Administrative Agent (which evidence may be in the form of an opinion of counsel), with respect to any Foreign Subsidiary of the Borrower which has not already had all of its stock pledged pursuant to the US Pledge Agreement that (i) a pledge of 65% or more of the total combined voting power of all classes of Equity Interests of such Foreign Subsidiary entitled to vote and (ii) the entering into by such Foreign Subsidiary of a guarantee in substantially the form of the Subsidiary Guaranty, in any such case could reasonably be expected to cause (I) any undistributed earnings of such Foreign Subsidiary as determined for Federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiarys United States parent for Federal income tax purposes or (II) other Federal income tax consequences to the Credit Parties having an adverse financial consequence to any Credit Party in any material respect, then in the case of a failure to deliver the evidence described in clause (i) above, that portion of such Foreign Subsidiarys outstanding Equity Interests not theretofore pledged pursuant to the US Pledge Agreement shall be promptly pledged to the Collateral Agent for the benefit of the Secured Creditors pursuant to the US Pledge Agreement (or another pledge agreement in substantially similar form, if needed), and in the case of a failure to deliver the evidence described in clause (ii) above such Foreign Subsidiary shall promptly execute and deliver the Subsidiary Guaranty (or another guarantee in substantially similar form, if needed), guaranteeing the obligations of the Borrower under the Credit Documents and under any Swap Agreement entered into with a Secured Creditor, in each case to the extent that the entering into of the US Pledge Agreement or Subsidiary Guaranty is permitted by the laws of the respective foreign jurisdiction and with all documents delivered pursuant to this Section 5.10(c) to be in form and substance reasonably satisfactory to the Administrative Agent. Notwithstanding the foregoing, (i) the Administrative Agent shall not take a security interest in those assets as to which the Administrative Agent shall determine, in its reasonable discretion, that the cost of obtaining such Lien (including any mortgage, stamp, intangibles or other tax, title insurance or similar items) is excessive in relation to the benefit to the Lenders of the security afforded thereby and (ii) no Foreign Subsidiary shall be required to guarantee the Obligations or provide collateral therefor to the extent such guarantee or collateral could reasonably be expected to result in personal liability to its directors or is otherwise prohibited by applicable law.
SECTION 5.11. Ownership of Subsidiaries; etc . Except as otherwise permitted by Section 6.05(c) or (m) or pursuant to a Permitted Acquisition consummated in accordance with the terms of this Agreement, the Borrower will directly or indirectly own 100% of the Equity Interests of each of its Subsidiaries (other than, in the case of Foreign Subsidiaries, directors qualifying shares and/or other nominal amounts of shares required to be held by Persons other than the Borrower and its Subsidiaries under applicable law).
SECTION 5.12. Margin Regulations . The Borrower will take all actions so that at all times the fair market value of all Margin Stock owned by the Borrower and its Subsidiaries (other than Equity Interests of the Borrower held in treasury) shall not exceed $2,500,000. So long as the covenant contained in the immediately preceding sentence is complied with, all Margin Stock at any time owned by the Borrower and its Subsidiaries will not constitute Collateral and no security interest shall be granted therein pursuant to any Credit Document. Without excusing any violation of the first sentence of this Section 5.12 , if at any time the fair market value of all Margin Stock owned by the Borrower and its Subsidiaries (other
93
than Equity Interests of the Borrower held in treasury) exceeds $2,500,000, then (a) all Margin Stock owned by the Credit Parties (other than Equity Interests of the Borrower held in treasury) shall be pledged, and delivered for pledge, pursuant to the US Pledge Agreement and (b) the Borrower will execute and deliver to the Lenders appropriate completed forms (including, without limitation, Forms G-3 and U-1, as appropriate) establishing compliance with Regulations T, U and X. If at any time any Margin Stock is required to be pledged as a result of the provisions of the immediately preceding sentence, repayments of outstanding obligations hereunder shall be required, and subsequent makings of Loans and issuances of Letters of Credit shall be permitted, only in compliance with the applicable provisions of Regulations T, U and X.
SECTION 5.13. Additional Guarantors and Collateral . (a) Effective upon any Domestic Subsidiary (other than an Unrestricted Subsidiary or SPC) which was not a Material Subsidiary on the Funding Date (either because it was not a Subsidiary on the Funding Date or because it did not on the Funding Date meet the other criteria of a Material Subsidiary) becoming a Material Subsidiary, the Borrower shall cause such Domestic Subsidiary within ten Business Days to (i) execute and deliver to the Administrative Agent for the benefit of the Secured Creditors a joinder to the Subsidiary Guaranty and (ii) pledge to the Administrative Agent for the benefit of the Secured Creditors a first priority security interest in (A) all personal property owned by such Person pursuant to a security or pledge agreement substantially similar to the US Security Agreement or, as applicable US Pledge Agreement (or pursuant to a joinder agreement to the US Security Agreement or US Pledge Agreement in form satisfactory to the Administrative Agent) and (B) all real property (including leasehold interests) having a fair market value in excess of $5,000,000 owned by such Person pursuant to a Mortgage in form satisfactory to the Administrative Agent (and in connection therewith deliver the related items referred to in Section 5.18 ). The Borrower shall promptly notify the Administrative Agent at any time at which any Domestic Subsidiary becomes a Material Subsidiary.
(b) The Borrower agrees to take all steps reasonably necessary to ensure that at all times (i) the aggregate assets of all Domestic Subsidiaries of the Borrower that are not Subsidiary Guarantors which have pledged their assets to secure the Obligations (any such Subsidiary, a Non-Subject Domestic Subsidiary ) does not exceed ten percent (10%) of the Consolidated Domestic Net Assets of the Borrower and its Domestic Subsidiaries that are Restricted Subsidiaries, and (ii) the Consolidated Net Income generated by Non-Subject Domestic Subsidiaries does not exceed ten percent (10%) of the Consolidated Net Income of the Borrower and its Domestic Subsidiaries that are Restricted Subsidiaries.
(c) The Borrower agrees that it will (i) identify to the Administrative Agent by written notice each Foreign Subsidiary that is a Material Subsidiary of the Borrower (and is not an Unrestricted Subsidiary) which may (x) become a guarantor of some or all of the Obligations, (y) have 65% or more of its Equity Interests pledged to secure some or all of the Obligations or (z) pledge its assets to secure some or all of the Obligations (each of the foregoing being Credit Support ), in each case (A) without having an adverse tax or other financial consequence to the Borrower or any of its Restricted Subsidiaries, in each case, in any material respect, (B) solely to the extent any of the foregoing actions could not reasonably be expected to result in personal liability to the directors of such Foreign Subsidiary and (C) solely to the extent any of the foregoing actions are not otherwise prohibited by applicable law (any of the actions described in clauses (x) (z) above which do not have any of the consequences described in
94
clauses (A) (C) above being Permitted Credit Support ), and (ii) take all steps reasonably necessary to ensure that at all times (x) the aggregate assets of all Subsidiaries of the Borrower that are not Subsidiary Guarantors which have pledged some or all of their assets to secure the Obligations (any such Subsidiary, a Non-Subject Subsidiary ) does not exceed twenty percent (20%) of the Consolidated Total Net Assets of the Borrower and its Subsidiaries that are Restricted Subsidiaries, and (y) the Consolidated Net Income generated by Non-Subject Subsidiaries does not exceed twenty percent (20%) of the Consolidate Net Income of the Borrower and its Subsidiaries that are Restricted Subsidiaries; provided , that if on any date the Borrower is not in compliance with the foregoing clause (ii) , then the Borrower shall have sixty (60) days from such date (or such longer period agreed to in writing by the Administrative Agent in its sole discretion), to ensure compliance therewith. Notwithstanding the foregoing, in no event shall the Borrower be required to deliver any guarantees or security from a Foreign Subsidiary to the extent that such guarantees or security would not constitute Permitted Credit Support, and no Lien shall be taken pursuant to this Section 5.13(c) in any assets as to which the Administrative Agent shall determine, in its reasonable discretion, that the cost of obtaining such Lien (including any mortgage, stamp, intangibles or other tax, title insurance or similar items) is excessive in relation to the benefit to the Lenders of the security afforded thereby, or with respect to Foreign Subsidiaries, in real estate.
SECTION 5.14. Maintenance of Ratings . The Borrower will use commercially reasonable efforts to maintain (i) a public corporate credit rating (but not any specific rating) from S&P and a public corporate family rating (but not any specific rating) from Moodys and (ii) a public rating (but not any specific rating) in respect of the Term B Facility from each of S&P and Moodys.
SECTION 5.15. Pensions .
(a) Each UK Borrower shall ensure that all pension schemes operated by or maintained for its benefit and/or any of its employees are fully funded based on the statutory funding objective under sections 221 and 222 of the Pensions Act 2004 (U.K.) and that no action or omission is taken by any UK Borrower in relation to such a pension scheme which has or is reasonably likely to have a Material Adverse Effect (including the termination or commencement of winding-up proceedings of any such pension scheme or a UK Borrower ceasing to employ any member of such a pension scheme).
(b) Each UK Borrower shall ensure that it is not an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004 (U.K.)) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993 (U.K.)) or connected with or an associate of (as those terms are defined in sections 38 or 43 of the Pensions Act 2004 (U.K.)) such an employer.
(c) Each UK Borrower shall deliver to the Administrative Agent: (i) at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the UK Borrower); and (ii) at any other time if the Administrative Agent reasonably believes that any relevant statutory or auditing requirements are not being complied with, actuarial reports in relation to all pension schemes mentioned in clause (a) above.
95
(d) Each UK Borrower shall promptly notify the Administrative Agent (i) of any material change in the rate of contributions to any pension scheme mentioned in clause (a) above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise); (ii) of any investigation or proposed investigation by the Pensions Regulator which may lead to the issue of a Financial Support Direction or a Contribution Notice to any UK Borrower; and (iii) if it or any Credit Party receives a Financial Support Direction or a Contribution Notice from the Pensions Regulator.
SECTION 5.16. Centre of Main Interests . Each UK Borrower shall maintain its centre of main interests in its jurisdiction of incorporation for the purposes of the Insolvency Regulation.
SECTION 5.17. Designation of Restricted Subsidiaries . The Borrower may at any time designate any Restricted Subsidiary of the Borrower as an Unrestricted Subsidiary upon written notice to the Administrative Agent; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) immediately after giving effect to such designation, the Borrower shall be in compliance on a Pro Forma Basis with the financial covenants set forth in Section 6.16 , and, as a condition precedent to the effectiveness of any such designation, the Borrower shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the calculations demonstrating compliance with such financial covenants, (c) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it was previously designated an Unrestricted Subsidiary, (d) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a Restricted Subsidiary for the purpose of any Specified Indebtedness and (e) at all times the aggregate Consolidated EBITDA of the Borrower and its Restricted Subsidiaries shall equal at least 90% of the Consolidated EBITDA of the Borrower and its Subsidiaries (if the Borrower is at any time in violation of this clause (e) it shall immediately designate an Unrestricted Subsidiary or Unrestricted Subsidiaries, as applicable, as Restricted Subsidiaries to the extent necessary so that after giving effect to such designation(s) the Borrower is in compliance with this clause (e) ); provided , further , that it is understood and agreed, that no Borrower or Subsidiary Guarantor may be designated as an Unrestricted Subsidiary unless it is not required to be a Subsidiary Guarantor pursuant to the terms hereof. The designation of any Subsidiary as an Unrestricted Subsidiary after the Funding Date shall constitute (i) an Investment by the Borrower therein at the date of designation in an amount equal to the fair market value of the Borrowers or its Restricted Subsidiaries (as applicable) Investments therein and (B) the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time.
SECTION 5.18. Post-Closing Obligations . No later than 60 days following the Funding Date (or such later date as agreed to by the Administrative Agent in its sole discretion), the Borrower shall deliver, or cause to be delivered, to the Administrative Agent, the following with respect to the Real Property locations listed on Schedule 5.18 hereto: (i) a duly executed Mortgage providing for a first priority perfected Lien, in favor of the Administrative Agent, (ii) a current ALTA/ASCM survey of such real property, in form and substance reasonably satisfactory to Administrative Agent, (iii) an ALTA Loan Title Insurance Policy, issued by an insurer reasonably acceptable to the Administrative Agent, insuring the Administrative Agents first priority Lien on such real property and containing such endorsements as the Administrative Agent may reasonably require, (iv) copies of all documents
96
of record concerning such real property as shown on the commitment for the ALTA Loan Title Insurance Policy referred to above, (v) life of loan flood zone determinations with respect to such real property in form and substance reasonably satisfactory to Administrative Agent, (vi) a flood insurance policy concerning such real property, if required by the Flood Disaster Protection Act of 1973, (vii) a zoning report from a nationally recognized zoning report provider in form and substance reasonably satisfactory to Administrative Agent, (viii) a local counsel opinion as to the enforceability of the Mortgage, and such others matters as may be reasonably requested by Administrative Agent, in form and substances reasonably satisfactory to Administrative Agent, and (ix) such other certificates, documents and information with respect to such property as are reasonably requested by the Administrative Agent, each in form and substance reasonably satisfactory to the Administrative Agent.
ARTICLE VI
Negative Covenants
From the Funding Date until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated, in each case, without any pending draws, and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness . The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness created under the Credit Documents;
(b) Indebtedness existing on the Escrow Date and after giving effect to the Spin Transaction and set forth in Schedule 6.01 , and any subsequently incurred Indebtedness under lines of credit to any Foreign Subsidiaries which were in effect on the Escrow Date, as reduced by any permanent repayments of principal thereof, and extensions, renewals and replacements of any such Indebtedness to the extent that such extensions, renewals and replacements do not increase the principal amount or facility amount, as applicable, outstanding at the time of any such extension, renewal or replacement);
(c) intercompany Indebtedness among the Borrower and its Restricted Subsidiaries to the extent permitted by Sections 6.05(i) and (j) and Indebtedness of Foreign Credit Parties in respect of intercompany notes payable described in subsection (y) of Section 6.04 ;
(d) Indebtedness of the Borrower or any of its Restricted Subsidiaries under Swap Agreements entered into in the ordinary course of business with respect to other Indebtedness permitted under this Section 6.01 , with respect to commodity hedging arrangements or with respect to currency hedging arrangements so long as, in each case, the entering into of such Swap Agreements are bona fide hedging activities and are not for speculative purposes;
97
(e) Indebtedness of the Borrower and its Restricted Subsidiaries evidenced by Capital Lease Obligations and purchase money Indebtedness described in Section 6.02(j) ;
(f) Indebtedness of a Restricted Subsidiary of the Borrower acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition of an asset securing such Indebtedness), provided that (i) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted Acquisition, (ii) such Indebtedness does not constitute debt for borrowed money, it being understood and agreed that Capital Lease Obligations and purchase money Indebtedness shall not constitute debt for borrowed money for purposes of this clause (ii) and (iii) the aggregate principal amount of all Indebtedness permitted by this clause (f) to be outstanding at any time shall not exceed $50,000,000;
(g) Indebtedness in respect of bid, payments, performance, advance payment or surety bonds entered into in the ordinary course of business and consistent with past practices;
(h) to the extent that same constitutes Indebtedness, obligations in respect of earn-out arrangements permitted pursuant to a Permitted Acquisition;
(i) Indebtedness of Foreign Subsidiaries that are Restricted Subsidiaries of the Borrower from Persons other than the Borrower or any of its Restricted Subsidiaries, the proceeds of which Indebtedness are used for such Foreign Subsidiarys working capital and other general corporate purposes and other Indebtedness of any such Foreign Subsidiary; provided that the aggregate principal amount of all such Indebtedness outstanding at any time for all such Foreign Subsidiaries (excluding Indebtedness existing on the Escrow Date and set forth on Schedule 6.01 , subsequently incurred Indebtedness of any Foreign Subsidiaries that are Restricted Subsidiaries which was in effect on the Escrow Date, and refinancings thereof by the applicable Restricted Subsidiary or another Restricted Subsidiary in the same country to the extent that such refinancings do not increase the amount of the applicable Indebtedness nor provide security not applicable to such scheduled or subsequently incurred Indebtedness, except to the extent secured and/or guaranteed by the Security Documents and/or the other applicable Credit Documents) shall not $60,000,000 in the aggregate at any time outstanding;
(j) Receivables Indebtedness; provided that the Borrower shall at no time permit the aggregate outstanding amount of Receivables Indebtedness to exceed $125,000,000;
(k) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business so long as such Indebtedness is extinguished within four Business Days of the incurrence thereof;
(l) Indebtedness of the Borrower or any of its Restricted Subsidiaries which may be deemed to exist in connection with agreements providing for indemnification, purchase price adjustments and similar obligations in connection with the acquisition or disposition of assets permitted by this Agreement so long as any such obligations are those of the Person making the respective acquisition or sale, and are not guaranteed by any other Person (other than the Borrower or a Restricted Subsidiary to the extent permitted by Section 6.01(n) );
98
(m) unsecured guarantees by the Borrower and its Restricted Subsidiaries in respect of Customer Financing;
(n) Indebtedness consisting of guarantees (v) by the Borrower or its Restricted Subsidiaries of the pension obligations of Enodis Holdings or its Restricted Subsidiaries, (w) by the Domestic Credit Parties of each others Indebtedness and lease and other contractual obligations permitted under this Agreement, (x) by the Foreign Credit Parties of each others and each Domestic Credit Partys Indebtedness and lease and other contractual obligations permitted under this Agreement, (y) by External Subsidiaries of each others and each Credit Partys Indebtedness and lease and other contractual obligations permitted under this Agreement or (z) by any Credit Party of any Indebtedness and lease and other contractual obligations permitted under this Agreement of any External Subsidiary (or by any Domestic Credit Party of any Indebtedness and lease and other contractual obligations permitted under this Agreement of any Foreign Credit Party) so long as the amount of such Guarantee under this clause (z) , when aggregated with (1) the aggregate outstanding principal amount of Intercompany Loans which are restricted in amount by the proviso to Section 6.05(i) and (2) the aggregate amount of contributions, capitalizations and debt forgiveness which are restricted in amount by the proviso to Section 6.05(j) and which have theretofore been made and not repaid do not at any time exceed the Dollar Equivalent of the greater of (x) $100,000,000 and (y) 5% of Consolidated Total Net Assets, determined at the time of the incurrence of such Indebtedness;
(o) [reserved];
(p) unsecured Indebtedness created under the Senior Notes Documents;
(q) additional unsecured Indebtedness incurred by the Borrower and the Subsidiary Guarantors (other than Indebtedness of the type described in Section 6.01(n)(z) ); provided that (i) no Default exists at the time of its incurrence or would result therefrom and (ii) such Indebtedness shall have a Weighted Average Life to Maturity which is at least six months after the latest scheduled Loan maturity date under this Agreement and shall be on terms not materially more onerous to the Borrower than the terms of the Senior Note Documents;
(r) so long as no Default then exists or would result therefrom, additional unsecured Indebtedness incurred by the Borrower for the purpose of (i) refinancing any portion of the Obligations or (ii) refinancing other senior Indebtedness permitted hereunder; provided , however , that such refinancing Indebtedness pursuant to this clause (ii) has a Weighted Average Life to Maturity at the time such refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being refinanced, is in a principal amount not in excess of the principal amount of Indebtedness being refinanced and is on terms not materially more onerous to the Borrower than the terms of the Indebtedness being refinanced;
(s) the Separation Obligations; and
(t) Indebtedness incurred in consummating the Permitted Transactions.
For the avoidance of doubt, a permitted refinancing pursuant to Section 6.01(r) in respect of Indebtedness incurred pursuant to a Dollar-denominated basket shall not increase capacity to
99
incur Indebtedness under such Dollar-denominated basket, and such Dollar-denominated basket shall be deemed to continue to be utilized by the amount of such permitted refinancing unless and until the Indebtedness incurred to effect such permitted refinancing is no longer outstanding.
SECTION 6.02. Liens . The Borrower will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets of the Borrower or any of its Restricted Subsidiaries, whether now owned or hereafter acquired, or sell any property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to the Borrower or any of its Restricted Subsidiaries), or assign any right to receive income or authorize the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute; provided that the provisions of this Section 6.02 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as Permitted Liens ):
(a) inchoate Liens for taxes, assessments or governmental charges or levies not yet due or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles;
(b) Liens in respect of property or assets of the Borrower or any of its Restricted Subsidiaries imposed by law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers, warehousemens, materialmens and mechanics liens and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of the Borrowers or such Restricted Subsidiarys property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Restricted Subsidiary or (y) which are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles and which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien;
(c) Liens (other than Liens imposed under ERISA) (i) incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance and social security benefits and (ii) Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business and statutory obligations, surety bonds, performance bonds and other obligations of a like nature (other than appeal bonds) incurred in the ordinary course of business;
(d) easements, rights-of-way, restrictions, encroachments, municipal and zoning ordinances and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of the business of the Borrower or any of its Restricted Subsidiaries;
(e) Liens arising out of the existence of judgments or awards in respect of which the Borrower or any of its Restricted Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a
100
subsisting stay of execution pending such appeal or proceedings; provided that the aggregate amount of all cash (including, for this purpose, the amount of all letters of credit) and the fair market value of all other property pledged or deposited to obtain a subsisting stay of execution pending such appeal does not exceed $10,000,000 at any time outstanding;
provided that Liens described in clauses (a) through (e) of this Section 6.02 shall not include Liens securing Indebtedness;
(f) Liens in existence on the Escrow Date which are listed, and the property subject thereto described, in Schedule 6.02 , plus renewals, replacements and extensions of such Liens to the extent set forth in Schedule 6.02 ; provided that (i) such Liens secure no more than the aggregate principal amount of Indebtedness, if any, secured by such Liens on the Escrow Date and (ii) such Liens do not encumber any additional assets or properties of the Borrower or any of its Restricted Subsidiaries other than those encumbered on the Escrow Date;
(g) Liens created pursuant to the Security Documents;
(h) licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Restricted Subsidiaries;
(i) Liens on assets of the Borrower or any of its Restricted Subsidiaries subject to Capital Lease Obligations to the extent such Capital Lease Obligations are permitted by Section 6.01(e) ; provided that (i) such Liens only serve to secure the payment of Indebtedness arising under such Capital Lease Obligation and (ii) the Lien encumbering the asset giving rise to the Capital Lease Obligation does not encumber any other asset of the Borrower or any Restricted Subsidiary of the Borrower (other than proceeds of the asset giving rise to such Capital Lease Obligation);
(j) Liens on fixed or capital assets acquired after the Funding Date and used in the ordinary course of business of the Borrower or any of its Restricted Subsidiaries and created at the time of the acquisition thereof by the Borrower or such Restricted Subsidiary or within 90 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase price thereof or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided that (i) the Indebtedness secured by such Liens is permitted by Section 6.01(e) and (ii) in all events, any Lien encumbering the equipment or machinery so acquired does not encumber any other asset of the Borrower or such Restricted Subsidiary (other than proceeds of such equipment or machinery);
(k) Liens arising from precautionary UCC financing statement filings regarding operating leases entered into in the ordinary course of business;
(l) statutory and common law landlords liens under leases to which the Borrower or any of its Restricted Subsidiaries is a party;
(m) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on property or assets of a Restricted Subsidiary of the Borrower in existence at the time such Restricted Subsidiary is acquired pursuant to a Permitted Acquisition; provided that (i) any
101
Indebtedness that is secured by such Liens is permitted to exist under Section 6.01(f) , (ii) such Liens are not created in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any other asset of the Borrower or any of its Restricted Subsidiaries and (iii) such Liens secure no more than the aggregate principal amount of the Indebtedness, if any, secured by such Liens on the date of the Permitted Acquisition;
(n) Liens on assets of Foreign Subsidiaries that are not Credit Parties and that secure Indebtedness permitted to be incurred by such Foreign Subsidiaries pursuant to Section 6.01 ;
(o) Liens in favor of customs or revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(p) Liens granted by Restricted Subsidiaries of the Borrower that are not Credit Parties in favor of the Borrower or any Subsidiary Guarantor;
(q) Liens upon assets of an SPC granted in connection with a Permitted Securitization (including customary backup Liens granted by the transferor in accounts receivable and related rights transferred to an SPC);
(r) customary Liens in favor of banking institutions encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business;
(s) rights of customers (or institutions providing financing to such customers) with respect to inventory which arise from deposits and progress payments made in the ordinary course of business;
(t) [Intentionally Omitted];
(u) Liens created by the transfer of title to work in progress to customers in return for progress payments; and
(v) other Liens incidental to the conduct of the business of the Borrower or any of its Restricted Subsidiaries that do not encumber any Collateral (other than on a junior and subordinated basis) and do not secure outstanding obligations in the aggregate in excess of $25,000,000 at any time outstanding for all such Liens.
SECTION 6.03. Merger, Purchase or Sale of Assets, Change in Business . (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of all or any part of its property or assets (whether now owned or hereafter acquired), or enter into any sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business) of any Person (or agree to do any of the foregoing at any future time), except that:
(i) capital expenditures by the Borrower or any of its Restricted Subsidiaries shall be permitted;
102
(ii) each of the Borrower and its Restricted Subsidiaries may make sales and/or rentals of inventory in the ordinary course of business;
(iii) each of the Borrower and its Restricted Subsidiaries may sell or otherwise transfer obsolete, uneconomic or worn-out equipment, materials or other assets in the ordinary course of business;
(iv) Investments may be made to the extent permitted by S ection 6.05 ;
(v) the Borrower and its Restricted Subsidiaries may sell assets (other than the Equity Interests of any Wholly-Owned Subsidiary unless all of the Equity Interests are sold in accordance with this clause (v) ) so long as (A) no Default or Event of Default then exists or would result therefrom, (B) each such sale is in an arms-length transaction and the Borrower or the respective Restricted Subsidiary receives at least fair market value (as determined in good faith by the Borrower or such Restricted Subsidiary, as the case may be), (C) the total consideration received by the Borrower or such Restricted Subsidiary is at least 70% cash and is paid at the time of the closing of such sale and (D) the aggregate amount of the proceeds received from all assets sold pursuant to this clause (v) shall not exceed the greater of (1) $100,000,000 and (2) 5% of Consolidated Total Net Assets, determined at the time of such sale, in any fiscal year of the Borrower;
(vi) each of the Borrower and its Restricted Subsidiaries may lease (as lessee) or license (as licensee) real or personal property (so long as any such lease or license does not create a Capital Lease Obligation except to the extent permitted by Section 6.01(e) );
(vii) [Intentionally Omitted];
(viii) each of the Borrower and its Restricted Subsidiaries may grant licenses, sublicenses, leases or subleases to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Restricted Subsidiaries, in each case so long as no such grant otherwise affects the Collateral Agents security interest in the asset or property subject thereto;
(ix) the Borrower may transfer assets to any Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary Guarantor (or which substantially contemporaneously with such transfer becomes a Subsidiary Guarantor) and any Restricted Subsidiary of the Borrower may transfer assets to the Borrower or to any Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary Guarantor (or which substantially contemporaneously with such transfer becomes a Subsidiary Guarantor), in each case so long as the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets so transferred shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such transfer);
103
(x) any Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, the Borrower or any Wholly-Owned Domestic Subsidiary of the Borrower so long as (I) in the case of any such merger, dissolution or liquidation involving the Borrower, the Borrower is the surviving corporation of any such merger, dissolution or liquidation, (II) in the case of any such merger, dissolution or liquidation involving a Restricted Subsidiary and an Unrestricted Subsidiary, the Restricted Subsidiary is the surviving Person of any such merger, dissolution or liquidation, (III) in all other cases, a Wholly-Owned Domestic Subsidiary is the surviving corporation of any such merger, dissolution or liquidation, (IV) in all cases, the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of such Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation) and (IV) the Borrower has complied with Section 5.13 , if applicable;
(xi) any Foreign Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, or transfer any of its assets to, any Wholly-Owned Subsidiary of the Borrower so long as (I) the Wholly-Owned Subsidiary of the Borrower is the survivor of such merger, dissolution or liquidation and, if either party is a Subsidiary Borrower, a Subsidiary Borrower is the survivor of such merger dissolution or liquidation, (II) in the case of any such merger, dissolution or liquidation involving a Restricted Subsidiary and an Unrestricted Subsidiary, the Restricted Subsidiary is the surviving Person of any such merger, dissolution or liquidation, (III) any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the equity interests of such Foreign Subsidiary or Wholly-Owned Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation) and (III) any guaranty made in favor of the Administrative Agent for the benefit of the Secured Creditors by such Foreign Subsidiary or Wholly-Owned Subsidiary shall remain in full force and effect;
(xii) Permitted Acquisitions may be made to the extent permitted by Section 6.05(m) ;
(xiii) subject to Section 6.01(j) and so long as no Default or Event of Default then exists or would result therefrom, each of the Borrower and its Restricted Subsidiaries may from time to time (I) sell accounts receivable (and rights ancillary thereto) pursuant to, and in accordance with the terms of, a Permitted Securitization and (II) repurchase accounts receivable theretofore sold pursuant to a Permitted Securitization in the ordinary course of business;
(xiv) the Borrower may enter into one or more Sale-Leaseback Transactions;
(xv) Restricted Payments may be made as, and to the extent, permitted by Section 6.04 ; and
(xvi) the Borrower may transfer assets to any Wholly-Owned Subsidiary (other than an Unrestricted Subsidiary) of the Borrower, and any Wholly-Owned Subsidiary of the Borrower may transfer assets to the Borrower or to any other Wholly-Owned Subsidiary (other than an Unrestricted Subsidiary), in connection with the Permitted Transactions.
104
(b) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Restricted Subsidiaries on the Escrow Date and businesses reasonably related thereto.
SECTION 6.04. Restricted Payments . The Borrower will not, and will not permit any of its Restricted Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(a) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock,
(b) Restricted Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests,
(c) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of the Borrower and its Restricted Subsidiaries,
(d) the Borrower may make the Funding Date Dividend on the Funding Date in an amount not to exceed $1,388,000,000 or such greater amount so long as (i) such greater amount is acceptable to the Administrative Agent in its reasonable discretion and (ii) the need for such greater amount is demonstrated by a certificate of a Senior Officer of the Borrower setting forth the applicable calculations in reasonable detail (such calculations to be consistent with those used to calculate the Funding Date Dividend as of the Escrow Date);
(e) so long as no Default has occurred and is continuing or would result therefrom, the Borrower may declare and make Restricted Payments in an aggregate amount not to exceed $10,000,000 in any fiscal year in respect of dividends on the Borrowers common stock;
(f) so long as no Default has occurred and is continuing as of the date such dividend is declared or would result therefrom, the Borrower may make additional Restricted Payments in an amount not to exceed the Available Amount; provided that at the time of and immediately after giving effect to any such Restricted Payment referred to in this clause (f) , after giving effect to such Restricted Payment and any related transaction on a Pro Forma Basis the Total Leverage Ratio shall not exceed 4.00 to 1.00 (calculated as of the last day of the fiscal quarter of the Borrower then most recently ended for which financial statements have been delivered pursuant to Section 5.01(a) );
(g) the Borrower may make additional Restricted Payments; provided that at the time of and immediately after giving effect to any such Restricted Payment referred to in this
105
clause (g) , (i) no Default shall have occurred and be continuing or would result therefrom and (ii) after giving effect to such Restricted Payment and any related transaction on a Pro Forma Basis the Total Leverage Ratio shall not exceed 3.50 to 1.00 (calculated as of the last day of the fiscal quarter of the Borrower then most recently ended for which financial statements have been delivered pursuant to Section 5.01(a)) ; and
(h) so long as no Default has occurred and is continuing or would result therefrom, the Borrower may declare and make additional Restricted Payments in an aggregate amount not to exceed $30,000,000 during the term of this Agreement.
Notwithstanding clause (b) of this Section 6.04 , other than in connection with the Permitted Transactions, a Foreign Credit Party may not pay any dividend to an External Subsidiary unless (x) such dividend is substantially contemporaneously therewith directly or indirectly remitted as a dividend or distribution to a Domestic Credit Party, (y) such dividend is in the form of an intercompany note payable of such Foreign Credit Party which is subordinated on terms satisfactory to the Administrative Agent to the obligations of such Foreign Credit Party under the Credit Documents (a Dividend Note ) or (z) at the time such dividend is paid no Default has occurred and is continuing and, after giving effect to such dividend, the Outflow Amount (as defined below) does not exceed $35,000,000. For purposes hereof, Outflow Amount means an amount equal to (1) the aggregate amount of (A) all dividends paid by Foreign Credit Parties to External Subsidiaries after the Funding Date other than as permitted by subsection (x) or (y) of the preceding sentence plus (B) all amounts (including principal, interest and other amounts) paid by Foreign Credit Parties to non-Credit Parties after the Funding Date in respect of Dividend Notes (other than such amounts substantially contemporaneously therewith directly or indirectly remitted as a dividend or distribution to a Domestic Credit Party) minus (2) the amount of all cash capital contributions received by such paying Foreign Credit Parties from External Subsidiaries after the Escrow Date. Payments (including principal, interest and other amounts) on account of Dividend Notes shall only be made if a dividend in the amount of such payment could then be made pursuant to subsection (z) of the second sentence of this Section 6.04 ; provided that the foregoing restriction shall not apply to such payments to the extent they are either made to a Credit Party or are substantially contemporaneously therewith directly or indirectly remitted as a dividend or a distribution to a Domestic Credit Party.
SECTION 6.05. Advances, Investments and Loans . The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, purchase or acquire (including pursuant to any merger with any Person not a Wholly-Owned Subsidiary prior to such merger) any stock, obligations or securities (including any option, warrant or other right to acquire any of the foregoing) of, or any other interest in, or make any capital contribution to, any Person, or lend money or make advances to any Person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or hold any cash or Cash Equivalents (each of the foregoing an Investment and, collectively, Investments ), except that the following shall be permitted:
(a) the Borrower and its Domestic Subsidiaries may acquire and hold cash and Cash Equivalents and Foreign Subsidiaries of the Borrower may acquire and hold cash, Cash Equivalents and Foreign Cash Equivalents;
106
(b) the Borrower and its Restricted Subsidiaries may hold the Investments held by them on the Escrow Date and described on Schedule 6.05 , provided that any additional Investments made with respect thereto shall be permitted only if independently permitted under the other provisions of this Section 6.05 ;
(c) the Borrower and its Restricted Subsidiaries may acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;
(d) the Borrower and its Restricted Subsidiaries may make loans and advances to their officers and employees for moving, relocation and travel expenses and other similar expenditures, in each case in the ordinary course of business in an aggregate amount not to exceed $5,000,000 at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances);
(e) the Borrower may acquire and hold obligations of one or more officers, directors or other employees of the Borrower or any of its Restricted Subsidiaries in connection with such officers, directors or employees acquisition of shares of Equity Interests of the Borrower so long as no cash is paid by the Borrower or any of its Restricted Subsidiaries to such officers, directors or employees in connection with the acquisition of any such obligations;
(f) the Borrower and its Restricted Subsidiaries may enter into Swap Agreements to the extent permitted by Section 6.01(d) ;
(g) the Borrower and its Restricted Subsidiaries may acquire and hold promissory notes and other non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Sections 6.03(a)(iii) and (v) ;
(h) the Borrower and its Restricted Subsidiaries may acquire and hold accounts receivables owing to any of them (i) if created or acquired in the ordinary course of business of the Borrower or such Restricted Subsidiary or (ii) as contemplated by Section 6.03(a)(xiii)(II) ;
(i) the Borrower and its Wholly-Owned Subsidiaries may make intercompany loans and advances between and among one another (collectively, Intercompany Loans ); provided that (I) at no time shall the sum of (A) the aggregate outstanding principal amount of all Intercompany Loans (excluding Intercompany Loans outstanding on the Escrow Date and set forth on Schedule 1.02 and Intercompany Loans permitted by Section 6.05(n) ) made pursuant to this clause (i) by Credit Parties to External Subsidiaries or by Domestic Credit Parties to Foreign Credit Parties, plus (B) the aggregate amount of contributions, capitalizations and forgivenesses (excluding any contributions, capitalizations and forgivenesses permitted by Section 6.05(n) ) theretofore made by Credit Parties to (or in respect of) External Subsidiaries and by Domestic Credit Parties to (or in respect of) Foreign Credit Parties, in each case pursuant to Section 6.05(j) (net of cash equity returns), plus (C) the outstanding amount of Guarantees issued pursuant to Section 6.01(n)(z) exceed the Dollar Equivalent of the greater of (x) $100,000,000 and (y) 5% of Consolidated Total Net Assets, determined at the time of incurrence of such Intercompany Loan
107
(determined without regard to any write-downs or write-offs of such Intercompany Loans), (II) no Intercompany Loans may be made by a Credit Party to an External Subsidiary or by a Domestic Credit Party to a Foreign Credit Party at a time that an Event of Default exists and is continuing, (III) any such Intercompany Loan made by a Credit Party shall be evidenced by an Intercompany Note which shall be pledged to the Collateral Agent to the extent required pursuant to the US Pledge Agreement, and (IV) each Intercompany Loan made to any Credit Party by an External Subsidiary shall include (or, if not evidenced by an Intercompany Note, the books and records of the respective parties shall note that such Intercompany Loan shall be subject to) the subordination provisions attached as Annex A to the form of Intercompany Note;
(j) the Borrower and its Wholly-Owned Subsidiaries may make cash or non-cash capital contributions (including the fair market value of non-cash distributions as determined by Borrower in its reasonable direction) to their respective Wholly-Owned Subsidiaries, and may capitalize or forgive any Indebtedness owed to them by a Wholly-Owned Foreign Subsidiary or a Wholly-Owned Domestic Subsidiary and outstanding under clause (i) of this Section 6.05 ; provided that (I) at no time shall the sum of (A) the aggregate amount of such contributions, capitalizations and forgiveness (excluding any contributions, capitalizations and forgivenesses permitted by Section 6.05(n) ) made by Credit Parties to External Subsidiaries or by Domestic Credit Parties to Foreign Credit Parties (net of cash equity returns), plus (B) the aggregate outstanding principal amount of Intercompany Loans (excluding Intercompany Loans outstanding on the Escrow Date and set forth on Schedule 1.02 and Intercompany Loans permitted by 6.05(n) ) made by Credit Parties to External Subsidiaries and by Domestic Credit Parties to Foreign Credit Parties, in each case pursuant to Section 6.05(i) (determined without regard to any write-downs or write-offs thereof), plus (C) the outstanding amount of Guarantees issued pursuant to Section 6.01(n)(z) , exceed the Dollar Equivalent of the greater of (x) $100,000,000 and (y) 5% of Consolidated Total Net Assets, determined at the time of incurrence of such contribution, capitalization or forgiveness, (II) Credit Parties may only make capital contributions to, and capitalize or forgive any Indebtedness owed to them by, a Wholly-Owned Foreign Subsidiary pursuant to this clause (j) to the extent (A) required to comply with any thin capitalization rules applicable to such Wholly-Owned Foreign Subsidiary or (B) that the making of Intercompany Loans to such Wholly-Owned Foreign Subsidiary would have adverse tax consequences to the Credit Party making the same, and (III) no such contributions, capitalizations or forgivenesses may be made by a Credit Party to an External Subsidiary or by a Domestic Credit Party to a Foreign Credit Party at any time that an Event of Default exists and is continuing;
(k) the Borrower and its Restricted Subsidiaries may make transfers of assets among the Borrower and its Restricted Subsidiaries as permitted by Sections 6.03(a)(ix) , (x) , (xi) and (xvi) ;
(l) so long as no Default or Event of Default then exists or would result therefrom, the Borrower and its Restricted Subsidiaries may make Investments not otherwise permitted by clauses (a) through (k) above or clause (m) , (o) , (p) or (q) below of this Section 6.05 in an aggregate amount not to exceed $100,000,000 (taking the fair market value (as determined in good faith by the Borrower) of property other than cash) at any time outstanding (determined without regard to any write-downs or write-offs thereof);
108
(m) subject to the provisions of this Section 6.05(m) and the requirements contained in the definition of Permitted Acquisition, the Borrower and its Wholly-Owned Subsidiaries may from time to time effect Permitted Acquisitions, so long as: (i) no Default or Event of Default shall have occurred and be continuing at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto; (ii) at any time when the Consolidated Senior Secured Leverage Ratio is greater than or equal to 3.75 to 1.00 (both immediately before and immediately after giving effect to such investment) the aggregate amount of cash consideration for any investment made pursuant to this Section 6.05(m) while this clause (ii) is applicable, when added to the aggregate amount of such cash consideration for all other investments made pursuant to this Section 6.05(m) while this clause (ii) is applicable in the same calendar year as the calendar year in which such investment occurs shall not exceed $75,000,000 of cash consideration, (iii) if the proposed Permitted Acquisition is for aggregate consideration of $75,000,000 or more, the Borrower shall have given to the Administrative Agent at least 5 Business Days prior written notice of such proposed Permitted Acquisition (or such shorter period of time as may be reasonably acceptable to the Administrative Agent), which notice shall be executed by a Financial Officer of the Borrower and shall describe in reasonable detail the principal terms and conditions of such Permitted Acquisition; (iv) both before and after giving effect to the Permitted Acquisition, the Borrower is in compliance with Section 6.01(q) ; (v) at the time of any such Permitted Acquisition involving the creation or acquisition of a Subsidiary, or the acquisition of Equity Interests of any Person, Equity Interests thereof created or acquired in connection with such Permitted Acquisition shall have been pledged for the benefit of the Secured Creditors pursuant to (and to the extent required by) the US Pledge Agreement and such Person, if a Domestic Subsidiary which is a Material Subsidiary, shall have executed and delivered to the Administrative Agent a joinder to the Subsidiary Guaranty; and (vi) giving effect to such Permitted Acquisition, the Borrower is in compliance with Section 6.16 , on a Pro Forma Basis;
(n) the Borrower and its Restricted Subsidiaries may consummate the Permitted Transactions (subject, in the case of Intercompany Loans with respect to the Permitted Transactions, to the requirements of clause (II) of Section 6.05(i) );
(o) Investments in connection with the Spin Transaction;
(p) other Investments in an amount not to exceed the Available Amount; provided that, at the time each such Investment is made no Default shall have occurred and be continuing or would result therefrom; and
(q) the Borrower and its Restricted Subsidiaries may make other Investments; provided that at the time of and immediately after giving effect to any such Investment referred to in this clause (q) , (i) no Default shall have occurred and be continuing or would result therefrom and (ii) after giving effect to such Investment and any related transaction on a Pro Forma Basis the Total Leverage Ratio shall not exceed 3.50 to 1.00 (calculated as of the last day of the fiscal quarter of the Borrower then most recently ended for which financial statements have been delivered pursuant to Section 5.01(a) ).
SECTION 6.06. Transactions with Affiliates . The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any transaction or series of related
109
transactions with any Affiliate of the Borrower or any of its Restricted Subsidiaries, other than in the ordinary course of business and on terms and conditions substantially as favorable to the Borrower or such Restricted Subsidiary as would reasonably be obtained by the Borrower or such Restricted Subsidiary at that time in a comparable arms-length transaction with a Person other than an Affiliate, except that the following in any event shall be permitted:
(a) Restricted Payments may be made to the extent permitted by Section 6.04 ;
(b) loans may be made and other transactions may be entered into by the Borrower and its Subsidiaries to the extent permitted by Sections 6.01 , 6.03 and 6.05 ;
(c) customary fees may be paid to non-officer directors of the Borrower and its Restricted Subsidiaries;
(d) the Borrower and its Restricted Subsidiaries may enter into, and may make payments under, employment agreements, employee benefits plans, stock option plans, indemnification provisions, severance arrangements, and other similar compensatory arrangements with officers, employees and directors of the Borrower and its Restricted Subsidiaries in the ordinary course of business;
(e) Restricted Subsidiaries of the Borrower may pay management fees, licensing fees and similar fees to (i) the Borrower or any Subsidiary Guarantor or (ii) any other Restricted Subsidiary so long as such fees are no greater than would result from an arms-length transaction;
(f) the Spin Transaction and any agreements entered into pursuant thereto;
(g) pledges of equity interests of Unrestricted Subsidiaries to secure Indebtedness of such Unrestricted Subsidiaries; and
(h) the Borrower and its Wholly-Owned Subsidiaries may otherwise engage in transactions exclusively between or among themselves so long as such transactions are otherwise permitted under this Agreement.
SECTION 6.07. Use of Proceeds . No Borrower will request any Borrowing or Letter of Credit, and no Borrower shall use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto.
SECTION 6.08. Limitations on Payments and Prepayments of Certain Indebtedness; Modifications of Certain Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements, etc . The Borrower will not, and will not permit any of its Restricted Subsidiaries to:
(a) make (or give any notice in respect of) any voluntary or optional payment or prepayment on or redemption or acquisition for value of, or any prepayment or redemption as a result of any asset sale, change of control or similar event of (including in each case, without limitation, by way of depositing with the trustee with respect thereto or any other Person money or securities before due for the purpose of paying when due), any Indebtedness (other than the Obligations) unless no Default has occurred and is continuing;
110
(b) make (or give any notice in respect of) any payment or prepayment on or redemption or acquisition for value of, or any payment, prepayment or redemption as a result of any asset sale, change of control or similar event of (including in each case, without limitation, by way of depositing with the trustee with respect thereto or any other Person money or securities before due for the purpose of paying when due), any Specified Indebtedness, except:
(i) payments of regularly scheduled interest and principal payments as and when due in respect of any Specified Indebtedness, other than payments in respect of any subordinated Indebtedness prohibited by the subordination provisions thereof;
(ii) refinancings of Specified Indebtedness with the proceeds of other Indebtedness permitted under Section 6.01(r);
(iii) payments of or in respect of Specified Indebtedness solely by issuance of the common stock of the Borrower;
(iv) payments made by a Restricted Subsidiary that is not a Credit Party of or in respect of Specified Indebtedness incurred by any such Restricted Subsidiary;
(v) payments of or in respect of Specified Indebtedness so long as at the time of and immediately after giving effect to any such payment referred to in this clause (i) , (x) no Default shall have occurred and be continuing or would result therefrom and (y) after giving effect to such payment and any related transaction on a Pro Forma Basis the Senior Secured Leverage Ratio shall not exceed 3.25 to 1.00 (calculated as of the last day of the fiscal quarter of the Borrower then most recently ended for which financial statements have been delivered pursuant to Section 5.01(a) ); and
(vi) other payments of or in respect of Specified Indebtedness so long that at the time of and immediately after giving effect thereto, (1) no Default or Even of Default shall have occurred and be continuing or would result therefrom, (2) the amount of such payment shall not exceed the Available Amount as of the date thereof, and (3) after giving effect to such payment and any related transaction on a Pro Forma Basis the Senior Secured Leverage Ratio shall not exceed 3.50 to 1.00 (calculated as of the last day of the fiscal quarter of the Borrower then most recently ended for which financial statements have been delivered pursuant to Section 5.01(a) );
(c) amend or modify, or permit the amendment or modification of any documents pursuant to which Indebtedness subordinated to any of the Obligations was incurred or by which it is governed; or
111
(d) amend, modify or change any Permitted Securitization documentation, any Tax Sharing Agreement or its certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or the equivalent organizational documents), as applicable, or any agreement entered into by it with respect to its Equity Interests (including any shareholders agreement), or enter into any new Permitted Securitization documentation, Tax Sharing Agreement or agreement with respect to its Equity Interests, unless such new agreement or amendment, modification, change or other action contemplated by this clause (d) could not reasonably be expected to be adverse to the interests of the Lenders in any material respect.
SECTION 6.09. Restrictive Agreements . The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Restricted Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Restricted Subsidiary to pay dividends or other distributions with respect to any shares of its Equity Interests or to make or repay loans or advances to the Borrower or any other Restricted Subsidiary or to Guarantee Indebtedness of the Borrower or any other Restricted Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement or the other Credit Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the Escrow Date identified on Schedule 6.09 (but shall apply to any extension, renewal, amendment or modification which expands the scope of, any such restriction or condition), (iii) the foregoing shall not apply to any restrictions or conditions contained in any Senior Note Documents issued subsequent to the Funding Date; provided that any Senior Note Documents issued subsequent to the Funding Date pursuant to Section 6.01(r)(i) shall be on terms not materially more onerous to the Borrower than the terms of the Senior Notes Documents, (iv) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Restricted Subsidiary pending such sale, provided that such restrictions and conditions apply only to the Restricted Subsidiary that is to be sold and such sale is permitted hereunder, (v) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (vi) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.
SECTION 6.10. End of Fiscal Years; Fiscal Quarters . The Borrower will cause (i) each of its fiscal years to end on December 31 of each year and (ii) its fiscal quarters to end on March 31, June 30, September 30 and December 31, respectively, of each year.
SECTION 6.11. Limitation on Issuance of Equity Interests . (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, issue (i) any preferred stock or other preferred equity interests other than Qualified Preferred Stock of the Borrower or (ii) any redeemable common stock or other redeemable common equity interests other than common stock or other redeemable common equity interests that is redeemable at the sole option of the Borrower or such Restricted Subsidiary, as the case may be.
(b) The Borrower will not permit any of its Restricted Subsidiaries to issue any Equity Interests (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, Equity Interests, except (i) for transfers and replacements
112
of then outstanding shares of Equity Interests, (ii) for stock splits, stock dividends and issuances which do not decrease the percentage ownership of the Borrower and its Restricted Subsidiaries in any class of the Equity Interests of such Restricted Subsidiary, (iii) in the case of Foreign Subsidiaries, to qualify directors to the extent required by applicable law and for other nominal share issuances to Persons other than the Borrower and its Restricted Subsidiaries to the extent required under applicable law or (iv) for issuances by newly created or acquired Restricted Subsidiaries in accordance with the terms of this Agreement.
SECTION 6.12. Limitation on Creation of Subsidiaries . The Borrower will not, and will not permit any of its Restricted Subsidiaries to, establish, create or acquire after the Funding Date any Subsidiary; provided that the Borrower and its Wholly-Owned Subsidiaries shall be permitted to (A) establish, create and, to the extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries so long as (i) the equity interests of each such new Wholly-Owned Subsidiary is pledged pursuant to, and to the extent required by, the US Pledge Agreement, (ii) if required by Section 5.13 , each such new Wholly-Owned Domestic Subsidiary (and, to the extent required by Section 5.10 , each such new Wholly-Owned Foreign Subsidiary) executes a counterpart of the Subsidiary Guaranty, the US Pledge Agreement and the US Security Agreement, and (iii) each such new Wholly-Owned Domestic Subsidiary (and, to the extent required by Section 5.10 , each such new Wholly-Owned Foreign Subsidiary), to the extent requested by the Administrative Agent or the Required Lenders, takes all actions required pursuant to Section 5.10 and (B) establish, create and acquire non-Wholly-Owned Subsidiaries in each case to the extent permitted by Section 6.05(l) and the definition of Permitted Acquisition so long as the equity interest of each such non-Wholly-Owned Subsidiary is pledged pursuant to, and to the extent required by, the US Pledge Agreement. In addition, each such new Wholly-Owned Subsidiary which is required to become a Credit Party shall execute and deliver, or cause to be executed and delivered, all other relevant documentation of the type described in Article IV as such new Wholly-Owned Subsidiary would have had to deliver if such new Wholly-Owned Subsidiary were a Credit Party on the Escrow Date.
SECTION 6.13. [ Reserved ].
SECTION 6.14. Swap Agreements . The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Restricted Subsidiary has actual exposure (other than those in respect of Equity Interests of the Borrower or any of its Restricted Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed or floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Restricted Subsidiary.
SECTION 6.15. UK Borrower . The Borrower shall not permit the UK Borrower to engage in any activities other than those not materially different from those engaged in on the Escrow Date and acting as a holding company for shares of Enodis Group Limited and other Subsidiaries of the Borrower and, in any event, shall not permit the UK Borrower to incur Indebtedness other than Indebtedness permitted to be incurred pursuant to Section 6.01 .
113
SECTION 6.16. Financial Covenants . Without the written consent of the Required Revolving Lenders:
(a) Maximum Consolidated Total Leverage Ratio . The Borrower will not permit the Consolidated Total Leverage Ratio for any fiscal quarter of the Borrower set forth below to be greater than or equal to the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending |
Ratio | |||
March 31, 2016 |
6.25:1.00 | |||
June 30, 2016 |
6.25:1.00 | |||
September 30, 2016 |
6.00:1.00 | |||
December 31, 2016 |
5.75:1.00 | |||
March 31, 2017 |
5.50:1.00 | |||
June 30, 2017 |
5.25:1.00 | |||
September 30, 2017 |
5.00:1.00 | |||
December 31, 2017 |
4.75:1.00 | |||
March 31, 2018 |
4.50:1.00 | |||
June 30, 2018 |
4.25:1.00 | |||
September 30, 2018 and each fiscal quarter thereafter |
4.00:1.00 |
(b) Minimum Consolidated Interest Coverage Ratio . The Borrower will not permit the Consolidated Interest Coverage Ratio for any fiscal quarter of the Borrower set forth below to be less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending |
Ratio | |||
March 31, 2016 |
2.00:1.00 | |||
June 30, 2016 |
2.00:1.00 | |||
September 30, 2016 |
2.25:1.00 | |||
December 31, 2016 |
2.25:1.00 | |||
March 31, 2017 |
2.50:1.00 | |||
June 30, 2017 |
2.50:1.00 | |||
September 30, 2017 |
2.75:1.00 | |||
December 30, 2017 and each fiscal quarter thereafter |
3.00:1.00 |
ARTICLE VII
Events of Default
If any of the following events ( Events of Default ) shall occur after the Funding Date:
(a) any of the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
114
(b) any of the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Credit Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Credit Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Credit Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02 , 5.03 (with respect to the Borrowers existence) or 5.08 , or in Article VI ; provided that a Default or an Event of Default that results from a failure of the Borrower to comply with Section 6.16 shall not constitute a Default for purposes of the Term B Facility unless and until the date upon which the Required Revolving Lenders have actually terminated all Revolving Commitments and declared any Revolving Loans to be immediately due and payable in accordance with this Agreement;
(e) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a) , (b) or (d) of this Article), or any other Credit Document, and such failure shall continue unremedied for a period of 30 days after written notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);
(f) the Borrower or any Restricted Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any of the Borrowers or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
115
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any of the Borrowers or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;
(i) any of the Borrowers or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any of the Borrowers or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(j) any of the Borrowers or any Material Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in excess of $25,000,000 shall be rendered against any of the Borrowers, any Material Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any of the Borrowers or any Material Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $25,000,000;
(m) a Change in Control shall occur;
(n) (i) any Security Document shall cease to be in full force and effect, or shall cease to give the Collateral Agent for the benefit of the Secured Creditors, the Liens, rights, powers and privileges purported to be created thereby, or any Credit Party shall deny or disaffirm such Credit Partys obligations under any Security Document or the Liens granted thereunder, or (ii) any Credit Party shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any such Security Document and such default shall continue beyond the period of grace, if any, specifically applicable thereto pursuant to the terms of such Security Document; or
(o) except as otherwise provided in Section 6.03(a)(x) or (xi) , (i) the Subsidiary Guaranty or any provision thereof shall cease to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting for or on behalf of such Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantors obligations under the Subsidiary Guaranty or (ii) any Subsidiary Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Subsidiary Guaranty; or
116
(p) (i) the Parent Guaranty or any provision thereof shall cease to be in full force or effect or the Borrower or any Person acting for or on behalf of the Borrower shall deny or disaffirm the Borrowers obligations under the Parent Guaranty or (ii) the Borrower shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Parent Guaranty;
then, and in every such event (other than an event with respect to any of the Borrowers described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers, and (iii) require cash collateral for the LC Exposure in accordance with Section 2.05(j) ; and in case of any event with respect to any of the Borrowers described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers.
Notwithstanding anything to the contrary, if the only Events of Default then having occurred and continuing are pursuant to noncompliance with Section 6.16 (which has not become an Event of Default with respect to the Term B Loans pursuant to clause (d) above), such Events of Default shall not constitute an Event of Default for purposes of any Term B Loan (or any other facility hereunder other than the Revolving Commitment) and the Lenders and the Administrative Agent shall only take the actions set forth in this Article VII at the request of the Required Revolving Lenders (as opposed to Required Lenders) and only with respect to the Revolving Commitments and the extensions of credit thereunder.
ARTICLE VIII
The Administrative Agent
SECTION 8.01. The Administrative Agent .
(a) Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.
117
(b) The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
(c) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (i) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (ii) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ), and (iii) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Credit Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Credit Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
(d) The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
(e) The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and
118
exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
(f) Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agents resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
(g) Each Lender acknowledges and agrees that the extensions of credit made hereunder are commercial loans and letters of credit and not investments in a business enterprise or securities. Each Lender further represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender shall, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrower and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder and in deciding whether or to the extent to which it will continue as a Lender or assign or otherwise transfer its rights, interests and obligations hereunder.
(h) The Administrative Agent shall be permitted from time to time to designate one of its Affiliates to perform the duties to be performed by the Administrative Agent hereunder with respect to Loans and Borrowings denominated in Foreign Currencies. The provisions of this Article VIII shall apply to any such Affiliate mutatis mutandis . All provisions of this Article VIII relating to the Administrative Agent shall be equally applicable to the Collateral Agent mutatis mutandis .
119
Without limiting the foregoing, if any Collateral or any Subsidiary is sold in a transaction permitted hereunder (excluding sales to the Borrower or a Subsidiary thereof other than sales comprising part of a Permitted Securitization made to a Subsidiary which is an SPC), (a) such Collateral and the assets of such Subsidiary shall be sold free and clear of the Liens created by the Security Documents and (b) in the case of such a sale of a Subsidiary Guarantor, such Subsidiary Guarantor and its subsidiaries shall be released from the Subsidiary Guaranty and, in each case, the Administrative Agent, the Collateral Agent and the UK Security Trustee shall be authorized to take any actions deemed appropriate in order to effect the foregoing. Each of the Administrative Agent, the Collateral Agent and the UK Security Trustee shall also be authorized, on behalf of the Lenders, to (i) enter into such amendments of the Security Documents and to enter into such agreements (including intercreditor agreements but excluding any releases of Collateral not otherwise authorized hereby) as, in either case, it deems necessary or appropriate in connection with a Permitted Securitization and (ii) execute releases of Collateral being transferred from the Borrower or a Subsidiary to the Borrower or a Subsidiary in a transaction permitted hereby and in connection with which such Collateral is substantially contemporaneously repledged (with the same priority as the released pledge or security interest) to the Administrative Agent, the Collateral Agent or the UK Security Trustee, as applicable, for the benefit of the Secured Creditors. Additionally, in connection with the granting of Liens of the type described in clauses (i) , (j) , (m) or (s) of Section 6.02 by the Borrower or any of its Subsidiaries, each of the Administrative Agent, the Collateral Agent and the UK Security Trustee is authorized to take any actions deemed appropriate by it in connection therewith (including, without limitation, the execution of appropriate lien releases or lien subordination agreements in favor of the holder or holders of such Liens, in either case solely with respect to the item or items of equipment or other assets subject to such Liens.
(i) The Administrative Agent shall, where a Lender has made a confirmation in accordance with Section 2.17(s) by providing notification to the Administrative Agent, use commercially reasonable efforts to send to the Borrowers a copy of such notification in sufficient time to enable the Borrowers to comply with their obligations under Sections 2.17(r) and (t) .
SECTION 8.02. Administrative Agent as UK Security Trustee .
(a) In this Agreement, any rights and remedies exercisable by, any documents to be delivered to, or any other indemnities or obligations in favor of the Administrative Agent shall be, as the case may be, exercisable by, delivered to, or be indemnities or other obligations in favor of, the Administrative Agent (or any other Person acting in such capacity) in its capacity as the UK Security Trustee to the extent that the rights, deliveries, indemnities or other obligations relate to the UK Security Agreements or the security thereby created. Any obligations of the Administrative Agent (or any other Person acting in such capacity) in this Agreement shall be obligations of the Administrative Agent in its capacity as UK Security Trustee to the extent that the obligations relate to the UK Security Agreement or the security thereby created. Additionally, in its capacity as UK Security Trustee, the Administrative Agent (or any Person acting in such capacity) shall have all the rights, remedies, and benefits in favor of the Administrative Agent contained in the provisions of the whole of this Article VIII and, subject always to the provisions of the UK Security Agreement, (i) all the powers of an absolute owner of the security constituted by the US Pledge Agreement governed by English law and (ii) all the rights, remedies and powers granted to it and be subject to all the obligations and duties owed by it under the UK Security Agreements and/or any of the Credit Documents.
120
(b) Each Lender and the Administrative Agent hereby appoint the UK Security Trustee to act as its trustee under and in relation to the UK Security Agreement and to hold the assets subject to the security thereby created as trustee for the Administrative Agent and Lenders on the trusts and other terms contained in the UK Security Agreement and the Administrative Agent and each Lender hereby irrevocably authorize the UK Security Trustee to exercise such rights, remedies, powers and discretions as are specifically delegated to the UK Security Trustee by the terms of the UK Security Agreement together with all such rights, remedies, powers and discretions as are reasonably incidental thereto.
(c) Any reference in this Agreement to Liens stated to be in favor of the Administrative Agent shall be construed so as to include a reference to Liens granted in favor of the UK Security Trustee.
(d) The Lenders agree that at any time that the UK Security Trustee shall be a Person other than the Administrative Agent, such other Person shall have the rights, remedies, benefits and powers granted to the Administrative Agent in its capacity as the UK Security Trustee in this Agreement.
(e) Nothing in this Section 8.02 shall require the UK Security Trustee to act as a trustee at common law or to be holding any property on trust, in any jurisdiction outside the United States or the United Kingdom which may not operate under principles of trust or where such trust would not be recognized or its effects would not be enforceable.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices . (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
(i) if to the Borrower or any Subsidiary Borrower, to it at Manitowoc Foodservice, Inc., 2227 Welbilt Boulevard, New Port Richey, Florida 34655, Attention of John Stewart, Senior Vice President and Chief Financial Officer (Telecopy No. 727-569-1208), with a copy to Foley & Lardner LLP, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, Attn: Heidi Furlong (Telecopy No. 414-297-4900);
(ii) (i) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan Operations, 10 South Dearborn, Floor L2, Chicago, Illinois 60603-2003, Attention of Nida Mischke (Telecopy No. 888-303-9732; email: jpm.agency.servicing.1@jpmchase.com), and, in the case of any Loan denominated in a Foreign Currency, to the J.P. Morgan Europe Limited, 25 Bank Street, Canary Wharf, E14 5JP, Attn: Loans Agency (Email: loan_and_agency_london@jpmorgan.com, Telecopy No. 44 207 777 2360);
121
(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., Letter of Credit Group, 10 South Dearborn, Floor L2, Chicago, IL 60603-2003, Attention of Sudeep Kalakkar (Telecopy No. 312-732-2729; Telephone No. 855-609-9959; Email: Chicago.lc.agency.activity.team@jpmchase.com);
(iv) if to the Swingline Lender, c/o the Administrative Agent at the address set forth in clause (ii) above; and
(v) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through Electronic Systems, to the extent provided in clause (b) below, shall be effective as provided in said clause (b) .
(b) Notices and other communications to the Lenders and the Issuing Bank hereunder may be delivered or furnished by using Electronic Systems pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the senders receipt of an acknowledgement from the intended recipient (such as by the return receipt requested function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i) , of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.
(d) Electronic Systems.
(i) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make Communications (as defined below) available to the Issuing Banks and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.
122
(ii) Any Electronic System used by the Administrative Agent is provided as is and as available. The Agent Parties (as defined below) do not warrant the adequacy of such Electronic Systems and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or any Electronic System. In no event shall the Administrative Agent or any of its Related Parties (collectively, the Agent Parties ) have any liability to the Borrower or the other Credit Parties, any Lender, the Issuing Bank or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrowers, any Credit Partys or the Administrative Agents transmission of communications through an Electronic System. Communications means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower or any other Credit Party pursuant to any Credit Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through an Electronic System.
SECTION 9.02. Waivers; Amendments . (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrowers therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Subject to Section 9.02(c) below and the last paragraph of Section 4.01 , neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall:
(i) increase the Commitment of any Lender without the written consent of such Lender,
123
(ii) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, postpone the scheduled date of expiration of any Commitment or extend the stated expiration date of any Letter of Credit beyond the Revolving Maturity Date (except as expressly permitted by Section 2.05(c) ), without the written consent of each Lender affected thereby,
(iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or change Section 2.08(c) in a manner which would alter the pro-rata sharing of Commitment reductions without the written consent of each Lender adversely affected thereby,
(v) change any of the provisions of this Section or the definition of Required Lenders, Required Revolving Lenders or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (or, with respect to the definition of Required Revolving Lenders, each Lender having Revolving Credit Exposure or unused Revolving Commitments),
(vi) release all or substantially all of the Collateral, release the Borrower from the Parent Guaranty or release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty, except (x) in connection with the sale of a Subsidiary Guarantor permitted under this Agreement, (y) as permitted by Section 9.17 or (z) if such Subsidiary Guarantor is designated as an Unrestricted Subsidiary in accordance with the terms hereof, without the written consent of each Lender,
(vii) except as permitted by the terms hereof on the date hereof, change the currency of any Loan or the currency in which any Commitment is required to be funded without the written consent of each Lender affected thereby,
(viii) alter the amount or the application of any prepayment required by Section 2.11 without the consent of Lenders holding at least 50.1% of the Term B Loans and/or Term B Commitments, as applicable, affected thereby,
(ix) expressly change or waive any condition precedent in Section 4.02 to any Revolving Borrowing, including, without limitation, the related defined terms therein to the extent applicable to such section, without the written consent of the Required Revolving Lenders; provided, that, the amendments, waivers or modifications described in this clause (ix) shall not require the consent of any Lenders other than the Required Revolving Lenders, or
(x) amend, waive or otherwise modify any financial covenant set forth in Section 6.16 and any definition related thereto (as any such definition is used therein) or waive any Default or Event of Default resulting from a failure to perform or observe the financial covenants set forth in Section 6.16 (including any related Default or Event of Default under Section 5.01 ) without the written consent of the Required Revolving Lenders; provided, that, the amendments, waivers or modifications described in this clause (x) shall not require the consent of any Lenders other than the Required Revolving Lenders;
124
provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be. Notwithstanding the foregoing (but subject to the foregoing proviso), (x) no consent with respect to any amendment, waiver or other modification of this Agreement or any other Credit Document shall be required of, in the case of any amendment, waiver or other modification referred to above in this Section 9.02(b) , any Lender that receives payment in full of the principal of and interest accrued on each Loan made by, and all other amounts owing to, such Lender or accrued for the account of such Lender under this Agreement and the other Credit Documents at the time such amendment, waiver or other modification becomes effective and whose Commitments terminate by the terms and upon the effectiveness of such amendment, waiver or other modification and (y) no amendment, waiver or consent shall be made to modify Section 6.16 or any definition related thereto (as any such definition is used for purposes of Section 6.16 ), accelerate the Revolving Facility upon a breach of Section 6.16 or waive any Default resulting from a failure to perform or observe the requirements of Section 6.16 without the written consent of the Revolving Required Lenders; provided , however , that the amendments, waivers and consents described in this clause (y) shall not require the consent of any Lenders other than the Revolving Required Lenders.
(c) If the Administrative Agent and the Borrower acting together identify any ambiguity, omission, mistake, typographical error or other defect in any provision of this Agreement or any other Credit Document, then the Administrative Agent and the Borrower shall be permitted to amend, modify or supplement such provision to cure such ambiguity, omission, mistake, typographical error or other defect, and such amendment shall become effective without any further action or consent of any other party to this Agreement.
SECTION 9.03. Expenses; Indemnity; Damage Waiver . (a) The Borrower shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent, the Syndication Agent, the Documentation Agents, the Arrangers and their respective Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement, the other Credit Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the
125
Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and the other Credit Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, the Collateral Agent, the Issuing Bank, the Syndication Agent, each Documentation Agent, each Arranger and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an Indemnitee ) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Credit Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not such claim, litigation, investigation or proceeding is brought by the Borrower or any of its Subsidiaries or their respective equityholders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.
(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section (and without limiting its obligation to do so), each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lenders ratable share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought by reference to the aggregate outstanding Term B Loans and unused Term B Commitments (or, if such Term B Commitments have terminated, aggregate outstanding Term B Loans) and Revolving Commitments (or, if such Revolving Commitments have terminated, aggregate Revolving Credit Exposure)) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.
126
(d) To the extent permitted by applicable law, the Borrowers shall not assert, and hereby waive, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than ten Business Days after written demand therefor.
SECTION 9.04. Successors and Assigns . (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including J. P. Morgan Europe Limited and any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrowers may not assign or otherwise transfer any of their respective rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrowers without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including J. P. Morgan Europe Limited and any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Borrower, provided that no consent of the Borrower shall be required for an assignment (x) to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee or (y) of all or any portion of the Term B Loan provided on the Funding Date in connection with the primary syndication thereof, provided further that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received written notice thereof;
(B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of (x) any Revolving Commitment to an assignee that is a Lender with a Revolving Commitment immediately prior to giving effect to such assignment and (y) all or any portion of a Term B Loan to a Lender, an Affiliate of a Lender or an Approved Fund;
127
(C) each Issuing Bank; provided that no consent of any Issuing Bank shall be required for an assignment of all or any portion of a Term B Loan; and
(D) each Swingline Lender; provided that no consent of any Swingline Lender shall be required for an assignment of all or any portion of a Term B Loan.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lenders Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 (or, in the case of a Term B Loan, $1,000,000) unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;
(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lenders rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lenders rights and obligations in respect of one Class of Commitments or Loans;
(C) the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and he parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500, except that no fee shall be required in the event of an assignment by a Lender to an Affiliate of such Lender; and
(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its affiliates, the Credit Parties and their related parties or their respective securities) will be made available and who may receive such information in accordance with the assignees compliance procedures and applicable laws, including Federal and state securities laws.
For the purposes of this Section 9.04(b) , the term Approved Fund and Ineligible Institution have the following meanings:
Approved Fund means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
128
Ineligible Institution means (a) a natural person, (b) a Defaulting Lender or its Lender Parent, (c) a company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof or (d) the Borrower or any of its Affiliates; provided that, such company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Commitments, (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (z) has assets greater than $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15 , 2.16 , 2.17 and 9.03 ). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of (and stated interest on) the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the Register ). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignees completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing
129
and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.04(c) , 2.05(d) or (e) , 2.06(b) , 2.18(d) or 9.03(c) , the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrowers, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a Participant ), other than an Ineligible Institution, in all or a portion of such Lenders rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lenders obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15 , 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (i) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section; and (ii) shall not be entitled to receive any greater payment under Sections 2.15 or 2.17 , with respect to any participation, than its participating Lender would have been entitled to receive; provided , however , that such participation shall be entitled to receive a greater payment than its participating Lender would have been entitled to receive to the extent such entitlement to receive such greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation and the Borrower was provided with notice of the participation and consented thereto, such consent not to be unreasonably withheld. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participants interest in the Loans or other obligations under this Agreement (the Participant Register ); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participants
130
interest in any Commitments, Loans, Letters of Credit or its other obligations under any Credit Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(d) Any Lender may, without the consent of the Borrower or the Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank or any other central banking authority, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival . All covenants, agreements, representations and warranties made by the Borrowers herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement and the other Credit Documents shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15 , 2.16 , 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness .
(a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Credit Documents and any separate letter agreements with respect to (i) fees payable to the Administrative Agent or any Arranger and (ii) the reductions of the Letter of Credit Fronting Sublimit of the applicable Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. The Borrower agrees to comply with its obligations under such letter agreements. Except as provided in Section 4.01 , this Agreement
131
shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
(b) Delivery of an executed counterpart of a signature page of this Agreement by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement. The words execution, signed, signature, delivery, and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 9.07. Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08. Right of Set-off . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any of the Borrowers against any of and all the obligations of such Person now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set-off) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process . (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b) Each of the Borrowers hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and of the United States District Court for the Southern District of New York sitting in the Borough of Manhattan, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal
132
court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrowers or their respective properties in the courts of any jurisdiction.
(c) Each of the Borrowers hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01 . Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
(e) Each Subsidiary Borrower hereby irrevocably and unconditionally designates and appoints the Borrower, as its authorized agent, to accept and acknowledge on its behalf, service of any and all process which may be served in any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. The Borrower hereby irrevocably and unconditionally accepts such appointment.
SECTION 9.10. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality . Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b)
133
to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (ii) any pledgee referred to in Section 9.04(d) or (iii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any of the Borrowers and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than the Borrower. For the purposes of this Section, Information means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrower and other than information pertaining to this Agreement routinely provided by arrangers to data service providers, including league table providers, that serve the lending industry; provided that, in the case of information received from the Borrower after the Escrow Date, such information is or was clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
THE BORROWER AGREES TO IDENTIFY IN WRITING WHETHER ANY DOCUMENT OR INFORMATION DELIVERED OR MADE AVAILABLE TO THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE SYNDICATION AGENT, ANY DOCUMENTATION AGENT, ANY ARRANGER OR ANY LENDER CONTAINS NON-PUBLIC INFORMATION.
EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS AFFILIATES, THE PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES) AND
134
ITS SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.
SECTION 9.13. Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the Charges ), shall exceed the maximum lawful rate (the Maximum Rate ) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.14. USA PATRIOT Act; KYC .
(a) Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the Act ) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrowers in accordance with the Act. Each Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable know your customer and anti-money laundering rules and regulations, including the Act and the Money Laundering Regulations 2007 (U.K.), Proceeds of Crime Act 2002 (U.K.) and Terrorism Act 2000 (U.K.).
(b) If (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; (ii) any change in the status of a UK Borrower after the date of this Agreement; or (iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, obliges the Administrative Agent or any Lender (or, in the case of clause (iii) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each UK Borrower shall promptly upon the request of the Administrative Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in clause (iii) above, on behalf of any prospective new Lender) in order for the Administrative Agent, such
135
Lender or, in the case of the event described in clause (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Credit Documents.
(c) Each Lender shall promptly upon the request of the supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself) in order for the Administrative Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Credit Documents.
SECTION 9.15. Conversion of Currencies . (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the day on which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the Applicable Creditor ) shall, notwithstanding any judgment in a currency (the Judgment Currency ) other than the currency in which such sum is stated to be due hereunder (the Agreement Currency ), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The obligations of the Borrower contained in this Section 9.15 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder.
SECTION 9.16. Administrative Agent, Syndication Agent, Documentation Agents and Arrangers . In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Credit Document), each of the Borrowers acknowledges and agrees that (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Documentation Agents, the Syndication Agent, the Lenders and the Arrangers are arms-length commercial transactions between the Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent, the Documentation Agents, the Syndication Agent, the Lenders and the Arrangers, on the other hand, (B) each of the Borrowers has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of the Borrowers is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each Syndication Agent, Documentation Agent and Arranger appointed with respect to this
136
Agreement shall, in their capacities as such, have no duties or responsibilities under this Agreement or any other Credit Document, (B) each of the Administrative Agent, the Documentation Agents, the Syndication Agent, the Lenders and the Arrangers is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or fiduciary for the Borrowers or any of their respective Affiliates or any other Person and (C) none of the Administrative Agent, the Documentation Agents, the Syndication Agent, the Lenders and the Arrangers has any obligation to the Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Credit Documents; and (iii) the Administrative Agent, the Documentation Agents, the Lenders and the Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their respective Affiliates, and none of the Administrative Agent, the Documentation Agents, the Syndication Agent, the Lenders and the Arrangers has any obligation to disclose any of such interests to the Borrowers or any of their respective Affiliates. To the fullest extent permitted by law, each of the Borrowers hereby waives and releases any claims that it may have against the Administrative Agent, the Documentation Agents, the Syndication Agent, the Lenders and the Arrangers with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
SECTION 9.17. Release of Liens and Guarantees . A Subsidiary Guarantor shall automatically be released from its obligations under the Credit Documents, and all security interests created by the Security Documents in Collateral owned by such Subsidiary Guarantor shall be automatically released, upon the consummation of any transaction permitted by this Agreement as a result of which such Subsidiary Guarantor ceases to be a Restricted Subsidiary; provided that, if so required by this Agreement, the Required Lenders shall have consented to such transaction and the terms of such consent shall not have provided otherwise. Upon any sale or other transfer by any Credit Party (other than to the Borrower or any other Credit Party) of any Collateral in a transaction permitted under this Agreement, or upon the effectiveness of any written consent to the release of the security interest created under any Security Document in any Collateral pursuant to Section 9.02 , the security interests in such Collateral created by the Collateral Documents shall be automatically released. In connection with any termination or release pursuant to this Section 9.17 , the Administrative Agent shall execute and deliver to any Credit Party, at such Credit Partys expense, all documents that such Credit Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.
ARTICLE X
Collection Action Mechanism
SECTION 10.01. Implementation of CAM . (a) On the CAM Exchange Date, (i) the Commitments shall automatically and without further act be terminated in accordance with Article VII , (ii) the Lenders shall automatically and without further act be deemed to have exchanged interests in the Designated Obligations such that, in lieu of the interests of each Lender in the Designated Obligations under each Tranche (as defined below) in which it shall
137
participate as of such date, such Lender shall own an interest equal to such Lenders CAM Percentage in the Designated Obligations under each of the Tranches and (iii) simultaneously with the deemed exchange of interests pursuant to clause (ii) above, the interests in the Designated Obligations to be received in such deemed exchange shall, automatically and with no further action required, be converted into the Dollar Equivalent, determined using the Exchange Rate calculated as of such date, of such amount and on and after such date all amounts accruing and owed to the Lenders in respect of such Designated Obligations shall accrue and be payable in Dollars at the rate otherwise applicable hereunder. Each Lender, each person acquiring a participation from any Lender as contemplated by Section 9.04 and each of the Borrowers hereby consents and agrees to the CAM Exchange. Each of the Borrowers and the Lenders agrees from time to time to execute and deliver to the Administrative Agent all such promissory notes and other instruments and documents as the Administrative Agent shall reasonably request to evidence and confirm the respective interests and obligations of the Lenders after giving effect to the CAM Exchange, and each Lender agrees to surrender any promissory notes originally received by it in connection with its Loans hereunder to the Administrative Agent against delivery of any promissory notes so executed and delivered; provided that the failure of any of the Borrowers to execute or deliver or of any Lender to accept any such promissory note, instrument or document shall not affect the validity or effectiveness of the CAM Exchange. For purposes hereof, Tranche means a category of Commitments and extensions of credits thereunder. For purposes of such definition, each of the following comprises a separate Tranche: (i) the Letters of Credit issued for the account of, and the Swingline Loans and Revolving Loans made to, the Borrower, (ii) the Letters of Credit issued for the account of, and the Revolving Loans made to, each Subsidiary Borrower and (iii) the Term B Loan.
(b) As a result of the CAM Exchange, on and after the CAM Exchange Date, each payment received by the Administrative Agent pursuant to any Credit Document in respect of the Designated Obligations shall (notwithstanding any provision therein to the contrary) be distributed to the Lenders pro rata in accordance with their respective CAM Percentages (to be redetermined as of each such date of payment or distribution to the extent required by Section 10.01(c) ).
(c) In the event that, on or after the CAM Exchange Date, the aggregate amount of the Designated Obligations shall change as a result of the making of a disbursement under a Letter of Credit by an Issuing Bank that is not reimbursed by the Applicable Borrower, then (i) each Lender which, immediately prior to the CAM Exchange Date, had a Revolving Commitment or Revolving Credit Exposure (a CAM Revolving Lender ) shall, in accordance with Section 2.05(d) , promptly purchase from the applicable Issuing Bank a participation in such L/C Disbursement in the amount of such CAM Revolving Lenders Applicable Revolver Percentage (determined without giving effect to the CAM Exchange) of such L/C Disbursement, (ii) the Administrative Agent shall redetermine the CAM Percentages after giving effect to such disbursement and the making of such L/C Disbursement and the purchase of participations therein by the applicable CAM Revolving Lenders and the Lenders shall automatically and without further act be deemed to have exchanged interests in the Designated Obligations such that each Lender shall own an interest equal to such Lenders CAM Percentage in the Designated Obligations under each of the Tranches (and the interests in the Designated Obligations to be received in such deemed exchange shall, automatically and with no further action required, be converted into the Dollar Equivalent of such amount in accordance with the first sentence of
138
Section 10.01(a) ), and (iii) in the event distributions shall have been made in accordance with Section 10.01(b) , the Lenders shall make such payments to one another as shall be necessary in order that the amounts received by them shall be equal to the amounts they would have received had each such disbursement and L/C Disbursement been outstanding on the CAM Exchange Date. Each such redetermination shall be binding on each of the Lenders and their successors and assigns and shall be conclusive, absent manifest error.
[signature pages follow]
139
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
MANITOWOC FOODSERVICE, INC. | ||
By |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Senior Vice President, General Counsel, and Secretary |
[Signature Page to Credit Agreement]
ENODIS HOLDINGS LIMITED | ||
By |
/s/ Adrian Gray |
|
Name: | Adrian Gray | |
Title: | Director |
[Signature Page to Credit Agreement]
JPMORGAN CHASE BANK, N.A., as a Lender, Issuing Bank and Administrative Agent | ||
By |
/s/ Richard Barritt |
|
Name: | Richard Barritt | |
Title: | Vice President |
[Signature Page to Credit Agreement]
GOLDMAN SACHS BANK USA, as a Lender | ||
By |
/s/ Rebecca Kratz |
|
Name: | Rebecca Kratz | |
Title: | Authorized Signatory |
[Signature Page to Credit Agreement]
HSBC BANK USA, N.A., as a Lender and Issuing Bank | ||
By |
/s/ Christina M. Love |
|
Name: | Christina M. Love | |
Title: | Relationship Manager |
[Signature Page to Credit Agreement]
CITIBANK, N.A., as a Lender | ||
By |
/s/ Monique Renta |
|
Name: | Monique Renta | |
Title: | Director and Vice President |
[Signature Page to Credit Agreement]
COÖPERTIEVE RABOBANK U.A., NEW YORK BRANCH, as a Lender | ||
By |
/s/ James Purky |
|
Name: | James Purky | |
Title: | Vice President | |
By |
/s/ Peter Duncan |
|
Name: | Peter Duncan | |
Title: | Managing Director |
[Signature Page to Credit Agreement]
BMO HARRIS BANK N.A., as a Lender | ||
By |
/s/ Ronald J. Carey |
|
Name: | Ronald J. Carey | |
Title: | Senior Vice President |
[Signature Page to Credit Agreement]
SCHEDULE 1.01
PRICING SCHEDULE
A PPLICABLE M ARGIN |
L
EVEL
I
S TATUS |
L
EVEL
II
S TATUS |
L
EVEL
III
S TATUS |
L
EVEL
IV
S TATUS |
L
EVEL
V
S TATUS |
L
EVEL
VI
S TATUS |
||||||||||||||||||
Eurocurrency Spread |
1.50 | % | 1.75 | % | 2.00 | % | 2.25 | % | 2.50 | % | 2.75 | % | ||||||||||||
ABR Spread |
0.50 | % | 0.75 | % | 1.00 | % | 1.25 | % | 1.50 | % | 1.75 | % |
A PPLICABLE F EE R ATE |
L
EVEL
I
S TATUS |
L
EVEL
II
S TATUS |
L
EVEL
III
S TATUS |
L
EVEL
IV
S TATUS |
L
EVEL
V
S TATUS |
L
EVEL
VI
S TATUS |
||||||||||||||||||
Commitment Fee Rate |
0.25 | % | 0.30 | % | 0.35 | % | 0.40 | % | 0.45 | % | 0.50 | % |
For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:
Financials means the annual or quarterly financial statements of the Borrower delivered pursuant to the Credit Agreement.
Level I Status exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, the Consolidated Total Leverage Ratio is less than 2.50 to 1.00.
Level II Status exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status and (ii) the Consolidated Total Leverage Ratio is less than 3.25 to 1.00.
Level III Status exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status or Level II Status and (ii) the Consolidated Total Leverage Ratio is less than 4.00 to 1.00.
Level IV Status exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status, Level II Status or Level III Status and (ii) the Consolidated Total Leverage Ratio is less than 4.75 to 1.00.
Level V Status exists at any date if, as of the last day of the fiscal quarter of the Borrower referred to in the most recent Financials, (i) the Borrower has not qualified for Level I Status, Level II Status, Level III Status or Level IV Status and (ii) the Consolidated Total Leverage Ratio is less than 5.50 to 1.00.
Level VI Status exists at any date if the Borrower has not qualified for Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status.
Status means Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status, as applicable.
Subject to the third and fourth sentences of this paragraph, the Applicable Margin and Applicable Fee Rate shall be determined in accordance with the foregoing table based on the Borrowers Status as reflected in the then most recent Financials. Adjustments, if any, to the Applicable Margin or Applicable Fee Rate shall be effective three (3) Business Days after the Administrative Agent has received the applicable Financials. If the Borrower fails to deliver the Financials to the Administrative Agent at the time required pursuant to the Credit Agreement, then the Applicable Margin and Applicable Fee Rate shall be the highest Applicable Margin and Applicable Fee Rate set forth in the foregoing table until five (5) days after such Financials are so delivered. From and after the Funding Date until adjusted pursuant to the first sentence of this paragraph following delivery of Financials for the fiscal quarter ending June 30, 2016, Level VI Status shall be deemed to exist.
SCHEDULE 1.02
EXISTING INTERCOMPANY NOTES
Lender Entity |
Borrower Entity | Start Date |
Maturity
Date |
Currency
of Loan |
Amount in
currency of Loan |
|||||||
Manitowoc FSG International Holdings, Inc. |
MTW County Limited | 11/7/08 | 11/6/18 | USD | $ | 560,724,185 |
Lender Entity |
Borrower Entity |
Lender
Amount |
||||
Enodis Corporation |
Enodis Group Ltd. | $ | 4,286,592 | |||
Enodis Germany |
Convotherm Germany Manufacturing | $ | 6,573,896 | |||
Convotherm Germany Manufacturing |
Enodis Holdings Ltd Group | $ | 1,827,265 | |||
Enodis Holdings Limited |
MTW County Ltd | $ | 6,904,734 | |||
JH Raymer (Cocoa) Ltd |
Enodis Holdings Ltd Group | $ | 252,588 | |||
Enodis Nederland BV |
Enodis Holdings Ltd Group | $ | 205,502 | |||
Enodis Holdings Limited |
Boek-en Offsettdrukkerj | $ | 55,630 | |||
Enodis Holdings Inc |
Enodis Holdings Limited | $ | 25,204 | |||
Garland Commercial Ranges Ltd |
Manitowoc Foodservice (Luxembourg) Sarl | $ | 12,232,505 | |||
Fabristeel Singapore |
Enodis Holdings Ltd | $ | 19,742,341 | |||
Enodis Holdings Ltd |
Manitowoc Beverage Systems Ltd. | $ | 11,648,293 | |||
Convotherm Germany |
MTW FSG UK | $ | 1,801,865 | |||
Enodis Holdings Limited |
Subsidiaries party to the Cash Pool Intercompany Note |
|
Revolving
Amounts |
|
||
Manitowoc (China) Foodservice Co., Ltd. |
Enodis Holdings Ltd. | $ | 22,677,800 | |||
Manitowoc FSG U.S. Holding, LLC |
Garland Commercial Ranges Ltd | $ | 9,000,000 | |||
Enodis Investments Ltd. |
Enodis Holdings Ltd. | $ | 183,077,758 | |||
Enodis Strand |
Enodis Holdings Ltd. | $ | 143,063,963 | |||
Enodis Property Developments Ltd. |
Enodis Holdings Ltd. | $ | 36,139,116 | |||
Enodis Group Limited |
Enodis Holdings Ltd. | $ | 7,823,577 | |||
Berisford Holdings |
Enodis Holdings Ltd. | $ | 22,895,908 |
SCHEDULE 2.01
COMMITMENTS
Lender |
Revolving
Commitment |
Term B
Commitment |
Total
Commitment |
|||||||||
JPMorgan Chase Bank, N.A. |
$ | 51,500,000 | $ | 975,000,000 | $ | 1,026,500,000 | ||||||
Goldman Sachs Bank USA |
$ | 41,500,000 | $ | 0 | $ | 41,500,000 | ||||||
HSBC Bank USA, N.A. |
$ | 40,000,000 | $ | 0 | $ | 40,000,000 | ||||||
Citibank, N.A. |
$ | 32,000,000 | $ | 0 | $ | 32,000,000 | ||||||
Coöperatieve Rabobank U.A., New York Branch |
$ | 35,000,000 | $ | 0 | $ | 35,000,000 | ||||||
BMO Harris Bank N.A. |
$ | 25,000,000 | $ | 0 | $ | 25,000,000 | ||||||
|
|
|
|
|
|
|||||||
Total |
$ | 225,000,000 | $ | 975,000,000 | $ | 1,200,000,000 | ||||||
|
|
|
|
|
|
LETTER OF CREDIT FRONTING SUBLIMITS
Issuing Bank |
Letter of Credit
Fronting Sublimit |
|||
JPMorgan Chase Bank, N.A. |
$ | 10,000,000 | ||
HSBC Bank USA, N.A. |
$ | 10,000,000 | ||
|
|
|||
Total |
$ | 20,000,000 | ||
|
|
SCHEDULE 2.06
EXISTING LETTERS OF CREDIT
Issuing Bank |
LC No. |
Outstanding
Amount |
L/C Available
Amount |
Expiry Date |
Beneficiary | |||||||||
JPMorgan Chase Bank, N.A. |
CPCS-687163 | $ | 279,126.90 | $ | 255,855.71 | April 17, 2017 |
National
Westminster Bank PLC |
|||||||
JPMorgan Chase Bank, N.A. |
CPCS-687178 | $ | 545,103.14 | $ | 419,785.97 | September 25, 2016 |
National
Westminster Bank PLC |
|||||||
JPMorgan Chase Bank, N.A. |
CPCS-731732 | $ | 56,939.50 | $ | 84,238.95 | January 31, 2017 |
JPMorgan
Chase Bank, N.A. |
|||||||
JPMorgan Chase Bank, N.A. |
CPCS-736889 | $ | 30,000.00 | $ | 30,000.00 | December 1, 2016 |
County of
Los Angeles Fire |
|||||||
JPMorgan Chase Bank, N.A. |
CPCS-868532 | $ | 482,000 | $ | 482,000 | December 31, 2016 |
The Travelers
Indemnity Company |
SCHEDULE 3.01
GOOD STANDING
None.
SCHEDULE 3.05
REAL PROPERTY
All real property having a fair market value in excess of $5,000,000 owned by the Borrower or any of the Subsidiary Guarantors :
Manitowoc FSG Operations, LLC
(f/k/a Manitowoc FSG Operations, Inc.)
2100 Future Drive
Sellersburg, IN 47172
Owner: Manitowoc FSG Operations, LLC
Manitowoc FSG Operations, LLC
(f/k/a Manitowoc FSG Operations, Inc. and Manitowoc Beverage Equipment, Inc.)
2110 S. 26 th Street
Manitowoc, WI 54220
Owner: Manitowoc FSG Operations, LLC
Manitowoc FSG Operations, LLC
(f/k/a Manitowoc FSG Operations, Inc. and Manitowoc Beverage Equipment, Inc.)
2915 Tennessee Ave North
Parsons, TN 38363
Owner: Manitowoc FSG Operations, LLC
The Delfield Company
980 S. Isabella Road
Mt. Pleasant, MI 48858
Owner: The Delfield Company LLC
Frymaster L.L.C. Shreve Park Plant
5489 Campus Drive
Shreveport, LA 71129
Owner: Frymaster L.L.C.
Cleveland Range, LLC
1333 East 179 th Street
Cleveland, OH 44110
Owner: Cleveland Range, LLC
Locations of all leased Real Property of Borrower or any Subsidiary Guarantor where equipment and/or inventory having a fair market value in excess of $1,000,000 in the aggregate (as determined at any time during the immediately preceding four fiscal quarters) is held :
Location |
Lessor |
|
The Delfield Company 1312 N. Mission Mt. Pleasant, MI 48858 |
Fabiano Properties Inc. 1885 Bevanda Ct Bay City, MI 48706 |
The Delfield Company 1111 Hope Street Covington, TN 38019 |
Anderson & Anderson LLC 202 N. Court Street Florence, AL 35630 |
|
Cleveland Range, Plant 3 1250 Reames Road Baltimore, MD 21220 |
Estherwar, LLC 100 Glenmore Court Bel Air, MD 21014 |
|
Manitowoc FSG Operations, LLC 18901 Euclid Drive Cleveland, OH 44110 |
Cleveland Commerce One, LLC 18901 Euclid Drive Cleveland, OH 44110 |
|
Neovia Logistics Services, LLC Warehouse for Kitchen Care 600 Patrol Road, Suite 100 Jeffersonville, IN 47130 Manitowoc Foodservice U.S. Holdings, Inc. |
Neovia Logistics Services, LLC Suite 1400 2001 Butterfield Road Downers Grove, Il 60515 |
Locations where equipment and/or inventory having a fair market value in excess of $1,000,000 in the aggregate is held pursuant to bailment arrangements :
Neovia Logistics Services, LLC
Warehouse for Kitchen Care
600 Patrol Road, Suite 100
Jeffersonville, IN 47130
Manitowoc Foodservice U.S. Holdings, Inc.
SCHEDULE 3.10
ERISA
The funded status will increase or decrease in the future due to changes in plan assumptions including the discount rate and the assumed investment return on Plan assets.
As of 12/31/15 | ||||||||||||
FOODSERVICE |
Fair Market Value of
Plan Assets (USD) |
Present Value of
Accumulated Benefit Obligations (USD) |
(Under)/Over Funded
Status (USD) |
|||||||||
Plans |
||||||||||||
US Qualified Pension |
||||||||||||
Manitowoc Foodservice Pension |
34,112,144 | 55,606,591 | (21,494,447 | ) | ||||||||
US SERP |
||||||||||||
Kysor SERP |
| 4,283,934 | (4,283,934 | ) | ||||||||
Kysor Supplemental |
| 1,219,889 | (1,219,889 | ) | ||||||||
Lanzani Pension Arrangement |
| 1,335,893 | (1,335,893 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal US SERP |
| 6,839,716 | (6,839,716 | ) | ||||||||
|
|
|
|
|
|
|||||||
Non-US Pension |
||||||||||||
Germany Convotherm |
| 75,932 | (75,932 | ) | ||||||||
Germany Enodis Holding GmbH |
| 1,564,782 | (1,564,782 | ) | ||||||||
Germany Enodis |
| 443,897 | (443,897 | ) | ||||||||
UK Berisford |
147,889,881 | 168,290,039 | (20,400,158 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal Non-US Pension |
147,889,881 | 170,374,650 | (22,484,769 | ) | ||||||||
|
|
|
|
|
|
|||||||
Consolidated Total |
182,002,025 | 232,820,957 | (50,818,932 | ) | ||||||||
|
|
|
|
|
|
| The balance due on the withdrawal liability that resulted from the closing of the Fort Wayne plant in 2011/2012 is $14,218,607.18. |
SCHEDULE 3.13
SUBSIDIARIES
The Credit Parties own, directly or indirectly, 100% of the capital stock or other equity of each of the following entities, except as otherwise noted. Entities marked with an asterisk are Material Subsidiaries as of the Funding Date. The Subsidiary Guarantors are italicized.
Subsidiaries of Manitowoc Foodservice, Inc. |
||
Manitowoc Foodservice Holding, Inc. |
(WI) | |
MTW Foodservice Escrow Corp. |
(DE) | |
Manitowoc FSG U.S. Holding, LLC * |
(DE) | |
Manitowoc Cayman Islands Funding Ltd. * |
(Cayman Islands) | |
Subsidiary of Manitowoc Foodservice Holding, Inc. |
||
Manitowoc Foodservice Germany Holding GmbH |
(Germany) | |
Subsidiary of Manitowoc Foodservice Germany Holding GmbH |
||
Manitowoc Deutschland GmbH * |
(Germany) | |
Subsidiary of Manitowoc Deutschland GmbH |
||
Convotherm Elecktrogerate GmbH |
(Germany) | |
Subsidiary of Convotherm Elecktrogerate GmbH |
||
Convotherm India Private Limited (99% CEGmbh & 1% MDGmbH) |
(India) | |
Subsidiaries of Manitowoc FSG U.S. Holding, LLC |
||
Manitowoc Equipment Works, Inc. |
(NV) | |
Manitowoc Foodservice Companies, LLC * |
(WI) | |
Manitowoc FSG Mexico, SRL de C.V. (99%) * |
(Mexico) | |
Manitowoc FSG Operations, LLC * |
(NV) | |
Manitowoc FP, Inc. * |
(NV) | |
Subsidiaries of Manitowoc Foodservice Companies, LLC |
||
Welbilt Manufacturing (Thailand) Ltd. |
||
(51% MFCllc, 49% Enodis Nederlands, 1 share MFAPL) |
(Thailand) | |
Enodis Holdings, Inc. * |
(Delaware) | |
Subsidiaries of Manitowoc FSG Operations, LLC |
||
Manitowoc TJ SRL de C.V. (99%) |
(Mexico) | |
McCanns Engineering & Manufacturing Co., LLC * |
(CA) | |
Manitowoc Foodservice (Luxembourg) S.à.r.l. |
(Luxembourg) |
Subsidiary of Manitowoc Foodservice (Luxembourg) S.à.r.l. |
||
Manitowoc FSG Holding, LLC |
(DE) | |
Subsidiary of Manitowoc FSG Holding, LLC |
||
Manitowoc FSG Manufactura Mexico, S. De R.L. De C.V. (99%) |
(Mexico) | |
Subsidiaries of Manitowoc FP, Inc. (NV) |
||
Inducs AG |
(Switzerland) | |
Manitowoc FSG International Holdings, Inc. |
(NV) | |
Subsidiaries of Manitowoc FSG International Holdings, Inc. |
||
Manitowoc Foodservice M.E. FZE |
(UAE) | |
Manitowoc FSG UK Limited |
(UK) | |
MTW County Limited (UK) MTW County (Domestication) LLC * |
(DE) | |
Manitowoc Foodservice Asia Pacific Private Limited * |
(Singapore) | |
Subsidiary of Manitowoc FSG UK Limited |
||
Enodis Nederland B.V. |
(Netherlands) | |
Subsidiary of Enodis Nederlands B.V. (Netherlands) |
||
Manitowoc Foodservice Iberia SAU * |
(Spain) | |
Subsidiary of MTW County Limited (UK) |
||
Manitowoc Foodservice UK Holding Limited |
(UK) | |
Subsidiary of Manitowoc Foodservice UK Holding Limited |
||
Enodis Holdings Limited * |
||
(69.9% MTW County Ltd. UK & US, 30.1% MTW FSG UK) |
(UK) | |
Subsidiary of Enodis Holdings Ltd. (UK) |
||
Enodis Group Ltd. * |
(UK) | |
Subsidiaries of Enodis Group Ltd. (UK) |
||
Manston Limited (BVI) |
(UK) | |
Berisford Holdings Limited * |
(UK) | |
Enodis Industrial Holdings Limited * |
(UK) | |
Enodis Investments Ltd. |
(UK) | |
Beleggingsmaatsch appli Interrub B.V. * |
(Netherlands) | |
Merrychef Limited |
(UK) | |
Subsidiary of Berisford Holdings Limited (UK) |
||
Enodis Property Group Ltd. |
(UK) | |
Subsidiary of Enodis Property Group Ltd (UK) |
||
Enodis Property Development Ltd. |
(UK) | |
Subsidiaries of Enodis Industrial Holdings Limited (UK) |
||
Enodis International Ltd. * |
(UK) | |
Glenluce Ltd. |
(Isle of Man) |
Subsidiary of Enodis Investments Ltd. (UK) |
||
Enodis Foodservice Equipment (Shanghai) Co. Ltd. |
(China) | |
Subsidiary of Beleggingsmaatsch appli Interrub B.V. (Netherlands) |
||
Enodis Strand Ltd. |
(UK) | |
Subsidiary of Merrychef Limited (UK) |
||
Manitowoc Beverage Systems Ltd. * |
(UK) | |
Subsidiaries of Manitowoc Beverage Systems Ltd. (UK) |
||
TruPour Ltd. |
(Ireland) | |
Manitowoc Foodservice UK Limited |
(UK) | |
Subsidiaries of Manitowoc Foodservice Asia Pacific Private Limited (Singapore) |
||
Manitowoc Foodservice India Private Limited |
||
99% MFAPPL & 1% MFSGIH |
(India) | |
Manitowoc (China) Foodservice Co. Ltd. * |
(China) | |
Subsidiary of Manitowoc (China) Foodservice Co. Ltd. |
||
Shanghai Manitowoc International Trading Co. Ltd. |
(China) | |
Subsidiaries of Enodis Holdings, Inc. |
||
Enodis Oxford |
(UK) | |
Enodis Regent * |
(UK) | |
Subsidiaries of Enodis Regent (UK) |
||
Enodis Hanover * |
(UK) | |
Subsidiaries of Enodis Hanover (UK) |
||
Berisford Property Development (USA) Ltd. |
(NY) | |
Enodis Corporation |
(DE) | |
Subsidiaries of Enodis Corporation |
||
Welbilt Corporation * |
(DE) | |
Welbilt Holding Company |
(DE) | |
Appliance Scientific, Inc. |
(DE) | |
Subsidiaries of Welbilt Holding Company (DE) |
||
Enodis Technology Center, Inc. |
(DE) | |
Enodis Group Holdings, US Inc. * |
(DE) | |
Subsidiaries of Enodis Group Holdings US, Inc. |
||
Landis Holdings LLC |
(DE) | |
Frymaster L.L.C.* |
(LA) | |
Kysor Nevada Holding Corp.* |
(NV) | |
The Delfield Company LLC* |
(DE) | |
Cleveland Range, LLC* |
(DE) | |
Garland Commercial Industries LLC |
(DE) | |
Boek-en Offsetdrukkerij Kuyte B.V. * |
(Netherlands) |
Subsidiaries of Kysor Nevada Holding Corp. |
||
Kysor Holdings, Inc. |
(DE) | |
Subsidiaries of Kysor Holdings, Inc. |
||
Kysor Industrial Corporation |
(MI) | |
Subsidiaries of Kysor Industrial Corporation (MI) |
||
Charles Needham Industries Inc. * |
(TX) | |
Kysor Industrial Corporation * |
(NV) | |
Westran Corporation |
(MI) | |
Subsidiaries of Charles Needham Industries, Inc. |
||
Kysor Business Trust * |
(DE) | |
Subsidiaries of Boek-en Offsetdrukkerij Kuyte, B.V. |
||
H. Tieskens Beheer B.V |
(Netherlands) | |
Garland Commercial Ranges Ltd * |
(Canada) | |
H. Tieskens Exploitatie B.V |
(Netherlands) | |
Subsidiaries of Garland Commercial Ranges Ltd. (Canada) |
||
Enodis Maple Leaf Ltd. * |
(UK) | |
Cleveland Range Ltd. |
(Canada) | |
Subsidiaries of Enodis Maple Leaf Ltd. (UK) |
||
Fabristeel Private Limited * |
(Singapore) | |
Subsidiaries of Fabristeel Private Limited (Singapore) |
||
Shanghai Fabristeel Foodservice Int. Trade Co. Ltd. |
(China) | |
Fo Shan Manitowoc Foodservice Co. Ltd. |
(China) | |
Fabristeel (M) Sdn Bhd |
(Malaysia) |
SCHEDULE 3.15
INSURANCE
Coverage |
Insurer |
Effective
Date/Term |
Policy
Number |
Retention/Limits |
||||
Deductible WC (FSG) |
Sentry | 10-1-15/16 | 90-02268-01 | $500,000 Per Occurrence Incl ALAE | ||||
Retro WC (FSG) |
Sentry | 10-1-15/16 | 90-02268-02 | $500,000 Per Occurrence Incl ALAE | ||||
General Liability & Cold Products (FSG) |
Sentry | 10-1-15/16 | 90-02268-03 | SIR $100,000/$750,000 | ||||
Product Liability Hot (FSG) |
Sentry | 10-1-15/16 | 90-02268-051 | SIR $250,000/$1,000,000 | ||||
Auto Liability (FSG) |
Sentry | 10-1-15/16 | 90-02268-07 | $250,000 per accident Incl ALAE/$2M | ||||
Foreign CGL FSG |
Insurance Company of
the State of PA (AIG) |
10-1-15/16 | 80-0274557 |
SIR/Deduct:$0 Per Occurrence Limits $2M Occ/$6M Aggr |
||||
Foreign Auto FSG |
Insurance Company of
the State of PA (AIG) |
10-1-15/16 | 80-0274558 |
$1,000 Deduct $2M Agg |
||||
Foreign Voluntary Compensation and EL - FSG |
Insurance Company of
the State of PA (AIG) |
10-1-15/16 | 83-70303 |
EL: $2M, BI by Accident or Disease each Employe Excess Repatriation: $1M per Person |
||||
US Occurrence / Foreign Jurisdiction - FSG |
Illinois National
Insurance Co. (AIG) |
10-1-15/16 | 1990590 | Limits: $2,000,000 | ||||
Umbrella Liability -Primary Foodservice |
Westchester Fire
Insurance |
10-1-15/16 | G2197903A010 |
SIR 10,000 Each Occurrence Limit: $25M |
||||
Excess Liability 1st Layer |
Lexington-London | 10-1-15/16 | 62785471 | $25M xs $25M | ||||
Excess Liability 2nd Layer |
Swiss Re | 10-1-15/16 | EXS 200040100 | $25M xs $50M | ||||
Excess Liability 3rd Layer |
XL Insurance
America, Inc. |
10-1-15/16 | US00065929LI15A | $25M xs $75M | ||||
Primary D&O |
Travelers Casualty
and Surety Company of America |
07-01-15/16 | 105635635 | $15M | ||||
Excess D&O |
U.S. Specialty
Insurance Company |
07-01-15/16 | 14-MGU-15-A34937 | 15M x15M | ||||
Excess D&O |
QBE Insurance
Corporation |
07-01-15/16 | QPL0050404 | 15M x30M |
Coverage |
Insurer |
Effective
Date/Term |
Policy
Number |
Retention/Limits |
||||
Excess D&O |
Endurance American
Insurance Company |
07-01-15/16 | DOX10005067301 | 15M x45M | ||||
Excess D&O |
Darwin National
Assurance Company (Allied World) |
07-01-15/16 | 0304-7543 | 15M x 60M | ||||
Side A D&O |
National Union Fire
Insurance Company of Pittsburgh, Pa. |
07-01-15/16 | 01-381-68-05 | 15M xs75M | ||||
Side A D&O |
Lloyds (Beazley
Syndicates 2623 & 0623 |
07-01-15/16 | 28793P15 | 10M x 90M | ||||
Fiduciary |
Travelers Casualty
and Surety Company of America |
07-01-15/16 | 105635012 | 10M | ||||
Excess Fiduciary |
National Union Fire
Insurance |
07-01-15/16 | 81714692 | 10M x10M | ||||
Crime |
Travelers Casualty and
Surety Company of America |
07-01-15/16 | 02-140-92-46 | 5M | ||||
Special Crime (K&R) |
National Union Fire
Ins Co of Pittsburgh (AIG) |
07-01-13/16 | 21-566-816 | Limits $5M each Loss | ||||
Aircraft Hull & Liability |
National Union Fire
Ins. Co of PA |
6-23-15/16 | GM001850905-14 | $100,000,000 | ||||
Property |
Lexington | 6-1-15/16 | 12944859 | Limits: $ 650,000,000 | ||||
Marine Cargo |
Liberty | 1-1-16/17 | N01188512 | Limits $20 M per |
This insurance document is furnished to you as a matter of information for your convenience. It only summarizes the listed policy(ies) and is not intended to reflect all the terms and conditions or exclusions of such policy(ies). Moreover, the information contained in this document reflects coverage as of the effective date(s) of the policy(ies) and does not include subsequent changes. This document is not an insurance policy and does not amend, alter or extend the coverage afforded by the listed policy(ies). The insurance afforded by the listed policy(ies) is subject to all the terms, exclusions and conditions of such policy(ies)
SCHEDULE 5.18
MORTGAGED REAL PROPERTY
Manitowoc FSG Operations, LLC
(f/k/a Manitowoc FSG Operations, Inc.)
2100 Future Drive
Sellersburg, IN 47172
Owner: Manitowoc FSG Operations, LLC
Manitowoc FSG Operations, LLC
(f/k/a Manitowoc FSG Operations, Inc. and Manitowoc Beverage Equipment, Inc.)
2110 S. 26 th Street
Manitowoc, WI 54220
Owner: Manitowoc FSG Operations, LLC
Manitowoc FSG Operations, LLC
(f/k/a Manitowoc FSG Operations, Inc. and Manitowoc Beverage Equipment, Inc.)
2915 Tennessee Ave North
Parsons, TN 38363
Owner: Manitowoc FSG Operations, LLC
The Delfield Company
980 S. Isabella Road
Mt. Pleasant, MI 48858
Owner: The Delfield Company LLC
Frymaster L.L.C. Shreve Park Plant
5489 Campus Drive
Shreveport, LA 71129
Owner: Frymaster L.L.C.
Cleveland Range, LLC
1333 East 179 th Street
Cleveland, OH 44110
Owner: Cleveland Range, LLC
SCHEDULE 6.01
EXISTING INDEBTEDNESS
| The Indebtedness set forth on Schedule 1.02 hereof. |
| $110,000,000 Sixth Amended and Restated Receivables Purchase Agreement dated as of March 3, 2016 among Manitowoc Cayman Islands Funding Ltd., Manitowoc Foodservice, Inc., Garland Commercial Ranges Limited, Convotherm Elektrogeräte GmbH, Manitowoc Deutschland GmbH, Manitowoc Foodservice UK Limited, Manitowoc Foodservice Asia Pacific Private Limited and the other persons from time to time party thereto, as servicers, and Wells Fargo Bank, N.A., as purchaser and agent. |
| The Manitowoc Company, Inc. provided a parent guarantee on behalf of Manitowoc FSG Manufactura Mexico, S. De R.L. De C.V. for $9,125,422 with counterparty being FINSA (developer who is building the manufacturing facility). Upon consummation of the Spin Transaction, this guarantee will be assigned to Manitowoc FSG US Holding, LLC. |
| Manitowoc Foodservice, Inc., has foreign credit lines as described below: |
Country |
Facility | Entity | Bank | CCY |
Amount
(M) |
Exchange
Rate |
USD
(M) |
1Q15
Balance (M USD) |
||||||||
Singapore |
Trade
Finance Line |
Fabristeel
Spore |
DBS | SGD | 3.0 | 1.40 | 2.2 | | ||||||||
China |
Short
Term Loan |
MTW
China Foodservice |
ICBC
Zhejiang Branch |
RMB | 20.0 | 6.36 | 3.1 | | ||||||||
China |
Trade
Finance Line |
MTW
China Foodservice |
ICBC
Zhejiang Branch |
RMB | 28.0 | 6.36 | 4.4 | |
SCHEDULE 6.02
EXISTING LIENS
Debtor |
Jurisdictions |
Secured Party |
File Number |
Date Filed |
Summary Collateral Description |
|||||
Cleveland Range, LLC | Delaware: Secretary of State | Wells Fargo Bank N.A. | 20153814372 | 8/31/2015 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Cleveland Range, LLC | Delaware: Secretary of State | Lenovo Financial Services | 20130798794 | 2/28/2013 |
1 Symmetra PX 20KW
6 Battery Module for Symmetra PX |
|||||
Cleveland Range, LLC | Delaware: Secretary of State | Banc of America Leasing & Capital, LLC | 20124027167 | 10/18/2012 | All Goods leased by Secured Party to Debtor. | |||||
Cleveland Range, LLC | Delaware: Secretary of State | Leaf Capital Funding, LLC and/or its assigns | 20123888619 | 10/9/2012 | 4 Sharp MC5111N Copier Systems | |||||
Cleveland Range, LLC | Delaware: Secretary of State | Leaf Capital Funding, LLC and/or its assigns | 20122638635 | 7/10/2012 | 3 Sharp MX Copiers. | |||||
Cleveland Range, LLC | Delaware: Secretary of State | Wells Fargo Bank N.A. | 20122390252 | 6/20/2012 |
1 2007 Crown Work Assist Vehicle
1 2012 Crown Turret Stockpicker
1 2012 Crown Stockpicker, |
|||||
Cleveland Range, LLC | Delaware: Secretary of State | Wells Fargo Bank, N.A. |
20094098437 Continuation No. 20143612199 filed 9/10/14 |
12/22/2009 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Cleveland Range, LLC The Manitowoc Company, Inc. | Delaware: Secretary of State | Banc of America Leasing & Capital, LLC | 20124047280 | 10/19/2012 | PMSI on all goods, furniture, fixtures and equipment leased by Secured Party to Debtor. | |||||
Enodis Corporation | Delaware: Secretary of State | Isuzu Finance of America Inc. | 20153596946 | 8/18/2015 | 1 2015 Izuzue NPR-HD ABC Van Body with Waltco C-20 2000# Tuckaway Liftgate |
Debtor |
Jurisdictions |
Secured Party |
File Number |
Date Filed |
Summary Collateral Description |
|||||
Frymaster L.L.C. | Louisiana: Secretary of State | IBM Credit LLC | 09-1275693 | 8/18/2015 | Financing of taxes, 5462/EBU system X3650 M5 Xeon 8 Core 2.4GHz 18 GB 20MB Cache and all related software. | |||||
Frymaster L.L.C. | Louisiana: Secretary of State | Joseph T. Ryerson & Son, Inc. | 09-1245086 | 8/15/2014 | Consigned inventory. | |||||
Frymaster L.L.C. | Louisiana: Secretary of State | Pratt Recycling | 37-198434 | 6/27/2014 | VB-047 One 60 VerticalSelco Model V5-R Serial #59562633 | |||||
Frymaster L.L.C. | Louisiana: Secretary of State | IBM Credit LLC | 09-1224143 | 11/25/2013 | 6 pieces of IBM equipment and all related software. | |||||
Frymaster L.L.C. | Louisiana: Secretary of State | IBM Credit LLC | 09-1204287 | 4/4/2013 | 8 pieces of IBM equipment and all related software. | |||||
Frymaster L.L.C. | Louisiana: Secretary of State | IBM Credit LLC | 09-1143459 | 11/3/2010 | 9 pieces of IBM equipment and all related software. | |||||
Frymaster L.L.C. | Louisiana: Secretary of State | Wells Fargo Bank, N.A. |
09-1121428 Continuation No. 09-1247659 filed 9/15/14 |
9/29/2009 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Frymaster L.L.C. | Louisiana: Secretary of State | De Lage Landen Financial Services, Inc. |
17-1344699 Continuation No. 17-1404613 filed 7/7/14 |
9/28/2009 | Salvaginni sheet metal fabrication equipment. | |||||
Frymaster L.L.C. | Louisiana: Secretary of State | Wells Fargo Bank, N.A. | 09-1276659 | 9/1/2015 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Kysor Industrial Corporation | Michigan: Department of State | De Lage Landen Financial Services, Inc. |
2009139055-1 Continuation No. 2014095449-4 filed 6/30/14 |
9/28/2009 | Salvaginni sheet metal fabrication equipment. |
Debtor |
Jurisdictions |
Secured Party |
File Number |
Date Filed |
Summary Collateral Description |
|||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | Wells Fargo Bank, N.A. | 2015024465-5 | 9/4/2015 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | CIT Bank, N.A. | 2015009593-7 | 4/14/2015 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | FirstMerit Equipment Finance, Inc. | 2014026159-6 | 10/9/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | FirstMerit Equipment Finance, Inc. | 2014021142-6 | 8/18/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | Wells Fargo Bank, N.A. | 2014020598-0 | 8/12/2014 | 2 forklifts, 2 batteries, 2 chargers. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | FirstMerit Equipment Finance, Inc. | 2014019800-8 | 8/1/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | FirstMerit Equipment Finance, Inc. | 2014016954-0 | 7/2/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. |
Debtor |
Jurisdictions |
Secured Party |
File Number |
Date Filed |
Summary Collateral Description |
|||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | FirstMerit Equipment Finance, Inc. | 2014016955-2 | 7/2/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | FirstMerit Equipment Finance, Inc. | 2014003193-1 | 2/5/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | First Merit Equipment Finance, Inc. | 2013033143-0 | 12/30/2013 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | De Lage Landen Financial Services, Inc. | 2013021697-9 | 8/26/2013 | 1 Minolta 552 copier, 3 Minolta 223 copiers, 2 Minolta C224 copiers, 2 Minolta C35 Copiers, 4 Minolta 423 Copiers, 2 Minolta C364 copiers. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | Toyota Motor Credit Corporation | 2013019262-4 | 7/30/2013 | 1 forklift, 1 battery, 1 charger. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | Toyota Motor Credit Corporation | 2012027585-6 | 10/17/2012 | 3 forklifts, 3 batteries, 3 chargrers. | |||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | Wells Fargo Bank, N.A. |
2010000168-7 Continuation No. 2014023294-9 filed 9/10/14 |
1/4/2010 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | Wells Fargo Bank, N.A. |
2007042808-8 Continuation No. 2012022082-5 filed 8/16/12 Continuation No. 2012026012-2 filed 9/28/12 |
12/31/2007 |
Accounts, related General Intangibles, other related assets and related proceeds. |
Debtor |
Jurisdictions |
Secured Party |
File Number |
Date Filed |
Summary Collateral Description |
|||||
Manitowoc FSG Operations, LLC | Nevada: Secretary of State | Wells Fargo Bank, N.A. |
2006042199-3 Continuation No. 2011034278-2 filed 12/21/11 |
12/22/2006 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Manitowoc FSG U.S. Holding, LLC | Delaware: Secretary of State | IBM Credit LLC | 20153630554 | 8/20/2015 | Certain equipment and related software. | |||||
Manitowoc FSG U.S. Holding, LLC | Delaware: Secretary of State | IBM Credit LLC | 20153630612 | 8/20/2015 | Certain equipment and related software. | |||||
Manitowoc FSG U.S. Holding, LLC | Delaware: Secretary of State | IBM Credit LLC | 20153631198 | 8/20/2015 | Certain equipment and related software. | |||||
Manitowoc FSG U.S. Holding, LLC | Delaware: Secretary of State | IBM Credit LLC | 20153554507 | 8/17/2015 | Certain equipment and related software. | |||||
Manitowoc FSG U.S. Holding, LLC | Delaware: Secretary of State | IBM Credit LLC | 20153554531 | 8/17/2015 | Certain equipment and related software. | |||||
Manitowoc FSG U.S. Holding, LLC | Delaware: Secretary of State | IBM Credit LLC | 20151823318 | 4/28/2015 | 7 pieces of IBM equipment and all related software. | |||||
Manitowoc Funding, LLC | Nevada: Secretary of State | Wells Fargo Bank, N.A. |
2006042197-9 Continuation No. 2011026124-7 filed 9/30/11 |
12/22/2006 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
The Delfield Company LLC | Delaware: Secretary of State | Wells Fargo Bank, N.A. | 20153813952 | 8/31/2015 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
The Delfield Company LLC | Delaware: Secretary of State | FirstMerit Equipment Finance, Inc. | 20144077186 | 10/9/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. |
Debtor |
Jurisdictions |
Secured Party |
File Number |
Date Filed |
Summary Collateral Description |
|||||
The Delfield Company LLC | Delaware: Secretary of State | FirstMerit Equipment Finance, Inc. | 20143384948 | 8/22/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
The Delfield Company LLC | Delaware: Secretary of State | FirstMerit Equipment Finance, Inc. | 20142891075 | 7/21/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
The Delfield Company LLC | Delaware: Secretary of State | FirstMerit Equipment Finance, Inc. | 20142624815 | 7/2/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
The Delfield Company LLC | Delaware: Secretary of State | Wells Fargo Bank, N.A. |
20094098593 Continuation No. 20143612116 filed 9/10/14 |
12/22/2009 |
Accounts, related General Intangibles, other related assets and related proceeds. |
|||||
Manitowoc FSG Operations, LLC | Wisconsin: Department of Financial Institutions | CIT Bank, N.A. | 150004168827 | 4/3/2015 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC, The Delfield Company LLC | Wisconsin: Department of Financial Institutions | FirstMerit Equipment Finance, Inc. | 140013209520 | 10/9/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC, The Delfield Company LLC | Wisconsin: Department of Financial Institutions | FirstMerit Equipment Finance, Inc. | 140010817320 | 8/18/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. |
Debtor |
Jurisdictions |
Secured Party |
File Number |
Date Filed |
Summary Collateral Description |
|||||
Manitowoc FSG Operations, LLC, The Delfield Company LLC | Wisconsin: Department of Financial Institutions | FirstMerit Equipment Finance, Inc. | 140010089321 | 8/1/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC, The Delfield Company LLC | Wisconsin: Department of Financial Institutions | FirstMerit Equipment Finance, Inc. | 140008771528 | 7/2/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. | |||||
Manitowoc FSG Operations, LLC, The Delfield Company LLC | Wisconsin: Department of Financial Institutions | FirstMerit Equipment Finance, Inc. | 140008771831 | 7/2/2014 | All Goods, furniture, fixtures, equipment, and other personal property leased by Secured Party to Debtor. |
SCHEDULE 6.05
EXISTING INVESTMENTS
| Existing Investments in Subsidiaries and Joint Ventures are set forth on Schedule 3.13 hereof. |
SCHEDULE 6.09
EXISTING RESTRICTIONS
| Indenture, dated as of February 18, 2016 between Manitowoc Foodservice, Inc. (as successor to MTW Foodservice Escrow Corp.), and Wells Fargo Bank, National Association, as trustee. |
| $110,000,000 Sixth Amended and Restated Receivables Purchase Agreement dated as of March 3, 2016 among Manitowoc Cayman Islands Funding Ltd., Manitowoc Foodservice, Inc., Garland Commercial Ranges Limited, Convotherm Elektrogeräte GmbH, Manitowoc Deutschland GmbH, Manitowoc Foodservice UK Limited, Manitowoc Foodservice Asia Pacific Private Limited and the other persons from time to time party thereto, as servicers, and Wells Fargo Bank, N.A., as purchaser and agent. |
EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this Assignment and Assumption ) is dated as of the Effective Date set forth below and is entered into by and between [ Insert name of Assignor ] (the Assignor ) and [ Insert name of Assignee ] (the Assignee ). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, supplemented or otherwise modified from time to time, the Credit Agreement ), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignors rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the Assigned Interest ). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
1. | Assignor: |
|
||||
2. | Assignee: |
|
||||
[and is an Affiliate/Approved Fund of [identify Lender] 1 ] | ||||||
3. | Borrower: | Manitowoc Foodservice, Inc. | ||||
4. | Administrative Agent: JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement | |||||
5. | Credit Agreement: The $1,200,000,000 Credit Agreement dated as of March 3, 2016 among Manitowoc Foodservice, Inc., the Subsidiary Borrowers party thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents parties thereto |
1 | Select as applicable. |
6. | Assigned Interest: |
Facility Assigned 2 |
Aggregate Amount of
Commitment/Loans for all Lenders |
Amount of
Commitment/Loans Assigned |
Percentage of
Commitment/Loans Assigned 3 |
|||||||||
$ | $ | % | ||||||||||
$ | % | |||||||||||
$ | % |
Effective Date: , 20 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Credit Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignees compliance procedures and applicable laws, including Federal and state securities laws.
[Signature Pages Follow]
2 | Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., Revolving Commitment and Term B Commitment, etc.) |
3 | Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. |
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR | ||
[NAME OF ASSIGNOR] | ||
By: |
|
|
Title: | ||
ASSIGNEE | ||
[NAME OF ASSIGNEE] | ||
By: |
|
|
Title: |
[Consented to and] 4 Accepted:
JPMORGAN CHASE BANK, N.A., as Administrative Agent | ||
By |
|
|
Title: |
[Consented to:] 5
[NAME OF RELEVANT PARTY] | ||
By |
|
|
Title: |
4 | To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. |
5 | To be added only if the consent of the Borrower and/or other parties (e.g., Swingline Lender, Issuing Bank) is required by the terms of the Credit Agreement. |
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Credit Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Credit Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Credit Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Acceptance and adoption of the terms of this Assignment and Assumption by the Assignee and Assignor by Electronic Signature or delivery of an executed counterpart of a signature page of this Assignment and Assumption by any Electronic System shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the laws of the State of New York.
EXHIBIT B
FORM OF DESIGNATION LETTER
,
JPMorgan Chase Bank, N.A.,
as Administrative Agent for the Lenders
to the Credit Agreement referred to below,
and the Lenders
10 South Dearborn, Floor 07
Chicago, Illinois 60603-2003
Attention: MTW Foodservice Account Manager
Ladies and Gentlemen:
We refer to the Credit Agreement (as amended, restated, amended and restated, supplemented or otherwise modified and in effect from time to time, the Credit Agreement ) dated as of March 3, 2016 among Manitowoc Foodservice, Inc. (the Borrower ), the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined herein, capitalized terms used in this Designation Letter have the meanings ascribed thereto in the Credit Agreement.
The Borrower hereby designates [ ] (the Designated Subsidiary ), a Wholly-Owned Subsidiary of the Company and a [corporation duly incorporated under the laws of [ ]], as a Subsidiary Borrower in accordance with Section 2.20 of the Credit Agreement until such designation is terminated in accordance with Section 2.20 of the Credit Agreement and sets forth on Schedule 1 hereto the contact information about such Designated Subsidiary specified on such schedule.
The Designated Subsidiary hereby accepts the above designation and hereby expressly and unconditionally accepts the obligations of a Subsidiary Borrower under the Credit Agreement and agrees and confirms that, upon your execution and return to the Borrower of the enclosed copy of this letter, the Designated Subsidiary shall be a Subsidiary Borrower for purposes of the Credit Agreement and agrees to be bound by and perform and comply with the terms and provisions of the Credit Agreement applicable to it as if it had originally executed the Credit Agreement as a Subsidiary Borrower. The Designated Subsidiary hereby authorizes and empowers the Borrower to act as its representative and attorney-in-fact for the purposes of signing documents and giving and receiving notices (including borrowing requests and interest elections under the Credit Agreement) and other communications in connection with the Credit Agreement and the transactions contemplated thereby and for the purposes of modifying or amending any provision of the Credit Agreement and further agrees that the Administrative Agent and each Lender may conclusively rely on the foregoing authorization.
The Borrower hereby represents and warrants to the Administrative Agent and each Lender that, before and after giving effect to this Designation Letter, (i) the representations and warranties set forth in Article III of the Credit Agreement are true and correct on the date hereof as if made on and as of the date hereof, and (ii) no Default has occurred and is continuing. The Designated
Subsidiary represents and warrants that, in so far as they relate to such Designated Subsidiary, each of the representations and warranties set forth in Article III of the Credit Agreement is true and correct on the date hereof as if made on and as of the date hereof. This Designation Letter shall be governed by, and construed in accordance with, the internal laws (without regard to the conflict of laws provisions) of the State of New York. Without limiting any other provisions hereof, the Designated Subsidiary hereby submits to jurisdiction and makes the waivers and otherwise in all aspects agrees to the terms of Sections 9.09(b), (c) and (d) of the Credit Agreement as if fully set forth herein.
The Designated Subsidiary hereby irrevocably and unconditionally designates and appoints the Borrower, as its authorized agent, to accept and acknowledge on its behalf, service of any and all process which may be served in any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 9.09(b) of the Credit Agreement. The Borrower hereby irrevocably and unconditionally accepts such appointment.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS DESIGNATION LETTER, THE CREDIT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS DESIGNATION LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Very truly yours, | ||||||||
MANITOWOC FOODSERVICE, INC. | ||||||||
By: |
|
|||||||
Name: |
|
|||||||
Title: |
|
|||||||
[NAME OF DESIGNATED SUBSIDIARY] | ||||||||
By: |
|
|||||||
Name: |
|
|||||||
Title: |
|
Schedule 1
1. | Registered address: |
2. | Contact Person: |
Telephone number
Facsimile number
Email address of contact person
3. | Internet address, if any |
4. | Federal employer identification number, if any |
EXHIBIT C
FORM OF INTERCOMPANY NOTE
[Date]
FOR VALUE RECEIVED, [NAME OF PAYOR] (the Payor) hereby promises to pay on demand to or its assigns (the Payee), in lawful money of the United States of America in immediately available funds, at such location in the United States of America as the Payee shall from time to time designate, the unpaid principal amount of all loans and advances made by the Payee to the Payor.
The Payor promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at such rate per annum as shall be agreed upon from time to time by the Payor and Payee.
Upon the commencement of any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar proceeding of any jurisdiction relating to the Payor, the unpaid principal amount hereof shall become immediately due and payable without presentment, demand, protest or notice of any kind in connection with this Note.
This Note evidences certain permitted intercompany indebtedness referred to in the Credit Agreement, dated as of March 3, 2016 (as amended, modified, amended and restated, restated and/or supplemented from time to time, the Credit Agreement), among Manitowoc Foodservice, Inc., the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, and is subject to the terms thereof[, and shall be pledged by the Payee pursuant to the US Pledge Agreement (as defined in the Credit Agreement). The Payor hereby acknowledges and agrees that the Pledgee pursuant to and as defined in the US Pledge Agreement, as in effect from time to time, may exercise all rights provided therein with respect to this Note].
[This Note, and all of the Payors obligations hereunder, shall be subordinate and junior to all Senior Indebtedness (as defined in Section 1.07 of Annex A hereto) on the terms and conditions set forth in Annex A hereto, which Annex A is incorporated herein by reference and made a part hereof as if set forth herein in its entirety.] 1
The Payee is hereby authorized to record all loans and advances made by it to the Payor (all of which shall be evidenced by this Note), and all repayments or prepayments thereof, in its books and records, such books and records constituting prima facie evidence of the accuracy of the information contained therein.
All payments under this Note shall be made without offset, counterclaim or deduction of any kind.
1 | Insert in all Intercompany Notes in which the Payor is either the Borrower or a Subsidiary Guarantor and the Payee is neither the Borrower nor a Subsidiary Guarantor. |
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[NAME OF PAYOR] | ||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
Pay to | ||||||||
|
||||||||
[NAME OF PAYEE] | ||||||||
By: |
|
|||||||
Name: | ||||||||
Title: |
SUBORDINATION PROVISIONS
Section 1.01. Subordination of Liabilities . [Name of Payor] (the Company), for itself, and its successors and assigns, covenants and agrees, and each holder of the Note to which this Annex A is attached (the Note) by its acceptance thereof likewise covenants and agrees, that the payment of the principal of, interest on, and all other amounts owing in respect of, the Note (the Subordinated Indebtedness ) is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, to the prior payment in full in cash of all Senior Indebtedness (as defined in Section 1.07 of this Annex A). The provisions of this Annex A shall constitute a continuing offer to all persons or other entities who, in reliance upon such provisions, become holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the holders of Senior Indebtedness, and such holders are hereby made obligees hereunder the same as if their names were written herein as such, and they and/or each of them may proceed to enforce such provisions.
Section 1.02. Company Not to Make Payments with Respect to Subordinated Indebtedness in Certain Circumstances . (a) Upon the maturity of any Senior Indebtedness (including interest thereon or fees or any other amounts owing in respect thereof), whether at stated maturity, by acceleration or otherwise, all Obligations (as defined in Section 1.07 of this Annex A) owing in respect thereof shall first be paid in full in cash, before any payment or distribution (whether in cash, property, securities or otherwise) is made on account of the Subordinated Indebtedness.
(b) The Company may not, directly or indirectly, make any payment of any Subordinated Indebtedness and may not acquire any Subordinated Indebtedness for cash or property until all Senior Indebtedness has been paid in full in cash if any default or event of default under the Credit Agreement referred to below or any other issue of Senior Indebtedness is then in existence or would result therefrom. Each holder of the Note hereby agrees that, so long as any such default or event of default exists, it will not ask, demand, sue for, or otherwise take, accept or receive, any amounts owing in respect of the Subordinated Indebtedness.
(c) In the event that, notwithstanding the provisions of the preceding subsections (a) and (b) of this Section 1.02, the Company shall make any payment on account of the Subordinated Indebtedness at a time when payment is not permitted by said subsection (a) or (b), such payment shall be held by the holder of the Note, in trust for the benefit of, and shall be paid forthwith over and delivered to, the holders of Senior Indebtedness or their representative or the trustee under the indenture or other agreement pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear, for application pro rata to the payment of all Senior Indebtedness (after giving effect to the relative priorities of such Senior Indebtedness) remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash in accordance with the terms of such Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. Without in any way modifying the provisions of this Annex A or affecting the subordination effected hereby if the hereafter referenced notice is not given, the Company shall give the holder of the Note prompt written notice of any event which would prevent payments under Section 1.02(a) or (b) hereof.
Section 1.03. Subordination to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization of Company . Upon any distribution of assets of the Company upon dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to receive payment in full in cash of all Senior Indebtedness (including, without limitation, post-petition interest at the rate provided in the documentation with respect to the Senior Indebtedness, whether or not such post-petition interest is an allowed claim against the debtor in any bankruptcy or similar proceeding) before the holder of the Note is entitled to receive any payment of any kind or character on account of the Subordinated Indebtedness;
(b) any payment or distributions of assets of the Company of any kind or character, whether in cash, property or securities to which the holder of the Note would be entitled except for the provisions of this Annex A, shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or other trustee or agent, directly to the holders of Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness may have been issued, to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid (after giving effect to the relative priorities of such Senior Indebtedness), after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of this Section 1.03, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, shall be received by the holder of the Note on account of Subordinated Indebtedness before all Senior Indebtedness is paid in full in cash, such payment or distribution shall be received and held in trust for and shall be paid over to the holders of the Senior Indebtedness (after giving effect to the relative priorities of such Senior Indebtedness) remaining unpaid or unprovided for or their representative or representatives, or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, for application to the payment of such Senior Indebtedness until all such Senior Indebtedness shall have been paid in full in cash, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness.
Without in any way modifying the provisions of this Annex A or affecting the subordination effected hereby if the hereafter referenced notice is not given, the Company shall give prompt written notice to the holder of the Note of any dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency or receivership proceedings or upon assignment for the benefit of creditors or otherwise).
Section 1.04. Subrogation . Subject to the prior payment in full in cash of all Senior Indebtedness, the holder of the Note shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness until all amounts owing an the Note shall be paid in full, and for the
purpose of such subrogation no payments or distributions to the holders of the Senior Indebtedness by or on behalf of the Company or by or on behalf of the holder of the Note by virtue of this Annex A which otherwise would have been made to the holder of the Note shall, as between the Company, its creditors other than the holders of Senior Indebtedness, and the holder of the Note, be deemed to be payment by the Company to or on account of the Senior Indebtedness, it being understood that the provisions of this Annex A are and are intended solely or the purpose of defining the relative rights of the holder of the Note, on the one hand, and the holders of the Senior Indebtedness, on the other hand.
Section 1.05. Obligation of the Company Unconditional . Nothing contained in this Annex A or in the Note is intended to or shall impair, as between the Company and the holder of the Note, the obligation of the Company, which is absolute and unconditional, to pay to the holder of the Note the principal of and interest on the Note as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the holder of the Note and other creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the holder of the Note from exercising all remedies otherwise permitted by applicable law upon an event of default under the Note, subject to all of the restrictions set forth in this Annex A and the rights, if any, under this Annex A of the holders of Senior Indebtedness in respect of cash, property, or securities of the Company received upon the exercise of any such remedy.
Section 1.06. Subordination Rights Not Impaired by Acts or Omissions of Company or Holders of Senior Indebtedness . No right of any present or future holders of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act in good faith by any such holder, or by any noncompliance by the Company with the terms and provisions of the Note, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. The holders of the Senior Indebtedness may, without in any way affecting the obligations of the holder of the Note with respect hereto, at any time or from time to time and in their absolute discretion, change the manner, place or terms of payment of, change or extend the time of payment of, or renew, increase or otherwise alter, any Senior Indebtedness or amend, modify or supplement any agreement or instrument governing or evidencing such Senior Indebtedness or any other document referred to therein, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness including, without limitation, the waiver of default thereunder and the release of any collateral securing such Senior Indebtedness, all without notice to or assent from the holder of the Note.
Section 1.07. Senior Indebtedness . The term Senior Indebtedness shall mean all Obligations (i) of the Company under, or in respect of, the Credit Agreement (as amended, modified, supplemented, extended, restated, amended and restated, refinanced, replaced or refunded from time to time, the Credit Agreement), dated as of March 3, 2016, among Manitowoc Foodservice, Inc., the Subsidiary Borrowers party thereto, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, and each other Credit Document (as defined in the Credit Agreement) to which the Company is a party [, including the Subsidiary Guaranty (as defined in the Credit Agreement)], and any renewal, extension, restatement, refinancing or refunding of any thereof, (ii) of the Company under, or in respect of, any Swap Agreement (as defined in the Credit Agreement) [, including any guaranty
thereof under the Subsidiary Guaranty], and (iii) of the Company under the Senior Notes and the (each as defined in the Credit Agreement) or any other Senior Note Document (as defined in the Credit Agreement). As used herein, the term Obligation shall mean all principal, interest, premium, reimbursement obligations, penalties, fees, expenses, indemnities and other liabilities and obligations (including any guaranties of the foregoing liabilities and obligations) payable under the documentation governing any indebtedness (including interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided in the documentation with respect thereto, whether or not such interest is an allowed claim against the debtor in any such proceeding).
EXHIBIT D
FORM OF TERMINATION LETTER
,
JPMorgan Chase Bank, N.A.,
as Administrative Agent for the Lenders
to the Credit Agreement referred to below
10 South Dearborn, Floor 07
Chicago, Illinois 60603-2003
Attention: MTW Foodservice Account Manager
Ladies and Gentlemen:
We refer to the Credit Agreement (as amended, restated, amended and restated, supplemented or otherwise modified and in effect from time to time, the Credit Agreement ) dated as of March 3, 2016 among Manitowoc Foodservice, Inc. (the Borrower ), the Subsidiary Borrowers party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined herein, capitalized terms used in this Termination Letter have the meanings ascribed thereto in the Credit Agreement.
The Borrower hereby terminates the status as a Subsidiary Borrower of , a corporation incorporated under the laws of (the Designated Subsidiary), in accordance with Section 2.20 of the Credit Agreement, effective as of the date of receipt of this notice by the Administrative Agent. The undersigned hereby represent and warrant that all Loans made to the Designated Subsidiary and all related interest have been paid in full on or prior to the date hereof. Notwithstanding the foregoing, this Termination Letter shall not terminate (a) any Obligation of such Designated Subsidiary that remains unpaid on the date hereof (including, without limitation, any Obligation arising hereafter in respect of the Designated Subsidiary under Sections 2.15, 2.16 or 2.17 of the Credit Agreement) or (b) the obligations of the Borrower under the Parent Guaranty with respect to any such unpaid Obligations.
Very truly yours, | ||
MANITOWOC FOODSERVICE, INC. | ||
By: |
|
|
Name: |
|
|
Title: |
|
|
[SUBSIDIARY BORROWER] | ||
By: |
|
|
Name: |
|
|
Title: |
|
EXHIBIT E-1
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement (as amended, restated, supplemented or otherwise modified and in effect from time to time, the Credit Agreement ) dated as of March 3, 2016 among Manitowoc Foodservice, Inc. (the Borrower ), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Applicable Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Applicable Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Applicable Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER] | ||
By: |
|
|
Name: | ||
Title: | ||
Date: , 20 |
EXHIBIT E-2
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement (as amended, restated, supplemented or otherwise modified and in effect from time to time, the Credit Agreement ) dated as of March 3, 2016 among Manitowoc Foodservice, Inc. (the Borrower ), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Credit Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Applicable Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partners/members beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Applicable Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Applicable Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER] | ||
By: |
|
|
Name: | ||
Title: | ||
Date: , 20 |
EXHIBIT E-3
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement (as amended, restated, supplemented or otherwise modified and in effect from time to time, the Credit Agreement ) dated as of March 3, 2016 among Manitowoc Foodservice, Inc. (the Borrower ), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER] | ||
By: |
|
|
Name: | ||
Title: | ||
Date: , 20 |
EXHIBIT E-4
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement (as amended, restated, supplemented or otherwise modified and in effect from time to time, the Credit Agreement ) dated as of March 3, 2016 among Manitowoc Foodservice, Inc. (the Borrower ), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (I) an IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partners/members beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF PARTICIPANT] | ||
By: |
|
|
Name: | ||
Title: | ||
Date: , 20 |
EXHIBIT F
FORM OF PERFECTION CERTIFICATE
(ATTACHED)
PERFECTION CERTIFICATE
March 3, 2016
The undersigned, an authorized officer of the companies listed on Schedule 1 (each, a Company and collectively, the Companies), hereby certifies as follows on behalf of each of the Company:
1. Names . (a) The exact name of the Company as that name appears on its Certificate of Incorporation, Certificate of Limited Partnership or Limited Liability Company Certificate, as applicable, is as follows:
See Schedule 1(a).
Source: | UCC §503(a)(i) |
(b) The following is a list of all other names (including trade names or similar appellations) used by the Company, or any other business or organization to which the Company became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, now or at any time during the past five years:
See Schedule 1(b).
Source: | UCC §9-507 |
(c) The following is the Companys federal employer identification number:
See Schedule 1(a).
(d) The following is the Companys corporation identification number or other applicable formation identification number.
See Schedule 1(a).
Source: | UCC §9-516(b)(5) |
2. Current Locations . (a) The chief executive office and principal mailing address of the Company is:
See Schedule 2(a).
Source: | UCC §§9-516(b)(5), 9-301 |
(b) The following are all other locations in the United States of America in which the Company maintains any books or records relating to any of the Collateral consisting of accounts, contract rights, chattel paper, general intangibles or mobile goods:
See Schedule 2(a).
Source: | UCC §§9-516(b)(5), 9-301 |
(c) The following are all other places of business of the Company in the United States of America:
None.
Source: | UCC §9-301, 9-501 |
(d) The following are all other locations in the United States of America where any of the Collateral consisting of inventory or equipment having a fair market value in excess of $1,000,000 in the aggregate is located:
See Schedule 2(d).
Source: | UCC §9-301, 9-501 |
(e) The following is a list of (i) all real property having a fair market value in excess of $5,000,000 owned by the Companies and (ii) all leased real property where equipment and/or inventory having a fair market value in excess of $1,000,000 in the aggregate (as determined at any time during the immediately preceding four fiscal quarters) is held by the Companies:
See Schedule 2(e).
(f) The following are the names and addresses of all persons or entities other than the Company, such as lessees, consignees, or warehousemen, which have possession or are intended to have possession of any of the Collateral consisting of inventory or equipment having a fair market value in excess of $1,000,000 in the aggregate held pursuant to bailment arrangements:
See Schedule 2(e).
Source: | UCC §§9-301 and 9-312; see also UCC §§2-326(3), 9-306, 9-330 and 9-505 |
3. Intellectual Property . The following is a complete list of all patents, copyrights, trademarks, trade names and service marks registered or for which applications are pending in the name of the Company:
UNITED STATES:
a. Patents
See Schedule 3(a).
- 2 -
b. Copyrights
See Schedule 3(b).
c. Trademarks, Trade Name
and Service Marks
See Schedule 3(c).
FOREIGN:
a. Patents
See Schedule 3(a).
b. Copyrights
See Schedule 3(b).
c. Trademarks, Trade Name
and Service Marks
See Schedule 3(c).
4. Investment Property: Instruments . The following is a complete list of all stock, bonds, debentures, notes, commodity contracts and other securities owned by the Company (provide name of issuer, a description of security and value) and all securities accounts and commodity accounts owned by the Company (provide name of intermediary and value):
See Schedule 4.
5. Motor Vehicles . The following is a complete list of all motor vehicles owned by the Company (describe each vehicle by make, model, and year and indicate for each the state in which registered and the state in which based) with fair market value in excess of $30,000:
None.
6. Vessels . The following is a complete list of all vessels of the Company which are subject to any certificate of title or other registration statute of the United States, any state or any other jurisdiction:
None.
- 3 -
7. Other Titled Collateral . The following is a complete list of all aircraft and all other inventory, equipment and other goods of the Company which are subject to any certificate of title or other registration statute of the United States, any state or any other jurisdiction with a fair market value in excess of $30,000 (provide description of covered goods and indicate registration system and jurisdiction):
See Schedule 7.
8. Deposit Accounts . The following is a complete list of all Deposit accounts maintained by the Company (provide name and address of depository bank, type of account and account number):
See Schedule 8.
9. Commercial Tort Claims . The following is a complete list of claims arising in tort with respect to which the Company is claimant and which arose in the course of the Companys business; together with case file numbers or other identification of such claim:
None.
Source: | UCC §§9-102(a)(13), 9-108, 9-504 |
10. Unusual Transactions . All of the Collateral has been originated by the Company in the ordinary course of the Companys business or consists of goods which have been acquired by the Company in the ordinary course from a person in the business of selling goods of that kind, except for the following Collateral which was obtained outside the ordinary course of business, including, but not limited to, transactions involving bulk transfers:
None.
Source: | UCC §§1-201(9) |
11. Timber . The following are all of the locations in the United States of America in which the Company possesses any timber to be cut:
None.
Source: | UCC §9-301(3)(B) and Official Comment 5(c) to 9-301. |
12. Extracted Collateral . The following are all of the locations in the United States of America in which the Company possesses any wellhead or minehead used in the extraction of minerals:
None.
Source: | UCC §9-301(4) and Official Comment 5(d) to 9-301. |
- 4 -
13. Farm Products . The following are all of the locations in the United States of America in which the Company possesses any farm products as defined in UCC §9-102(34):
None.
Source: | UCC §9-302. |
14. Authorization . The undersigned hereby irrevocably authorizes JPMorgan Chase Bank, N.A., as administrative agent (the Secured Party ) at any time (including, without limitation, any time prior to the execution of the Pledge and Security Agreement) and from time to time to file in any filing office in any jurisdiction any initial financing statements and amendments thereto and hereby ratifies its authorization for the Secured Party to have filed in any jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.
[signature page follows]
- 5 -
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date first written above.
MANITOWOC FOODSERVICE, INC. | ||
APPLIANCE SCIENTIFIC, INC. | ||
BERISFORD PROPERTY DEVELOPMENT (USA) LTD. | ||
CHARLES NEEDHAM INDUSTRIES INC. | ||
CLEVELAND RANGE, LLC | ||
THE DELFIELD COMPANY LLC | ||
ENODIS TECHNOLOGY CENTER, INC. | ||
FRYMASTER L.L.C. | ||
GARLAND COMMERCIAL INDUSTRIES LLC | ||
KYSOR BUSINESS TRUST | ||
KYSOR HOLDINGS, INC. | ||
KYSOR INDUSTRIAL CORPORATION | ||
KYSOR INDUSTRIAL CORPORATION | ||
KYSOR NEVADA HOLDING CORP. | ||
LANDIS HOLDINGS LLC | ||
MANITOWOC EQUIPMENT WORKS, INC. | ||
MANITOWOC FOODSERVICE COMPANIES, LLC | ||
MANITOWOC FOODSERVICE HOLDING, INC. | ||
MANITOWOC FP, INC. | ||
MANITOWOC FSG HOLDING, LLC | ||
MANITOWOC FSG INTERNATIONAL HOLDINGS, INC. | ||
ENODIS CORPORATION | ||
ENODIS GROUP HOLDINGS US, INC. | ||
ENODIS HOLDINGS, INC. | ||
MANITOWOC FSG OPERATIONS, LLC. | ||
MANITOWOC FSG U.S. HOLDING, LLC | ||
WELBILT CORPORATION | ||
WELBILT HOLDING COMPANY | ||
WESTRAN CORPORATION | ||
MCCANNS ENGINEERING & MANUFACTURING CO., LLC | ||
MTW COUNTY LIMITED | ||
By: |
|
|
Name: | ||
Title: |
Schedule 1(a)
Company Information
Schedule 1(b)
Trade Names
Schedule 2(a)
Chief Executive Offices
and Other Record Locations
Schedule 2(d)
Locations
Schedule 2(e)
Real & Leased Property
Schedule 3(a)
Patents
Schedule 3(b)
Copyrights
Schedule 3(c)
Trademarks
Schedule 4
Investment Property; Instruments
Schedule 7
Other Titled Collateral
Schedule 8
Bank Accounts
Schedule 9
Commercial Tort Claims
Schedule 10
Other Collateral
EXHIBIT G
FORM OF PARENT GUARANTY
(ATTACHED)
PARENT GUARANTY
PARENT GUARANTY dated as of March 3, 2016 (as same may be amended, supplemented, or otherwise modified, restated or amended and restated from time to time, this Guaranty ) made by Manitowoc Foodservice, Inc., a Delaware corporation (the Guarantor ), in favor of JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the Administrative Agent ) under the Credit Agreement referred to below for the benefit of the Administrative Agent, the Collateral Agent, the Lenders and their Affiliates and each other Secured Creditor to the extent provided below.
WITNESSETH:
WHEREAS, the Guarantor, the Subsidiary Borrowers party thereto, the Administrative Agent and certain other financial institutions are contemporaneously herewith entering into a credit agreement dated as of the date hereof (as same may be amended, supplemented, or otherwise modified, restated or amended and restated from time to time, the Credit Agreement ), providing, subject to the terms and conditions thereof, for extensions of credit to be made by the Lenders to the Guarantor and the Subsidiary Borrowers. Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them by the Credit Agreement;
WHEREAS, the Guarantor may from time to time designate one or more additional Subsidiary Borrowers who shall be entitled to make borrowings as permitted by the Credit Agreement;
WHEREAS, it is a condition precedent to the extension of credit by the Lenders under the Credit Agreement that the Guarantor executes and delivers this Guaranty whereby the Guarantor shall guarantee the payment when due of all Liabilities (as defined below); and
WHEREAS, in order to (a) induce the Lenders and the Administrative Agent to enter into the Credit Agreement and extend credit thereunder and (b) induce the Lenders and their Affiliates to enter into one or more Swap Agreements, Bank Product Agreements (as defined in the US Security Agreement) and/or Designated Foreign Facility Agreements (as defined in the US Security Agreement) permitted by the Credit Agreement (such agreements, as from time to time amended, supplemented, otherwise modified, restated or amended and restated being the Covered Agreements ), the Guarantor is willing to guarantee the obligations of the Subsidiary Borrowers and each other Subsidiary of the Borrower (together, the Subsidiary Borrowers ) under the Credit Agreement, any promissory note, the other Credit Documents and the Covered Agreements (all of the foregoing agreements or arrangements being the Facilities and any writing evidencing, supporting or securing a Facility, including but not limited to this Guaranty, as such writing may be amended, supplemented or otherwise modified from time to time, being a Facility Document ).
NOW THEREFORE, in order to induce the Guaranteed Parties (as defined below) to enter into or extend or continue credit or give financial accommodation under the Facilities, the Guarantor agrees as follows:
Section 1. Guaranty of Payment . The Guarantor unconditionally and irrevocably guarantees to each of the Administrative Agent, the Collateral Agent, the Lenders, each of their Affiliates party to a Covered Agreement and each other Secured Creditor (individually, a Guaranteed Party , and collectively, the Guaranteed Parties ) the punctual payment of all sums now owing or which may in the future be owing by the Subsidiary Borrowers under the Facility Documents, when the same are due and payable, whether on demand, at stated maturity, by acceleration or otherwise, and whether for principal, interest, fees, expenses, indemnification or otherwise (all of the foregoing sums being the Liabilities ). Upon failure by any Subsidiary Borrower to pay punctually any Liability, the Guarantor agrees that it shall forthwith on demand pay to the Administrative Agent for the benefit of the Guaranteed Parties (or in the case of amounts owing under a Covered Agreement, to the applicable Guaranteed Party) the amount not so paid at the place and in the manner specified in the applicable Facility Document. The Liabilities include, without limitation, interest accruing after the commencement of a proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at the rate or rates provided in the Facility Documents. This Guaranty is a guarantee of payment and not of collection only. The Guaranteed Parties shall not be required to exhaust any right or remedy or take any action against the Subsidiary Borrowers or any other person or entity or any Collateral. The Guarantor agrees that, as between the Guarantor and the Guaranteed Parties, the Liabilities may be declared to be due and payable for the purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any declaration as regards any of the Subsidiary Borrowers and that in the event of a declaration or attempted declaration, the Liabilities shall immediately become due and payable by the Guarantor for the purposes of this Guaranty.
Section 2. Guaranty Absolute . The Guarantor guarantees that the Liabilities shall be paid strictly in accordance with the terms of the Facility Documents. The liability of the Guarantor under this Guaranty is absolute and unconditional irrespective of: (a) any change in the time, manner or place of payment of, or in any other term of, all or any of the Facility Documents or Liabilities, or any other amendment or waiver of or any consent to departure from any of the terms of any Facility Document or Liability, including any increase or decrease in the rate of interest thereon; (b) any release or amendment or waiver of, or consent to departure from, any other guarantee or support document, or any exchange, release or non-perfection of any Collateral, for all or any of the Facility Documents or Liabilities; (c) any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of any Facility Document or Liability; (d) without being limited by the foregoing, any lack of validity or enforceability of any Facility Document or Liability; and (e) any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Facility Documents or the transactions contemplated thereby which might constitute a legal or equitable defense available to, or discharge of, any of the Subsidiary Borrowers or the Guarantor.
Section 3. Guaranty Irrevocable . This Guaranty is a continuing guarantee of the payment of all Liabilities now or hereafter existing under the Facility Documents and shall remain in full force and effect until payment in full of all Liabilities and other amounts payable under this Guaranty and until the Facility Documents are no longer in effect.
- 2 -
Section 4. Reinstatement . This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Liabilities is rescinded or must otherwise be returned by the Guaranteed Party on the insolvency, bankruptcy or reorganization of any of the Subsidiary Borrowers or otherwise, all as though the payment had not been made.
Section 5. Subrogation . The Guarantor shall not exercise any rights which it may acquire by way of subrogation, by any payment made under this Guaranty or otherwise, until all the Liabilities have been paid in full and the Facility Documents are no longer in effect. If any amount is paid to the Guarantor on account of subrogation rights under this Guaranty at any time when all the Liabilities have not been paid in full, the amount shall be held in trust by the Guarantor for the benefit of the Guaranteed Parties and shall be promptly paid to the Administrative Agent for the benefit of the Guaranteed Parties (or in the case of amounts owing under a Covered Agreement, to the applicable Guaranteed Party) to be credited and applied to the Liabilities, whether matured or unmatured or absolute or contingent, in accordance with the terms hereof and of the Facility Documents. If the Guarantor makes payment to the Guaranteed Parties of all or any part of the Liabilities and all the Liabilities are paid in full and the Facility Documents are no longer in effect, the applicable Guaranteed Party shall, at the Guarantors request, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Liabilities resulting from the payment.
Section 6. Subordination . Without limiting the Guaranteed Parties rights under any other agreement, any liabilities owed by any of the Subsidiary Borrowers to the Guarantor in connection with any extension of credit or financial accommodation by the Guarantor to or for the account of such Subsidiary Borrower, including but not limited to interest accruing at the agreed contract rate after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the Liabilities, and such liabilities of such Subsidiary Borrower to the Guarantor, if the Administrative Agent so requests, shall be collected, enforced and received by the Guarantor as trustee for the Guaranteed Parties and shall be paid over to the Administrative Agent for the benefit of the Guaranteed Parties (or in the case of amounts owing under a Covered Agreement, to the applicable Guaranteed Party) on account of the Liabilities but without reducing or affecting in any manner the liability of the Guarantor under the other provisions of this Guaranty.
Section 7. Payments Generally . All payments by the Guarantor hereunder shall be made in the manner, at the place and in the currency (the Payment Currency ) required by the applicable Facility Document; provided , however , that (if the Payment Currency is other than Dollars) the Guarantor may, at its option (or, if for any reason whatsoever the Guarantor is unable to effect payments in the foregoing manner, the Guarantor shall be obligated to) pay to the applicable Guaranteed Party at its principal office the equivalent amount in Dollars computed in the same manner as, and the Guarantor shall indemnify the applicable Guaranteed Party to the same extent as set forth in, Section 9.15 of the Credit Agreement.
Section 8. Certain Taxes . The provisions of Sections 2.17(a), (b) and (c) of the Credit Agreement, including related definitions, are incorporated herein mutatis mutandis with respect to Taxes associated with payments to be made by the Guarantor hereunder.
- 3 -
Section 9. Representations and Warranties . The Guarantor represents and warrants that: (a) the execution, delivery and performance of this Guaranty by the Guarantor (i) are within the Guarantors corporate or other organizational powers and have been duly authorized by all necessary corporate and, if required, stockholder or similar action on the part of the Guarantor; (ii) do not violate any agreement, instrument, law, regulation or order applicable to the Guarantor, other than, in the case of agreements and instruments, for such violations or defaults which could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect; and (iii) do not require the consent or approval of any person or entity, including but not limited to any governmental authority, or any filing or registration of any kind other than such as have been obtained and which are in full force and effect as of the date hereof; (b) this Guaranty has been duly executed and delivered by the Guarantor and is the legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, fraudulent conveyance and other similar laws affecting creditors rights generally; and (c) in executing and delivering this Guaranty, the Guarantor has (i) without reliance on any Guaranteed Party or any information received from any Guaranteed Party and based upon such documents and information it deems appropriate, made an independent investigation of the transactions contemplated hereby and the Subsidiary Borrower, the Subsidiary Borrowers business, assets, operations, prospects and condition, financial or otherwise, and any circumstances which may bear upon such transactions, the Subsidiary Borrowers or the obligations and risks undertaken herein with respect to the Liabilities; (ii) adequate means to obtain from the Subsidiary Borrowers on a continuing basis information concerning the Subsidiary Borrowers; (iii) has full and complete access to the Facility Documents and any other documents executed in connection with the Facility Documents; and (iv) not relied and will not rely upon any representations or warranties of any Guaranteed Party not embodied herein or any acts heretofore or hereafter taken by any Guaranteed Party (including but not limited to any review by any Guaranteed Party of the affairs of the Subsidiary Borrowers).
Section 10. Limitation on Obligations . (a) The provisions of this Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of the Guarantor under this Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of the Guarantors liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the amount of such liability shall, without any further action by the Guarantor or any Guaranteed Party, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the Guarantors Maximum Liability ). This Section 10 with respect to the Maximum Liability of the Guarantor is intended solely to preserve the rights of the Guaranteed Parties hereunder to the maximum extent not subject to avoidance under applicable law, and neither the Guarantor nor any other person or entity shall have any right or claim under this Section 10 with respect to the Maximum Liability, except to the extent necessary so that the obligations of the Guarantor hereunder shall not be rendered voidable under applicable law.
(b) The Guarantor agrees that the Liabilities may at any time and from time to time exceed the Maximum Liability of the Guarantor without impairing this Guaranty or affecting the rights and remedies of the Guaranteed Parties hereunder. Nothing in this Section 10 shall be construed to increase the Guarantors obligations hereunder beyond its Maximum Liability.
- 4 -
Section 11. Application of Payments . All payments received by the Administrative Agent hereunder shall be applied by the Administrative Agent to payment of the Liabilities in the following order unless a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all costs and expenses of the Administrative Agent incurred in connection with the collection and enforcement of the Liabilities;
(b) SECOND, in the order provided in Section 7.4 of the US Security Agreement;
(c) THIRD, to payment of the principal of the Liabilities and the net early termination payments and any other obligations under Covered Agreements then due and unpaid from the Subsidiary Borrowers to any of the Guaranteed Parties, pro rata among the Guaranteed Parties in accordance with the amount of such principal and such net early termination payments and other obligations under Covered Agreements then due and unpaid owing to each of them; and
(d) FOURTH, to payment of any Liabilities (other than those listed above) pro rata among those parties to whom such Liabilities are due in accordance with the amounts owing to each of them.
Section 12. Remedies Generally . The remedies provided in this Guaranty are cumulative and not exclusive of any remedies provided by law.
Section 13. Setoff . The Guarantor agrees that, in addition to (and without limitation of) any right of setoff, bankers lien or counterclaim the Guaranteed Parties may otherwise have, each Guaranteed Party shall be entitled, at its option, to offset balances (general or special, time or demand, provisional or final) held by it for the account of the Guarantor at any of such Guaranteed Partys offices, in Dollars or in any other currency, against any amount payable by the Guarantor under this Guaranty which is not paid when due (regardless of whether such balances are then due to the Guarantor), in which case it shall promptly notify the Guarantor thereof; provided that the Guaranteed Parties failure to give such notice shall not affect the validity thereof.
Section 14. Formalities . The Guarantor waives presentment, notice of dishonor, protest, notice of acceptance of this Guaranty or incurrence of any Liability and any other formality with respect to any of the Liabilities or this Guaranty.
Section 15. Amendments and Waivers . No amendment or waiver of any provision of this Guaranty, nor consent to any departure by the Guarantor therefrom, shall be effective unless it is in writing and signed by the Administrative Agent, and then the waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of any Guaranteed Party to exercise, and no delay in exercising, any right under this Guaranty shall operate as a waiver or preclude any other or further exercise thereof or the exercise of any other right.
- 5 -
Section 16. Expenses . The Guarantor shall reimburse the Guaranteed Parties on demand for all reasonable costs, expenses and charges (including without limitation reasonable fees and charges of external legal counsel and reasonable costs allocated by internal legal counsel) incurred by such Guaranteed Parties in connection with the enforcement of this Guaranty. The obligations of the Guarantor under this Section shall survive the termination of this Guaranty.
Section 17. Assignment . This Guaranty shall be binding on, and shall inure to the benefit of, the Guarantor, each Guaranteed Party and their respective successors and assigns; provided that the Guarantor may not assign or transfer its rights or obligations under this Guaranty without the prior written consent of the Administrative Agent and without requiring any further consent of any Lender. Without limiting the generality of the foregoing, each Guaranteed Party may assign, sell participations in or otherwise transfer its rights under the Facility Documents in accordance with the terms thereof to any other person or entity, and the other person or entity shall then become vested with all the rights granted to the Guaranteed Parties in this Guaranty or otherwise.
Section 18. Captions . The headings and captions in this Guaranty are for convenience only and shall not affect the interpretation or construction of this Guaranty.
Section 19. Governing Law, Etc . THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. THE GUARANTOR CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF. SERVICE OF PROCESS BY A GUARANTEED PARTY IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE GUARANTOR IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED IN SECTION 21 BELOW OR AS OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO TIME. THE GUARANTOR WAIVES ANY RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM (OTHER THAN A COMPULSORY COUNTERCLAIM) RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
Section 20. Integration; Effectiveness . This Guaranty alone sets forth the entire understanding of the Guarantor and the Guaranteed Parties relating to the guarantee of the Liabilities and constitutes the entire contract between the parties relating to the subject matter
- 6 -
hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Guaranty shall become effective when it shall have been executed and delivered by the Guarantor to the Administrative Agent. Delivery of an executed signature page of this Guaranty by telecopy shall be effective as delivery of a manually executed signature page of this Guaranty.
Section 21. Notices . All communications and notices hereunder shall be in writing and given as provided in Section 9.01 of the Credit Agreement.
[signature pages follow]
- 7 -
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its authorized officer as of the date first above written.
MANITOWOC FOODSERVICE, INC. | ||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to the Parent Guaranty]
EXHIBIT H
FORM OF SUBSIDIARY GUARANTY
(ATTACHED)
EXECUTION VERSION
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated as of March 3, 2016 (as same may be amended, supplemented, restated or amended and restated or otherwise modified from time to time, this Guaranty ) made by each of the Persons that is a signatory hereto (individually a Guarantor and collectively, the Guarantors ) in favor of JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the Administrative Agent ) under the Credit Agreement referred to below for the benefit of the Administrative Agent, the Collateral Agent, the Lenders and their Affiliates and each other Secured Creditor to the extent provided below.
WITNESSETH:
WHEREAS, Manitowoc Foodservice, Inc., a Delaware corporation (the Borrower ), the Subsidiary Borrowers party thereto, the Administrative Agent and certain other financial institutions are contemporaneously herewith entering into a credit agreement dated as of the date hereof (as same may be amended, supplemented, restated or amended and restated or otherwise modified from time to time, the Credit Agreement ), providing, subject to the terms and conditions thereof, for extensions of credit to be made by the Lenders to the Borrower and Subsidiary Borrowers. Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them by the Credit Agreement;
WHEREAS, it is a condition precedent to the extension of credit by the Lenders under the Credit Agreement that each of the Guarantors execute and deliver this Guaranty whereby each of the Guarantors shall guarantee the payment when due of all Liabilities (as defined below); and
WHEREAS, in consideration of the financial and other support that the Borrower has provided, and such financial and other support as the Borrower may in the future provide, to the Guarantors (each of which is a Subsidiary of the Borrower), and in order to (a) induce the Lenders and the Administrative Agent to enter into the Credit Agreement and extend credit thereunder and (b) induce the Lenders and their Affiliates to enter into one or more Swap Agreements, Bank Product Agreements (as defined in the US Security Agreement) and/or Designated Foreign Facility Agreements (as defined in the US Security Agreement) permitted by the Credit Agreement (such agreements, as from time to time amended, supplemented or otherwise modified, restated or amended and restated being the Covered Agreements ) and because each Guarantor has determined that executing this Guaranty is in its interest and to its financial benefit, each of the Guarantors is willing to guarantee the obligations of the Borrower, each Subsidiary Borrower and each other Subsidiary of the Borrower (together, the Borrowers ) under the Credit Agreement, any promissory note, the other Credit Documents and the Covered Agreements (all of the foregoing agreements or arrangements being the Facilities and any writing evidencing, supporting or securing a Facility, including but not limited to this Guaranty, as such writing may be amended, supplemented or otherwise modified from time to time, being a Facility Document ).
-1-
NOW THEREFORE, in order to induce the Guaranteed Parties (as defined below) to enter into or extend or continue credit or give financial accommodation under the Facilities, each Guarantor agrees as follows:
Section 1. Guaranty of Payment . Each Guarantor unconditionally and irrevocably guarantees to each of the Administrative Agent, the Collateral Agent, the Lenders, each of their Affiliates party to a Covered Agreement, and each other Secured Creditor (individually, a Guaranteed Party , and collectively, the Guaranteed Parties ) the full and punctual payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, principal, premium, interest, reimbursement obligations, fees and indemnities (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Guarantor at the rate provided for in the applicable Facility Document, whether or not a claim for post-petition interest is allowed in any such proceeding)) of each of the Borrowers to the Guaranteed Parties, whether now owing or which may in the future may be owing (all of the foregoing being the Liabilities ). Upon failure by any of the Borrowers to pay punctually any of the Liabilities, each of the Guarantors agrees that it shall forthwith pay to the Administrative Agent for the benefit of the applicable Guaranteed Parties (or in the case of amounts owing under a Covered Agreement, to the applicable Guaranteed Party) the amount not so paid at the place and in the manner specified in the applicable Facility Document. This Guaranty is a guarantee of payment and not of collection only. The Guaranteed Parties shall not be required to exhaust any right or remedy or take any action against the Borrowers or any other person or entity or any Collateral. Each Guarantor agrees that, as between such Guarantor and the Guaranteed Parties, the Liabilities may be declared to be due and payable for the purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any declaration as regards any of the Borrowers and that in the event of a declaration or attempted declaration, the Liabilities shall immediately become due and payable by such Guarantor for the purposes of this Guaranty. All liabilities of the Guarantors hereunder shall be the joint and several liabilities of each Guarantor. Notwithstanding anything contained herein, the Liabilities guaranteed by Enodis Holdings Limited and Manitowoc FSG UK Limited shall exclude all liabilities as to which the Borrower or any Domestic Subsidiary of the Borrower is the primary obligor.
Section 2. Guaranty Absolute . Each Guarantor guarantees that the Liabilities shall be paid strictly in accordance with the terms of the Facility Documents. The liability of a Guarantor under this Guaranty is absolute and unconditional irrespective of: (a) any change in the time, manner or place of payment of, or in any other term of, all or any of the Facility Documents or Liabilities, or any other amendment or waiver of or any consent to departure from any of the terms of any Facility Document or Liability, including any increase or decrease in the rate of interest thereon; (b) any release or amendment or waiver of, or consent to departure from, any other guarantee or support document, or any exchange, release or non-perfection of any Collateral, for all or any of the Facility Documents or Liabilities; (c) any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of any Facility Document or Liability; (d) without being limited by the foregoing, any lack of validity or enforceability of any Facility Document or Liability; and (e) any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Facility Documents or the transactions contemplated thereby which might otherwise constitute a legal or equitable defense available to, or discharge of, any of the Borrowers or a Guarantor.
-2-
Section 3. Guaranty Irrevocable . This Guaranty is a continuing guarantee of the payment of all Liabilities now or hereafter existing under the Facility Documents and shall remain in full force and effect until payment in full of all Liabilities and other amounts payable under this Guaranty and until the Facility Documents are no longer in effect.
Section 4. Reinstatement . This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Liabilities is rescinded or must otherwise be returned by the Guaranteed Party on the insolvency, bankruptcy or reorganization of any of the Borrowers or otherwise, all as though the payment had not been made.
Section 5. Subrogation . No Guarantor shall exercise any rights which it may acquire by way of subrogation, by any payment made under this Guaranty or otherwise, until all the Liabilities have been paid in full and the Facility Documents are no longer in effect. If any amount is paid to a Guarantor on account of subrogation rights under this Guaranty at any time when all the Liabilities have not been paid in full, the amount shall be held in trust by such Guarantor for the benefit of the Guaranteed Parties and shall be promptly paid to the Administrative Agent for the benefit of the Guaranteed Parties (or in the case of amounts owing under a Covered Agreement, to the applicable Guaranteed Party) to be credited and applied to the Liabilities, whether matured or unmatured or absolute or contingent, in accordance with the terms hereof and of the Facility Documents. If a Guarantor makes payment to the Guaranteed Parties of all or any part of the Liabilities and all the Liabilities are paid in full and the Facility Documents are no longer in effect, the applicable Guaranteed Party shall, at such Guarantors request, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Liabilities resulting from the payment.
Section 6. Subordination . Without limiting the Guaranteed Parties rights under any other agreement, any liabilities owed by any of the Borrowers to a Guarantor in connection with any extension of credit or financial accommodation by a Guarantor to or for the account of such Borrower, including but not limited to interest accruing at the agreed contract rate after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the Liabilities, and such liabilities of such Borrower to such Guarantor, if the Administrative Agent so requests, shall be collected, enforced and received by such Guarantor as trustee for the Guaranteed Parties and shall be paid over to the Administrative Agent for the benefit of the Guaranteed Parties (or in the case of amounts owing under a Covered Agreement, to the applicable Guaranteed Party) on account of the Liabilities but without reducing or affecting in any manner the liability of such Guarantor under the other provisions of this Guaranty.
Section 7. Payments Generally . All payments by a Guarantor hereunder shall be made in the manner, at the place and in the currency (the Payment Currency ) required by the applicable Facility Document; provided , however , that (if the Payment Currency is other than Dollars) a Guarantor may, at its option (or, if for any reason whatsoever such Guarantor is unable to effect payments in the foregoing manner, such Guarantor shall be obligated to) pay to the applicable Guaranteed Party at its principal office the equivalent amount in Dollars computed in the same manner as, and such Guarantor shall indemnify the applicable Guaranteed Party to the same extent as set forth in, Section 9.15 of the Credit Agreement.
-3-
Section 8. Certain Taxes . The provisions of Sections 2.17(a), (b) and (c) of the Credit Agreement, including related definitions, are incorporated herein mutatis mutandis with respect to Taxes associated with payments to be made by the Guarantors hereunder.
Section 9. Representations and Warranties . Each Guarantor represents and warrants that: (a) the execution, delivery and performance of this Guaranty by such Guarantor (i) are within such Guarantors corporate or other organizational powers and have been duly authorized by all necessary corporate or limited liability company and, if required, stockholder or similar action on the part of such Guarantor; (ii) do not violate any agreement, instrument, law, regulation or order applicable to such Guarantor, other than, in the case of agreements and instruments, for such violations or defaults which could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect; and (iii) do not require the consent or approval of any person or entity, including but not limited to any governmental authority, or any filing or registration of any kind other than such as have been obtained and which are in full force and effect as of the date hereof; (b) this Guaranty has been duly executed and delivered by such Guarantor and is the legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency, fraudulent conveyance and other similar laws affecting creditors rights generally; and (c) in executing and delivering this Guaranty, such Guarantor has (i) without reliance on any Guaranteed Party or any information received from any Guaranteed Party and based upon such documents and information it deems appropriate, made an independent investigation of the transactions contemplated hereby and the Borrowers, the Borrowers business, assets, operations, prospects and condition, financial or otherwise, and any circumstances which may bear upon such transactions, the Borrowers or the obligations and risks undertaken herein with respect to the Liabilities; (ii) adequate means to obtain from the Borrowers on a continuing basis information concerning the Borrowers; (iii) has full and complete access to the Facility Documents and any other documents executed in connection with the Facility Documents; and (iv) not relied and will not rely upon any representations or warranties of any Guaranteed Party not embodied herein or any acts heretofore or hereafter taken by any Guaranteed Party (including but not limited to any review by any Guaranteed Party of the affairs of the Borrowers).
Section 10. Limitation on Obligations . (a) The provisions of this Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Guarantors liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the amount of such liability shall, without any further action by the Guarantors or any Guaranteed Party, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Guarantors Maximum Liability ). This Section 10 with respect to the Maximum Liability of the Guarantors is intended solely to preserve the rights
-4-
of the Guaranteed Parties hereunder to the maximum extent not subject to avoidance under applicable law, and neither the Guarantor nor any other person or entity shall have any right or claim under this Section 10 with respect to the Maximum Liability, except to the extent necessary so that the obligations of the Guarantor hereunder shall not be rendered voidable under applicable law.
(b) Each of the Guarantors agrees that the Liabilities may at any time and from time to time exceed the Maximum Liability of each Guarantor, and may exceed the aggregate Maximum Liability of all other Guarantors, without impairing this Guaranty or affecting the rights and remedies of the Guaranteed Parties hereunder. Nothing in this Section 10 shall be construed to increase any Guarantors obligations hereunder beyond its Maximum Liability.
(c) In the event any Guarantor (a Paying Guarantor ) shall make any payment or payments under this Guaranty or shall suffer any loss as a result of any realization upon any Collateral granted by it to secure its obligations under this Guaranty, each other Guarantor (each a Non-Paying Guarantor ) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantors Pro Rata Share of such payment or payments made, or losses suffered, by such Paying Guarantor. For the purposes hereof, each Non-Paying Guarantors Pro Rata Share with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantors Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantors Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Guarantors, the aggregate amount of all monies received by all Guarantors from the Borrowers after the date hereof (whether by loan, capital infusion or by other means). Nothing in this Section 10 shall affect any Guarantors several liability for the entire amount of the Liabilities (up to such Guarantors Maximum Liability). Each of the Guarantors covenants and agrees that its right to receive any contribution under this Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to all the Liabilities. The provisions of this Section 10 are for the benefit of both the Guaranteed Parties and the Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.
Section 11. Application of Payments . All payments received by the Administrative Agent hereunder (shall unless a court of competent jurisdiction shall otherwise direct) be applied by the Administrative Agent first to payment of all costs and expenses of the Administrative Agent incurred in connection with the collection and enforcement of the Liabilities and then in the order set forth in Section 7.4 of the U.S. Security Agreement.
Section 12. Remedies Generally . The remedies provided in this Guaranty are cumulative and not exclusive of any remedies provided by law.
-5-
Section 13. Setoff . Each Guarantor agrees that, in addition to (and without limitation of) any right of setoff, bankers lien or counterclaim the Guaranteed Parties may otherwise have, each Guaranteed Party shall be entitled, at its option, to offset balances (general or special, time or demand, provisional or final) held by it for the account of such Guarantor at any of such Guaranteed Partys offices, in Dollars or in any other currency, against any amount payable by such Guarantor under this Guaranty which is not paid when due (regardless of whether such balances are then due to such Guarantor), in which case it shall promptly notify such Guarantor thereof; provided that the Guaranteed Parties failure to give such notice shall not affect the validity thereof.
Section 14. Formalities . Each Guarantor waives presentment, notice of dishonor, protest, notice of acceptance of this Guaranty or incurrence of any Liability and any other formality with respect to any of the Liabilities or this Guaranty.
Section 15. Amendments and Waivers . No amendment or waiver of any provision of this Guaranty, nor consent to any departure by a Guarantor therefrom, shall be effective unless it is in writing and signed by the Administrative Agent, and then the waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of any Guaranteed Party to exercise, and no delay in exercising, any right under this Guaranty shall operate as a waiver or preclude any other or further exercise thereof or the exercise of any other right.
Section 16. Expenses . The Guarantors shall reimburse the Guaranteed Parties on demand for all reasonable costs, expenses and charges (including without limitation reasonable fees and charges of external legal counsel and reasonable costs allocated by internal legal counsel) incurred by such Guaranteed Parties in connection with the enforcement of this Guaranty. The obligations of each Guarantor under this Section shall survive the termination of this Guaranty.
Section 17. Assignment . This Guaranty shall be binding on, and shall inure to the benefit of, each Guarantor, each Guaranteed Party and their respective successors and assigns; provided that a Guarantor may not assign or transfer its rights or obligations under this Guaranty without the prior written consent of the Administrative Agent and each Lender. Without limiting the generality of the foregoing: (a) the obligations of each Guarantor under this Guaranty shall continue in full force and effect and shall be binding on any successor partnership and on previous partners and their respective estates if the Guarantor is a partnership, regardless of any change in the partnership as a result of death, retirement or otherwise; and (b) each Guaranteed Party may assign, sell participations in or otherwise transfer its rights under the Facility Documents in accordance with the terms thereof to any other person or entity, and the other person or entity shall then become vested with all the rights granted to the Guaranteed Parties in this Guaranty or otherwise.
Section 18. Captions . The headings and captions in this Guaranty are for convenience only and shall not affect the interpretation or construction of this Guaranty.
Section 19. Governing Law, Etc . THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. EACH GUARANTOR CONSENTS
-6-
TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF. SERVICE OF PROCESS BY A GUARANTEED PARTY IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON A GUARANTOR IF SENT TO SUCH GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED IN SECTION 22 BELOW OR AS OTHERWISE SPECIFIED BY SUCH GUARANTOR FROM TIME TO TIME. EACH GUARANTOR WAIVES ANY RIGHT SUCH GUARANTOR MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM (OTHER THAN A COMPULSORY COUNTERCLAIM) RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION. TO THE EXTENT THAT A GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
Section 20. Integration; Effectiveness . This Guaranty alone sets forth the entire understanding of each Guarantor and the Guaranteed Parties relating to the guarantee of the Liabilities and constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Guaranty shall become effective when it shall have been executed and delivered by each Guarantor to the Administrative Agent. Delivery of an executed signature page of this Guaranty by telecopy shall be effective as delivery of a manually executed signature page of this Guaranty.
Section 21. Additional Subsidiary Guarantors . Pursuant to Sections 5.10 and 5.13 of the Credit Agreement, certain Subsidiaries are from time to time required to enter into this Guaranty as a Guarantor. Upon execution and delivery after the date hereof by the Administrative Agent and a Subsidiary of a supplement in the form of Exhibit A hereto (or in such other form as may be satisfactory to the Administrative Agent), such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. Each Guarantor hereby consents to additional Subsidiaries becoming party hereto as Guarantors in such manner. The execution and delivery of any instrument adding an additional Guarantor as a party to this Guaranty shall not require any further consent of any Guarantor hereunder or the consent of any of the Borrowers or of any Guaranteed Party. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party hereto.
Section 22. Notices . All communications and notices hereunder shall be in writing and (other than to a Guarantor) given as provided in Section 9.01 of the Credit Agreement.
-7-
Notices to the Guarantors shall be sent to them in care of Manitowoc Foodservice, Inc., Attn: John Stewart, Senior Vice President and Chief Financial Officer, 2227 Welbilt Boulevard, New Port Richey, Florida 34655, or at such other address as they may specify in a writing delivered to the Administrative Agent in the manner specified by such Section 9.01.
Section 23. Excluded Swap Obligations, Etc . (a) Notwithstanding anything herein to the contrary (including the definition of Liabilities), the definition of Liabilities shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.
(b) Notwithstanding anything to the contrary in Section 11 hereof or Section 9.16 of the 7.4 of the US Security Agreement, amounts received from any Guarantor that is not a Qualified ECP Guarantor (as defined below) shall not be applied to any Excluded Swap Obligation of such Guarantor. For purposes hereof, Qualified ECP Guarantor means, in respect of any Swap Obligation, each Guarantor that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an eligible contract participant under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an eligible contract participant at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
(c) Without limiting the provisions of Section 10 hereof, each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Guarantor to honor all of its obligations under this Guaranty in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this paragraph for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this paragraph or otherwise under this Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this paragraph shall remain in full force and effect until payment in full of all Liabilities and other amounts payable under this Guaranty and until the Credit Agreement is no longer in effect. Each Qualified ECP Guarantor intends that this paragraph constitute, and this paragraph shall be deemed to constitute, a keepwell, support, or other agreement for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
[signature pages follow]
-8-
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be duly executed and delivered by its authorized officer as of the date first above written.
APPLIANCE SCIENTIFIC, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
BERISFORD PROPERTY DEVELOPMENT (USA) LTD., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
CHARLES NEEDHAM INDUSTRIES INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
CLEVELAND RANGE, LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
THE DELFIELD COMPANY LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
ENODIS TECHNOLOGY CENTER, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
FRYMASTER L.L.C., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
GARLAND COMMERCIAL INDUSTRIES LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
KYSOR BUSINESS TRUST, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
KYSOR HOLDINGS, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
KYSOR INDUSTRIAL CORPORATION, a Michigan corporation, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
KYSOR INDUSTRIAL CORPORATION, a Nevada corporation, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
KYSOR NEVADA HOLDING CORP., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
LANDIS HOLDING LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC EQUIPMENT WORKS, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC FOODSERVICE COMPANIES, LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
MANITOWOC FOODSERVICE HOLDING, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC FP, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC FSG INTERNATIONAL HOLDINGS, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
ENODIS CORPORATION, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
ENODIS GROUP HOLDINGS US, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
ENODIS HOLDINGS, INC., as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC FSG OPERATIONS, LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC FSG U.S. HOLDING, LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
WELBILT CORPORATION, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
WELBILT HOLDING COMPANY, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
WESTRAN CORPORATION, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MCCANNS ENGINEERING & MANUFACTURING CO., LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MTW COUNTY (DOMESTICATION) LLC, as Pledgor |
||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
ENODIS HOLDINGS LIMITED |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC FSG UK LIMITED |
||||
By: |
|
|||
Name: | ||||
Title: | ||||
MANITOWOC FOODSERVICE UK HOLDING LIMITED | ||||
By: |
|
|||
Name: | ||||
Title: |
[Signature Page to Subsidiary Guaranty]
EXHIBIT A
TO GUARANTY
SUPPLEMENT NO. dated as of , 20 to the Subsidiary Guaranty dated as of [ ], 2016 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Guaranty ), by the Subsidiaries of Manitowoc Foodservice, Inc., a Delaware corporation (the Borrower ), party thereto (individually, a Guarantor , and collectively, the Guarantors ) for the benefit of the Guaranteed Parties.
Reference is made to the Credit Agreement dated as of March 3, 2016 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement ), among the Borrower, the Subsidiary Borrowers, the lenders from time to time party thereto (the Lenders ) and JPMorgan Chase Bank, N.A., as Administrative Agent.
Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guaranty and the Credit Agreement.
The Guarantors have entered into the Guaranty in order to induce the Guaranteed Parties to extend credit and take other actions pursuant to the Facility Documents. Pursuant to Section 5.10 or 5.13 of the Credit Agreement, the undersigned Subsidiary is required to enter into the Guaranty as a Guarantor. Section 21 of the Guaranty provides that additional Subsidiaries of the Borrower may become Guarantors under the Guaranty by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary of the Borrower (the New Guarantor ) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guaranty in order to induce the Guaranteed Parties to extend and continue the extension of credit pursuant to the Credit Agreement and/or to enter into and perform under other Facility Documents.
Accordingly, the Administrative Agent and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 21 of the Guaranty, the New Guarantor by its signature below becomes a Guarantor under the Guaranty with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms thereof and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof (with all references to the Guaranty in Section 9 of the Guaranty being deemed references to the Guaranty and this Supplement). Henceforth, each reference to a Guarantor in the Guaranty shall be deemed to include the New Guarantor. The Guaranty is hereby incorporated herein by reference. [Notwithstanding anything contained herein or in the Guaranty, the Liabilities guaranteed by the New Guarantor pursuant hereto (and pursuant to the Guaranty) shall exclude all Liabilities as to which the Borrower is the primary obligor.] 1
SECTION 2. This Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single agreement. This Supplement shall become effective when the Administrative Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and the Administrative Agent.
1 | To be inserted with the consent of the Administrative Agent to the extent permitted by Section 5.10 of the Credit Agreement. |
SECTION 3. Except as expressly supplemented hereby, the Guaranty shall remain in full force and effect.
SECTION 4. THIS GUARANTY SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 5. All communications and notices hereunder shall be in writing and (other than to the New Guarantor) given as provided in Section 9.01 of the Credit Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower.
IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly executed this Supplement to the Guaranty as of the day and year first above written.
[Name of New Guarantor] | ||
By: |
|
|
Name: |
|
|
Title: |
|
|
Address: |
|
|
|
||
JPMORGAN CHASE BANK, N.A., as Administrative Agent | ||
By: |
|
|
Name: |
|
|
Title: |
|
EXHIBIT I
FORM OF UK SECURITY AGREEMENT
(ATTACHED)
EXECUTION VERSION
SECURITY AGREEMENT
DATED MARCH 2016
BETWEEN
THE COMPANIES LISTED IN SCHEDULE 1
as the Original Chargors
and
JPMORGAN CHASE BANK, N.A.
as UK Security Trustee
CONTENTS
Clause | Page | |||||
1. |
Interpretation | 1 | ||||
2. |
Creation of Security | 8 | ||||
3. |
Representations - General | 12 | ||||
4. |
Restrictions on Dealings | 13 | ||||
5. |
Investments | 13 | ||||
6. |
Intellectual Property | 18 | ||||
7. |
Accounts | 18 | ||||
8. |
Relevant Contracts | 19 | ||||
9. |
Insurances | 19 | ||||
10. |
When Security Becomes Enforceable | 20 | ||||
11. |
Enforcement of Security | 20 | ||||
12. |
Receiver | 22 | ||||
13. |
Powers of Receiver | 23 | ||||
14. |
Application of Proceeds: Order of Priority | 25 | ||||
15. |
Expenses and Indemnity | 26 | ||||
16. |
Delegation | 26 | ||||
17. |
Further Assurances | 27 | ||||
18. |
Power of Attorney | 27 | ||||
19. |
Preservation of Security | 28 | ||||
20. |
Miscellaneous | 30 | ||||
21. |
Notices | 33 | ||||
22. |
Release | 34 | ||||
23. |
Counterparts | 35 | ||||
24. |
Enforcement | 35 | ||||
25. |
Governing Law | 36 | ||||
Schedule 1 Original Chargors | 37 | |||||
Schedule 2 Security Assets | 38 | |||||
Part 1 Shares | 38 | |||||
Part 2 Relevant Contracts | 39 | |||||
Part 3 Specific Intellectual Property Rights | 39 |
i
Schedule 3 Forms of Letter for Security Accounts |
40 | |||||
Part 1 Notice to Account Bank |
40 | |||||
Part 2 Acknowledgment of Account Bank |
42 | |||||
Schedule 4 Form of Notice of Assignment/Form of Letter of Undertaking |
43 | |||||
Part 1 Form of Notice of Assignment |
43 | |||||
Part 2 Form of Letter of Undertaking |
45 | |||||
Schedule 5 Forms of Letter for Relevant Contracts |
46 | |||||
Part 1 Notice to Counterparty |
46 | |||||
Part 2 Acknowledgement of Counterparty |
48 | |||||
Schedule 6 Form of Deed of Accession |
49 | |||||
Signatories (to Deed of Accession) |
53 | |||||
Signatories (to Security Agreement) |
54 |
ii
THIS DEED is dated March 2016
BETWEEN:
(1) | THE COMPANIES listed in Schedule 1 as chargors (each an Original Chargor and together the Original Chargors ); and |
(2) | JPMORGAN CHASE BANK, N.A. as agent and trustee for the Secured Creditors referred to below (the UK Security Trustee ). |
BACKGROUND:
(A) | Each Chargor enters into this Deed in connection with the Credit Agreement (as defined below). |
(B) | It is intended that this document takes effect as a deed notwithstanding the fact that a party may only execute this document under hand. |
IT IS AGREED as follows:
1. | INTERPRETATION |
1.1 | Definitions |
In this Deed:
Account Bank means each person with whom a Security Account is maintained.
Act means the Law of Property Act 1925.
Additional Chargor means a Credit Party which becomes a Chargor by executing a Deed of Accession.
Additional Secured Document means any Swap Agreement permitted by the Credit Agreement, any Bank Product Agreement, and any Designated Foreign Facility Agreement, in each case between one or more Credit Parties and one or more Lenders or Affiliates of Lenders.
Administrative Agent means JPMorgan Chase Bank, N.A. in its capacity as administrative agent under the Credit Agreement and its permitted successors and assigns.
Bank Product Agreements shall mean any agreement entered into from time to time with any Credit Party in connection with any of the Bank Products which Manitowoc Foodservice, Inc. identifies to the UK Security Trustee and the Administrative Agent in writing as an agreement intended to be secured by this Deed (which designation, once made, may be revoked only with the consent of the Lender or Lender Affiliate party thereto).
1
Bank Products shall mean the following bank services or facilities extended to any Credit Party: (a) commercial credit cards, (b) stored value cards, and (c) treasury management services (including controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).
Chargor means the Original Chargors and any Additional Chargor.
Credit Agreement means the credit agreement dated as of March 2016 between, amongst others, Manitowoc Foodservice, Inc., the Subsidiary Borrowers party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent and UK Security Trustee, and the other agents, arrangers and bookrunners party thereto.
Credit Documents has the meaning given to that term in the Credit Agreement.
Credit Party has the meaning given to that term in the Credit Agreement.
Deed of Accession means a deed substantially in the form of Schedule 6 (Form of Deed of Accession).
Designated Foreign Facility Agreement has the meaning given to that term in the US Security Agreement.
Discharge Date means the date on which the Administrative Agent is satisfied that all of the Secured Liabilities have been unconditionally and irrevocably paid and discharged in full or have otherwise been addressed in a manner acceptable to the Administrative Agent.
Event of Default has the meaning given to that term in the Credit Agreement.
Foreign Entity means a member of the Group which is a Foreign Subsidiary of Manitowoc Foodservice, Inc.
Foreign Subsidiary has the meaning given to that term in the Credit Agreement.
Group means Manitowoc Foodservice, Inc. and its Subsidiaries.
Insurance in relation to any Chargor means any contract of insurance taken out by or on behalf of that Chargor or under which it has a right to claim.
Intellectual Property Rights means:
(a) | any know-how, show-how, patent, trade mark, service mark, design, business name, domain name, invention, trade secret, topographical or similar right or other data and information; |
(b) | any copyright, database, software and all embodiments or fixations thereof and related documentation, registrations and franchises or other intellectual property right; or |
(c) | any improvements and accessions to and books and records describing or used in connection with any of the foregoing or any interest (including by way of licence) in the above, |
2
in each case whether registered or not, and includes any related application.
Investments means in relation to any Chargor:
(a) | the Shares; and |
(b) | all other shares, stocks, debentures, bonds, warrants, coupons and other securities and investments, which it purports to mortgage or charge under this Deed. |
Issuing Bank has the meaning given to that term in the Credit Agreement.
Lenders has the meaning given to that term in the Credit Agreement.
Lien means, with respect to any asset:
(a) | any mortgage, deed of trust, lien, hypothecation, pledge, encumbrance, charge (fixed or floating), trust arrangements or security interest in or on such asset; |
(b) | the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset; or |
(c) | in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. |
Obligors means each Chargor and each other Credit Party.
Party means a party to this Deed.
Receiver means an administrative receiver (if applicable), a receiver and manager or a receiver, in each case, appointed under this Deed.
Relevant Contract means in relation to the Original Chargors any agreement specified in Part 3 of Schedule 2 (Security Assets) opposite its name or in relation to any Additional Chargor in Part 3 of the schedule to any Deed of Accession by which it became party to this Deed, and in each case each other agreement or document supplementing or amending any of them.
Required Lenders has the meaning given to that term in the Credit Agreement.
Secured Creditors means:
(a) | the Lenders (and any Affiliate thereof); |
(b) | the UK Security Trustee; |
3
(c) | the Administrative Agent; |
(d) | each Swingline Lender; and |
(e) | each Issuing Bank. |
Secured Liabilities means in relation to the Security over or in respect of all of the Security Assets, (i) all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Obligor which is a Foreign Entity to any Secured Creditor under any Credit Document, and (ii) all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Obligor or other person which is a Foreign Entity to any Secured Creditor under any Additional Secured Document, in each case, including liabilities and obligations accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding).
Security means any Lien created, evidenced or conferred by or pursuant to this Deed or any Deed of Accession.
Security Account means any account (other than a suspense account) used by any Chargor from time to time.
Security Assets means the assets of each Chargor that are subject of this Security.
Security Period means the period beginning on the date of this Deed and ending on the Discharge Date.
Shares means:
(a) | the shares in the capital of the Original Chargors directly owned Subsidiaries which are registered in the name of an Original Chargor or held by any nominee on its behalf, in each case, as specified in Part 1 of Schedule 2 (Security Assets); and |
(b) | all other shares in the capital of a directly owned Subsidiary of a Chargor in respect of which share certificates are, or are required to be, delivered to the UK Security Trustee or its nominee pursuant to Clause 5.9 (Issue or acquisition of further Shares). |
Swap Agreement means each Swap Agreement as defined in the Credit Agreement other than any such agreement which by its terms states that it is not intended to be secured by the Security Documents.
Swingline Lender has the meaning given to that term in the Credit Agreement.
UK Borrower means Enodis Holdings Limited (registered number 04330209) with its registered office at St Anns Wharf, 112 Quayside, Newcastle Upon Tyne NE1 3DX.
4
US Security Agreement has the meaning given to that term in the Credit Agreement.
1.2 | Construction |
(a) | Capitalised terms defined in the Credit Agreement have, unless expressly defined in this Deed, the same meaning in this Deed. |
(b) | The words include , includes and including shall be deemed to be followed by the phrase without limitation . |
(c) | References to, or to any specified provision of, this Deed, any Credit Document or any Additional Secured Document, or any other document ancillary or relevant to any Credit Document or any Additional Secured Document shall be construed as references to this Deed, that Credit Document, that Additional Secured Document, that provision or that document as in force for the time being and as amended (which, as each Chargor specifically agrees and acknowledges in relation to the Credit Documents and Additional Secured Documents may include,: |
(i) | any (however fundamental) variation, increase, addition, extension or reduction in any amount made available thereunder and/or any alteration and/or addition to the purposes for which any such amount, or increased or reduced amount, may be used, including for the purposes of acquisitions of any nature; increasing working capital, enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; or any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing; |
(ii) | any facilities or commitments provided in substitution for or in addition to the facilities or commitments originally made available thereunder; |
(iii) | any restructuring or rescheduling of the indebtedness incurred thereunder whether in isolation or in connection with any of the foregoing; |
(iv) | any substitution of any existing borrower thereunder for any other borrower and/or any addition of any new borrower thereunder; |
(v) | any increase to the margin, commitment commission, fees or other amounts payable thereunder; and |
(vi) | any combination of any of the foregoing, |
in accordance with the terms thereof or, as the case may be, with the agreement of the relevant parties and (where any consents are required to be obtained as a condition to such amendment being permitted) with the requisite consents.
5
(d) | The term: |
(i) | certificated has the meaning given to it in the Uncertificated Securities Regulations 2001; and |
(ii) | clearance system means a person whose business is or includes the provision of clearance services or security accounts or any nominee or depository for that person. |
(e) | Any covenant of a Chargor under this Deed remains in force during the Security Period and is given for the benefit of each Secured Creditor. |
(f) | Unless the context otherwise requires, a reference to a Security Asset includes: |
(i) | any part of that Security Asset; |
(ii) | the proceeds of sale of that Security Asset; and |
(iii) | any present and future assets of that type. |
(g) | In this Deed, unless the contrary intention appears, a reference to: |
(i) | an amendment includes an amendment, extension, supplement, novation, reenactment, replacement, restatement or variation and amended will be construed accordingly; |
(ii) | assets includes businesses, undertakings, securities, properties, revenues or rights of every description and whether present or future, actual or contingent; |
(iii) | an authorisation includes an authorisation, consent, approval, resolution, permit, licence, exemption, filing, registration or notarisation; |
(iv) | disposal means a sale, transfer, assignment, grant, lease, licence or other disposal, whether voluntary or involuntary and whether pursuant to a single transaction or a series of transactions, and dispose will be construed accordingly; |
(v) | guarantee means any guarantee, bond, letter of credit, indemnity or similar assurance against financial loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person, where, in each case, that obligation is assumed in order to maintain or assist the ability of that person to meet all or any of its indebtedness (and includes any Guarantee as defined in the Credit Agreement); |
(vi) | incorporation includes the formation or establishment of a partnership or any other person and incorporate and incorporated will be construed accordingly; |
6
(vii) | indebtedness includes any obligation (whether incurred as principal or as surety and whether present or future, actual or contingent) for the payment or repayment of money; |
(viii) | a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, fund, joint venture or consortium), government, state, agency, organisation or other entity whether or not having separate legal personality; |
(ix) | a regulation includes any regulation, rule, order, official directive, request or guideline (in each case, whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; |
(x) | a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation; |
(xi) | a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Deed; |
(xii) | a Party or any other person includes its successors in title, permitted assigns and permitted transferees; and |
(xiii) | words imparting the singular include the plural and vice versa. |
(h) | Unless expressly provided to the contrary in this Deed, a person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999 and, notwithstanding any term of this Deed, no consent of any third party is required for any amendment (including any release or compromise of any liability) or termination of this Deed. |
(i) | An Event of Default is continuing if it has not been waived or remedied. |
(j) | Unless the contrary intention appears: |
(i) | a reference to a Party will not include that party if it has ceased to be a party under this Deed; |
(ii) | if there is an inconsistency between this Deed and another Credit Document, this Deed will prevail; |
(iii) | any obligation of an Obligor under this Deed which is not a payment obligation remains in force for so long as any payment obligation of an Obligor is or may be or is capable of becoming outstanding under the Credit Documents; and |
(iv) | any obligation of an Obligor under this Deed includes an obligation on that Obligor not to contract or agree to do something or not to do something which would breach that first obligation unless such contract or agreement is conditional on the Discharge Date or on the approval of the Lenders or the Required Lenders (as required under the Credit Agreement). |
7
(k) | The index to and headings in this Deed do not affect its interpretation. |
(l) | This Deed is the UK Security Agreement for the purposes of the Credit Agreement. |
1.3 | Certificates |
A certificate of the UK Security Trustee setting forth the amount of any Secured Liability due from any Obligor shall, in the absence of manifest error, be prima facie evidence of such amount against that Obligor.
2. | CREATION OF SECURITY |
2.1 | General |
(a) | All this Security: |
(i) | is created in favour of the UK Security Trustee; |
(ii) | is continuing security for the payment, discharge and performance of all the relevant Secured Liabilities and will extend to the ultimate balance of all relevant sums payable by the Obligors under the Credit Documents regardless of any intermediate payment or discharge in whole or in part; and |
(iii) | is made with full title guarantee in accordance with the Law of Property (Miscellaneous Provisions) Act 1994. |
(b) | If any of the assets of a Chargor cannot be fully and effectively secured in the manner envisaged by this Deed without the consent of a third party: |
(i) | that Chargor must notify the UK Security Trustee as soon as reasonably practicable; |
(ii) | this Security will, until such consent is received (whereupon the same shall be secured in the manner envisaged by this Deed), secure all amounts which that Chargor may receive, or has received, in respect of that asset but exclude the asset itself; and |
(iii) | that Chargor must, and each other Chargor must procure that each Chargor will, use all reasonable endeavours to obtain that consent as soon as reasonably practicable and, once obtained, will promptly provide a copy of that consent to the UK Security Trustee. |
8
(c) | The UK Security Trustee holds the benefit of this Deed on trust for the Secured Creditors. |
(d) | The fact that no or incomplete details of any Security Asset are inserted in Schedule 2 (Security Assets) or in the schedule to any Deed of Accession (if any) by which any Chargor became party to this Deed shall not affect the validity or enforceability of this Security. |
(e) | Notwithstanding any other provision contained herein to the contrary, in no event shall the Security created hereby secure any Obligation of any Person that is not a Foreign Entity. |
2.2 | Investments |
(a) | Each Chargor charges: |
(i) | by way of a first equitable mortgage and first fixed charge the Shares; and |
(ii) | (to the extent that they are not the subject of a charge under sub-paragraph (i) above) by way of a first fixed charge its interest in all shares, stocks, debentures, bonds, warrants, coupons or other securities and investments in each case in respect of any person which is not a member of the Group and which are owned by it or held by any nominee on its behalf. |
(b) | A reference in this Deed to any share, stock, debenture, bond, warrant, coupon or other security or investment includes: |
(i) | any dividend, interest or other distribution paid or payable; |
(ii) | any right, money or property accruing or offered at any time by way of redemption, substitution, exchange, bonus or preference, under option rights or otherwise; |
(iii) | any right against any clearance system; and |
(iv) | any right under any custodian or other agreement, |
in relation to that share, stock, debenture, bond, warrant, coupon or other security or investment.
2.3 | Insurances |
(a) | Each Chargor assigns by way of security, subject to a proviso for re-assignment on redemption, all amounts payable to it under or in connection with each of its Insurances and all its rights in connection with those amounts. |
9
(b) | To the extent that they are not effectively assigned under paragraph (a) above, each Chargor charges by way of first fixed charge all amounts and rights described in paragraph (a) above. |
(c) | A reference in this Subclause to any amounts excludes all amounts received or receivable under or in connection with any third party liability Insurance and required to settle a liability of an Obligor to a third party. |
2.4 | Other contracts |
(a) | Each Chargor assigns by way of security, subject to a proviso for re-assignment on redemption, all of its rights in respect of: |
(i) | its Relevant Contracts; |
(ii) | any letter of credit issued in its favour, and |
(iii) | any bill of exchange or other negotiable instrument held by it. |
(b) | To the extent that any such right, title and interest described in paragraph (a) above is not assignable or capable of assignment, the assignment thereof purported to be effected by paragraph (a) shall operate as an assignment of any and all damages, compensation, remuneration, profit, rent or income which such Chargor may derive therefrom or be awarded or entitled to in respect thereof. |
(c) | To the extent that they do not fall within any other Subclause of this Clause and are not effectively assigned under paragraph (a) or (b) above, each Chargor charges by way of first fixed charge all of its rights and benefits under each agreement and document to which it is a party. |
2.5 | Intellectual property |
Each Chargor charges by way of a first fixed charge all of its rights in respect of any Intellectual Property Rights; this includes any specified in Part 4 of Schedule 2 (Security Assets) opposite its name or in Part 4 of the schedule to any Deed of Accession by which it became party to this Deed.
2.6 | Miscellaneous |
Each Chargor charges by way of a first fixed charge:
(a) | any beneficial interest, claim or entitlement it has to any assets of any pension fund; |
(b) | its goodwill; |
(c) | the benefit of any authorisation (statutory or otherwise) held in connection with its business or the use of any Security Asset; |
10
(d) | the right to recover and receive compensation which may be payable to it in respect of any authorisation referred to in paragraph (c) above; and |
(e) | its uncalled capital. |
2.7 | Floating charge |
(a) | Each Chargor charges by way of a first floating charge all its assets whatsoever and wheresoever not otherwise effectively mortgaged, charged or assigned under this Deed. |
(b) | Except as provided below, the UK Security Trustee may by notice to a Chargor convert the floating charge created by that Chargor under this Deed into a fixed charge as regards any of that Chargors assets specified in that notice, if: |
(i) | an Event of Default has occurred and is continuing; or |
(ii) | the UK Security Trustee (acting reasonably) considers those assets to be in danger of being seized or sold under any form of distress, attachment, execution or other legal process. |
(c) | The floating charge created under this Deed may not be converted into a fixed charge solely by reason of: |
(i) | the obtaining of a moratorium; or |
(ii) | anything done with a view to obtaining a moratorium, |
under the Insolvency Act 2000.
(d) | The floating charge created under this Deed will (in addition to the circumstances in which the same will occur under general law) automatically and immediately (without notice) convert into a fixed charge over all of each Chargors assets: |
(i) | if a Chargor (x) creates, or attempts to create, without the prior written consent of the UK Security Trustee, a Security or a trust in favour of another person over all or any part of the Security Assets; or (y) disposes, or attempts to dispose of, all or any part of the Security Assets (other than Security Assets that are only subject to the floating charge while it remains uncrystallised) and except, in each case, as expressly permitted under the Credit Agreement; |
(ii) | if any person levies (or attempts to levy) any distress, attachment, execution or other process against all or any part of the Security Assets; or |
(iii) | if an administrator is appointed or the UK Security Trustee receives notice of an intention to appoint an administrator; or |
(iv) | on the convening of any meeting of the members of that Chargor to consider a resolution to wind that Chargor up (or not to wind that Chargor up) other than as part of a solvent reconstruction of that Chargor which is permitted under the Credit Agreement. |
11
(e) | The floating charge created under this Deed is a qualifying floating charge for the purpose of paragraph 14 of Schedule B1 to the Insolvency Act 1986. |
(f) | The giving by the UK Security Trustee of a notice pursuant to paragraph (b) above in relation to any class of any Chargors assets shall not be construed as a waiver or abandonment of the UK Security Trustees rights to give other similar notices in respect of any other class of assets or of any other of the rights of any of the Secured Creditors under this Deed or under any of the other Credit Documents. |
3. | REPRESENTATIONS - GENERAL |
3.1 | Nature of security |
Each Chargor represents and warrants to each Secured Creditor that:
(a) | the transfer of any Share on the creation, perfection or enforcement of this Security is not, and could not be, restricted or limited by or under the memorandum and articles of association or equivalent of the member of the Group concerned; and |
(b) | the provisions of this Deed are effective to create in favour of the UK Security Trustee for the benefit of the Secured Creditors a legal, valid and enforceable Lien in all right, title and interest of each Chargor in the Security Assets. |
3.2 | Times for making representations |
(a) | The representations and warranties set out in this Deed (including in this Clause) are made by the Original Chargors on the date of this Deed. |
(b) | Each representation and warranty under this Deed will survive the execution of each of the Credit Documents and the Additional Secured Documents and the making of each utilisation under the Credit Agreement and is deemed to be repeated by: |
(i) | each Chargor which becomes party to this Deed by a Deed of Accession, on the date on which that Chargor becomes a Chargor; and |
(ii) | each Chargor on each date during the Security Period on which the Chargor or any Borrower makes, or is deemed to make, any representations or warranties under the Credit Agreement. |
(c) | When a representation and warranty is deemed to be repeated, it is deemed to be made by reference to the circumstances existing at the time of repetition. |
12
4. | RESTRICTIONS ON DEALINGS |
(a) | No Chargor may: |
(i) | create or allow to exist any Lien on any of its Security Assets; or |
(ii) | either in a single transaction or a series of transactions and whether related or not and whether voluntarily or involuntarily dispose of all or any part of its Security Assets or agree to do so (whether conditionally or not), |
except, in each case, as expressly permitted under the Credit Agreement. |
(b) | If any Chargor creates or allows to exist any Lien in breach of the provisions of this Subclause then, to the extent possible under applicable law, all the obligations of that Chargor under each of the Credit Documents shall automatically and immediately be secured upon the same assets equally and rateably with the other obligations secured thereon. |
5. | INVESTMENTS |
5.1 | Investments |
Each Chargor represents and warrants to each Secured Creditor that:
(a) | the Investments are duly authorised, validly issued and fully paid and are not subject to any option to purchase or similar right; |
(b) | it is the sole legal and beneficial owner of the Investments; |
(c) | the Investments are free from any Lien other than under this Deed or as expressly permitted under the Credit Agreement; and |
(d) | the Shares constitute all of the shares in the capital and each class of shares constituting the share capital of the relevant Chargors directly owned Subsidiaries which are not Shares. |
5.2 | Certificated Investments |
(a) | As soon as possible and in any event within 5 Business Days after its acquisition of any Shares or on the date hereof in respect of any certificated Shares currently owned, each Chargor: |
(i) | must deposit with the UK Security Trustee, or as the UK Security Trustee may direct, all bearer instruments, certificates and other documents of title or evidence of ownership in relation to any of those Shares; |
(ii) | must execute and deliver to the UK Security Trustee all share transfers and other documents which may be requested by the UK Security Trustee in order to enable the UK Security Trustee or its nominees to be registered as the owner or otherwise obtain a legal title to any of those Shares in accordance with paragraph (iii) below; |
13
(iii) | authorises the UK Security Trustee (at any time whilst an Event of Default has occurred and is continuing) to arrange for those Shares to be delivered to any nominee of the UK Security Trustee or to any purchaser or transferee (under the powers of realisation conferred by this Deed) or registered as the UK Security Trustee may feel appropriate to perfect the security over those Shares and to transfer or cause those Shares to be transferred to and registered in the name of any suitably qualified nominee(s) of the UK Security Trustee; |
(iv) | must execute and sign all transfers, contract notes, powers of attorney and other documents (and, if an Event of Default has occurred and is continuing, promptly register any transfer in its register of members) which the UK Security Trustee may require for perfecting its title to any of those Shares or for vesting the same in itself or its nominee or in any purchaser or transferee (under the powers of realisation conferred by this Deed); and |
(v) | without limiting the generality of paragraphs (i) to (iv) above, must deliver to the UK Security Trustee executed (and, if required to be stamped, pre-stamped) share transfers for all those Shares (other than any bearer shares) in favour of the UK Security Trustee and/or its nominee(s) as transferee or, if the UK Security Trustee so directs, with the transferee left blank and shall procure that all those share transfers are at the request of the UK Security Trustee, if an Event of Default has occurred and is continuing, immediately registered by the relevant company and that share certificates in the name of the UK Security Trustee and/or such nominee(s) in respect of all those Shares (other than any bearer shares) are forthwith delivered to the UK Security Trustee. |
(b) | If an Event of Default has occurred and is continuing then in respect of certificated Investments other than the Shares, each Chargor: |
(i) | must immediately deposit with the UK Security Trustee, or as the UK Security Trustee may direct, all bearer instruments, certificates and other documents of title or evidence of ownership in relation to any of those Investments; |
(ii) | must promptly execute and deliver to the UK Security Trustee all share transfers and other documents which may be requested by the UK Security Trustee in order to enable the UK Security Trustee or its nominees to be registered as the owner or otherwise obtain a legal title to any of those Investments; |
(iii) |
authorises the UK Security Trustee to arrange for those Investments to be delivered to any nominee of the UK Security Trustee or to any purchaser or |
14
transferee (under the powers of realisation conferred by this Deed) or registered as the UK Security Trustee may feel appropriate to perfect the security over those Investments and to transfer or cause those Investments to be transferred to and registered in the name of any suitably qualified nominee(s) of the UK Security Trustee; |
(iv) | must promptly execute and sign all transfers, contract notes, powers of attorney and other documents (and promptly register any transfer in its register of members) which the UK Security Trustee may require for perfecting its title to any of those Investments or for vesting the same in itself or its nominee or in any purchaser or transferee (under the powers of realisation conferred by this Deed); and |
(v) | without limiting the generality of paragraphs (i) to (iv) above, must deliver to the UK Security Trustee executed (and, if required to be stamped, pre-stamped) share transfers for all those Investments (other than any bearer shares) in favour of the UK Security Trustee and/or its nominee(s) as transferee or, if the UK Security Trustee so directs, with the transferee left blank and shall procure that all those share transfers are at the request of the UK Security Trustee, immediately registered by the relevant company and that share certificates in the name of the UK Security Trustee and/or such nominee(s) in respect of all those Investments (other than any bearer shares) are forthwith delivered to the UK Security Trustee. |
5.3 | Changes to rights |
No Chargor may (except to the extent permitted by this Deed or the Credit Agreement) take or allow the taking of any action on its behalf which may result in the rights attaching to any of its Investments being altered or further Shares being issued.
5.4 | Calls |
(a) | Each Chargor must pay all calls and other payments due and payable in respect of any of its Investments. |
(b) | If a Chargor fails to pay any payment required under clause 5.4(a) within 14 days of such payment being due, the UK Security Trustee may pay those calls or other payments on behalf of that Chargor. That Chargor must following a request by the UK Security Trustee immediately reimburse the UK Security Trustee for any payment made by the UK Security Trustee under this Subclause and pending reimbursement that payment shall constitute part of the Secured Liabilities for which those Investments are Security. |
5.5 | Other obligations in respect of Investments |
(a) | Each Chargor must comply with all material conditions and obligations assumed by it in respect of any of its Investments. |
15
(b) | None of the Secured Creditors shall be required in any manner to: |
(i) | perform or fulfil any obligation of a Chargor; |
(ii) | make any payment; |
(iii) | make any enquiry as to the nature or sufficiency of any payment received by it or a Chargor; or |
(iv) | present or file any claim or take any other action to collect or enforce the payment of any amount, |
in respect of any Investment. |
(c) | The Chargors agree not to amend the memorandum and articles of association or equivalent of the member of the Group concerned so as to limit or restrict the ability to transfer any Share on the creation, perfection or enforcement of this Security. |
5.6 | Voting rights and dividends |
(a) | At any time whilst there is no Event of Default continuing, the Chargor may continue to exercise the voting rights, powers and other rights in respect of the Investments. |
(b) | At any time whilst there is no Event of Default continuing, all dividends or other income or distributions paid or payable in relation to the Investments must be paid to the Chargor. |
(c) | At any time whilst an Event of Default is continuing, the UK Security Trustee or its nominee shall be entitled to receive all dividends or other income or distributions paid or payable in relation to the Investments and exercise or refrain from exercising: |
(i) | any voting rights; and |
(ii) | any other powers or rights which may be exercised by the legal or beneficial owner of the Investments, any person who is the holder of the Investments or otherwise, |
in each case, in the name of the relevant Chargor, the registered holder or otherwise and without any further consent or authority on the part of that Chargor and irrespective of any direction given by that Chargor. |
(d) | To the extent that the Investments remain registered in the name of the relevant Chargor, that Chargor irrevocably appoints the UK Security Trustee or its nominee as its proxy to exercise all voting rights in respect of those Investments at any time whilst an Event of Default is continuing. |
(e) | The relevant Chargor must indemnify the UK Security Trustee on demand against any loss or liability incurred by the UK Security Trustee as a consequence of the UK Security Trustee acting in respect of the Investments on the direction of that Chargor. |
16
5.7 | Clearance systems |
(a) | If an Event of Default has occurred and is continuing, each Chargor must, if so requested by the UK Security Trustee: |
(i) | instruct any clearance system to transfer any Investment held by it for that Chargor or its nominee to an account of the UK Security Trustee or its nominee with that clearance system; and |
(ii) | take whatever action the UK Security Trustee may request for the dematerialisation or rematerialisation of any Investments held in a clearance system. |
(b) | Without prejudice to the rest of this Subclause the UK Security Trustee may, at the expense of the relevant Chargor, take whatever action is required for the dematerialisation or rematerialisation of the Investments as necessary. |
5.8 | Custodian arrangements |
If an Event of Default has occurred and is continuing, each Chargor must:
(a) | promptly give notice to any custodian of any agreement with that custodian in respect of any Investment in a form the UK Security Trustee may require; and |
(b) | use reasonable endeavours to ensure that the custodian acknowledges that notice in a form the UK Security Trustee may require. |
5.9 | Issue or acquisition of further Shares |
(a) | No shares in a Chargors directly owned Subsidiaries may be acquired by or issued or allotted to any person other than that Chargor. |
(b) | On the acquisition by, or issue or allotment to, a Chargor of any shares or further shares in the capital of a member of the Group, that Chargor must comply in all respects with Clause 5.2 (Certificated Investments). |
5.10 | Sub-division or consolidation of the Shares |
No Chargor may sub-divide, consolidate or take any other action in respect of any Shares which may result in the Shares not representing all of the total share capital and each class of shares constituting the share capital of each member of the Group owned by any Chargor.
17
6. | INTELLECTUAL PROPERTY |
6.1 | Each Chargor represents to each Secured Creditor that as at the date of this Deed or, if later, the date it became a Party, all Intellectual Property Rights which are material to its business are identified in Part 4 of Schedule 2 (Security Assets) or in Part 5 of the schedule to any Deed of Accession by which it became party to this Deed. |
6.2 | Each Chargor must promptly, if requested to do so by the UK Security Trustee, sign or procure the signature of, and comply with the instructions of the UK Security Trustee in respect of, any document required to make entries on the United Kingdom Trade Marks Register or any other public register of Intellectual Property Rights which either record the existence of this Deed or the restrictions on disposal imposed by this Deed. |
7. | ACCOUNTS |
7.1 | Book debts and receipts |
Each Chargor must get in and realise its:
(a) | securities to the extent held by way of temporary investment; |
(b) | book and other debts and other moneys owed to it; and |
(c) | royalties, fees and income of any nature owed to it, |
in the ordinary course of its business.
7.2 | Withdrawals |
(a) | Except with the prior consent of the UK Security Trustee or as provided below, no Chargor may withdraw any moneys (including interest) standing to the credit of any Security Account if (i) an Event of Default has occurred and is continuing; and (ii) the UK Security Trustee has prohibited such withdrawals. |
(b) | Whilst this Security is enforceable in accordance with Clause 10.1 (Event of Default), the UK Security Trustee (or a Receiver) may (subject to the payment of any claims having priority to this Security) withdraw amounts standing to the credit of any Security Account or suspense account for application in accordance with Clause 14 (Application of Proceeds: Order of Priority). |
7.3 | Notices of charge |
If an Event of Default has occurred and is continuing, each Chargor must at the request of the UK Security Trustee:
(a) | immediately give notice to each Account Bank substantially in the form of Part 1 of Schedule 3 (Forms of Letter for Security Accounts); and |
(b) | use its reasonable endeavours to procure that, within 20 days of the date of such notice, each Account Bank acknowledges that notice substantially in the form of Part 2 of Schedule 3 (Forms of Letter for Security Accounts). |
18
8. | RELEVANT CONTRACTS |
8.1 | Copies |
Each Chargor must promptly upon request by the UK Security Trustee or any Receiver supply the UK Security Trustee and any Receiver with copies of each of its Relevant Contracts and any information and documentation relating to any such Relevant Contracts.
8.2 | Rights |
Whilst this Security is enforceable in accordance with Clause 10.1 (Event of Default), the UK Security Trustee may exercise (without any further consent or authority on the part of the relevant Chargor and irrespective of any direction given by any Chargor) any of a Chargors rights under its Relevant Contracts, but shall not, for the avoidance of doubt, be required to perform any of the Chargors obligations under such Relevant Contracts.
8.3 | Notices of assignment |
If an Event of Default has occurred and is continuing, each Chargor must at the request of the UK Security Trustee:
(a) | promptly serve a notice of assignment, substantially in the form of Part 1 of Schedule 5 (Forms of Letter for Relevant Contracts), on each of the other parties to each of its Relevant Contracts; and |
(b) | use its reasonable endeavours to procure that within 20 days of the date of such notice of assignment each of those other parties acknowledges that notice, substantially in the form of Part 2 of Schedule 5 (Forms of Letter for Relevant Contracts). |
9. | INSURANCES |
9.1 | Rights |
Whilst this Security is enforceable in accordance with Clause 10.1 (Event of Default):
(a) | the UK Security Trustee may exercise (without any further consent or authority on the part of any Chargor and irrespective of any direction given by any Chargor) any of the rights of any Chargor in connection with any amounts payable to it under any of its Insurances; |
(b) | each Chargor shall take such steps (at its own cost) as the UK Security Trustee may require to enforce those rights; this includes initiating and pursuing legal or arbitration proceedings in the name of that Chargor; and |
(b) | each Chargor will hold any payments received by it under any of its Insurances on trust for the UK Security Trustee. |
19
9.2 | Notice |
Subject to Subclause 20.5 (Notice of assignment), each Chargor must:
(a) | forthwith give notice of this Deed to each of the other parties to each of the Insurances by sending a notice substantially in the form of Part 1 of Schedule 4 (Form of Notice of Assignment/Form of Letter of Undertaking); and |
(b) | use its reasonable endeavours to procure that, within 20 days of the date of this Deed or, if later, the date of entry into that Insurance, each such other party delivers a letter of undertaking to the UK Security Trustee in the form of Part 2 of Schedule 4 (Form of Notice of Assignment/Form of Letter of Undertaking). |
10. | WHEN SECURITY BECOMES ENFORCEABLE |
10.1 | Event of Default |
This Security will be immediately enforceable at any time when an Event of Default is continuing.
10.2 | Discretion |
At any time whilst this Security is enforceable in accordance with Clause 10.1 (Event of Default), the UK Security Trustee may in its absolute discretion enforce all or any part of this Security in any manner it sees fit or as the Required Lenders direct.
11. | ENFORCEMENT OF SECURITY |
11.1 | General |
(a) | The power of sale and any other power conferred on a mortgagee by law (including under section 101 of the Act) as varied or amended by this Deed will be immediately exercisable at any time whilst this Security is enforceable. |
(b) | For the purposes of all powers implied by law, the Secured Liabilities are deemed to have become due and payable on the date of this Deed. |
(c) | Any restriction imposed by law on the power of sale (including under section 103 of the Act) or the right of a mortgagee to consolidate mortgages (including under section 93 of the Act) does not apply to this Security. |
(d) | Any powers of leasing conferred on the UK Security Trustee by law are extended so as to authorise the UK Security Trustee to lease, make agreements for leases, accept surrenders of leases and grant options as the UK Security Trustee may think fit and without the need to comply with any restrictions conferred by law (including under section 99 or 100 of the Act). |
20
11.2 | No liability as mortgagee in possession |
Neither the UK Security Trustee nor any Receiver will be liable, by reason of entering into possession of a Security Asset:
(a) | to account as mortgagee in possession or for any loss on realisation; or |
(b) | for any default or omission for which a mortgagee in possession might be liable. |
11.3 | Privileges |
Each Receiver and the UK Security Trustee is entitled to all the rights, powers, privileges and immunities conferred by law (including the Act) on mortgagees and receivers duly appointed under any law (including the Act), except that section 103 of the Act does not apply.
11.4 | Protection of third parties |
No person (including a purchaser) dealing with the UK Security Trustee or a Receiver or its or his agents will be concerned to enquire:
(a) | whether the Secured Liabilities have become payable; |
(b) | whether any power which the UK Security Trustee or a Receiver is purporting to exercise has become exercisable or is being properly exercised; |
(c) | whether any money remains due under the Credit Documents or the Additional Secured Documents; or |
(d) | how any money paid to the UK Security Trustee or to that Receiver is to be applied. |
11.5 | Redemption of prior mortgages |
(a) | At any time whilst this Security is enforceable, the UK Security Trustee may: |
(i) | redeem any prior Lien against any Security Asset; and/or |
(ii) | procure the transfer of that Lien to itself; and/or |
(iii) | settle and pass the accounts of the prior mortgagee, chargee or encumbrancer; any accounts so settled and passed will be, in the absence of manifest error, conclusive and binding on each Chargor. |
(b) | Each Chargor must pay to the UK Security Trustee, immediately on demand, the costs and expenses incurred by the UK Security Trustee in connection with any such redemption and/or transfer, including the payment of any principal or interest. |
21
11.6 | Contingencies |
If this Security is enforced at a time when no amount is due by an Obligor under the Credit Documents or the Additional Secured Documents, but at a time when such amounts may or will become due, the UK Security Trustee (or the Receiver) may pay the proceeds of any recoveries effected by it into such number of suspense accounts as it considers appropriate.
12. | 12. RECEIVER |
12.1 | Appointment of Receiver |
(a) | Except as provided below, the UK Security Trustee may appoint any one or more persons to be a Receiver of all or any part of the Security Assets if: |
(i) | this Security is enforceable in accordance with Clause 10.1 (Event of Default); or |
(ii) | a Chargor so requests the UK Security Trustee in writing at any time. |
(b) | Any appointment under paragraph (a) above may be by deed, under seal or in writing under its hand. |
(c) | Any restriction imposed by law on the right of a mortgagee to appoint a Receiver (including under section 109(1) of the Act) does not apply to this Deed. |
(d) | The UK Security Trustee is not entitled to appoint a Receiver solely as a result of the obtaining of a moratorium (or anything done with a view to obtaining a moratorium) under the Insolvency Act 2000 except with the leave of the court. |
12.2 | Removal |
The UK Security Trustee may by writing under its hand (subject to any requirement for an order of the court in the case of an administrative receiver) remove any Receiver appointed by it and may, whenever this Security is enforceable in accordance with Clause 10.1 (Event of Default), appoint a new Receiver in the place of any Receiver whose appointment may for any reason have terminated.
12.3 | Remuneration |
The UK Security Trustee may fix the remuneration of any Receiver appointed by it and any maximum rate imposed by any law (including under section 109(6) of the Act) will not apply.
12.4 | Agent of each Chargor |
(a) | A Receiver will be deemed to be the agent of the relevant Chargor for all purposes and accordingly will be deemed to be in the same position as a Receiver duly appointed by a mortgagee under the Act. The relevant Chargor is solely responsible for the contracts, engagements, acts, omissions, defaults and losses of a Receiver and for liabilities incurred by a Receiver. |
(b) | No Secured Creditor will incur any liability (either to a Chargor or to any other person) by reason of the appointment of a Receiver or for any other reason. |
22
12.5 | Relationship with UK Security Trustee |
To the fullest extent allowed by law, any right, power or discretion conferred by this Deed (either expressly or impliedly) or by law on a Receiver may whilst this Security is enforceable in accordance with Clause 10.1 (Event of Default) be exercised by the UK Security Trustee in relation to any Security Asset without first appointing a Receiver or notwithstanding the appointment of a Receiver.
13. | 13. POWERS OF RECEIVER |
13.1 | General |
(a) | Every Receiver shall have and be entitled to exercise all of the rights, powers and discretions set out in this Clause in addition to those conferred on it by any law (including the Act and the Insolvency Act 1986). |
(b) | If there is more than one Receiver holding office at the same time, each Receiver may (unless the document appointing him states otherwise) exercise all of the powers conferred on a Receiver under this Deed individually and to the exclusion of any other Receiver. |
13.2 | Possession |
A Receiver may take immediate possession of, get in and collect any Security Asset.
13.3 | Carry on business |
A Receiver may carry on the business of any Chargor in any manner he thinks fit.
13.4 | Employees |
(a) | A Receiver may appoint and discharge managers, officers, agents, accountants, servants, workmen and others for the purposes of this Deed upon such terms as to remuneration or otherwise as he thinks fit. |
(b) | A Receiver may discharge any person appointed by any Chargor. |
13.5 | Borrow money |
A Receiver may raise and borrow money either unsecured or on the security of any Security Asset either in priority to this Security or otherwise and generally on any terms and for whatever purpose which he thinks fit.
23
13.6 | Sale of assets |
(a) | A Receiver may sell, exchange, convert into money and realise any Security Asset by public auction or private contract and generally in any manner and on any terms which he thinks fit. |
(b) | The consideration for any such transaction may consist of cash, debentures or other obligations, shares, stock or other valuable consideration and any such consideration may be payable in a lump sum or by instalments spread over any period which he thinks fit. |
(c) | Fixtures may be severed and sold separately from the property containing them without the consent of the relevant Chargor. |
13.7 | Leases |
A Receiver may let any Security Asset for any term and at any rent (with or without a premium) which he thinks fit and may accept a surrender of any lease or tenancy of any Security Asset on any terms which he thinks fit (including the payment of money to a lessee or tenant on a surrender).
13.8 | Compromise |
A Receiver may settle, adjust, refer to arbitration, compromise and arrange any claim, account, dispute, question or demand with or by any person who is or claims to be a creditor of any Chargor or relating in any way to any Security Asset.
13.9 | Legal actions |
A Receiver may bring, prosecute, enforce, defend and abandon any action, suit or proceedings in relation to any Security Asset which he thinks fit.
13.10 | Receipts |
A Receiver may give a valid receipt for any moneys and execute any assurance or thing which may be proper or desirable for realising any Security Asset.
13.11 | Subsidiaries |
A Receiver may form a Subsidiary of any Chargor and transfer to that Subsidiary any Security Asset.
13.12 | Delegation |
A Receiver may delegate his powers in accordance with this Deed.
13.13 | Lending |
A Receiver may lend money or advance credit to any customer of any Chargor.
24
13.14 | Protection of assets |
A Receiver may:
(a) | make and effect any repair or insurance and do any other act which any Chargor might do in the ordinary conduct of its business to protect or improve any Security Asset; |
(b) | commence and/or complete any building operation; and |
(c) | apply for and maintain any planning permission, building regulation approval or any other authorisation, |
in each case as he thinks fit.
13.14 | Other powers |
A Receiver may:
(a) | do all other acts and things which he may consider desirable or necessary for realising any Security Asset or incidental or conducive to any of the rights, powers or discretions conferred on a Receiver under or by virtue of this Deed or by law; |
(b) | exercise in relation to any Security Asset all the powers, authorities and things which he would be capable of exercising if he were the absolute beneficial owner of that Security Asset; and |
(c) | use the name of any Chargor for any of the above purposes. |
14. | APPLICATION OF PROCEEDS: ORDER OF PRIORITY |
Unless otherwise determined by the UK Security Trustee or a Receiver, any moneys received by the UK Security Trustee or any Receiver after this Security has become enforceable must be applied by the UK Security Trustee in the following order of priority:
(a) | first, in or towards the payment of or provision for all costs and expenses incurred by the UK Security Trustee or any Receiver under or in connection with this Deed and all remuneration due to any Receiver under or in connection with this Deed; |
(b) | second, in payment to the Administrative Agent for application towards the balance of the Secured Liabilities in accordance with the terms of the US Security Agreement; provided that the moneys received in respect of the Security shall applied be within the discretion of the UK Security Trustee to ensure that such moneys do not repay any obligations owed by any Obligor or other person that is not a Foreign Entity; and |
(c) | third, in payment of the surplus (if any) to the Credit Parties or as a court of competent jurisdiction may otherwise direct. |
This Clause is subject to the payment of any claims having priority over this Security. This Clause does not prejudice the right of any Secured Creditor to recover any shortfall from any Chargor.
25
15. | EXPENSES AND INDEMNITY |
15.1 | General |
Each Chargor must:
(a) | pay immediately on demand by the UK Security Trustee or the Receiver all costs, charges and expenses (including legal fees) incurred in connection with this Deed by any Secured Creditor, Receiver, attorney, manager, agent or other person appointed by the UK Security Trustee under this Deed; and |
(b) | keep each of those persons indemnified against any loss or liability incurred by it in connection with any litigation, arbitration or administrative proceedings concerning this Security; this includes any arising from any actual or alleged breach by any person of any law or regulation, whether relating to the environment or otherwise. |
15.2 | Currency Indemnity |
(a) | Each Chargor must, as an independent obligation, indemnify each Secured Creditor against any loss or liability which that Secured Creditor incurs as a consequence of: |
(i) | that Secured Creditor receiving an amount in respect of an Obligors liability under the Credit Documents or Additional Secured Documents; or |
(ii) | that liability being converted into a claim, proof, judgment or order, |
in a currency other than the currency in which the amount is expressed to be payable under the relevant Credit Document or Additional Secured Document. |
(b) | Unless otherwise required by law, each Chargor waives any right it may have in any jurisdiction to pay any amount under the Credit Documents or Additional Secured Documents in a currency other than that in which it is expressed to be payable. |
16. | DELEGATION |
16.1 | Power of Attorney |
The UK Security Trustee or any Receiver may delegate by power of attorney or in any other manner to any person any right, power or discretion exercisable by it under this Deed.
26
16.2 | Terms |
Any such delegation may be made upon any terms (including power to sub-delegate) which the UK Security Trustee or any Receiver may think fit.
16.3 | Liability |
Neither the UK Security Trustee nor any Receiver will be in any way liable or responsible to any Chargor for any loss or liability arising from any act, default, omission or misconduct on the part of any delegate or sub-delegate.
17. | FURTHER ASSURANCES |
Each Chargor must, at its own expense, take whatever action the UK Security Trustee or a Receiver may require for:
(a) | creating, perfecting or protecting any security intended to be created by or pursuant to this Deed; |
(b) | facilitating the realisation of any Security Asset; |
(c) | facilitating the exercise of any right, power or discretion exercisable by the UK Security Trustee or any Receiver or any of their respective delegates or sub-delegates in respect of any Security Asset; or |
(d) | creating, perfecting, protecting, acknowledging or confirming security in favour of the UK Security Trustee (equivalent to the security intended to be created by this Deed) over any assets of any Chargor located in any jurisdiction outside England and Wales. |
This includes:
(i) | the re-execution of this Deed; |
(ii) | the execution of any legal mortgage, charge, transfer, conveyance, assignment or assurance of any property, whether to the UK Security Trustee or to its nominee; or |
(iii) | the giving of any notice, order or direction and the making of any filing or registration, |
which, in any such case, the UK Security Trustee may think expedient.
18. | POWER OF ATTORNEY |
Each Chargor, by way of security, irrevocably and severally appoints the UK Security Trustee, each Receiver and each of their respective delegates and sub-delegates to be its attorney to take any action which that Chargor is obliged to take under this Deed and which that Chargor fails to take within 7 days of a written request from the UK Security Trustee, including under Clause 17 (Further Assurances). Each Chargor ratifies and confirms whatever any attorney does or purports to do under its appointment under this Clause.
27
19. | PRESERVATION OF SECURITY |
19.1 | Reinstatement |
(a) | If any payment by an Obligor or any discharge given by a Secured Creditor (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event: |
(i) | the liability of each Obligor will continue as if the payment, discharge, avoidance or reduction had not occurred; and |
(ii) | each Secured Creditor will be entitled to recover the value or amount of that security or payment from each Obligor as if the payment, discharge, avoidance or reduction had not occurred. |
(b) | Each Secured Creditor may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration. |
19.2 | Waiver of defences |
The obligations of each Chargor under this Deed will not be affected by any act, omission or thing which, but for this provision, would reduce, release or prejudice any of its obligations under this Deed (whether or not known to it or any Secured Creditor). This includes:
(a) | any time or waiver granted to, or composition with, any person; |
(b) | any release of any person under the terms of any composition or arrangement; |
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any person; |
(d) | any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(e) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any person; |
(f) | any amendment (however fundamental) of any of the Credit Documents or any of the Additional Secured Documents or any other document or security; |
(g) |
any unenforceability, illegality, invalidity or non-provability of any obligation of any person under any of the Credit Documents or Additional Secured Documents |
28
or any other document or security or the failure by any member of the Group to enter into or be bound by any of the Credit Documents or Additional Secured Documents; or |
(h) | any insolvency or similar proceedings. |
19.3 | Immediate recourse |
(a) | Each Chargor waives any right it may have of first requiring any Secured Creditor (or any trustee or agent on its behalf) to proceed against or enforce any other right or security or claim payment from any person or file any proof or claim in any insolvency, administration, winding-up or liquidation proceedings relative to any other Obligor or any other person before claiming from that Chargor under this Deed. |
(b) | This waiver applies irrespective of any law or any provision of any Credit Document or any Additional Secured Document to the contrary. |
19.4 | Appropriations |
Until the Discharge Date, each Secured Creditor (or any trustee or agent on its behalf) may without affecting the liability of any Chargor under this Deed:
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Secured Creditor (or any trustee or agent on its behalf) against those amounts; or |
(b) | apply and enforce them in such manner and order as it sees fit (whether against those amounts or otherwise); and |
(c) | hold in an interest-bearing suspense account any moneys received from any Chargor or on account of that Chargors liability under this Deed. |
19.5 | Non-competition |
Unless:
(a) | the Discharge Date occurs; or |
(b) | the UK Security Trustee otherwise directs, |
no Chargor will, after a claim has been made or by virtue of any payment or performance by it under this Deed:
(i) | be subrogated to any rights, security or moneys held, received or receivable by any Secured Creditor (or any trustee or agent on its behalf); |
29
(ii) | be entitled to any right of contribution or indemnity in respect of any payment made or moneys received on account of that Chargors liability under this Deed; |
(iii) | claim, rank, prove or vote as a creditor of any Obligor or its estate in competition with any Secured Creditor (or any trustee or agent on its behalf); or |
(iv) | receive, claim or have the benefit of any payment, distribution or security from or on account of any Obligor, or exercise any right of set-off as against any Obligor. |
Each Chargor must hold in trust for and must immediately pay or transfer to the UK Security Trustee for the Secured Creditors any payment or distribution or benefit of security received by it contrary to this Subclause or in accordance with any directions given by the UK Security Trustee under this Subclause.
19.6 | Additional security |
(a) | This Deed is in addition to and is not in any way prejudiced by any other security now or subsequently held by any Secured Creditor. |
(b) | No prior security held by any Secured Creditor (in its capacity as such or otherwise) over any Security Asset will merge into this Security. |
19.7 | Security held by Chargor |
No Chargor will, without the prior written consent of the UK Security Trustee, hold any security from any other Obligor in respect of such Chargors liability hereunder. Each Chargor will hold any security held by it in breach of this provision on trust for the UK Security Trustee.
20. | MISCELLANEOUS |
20.1 | Covenant to pay |
Each Chargor must pay or discharge the Secured Liabilities on the due date provided for in the Credit Documents or the Additional Secured Documents and in the manner provided for in the Credit Documents or the Additional Secured Documents.
20.2 | Tacking |
Each Secured Creditor must perform its obligations under the Credit Documents or Additional Secured Documents (including any obligation to make available further advances).
30
20.3 | New Accounts |
(a) | If any subsequent charge or other interest affects any Security Asset, any Secured Creditor may open a new account with any Obligor. |
(b) | If a Secured Creditor does not open a new account, it will nevertheless be treated as if it had done so at the time when it received or was deemed to have received notice of that charge or other interest. |
(c) | As from that time all payments made to that Secured Creditor will be credited or be treated as having been credited to the new account and will not operate to reduce any Secured Liability. |
20.4 | Time deposits |
Without prejudice to any right of set-off any Secured Creditor may have under any Credit Document or Additional Secured Document or otherwise, if any time deposit matures on any account a Chargor has with any Secured Creditor within the Security Period when:
(a) | this Security is enforceable; and |
(b) | no Secured Liability is due and payable, |
that time deposit will automatically be renewed for any further maturity which that Secured Creditor in its absolute discretion considers appropriate unless such Secured Creditor otherwise agrees in writing.
20.5 | Notice of assignment |
This Deed constitutes notice in writing to each Chargor of any charge or assignment of a debt owed by that Chargor to any other member of the Group and contained in any other Security Document.
20.6 | Perpetuities |
The trusts constituted, evidenced and acknowledged in this Deed shall remain in full force and effect until the expiration of a period of 125 years from the date of this Deed and the Parties declare that the perpetuity period applicable to this Deed shall for the purposes of the Perpetuities and Accumulations Act 1964 be the period of 125 years from the date of this Deed.
20.7 | Waivers and remedies cumulative |
The rights of each Secured Creditor under the Credit Documents and the Additional Secured Documents:
(a) | may be exercised as often as necessary; |
(b) | are cumulative and not exclusive of its rights under general law; and |
(c) | may be waived only in writing and specifically. |
31
Delay in exercising or non-exercise of any right is not a waiver of that right.
20.8 | Successors and assigns |
References in this Deed to the UK Security Trustee shall include the permitted successors and assigns of the UK Security Trustee (in accordance with section 8.01 (Administrative Agent) of the Credit Agreement and all covenants, promises and agreements by or on behalf of any Chargor that are contained in this Deed shall inure to the benefit of the UK Security Trustees permitted successors and assigns.
20.9 | Right of Set-off |
Each Secured Creditor is hereby authorised at any time and from time to time upon the occurrence and during the continuance of an Event of Default, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Secured Creditor to or for the credit or the account of any Chargor against any of and all the obligations of such Chargor now or hereafter existing under this Deed held by such Secured Creditor, irrespective of whether or not such Secured Creditor shall have made any demand under this Deed and although such obligations may be unmatured. The rights of each Secured Creditor under this Clause are in addition to other rights and remedies (including other rights of set-off) which such Secured Creditor may have.
20.10 | Severability |
If a provision of this Deed is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect:
(a) | the legality, validity or enforceability in that jurisdiction of any other provision of this Deed; or |
(b) | the legality, validity or enforceability in other jurisdictions of that or any other provision of this Deed. |
20.11 | Change of parties |
(a) | No Chargor may assign, transfer, novate or dispose of its rights and/or obligations under this Deed without the prior written consent of the UK Security Trustee. |
(b) | The UK Security Trustee may assign, transfer, novate or dispose of all or any part of its rights and/or obligations under this Deed and may disclose any information in its possession relating to any Chargor to any actual or potential assignee, transferee or participant. |
32
20.12 | Financial collateral |
To the extent that the assets mortgaged or charged by this Deed constitute financial collateral and this Deed and the obligations of the Chargors hereunder constitute a security financial collateral arrangement (in each case for the purpose of and as defined in the Financial Collateral Arrangements (No.2) Regulations 2003 (SI 2003 No. 3226)) the UK Security Trustee shall have the right after this Security has become enforceable to appropriate all or any part of such financial collateral in or towards the satisfaction of the Secured Liabilities. For this purpose, the value of such financial collateral so appropriated shall be such amount as the UK Security Trustee reasonably determines having taken into account advice obtained by it from an independent investment or accountancy firm of national standing selected by it.
21. | NOTICES |
21.1 | Chargors |
(a) | All communications under this Deed to or from a Chargor must be sent through the UK Borrower. |
(b) | Each Chargor (other than the UK Borrower) irrevocably appoints the UK Borrower to act as its agent: |
(i) | to give and receive all communications under this Deed; |
(ii) | to supply all information concerning itself to any Secured Creditor; and |
(iii) | to agree and sign all documents under or in connection with this Deed without further reference to the other Chargors. |
(c) | Any communication given to the UK Borrower in connection with this Deed will be deemed to have been given also to the other Chargors. |
(d) | The UK Security Trustee and each of the other Secured Creditors may assume that any communication made by the UK Borrower is made with the consent of each other Chargor. |
21.2 | Giving of notices |
(a) | All notices or other communications under or in connection with this Deed shall be given in writing and, unless otherwise stated, may be made be given in person, by post or facsimile. Any such notice will be deemed to be given as follows: |
(i) | if delivered in person, at the time of delivery; |
(ii) | if by letter, when delivered; and |
(iii) | if by facsimile, when received in legible form. |
33
However, a notice given in accordance with the above but received on a non-working day or after business hours in the place of receipt, will only be deemed to be given on the next working day in that place.
(b) | A communication to the UK Security Trustee will only be effective on actual receipt by it. |
21.3 | Addresses for notices |
(a) | The address and facsimile number of each of the Original Chargors is: |
UK Borrower, Manitowoc FSG UK Limited and Manitowoc Foodservice UK
Holding Limited
St Anns Wharf
112 Quayside
Newcastle upon Tyne
NE1 3DX
Fax: + 44 345 415 5266
Attention: Adrian Gray
or such other as either Original Chargor may notify to the UK Security Trustee by not less than five Business Days notice.
(b) | The address and facsimile number of the UK Security Trustee are those applying to the Administrative Agent under Section 9.01(a)(ii) (Notices) of the Credit Agreement, or such other as the UK Security Trustee may notify the UK Borrower by not less than five Business Days notice. |
(c) | Where the UK Security Trustee nominates a particular department or officer to receive a notice, a notice will not be effective if it fails to specify that department or officer. |
21.4 | Language |
Any notice given in connection with this Deed must be in English.
22. | RELEASE |
At the end of the Security Period, the UK Security Trustee must, at the request and cost of the Chargors, take whatever action is reasonably necessary to release the Security Assets from this Security.
In the event that any part of the Security Assets are sold or otherwise disposed of in connection with a transaction permitted by the Credit Agreement or are otherwise released with the consent of the Required Lenders and the proceeds of such transaction or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, such Security Assets will be sold free and clear of the Liens
34
created by this Deed and the UK Security Trustee, at the request and expense of the relevant Chargor, will duly and promptly assign, transfer and deliver to such Chargor (without recourse and without any representation or warranty) such of the Security Assets as are then being (or have been) so sold or released and as may be in the possession of the UK Security Trustee and have not been released pursuant to this Deed.
If the UK Security Trustee (on the basis of legal advice received by it for this purpose) considers that there is a material risk that an amount paid to a Secured Creditor in discharge of the Secured Liabilities could be avoided or otherwise set aside on the liquidation or administration of the payer or otherwise, then that amount will not be considered to have been irrevocably paid for the purposes of this Deed.
23. | COUNTERPARTS |
This Deed may be executed in any number of counterparts and all of those counterparts taken together shall be deemed to constitute one and the same instrument.
24. | ENFORCEMENT |
24.1 | Submission |
(a) | For the benefit of the UK Security Trustee, each Chargor agrees that the courts of England and Wales have jurisdiction to settle any dispute including a dispute relating to any non-contractual obligation arising out of or in connection with this Deed and accordingly submits to the exclusive jurisdiction of the courts of England and Wales. |
(b) | This Subclause is for the benefit of the Secured Creditors only. As a result, no Secured Creditor shall be prevented from taking proceedings relating to a dispute in any other courts with jurisdiction. |
(c) | The Secured Creditors may take concurrent proceedings in any number of jurisdictions. |
24.2 | Service of process |
(a) | Without prejudice to any other mode of service allowed under any relevant law, each Chargor other than the UK Borrower: |
(i) | irrevocably appoints the UK Borrower as its agent for service of process in relation to any proceedings before the English courts in connection with this Deed (and the UK Borrower by its execution of this Deed, accepts that appointment); |
(ii) | agrees to maintain such an agent for service of process in England during the Security Period; |
35
(iii) | agrees that failure by an agent for service of process to notify the relevant Chargor of the process will not invalidate the proceedings concerned; |
(iv) | consents to the service of process relating to any such proceedings by prepaid posting of a copy of the process to the registered office of the UK Borrower from time to time; and |
(v) | agrees that if the appointment of any person mentioned in this paragraph (a) ceases to be effective, such Chargor must immediately appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the UK Security Trustee is entitled to appoint such a person by notice to the relevant Chargor or the UK Borrower. |
(b) | The UK Borrower hereby unconditionally and irrevocably accepts the appointment of it as an English process agent under this Deed and expressly agrees and consents to the provisions of this Clause and Clause 24 (Governing Law). |
24.3 | Forum convenience and enforcement abroad |
Each Chargor:
(a) | waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Deed; and |
(b) | agrees that a judgment or order of an English court in connection with this Deed is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction. |
25. | GOVERNING LAW |
This Deed and any non-contractual obligations arising out of or in connection with it are governed by English law.
This Deed has been executed and delivered as a deed on the date stated at the beginning of this Deed.
36
SCHEDULE 1
ORIGINAL CHARGORS
Name | Registered Number | |||
1. |
Enodis Holdings Limited | 04330209 | ||
2. |
Manitowoc FSG UK Limited | 09836380 | ||
3. |
Manitowoc Foodservice UK Holding Limited | 09927373 |
37
SCHEDULE 2
SECURITY ASSETS
PART 1
SHARES
Name of Original Chargor |
Name of company in
which shares are held |
Name of nominee (if any) by
whom shares are held |
Class of shares held | Number of shares held | ||||
Enodis Holdings Limited | Enodis Group Limited | N/A | Ordinary share of £1 | 1 | ||||
Manitowoc FSG UK Limited | Enodis Holdings Limited | N/A | Ordinary shares of £0.001 each | 301 | ||||
Manitowoc Foodservice UK Holding Limited | Enodis Holdings Limited | N/A | Ordinary shares of £0.001 each | 699 |
38
PART 2
RELEVANT CONTRACTS
This section is intentionally left blank.
PART 3
SPECIFIC INTELLECTUAL PROPERTY RIGHTS
Trademarks
This section is intentionally left blank
Patents
This section is intentionally left blank
39
SCHEDULE 3
FORMS OF LETTER FOR SECURITY ACCOUNTS
PART 1
NOTICE TO ACCOUNT BANK
To: | [Account Bank] | |
Copy: | JPMorgan Chase Bank, N.A., | |
as UK Security Trustee | ||
[10 South Dearborn, Floor 07 | ||
Chicago, Illinois 60603-2003 | ||
Attention of Cheryl Lyons | ||
Telecopy No. 312-385-7103] |
[Date]
Dear Sirs,
Security agreement dated March 2016 between, amongst others,
Enodis Holdings Limited and JPMorgan Chase Bank, N.A. as UK Security Trustee
(the Security Agreement)
This letter constitutes notice to you that under the Security Agreement we have charged (by way of a first fixed charge) in favour of JPMorgan Chase Bank, N.A. as agent and trustee for the Secured Creditors referred to in the Security Agreement (the UK Security Trustee ) as first priority chargee all of its rights in respect of any amount standing to the credit of any account maintained by us with you at any of your branches (the Security Accounts ) and the debts represented by the Security Accounts.
We irrevocably instruct and authorise you to:
(a) | disclose to the UK Security Trustee any information relating to any Security Account requested from you by the UK Security Trustee; |
(b) | comply with the terms of any written notice or instruction relating to any Security Account received by you from the UK Security Trustee; |
(c) | hold all sums standing to the credit of any Security Account to the order of the UK Security Trustee; |
(d) | pay or release any sum standing to the credit of any Security Account in accordance with the written instructions of the UK Security Trustee; and |
(e) | pay all sums received by you for our account to the credit of the Security Account with you. |
40
No amount may be withdrawn from any Security Account without the prior written consent of the UK Security Trustee.
We acknowledge that you may comply with the instructions in this letter without any further permission from us or any other Chargor and without any enquiry by you as to the justification for or validity of any request, notice or instruction.
The instructions in this letter may not be revoked or amended without the prior written consent of the UK Security Trustee.
This letter is governed by English law.
Please send to the UK Security Trustee at the address set forth above with a copy to ourselves the attached acknowledgement confirming your agreement to the matters set out therein.
Yours faithfully,
|
(Authorised signatory) |
For and on behalf of |
[Chargor] |
41
PART 2
ACKNOWLEDGMENT OF ACCOUNT BANK
To: | JPMorgan Chase Bank, N.A., |
as UK Security Trustee
[10 South Dearborn, Floor 07
Chicago, Illinois 60603-2003
Attention of Cheryl Lyons
Telecopy No. 312-385-7103]
Copy: [Chargor]
[Date]
Dear Sirs,
Security agreement dated March 2016 between, amongst others,
Enodis Holdings Limited and JPMorgan Chase Bank, N.A. as UK Security Trustee
(the Security Agreement)
We confirm receipt from [ ] (the Chargor ) of a notice dated [ ] of a charge upon the terms of the Security Agreement over all the rights of the Chargor to any amount standing to the credit of any of its accounts with us at any of our branches (the Security Accounts ).
We confirm that:
(a) | we accept the instructions contained in the notice and agree to comply with the notice; |
(b) | we have not received notice of the interest of any third party in any Security Account; |
(c) | we have neither claimed nor exercised, nor will claim or exercise, any security interest, set-off, counter claim or other right in respect of any Security Account; and |
(d) | we will pay all sums received by us for the account of the Chargor to a Security Account of the Chargor with us. |
Nothing contained in any of our arrangements with you shall commit us to providing any facilities or making advances available to any of the Chargors.
This letter is governed by English law.
Yours faithfully,
(Authorised signatory)
|
On behalf of [Account Bank] |
42
SCHEDULE 4
FORM OF NOTICE OF ASSIGNMENT/FORM OF LETTER OF UNDERTAKING
PART 1
FORM OF NOTICE OF ASSIGNMENT
(for attachment by way of endorsement to the insurance policies)
To: | [Insurer] | |
Copy: |
JPMorgan Chase Bank, N.A., as UK Security Trustee [10 South Dearborn, Floor 07 Chicago, Illinois 60603-2003 Attention of Cheryl Lyons Telecopy No. 312-385-7103] |
[Date]
Dear Sirs,
Security agreement dated March 2016 between, amongst others,
Enodis Holdings Limited and JPMorgan Chase Bank, N.A. as UK Security Trustee
(the Security Agreement)
This letter constitutes notice to you that under the Security Agreement, we have assigned in favour of JPMorgan Chase Bank, N.A. as agent and trustee for the Secured Creditors referred to in the Security Agreement (the UK Security Trustee ) as first priority assignee all amounts payable to us under or in connection with any contract of insurance of whatever nature taken out with you by or on behalf of it or under which we have a right to claim (each an Insurance ) and all its rights in connection with those amounts.
A reference in this letter to any amounts excludes all amounts received or receivable under or in connection with any third party liability Insurance and required to settle a liability of an Obligor to a third party.
We confirm that:
(a) | we will remain liable under [the] [each] Insurance to perform all the obligations assumed by us under [the] [that] Insurance; and |
(b) | none of the UK Security Trustee, its agents, any receiver or any other person will at any time be under any obligation or liability to you under or in respect of [the] [any] Insurance. |
We will also remain entitled to exercise all our rights, powers and discretions under [the] [each] Insurance and you should continue to give notices under [the] [each] Insurance to us, unless and
43
until you receive notice from the UK Security Trustee to the contrary stating that an Event of Default (as that term is defined in the Security Agreement) has occurred and is continuing. In this event, all amounts payable to us under [the] [each] Insurance must be paid to the UK Security Trustee unless the UK Security Trustee otherwise agrees in writing and any of our rights in connection with those amounts will be exercisable by, and notices must be given to, the UK Security Trustee or as it directs.
Please note that we have agreed that we will not amend or waive any provision of or cancel or terminate [any of] the Insurance[s] without the prior consent of the UK Security Trustee.
The instructions in this letter may not be revoked or amended without the prior written consent of the UK Security Trustee.
Please note on the relevant contracts the UK Security Trustees interest as loss payee and the UK Security Trustees interest as first priority assignee of those amounts and rights and send to the UK Security Trustee at the address set forth above with a copy to ourselves the attached acknowledgement confirming your agreement to the above and such information relating to the Insurances as the UK Security Trustee may at any time request.
We acknowledge that you may comply with the instructions in this letter without any further permission from us or any other Chargor and without any enquiry by you as to the justification for or validity of any request, notice or instruction.
This letter is governed by English law.
Yours faithfully,
|
For and on behalf of |
[CHARGOR] |
44
PART 2
FORM OF LETTER OF UNDERTAKING
To: | JPMorgan Chase Bank, N.A., |
as UK Security Trustee
[10 South Dearborn, Floor 07
Chicago, Illinois 60603-2003
Attention of Cheryl Lyons
Telecopy No. 312-385-7103]
Copy: [Chargor]
[Date]
Dear Sirs,
Security agreement dated March 2016 between, amongst others,
Enodis Holdings Limited and JPMorgan Chase Bank, N.A. as UK Security Trustee
(the Security Agreement)
We confirm receipt from [ ] (the Chargor ) of a notice dated [ ] of an assignment by the Chargor upon the terms of the Security Agreement of all amounts payable to it under or in connection with any contract of insurance of whatever nature taken out with us by or on behalf of it or under which it has a right to claim and all its rights in connection with those amounts.
A reference in this letter to any amounts excludes all amounts received or receivable under or in connection with any third party liability Insurance and required to settle a liability of an Obligor to a third party.
In consideration of the Chargor continuing their insurance arrangements with us we confirm that we:
1. | accept the instructions contained in the notice and agree to comply with the notice; |
2. | have not received notice of the interest of any third party in those amounts and rights; and |
3. | will not agree to amend or waive any provision of or cancel or terminate any of those contracts on request by any Chargor without your prior written consent. |
This letter is governed by English law.
Yours faithfully,
|
for and on behalf of [Insurer] |
45
SCHEDULE 5
FORMS OF LETTER FOR RELEVANT CONTRACTS
PART 1
NOTICE TO COUNTERPARTY
To: | [Counterparty] | |
Copy: |
JPMorgan Chase Bank, N.A., as UK Security Trustee [10 South Dearborn, Floor 07 Chicago, Illinois 60603-2003 Attention of Cheryl Lyons Telecopy No. 312-385-7103] |
[Date]
Dear Sirs,
Security agreement dated March 2016 between, amongst others,
Enodis Holdings Limited and JPMorgan Chase Bank, N.A. as UK Security Trustee
(the Security Agreement)
This letter constitutes notice to you that under the Security Agreement, [ ] (the Chargor ) has assigned in favour of JPMorgan Chase Bank, N.A. as agent and trustee for the Secured Creditors referred to in the Security Agreement (the UK Security Trustee ) as first priority assignee all its rights in respect of [insert details of Relevant Contract(s)] (the Relevant Contract[s] ).
We confirm that:
(a) | we will remain liable under [the] [each] Relevant Contract to perform all the obligations assumed by us under [the] [that] Relevant Contract; and |
(b) | none of the UK Security Trustee, its agents, any receiver or any other person will at any time be under any obligation or liability to you under or in respect of [the] [any] Relevant Contract. |
All the rights, powers and discretions in relation to [the] [each] Relevant Contract will be exercisable by, and notices must be given to, the UK Security Trustee or as it directs.
Please note that the Chargor has agreed that it will not amend or waive any provision of or cancel or terminate [any of] the Relevant Contract[s] without the prior consent of the UK Security Trustee.
The instructions in this letter may not be revoked or amended without the prior written consent of the UK Security Trustee.
46
Please send to the UK Security Trustee at the address set forth above with a copy to ourselves the attached acknowledgement confirming your agreement to the above and such information relating to [the][those] Relevant Contract[s] as the UK Security Trustee may at any time request.
We acknowledge that you may comply with the instructions in this letter without any further permission from us or any other Chargor and without any enquiry by you as to the justification for or validity of any request, notice or instruction.
This letter is governed by English law.
Yours faithfully,
|
(Authorised signatory) |
[CHARGOR] |
47
PART 2
ACKNOWLEDGEMENT OF COUNTERPARTY
To: |
JPMorgan Chase Bank, N.A., as UK Security Trustee [10 South Dearborn, Floor 07 Chicago, Illinois 60603-2003 Attention of Cheryl Lyons Telecopy No. 312-385-7103] |
|
Copy: | [Chargor] |
[Date]
Dear Sirs,
Security agreement dated March 2016 between, amongst others,
Enodis Holdings Limited and JPMorgan Chase Bank, N.A. as UK Security Trustee
(the Security Agreement)
We confirm receipt from [ ] (the Chargor ) of a notice dated [ ] of an assignment on the terms of the Security Agreement of all of its rights in respect of [insert details of the Relevant Contract(s)] (the Relevant Contract[s] ).
We confirm that we:
1. | accept the instructions contained in the notice and agree to comply with the notice; |
2. | have not received notice of the interest of any third party in [any of] the Relevant Contract[s]; |
3. | undertake to notify you of any breach by any Chargor of [the] [any of those] Relevant Contract[s] and to allow you or any of the other Secured Creditors to remedy that breach; and |
4. | will not agree to amend or waive any provision of or cancel or terminate [the] [any of those] Relevant Contract[s] on request by the Chargor without your prior written consent. |
This letter is governed by English law.
Yours faithfully,
|
(AUTHORISED SIGNATORY) |
[COUNTERPARTY] |
48
SCHEDULE 6
FORM OF DEED OF ACCESSION
THIS DEED is dated [ ]
BETWEEN:
(1) | [ ] (Registered number [ ]) with its registered office at [ ] (the Acceding Chargor ); |
(2) | Enodis Holdings Limited for itself and as agent for each of the other Chargors referred to in the Security Agreement referred to below (the UK Borrower ); and |
(3) | JPMORGAN CHASE BANK, N.A. as agent and trustee for the Secured Creditors referred to in the Security Agreement referred to below (the UK Security Trustee ). |
BACKGROUND:
(A) | The Acceding Chargor is a wholly-owned Subsidiary of Manitowoc Foodservice, Inc. |
(B) | The UK Borrower has entered into a security agreement dated March 2016 (as supplemented and amended by Deeds of Accession or otherwise from time to time, the Security Agreement ) between the UK Borrower, the Chargors referred to in the Security Agreement and the UK Security Trustee. |
(C) | The Acceding Chargor has at the request of the UK Borrower and in consideration of the Lenders, the Swingline Lenders and the Alternate Currency Lenders making or continuing to make facilities available to members of the Group and after giving due consideration to the terms and conditions of the Credit Documents and any Additional Secured Documents and the Security Agreement and satisfying itself that there are reasonable grounds for believing that the entry into this Deed by it will be of benefit to it, decided in good faith and for the purpose of carrying on its business to enter into this Deed and thereby become a Chargor under the Security Agreement. |
(D) | It is intended that this document takes effect as a deed notwithstanding the fact that a party may only execute this document under hand. |
IT IS AGREED as follows:
1. | Terms defined in the Security Agreement shall have the same meaning in this Deed unless given a different meaning in this Deed. This Deed is a Credit Document. |
2. (a) |
The Acceding Chargor hereby agrees to become a party to and to be bound by the terms of the Security Agreement as a Chargor with immediate effect and so that the Security Agreement shall be read and construed for all purposes as if the Acceding Chargor had been an original party thereto in the capacity of Chargor (but so that the Liens created as a result of such accession shall be created on the date of this |
49
Deed). The Acceding Chargor hereby undertakes to be bound by all the covenants and agreements in the Security Agreement which are expressed to be binding on a Chargor. |
(b) | In accordance with the foregoing, the Acceding Chargor now grants to the UK Security Trustee as agent and trustee for the Secured Creditors the Liens described in the Security Agreement as being granted, created or made by a Chargor thereunder, to the intent that its Liens shall be effective and binding upon it and its property and assets and shall not in any way be avoided, discharged or released or otherwise adversely affected by any ineffectiveness or invalidity of the Security Agreement or of any other partys execution thereof or any other Deed of Accession, or by any avoidance, invalidity, discharge or release of any guarantee, assignment or charge contained in the Security Agreement or in any other Deed of Accession. The Security Agreement and this Deed shall be read as one to this extent and so that references in the Security Agreement to this Deed and similar phrases shall be deemed to include this Deed and all references in the Security Agreement to Schedule 2 (or any part of it) shall be deemed to include a reference to the schedule to this Deed (or relevant part of it). |
3. | The UK Borrower, for itself and as agent for each of the other Chargors under the Security Agreement, hereby agrees to all matters provided for herein. |
4. | The UK Security Trustee holds the benefit of this Deed on trust for the Secured Creditors. |
5. | Without limiting the generality of the other provisions of this Deed and the Security Agreement, the Acceding Chargor: |
(a) | agrees that the Acceding Chargors estates and other interests in certain Investments for the purposes of Subclause 2.2 (Investments) of the Security Agreement, as such provisions apply in relation to the Acceding Chargor, are specified in Parts 1, 2 and 3 of the schedule to this Deed and are hereby mortgaged and charged as provided in such provisions and the other provisions of the Security Agreement so that those Investments specified in Part 1 of the schedule shall constitute Shares for the purposes of the Security Agreement, and those Investments specified in Part 2 of the schedule shall constitute Investments which are not Shares for the purposes of the Security Agreement; |
(b) | assigns by way of security (subject to a proviso on redemption) all of its rights in respect of each of the agreements specified in Part 4 of the schedule to this Deed; and |
(c) | agrees that the Acceding Chargors estates and other interests in certain specific intellectual property rights for the purposes of Subclause 2.5 (Intellectual property) of the Security Agreement, as such provisions apply in relation to the Acceding Chargor, are specified in Part 5 of the schedule to this Deed and are hereby charged as provided in such provisions and the other provisions of the Security Agreement. |
6. | This Deed is governed by English law. |
50
This Deed has been executed and delivered as a deed on the date stated at the beginning of this Deed.
51
SCHEDULE
Part 1
SHARES
Name of company in which shares are held |
Name of nominee
(if any) by whom shares are held |
Class of shares held |
Number of shares held | |||||
[ ] |
[ ] | [ ] | [ | ] | ||||
[ ] |
[ ] | [ ] | [ | ] |
Part 2
RELEVANT CONTRACTS
Description
Part 3
SPECIFIC INTELLECTUAL PROPERTY RIGHTS
Description
SIGNATORIES (TO DEED OF ACCESSION)
The Acceding Chargor
Executed and delivered as a deed by | ) |
|
||
[ ] | ) | Director | ||
acting by | ) | |||
) | ||||
) | ||||
in the presence of: | ) |
|
||
) | Witness | |||
Name: | ) | |||
) | ||||
Address: | ||||
Enodis Holdings Limited | ||||
Executed and delivered as a deed by | ) |
|
||
[ ] | ) | Director | ||
(for itself and] as agent for each of the other | ) | |||
Chargors party to the Security Agreement | ) | |||
referred to in this Deed) acting by | ) | |||
) | ||||
) | ||||
in the presence of: | ) |
|
||
) | Witness | |||
Name: | ) | |||
) | ||||
Address: | ) |
The UK Security Trustee |
JPMORGAN CHASE BANK, N.A. |
By: |
SIGNATORIES (TO SECURITY AGREEMENT)
Original Chargors
Executed and delivered as a deed by | ) |
|
||
ENODIS HOLDINGS LIMITED | ) | Director | ||
) | ||||
acting by | ) | |||
) | ||||
In the presence of: | ) | |||
) | ||||
Name: | ) |
|
||
) | Witness | |||
Address: | ) | |||
) | ||||
) | ||||
Executed and delivered as a deed by | ) |
|
||
MANITOWOC FSG UK LIMITED | ) | Director | ||
) | ||||
acting by | ) | |||
) | ||||
In the presence of: | ) | |||
) | ||||
Name: | ) |
|
||
) | Witness | |||
Address: | ) | |||
) | ||||
) |
Executed and delivered as a deed by | ) |
|
||
MANITOWOC FOODSERVICE UK | ) | Director | ||
HOLDING LIMITED | ) | |||
) | ||||
acting by | ) | |||
) | ||||
In the presence of: | ) | |||
) |
|
|||
Name: | ) | Witness | ||
) | ||||
Address: | ) | |||
) | ||||
UK Security Trustee | ||||
JPMORGAN CHASE BANK, N.A. | ||||
acting by: |
EXHIBIT J
FORM OF US PLEDGE AGREEMENT
(ATTACHED)
EXECUTION VERSION
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified, restated, amended and restated and/or supplemented from time to time, this Agreemen t), dated as of March 3, 2016, made by each of the undersigned pledgors (each, a Pledgor and, together with any other entity that becomes a pledgor hereunder pursuant to Section 25 hereof, the Pledgors ) to JPMORGAN CHASE BANK, N.A., as collateral agent (together with any successor collateral agent, the Collateral Agent or the Pledgee ), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Manitowoc Foodservice, Inc. (the Borrower ), the Subsidiary Borrowers party thereto (together with the Borrower, the Borrowers ), the lenders from time to time party thereto (the Lenders ), and JPMorgan Chase Bank, N.A., as Administrative Agent (together with any successor Administrative Agent, the Administrative Agent ), have entered into a Credit Agreement dated as of March 3, 2016 (as amended, modified, restated, amended and restated and/or supplemented from time to time, the Credit Agreement ), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrowers as contemplated therein (the Lenders, the Issuing Bank, the Swingline Lender, the Administrative Agent and the Pledgee are herein called the Lender Creditors );
WHEREAS, one or more Pledgors may at any time and from time to time after the date hereof enter into, or guaranty the obligations of one or more other Pledgors or any of their respective Subsidiaries under, one or more Swap Agreements, Bank Product Agreements or Designated Foreign Facility Agreements with one or more Lender Creditors or any affiliate thereof (each such Lender Creditor or affiliate, even if the respective Lender Creditor subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender Creditors or affiliates successors and assigns, if any, collectively, the Other Creditors and, together with the Lender Creditors, are herein called the Secured Creditors );
WHEREAS, it is a condition precedent to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrowers under the Credit Agreement that each Pledgor shall have executed and delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Pledgee for the benefit of the Secured Creditors and hereby covenants and agrees with the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS . This Agreement is made by each Pledgor for the benefit of the Secured Creditors to secure:
(a) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, principal, premium, interest, reimbursement obligations, fees and indemnities (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) of such Pledgor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Pledgor is a party (including, in the case of each Pledgor that is a Subsidiary Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under the Subsidiary Guaranty) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (a) , except to the extent consisting of obligations, liabilities or indebtedness with respect to Swap Agreements, Bank Product Agreements or Designated Foreign Facility Agreements, being herein collectively called the Credit Document Obligations );
(b) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Pledgor to the Other Creditors under, or with respect to (including, in the case of each Pledgor that is a Subsidiary Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under the Subsidiary Guaranty), any Swap Agreement permitted by the Credit Agreement, Bank Product Agreement or Designated Foreign Facility Agreements, whether such Swap Agreement, Bank Product Agreement or Designated Foreign Facility Agreements, as applicable, is now in existence or hereafter arising, and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained therein (all such obligations, liabilities and indebtedness described in this clause (b) being herein collectively called the Other Obligations );
(c) any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral;
(d) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of such Pledgor referred to in clauses (a) and (b) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable attorneys fees and court costs; and
(e) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under Section 11 of this Agreement; all such obligations, liabilities, sums and expenses set forth in clauses (a) through (e) of this Section 1 being herein collectively called the Obligations , it being acknowledged and agreed that the Obligations shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.
Page 2
2. DEFINITIONS .
(a) Reference to singular terms shall include the plural and vice versa.
(b) The following capitalized terms used herein shall have the definitions specified below:
Administrative Agent has the meaning set forth in the Recitals hereto.
Adverse Claim has the meaning given such term in Section 8-102(a)(1) of the UCC.
Agreement has the meaning set forth in the first paragraph hereof.
Bank Product Agreements shall mean any agreement entered into from time to time with any Credit Party in connection with any of the Bank Products which the Borrower identifies to the Collateral Agent and the Administrative Agent in writing as an agreement intended to be secured by the US Security Agreement (which designation, once made, may be revoke only with the consent of the Lender or Lender Affiliate party thereto).
Bank Products shall mean the following bank services or facilities extended to any Credit Party: (a) commercial credit cards, (b) stored value cards, and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).
Borrower has the meaning set forth in the Recitals hereto.
Borrowers has the meaning set forth in the Recitals hereto.
Certificated Security has the meaning given such term in Section 8-102(a)(4) of the UCC.
Clearing Corporation has the meaning given such term in Section 8-102(a)(5) of the UCC.
Collateral has the meaning set forth in Section 3.1 hereof.
Page 3
Collateral Accounts means any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited.
Credit Agreement has the meaning set forth in the Recitals hereto.
Credit Document Obligations has the meaning set forth in Section 1(a) hereof.
Designated Foreign Facility Agreements has the meaning set forth in the US Security Agreement.
Domestic Corporation has the meaning set forth in the definition of Stock.
Event of Default means any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period.
Financial Asset has the meaning given such term in Section 8-102(a)(9) of the UCC; provided that the term Financial Asset shall not include any security (as defined in Section 8-102(a) of the New York UCC as in effect on the date hereof) of any Person that is not a Subsidiary of any Pledgor or is not an Intercompany Note, to the extent (and only for so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting a security interest in, such security (it being understood and agreed, however, (a) that notwithstanding the foregoing, all rights to payment for money due or to become due, and all distributions to which any Pledgor may be entitled, in respect of any such excluded security shall be Collateral subject to the security interests created by this Agreement and (b) such excluded security shall otherwise be subject to the security interests created by this Agreement (and become a Financial Asset for all purposes of this Agreement) upon the receipt of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Pledgor, the Pledgee or any other Secured Creditor).
Foreign Corporation has the meaning set forth in the definition of Stock.
Indemnitees has the meaning set forth in Section 11 hereof.
Instrument has the meaning given such term in Section 9-102 of the UCC; provided that the term Instrument shall not include any Instrument (as defined above without giving effect to this proviso) to the extent that (and only for so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting a security interest in, such Instrument (it being understood and agreed, however, (a) that notwithstanding the foregoing, each Intercompany Note shall be an Instrument for purposes of this Agreement and all rights to payment for money due or to become due pursuant to any such excluded instrument shall be Collateral subject to the security interests created by this Agreement and (b) such excluded instrument shall otherwise be subject to the security interests created by this Agreement (and become an Instrument for all purposes of this Agreement) upon the receipt of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Pledgor, the Pledgee or any other Secured Creditor).
Page 4
Investment Property has the meaning given such term in Section 9-102 of the UCC; provided that the term Investment Property shall not include any security (as defined in Section 8-102 of the New York UCC as in effect on the date hereof) of any Person that is not a Subsidiary of any Pledgor or is not an Intercompany Note, to the extent (and only for so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting a security interest in, such security (it being understood and agreed, however, (a) that notwithstanding the foregoing, all rights to payment for money due or to become due, and all distributions to which any Pledgor may be entitled, in respect of any such excluded security shall be Collateral subject to the security interests created by this Agreement and (b) such excluded security shall otherwise be subject to the security interests created by this Agreement (and become Investment Property for all purposes of this Agreement) upon the receipt of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Pledgor, the Pledgee or any other Secured Creditor).
Lender Creditors has the meaning set forth in the Recitals hereto.
Lenders has the meaning set forth in the Recitals hereto.
Limited Liability Company Assets means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned or represented by any Limited Liability Company Interest.
Limited Liability Company Interests means the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company; provided that the term Limited Liability Company Interest shall not include any limited liability company membership interest in any limited liability company that is not a Subsidiary of any Pledgor to the extent (and only for so long as) the limited liability company agreement or operating agreement for such limited liability company prohibits the assignment of, or granting of a security interest in, the limited liability company membership interests of such limited liability company, it being understood and agreed, however, any such excluded limited liability company membership interest shall otherwise be subject to the security interests created by this Agreement (and become a Limited Liability Company Interest for all purposes of this Agreement) upon the receipt by the respective Pledgor of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein.
Non-Voting Stock means all capital stock which is not Voting Stock.
Notes means all promissory notes from time to time issued to, or held by, each Pledgor.
Obligations has the meaning set forth in Section 1 hereof.
Other Creditors has the meaning set forth in the Recitals hereto.
Other Obligations has the meaning set forth in Section 1(b) hereof.
Page 5
Partnership Assets means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned or represented by any Partnership Interest.
Partnership Interest means the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership; provided that the term Partnership Interest shall not include any partnership interest (general or limited) in any partnership that is not a Subsidiary of any Pledgor to the extent (and only for so long as) the partnership agreement for such partnership prohibits the assignment of, or granting of a security interest in, the partnership interests of such partnership, it being understood and agreed, however, any such excluded partnership interest shall otherwise be subject to the security interests created by this Agreement (and become a Partnership Interest for all purposes of this Agreement) upon the receipt by the respective Pledgor of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein.
Pledged Notes has the meaning set forth in Section 3.5 hereof.
Pledgee has the meaning set forth in the first paragraph hereof.
Pledgor has the meaning set forth in the first paragraph hereof.
Proceeds has the meaning given such term in Section 9-102 of the UCC.
Required Secured Creditors has the meaning provided in the US Security Agreement.
Secured Creditors has the meaning set forth in the Recitals hereto.
Secured Debt Agreements means and includes this Agreement, the other Credit Documents and the Swap Agreements, Bank Product Agreements and Designated Foreign Facility Agreements entered into with any Other Creditors.
Securities Account has the meaning given such term in Section 8-501(a) of the UCC.
Securities Act means the Securities Act of 1933, as amended, as in effect from time to time.
Security and Securities has the meaning given such term in Section 8-102(a)(15) of the UCC and, subject to the following proviso, shall in any event also include all Stock and all Notes; provided that the term Security shall not include any Security (as defined above without regard to this proviso) of any Person that is not a Subsidiary of any Pledgor or is not an Intercompany Note, to the extent (and only for so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting a security interest in, such security (it being understood and agreed, however, (a) that notwithstanding the foregoing, all rights to payment for money due or to become due, and all distributions to which any Pledgor may be entitled, in respect of any such excluded security shall
Page 6
be Collateral subject to the security interests created by this Agreement and (b) such excluded security shall otherwise be subject to the security interests created by this Agreement (and become Investment Property for all purposes of this Agreement) upon the receipt of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Pledgor, the Pledgee or any other Secured Creditor).
Security Entitlement has the meaning given such term in Section 8-102(a)(17) of the UCC.
Stock means (x) with respect to corporations incorporated under the laws of the United States or any State thereof or the District of Columbia (each a Domestic Corporation ), all of the issued and outstanding shares of capital stock of any corporation at any time owned by any Pledgor of any Domestic Corporation and (y) with respect to corporations or other entities that are not Domestic Corporations (each a Foreign Corporation ), all of the issued and outstanding shares of capital stock at any time owned by any Pledgor of any Foreign Corporation.
Subsidiary means, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time.
Termination Date has the meaning set forth in Section 20 hereof.
UCC means the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific sections or subsections of the UCC are references to such sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof.
Uncertificated Security has the meaning given such term in Section 8-102(a)(18) of the UCC.
Voting Stock means all classes of capital stock of any Foreign Corporation entitled to vote.
Page 7
3. PLEDGE OF SECURITIES, ETC.
3.1 Pledge . To secure the Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the Collateral ):
(a) each of the Collateral Accounts, including any and all assets of whatever type or kind deposited by such Pledgor in such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, moneys, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing;
(b) all Securities owned by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities;
(c) all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Limited Liability Company Interests and applicable law:
(i) all the capital thereof and its interest in all profits, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;
(ii) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;
(iv) all present and future claims, if any, of such Pledgor against any such limited liability company for moneys loaned or advanced, for services rendered or otherwise;
(v) all of such Pledgors rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any such limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option
Page 8
or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
(vi) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
(d) all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Partnership Interests and applicable law:
(i) all the capital thereof and its interest in all profits, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests;
(ii) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests;
(iv) all present and future claims, if any, of such Pledgor against any such partnership for moneys loaned or advanced, for services rendered or otherwise;
(v) all of such Pledgors rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
(vi) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
Page 9
(e) all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing;
(f) all Financial Assets and Investment Property owned by such Pledgor from time to time;
(g) (i) all rights to payments due or to become due in respect of any limited liability company membership interest, partnership interest, instrument or security owned by such Pledgor and excluded pursuant to the proviso appearing in the definition of Limited Liability Company Interest, Partnership Interest, Instrument, Security, Financial Asset or Investment Property, as applicable (whether under any limited liability company agreement, operating agreement, partnership agreement, joint venture agreement or otherwise) and (ii) all distributions to which such Pledgor shall at any time be entitled in respect of any limited liability company membership interest, partnership interest, instrument or security owned by such Pledgor and excluded pursuant to the proviso appearing in the definition of Limited Liability Company Interest, Partnership Interest, Instrument, Security, Financial Asset or Investment Property, as applicable; and
(h) all Proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained in this Section 3.1 , (x) except as otherwise provided in Section 5.10(c) of the Credit Agreement, no Pledgor (to the extent that it is a Borrower or a Domestic Subsidiary of a Borrower) shall be required at any time to pledge hereunder more than 65% of the Stock of any Subsidiary which is a Foreign Corporation, and (y) except as otherwise required by Section 5.12 of the Credit Agreement, no Pledgor shall be required to pledge hereunder any Margin Stock owned by such Pledgor.
3.2 Procedures .
(a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant to Section 3.1 or Section 3.2 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) for the benefit of the Pledgee and the Secured Creditors:
(i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall deliver such Certificated Security to the Pledgee, indorsed to the Pledgee or indorsed in blank or accompanied by an executed blank instrument of transfer;
Page 10
(ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall cause the issuer of such Uncertificated Security (or, in the case of an issuer that is not a Subsidiary of such Pledgor, will use reasonable efforts to cause such issuer) to duly authorize and execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the other Secured Creditors substantially in the form of Annex H hereto (appropriately completed to the reasonable satisfaction of the Pledgee and with such modifications, if any, as shall be reasonably satisfactory to the Pledgee) pursuant to which such issuer agrees (upon receipt of written notice from the Pledgee that an Event of Default exists) to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security originated by any other Person other than a court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), the respective Pledgor shall promptly notify the Pledgee thereof and shall promptly take (x) all actions required (1) to comply with the applicable rules of such Clearing Corporation and (2) to perfect the security interest of the Pledgee under applicable law (including, in any event, under Sections 9-309, 9-310, 9-312, 9-314 and 8-106(d) of the UCC) and (y) such other actions as the Pledgee deems reasonably necessary or desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Interest credited on the books of a Clearing Corporation), (x) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(i) hereof, and (y) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof;
(v) with respect to any Note (other than any Note (other than an Intercompany Note) in an aggregate principal amount of $5,000,000 or less), delivery of such Note to the Pledgee, indorsed to the Pledgee or indorsed in blank; and
(vi) with respect to cash proceeds from any of the Collateral described in Section 3.1 hereof, at any time after the occurrence and during the continuance
Page 11
of an Event of Default, (x) establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall have exclusive and absolute control and dominion (and no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Pledgee) and (y) deposit of such cash in such cash account.
(b) In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Securities and Collateral:
(i) with respect to all Collateral of such Pledgor whereby or with respect to which the Pledgee may obtain control thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), the respective Pledgor shall take all actions as may be reasonably requested from time to time by the Pledgee so that control of such Collateral is obtained and at all times held by the Pledgee; and
(ii) each Pledgor shall permit Pledgee from time to time to file appropriate financing statements (on Form UCC-1 or other appropriate form) under the Uniform Commercial Code as in effect in the various relevant States, covering all Collateral hereunder (with the form of such financing statements to be satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee has a security interest in all Investment Property and other Collateral which is perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-310 of the UCC).
3.3 Subsequently Acquired Collateral . If any Pledgor shall acquire (by purchase, stock dividend or similar distribution or otherwise) any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, the respective Pledgor will promptly thereafter take (or cause to be taken) all action with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (a) a certificate executed by a principal executive officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (b) supplements to Annexes A through G hereto as are reasonably necessary to cause such annexes to be complete and accurate at such time. Without limiting the foregoing, each Pledgor shall be required to pledge hereunder any shares of stock at any time and from time to time after the date hereof acquired by such Pledgor of any Foreign Corporation, provided that except as provided in Section 5.10(c) of the Credit Agreement, no Pledgor (to the extent that it is the Borrower or a Domestic Subsidiary of the Borrower) shall be required at any time to pledge hereunder more than 65% of the Stock of any Subsidiary which is a Foreign Corporation. Notwithstanding anything to the contrary contained above in this Section 3.3 , except as otherwise required by Section 5.12 of the Credit Agreement, no Pledgor shall be required to pledge hereunder any Margin Stock acquired by such Pledgor after the date hereof.
Page 12
3.4 Transfer Taxes . Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral.
3.5 Definition of Pledged Notes . All Notes at any time pledged or required to be pledged hereunder are hereinafter called the Pledged Notes .
3.6 Certain Representations and Warranties Regarding the Collateral . Each Pledgor represents and warrants that on the date hereof: (a) the jurisdiction of organization of such Pledgor, and such Pledgors organizational identification number, is listed on Annex A hereto; (b) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex B hereto; (c) the Stock (and any warrants or options to purchase Stock) held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex C hereto; (d) such Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex C hereto; (e) the Notes held by such Pledgor consist of the promissory notes described in Annex D hereto where such Pledgor is listed as the lender; (f) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (g) each such Limited Liability Company Interest constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex E hereto; (h) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex F hereto; (i) each such Partnership Interest constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex F hereto; (j) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes B through E hereto, in each case to the extent required by the respective procedure for such item of Collateral on the date hereof; and (k) on the date hereof, such Pledgor owns no other Securities, Limited Liability Company Interests or Partnership Interests that are required to be pledged hereunder.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC . If and to the extent necessary to enable the Pledgee to perfect its security interest in any of the Collateral or to exercise any of its remedies hereunder, the Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT . Unless and until there shall have occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate or be inconsistent with any of the terms of any Secured Debt Agreement, or which could reasonably be expected to have the effect of impairing in any
Page 13
material respect the value of the Collateral or any part thereof or the position or interests of the Pledgee or any other Secured Creditor in the Collateral unless expressly permitted by the terms of the Secured Debt Agreements. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS . Unless and until there shall have occurred and be continuing an Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. The Pledgee shall be entitled to receive directly, and to retain as part of the Collateral:
(a) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash dividends other than as set forth above) paid or distributed by way of dividend or otherwise in respect of the Collateral;
(b) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash other than as set forth above) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and
(c) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate or other reorganization.
All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 and Section 7 hereof shall be received in trust for the benefit of the Pledgee, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT . If there shall have occurred and be continuing an Event of Default, then and in every such case, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor;
Page 14
(b) to transfer all or any part of the Collateral into the Pledgees name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon);
(d) to vote all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so);
(e) at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine, provided that at least 30 days written notice of the time and place of any such sale shall be given to the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and
(f) to set-off any and all Collateral against any and all Obligations then due, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations then due.
8. REMEDIES, ETC., CUMULATIVE . Each and every right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other
Page 15
Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. The Secured Creditors agree that this Agreement may be enforced only by the action of the Pledgee, in each case acting upon the instructions of the Required Secured Creditors as provided in the US Security Agreement, and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement and the US Security Agreement.
9. APPLICATION OF PROCEEDS .
(a) All monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided in Section 7.4 of the US Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral hereunder and the aggregate amount of the Obligations.
10. PURCHASERS OF COLLATERAL . Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or non-application thereof.
11. INDEMNITY . Each Pledgor jointly and severally agrees (a) to indemnify and hold harmless the Pledgee and each other Secured Creditor and their respective successors, assigns, employees, agents and affiliates (individually an Indemnitee , and collectively the Indemnitees ) from and against any and all claims, demands, losses, judgments and liabilities (including liabilities for penalties) of whatsoever kind or nature, and (b) to reimburse each Indemnitee for all reasonable costs and expenses, including reasonable attorneys fees, in each case growing out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any claims, demands, losses, judgments and liabilities or expenses to the extent incurred by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision)). In no event shall the Pledgee be liable, in the absence of gross negligence or willful misconduct on its part, for any matter or thing in connection with this Agreement other than to account for monies actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.
Page 16
12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER .
(a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor, any Pledgor and/or any other Person.
(b) Except as provided in the last sentence of paragraph (a) of this Section 12 , the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12 .
(c) The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY .
(a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgors own expense, file and refile under the Uniform Commercial Code or other applicable law such financing statements, continuation statements and other documents in such offices as the Pledgee may deem reasonably necessary and wherever required by law in order to perfect and preserve the Pledgees security interest in the Collateral and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral without the signature of such Pledgor where
Page 17
permitted by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or deem necessary to carry into effect the purposes of this Agreement or to further assure and confirm unto the Pledgee its rights, powers and remedies hereunder, in each case to the extent such action is not otherwise inconsistent with the provisions of this Agreement.
(b) Each Pledgor hereby appoints the Pledgee such Pledgors attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, to act from time to time solely after the occurrence and during the continuance of an Event of Default in the Pledgees reasonable discretion to take any action and to execute any instrument which the Pledgee may deem reasonably necessary or advisable to accomplish the purposes of this Agreement.
14. THE PLEDGEE AS AGENT . The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Article VIII of the Credit Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Article VIII of the Credit Agreement.
15. TRANSFER BY THE PLEDGORS . No Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein (except as may be permitted in accordance with the terms of the Secured Debt Agreements).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS .
(a) Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has good and marketable title to, all Collateral consisting of one or more Securities, Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except Liens of the type described in Sections 6.02(a) and (g) of the Credit Agreement and, as to Collateral consisting of Securities, Partnership Interests and Limited Liability Company Interests issued by (and only by) any Person which is not a Subsidiary of any Pledgor, Section 6.02(m) of the Credit Agreement);
(ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement;
Page 18
(iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws generally affecting creditors rights and by equitable principles (regardless of whether enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (w) the execution, delivery or performance of this Agreement, (x) the validity or enforceability of this Agreement, (y) the perfection or enforceability of the Pledgees security interest in the Collateral or (z) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein;
(v) the execution, delivery and performance of this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to such Pledgor, or of the certificate or articles of incorporation, certificate of formation, operating agreement, limited liability company agreement, partnership agreement or by-laws of such Pledgor, as applicable, or of any securities issued by such Pledgor or any of its Subsidiaries, or of any mortgage, deed of trust, indenture, lease, loan agreement, credit agreement or other material contract, agreement or instrument or undertaking to which such Pledgor or any of its Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective assets other than (in the case of such other indentures, agreements or instruments) such violations or defaults which could not reasonably be expected to result individually or in the aggregate in a Material Adverse Effect and will not result in the creation or imposition of (or the obligation to create or impose) any lien or encumbrance on any of the assets of such Pledgor or any of its Subsidiaries except as contemplated by this Agreement;
(vi) all of the Collateral (consisting of Securities, Limited Liability Company Interests or Partnership Interests) has been duly and validly issued and acquired, is fully paid and non-assessable (except as otherwise required by applicable law) and is subject to no options to purchase or similar rights;
(vii) each of the Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency,
Page 19
reorganization, moratorium or other similar laws generally affecting creditors rights and by equitable principles (regardless of whether enforcement is sought in equity or at law);
(viii) the pledge and collateral assignment to, and possession by, the Pledgee of the Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities and the Pledgee is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and
(ix) control (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all Collateral consisting of Securities (including Notes which are Securities) with respect to which such control may be obtained pursuant to Section 8-106 of the UCC, in each such case to the extent required by the terms of this Agreement.
(b) Each Pledgor covenants and agrees that it will defend the Pledgees right, title and security interest in and to the Securities and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors.
17. JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE; RECORDS . The jurisdiction of organization of each Pledgor is specified in Annex A hereto. The chief executive office of each Pledgor is located at the address specified in Annex G hereto. Each Pledgor will not change the jurisdiction of its organization or move its chief executive office except to such new jurisdiction or location as such Pledgor may establish in accordance with the last sentence of this Section 17 . The originals of all documents in the possession of such Pledgor evidencing all Collateral, including but not limited to all Limited Liability Company Interests and Partnership Interests, and the only original books of account and records of such Pledgor relating thereto are, and will continue to be, kept at such chief executive office or divisional office as specified in Annex G hereto, at the chief executive office of the Borrower as specified in Annex G hereto or at such new locations as such Pledgor may establish in accordance with the last sentence of this Section 17 . All Limited Liability Company Interests and Partnership Interests are, and will continue to be, maintained at, and controlled and directed (including, without limitation, for general accounting purposes) from, such chief executive office or divisional office as specified in Annex G hereto, the chief executive office of the Borrower or such new locations as such Pledgor may establish in accordance with the last sentence of this Section 17 . No Pledgor shall establish a new jurisdiction of organization or a new location for such chief executive offices or divisional offices until (a) it shall have given to the Pledgee not less than 15 days prior written notice of its intention so to do, clearly describing such new
Page 20
jurisdiction of organization or new location, as the case may be, and providing such other information in connection therewith as the Pledgee may reasonably request, and (b) with respect to such new jurisdiction of organization or new location, as the case may be, it shall have taken all action, satisfactory to the Pledgee, to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. Promptly after establishing a new jurisdiction of organization or new location for such chief executive offices or divisional offices in accordance with the immediately preceding sentence, the respective Pledgor shall deliver to the Pledgee a supplement to Annex A hereto or Annex G hereto, as the case may be, so as to cause such Annex A or G , as the case may be, to be complete and accurate.
18. PLEDGORS OBLIGATIONS ABSOLUTE, ETC . The obligations of each Pledgor under this Agreement (so long as it remains a Pledgor hereunder) shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any renewal, extension, amendment or modification of or addition or supplement to or deletion from any Secured Debt Agreement or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement; (c) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee; (d) any limitation on any partys liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.
19. REGISTRATION, ETC . If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and the Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Collateral, as the case may be, or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion (a) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (b) may approach and negotiate with a single possible purchaser to effect such sale, and (c) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Pledgee, in its sole and absolute discretion, in good faith deems reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until after registration as aforesaid.
Page 21
20. TERMINATION; RELEASE .
(a) After the Termination Date, this Agreement and the security interest created hereby shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination), and the Pledgee, at the request and expense of any Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any monies at the time held by the Pledgee or any of its sub-agents hereunder. As used in this Agreement, Termination Date shall mean the date upon which the Commitments under the Credit Agreement have been terminated, no Note under the Credit Agreement is outstanding and all Loans thereunder have been repaid in full, all Letters of Credit issued under the Credit Agreement have been terminated or otherwise addressed in a manner acceptable to the Administrative Agent and all other Obligations then due and payable have been paid in full.
(b) In the event that any part of the Collateral is sold or otherwise disposed of in connection with a sale or other disposition permitted by the Secured Debt Agreements (other than a sale or other disposition to any Pledgor or any Subsidiary thereof) or is otherwise released with the consent of the Required Secured Creditors and the proceeds of such sale or other disposition or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, the Pledgee, at the request and expense of the respective Pledgor, will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral (and releases therefor) as is then being (or has been) so sold or released and has not theretofore been released pursuant to this Agreement.
(c) At any time that a Pledgor desires that the Pledgee assign, transfer and deliver Collateral (and releases therefor) as provided in Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate signed by a principal executive officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to such Section 20(a) or (b) .
(d) The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with this Section 20 .
Page 22
21. NOTICES, ETC . All notices and communications hereunder shall be in writing and sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Pledgee or any Pledgor shall not be effective until received by the Pledgee or such Pledgor, as the case may be. All such notices and other communications shall be addressed as follows:
(a) if to any Pledgor, at its address set forth opposite its signature below;
(b) if to the Pledgee, at:
JPMorgan Chase Bank, N.A.
Loan Operations
10 South Dearborn Street, Floor L2
Chicago, Illinois 60603
Attention: Nida Mischke
Telecopier No.: (888) 303-9732
(c) if to any Lender Creditor, at such address as such Lender Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor at such address as such Other Creditor shall have specified in writing to the Borrower and the Pledgee;
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
22. WAIVER; AMENDMENT . None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the US Security Agreement.
23. MISCELLANEOUS . This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns, provided that no Pledgor may assign any of its rights or obligations under this Agreement except in accordance with the terms of the Secured Debt Agreements. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto.
24. RECOURSE . This Agreement is made with full recourse to the Pledgors and pursuant to and upon all the representations, warranties, covenants and agreements on the part of the Pledgors contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.
Page 23
25. ADDITIONAL PLEDGORS . It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Agreement after the date hereof pursuant to the Credit Agreement shall become a Pledgor hereunder by executing a counterpart hereof and delivering the same to the Pledgee.
26. RELEASE OF PLEDGORS . If at any time all of the capital stock or other equity interests of any Pledgor are sold in a transaction permitted pursuant to the Credit Agreement (other than a sale to any Pledgor or any Subsidiary thereof) and the proceeds of such sale are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, then, at the request and expense of the Borrower, the respective such Pledgor shall be released as a Pledgor pursuant to this Agreement (and the Pledgee is authorized and directed to execute and deliver such instruments of release as are reasonably satisfactory to it). At any time that the Borrower desires that a Pledgor be released from this Agreement as provided in this Section 26 , the Borrower shall deliver to the Pledgee a certificate signed by a principal executive officer of the Borrower stating that the release of the respective Pledgor is permitted pursuant to this Section 26 . If requested by Pledgee (although the Pledgee shall have no obligation to make any such request), the Borrower shall furnish legal opinions (from counsel acceptable to the Pledgee) to the effect set forth in the immediately preceding sentence. The Pledgee shall have no liability whatsoever to any other Secured Creditor as a result of the release of any Pledgor by it in accordance with, or which it believes to be in accordance with, this Section 26 .
* * * *
Page 24
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.
[Signature Page to US Pledge Agreement]
CLEVELAND RANGE, LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
THE DELFIELD COMPANY LLC, | ||||||||
as a Pledgor | ||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
ENODIS TECHNOLOGY CENTER, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
FRYMASTER L.L.C., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
GARLAND COMMERCIAL INDUSTRIES LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: |
[Signature Page to US Pledge Agreement]
KYSOR BUSINESS TRUST, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
KYSOR HOLDINGS, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
KYSOR INDUSTRIAL CORPORATION, a Michigan corporation, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
KYSOR INDUSTRIAL CORPORATION, a Nevada corporation, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
KYSOR NEVADA HOLDING CORP., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: |
[Signature Page to US Pledge Agreement]
LANDIS HOLDING LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
MANITOWOC EQUIPMENT WORKS, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
MANITOWOC FOODSERVICE COMPANIES, LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
MANITOWOC FOODSERVICE HOLDING, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
MANITOWOC FP, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: |
[Signature Page to US Pledge Agreement]
MANITOWOC FSG INTERNATIONAL HOLDINGS, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
ENODIS CORPORATION, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
ENODIS GROUP HOLDINGS US, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
ENODIS HOLDINGS, INC., as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
MANITOWOC FSG OPERATIONS, LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: |
[Signature Page to US Pledge Agreement]
MANITOWOC FSG U.S. HOLDING, LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
WELBILT CORPORATION, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
WELBILT HOLDING COMPANY, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
WESTRAN CORPORATION, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: | ||||||||
MCCANNS ENGINEERING & MANUFACTURING CO., LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: |
[Signature Page to US Pledge Agreement]
MTW COUNTY (DOMESTICATION) LLC, as a Pledgor |
||||||||
By: |
|
|||||||
Name: | ||||||||
Title: |
[Signature Page to US Pledge Agreement]
Accepted and Agreed to: | ||
JPMORGAN CHASE BANK, N.A., as Collateral Agent and Pledgee |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Pledge Agreement]
ANNEX A
to
PLEDGE AGREEMENT
JURISDICTION OF ORGANIZATION
Name of Pledgor |
Jurisdiction of Organization |
Organizational Identification Number |
ANNEX B
to
PLEDGE AGREEMENT
LIST OF SUBSIDIARIES
ANNEX C
to
PLEDGE AGREEMENT
LIST OF STOCK
Name of Issuing Corporation |
Type of
Shares |
Number of
Shares |
Certificate
No. |
Percentage
Owned |
Sub-clause of Section 3.2(a)
of Pledge Agreement |
|||||
ANNEX D
to
PLEDGE AGREEMENT
LIST OF NOTES
Amount |
Maturity Date | Obligor |
Sub-clause of Section 3.2(a)
of Pledge Agreement |
|||
ANNEX E
to
PLEDGE AGREEMENT
LIST OF LIMITED LIABILITY COMPANY INTERESTS
Name of Limited Liability Company |
Type of
Interest |
Percentage Owned |
Sub-clause of Section 3.2(a)
of Pledge Agreement |
|||
ANNEX F
to
PLEDGE AGREEMENT
LIST OF PARTNERSHIP INTERESTS
Name of Partnership |
Type of
Interest |
Percentage Owned |
Sub-clause of Section 3.2(a)
of Pledge Agreement |
|||
ANNEX G
to
PLEDGE AGREEMENT
LIST OF CHIEF EXECUTIVE OFFICES
ANNEX H
to
PLEDGE AGREEMENT
Form of Agreement Regarding Uncertificated Securities, Limited Liability
Company Interests and Partnership Interests
AGREEMENT (as amended, restated, amended and restated, modified and/or supplemented from time to time, this Agreement ), dated as of , , among the undersigned pledgor (the Pledgor ), JPMorgan Chase Bank, N.A., not in its individual capacity but solely as Collateral Agent (the Pledgee ), and , as the issuer of the Uncertificated Securities, Limited Liability Company Interests and/or Partnership Interests (each as defined below) (the Issuer ).
W I T N E S S E T H :
WHEREAS, the Pledgor, certain of its affiliates and the Pledgee have entered into a Pledge Agreement, dated as of March 3, 2016 (as amended, restated, amended and restated, modified and/or supplemented from time to time, the Pledge Agreement ), under which, among other things, in order to secure the payment of the Obligations (as defined in the Pledge Agreement), the Pledgor will pledge to the Pledgee for the benefit of the Secured Creditors (as defined in the Pledge Agreement), and grant a security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest of the Pledgor in and to any and all (1) uncertificated securities (as defined in Section 8-102(a)(18) of the Uniform Commercial Code, as adopted in the State of New York) ( Uncertificated Securities ), (2) Partnership Interests (as defined in the Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the Pledge Agreement), in each case issued from time to time by the Issuer, whether now existing or hereafter from time to time acquired by the Pledgor (with all of such Uncertificated Securities, Partnership Interests and Limited Liability Company Interests being herein collectively called the Issuer Pledged Interests ); and
WHEREAS, the Pledgor desires the Issuer to enter into this Agreement in order to protect the security interest of the Pledgee under the Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the Issuer Pledge Interests and to provide for the rights of the parties under this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. The Pledgor hereby irrevocably authorizes and directs the Issuer, and the Issuer hereby agrees, to comply with any and all instructions and orders originated by the Pledgee (and its successors and assigns) regarding any and all of the Issuer Pledged Interests without the further consent by the registered owner (including the Pledgor), and, after receiving a notice from the Pledgee stating that an Event of Default has occurred and is continuing, not to comply with any instructions or orders regarding any or all of the Issuer Pledged Interests originated by any person or entity other than the Pledgee (and its successors and assigns) or a court of competent jurisdiction.
Annex H
Page 2
2. The Issuer hereby certifies that (a) no notice of any security interest, lien or other encumbrance or claim affecting the Issuer Pledged Interests (other than the security interest of the Pledgee) has been received by it, and (b) the security interest of the Pledgee in the Issuer Pledged Interests has been registered in the books and records of the Issuer.
3. The Issuer hereby represents and warrants that (a) the pledge by the Pledgor of, and the granting by the Pledgor of a security interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of the Secured Creditors, does not violate the charter, by-laws, partnership agreement, membership agreement or any other agreement governing the Issuer or the Issuer Pledged Interests, and (b) the Issuer Pledged Interests are fully paid and nonassessable.
4. All notices, statements of accounts, reports, prospectuses, financial statements and other communications to be sent to the Pledgor by the Issuer in respect of the Issuer will also be sent to the Pledgee at the following address:
JPMorgan Chase Bank, N.A.
Loan Operations
10 South Dearborn Street, Floor L2
Chicago, Illinois 60603
Attention: Nida Mischke
Telecopier No.: (888) 303-9732
5. Until the Pledgee shall have delivered written notice to the Issuer that all of the Obligations have been paid in full and this Agreement is terminated, the Issuer will, upon receiving notice from the Pledgee stating that an Event of Default has occurred and is continuing, send any and all redemptions, distributions, interest or other payments in respect of the Issuer Pledged Interests from the Issuer for the account of the Pledgor only by wire transfers to such address as shall be identified by the Administrative Agent in writing.
6. Except as expressly provided otherwise in Sections 4 and 5, all notices, shall be sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Pledgee, the Pledgor or the Issuer shall not be effective until received by the Pledgee, the Pledgor or the Issuer, as the case may be. All notices and other communications shall be in writing and addressed as follows:
(a) | if to the Pledgor, at: |
|
||||
|
||||
|
||||
|
||||
Attention: |
|
|||
Telephone No.: | ||||
Fax No |
Annex H
Page 3
(b) | if to the Pledgee, at: |
[JPMorgan Chase Bank, N.A.
Loan Operations
10 South Dearborn Street, Floor L2
Chicago, Illinois 60603
Attention: Nida Mischke
Telecopier No.: (888) 303-9732
(c) | if to the Issuer, at: |
|
||
|
||
|
or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. As used in this Section 6, Business Day means any day other than a Saturday, Sunday, or other day in which banks in New York are authorized to remain closed.
7. This Agreement shall be binding upon the successors and assigns of the Pledgor and the Issuer and shall inure to the benefit of and be enforceable by the Pledgee and its successors and assigns. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in the manner whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor.
8. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
[Signature Page Follows]
Annex H
Page 4
IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.
[ ], | ||
as Pledgor | ||
By |
|
|
Name: | ||
Title: | ||
[ ], the Issuer | ||
By |
|
|
Name: | ||
Title: |
Annex H
Page 5
JPMORGAN CHASE BANK, N.A., not in its individual capacity but solely as Collateral Agent and Pledgee |
||
By |
|
|
Name: | ||
Title: |
EXHIBIT K
FORM OF US SECURITY AGREEMENT
(ATTACHED)
EXECUTION VERSION
SECURITY AGREEMENT
among
MANITOWOC FOODSERVICE, INC.,
CERTAIN SUBSIDIARIES
PARTIES HERETO FROM TIME TO TIME,
and
JPMORGAN CHASE BANK, N.A.,
as COLLATERAL AGENT
Dated as of March 3, 2016
Table of Contents
Page | ||||
ARTICLE I SECURITY INTERESTS |
2 | |||
1.1. Grant of Security Interests |
2 | |||
1.2. Power of Attorney |
3 | |||
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS |
3 | |||
2.1. Necessary Filings |
3 | |||
2.2. No Liens |
4 | |||
2.3. Other Financing Statements |
4 | |||
2.4. Chief Executive Office, Record Locations |
4 | |||
2.5. Location of Inventory and Equipment |
4 | |||
2.6. Legal Names; Organizational Identification Number; Trade Names; Change of Name, etc |
5 | |||
2.7. Jurisdiction and Type of Organization |
5 | |||
2.8. Collateral in the Possession of a Bailee |
5 | |||
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL |
6 | |||
3.1. Additional Representations and Warranties |
6 | |||
3.2. Maintenance of Records |
6 | |||
3.3. Direction to Account Debtors; Contracting Parties, etc |
6 | |||
3.4. Modification of Terms; etc |
7 | |||
3.5. Collection |
7 | |||
3.6. Instruments |
7 | |||
3.7. Assignors Remain Liable Under Receivables |
8 | |||
3.8. Assignors Remain Liable Under Contracts |
8 | |||
3.9. Deposit Accounts |
8 | |||
3.10. Letter-of-Credit Rights |
9 | |||
3.11. Commercial Tort Claims |
9 | |||
3.12. Electronic Chattel Paper |
9 | |||
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS |
9 | |||
4.1. Additional Representations and Warranties |
9 | |||
4.2. Licenses and Assignments |
10 | |||
4.3. Infringements |
10 | |||
4.4. Preservation of Marks |
10 | |||
4.5. Maintenance of Registration |
10 | |||
4.6. Future Registered Marks |
10 | |||
4.7. Remedies |
10 | |||
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS |
11 | |||
5.1. Additional Representations and Warranties |
11 | |||
5.2. Licenses and Assignments |
11 | |||
5.3. Infringements |
11 | |||
5.4. Maintenance of Patents or Copyright |
11 |
i
Table of Contents (continued)
Page | ||||
5.5. Prosecution of Patent Applications |
12 | |||
5.6. Other Patents and Copyrights |
12 | |||
5.7. Remedies |
12 | |||
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL |
12 | |||
6.1. Protection of Collateral Agents Security |
12 | |||
6.2. Warehouse Receipts Non-negotiable |
12 | |||
6.3. Further Actions |
13 | |||
6.4. Financing Statements |
13 | |||
ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT |
13 | |||
7.1. Remedies; Obtaining the Collateral Upon Default |
13 | |||
7.2. Remedies; Disposition of the Collateral |
14 | |||
7.3. Waiver of Claim |
15 | |||
7.4. Application of Proceeds |
16 | |||
7.5. Remedies Cumulative |
18 | |||
7.6. Discontinuance of Proceedings |
18 | |||
ARTICLE VIII INDEMNITY |
19 | |||
8.1. Indemnity |
19 | |||
ARTICLE IX DEFINITIONS |
20 | |||
ARTICLE X MISCELLANEOUS |
28 | |||
10.1. Notices |
28 | |||
10.2. Waiver; Amendment |
28 | |||
10.3. Obligations Absolute |
29 | |||
10.4. Successors and Assigns |
29 | |||
10.5. Headings Descriptive |
29 | |||
10.6. Governing Law |
29 | |||
10.7. Assignors Duties |
29 | |||
10.8. Termination; Release |
30 | |||
10.9. Counterparts |
30 | |||
10.10. Severability |
30 | |||
10.11. The Collateral Agent and the other Secured Creditors |
31 | |||
10.12. Benefit of Agreement |
31 | |||
10.13. Additional Assignors |
31 |
ii
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of March 3, 2016, made by each of the undersigned assignors (each an Assignor and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.13 hereof, the Assignors ) in favor of JPMorgan Chase Bank, N.A., as Collateral Agent (together with any successor Collateral Agent, the Collateral Agent ), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Manitowoc Foodservice, Inc. (the Borrower ), the Subsidiary Borrowers (together with the Borrower, the Borrowers ), the lenders from time to time party thereto (the Lenders ), and JPMorgan Chase Bank, N.A., as Administrative Agent (together with any successor Administrative Agent, the Administrative Agent ), have entered into a Credit Agreement, dated as of March 3, 2016 (as amended, modified, restated, amended and restated and/or supplemented from time to time, the Credit Agreement ), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrowers as contemplated therein and the Assignors have guaranteed the obligations of the Borrowers thereunder (the Lenders, the Issuing Banks, the Swingline Lender, the Administrative Agent and the Collateral Agent are herein called the Lender Creditors );
WHEREAS, one or more Assignors may at any time and from time to time after the date hereof enter into, or guaranty the obligations of one or more other Assignors or any of their respective Subsidiaries under, one or more Swap Agreements, Bank Product Agreements or Designated Foreign Facility Agreements with one or more Lender Creditors or any affiliate of any Lender Creditor (each such Lender Creditor or affiliate, even if the respective Lender Creditor subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender Creditors or affiliates successors and assigns, if any, collectively, the Other Creditors and, together with the Lender Creditors, are herein called the Secured Creditors );
WHEREAS, it is a condition precedent to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrowers under the Credit Agreement that each Assignor shall have executed and delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of Loans by, and the issuance of Letters of Credit for the account of, the Borrowers under the Credit Agreement and the entering into by the Assignors (or any of their respective Subsidiaries) of Swap Agreements, Bank Product Agreements and Designated Foreign Facility Agreements and, accordingly, each Assignor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests .
(a) As security for the prompt and complete payment and performance when due of all of its Obligations, each Assignor does hereby assign and transfer unto the Collateral Agent, and does hereby pledge and grant to the Collateral Agent for the benefit of the Secured Creditors, a continuing security interest in, all of the right, title and interest of such Assignor in, to and under all of the following, whether now existing or hereafter from time to time acquired: (i) all Receivables; (ii) all Chattel Paper; (iii) all Documents; (iv) all General Intangibles (including Contract Rights, Permits, payment intangibles, Trade Secret Rights and Software); (v) all Goods (including Inventory, Equipment and Fixtures); (vi) all Instruments; (vii) all Investment Property; (viii) all Deposit Accounts, including the Cash Collateral Account, and all other bank accounts and all deposits therein; (ix) all money, cash or cash equivalents; (x) all Supporting Obligations and Letter-of-Credit Rights; (xi) any commercial tort claims (provided, however, that as of the date of this Agreement, no such claims exist); and (xii) to the extent not otherwise included, all Proceeds, tort claims, insurance claims and other rights to payments not otherwise included in the foregoing and products of the foregoing and all accessions to, substitutions and replacements for, and rents and profits of, each of the foregoing (all of the above, collectively, the Collateral ).
(b) The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Assignor may acquire at any time during the term of this Agreement.
(c) Notwithstanding anything to the contrary contained in clauses (a) and (b) above, the security interest created by this Agreement shall not extend to, and the term Collateral shall not include, any computer program owned or created by such Assignor and any intellectual property rights therein or any other proprietary information (including Trade Secret Rights) of such Assignor that is subject to any agreement which validly prohibits the creation by such Assignor of a security interest in such computer program and the intellectual property rights therein or other proprietary information; provided , however , that (i) the right to receive payments of money in respect of such computer programs, the intellectual property rights therein and such other proprietary information (or any agreement covering the same) shall not be excluded from the security interest created hereunder and (ii) such rights and property described above shall be excluded from the Collateral only to the extent and for so long as such agreement continues validly to prohibit the creation of such security interest, and upon the expiration of such prohibition, the computer programs and the intellectual property rights therein or other proprietary information as to which such prohibition previously applied shall automatically be included in the Collateral, without further action on the part of any Assignor, the Collateral Agent or any other Secured Creditor.
2
(d) Notwithstanding anything to the contrary contained in clauses (a) and (b) above, the security interest created by this Agreement shall not extend to, and the term Collateral shall not include, any Equipment or Goods subject to a purchase money Lien permitted under Section 6.02(f), (i) or (j) of the Credit Agreement, in each case to the extent, and only to the extent, that the instrument or other agreement evidencing the purchase money Indebtedness or Capitalized Lease Obligations, as the case may be, secured by such Lien expressly and validly prohibits any other Lien on such Equipment or Goods, as the case may be; provided however, that such Equipment and Goods described above shall be excluded from the Collateral only for so long as such purchase money Indebtedness or Capitalized Lease Obligations, as the case may be, remains or remain outstanding and upon the earlier of the termination of such prohibition or the satisfaction of such Indebtedness, such Equipment or Goods, as the case may be, shall be included in the term Collateral without any further action on the part of any Assignor, the Collateral Agent or any other Secured Creditor.
1.2. Power of Attorney . Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquaintance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Collateral Agent may deem to be necessary or advisable to protect the interests of the Secured Creditors in compliance with Part 5 or 6 of Article 9 of the UCC, which appointment as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:
2.1. Necessary Filings . All filings, registrations and recordings necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral (other than vehicles) have been accomplished or will be accomplished promptly upon the execution of this Agreement and the other Security Documents and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral (except for Instruments not required to be delivered to the Collateral Agent as contemplated by the parenthetical appearing in Section 3.6 hereof) creates or will create a perfected security interest therein prior to the rights of all other Persons therein (other than Permitted Liens related thereto) and subject to no other Liens (other than Permitted Liens) and is entitled to all rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by
3
possession, by filing a financing statement under the UCC as enacted in any relevant jurisdiction and by filing a Grant of Security Interest in the respective form attached hereto in the United States Patent and Trademark Office or in the United States Copyright Office.
2.2. No Liens . Such Assignor is, and as to Collateral ownership of which has been or will be acquired by it from time to time after the date hereof such Assignor will be, the owner of all Collateral free from any Lien, security interest, encumbrance or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent (other than holders of Permitted Liens).
2.3. Other Financing Statements . As of the date hereof, there is no effective financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens.
2.4. Chief Executive Office, Record Locations . The chief executive office and divisional offices of such Assignor are located at the addresses indicated on Annex A hereto for such Assignor. Such Assignor will not move its chief executive office or divisional offices except to such new locations as such Assignor may establish in accordance with the last sentence of this Section 2.4 . The originals of all documents evidencing all Receivables and Contract Rights of such Assignor and the only original books of account and records of such Assignor relating thereto are, and will continue to be, kept at such chief executive office or divisional offices, at the chief executive office of the Borrower, at one or more of the other locations set forth on Annex A hereto or at such new locations as such Assignor may establish in accordance with the last sentence of this Section 2.4 . All Receivables and Contract Rights of such Assignor are, and will continue to be, maintained at, and controlled and directed (including, without limitation, for general accounting purposes) from, the office locations described above or such new location established in accordance with the last sentence of this Section 2.4 . No Assignor shall establish new locations for such offices until it shall have given to the Collateral Agent not less than 15 days prior written notice of its intention to do so, clearly describing such new location and providing such other information in connection therewith as the Collateral Agent may reasonably request.
2.5. Location of Inventory and Equipment . All Inventory and Equipment held on the date hereof by each Assignor is located at one of the locations shown on Annex B hereto for such Assignor (other than immaterial portions of the Inventory of such Assignor transferred to another location in connection with (a) a trade show in which such Assignor is participating or (b) a sale of such Inventory in the ordinary course of business, so long as such sale occurs (or such Inventory is otherwise returned to a location listed on Annex B for such Assignor) within 60 days from the date of such transfer) shall be kept at (or shall be in transport to) any one of the locations shown on Annex B hereto, or such new location as such Assignor may establish in
4
accordance with the last sentence of this Section 2.5 . Any Assignor may establish a new location for Inventory and Equipment only if it shall have given to the Collateral Agent not less than 15 days prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Collateral Agent may reasonably request.
2.6. Legal Names; Organizational Identification Number; Trade Names; Change of Name, etc . The legal name of each Assignor, and the organizational identification number (if any) of each Assignor, is listed on Annex C hereto for such Assignor. No Assignor has or operates in any jurisdiction under, or in the preceding five years has had or has operated in any jurisdiction under, any trade names, fictitious names or other names except its legal name and such other trade or fictitious names as are listed on Annex C hereto for such Assignor. No Assignor shall change its legal name, organizational identification number (if any) or assume or operate in any jurisdiction under any trade, fictitious or other name except its legal name, organizational identification number and those trade names in each case listed on Annex C hereto for such Assignor and those that may be established in accordance with the immediately succeeding sentence of this Section 2.6 . No Assignor shall change its legal name or organizational identification number or assume or operate in any jurisdiction under any new trade, fictitious or other name until (a) it shall have given to the Collateral Agent not less than 15 days prior written notice of its intention so to do, clearly describing such new name and the jurisdictions in which such new name shall be used and providing such other information in connection therewith as the Collateral Agent may reasonably request, and (b) with respect to such new name, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Assignor does not have an organizational identification number on the date hereof and later obtains one, such Assignor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.
2.7. Jurisdiction and Type of Organization . The jurisdiction of organization of each Assignor, and the type of organization of each Assignor, is listed on Annex D hereto for such Assignor. No Assignor shall change its jurisdiction of organization or its type of organization until (a) it shall have given to the Collateral Agent not less than 15 days prior written notice of intention so to do, clearly describing such new jurisdiction of organization and/or type of organization and providing such other information in connection therewith as the Collateral Agent may reasonably request and (b) with respect to such new jurisdiction of organization and/or type of organization, it shall have taken all actions reasonably requested by the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.
2.8. Collateral in the Possession of a Bailee . If any Inventory or other Goods with a fair market value (as determined in good faith by senior management of the Borrower or the respective Assignor) of $500,000 or more are at any time in the possession of a bailee, the respective Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall promptly obtain an acknowledgment from the bailee, in form and
5
substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of the respective Assignor. The Collateral Agent agrees with the Assignors that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to the bailee.
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1. Additional Representations and Warranties . As of the time when each of its Receivables arises, each Assignor shall be deemed to have represented and warranted that each such Receivable, and all records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (a) will, to the knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale or lease and delivery of the merchandise listed therein, or both, (b) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (c) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in accordance with their respective terms, and (d) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.
3.2. Maintenance of Records . Each Assignor will keep and maintain at its own cost and expense accurate records of its Receivables and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignors premises to the Collateral Agent for inspection, at such Assignors own cost and expense, at any and all reasonable times upon prior notice to such Assignor and otherwise in accordance with the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Receivables and Contract Rights (including, without limitation, all documents evidencing the Receivables and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner satisfactory to the Collateral Agent, the Receivables and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Receivables and Contracts with an appropriate reference to the fact that such Receivables and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.
3.3. Direction to Account Debtors; Contracting Parties, etc . Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs any
6
Assignor, such Assignor agrees (a) to cause all payments on account of the Receivables and Contracts to be made directly to the Cash Collateral Account, (b) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Receivables and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (a) , and (c) that the Collateral Agent may enforce collection of any such Receivables and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Obligations in the manner provided in Section 7.4 of this Agreement. The reasonable costs and expenses (including reasonable attorneys fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (b) to the relevant Assignor, provided that the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 .
3.4. Modification of Terms; etc . Except in accordance with such Assignors ordinary course of business and consistent with reasonable business judgment, no Assignor shall rescind or cancel any indebtedness evidenced by any Receivable or under any Contract, or modify any term thereof or make any adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Receivable or Contract, or interest therein, without the prior written consent of the Collateral Agent. Except as otherwise permitted by the Secured Debt Agreements, no Assignor will do anything to impair the rights of the Collateral Agent in the Receivables or Contracts.
3.5. Collection . Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Receivables or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Receivable or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Receivables and Contracts (a) an extension or renewal of the time or times of payment, or (b) settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor.
3.6. Instruments . If any Assignor owns or acquires any Instrument constituting Collateral (other than (a) checks and other payment instruments received and collected in the ordinary course of business and (b) Instruments with a face amount of $5,000,000 or less), such Assignor will within 10 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent as further security hereunder.
7
3.7. Assignors Remain Liable Under Receivables . Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Receivables to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Receivables. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Receivable pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any part under any Receivable (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
3.8. Assignors Remain Liable Under Contracts . Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
3.9. Deposit Accounts . For each deposit or similar account that any Assignor at any time opens or maintains, such Assignor shall, at the Collateral Agents request, pursuant to an agreement in form and substance reasonable satisfactory to the Collateral Agent, either (a) cause the depositary bank to agree to comply at any time with instructions from the Collateral Agent to such depositary bank directing the disposition of funds from time to time credited to such deposit account, without further consent of the respective Assignor, or (b) arrange for the Collateral Agent to become the customer of the depositary bank with respect to the deposit account, with the respective Assignor being permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw funds from such deposit account. The Collateral Agent agrees with the Assignors that the Collateral Agent shall not give any such instructions or withhold any withdrawal rights from any Assignor, unless an Event of Default has occurred and is continuing, or, after giving effect to any withdrawal not otherwise permitted by the Secured Debt Agreement, would occur. The provisions of this Section 3.9 shall not apply to (i) deposit accounts for which the Collateral Agent is the depositary and (ii) deposit accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of the Assignors salaried employees.
8
3.10. Letter-of-Credit Rights . If any Assignor is at any time a beneficiary under a letter of credit with a stated amount of $5,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, such Assignor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (a) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (b) arrange for the Collateral Agent to become the transferee beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in the Security Agreement after the occurrence of an Event of Default.
3.11. Commercial Tort Claims . If any Assignor shall at any time hold or acquire a commercial tort claim with a value of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing in brief the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent.
3.12. Electronic Chattel Paper . Each Assignor shall take all steps necessary to grant the Agent control of all electronic chattel paper in accordance with the UCC and all transferable records as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties . Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use the registered Marks listed in Annex E hereto for such Assignor and that said listed Marks include all United States marks and applications for United States marks registered in the United States Patent and Trademark Office that such Assignor owns or uses in connection with its business as of the date hereof. Each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all Marks that it uses and that are material to its business. Each Assignor further warrants that it has no knowledge that any aspect of such Assignors present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use all U.S. trademark registrations and applications listed in Annex E hereto and that said registrations are valid and subsisting, and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default, any document which may be required by the United States Patent and Trademark Office in order to effect an absolute assignment of all right, title and interest in each Mark, and record the same.
9
4.2. Licenses and Assignments . Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark absent prior written approval of the Collateral Agent.
4.3. Infringements . Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is infringing or diluting or otherwise violating any of such Assignors rights in and to any Mark in any manner that could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees to prosecute in accordance with reasonable business practices any Person infringing any Mark in any manner that could reasonably be expected to have a Material Adverse Effect.
4.4. Preservation of Marks . Each Assignor agrees to use its Marks in interstate commerce during the time in which this Agreement is in effect and to take all such other actions as are reasonably necessary to preserve such Marks as trademarks or service marks under the laws of the United States (other than any such Marks which are no longer used or useful in its business or operations).
4.5. Maintenance of Registration . Each Assignor shall, at its own expense, diligently process all documents reasonably required to maintain trademark registrations, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its material registered Marks, and shall pay all fees and disbursement in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent (other than with respect to registrations and applications deemed by such Assignor to be no longer prudent to pursue).
4.6. Future Registered Marks . If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office, within 30 days of receipt of such certificate, such Assignor shall deliver to the Collateral Agent a copy of such certificate, and an assignment for security in such Mark, to the Collateral Agent and at the expense of such Assignor, confirming the assignment for security in such Mark to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex H hereto or in such other form as may be reasonably satisfactory to the Collateral Agent.
4.7. Remedies . If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (a) take and use or sell the Marks and the goodwill of such Assignors business symbolized by the Marks and the right to carry on the business and use the assets of such Assignor in connection with which the Marks have been used and (b) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks and registrations and any pending trademark application in the United States Patent and Trademark Office pursuant to the terms set forth herein.
10
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties . Each Assignor represents and warrants that it is the true and lawful owner of all rights in (a) all United States trade secrets and proprietary information necessary to operate the business of the Assignor (the Trade Secret Rights ), (ii) the Patents listed in Annex F hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the date hereof and (iii) the Copyrights listed in Annex G hereto for such Assignor and that said Copyrights constitute all the United States copyrights registered with the United States Copyright Office and applications to United States copyrights that such Assignor owns as of the date hereof. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignors present or contemplated business operations infringes or will infringe any patent of any other Person or such Assignor has misappropriated any trade secret or proprietary information which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the United States Patent and Trademark Office in order to effect an absolute assignment of all right, title and interest in each Patent, and to record the same, pursuant to the terms set forth herein
5.2. Licenses and Assignments . Except (a) in the ordinary course of business, (b) with respect to Patents and Copyrights that are no longer useful to the business of the applicable Assignor, or (c) as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright acquired after the date hereof absent prior written approval of the Collateral Agent.
5.3. Infringements . Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe in any Patent or Copyright or to any claim that the practice of any Patent or use of any Copyright violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any claim that practice of any Trade Secret Right violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees to take such action as it shall reasonably deem appropriate, under the circumstances, to protect such Patent, Copyright or Trade Secret Right.
5.4. Maintenance of Patents or Copyright . At its own expense, each Assignor shall make timely payment of all post-issuance fees required pursuant to 35 U.S.C. § 41 to maintain in force its rights under each Patent or Copyright, absent prior written consent of the Collateral Agent (other than any such Patents or Copyrights which are no longer used or useful in its business or operations).
11
5.5. Prosecution of Patent Applications . At its own expense, each Assignor shall diligently prosecute all material applications for (i) United States Patents listed in Annex F hereto and (ii) Copyrights listed on Annex G hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications deemed by such Assignor to be no longer prudent to pursue), absent written consent of the Collateral Agent.
5.6. Other Patents and Copyrights . Within 30 days of the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright or certificate or registration of, or application therefor, said Patents, as the case may be, with an assignment for security as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the expense of such Assignor, confirming the assignment for security, the form of such assignment for security to be substantially in the form of Annex I or J hereto, as appropriate, or in such other form as may be reasonably satisfactory to the Collateral Agent.
5.7. Remedies . If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any and all of the following actions: (a) take and practice or sell the Patents and Copyrights and (b) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Patents and Copyrights pursuant to the terms set forth herein
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agents Security . Except as otherwise permitted by the Secured Debt Agreements, each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times keep its Inventory and Equipment insured in favor of the Collateral Agent, at such Assignors own expense to the extent and in the manner provided in the Secured Debt Agreements. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Secured Debt Agreements, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable . To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is
12
issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be negotiable (as such term is used in Section 7-104 of the UCC as in effect in any relevant jurisdiction or under other relevant law).
6.3. Further Actions . To the extent consistent with the other terms of this Agreement, each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral.
6.4. Financing Statements . Each Assignor agrees to deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, first priority perfected security interest in the Collateral (subject to Permitted Liens) as provided herein and the other rights and security contemplated hereby. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements without the signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default . Each Assignor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and may:
(a) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignors premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;
(b) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Receivables and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;
13
(c) withdraw all monies, securities and instruments in the Cash Collateral Account for application to the Obligations in accordance with Section 7.4 hereof;
(d) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct the relevant Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation;
(e) take possession of the Collateral or any part thereof, by directing the relevant Assignor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense:
(i) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent;
(ii) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and
(iii) while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition; and
(f) license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Patents or Copyrights included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall in its sole judgment determine;
it being understood that each Assignors obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that this Agreement and each other Security Document may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce this Agreement or any other Security Document or to realize upon the security to be granted hereby or thereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Creditors upon the terms of this Agreement and other Security Documents.
7.2. Remedies; Disposition of the Collateral . If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more
14
contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral Agent shall determine to be commercially reasonable. Any such disposition which shall be a private sale or other private proceedings permitted by such requirements shall be made upon not less than 30 days prior written notice to the relevant Assignor specifying the time at which such disposition is to be made and the intended sale price or other consideration therefor, and shall be subject, for the 30 days after giving such notice, to the right of the relevant Assignor or any nominee of such Assignor to acquire the Collateral involved at a price or for such other consideration at least equal to the intended sale price or other consideration so specified. Any such disposition which shall be a public sale permitted by such requirements shall be made upon not less than 30 days prior written notice to the relevant Assignor specifying the time and place of such sale and, in the absence of applicable requirements of law, shall be by public auction (which may, at the Collateral Agents option, be subject to reserve), after publication of notice of such auction (where required by applicable law) not less than 30 days prior thereto. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser of the Collateral or any item thereof, offered for sale in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be reasonably practicable in view of such applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such sale or sales of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignors expense.
7.3. Waiver of Claim . Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENTS TAKING POSSESSION OR THE COLLATERAL AGENTS DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:
(a) all damages occasioned by such taking of possession except any damages which are the direct result of the Collateral Agents gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision);
15
(b) all other requirements as to the time, place and terms of sale or other requirements with respect to the commercially reasonable enforcement of the Collateral Agents rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.
7.4. Application of Proceeds .
(a) All moneys collected by the Collateral Agent (or, to the extent the Pledge Agreement or any other Security Document requires proceeds of collateral under such other Security Document to be applied in accordance with the provisions of this Agreement, the Pledgee or Collateral Agent under such other Security Document) upon any sale or other disposition of the Collateral, together with all other moneys received by the Collateral Agent hereunder, shall be applied as follows:
(i) first , to the payment of all amounts owing the Collateral Agent of the type described in clauses (iii) and (iv) of the definition of Obligations;
(ii) second , to the extent proceeds remain after the application pursuant to the preceding clause (i) , an amount equal to the outstanding Primary Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary Obligations or, if the proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share of the amount remaining to be distributed;
(iii) third , to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii) , an amount equal to the outstanding Secondary Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Obligations or, if the proceeds are insufficient to pay in full all such Secondary Obligations, its Pro Rata Share of the amount remaining to be distributed; and
(iv) fourth , to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii) , inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus.
16
(b) For purposes of this Agreement, Pro Rata Share shall mean, when calculating a Secured Creditors portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditors Primary Obligations or Secondary Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary Obligations or Secondary Obligations, as the case may be.
(c) When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 7.4 only) (i) first , to their Primary Obligations and (ii) second , to their Secondary Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Primary Obligations or Secondary Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of all Secured Creditors entitled to such distribution.
(d) Each of the Secured Creditors, by their acceptance of the benefits hereof and of the other Security Documents, agrees and acknowledges that if the Lender Creditors are to receive a distribution on account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement (which shall only occur after all outstanding Loans under the Credit Agreement and LC Exposure have been paid in full), such amounts shall be paid to the Administrative Agent under the Credit Agreement and held by it, for the equal and ratable benefit of the Lender Creditors, as cash security for the repayment of Obligations owing to the Lender Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of all outstanding Letters of Credit under the Credit Agreement, and after the application of all such cash security to the repayment of all Obligations owing to the Lender Creditors after giving effect to the termination of all such Letters of Credit, if there remains any excess cash, such excess cash shall be returned by the Administrative Agent to the Collateral Agent for distribution in accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made (i) if to the Lender Creditors, to the Administrative Agent for the account of the Lender Creditors and (ii) if to the Other Creditors, to the trustee, paying agent or other similar representative (each a Representative ) for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance with this Section 7.4 , the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent and (ii) the Representative or, in the absence of such a Representative, upon the Other Creditors for a determination (which the Administrative Agent, each
17
Representative and the Secured Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Primary Obligations and Secondary Obligations owed to the Lender Creditors or the Other Creditors, as the case may be. Unless it has received written notice from a Lender Creditor or an Other Creditor to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding. Unless it has written notice from an Other Creditor to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no Swap Agreements, Bank Product Agreements or Designated Foreign Facility Agreements are in existence.
(g) This Agreement is made with full recourse to each Assignor (including, without limitation, with full recourse to all assets of such Assignor) and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. Remedies Cumulative . Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, and other Secured Debt Agreements or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence therein. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys fees, and the amounts thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings . In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.
18
ARTICLE VIII
INDEMNITY
8.1. Indemnity .
(a) Each Assignor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, assigns, employees, affiliates and agents (hereinafter in this Section 8.1 referred to individually as Indemnitee , and collectively as Indemnitees ) harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys fees and expenses) (for the purposes of this Section 8.1 the foregoing are collectively called expenses ) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Secured Debt Agreement or any other document executed in connection herewith or therewith or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent caused by the gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision).
(b) Without limiting the application of Section 8.1(a) hereof, each Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent for any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agents Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agents interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation
19
by any Assignor in this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement.
(d) If and to the extent that the obligations of any Assignor under this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.
(e) Indemnity Obligations Secured by Collateral; Survival . Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all the Notes issued, and Loans made, under the Credit Agreement, the termination of all Letters of Credit issued under the Credit Agreement, the termination of all Swap Agreements, Bank Product Agreements and Designated Foreign Facility Agreements entered into with the Other Creditors and the payment of all other Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.
Administrative Agent shall have the meaning provided in the recitals of this Agreement.
Agreement shall mean this Security Agreement as the same may be modified, supplemented, restated and/or amended from time to time in accordance with its terms.
Assignor shall have the meaning provided in the first paragraph of this Agreement.
Bank Product Agreements shall mean any agreement entered into from time to time with any Credit Party in connection with any of the Bank Products which the Borrower identifies to the Collateral Agent and the Administrative Agent in writing as an agreement intended to be secured hereby (which designation, once made, may be revoked only with the consent of the Lender or Lender Affiliate party thereto).
Bank Products shall mean the following bank services or facilities extended to any Credit Party: (a) commercial credit cards, (b) stored value cards, and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).
20
Borrower shall have the meaning provided in the recitals of this Agreement.
Borrowers shall have the meaning provided in the recitals of this Agreement.
Cash Collateral Account shall mean a cash collateral account maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors.
Chattel Paper shall have the meaning provided in the UCC as in effect on the date hereof in the State of New York; provided that the term Chattel Paper shall not include any Chattel Paper (as defined above without giving effect to this proviso) to the extent that (and only for so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting a security interest in, such Chattel Paper (it being understood and agreed, however, (i) that notwithstanding the foregoing, all rights to payment for money due or to become due pursuant to any such excluded chattel paper shall be Collateral subject to the security interests created by this Agreement and (ii) such excluded chattel paper shall otherwise be subject to the security interests created by this Agreement (and become Chattel Paper for all purposes of this Agreement) upon the receipt by the respective Assignor of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Assignor, the Collateral Agent or any other Secured Creditor).
Class shall have the meaning provided in Section 10.2 of this Agreement.
Collateral shall have the meaning provided in Section 1.1(a) of this Agreement.
Collateral Agent shall have the meaning provided in the first paragraph of this Agreement.
Contract Rights shall mean (a) all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts, and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts and (b) all rights of any Assignor to payment for money due or to become due pursuant to any contract excluded from the definition of Contract by virtue of the exclusion appearing in said definition.
Contracts shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Swap Agreements, Bank Product Agreements, Designated Foreign Facility Agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements), but excluding any contract to the extent that (but only for so long as) the terms thereof validly prohibit the assignment of, or granting a security interest in, such contract (it being understood and agreed, however, (i) that notwithstanding the foregoing, all rights to payment for money due or to become due pursuant to any such excluded contract shall be Collateral subject to the security interests created by this Agreement, and (ii) such excluded contract shall otherwise be subject to the security interests created by this Agreement (and become a Contract for all purposes of this Agreement) upon the receipt of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Assignor, the Collateral Agent or any other Secured Creditor).
21
Copyrights shall mean any United States copyright owned by any Assignor, including any registrations of any Copyrights, in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent by any Assignor.
Credit Agreement shall have the meaning provided in the recitals of this Agreement.
Credit Document Obligations shall have the meaning provided in the definition of Obligations in this Article IX .
Designated Foreign Facility Agreements shall mean agreements between any Lender and/or Affiliate of a Lender and any Foreign Subsidiary of the Borrower; provided that (1) the Borrower shall have provided the Administrative Agent with advance written notice of the Borrowers designation of any such line of credit or debt obligation as a Designated Foreign Facility Agreement pursuant to the form attached hereto as Annex L , (2) the aggregate outstanding amount of Indebtedness of the Foreign Subsidiaries secured by all such Designated Foreign Facility Agreements shall not exceed in the aggregate at any time $50,000,000, and (3) such Indebtedness shall be permitted by Section 6.01(i) of the Credit Agreement.
Documents shall have the meaning provided in the UCC as in effect on the date hereof in the State of New York; provided that the term Document shall not include any Document (as defined above without giving effect to this proviso) to the extent that (and only for so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting a security interest in, such Document (it being understood and agreed, however, (i) that notwithstanding the foregoing, all rights to payment for money due or to become due pursuant to any such excluded document shall be Collateral subject to the security interests created by this Agreement and (ii) such excluded document shall otherwise be subject to the security interests credited by this Agreement (and become a Document for all purposes of this Agreement) upon the receipt by the respective Assignor of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Assignor, the Collateral Agent or any other Secured Creditor).
Equipment shall mean any equipment, as such term is defined in the UCC as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor and, in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.
22
Event of Default shall mean any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period.
General Intangibles shall have the meaning provided in the UCC as in effect on the date hereof in the State of New York (and shall include all partnership interests and all limited liability company membership interests to the extent that same constitutes a general intangible under such UCC); provided that the term General Intangible shall not include any General Intangible (as defined above without giving effect to this proviso) to the extent that (and only for so long as) the terms thereof or of any agreement or other instrument giving rise thereto validly prohibit the assignment of, or the granting of a security interest in, such General Intangible (it being understood and agreed, however, (i) that notwithstanding the foregoing, (x) all partnership interests and limited liability company membership interests of any Subsidiary of any Pledgor (to the extent that same constitutes a General Intangible (as defined above without regard to this proviso)) shall be subject to the security interests created by this Agreement, and (y) all Receivables and all rights of any Assignor to payment for money due or to become due which constitute General Intangibles (as defined above without giving effect to this proviso), whether pursuant to any instrument, note or agreement or otherwise, shall be Collateral subject to the security interests created by this Agreement, and (ii) such excluded general intangibles shall otherwise be subject to the security interests created by this Agreement (and become a General Intangible for all purposes of this Agreement) upon receipt by the respective Assignor of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Assignor, the Collateral Agent or any other Secured Creditor).
Goods shall have the meaning provided in the UCC as in effect on the date hereof in the State of New York.
Indemnitee shall have the meaning provided in Section 8.1 of this Agreement.
Instrument shall have the meaning provided in the UCC as in effect on the date hereof in the State of New York; provided that the term Instrument shall not include any Instrument (as defined above without giving effect to this proviso) to the extent that (and only for so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting of a security interest in, such Instrument (it being understood and agreed, however, (i) that notwithstanding the foregoing, each Intercompany Note shall be an Instrument for purposes of this Agreement and all rights to payment for money due or to become due pursuant to any such excluded instrument shall be Collateral subject to the security interests created by this Agreement and (ii) such excluded instrument shall otherwise be subject to the security interests created by this Agreement (and become an Instrument for all purposes of this Agreement) upon the receipt of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Assignor, the Collateral Agent or any other Secured Creditor).
Inventory shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof, wherever located, together with all goods, supplies,
23
incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignors customers, and shall specifically include all inventory as such term in defined in the UCC as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor.
Investment Property shall have the meaning provided in the UCC as in effect on the date hereof in the State of New York; provided that the term Investment Property shall not include any security (as defined in Section 8-102 of the New York UCC as in effect on the date hereof) of any Person that is not a Subsidiary of any Assignor or is not an Intercompany Note, to the extent (and only so long as) the terms thereof or of any agreement governing the same validly prohibit the assignment of, or the granting of a security interest in, such security (it being understood and agreed, however, (i) that notwithstanding the foregoing, all rights to payment for money due or to become due, and all distributions to which any Assignor may be entitled, in respect of any such excluded security shall be Collateral subject to the security interests created by this Agreement and (ii) such excluded security shall otherwise be subject to the security interests created by this Agreement (and become Investment Property for all purposes of this Agreement) upon the receipt of any necessary approvals or waivers permitting the assignment thereof or the granting of a security interest therein, in any such case without any further action upon the part of the respective Assignor, the Collateral Agent or any other Secured Creditor).
Lender Creditors shall have the meaning provided in the recitals of this Agreement.
Lenders shall have the meaning provided in the recitals of this Agreement.
Letter-of-Credit Rights means letter-of-credit rights as such term is defined in the UCC as in effect on the date hereof in the State of New York, now owned or hereafter acquired by any Assignor, including rights to payment or performance under a letter of credit, whether or not such Assignor, as beneficiary, has demanded or is entitled to demand payment or performance.
Marks shall mean all right, title and interest in and to any trademarks, service marks and trade names now held or hereafter acquired by any Assignor, including any registration of any trademarks and services marks in the United States Patent and Trademark Office or in any equivalent foreign office and any trade dress including logos and/or designs used by any Assignor, but excluding any such right, title and interest of an Assignor in and to same as licensee pursuant to a contract which is expressly excluded from the definition of Contract contained herein pursuant to the terms of such definition.
Obligations shall mean (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, principal, premium, interest, reimbursement obligations, fees and indemnities (including, without limitation, all interest that accrues after the commencement of
24
any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) of each Assignor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Assignor is a party (including, in the case of each Assignor that is a Subsidiary Guarantor, all such obligations, liabilities and indebtedness of such Assignor under the Subsidiary Guaranty) and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i) , except to the extent consisting of obligations or indebtedness with respect to Swap Agreements, Bank Product Agreements or Designated Foreign Facility Agreements, being herein collectively called the Credit Document Obligations ); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Assignor to the Other Creditors under, or with respect to (including, in the case of each Assignor that is a Subsidiary Guarantor, all such obligations, liabilities and indebtedness of such Assignor under the Subsidiary Guaranty), any Swap Agreement permitted by the Credit Agreement or Bank Product Agreement or Designated Foreign Facility Agreement, whether such Swap Agreement, Bank Product Agreement or Designated Foreign Facility Agreement, as applicable, is now in existence or hereafter arising, and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained therein (all such obligations, liabilities and indebtedness described in this clause (ii) being herein collectively called the Other Obligations ); (iii) any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral; (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys fees and court costs; and (v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 of this Agreement; it being acknowledged and agreed that the Obligations shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.
Other Creditors shall have the meaning provided in the recitals of this Agreement.
Other Obligations shall have the meaning provided in the definition of Obligations in this Article IX .
Patents shall mean any patent to which any Assignor now or hereafter has right, title and interest therein, and any divisions, continuations (including, but not limited to,
25
continuations-in-parts) and improvements thereof, as well as any application for a patent now or hereafter made by an Assignor, but excluding any patent to which any such Assignor has right, title and interest as licensee pursuant to a contract which is expressly excluded from the definition of Contract contained herein pursuant to the terms of such definition.
Permits shall mean, to the extent permitted to be assigned by the terms thereof and by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency.
Primary Obligations shall mean (i) in the case of the Credit Document Obligations, all principal of, premium (if any), and interest on, all Loans under the Credit Agreement, all unreimbursed LC Disbursements, the obligation to reimburse all LC Disbursements that may thereafter occur with respect to outstanding Letters of Credit under the Credit Agreement and all fees owing pursuant to the Credit Agreement, and (ii) in the case of Other Obligations, all amounts due under any Swap Agreements, Bank Product Agreements and Designated Foreign Facility Agreements (other than indemnities, fees (including, without limitation, attorneys fees) and similar obligations and liabilities).
Pro Rata Share shall have the meaning provided in Section 7.4(b) of this Agreement.
Proceeds shall have the meaning provided in the UCC as in effect in the State of New York on the date hereof or under other relevant law and, in any event, shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
Receivables shall mean any account as such term is defined in the UCC as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor and, in any event, shall include, but shall not be limited to, all of such Assignors rights to health-care insurance receivables and to payment for goods sold or leased or services performed by such Assignor, whether now in existence or arising from time to time hereafter, including, without limitation, rights evidenced by an account, note contract, security agreement, chattel paper, or other evidence of indebtedness or security, together with (a) all security pledged, assigned, hypothecated or granted to or held by such Assignor to secure the foregoing, (b) all of any Assignors right, title and interest in and to any goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and indemnifications on, or of, any of the foregoing, (d) all powers of attorney for the execution of any evidence of indebtedness or security or other writing in connection therewith, (e) all books, records, ledger cards, and invoices relating thereto, (f) all instruments in connection therewith and amendments thereto, notices to other creditors or secured parties, and certificates from filing or other registration officers, (g) all credit information, reports and memoranda relating thereto and (h) all other writings related in any way to the foregoing.
26
Representative shall have the meaning provided in Section 7.4(e) of this Agreement.
Required Secured Creditors shall mean (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, the Required Lenders (or, to the extent provided in Section 9.02 of the Credit Agreement, each of the Lenders), and (ii) at any time after all of the Credit Document Obligations have been paid in full in cash and all Commitments under the Credit Agreement have been terminated and if any Other Obligations are outstanding, the holders of a majority of the Other Obligations.
Requisite Creditors shall have the meaning provided in Section 10.2 of this Agreement.
Secondary Obligations shall mean all Obligations other than Primary Obligations.
Secured Creditors shall have the meaning provided in the recitals of this Agreement.
Secured Debt Agreements shall mean and include this Agreement, the other Credit Documents and the Swap Agreements, Bank Product Agreements and Designated Foreign Facility Agreements entered into with an Other Creditor.
Software means all software as such term is defined in the UCC as in effect on the date hereof in the State of New York, now owned or hereafter acquired by any Assignor, other than software embedded in any category of Goods, including all computer programs and all supporting information provided in connection with a transaction related to any program.
Supporting Obligations means all supporting obligations as such term is defined in the UCC as in effect on the date hereof in the State of New York, including letters of credit and guaranties issued in support of Receivables, Chattel Paper, Documents, General Intangibles, Instruments, or Investment Property.
Swap Agreemen t means a Swap Agreement (as defined in the Credit Agreement) other than any such agreement which by its terms states that it is not intended to be secured by the Security Documents.
Termination Date shall have the meaning provided in Section 10.8 of this Agreement.
Trade Secret Rights shall have the meaning provided in Section 5.1 of this Agreement.
UCC shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.
27
ARTICLE X
MISCELLANEOUS
10.1. Notices . Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Collateral Agent or any Assignor shall not be effective until received by the Collateral Agent or such Assignor, as the case may be. All notices and other communications shall be in writing and addressed as follows:
(a) if to any Assignor, at:
c/o Manitowoc Foodservice, Inc.
2227 Welbilt Boulevard
New Port Richey, Florida 34655
Attention: John Stewart, Senior Vice President and
Chief Financial Officer
Telecopier No.: (727) 569-1208
(b) if to the Collateral Agent, at:
JPMorgan Chase Bank, N.A.
Loan Operations
10 South Dearborn Street, Floor L2
Chicago, Illinois 60603
Attention: Nida Mischke
Telecopier No.: (888) 303-9732
(c) if to any Lender Creditor, at such address as such Lender Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to the Borrowers and the Collateral Agent;
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
10.2. Waiver; Amendment . None of the terms and conditions of this Agreement or any other Security Document may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor directly affected thereby and the Collateral Agent (with the written consent of the Required Secured Creditors); provided , however , that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) also shall require the written consent of the Requisite Creditors of such affected Class. For the
28
purpose of this Agreement and each other Security Document, the term Class shall mean each class of Secured Creditors, i.e. , whether (x) the Lender Creditors as holders of the Credit Document Obligations or (y) the Other Creditors as the holders of the Other Obligations. For the purpose of this Agreement and each other Security Document, the term Requisite Creditors of any Class shall mean each of (x) with respect to the Credit Document Obligations, the Required Lenders, and (y) with respect to the Other Obligations, the holders of at least a majority of all Other Obligations outstanding from time to time.
10.3. Obligations Absolute . The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations; whether or not such Assignor shall have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns . This Agreement shall be binding upon each Assignor and its successors and assigns (although no Assignor may assign its rights and obligations hereunder except in accordance with the provisions of the Secured Debt Agreements) and shall inure to the benefit of the Collateral Agent and the other Secured Creditors and their respective successors and assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf.
10.5. Headings Descriptive . The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
10.6. Governing Law . THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
10.7. Assignors Duties . It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.
29
10.8. Termination; Release .
(a) After the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 8.1 hereof shall survive such termination) and the Collateral Agent, at the request and expense of the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement, Termination Date shall mean the date upon which the Commitments under the Credit Agreement have been terminated, no Note under the Credit Agreement is outstanding and all Loans thereunder have been repaid in full, all Letters of Credit issued under the Credit Agreement have been terminated or otherwise addressed in a manner acceptable to the Administrative Agent and all other Obligations then due and payable have been paid in full.
(b) In the event that any part of the Collateral is sold or otherwise disposed of in connection with a transaction permitted by the Secured Debt Agreements (including accounts receivable sold pursuant to Section 6.03(a)(xiii) of the Credit Agreement but excluding any sale or other disposition to any Assignor or a Subsidiary thereof) or is otherwise released with the consent of the Required Secured Creditors and the proceeds of such transaction or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, such Collateral will be sold free and clear of the Liens created by this Agreement and the Collateral Agent, at the request and expense of the relevant Assignor, will duly and promptly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in the possession of the Collateral Agent and has not theretofore been released pursuant to this Agreement.
(c) At any time that an Assignor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.8(a) or (b) , such Assignor shall deliver to the Collateral Agent a certificate signed by a senior officer of such Assignor stating that the release of the respective Collateral is permitted pursuant to such Section 10.8(a) or (b) .
10.9. Counterparts . This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with each Assignor and the Collateral Agent.
10.10. Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
30
10.11. The Collateral Agent and the other Secured Creditors . The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Article VIII of the Credit Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in Article VIII of the Credit Agreement.
10.12. Benefit of Agreement . This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns.
10.13. Additional Assignors . It is understood and agreed that any Subsidiary of the Borrower may, as required by Section 5.10 or 5.13 of the Credit Agreement or otherwise, become an Assignor hereunder either by executing a counterpart hereof and delivering the same to the Collateral Agent or by executing and delivering to the Collateral Agent a joinder agreement in the form of Annex K hereto.
[Signature pages follow]
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.
MANITOWOC FOODSERVICE, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
APPLIANCE SCIENTIFIC, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
BERISFORD PROPERTY DEVELOPMENT (USA) LTD., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
CHARLES NEEDHAM INDUSTRIES INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
CLEVELAND RANGE, LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Security Agreement]
THE DELFIELD COMPANY LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
ENODIS TECHNOLOGY CENTER, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
FRYMASTER L.L.C., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
GARLAND COMMERCIAL INDUSTRIES LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
KYSOR BUSINESS TRUST, as an Assignor |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Security Agreement]
KYSOR HOLDINGS, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
KYSOR INDUSTRIAL CORPORATION, a Michigan corporation, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
KYSOR INDUSTRIAL CORPORATION, a Nevada corporation, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
KYSOR NEVADA HOLDING CORP., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
LANDIS HOLDING LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Security Agreement]
MANITOWOC EQUIPMENT WORKS, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MANITOWOC FOODSERVICE COMPANIES, LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MANITOWOC FOODSERVICE HOLDING, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MANITOWOC FP, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MANITOWOC FSG INTERNATIONAL HOLDINGS, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Security Agreement]
ENODIS CORPORATION, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
ENODIS GROUP HOLDINGS US, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
ENODIS HOLDINGS, INC., as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MANITOWOC FSG OPERATIONS, LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MANITOWOC FSG U.S. HOLDING, LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Security Agreement]
WELBILT CORPORATION, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
WELBILT HOLDING COMPANY, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
WESTRAN CORPORATION, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MCCANNS ENGINEERING & MANUFACTURING CO., LLC, as an Assignor |
||
By: |
|
|
Name: | ||
Title: | ||
MTW COUNTY (DOMESTICATION) LLC as an Assignor |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Security Agreement]
Accepted and Agreed to: | ||
JPMORGAN CHASE BANK, N.A., as Assignee and Collateral Agent |
||
By: |
|
|
Name: | ||
Title: |
[Signature Page to US Security Agreement]
ANNEX A
to
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
ANNEX B
to
SECURITY AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
Assignor |
Location |
|
9
ANNEX C
to
SECURITY AGREEMENT
SCHEDULE OF LEGAL, TRADE AND FICTITIOUS NAMES
AND ORGANIZATIONAL IDENTIFICATION NUMBERS
I. | Legal Name/Organizational Identification Number |
II. | Trade and Fictitious Names |
10
ANNEX D
to
SECURITY AGREEMENT
SCHEDULE OF JURISDICTIONS AND TYPES OF ORGANIZATIONS
11
ANNEX E
to
SECURITY AGREEMENT
SCHEDULE OF MARKS
Marks |
Country |
Registration No. |
||
12
ANNEX F
to
SECURITY AGREEMENT
SCHEDULE OF PATENTS
13
ANNEX G
to
SECURITY AGREEMENT
SCHEDULE OF COPYRIGHTS
14
ANNEX H
to
SECURITY AGREEMENT
GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, [Name of Grantor], a (the Grantor ) with principal offices at , hereby assigns and grants to JPMorgan Chase Bank, N.A., as Collateral Agent, with offices at 10 South Dearborn Street, Floor 07, Chicago, Illinois 60603-2003 (the Grantee ), a security interest in (i) all of the Grantors right, title and interest in and to the United States trademarks, trademark registrations and trademark applications (the Marks ) set forth on Schedule A attached hereto, (ii) all Proceeds (as such term is defined in the Security Agreement referred to below) and products of the Marks, (iii) the goodwill of the businesses with which the Marks are associated and (iv) all causes of action arising prior to or after the date hereof for infringement of any of the Marks or unfair competition regarding the same.
THIS GRANT is made to secure the satisfactory performance and payment of all the Obligations of the Grantor, as such term is defined in the Security Agreement among the Grantor, the other assignors from time to time party thereto and the Grantee, dated as of March 3, 2016 (as amended, modified, restated, amended and restated and/or supplemented from time to time, the Security Agreement ). Upon the occurrence of the Termination Date (as defined in the Security Agreement), the Grantee shall execute, acknowledge, and deliver to the Grantor an instrument in writing releasing the security interest in the Marks acquired under this Grant.
This Grant has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect
15
to the security interest granted herein are set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.
[Signature page follows]
16
IN WITNESS WHEREOF, the undersigned have executed this Grant as of the day of , 20 .
[NAME OF GRANTOR], as Grantor | ||
By: |
|
|
Name: | ||
Title: | ||
JPMORGAN CHASE BANK, N.A., as Collateral Agent and Grantee | ||
By: |
|
|
Name: | ||
Title: |
17
STATE OF | ) | |||
) | ss: | |||
COUNTY OF | ) |
On this day of , 20 , before me personally came , who, being by me duly sworn, did state as follows: that [s]he is of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said and that [s]he did so by authority of the [Board of Directors] of said .
|
Notary Public |
18
STATE OF | ) | |||
) | ss: | |||
COUNTY OF | ) |
On this day of , 20 , before me personally came , who, being by me duly sworn, did state as follows: that [s]he is of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said and that [s]he did so by authority of the [Board of Directors] of said .
|
Notary Public |
19
SCHEDULE A
MARK |
REG. NO. |
REG. DATE |
||
20
ANNEX I
GRANT OF SECURITY INTEREST
IN UNITED STATES PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, [Name of Grantor], a (the Grantor ) with principal offices at , hereby assigns and grants to JPMorgan Chase Bank, N.A., as Collateral Agent, with offices at 10 South Dearborn Street, Floor 07, Chicago, Illinois 60603-2003 (the Grantee ), a security interest in (i) all of the Assignors rights, title and interest in and to the United States patents (the Patents ) set forth on Schedule A attached hereto, in each case together with (ii) all Proceeds (as such term is defined in the Security Agreement referred to below) and products of the Patents, and (iii) all causes of action arising prior to or after the date hereof for infringement of any of the Patents or unfair competition regarding the same.
THIS GRANT is made to secure the satisfactory performance and payment of all the Obligations of the Grantor, as such term is defined in the Security Agreement among the Grantor, the other assignors from time to time party thereto and the Grantee, dated as of March 3, 2016 (as amended, modified, restated, amended and restated and/or supplemented from time to time, the Security Agreement ). Upon the occurrence of the Termination Date (as defined in the Security Agreement), the Grantee shall execute, acknowledge, and deliver to the Grantor an instrument in writing releasing the security interest in the Patents acquired under this Grant.
This Grant has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect to the security interest granted herein are as set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.
21
[Signature page follows]
22
IN WITNESS WHEREOF, the undersigned have executed this Grant as of the day of , 20 .
[NAME OF GRANTOR], as Grantor | ||
By: |
|
|
Name: | ||
Title: | ||
JPMORGAN CHASE BANK, N.A., as Collateral Agent and Grantee | ||
By: |
|
|
Name: | ||
Title: |
23
STATE OF | ) | |||
) | ss: | |||
COUNTY OF | ) |
On this day of , 20 , before me personally came , who, being by me duly sworn, did state as follows: that [s]he is of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said and that [s]he did so by authority of the [Board of Directors] of said .
|
Notary Public |
24
STATE OF | ) | |||
) | ss: | |||
COUNTY OF | ) |
On this day of , 20 , before me personally came , who, being by me duly sworn, did state as follows: that [s]he is of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said and that [s]he did so by authority of the [Board of Directors] of said .
|
Notary Public |
25
SCHEDULE A
PATENT |
PATENT NO. |
ISSUE DATE |
||
26
Annex J
to
SECURITY AGREEMENT
GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Grantor], a (the Grantor ), having its chief executive office at , , is the owner of all right, title and interest in and to the United States copyrights and associated United States copyright registrations and applications for registration set forth in Schedule A attached hereto;
WHEREAS, JPMORGAN CHASE BANK, N.A., as Collateral Agent, having its offices at 10 South Dearborn Street, Floor 07, Chicago, Illinois 60603-2003 (the Grantee ), desires to acquire a security interest in said copyrights and copyright registrations and applications therefor; and
WHEREAS, the Grantor is willing to assign to the Grantee, and to grant to the Grantee a security interest in and lien upon the copyrights and copyright registrations and applications therefor described above.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, and subject to the terms and conditions of the Security Agreement, dated as of March 3, 2016, made by the Grantor, the other assignors from time to time party thereto and the Grantee (as amended, modified, restated, amended and restated and/or supplemented from time to time, the Security Agreement ), the Grantor hereby assigns to the Grantee as collateral security, and grants to the Grantee a security interest in, the copyrights and copyright registrations and applications therefor set forth in Schedule A attached hereto.
This Grant has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect to the security interest granted herein are as set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.
[Signature page follows]
27
Executed at , , the day of , 20 .
[NAME OF GRANTOR], as Grantor |
||
By: |
|
|
Name: | ||
Title: | ||
JPMORGAN CHASE BANK, N.A.,as Collateral Agent and Grantee | ||
By: |
|
|
Name: | ||
Title: |
28
STATE OF | ) | |||
) | ss: | |||
COUNTY OF | ) |
On this day of , 20 , before me personally came , who, being by me duly sworn, did state as follows: that [s]he is of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said and that [s]he did so by authority of the [Board of Directors] of said .
|
Notary Public |
29
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION NUMBERS |
PUBLICATION DATE |
COPYRIGHT TITLE |
||
30
ANNEX K
to
Security Agreement
Form of Joinder
Joinder to Security Agreement
The undersigned, , a , hereby joins in the , execution of that certain Security Agreement dated as of March 3, 2016 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified and in effect from time to time, the Security Agreement ) by Manitowoc Foodservice, Inc., the other Assignors party thereto and each other Person that becomes an Assignor thereunder after the date and pursuant to the terms thereof, to and in favor of JPMorgan Chase Bank, N.A., as Collateral Agent. By executing this Joinder, the undersigned hereby agrees that it is an Assignor thereunder and agrees to be bound by all of the terms and provisions of the Security Agreement.
The undersigned Assignor represents and warrants to the Collateral Agent that:
(a) the chief executive office and divisional offices of such Assignor are located at the addresses indicated on Annex A hereto;
(b) all Inventory and Equipment held on the date hereof by such Assignor is located at one of the locations shown on Annex B hereto, subject to the exceptions and qualifications set forth in Section 2.5 of the Security Agreement;
(c) The legal name of such Assignor, and the organizational identification number (if any) of such Assignor, is listed on Annex C hereto;
(d) The jurisdiction of organization of such Assignor, and the type of organization of such Assignor, is listed on Annex D hereto;
(e) The registered Marks listed in Annex E hereto include all United States marks and applications for United States marks registered in the United States Patent and Trademark Office that such Assignor owns or uses in connection with its business as of the date hereof;
(f) the Patents listed in Annex F hereto include all the United States patents and applications for United States patents that such Assignor owns as of the date hereof; and
(g) the Copyrights listed in Annex G hereto constitute all the United States copyrights registered with the United States Copyright Office and applications to United States copyrights that such Assignor owns as of the date hereof.
, a | ||
By: |
|
|
Name: |
|
|
Title: |
|
|
FEIN: |
|
31
ANNEX L
to
Security Agreement
[ ], 20[ ]
V IA C ERTIFIED M AIL R ETURN R ECEIPT R EQUESTED
JPMorgan Chase Bank, N.A.
as Collateral Agent and Administrative Agent
Loan Operations
10 South Dearborn Street, Floor L2
Chicago, Illinois 60603
Attention: Nida Mischke
Ladies and Gentlemen:
We refer to that certain Security Agreement, dated as of March 3, 2016, made by the undersigned, Manitowoc Foodservice, Inc., and certain of our subsidiaries in favor of JPMorgan Chase Bank, N.A. as Collateral Agent (as amended, modified, restated, extended or renewed from time to time, the Security Agreement ). Capitalized terms used herein and not defined herein have the meanings ascribed to them in the Security Agreement.
In accordance with the provisions of the Security Agreement (and in particular the definition of Designated Foreign Facility Arrangements therein), please be advised that the following agreement is a Designated Foreign Facility Agreement intended to be secured by the Security Agreement: [insert description of agreement and maximum amount of debt that may be incurred thereunder].
To acknowledge your receipt of this notice, please countersign this notice in the space provided below and return a copy to Manitowoc Foodservice, Inc. (by e-mail ( [insert email of company officer] ) or fax (insert fax number of company officer) to [insert name of company officer] and to [insert name of contact at Secured Party] (by e-mail ( [insert email of contact at Secured Party] ) or fax ([insert fax number of contact at Secured Party) to [insert name of contact at Secured Party]).
[Signature Pages Follow]
Sincerely yours, | ||
MANITOWOC FOODSERVICE, INC. | ||
By: |
Name: |
Title: | ||
[SECURED PARTY] | ||
By: |
Name: |
Title: |
[Signature Page to Designated Foreign Facility Letter]
Receipt acknowledged: | ||
JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent |
||
By: | ||
Name: | ||
Title: |
Exhibit 10.7
EXECUTION VERSION
SIXTH AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
among
MANITOWOC CAYMAN ISLANDS FUNDING LTD.
as Seller,
MANITOWOC FOODSERVICE, INC.,
GARLAND COMMERCIAL RANGES LIMITED,
CONVOTHERM-ELEKTROGERÄTE GMBH,
MANITOWOC DEUTSCHLAND GMBH,
MANITOWOC FOODSERVICE UK LIMITED,
MANITOWOC FOODSERVICE ASIA PACIFIC PRIVATE LIMITED
and
THE OTHER PERSONS FROM TIME TO TIME PARTY HERETO,
as Servicers,
and
WELLS FARGO BANK, N.A.,
as Purchaser and as Agent
Dated as of March 3, 2016
TABLE OF CONTENTS
Page | ||||||
ARTICLE I |
AMOUNTS AND TERMS OF THE PURCHASES |
2 | ||||
Section 1.1 |
Purchase Facility |
2 | ||||
Section 1.2 |
Making Investments |
3 | ||||
Section 1.3 |
Transfer of 100% of Pool Receivables and other Purchased Assets |
4 | ||||
Section 1.4 |
Terms and Conditions for Sale, Assignment, Conveyance, and Transfer |
5 | ||||
Section 1.5 |
Computation of the Purchased Assets Coverage Percentage; Application of Collections by Currency; Conversion of Currencies |
7 | ||||
Section 1.6 |
Settlement Procedures |
8 | ||||
Section 1.7 |
Discount and Fees |
12 | ||||
Section 1.8 |
Payments and Computations, Etc |
12 | ||||
Section 1.9 |
Increased Costs |
13 | ||||
Section 1.10 |
Requirements of Law |
14 | ||||
Section 1.11 |
Inability to Determine Eurodollar Rate |
15 | ||||
ARTICLE II |
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS |
15 | ||||
Section 2.1 |
Representations and Warranties; Covenants |
15 | ||||
Section 2.2 |
Termination Events |
15 | ||||
ARTICLE III |
INDEMNIFICATION |
16 | ||||
Section 3.1 |
Indemnification |
16 | ||||
ARTICLE IV |
ADMINISTRATION AND COLLECTIONS |
19 | ||||
Section 4.1 |
Appointment of Servicers |
19 | ||||
Section 4.2 |
Duties of Servicer |
21 | ||||
Section 4.3 |
Establishment and Use of Certain Accounts |
22 | ||||
Section 4.4 |
Enforcement Rights |
23 | ||||
Section 4.5 |
Responsibilities of the Seller |
24 | ||||
Section 4.6 |
Servicing Fee |
24 | ||||
ARTICLE V |
MISCELLANEOUS |
24 | ||||
Section 5.1 |
Amendments, Etc |
24 | ||||
Section 5.2 |
Notices, Etc |
25 | ||||
Section 5.3 |
Assignability |
25 | ||||
Section 5.4 |
Costs, Expenses and Taxes |
25 | ||||
Section 5.5 |
Severability |
26 | ||||
Section 5.6 |
Confidentiality |
26 | ||||
Section 5.7 |
GOVERNING LAW AND JURISDICTION |
26 | ||||
Section 5.8 |
Execution in Counterparts |
27 | ||||
Section 5.9 |
Survival of Termination |
27 |
i
TABLE OF CONTENTS
(continued)
Page | ||||||
Section 5.10 |
WAIVER OF JURY TRIAL |
27 | ||||
Section 5.11 |
Entire Agreement |
27 | ||||
Section 5.12 |
Headings |
28 | ||||
Section 5.13 |
Purchasers and Agents Liabilities |
28 | ||||
Section 5.14 |
Mutual Negotiations |
28 | ||||
Section 5.15 |
USA Patriot Act |
28 | ||||
Section 5.16 |
Register |
28 |
EXHIBITS |
||
Exhibit I |
Definitions | |
Exhibit II |
Conditions of Investments and Reinvestments | |
Exhibit III |
Representations and Warranties | |
Exhibit IV |
Covenants | |
Exhibit V |
Termination Events | |
Exhibit VI |
Supplemental Representations, Warranties and Covenants | |
SCHEDULES |
||
Schedule I |
Notices | |
Schedule II |
Lock-Box Banks, Lock-Box Accounts, Lock-Boxes and Post Office Boxes; Collection Accounts | |
Schedule III |
Trade Names | |
Schedule IV |
Credit and Collection Policy | |
Schedule V |
[Reserved] | |
Schedule VI |
Purchasers Account | |
Schedule VII |
Sellers Accounts | |
Schedule VIII |
Excluded Accounts, Lock-Box Accounts, Lock-Boxes and Post Office Boxes | |
Schedule IX |
Specified Receivable Obligors | |
ANNEXES |
||
Annex A |
Form of Investment Notice | |
Annex B |
Form of Monthly Report | |
Annex C |
Form of Paydown Notice |
ii
SIXTH AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
This SIXTH AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this Agreement ) is entered into as of March 3, 2016 by and among the following parties:
(i) | MANITOWOC CAYMAN ISLANDS FUNDING LTD., an exempted company limited by shares established under the laws of the Cayman Islands (the Seller ); |
(ii) | MANITOWOC FOODSERVICE, INC., a limited liability company organized under the laws of the state of Delaware ( Manitowoc ), as a Servicer; |
(iii) | GARLAND COMMERCIAL RANGES LIMITED, a corporation amalgamated under the laws of Ontario ( Garland ), as a Servicer; |
(iv) | CONVOTHERM-ELEKTROGERÄTE GMBH, a limited liability company ( GmbH ) organized under the laws of the Federal Republic of Germany ( Convotherm ), as a Servicer; |
(v) | MANITOWOC DEUTSCHLAND GMBH, a limited liability company ( GmbH ) organized under the laws of the Federal Republic of Germany ( Manitowoc Deutschland ), as a Servicer; |
(vi) | MANITOWOC FOODSERVICE UK LIMITED, a private limited company incorporated under the laws of England ( Foodservice UK ), as a Servicer; |
(vii) | MANITOWOC FOODSERVICE ASIA PACIFIC PRIVATE LIMITED, a private limited company incorporated under the laws of Singapore ( Foodservice Asia ), as a Servicer; and |
(viii) | WELLS FARGO BANK, N.A. ( Wells ), as purchaser (in such capacity, together with its successors and assigns in such capacity, the Purchaser ), and as agent for the Purchaser (in such capacity, together with its successors and assigns in such capacity, the Agent ). |
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used throughout this Agreement are defined in Exhibit I to this Agreement. References in the Exhibits hereto to the Agreement refer to this Agreement, as amended, amended and restated, modified or supplemented from time to time.
On the terms and subject to the conditions set forth herein, (i) the Seller desires to sell, transfer and assign receivables to the Purchaser, (ii) the Purchaser desires to acquire such receivables from time to time and (iii) the Servicers desire to service such receivables.
This Agreement amends and restates in its entirety, as of the Closing Date, that certain Fifth Amended and Restated Receivables Purchase Agreement, dated as of December 15, 2014 (as amended, restated, supplemented or otherwise modified prior to the Closing Date, the Existing Agreement ), among the Seller, Manitowoc Funding, LLC, The Manitowoc Company, Inc., Garland, Convotherm, Manitowoc Deutschland, Foodservice UK, Foodservice Asia, the Purchaser and the Agent. Notwithstanding the amendment and restatement of the Existing Agreement by this Agreement, subject to the Release Agreement, (i) the Seller, Garland, Convotherm, Manitowoc Deutschland, Foodservice UK and Foodservice Asia shall continue to be liable to the Purchaser, the Agent or any other Indemnified Party or Affected Person (as such terms are defined in the Existing Agreement) for fees and expenses which are accrued and unpaid under the Existing Agreement on the Closing Date (collectively, the Existing Agreement Outstanding Amounts ) and all agreements to indemnify such parties in connection with events or conditions arising or existing prior to the Closing Date and (ii) the security interest created under the Existing Agreement shall remain in full force and effect as security for such Existing Agreement Outstanding Amounts until such Existing Agreement Outstanding Amounts have been paid in full. Upon the effectiveness of this Agreement, each reference to the Existing Agreement in any Transaction Document or in any other document, instrument or agreement shall mean and be a reference to this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchase Facility .
(a) On the terms and conditions hereinafter set forth, including the conditions set forth in Exhibit II hereto, the Purchaser hereby agrees to make Investments (as such term is defined in Section 1.4(a) below) and Reinvestments (as such term is defined in Section 1.4(b) below) in the Purchased Assets from time to time from the Closing Date to the Facility Termination Date; provided , however , that under no circumstances shall the Purchaser make any such Investment or Reinvestment if, after giving effect thereto:
(i) (A) the Aggregate Capital would exceed the Investment Limit or (B) solely with respect to (I) any Investment and (II) the first Reinvestment occurring on or after each Settlement Date, the Aggregate Capital would exceed the Net Investment Limit;
(ii) the Purchased Assets Coverage Percentage would exceed 100%;
(iii) solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the U.S. Capital would exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in U.S. Dollars that are then included in the Receivables Pool;
2
(iv) solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the CAD Capital would exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in Canadian Dollars that are then included in the Receivables Pool;
(v) solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the Euro Capital would exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in Euro that are then included in the Receivables Pool; or
(vi) solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the GBP Capital would exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in GBP that are then included in the Receivables Pool.
(b) The Seller may, upon at least five (5) Business Days joint written notice to the Agent, reduce the unused portion of the Investment Limit in whole or in part (but not below the amount that would cause the Aggregate Capital to exceed the Net Investment Limit after giving effect to such reduction); provided that each partial reduction shall be in the amount of at least one million dollars ($1,000,000) or an integral multiple of one hundred thousand dollars ($100,000) in excess thereof; provided , further , that unless reduced to zero, the Investment Limit shall in no event be reduced below fifty million dollars ($50,000,000) pursuant to this clause (b) .
Section 1.2 Making Investments .
(a) Each Investment by the Purchaser hereunder shall be made upon the Sellers request (or the request of a Servicer on its behalf) evidenced by an irrevocable written notice in the form of Annex A (each, an Investment Notice ) delivered to the Agent in accordance with Section 5.2 , which Investment Notice must be received by the Agent (I) with respect to Investments in U.S. Dollars, prior to 1:00 p.m., New York time on or before one (1) Business Day prior to the requested Investment Date and (II) with respect to Investments in any other Approved Currency, prior to 3:00 p.m., London time on or before one (1) Business Day prior to the requested Investment Date. The Seller hereby agrees (I) to deliver no more than 6 Investment Notices, in the aggregate, to the Agent during any calendar month and (II) not to deliver any Investment Notice to the Agent requesting an Investment in a currency for which any other Investment Notice for an Investment denominated in such currency is currently outstanding. Neither the Purchaser nor the Agent shall have any obligation (including any obligation to fund any requested Investment) with respect to any Investment Notice delivered in violation of the immediately preceding sentence. Each such Investment Notice shall specify:
(i) the amount and Approved Currency of the Capital requested to be paid by the Purchaser to the Seller in connection with such Investment; provided that such amount shall not be less than (A) one million U.S. Dollars ($1,000,000) or an integral multiple of one hundred thousand Dollars ($100,000) in excess thereof for Investments in U.S. Dollars, (B) one million Euros (1,000,000) or an integral multiple of one hundred thousand Euros (100,000) in excess thereof for Investments in Euros, (C) one million Canadian Dollars (CAD 1,000,000) or an integral multiple of one hundred thousand
3
Canadian Dollars (CAD 100,000) in excess thereof for Investments in Canadian Dollars and (D) one million GBP (£1,000,000) or an integral multiple of one hundred thousand GBP (£100,000) in excess thereof for Investments in GBP;
(ii) the requested Investment Date (which shall be a Business Day);
(iii) a pro forma calculation of the Purchased Assets Coverage Percentage after giving effect to the requested Investment; and
(iv) the other information contemplated by Annex A .
Unless the information set forth in such Investment Notice is also delivered through Agents electronic platform or portal, neither the Purchaser nor the Agent shall have any obligation (including any obligation to fund any requested Investment) with respect to such Investment Notice until the Agent shall have received such information from the Seller reasonably requested by the Agent to complete its authentication process with respect to such Investment Notice and the results of the Agents authentication process shall be satisfactory to the Agent in its sole discretion, as notified by the Agent to the Seller in writing.
(b) On each Investment Date, the Purchaser shall, upon satisfaction of the applicable conditions set forth in Section 1.2(a) and Exhibit II hereto, make available to the Agent at the Agents office at its address determined pursuant to Section 5.2 , an amount equal to the Capital of the Investment being funded by the Purchaser (set forth in the related Investment Notice delivered in accordance with Section 1.2(a) ) in same day funds denominated in the applicable Approved Currency, and after the Agents receipt of such funds, the Agent shall make such funds immediately available to the Seller at the applicable account set forth on Schedule VII . The Purchaser may, if it so elects, fulfill its commitment to make any Investment in an Approved Currency other than U.S. Dollars by causing a foreign branch (a Foreign Branch ) or Affiliate of the Purchaser to make such Investment; provided that in such event for the purposes of this Agreement such Investment shall be deemed to have been made by the Purchaser and the obligation of the Seller to repay the Capital of such Investment shall nevertheless be to the Purchaser and shall be deemed held by it, to the extent of the Capital of such Investment, for the account of such branch or Affiliate.
Section 1.3 Transfer of 100% of Pool Receivables and other Purchased Assets .
(a) Sale of Receivables . Notwithstanding the otherwise applicable conditions precedent to Investments hereunder, upon effectiveness of this Agreement in accordance with its terms, (i) the Purchaser shall be deemed to have made a U.S. Capital Investment equal to the applicable amount set forth in the Release Agreement, (ii) the Purchaser shall be deemed to have made a Euro Capital Investment equal to the outstanding Euro Capital under, and as defined in, the Existing Agreement, (iii) the Purchaser shall be deemed to have made a CAD Capital Investment equal to the outstanding CAD Capital under, and as defined in, the Existing Agreement, (iv) the Purchaser shall be deemed to have made a GBP Capital Investment equal to the outstanding GBP Capital under, and as defined in, the Existing Agreement, (v) the Purchasers outstanding U.S. Capital hereunder after giving effect to such deemed Investment (but prior to giving effect to any other Investment hereunder) shall be equal to the U.S. Capital
4
that was outstanding under, and as defined in, the Existing Agreement immediately prior to the effectiveness of this Agreement, (v) the Purchasers outstanding Euro Capital hereunder after giving effect to such deemed Investment (but prior to giving effect to any other Investment hereunder) shall be equal to the Euro Capital that was outstanding under, and as defined in, the Existing Agreement immediately prior to the effectiveness of this Agreement, (vi) the Purchasers outstanding CAD Capital hereunder after giving effect to such deemed Investment (but prior to giving effect to any other Investment hereunder) shall be equal to the CAD Capital that was outstanding under, and as defined in, the Existing Agreement immediately prior to the effectiveness of this Agreement and (vii) the Purchasers outstanding GBP Capital hereunder after giving effect to such deemed Investment (but prior to giving effect to any other Investment hereunder) shall be equal to the GBP Capital that was outstanding under, and as defined in, the Existing Agreement immediately prior to the effectiveness of this Agreement. In consideration of such initial Investment and the entry into this Agreement by the Agent and the Purchaser and the Purchasers agreement to make payments to the Seller from time to time in accordance with Section 1.4 , effective on the Closing Date, the Seller hereby sells, conveys, transfers and assigns to the Purchaser, all of the Sellers right, title and interest in and to the following (collectively, the Purchased Assets ): (i) all the Sellers Pool Receivables existing on the Closing Date or thereafter arising or acquired by the Seller from time to time prior to the Facility Termination Date, (ii) all Related Security, whether existing on the Closing Date or thereafter arising at any time and acquired by the Seller, (iii) all Collections with respect to the foregoing and (iv) the Purchase and Sale Agreements.
(b) Purchase of Purchased Assets . On the terms and subject to the conditions hereof, the Purchaser hereby purchases and accepts from the Seller all of the Sellers Purchased Assets.
(c) Obligations Not Assumed . The foregoing sale, assignment, conveyance, and transfer does not constitute and is not intended to result in the creation, or an assumption by the Purchaser or the Agent, of any obligation of the Seller, any Originator, any Servicer or any other Person under or in connection with the Receivables, any other Related Security or any Purchase and Sale Agreement, all of which shall remain the obligations and liabilities of the Seller, Originator, Servicer and/or other Person, as applicable.
(d) Transfer of 100% of Financial Assets; No Offset . For the avoidance of doubt, on the terms and subject to the conditions set forth herein, (i) the Seller is hereby selling to the Purchaser, and the Purchaser is hereby purchasing, 100% of the Sellers right, title and interest in the Purchased Assets (including, without limitation, 100% of the financial assets constituting the Pool Receivables), and accordingly (unless, notwithstanding the intent of the parties, such sale is not treated as a sale), the Seller shall cease being a creditor of the Obligors on the Pool Receivables and rather, the Purchaser shall be a creditor of such Obligors, and (ii) the Purchaser shall not offset the new Receivables acquired against the obligation to the Seller to pay the Deferred Purchase Price.
Section 1.4 Terms and Conditions for Sale, Assignment, Conveyance, and Transfer . On the terms and subject to the conditions set forth herein, including Exhibit II , in consideration for the sale, assignment, conveyance and transfer of the Purchased Assets by the Seller to the Purchaser hereunder:
(a) Investments . On the Closing Date, and thereafter from time to time prior to the Facility Termination Date, on request of the Seller for an Investment in accordance with Section 1.2(a) , the Purchaser, in accordance with Section 1.2(b) , shall pay to the Seller the amount of Capital in the Approved Currency requested by the Seller under Section 1.2(a) . Each such payment is herein referred to as an Investment .
5
(b) Reinvestments . On each Business Day prior to the Facility Termination Date, the Applicable Servicer, on behalf of the Purchaser, shall pay to the Seller, out of Collections, the amount available for reinvestment in accordance with Section 1.6(b)(ii) . Each such payment is herein referred to as a Reinvestment .
(c) Deferred Purchase Price . The Applicable Servicer, on behalf of the Purchaser, shall pay to the Seller, from Collections, the amounts payable to the Seller from time to time pursuant to Section 1.6(b)(ii) , Section 1.6(b)(iv) and the last paragraph of Section 1.6(d) (such amounts, the Deferred Purchase Price with respect to the Purchased Assets) at the times specified in such Sections and determined in accordance with Section 1.8(f) .
(d) Payments to the Seller Limited to Collections . Notwithstanding any provision contained in this Agreement to the contrary, neither the Agent nor the Purchaser shall be obligated to pay any amount to the Seller as the purchase price (including, without limitation, in respect of the Deferred Purchase Price) for the Purchased Assets pursuant to clauses (b) and (c) above except to the extent of Collections on the Pool Receivables available for distribution to the Seller in accordance with this Agreement. Any amount that the Agent or the Purchaser does not pay pursuant to the preceding sentence shall not constitute a claim (as defined in § 101 of the Bankruptcy Code) against or corporate obligation of the Agent or the Purchaser for any such insufficiency unless and until such amount becomes available for distribution to the Seller in accordance with the last paragraph of Section 1.6(d) .
(e) Intent of the Parties . The Seller, the Servicers, the Agent and the Purchaser intend that each sale, conveyance, assignment and transfer of Purchased Assets to the Purchaser shall be treated as a sale for all purposes (other than for federal, state and local income and franchise tax purposes as provided in the following paragraph of this clause (e) ). If notwithstanding the intent of the parties, any such sale, conveyance, transfer and assignment is not treated as a sale for such purposes, such sale, conveyance, assignment and transfer shall be treated as the grant of, and the Seller does hereby grant to the Purchaser a security interest in the following property to secure all of the Sellers obligations (monetary or otherwise) under this Agreement and the other Transaction Documents to which it is a party, whether now or hereafter existing or arising, due or to become due, direct or indirect, absolute or contingent: all of the Sellers right, title and interest in, to and under all of the following, whether now or hereafter owned, existing or arising: (i) all Pool Receivables, (ii) all Related Security with respect to each such Pool Receivable, (iii) all Collections with respect to each such Pool Receivable, (iv) the Lock-Box Accounts (other than any German Account, which shall instead be subject to an Account Pledge Agreement) and all amounts on deposit therein representing proceeds of the Pool Receivables and proceeds of the Related Security with respect thereto, the Collection Accounts (other than any European Collection Account, which shall instead be subject to an Account Pledge Agreement) and all amounts on deposit therein and all certificates and instruments, if any, from time to time evidencing such Lock-Box Accounts and Collection
6
Accounts and such amounts on deposit therein, (v) the Purchase and Sale Agreements, (vi) all other accounts, deposit accounts, chattel paper, documents, fixtures, general intangibles (including payment intangibles), goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and supporting obligations and proceeds from commercial tort claims, (vii) all other personal property of any nature or type, and (viii) all accessions, products, substitutions, replacements and proceeds of any of the foregoing, and all other personal property of any nature or type, and cash and non-cash proceeds of any of the foregoing (collectively, the Pool Assets ). The Seller hereby authorizes the Purchaser to file financing statements describing as the collateral covered thereby as all of the debtors personal property or assets or words to that effect, notwithstanding that such wording may be broader in scope than the collateral described in this Agreement. The Purchaser shall have, with respect to the Pool Assets, and in addition to all the other rights and remedies available to the Purchaser and the Agent, all the rights and remedies of a secured party under the UCC and the PPSA.
Notwithstanding the foregoing paragraph of this clause (e) , the Seller, the Servicers, the Agent and the Purchaser intend and agree to treat, for purposes only of federal, state and local income and franchise tax and any other tax measured in whole or in part by income, the sales, conveyances, assignments and transfers of the Purchased Assets to the Purchaser as loans to the Seller secured by the Pool Assets. The provisions of this Agreement and all related Transaction Documents shall be construed to further these intentions of the parties.
Section 1.5 Computation of the Purchased Assets Coverage Percentage; Application of Collections by Currency; Conversion of Currencies.
(a) Computation of the Purchased Assets Coverage Percentage . The Purchased Assets Coverage Percentage shall be initially computed on the Closing Date. Thereafter, until the Facility Termination Date, such Purchased Assets Coverage Percentage shall be automatically recomputed (or deemed to be recomputed) on each Business Day other than a Termination Day. From and after the occurrence of any Termination Day, the Purchased Assets Coverage Percentage shall (until the event(s) or circumstance(s) giving rise to such Termination Day are cured and at all times on and after the Termination Date) be deemed to be 100% until the occurrence of the Final Payout Date.
(b) Application of Collections by Currency . In making the distributions and payments out of Collections hereunder and in setting aside and reserving Collections for future distributions and payments hereunder (including, without limitation, distributions and payments in respect of Reinvestments, the Deferred Purchase Price, Capital, Discount and fees), the Servicers shall, to the extent Collections are available therefor and subject to any applicable priorities of payment set forth herein, (i) first, apply Collections received in a particular Approved Currency to amounts distributable or payable in such Approved Currency, and (ii) second, to the extent that Collections received in a particular Approved Currency are not sufficient to distribute, pay, set aside or reserve for amounts distributable or payable in such Approved Currency, apply any excess Collections received in another Approved Currency to such amounts.
7
(c) Conversion of Currencies .
(i) If on any Settlement Date or any other day a payment is due and payable hereunder it is necessary for funds in one Approved Currency to be converted into any other Approved Currency in order to make any payment required to be made hereunder, the Seller shall (or shall cause the Applicable Servicer to) solicit offer quotations from at least two (2) foreign exchange dealers reasonably acceptable to the Agent for effecting such exchange and shall select the quotation which provides for the best exchange rate. The Seller or the Applicable Servicer on its behalf shall effect such exchange on such Settlement Date or other day, as the case may be.
(ii) On any day when any computation or calculation hereunder requires the aggregation of amounts denominated in more than one currency, all amounts that are denominated in an Approved Currency shall be converted to the U.S. Dollar Equivalent on such day.
(iii) Without limiting the generality of the foregoing, for the purpose of calculating the terms set out below on any day, all Receivables or other amounts that are denominated in an Approved Currency other than U.S. Dollars will be converted to the U.S. Dollar Equivalent on such day:
A. | Dilution; |
B. | Eligible Dilution; |
C. | Eligible Sales; |
D. | Eligible Unapplied Cash and Credits; |
E. | Excess Concentration; |
F. | Net Eligible Pool Balance; |
G. | Net Outstanding Balance; |
H. | Outstanding Balance; |
I. | Servicing Fee; and |
J. | Total Reserve. |
Section 1.6 Settlement Procedures .
(a) Collection of the Pool Receivables shall be administered by the Servicers in accordance with the terms of this Agreement. The Seller shall provide to the Servicers on a timely basis all information needed for such administration, including notice of the occurrence of any Termination Day and current computations of the Purchased Assets Coverage Percentage.
(b) Each Applicable Servicer shall, on each day on which Collections of Pool Receivables are received (or deemed received) by the Seller or a Servicer, transfer (or cause to
8
be transferred) such Collections from the Lock-Box Accounts and deposit (or cause to be deposited) such Collections into a Collection Account, except as otherwise permitted pursuant to Section 4.3(a) . With respect to all Collections on deposit in the Collection Accounts on such day, the Servicers shall:
(i) set aside and maintain in the Collection Accounts for the benefit of the Purchaser (and, in the case of clause fourth below, the other applicable Purchaser Parties, subject to their right to receive such amounts solely in accordance with the priorities for payment set forth in Section 1.6(d) below), out of such Collections, first an amount equal to all Discount accrued through such day and not previously set aside, second , an amount equal to the sum of the Used Fees, Unused Fees and Breakage Costs accrued through such day and not previously set aside, third , to the extent funds are available therefor, an amount equal to the Servicing Fee accrued through such day and not previously set aside and fourth , to the extent funds are available therefor, any other amounts (other than return of Capital) owed to any Purchaser Party pursuant to Section 1.9 , Section 1.10 , Section 3.1 , or Section 5.4 and not previously set aside;
(ii) subject to Section 1.6(f) , if such day is not a Termination Day, remit to the Seller, on behalf of the Purchaser, the remainder of such Collections. Such remainder shall, (x) to the extent representing a return of Capital, be automatically reinvested in Purchased Assets and other proceeds with respect thereto and (y) to the extent not representing a return of Capital, be paid (on behalf of the Purchaser) to the Seller in respect of the Deferred Purchase Price for the Purchased Assets; provided , however , that if, after giving effect to such Reinvestment, the Purchased Assets Coverage Percentage would exceed 100%, then the Servicers shall set aside and maintain in the Collection Accounts for the benefit of the Purchaser in accordance with clause (iii) below the portion of such remaining Collections that, together with any other Collections set aside pursuant to this clause (ii) , equals the amount necessary to reduce the Purchased Assets Coverage Percentage to 100% (or, if all such remaining Collections are not sufficient to reduce the Purchased Assets Coverage Percentage to 100%, then all such remaining Collections shall be so set aside for the benefit of the Purchaser), rather than remitting all of such remaining Collections to the Seller for Reinvestment or for payment of the Deferred Purchase Price;
(iii) if such day is a Termination Day, set aside and maintain in the Collection Account for the benefit of the Purchaser Parties the entire remainder of such Collections; and
(iv) subject to Section 1.6(f) , pay to the Seller (on behalf of the Purchaser) for the Sellers own accounts and in payment of the Deferred Purchase Price for the Purchased Assets, any Collections in excess of: (x) amounts required to be reinvested in accordance with clause (ii) above, plus (y) the amounts that are required to be set aside pursuant to clause (i) above, pursuant to the proviso to clause (ii) above and pursuant to clause (iii) above, plus (z) all reasonable and appropriate out-of-pocket costs and expenses of the Servicers for servicing, collecting and administering the Pool Receivables.
9
(c) On each Settlement Date, each Applicable Servicer shall (i) deposit into the applicable Purchasers Account (or such other account designated by the Agent) all Collections held on deposit in each Collection Account for the benefit of the Purchaser Parties pursuant to Section 1.6(b) and Section 1.6(f) and (ii) deposit to each Servicers own account, from Collections held on deposit in the Collection Account pursuant to clause third of Section 1.6(b)(i) in respect of the accrued Servicing Fee, an amount equal to such Servicers portion of such accrued Servicing Fee; provided , however , that no amounts shall be payable to Garland under clause (ii) above.
(d) Upon receipt of funds deposited into any of the Purchasers Accounts pursuant to Section 1.6(c) , the Agent shall cause such funds to be distributed as follows:
(i) if such distribution occurs on a day that is not a Termination Day, such funds shall be distributed in the following order of priority: first to the Purchaser in payment in full of all unpaid Discount accrued during the most recently ended Discount Accrual Period, second to the Purchaser in payment in full of all unpaid Used Fees, Unused Fees and Breakage Costs accrued during the most recently ended Discount Accrual Period, third to the Purchaser in payment of outstanding Capital (and accrued Discount thereon) to the extent that funds have been set aside for such purpose pursuant to Section 1.6(f) , fourth to the Purchaser, the Agent and any other Purchaser Party in payment in full of any other amounts owed thereto pursuant to Section 1.9 , Section 1.10 , Section 3.1 , or Section 5.4 and fifth , any remaining amounts shall be paid to the Purchaser in payment of outstanding Capital; and
(ii) if such distribution occurs on a Termination Day, such funds shall be distributed in the following order of priority: first to the Purchaser in payment in full of all accrued and unpaid Discount, second to the Purchaser in payment in full of all accrued and unpaid Used Fees, Unused Fees and Breakage Costs, third to the Purchaser in payment in full of all outstanding Capital, and fourth to the Purchaser, the Agent and any other Purchaser Party in payment in full of any other amounts owed thereto by the Seller or any Servicer hereunder (including, without limitation, pursuant to Section 1.9 , Section 1.10 , Section 3.1 , or Section 5.4 ) or under any other Transaction Document.
After the occurrence of the Final Payout Date, all additional Collections with respect to the Purchased Assets shall be paid to the Seller for its own accounts in payment of the Deferred Purchase Price for the Purchased Assets.
(e) For the purposes of this Section 1.6 :
(i) if on any day the Outstanding Balance of any Pool Receivable is reduced or adjusted as a result of any defective, damaged, rejected, returned, repossessed or foreclosed goods or services, or any discount, rebate, credit, counterclaim, billing error or other adjustment made by the Seller, any Originator or any Servicer, or any setoff or dispute between the Seller, any Originator or any Servicer and any Obligor, the Seller of such Pool Receivable shall be deemed to have received on such day a Collection of such Pool Receivable in the amount of such reduction or adjustment;
10
(ii) if on any day any of the representations or warranties in paragraphs (e) , (f) or (k) of Section 1 of Exhibit III is not true with respect to any Pool Receivable, the Seller of such Pool Receivable shall be deemed to have received on such day a Collection of such Pool Receivable in full;
(iii) If an Obligor makes a payment but does not designate the Receivable to which such payment applies, then the Applicable Servicer shall contact such Obligor promptly in order to determine to which Receivable such payment relates; provided , that if the Obligor does not direct the Applicable Servicer to apply such payment to a particular Receivable or Receivables within thirty (30) days after such payment has been received in a Lock-Box Account or by the Applicable Servicer, then, except as otherwise required by applicable law or the relevant Contract, such payment shall be applied to the Receivables of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable; and
(iv) if and to the extent the Agent, the Purchaser or any other Indemnified Party shall be required for any reason to pay over to an Obligor (or any trustee, receiver, custodian or similar official in any Insolvency Proceeding) any amount received by it hereunder, such amount shall be deemed not to have been so received but rather to have been retained by the Seller of the relevant Pool Receivable and, accordingly, the Agent or the Purchaser, as the case may be, shall have a claim against the Seller for such amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof.
(f) If at any time the Seller shall wish to cause the reduction of the Aggregate Capital (in whole or in part), the Seller may do so as follows:
(i) the Seller shall give the Agent at least (x) one (1) Business Days prior written notice thereof in the case of any reduction of the aggregate U.S. Capital or (y) one (1) Business Days prior written notice in the case of any reduction of the aggregate CAD Capital, EUR Capital or GBP Capital, in either case, in the form of Annex C (each, a Paydown Notice ) setting forth the proposed amount of such reduction, the proposed date on which such reduction will commence (the Paydown Date ) and the Approved Currency of the Capital to be reduced;
(ii) on the proposed date of commencement of such reduction and on each day thereafter, the Servicer shall cause Collections in the applicable Approved Currency with respect to the Capital or portion thereof to be reduced (including to any related Discount) not to be reinvested or used to pay the Deferred Purchase Price until the amount thereof not so reinvested shall equal the desired amount of reduction; and
(iii) the Applicable Servicer shall hold such Collections in a Collection Account for the benefit of the Purchaser, for payment to the Purchasers Account on the next Settlement Date (and in the case of a reduction of the entire Investment, the Servicers shall hold in the Collection Accounts for payment on such date an amount equal to all other obligations of the Seller or Servicers to the Purchaser, the Agent and each other Purchaser Party hereunder) in accordance with Section 1.6(c) , and the Aggregate Capital shall be deemed reduced in the amount to be paid to the Purchasers Account only when in fact finally so paid;
11
provided that, the amount of any such reduction shall be not less than (A) one million U.S. Dollars ($1,000,000) or an integral multiple of one hundred thousand Dollars ($100,000) in excess thereof for reductions of U.S. Capital, (B) one million Euros (1,000,000) or an integral multiple of one hundred thousand Euros (100,000) in excess thereof for reductions of Euro Capital, (C) one million Canadian Dollars (CAD 1,000,000) or an integral multiple of one hundred thousand Canadian Dollars (CAD 100,000) in excess thereof for reductions of CAD Capital, and (D) one million GBP (£1,000,000) or an integral multiple of one hundred thousand GBP (£100,000) in excess thereof for reductions of GBP Capital, in each case, unless the aggregate U.S. Capital, Euro Capital, CAD Capital or GBP Capital, as applicable, shall have been reduced to zero; provided , further , unless the information set forth in such Paydown Notice is also delivered through Agents electronic platform or portal, such Paydown Notice shall not be effective and the commencement of the reduction of the Aggregate Capital shall not occur until the Agent shall have received such information from the Seller reasonably requested by the Agent to complete its authentication process with respect to such Paydown Notice and the results of the Agents authentication process shall be satisfactory to the Agent in its sole discretion, as notified by the Agent to the Seller in writing.
Section 1.7 Discount and Fees .
(a) The Seller shall pay to the Purchaser certain fees in the amounts and on the dates set forth in a letter agreement, dated as of the Closing Date, among the Seller, the Agent, the Purchaser and Manitowoc (as the same may be amended, amended and restated, supplemented or modified, the Fee Letter ) delivered pursuant to Section 1 of Exhibit II , as such letter agreement may be amended, supplemented or otherwise modified from time to time.
(b) The Seller shall pay to the Purchaser on each Settlement Date, to the extent not paid pursuant to Section 1.6 , all accrued and unpaid Discount for the related Discount Accrual Period.
(c) Nothing in this Agreement shall limit in any way the obligation of the Seller to pay the amounts set forth in this Section 1.7 .
Section 1.8 Payments and Computations, Etc .
(a) Timing of Payments . All amounts to be paid or deposited by the Seller or any Servicer hereunder shall be paid or deposited no later than (I) 1:00 p.m. (New York time) with respect to amounts owing in U.S. Dollars and (II) 1:00 p.m. (London time) with respect to amounts owing in any other Approved Currency, in each case on the day when due in same day funds in the appropriate Approved Currency to the Purchasers Account. All amounts received after 1:00 p.m. (New York time) or 1:00 p.m. (London time), as applicable, will be deemed to have been received on the immediately succeeding Business Day.
(b) Interest on Unpaid Amounts . The Seller shall, to the extent permitted by law, pay interest on any amount not paid or deposited by the Seller or any Servicer when due hereunder, at an interest rate equal to two and one-half percent (2.50%) per annum above the Base Rate, payable on demand.
12
(c) Computation Conventions . All computations of interest under clause (b) above and all computations of Discount, fees, and other amounts hereunder shall be made on the basis of a year of three hundred sixty (360) days (other than Discount calculated by reference to the Base Rate which shall be computed on the basis of a year of three hundred sixty-five (365) or three hundred sixty-six (366) days, as the case may be) for the actual number of days elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.
(d) Changes in Rates . From time to time, upon reasonable request by the Seller or any Servicer, the Agent shall notify the Seller or such Servicer, in response to such request, as to changes in the Base Rate, the Eurodollar Rate and LIBOR; provided that the failure of such notice to be requested or given shall not waive, preclude, delay or otherwise limit the effectiveness of any such change.
(e) Payments in Approved Currencies . All Capital denominated in a particular Approved Currency shall be repaid to the Purchaser from time to time in such Approved Currency, and all Discount, fees (unless otherwise provided for in the Fee Letter) and other amounts accrued and payable from time to time in respect of (or attributable to) such Capital shall accrue and be paid in such Approved Currency.
Section 1.9 Increased Costs . (a) If the Agent, the Purchaser, any Foreign Branch or any of their respective Affiliates (each an Affected Person ) determines that the existence of or compliance with (i) any law, rule or regulation of any Governmental Authority (including, without limitation, any Specified Law) or any change therein or in the interpretation or application thereof, in each case (except with respect to a Specified Law) adopted, issued or occurring after the Closing Date or (ii) any request, guideline or directive from any central bank or other Governmental Authority (whether or not having the force of law) issued or occurring after the Closing Date (or, if related to any Specified Law, issued or occurring on any date) affects or would affect the amount of capital required or expected to be maintained by such Affected Person and such Affected Person determines that the amount of such capital is increased by or based upon the existence of any commitment to make purchases of or Investments or Reinvestments in (or otherwise to maintain purchases of or Investments or Reinvestments in) Pool Receivables related to this Agreement, then, upon demand by such Affected Person (with a copy to the Agent), the Seller shall promptly pay to the Agent, for the account of such Affected Person, from time to time as specified by such Affected Person, additional amounts sufficient to compensate such Affected Person in the light of such circumstances, to the extent that such Affected Person determines such increase in capital to be allocable to the existence of any of such commitments. A certificate as to such amounts submitted to the Seller and the Agent by such Affected Person certifying, in reasonably specific detail, the basis for, and calculation of such amounts, shall be conclusive and binding for all purposes, absent manifest error.
13
(b) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements referred to in Section 1.10 ) in or in the interpretation of any law or regulation or (ii) compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), in either case (except with respect to any Specified Law), after the Closing Date, there shall be any increase in the cost to any Affected Person of agreeing to make purchases, Investments or Reinvestments hereunder (or otherwise to maintain such purchases, Investments or Reinvestments) in respect of which Discount is computed by reference to the Eurodollar Rate, then, upon demand by such Affected Person, the Seller shall immediately pay to such Affected Person, from time to time as specified, additional amounts sufficient to compensate such Affected Person for such increased costs. A certificate as to such amounts submitted to the Seller by such Affected Person certifying, in reasonably specific detail, the basis for, and calculation of such amounts, shall be conclusive and binding for all purposes, absent manifest error.
Section 1.10 Requirements of Law . In the event that any Affected Person determines that the existence of or compliance with (i) any law, rule or regulation of any Governmental Authority or any change therein or in the interpretation or application thereof or (ii) any request, guideline or directive from any central bank or other Governmental Authority (whether or not having the force of law), in each case (except with respect to any Specified Law), adopted, issued or occurring after the Closing Date:
(i) does or shall subject such Affected Person to any Tax of any kind whatsoever with respect to this Agreement, any purchase of or Investment or Reinvestment in the Purchased Assets or any increase in the amount of Capital relating thereto, or does or shall change the basis of taxation of payments to such Affected Person on account of Collections, Discount or any other amounts payable hereunder (excluding taxes imposed on the overall net income or gross receipts of such Affected Person, and franchise taxes imposed on such Affected Person, by the jurisdiction under the laws of which such Affected Person is organized or a political subdivision thereof);
(ii) does or shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, purchases, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Affected Person which are not otherwise included in the determination of the Eurodollar Rate or the Base Rate hereunder; or
(iii) does or shall impose on such Affected Person any other condition;
and the result of any of the foregoing is (x) to increase the cost to such Affected Person of acting as Agent, or of agreeing to make purchases, Investments or Reinvestments hereunder (or otherwise maintain such purchases, Investments or Reinvestments) or (y) to reduce any amount receivable hereunder (whether directly or indirectly), then, in any such case, upon demand by such Affected Person the Seller shall pay such Affected Person any additional amounts sufficient to compensate such Affected Person for such additional cost or reduced amount receivable. All such amounts shall be payable as incurred. A certificate from such Affected Person to the Seller
14
certifying, in reasonably specific detail, the basis for, calculation of, and amount of such additional costs or reduced amount receivable shall be conclusive and binding for all purposes, absent manifest error.
Section 1.11 Inability to Determine Eurodollar Rate . In the event that the Agent shall have determined on any day during any Discount Accrual Period (which determination shall be conclusive and binding upon the parties hereto) by reason of circumstances affecting the interbank Eurodollar market, either (a) dollar deposits in the relevant amounts for such day are not available, (b) adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such day or (c) the Eurodollar Rate determined pursuant hereto does not accurately reflect the cost to the Purchaser (as conclusively determined by the Agent) of maintaining any Portion of Capital for such day, the Agent shall promptly give telephonic notice of such determination, confirmed in writing, to the Seller prior to such day. Upon delivery of such notice (a) no Portion of Capital shall be funded thereafter at the Bank Rate determined by reference to the Eurodollar Rate, unless and until the Agent shall have given notice to the Seller that the circumstances giving rise to such determination no longer exist, and (b) with respect to any outstanding Portions of Capital then funded at the Bank Rate determined by reference to the Eurodollar Rate, such Bank Rate shall automatically be converted to the Bank Rate determined by reference to the Base Rate on such day.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1 Representations and Warranties; Covenants . The Seller hereby makes the representations and warranties, and hereby agrees to perform and observe the covenants, set forth in Exhibits III , IV and VI , respectively hereto.
Section 2.2 Termination Events . If any of the Termination Events contemplated by Exhibit V hereto shall occur and be continuing, the Agent may, by notice to the Seller, declare the Facility Termination Date to have occurred (in which case the Facility Termination Date shall be deemed to have occurred); provided that, automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice) described in subsection (g) of Exhibit V , the Facility Termination Date shall occur. Upon any such declaration, occurrence or deemed occurrence of the Facility Termination Date, the Purchaser and the Agent shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided after default under the UCC, the PPSA and under all other applicable law (including, without limitation, the applicable laws of Germany, England, Canada, Singapore and the Cayman Islands), which rights and remedies shall be cumulative.
15
ARTICLE III
INDEMNIFICATION
Section 3.1 Indemnification .
(a) Indemnities by the Seller . Without limiting any other rights that the Agent, the Purchaser, any Foreign Branch or any of their respective Affiliates, employees, agents, successors, transferees or assigns (each of the Agent, the Purchaser and their respective Affiliates, employees, agents, successors, transferees and assigns may be referred to as an Indemnified Party ) may have hereunder or under applicable law, the Seller hereby agrees to indemnify each Indemnified Party from and against any and all claims, damages, Taxes, costs, expenses, losses, judgments, liabilities and other amounts (including Attorney Costs) (all of the foregoing being collectively referred to as Indemnified Amounts ) arising out of or resulting from this Agreement or other Transaction Documents (whether directly or indirectly) or the use of proceeds of purchases, Investments or Reinvestments hereunder, the ownership of the Purchased Assets (or any portion thereof or any interest therein), the payment, or use of proceeds, of the Deferred Purchase Price, or in respect of any Receivable or any Contract, excluding , however , (a) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Indemnified Party, or (b) any net income taxes or franchise taxes imposed on such Indemnified Party by the jurisdiction under the laws of which such Indemnified Party is organized or is doing business (except solely as a result of the transactions contemplated by this Agreement and the other Transaction Documents) or any political subdivision thereof. Without limiting or being limited by the foregoing, but subject to the exclusions set forth in the preceding sentence, the Seller shall pay within five (5) Business Days of demand to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts relating to or resulting from any of the following:
(i) the failure of any Receivable included in the calculation of the Net Eligible Pool Balance to be an Eligible Receivable, the failure of any information contained in a Monthly Report or Daily Report to be true and correct, or the failure of any other information provided to the Purchaser or the Agent with respect to Receivables or this Agreement to be true and correct;
(ii) the failure of any representation or warranty or statement made or deemed made by the Seller (or any of its officers) under or in connection with this Agreement to have been true and correct in all respects when made;
(iii) the failure by the Seller to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract; or the failure of any Pool Receivable or the related Contract to conform to any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the Purchaser a valid and enforceable first priority perfected ownership (or in the case of any UK Originator Receivable, good title) or security interest in all the Pool Assets free and clear of any Adverse Claim;
(v) the failure to have filed, or any delay in filing, financing statements, financing statement amendments, continuation statements or other similar instruments or documents under the UCC, the PPSA or any other applicable laws (including, without limitation, any applicable laws of Germany, England, Canada, Singapore or the Cayman
16
Islands) with respect to any Receivables in, or purporting to be in, the Receivables Pool and the Related Security and Collections in respect thereof, whether at the time of any Investment or Reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense of the Obligor to the payment of any Receivable in, or purporting to be in, the Receivables Pool (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the goods or services related to such Receivable or the furnishing or failure to furnish such goods or services or relating to collection activities with respect to such Receivable;
(vii) any failure of the Seller to perform its duties or obligations in accordance with the provisions hereof or to perform its duties or obligations under the Contracts;
(viii) any products liability or other claim, investigation, litigation or proceeding arising out of or in connection with merchandise, insurance or services which are the subject of any Contract;
(ix) the commingling of Collections of Pool Receivables at any time with other funds;
(x) any investigation, litigation or proceeding related to this Agreement or the use of proceeds of any Investment, Reinvestment or any Deferred Purchase Price (or the payment thereof) or the ownership of the Purchased Assets (or any interest therein or portion thereof);
(xi) any reduction in Capital as a result of the distribution of Collections pursuant to Section 1.6 , in the event that all or a portion of such distributions shall thereafter be rescinded or otherwise must be returned for any reason;
(xii) any Tax or governmental fee or charge (other than any tax upon or measured by net income or gross receipts or franchise tax), all interest and penalties thereon or with respect thereto, and all reasonable out-of-pocket costs and expenses, including the reasonable fees and expenses of counsel in defending against the same, which are required to be paid by reason of any Investment, Reinvestment or Deferred Purchase Price or the ownership of the Purchased Assets (or any interest therein or portion thereof);
(xiii) any Lock-Box Agreement, Account Pledge Agreement or Collection Account Agreement; or
(xiv) (A) funding or maintaining Capital or Pool Receivables denominated in currencies other than U.S. Dollars and (B) without limiting the generality of the foregoing, any costs of, or arising in connection with, any Hedge Agreement.
Without limiting or being limited by the foregoing, if any Indemnified Party incurs any loss or expense (including any loss or expense incurred by reason of the liquidation or
17
reemployment of deposits or other funds acquired by such Indemnified Party or the termination of all or any portion of any Hedge Agreement) (such loss or expense may be referred to as Breakage Costs ) as a result of (i) the full or partial repayment of any Portion of Capital on any day other than the scheduled last day of a Discount Accrual Period with respect thereto or on any day in an amount greater than the amount specified by the Seller or applicable Servicer, (ii) any reduction of the Aggregate Capital not being made in accordance with a notice pursuant to Section 1.6(f) or (iii) any Investment not being made (other than as a result of a default by the Purchaser) in accordance with a notice pursuant to Section 1.2(a) , then upon demand by such Indemnified Party, the Seller shall pay to such Indemnified Party the amount of such Breakage Costs.
The obligations of the Seller under this Section 3.1(a) shall survive the resignation or removal of the Agent and the execution, delivery, performance and termination of this Agreement, regardless of any investigation made by any Indemnified Party.
(b) Indemnity by the Servicers . Without limiting any other rights which any Indemnified Party may have hereunder or under applicable law, the Servicers, jointly and severally, hereby agree to indemnify each Indemnified Party, forthwith within five (5) Business Days of demand, from and against any and all Indemnified Amounts awarded against or incurred by any of them arising out of or relating to:
(i) any representation or warranty made by any Servicer under or in connection with any Transaction Document or any information or report delivered by or on behalf of any Servicer pursuant hereto, which shall have been false, incorrect or misleading in any respect when made or deemed made (except any such amounts to the extent representing recourse due to the insolvency or other financial inability to pay of any Obligor);
(ii) the failure by any Servicer to comply with any applicable law, rule or regulation (including truth in lending, fair credit billing, usury, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) with respect to any Pool Receivable or other related Contract;
(iii) any failure of any Servicer to perform its duties, covenants and obligations in accordance with the applicable provisions of this Agreement;
(iv) any dispute, claim, offset or defense (other than a discharge in bankruptcy of the related Obligor) of an Obligor to the payment of any Receivable in or purporting to be in the Receivables Pool resulting solely from collection or other servicing activities of any Servicer with respect to such Receivable; or
(v) costs and expenses (including Attorney Costs) in connection with litigation relating to any Transaction Document.
The obligations of the Servicers under this Section 3.1(b) shall survive the resignation or removal of the Agent and the execution, delivery, performance and termination of this Agreement for a period of three years following the Final Payout Date, regardless of any investigation made by any Indemnified Party.
18
(c) Currency Indemnity . If, for the purpose of obtaining judgment in any court, it is necessary to convert an amount owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that provided for in the definition of Spot Rate.
The obligations of the Seller and each Servicer in respect of any amount due to any party hereto (or their respective assigns) or any holder of the obligations owing hereunder or under any other Transaction Document (the Applicable Creditor ) shall, notwithstanding any judgment in a currency (the Judgment Currency ) other than the currency in which such amount is stated to be due hereunder (the Agreement Currency ), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any amount adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, the Seller or applicable Servicer, as the case may be, shall, as a separate obligation and notwithstanding any such judgment, indemnify the Applicable Creditor against such loss.
The obligations of the Seller and the Servicers under this Section 3.1(c) shall survive the resignation or removal of the Agent and the execution, delivery, performance and termination of this Agreement, regardless of any investigation made by any Applicable Creditor.
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1 Appointment of Servicers . (a) The servicing, administering and collection of the Pool Receivables shall be conducted by the Persons so designated from time to time as Servicer in accordance with this Section 4.1 . Until the Agent gives notice to the Seller and the Servicers (in accordance with this Section 4.1 ) of the designation of a new Servicer:
(i) Manitowoc is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated by a U.S. Originator;
(ii) Garland is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated by Garland;
(iii) Convotherm is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated by Convotherm;
(iv) Manitowoc Deutschland is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated by Manitowoc Deutschland;
19
(v) Foodservice UK is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated by Foodservice UK; and
(vi) Foodservice Asia is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated by Foodservice Asia;
in each case, in accordance with the terms hereof. Upon the occurrence and during the continuance of a Termination Event, the Agent may designate as Servicer of any or all Pool Receivables any Person (including itself) to succeed the foregoing Servicers or any successor thereto, on the condition, in each case, that any such Person so designated shall agree to perform the duties and obligations of such Servicer pursuant to the terms hereof. Without limiting the generality of the foregoing, effective immediately upon the occurrence of a German Insolvency Event with respect to any German Servicer, such German Servicer shall automatically and without further action by any Person be terminated as a Servicer hereunder, and the Agent may designate a successor to such German Servicer as described above; provided , however , that absent such designation, Manitowoc shall cause all the related Pool Receivables to be serviced in accordance with the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in Section 4.1(a) hereof, the applicable existing Servicer agrees that it will terminate its activities as Servicer hereunder in a manner which the Agent determines will facilitate the transition of the performance of such activities to the new Servicer, and all existing Servicers shall cooperate with and assist such new Servicer. Such cooperation shall include (without limitation) access to and transfer of records and use by the new Servicer of all licenses or software necessary or desirable to collect the Pool Receivables and the Related Security.
(c) Each Servicer acknowledges that, in making its decision to execute and deliver this Agreement, the Agent and the Purchaser have relied on such Servicers agreement to act as Servicer hereunder. Accordingly, each Servicer agrees that it will not voluntarily resign as Servicer.
(d) Each Servicer may delegate its duties and obligations hereunder to any sub-servicer (each, a Sub-Servicer ); provided that, in each such delegation (i) such Sub-Servicer shall agree in a separate agreement, to perform the duties and obligations of such Servicer pursuant to the terms hereof, (ii) such Servicer shall remain solely liable to the Purchaser and the Agent for the performance of the duties and obligations so delegated, (iii) the Seller, the Agent and the Purchaser shall have the right to look solely to such Servicer for performance and (iv) the terms of any agreement with any Sub-Servicer shall provide that the Agent may terminate such agreement upon the termination of such Servicer hereunder by giving notice of its desire to terminate such agreement to such Servicer (and such Servicer shall provide appropriate notice to such Sub-Servicer). For avoidance of doubt, the existence of the Bond Administration Agreement shall not limit or diminish the obligations of any Servicer under this Agreement.
(e) No Servicer or any of its sub-servicers, employees, agents or other delegates shall (nor shall it have the authority to) (i) while acting in Canada, the United Kingdom, Singapore or
20
Germany, negotiate or enter into contracts or other agreements in the name of the Seller, the Purchaser, the Agent or any other Purchaser Party, (ii) delegate to any Person acting in Canada, the United Kingdom, Singapore or Germany the authority to, or permit any such Person to, negotiate or enter into contracts or other agreements in the name of the Seller, the Purchaser, the Agent or any other Purchaser Party or (iii) establish an office or other place of business of the Seller, the Purchaser, the Agent or any other Purchaser Party in Canada, the United Kingdom, Singapore or Germany.
Section 4.2 Duties of Servicer . (a) Each Servicer shall take or cause to be taken all such action as may be necessary or advisable to collect each Pool Receivable for which it is the Applicable Servicer from time to time, all in accordance with this Agreement and all applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. With respect to each Pool Receivable for which it is the Applicable Servicer, each Servicer also shall perform the duties of the Servicer set forth in the applicable Purchase and Sale Agreement(s), in accordance with all applicable laws, rules and regulations and with reasonable care and diligence. Each Servicer shall set aside for the accounts of the Seller and the Purchaser the amount of the Collections to which each is entitled in accordance with Article I hereto. Each Servicer may, in accordance with the Credit and Collection Policy, extend the maturity of any Pool Receivable for which it is the Applicable Servicer (but not beyond thirty (30) days) and extend the maturity or adjust the Outstanding Balance of any such Pool Receivable that is a Defaulted Receivable or Delinquent Receivable as such Servicer may determine to be appropriate to maximize Collections thereof; provided , however , that (i) such extension or adjustment shall not alter the status of such Pool Receivable as a Delinquent Receivable or a Defaulted Receivable or limit the rights of the Purchaser or the Agent under this Agreement and (ii) if a Termination Event has occurred and is continuing and Manitowoc or any of its Affiliates is still serving as a Servicer, no Servicer shall make any such extension or adjustment without the prior written approval of the Agent. The Seller shall deliver to the Applicable Servicers and such Servicers shall hold for the benefit of the Seller and the Agent (for the benefit of the Purchaser and individually) in accordance with their respective interests, all records and documents (including without limitation computer tapes or disks) with respect to each Pool Receivable. Notwithstanding anything to the contrary contained herein, the Agent may direct any Servicer to commence or settle any legal action to enforce collection of any Pool Receivable or to foreclose upon or repossess any Related Security; provided , however , that no such direction may be given unless either: (A) a Termination Event has occurred and is continuing or (B) the Agent believes in good faith that the failure to commence, settle or effect such legal action, foreclosure or repossession could adversely affect the collectibility of such Pool Receivable.
(b) On each Business Day, the Servicers shall provide to the Agent a report (each such report, a Daily Report ), in form and substance reasonably satisfactory to the Agent, as to: (i) all outstanding Receivables that have been sold or contributed by the Originators to the Seller pursuant to the Purchase and Sale Agreements since the most recent Daily Report; (ii) the Net Eligible Pool Balance as of the beginning of the day on the date of Daily Report; (iii) the Purchased Assets Coverage Percentage; (iv) Receivables that became Defaulted Receivables since the most recent such Daily Report; (v) agings of Pool Receivables as of the beginning of the day on the date of such Daily Report; and (vi) the sum of the Outstanding Balances of the Eligible Receivables in the Receivables Pool.
21
(c) The Servicers obligations hereunder shall terminate on the Final Payout Date. After such termination, each Servicer shall promptly deliver to the Seller all books, records and related materials that the Seller previously provided to such Servicer in connection with this Agreement.
Section 4.3 Establishment and Use of Certain Accounts.
(a) Lock-Box Accounts . Prior to the Closing Date, the Seller shall have entered into Lock-Box Agreements (or, with respect to European and Singapore Accounts, Account Pledge Agreements) covering each Lock-Box Account listed on Schedule II with all of the Lock-Box Banks, and shall have delivered fully executed copies thereof to the Agent. All Lock-Box Accounts (other than European and Singapore Accounts and Excluded Accounts) shall be maintained in the name of the Seller. Each European and Singapore Account shall be maintained in the name of the Seller or an Originator. Each Excluded Account may be maintained in the name of an Originator or the Seller. The Seller and the Servicers shall have directed (and shall continue to direct) each Lock-Box Bank to cause all Collections received in the applicable Lock-Box Accounts to be automatically (and without further action, notice to or consent of the Seller or any Servicer) wire transferred to a Collection Account within one (1) Business Day following the receipt thereof into such Lock-Box Account; provided that, BMO Account Collections need not be transferred to a Collection Account; provided , further , that Excluded Account Collections need not be transferred automatically to a Collection Account and, instead, the Applicable Servicer shall cause Excluded Account Collections to be deposited in a Collection Account within one (1) Business Day following the receipt thereof in an Excluded Account.
The Agent (for the benefit of the Purchaser) shall have sole dominion and control over each Lock-Box Account (other than the Excluded Accounts) together with the ability, in the circumstances contemplated by Section 4.3(d) , to exercise all rights with respect thereto, including without limitation, the exclusive right to receive all Collections deposited therein. Unless otherwise provided for in this Section 4.3(a) , neither the Seller nor the Servicers shall have any ability to control or direct the application of any Collections deposited in the Lock-Box Accounts; provided that unless a Termination Event or an Unmatured Termination Event has occurred and is continuing, Collections shall continue to be automatically transferred to the Collection Accounts as required pursuant to this Section 4.3(a) .
(b) Collection Accounts . Prior to the Closing Date, the Seller (or the Servicers on their behalf) shall have established the Collection Accounts listed on Schedule II and shall have entered into Collection Account Control Agreements (or, with respect to the European Collection Accounts, Account Pledge Agreements) covering each such Collection Account with all of the Collection Account Banks, and shall have delivered fully executed copies thereof to the Agent. All Collection Accounts shall be maintained in the name of the Seller. The Collection Accounts shall be used to accept the transfer of Collections of Pool Receivables from the Lock-Box Accounts pursuant to Section 1.6(b) and for such other purposes described in the Transaction Documents.
(c) [Reserved] .
22
(d) Control of Accounts . The Agent may at any time following the occurrence and during the continuance of a Termination Event or Unmatured Termination Event give notice to any or all of the Lock-Box Banks and Collection Account Banks that the Agent is exercising its rights under the Lock-Box Agreements, Collection Account Agreements and/or Account Pledge Agreements to do any or all of the following: (i) to have the exclusive ownership and control of the Lock-Box Accounts and/or the Collection Accounts, as the case may be, transferred to the Agent, to the extent provided in the related Lock-Box Agreement, Account Pledge Agreement and/or Collection Account Agreement, as applicable, (ii) to have the proceeds that are sent to the respective Lock-Box Accounts and/or Collection Accounts, as the case may be, be redirected pursuant to its instructions rather than deposited in the applicable Lock-Box Account and/or Collection Account, as the case may be, and (iii) to take any or all other actions permitted under the applicable Lock-Box Agreement, Account Pledge Agreement and/or Collection Account Agreement. The Seller hereby agrees that if the Agent at any time takes any action set forth in the preceding sentence, the Agent shall have exclusive control of the proceeds (including Collections) of all Pool Receivables, and the Seller hereby further agrees to take any other action that the Agent may reasonably request to transfer such control. Any proceeds of Pool Receivables received by the Seller or a Servicer, thereafter shall be sent immediately to the Agent. The parties hereto hereby acknowledge that if at any time the Agent takes control of any Lock-Box Account or Collection Account, the Agent shall not have any rights to the funds therein in excess of the unpaid amounts due to the Agent, the Purchaser or any other Person hereunder and any such funds shall be distributed by the Agent in accordance with the provisions set forth in Section 1.6 .
Section 4.4 Enforcement Rights . (a) At any time following the occurrence and during the continuance of a Termination Event:
(i) the Agent may direct the Obligors that payment of all amounts payable under any Pool Receivable be made directly to the Agent or its designee;
(ii) the Agent may instruct the Seller or the Applicable Servicer to give notice of the Purchasers ownership of the Pool Receivables to each Obligor, which notice shall direct that payments be made directly to the Agent or its designee, and upon such instruction from the Agent, the Seller or such Servicer, as applicable, shall give such notice at the expense of the Seller; provided , that if the Seller or such Servicer fails to so notify each Obligor, the Agent may so notify the Obligors; and
(iii) the Agent may request the Seller or any Servicer to, and upon such request the Seller or such Servicer, as applicable, shall (A) assemble all of the records necessary or desirable to collect the Pool Receivables and the Related Security, and transfer or license to any new Servicer the use of all software necessary or desirable to collect the Pool Receivables and the Related Security, and make the same available to the Agent or its designee at a place selected by the Agent, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections with respect to the Pool Receivables in a manner acceptable to the Agent and, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Agent or its designee.
23
(b) The Seller hereby authorizes the Agent, and irrevocably appoints the Agent as its attorney-in-fact with full power of substitution and with full authority in the place and stead of the Seller, which appointment is coupled with an interest, during the occurrence and continuance of a Termination Event or Unmatured Termination Event, to take any and all steps in the name of the Seller and on behalf of the Seller necessary or desirable, in the determination of the Agent, to collect any and all amounts or portions thereof due under any and all Pool Receivables or Related Security, including, without limitation, endorsing the name of the Seller on checks and other instruments representing Collections and enforcing such Pool Receivables, Related Security and the related Contracts. Notwithstanding anything to the contrary contained in this subsection (b) , none of the powers conferred upon such attorney-in-fact pursuant to the immediately preceding sentence shall subject such attorney-in-fact to any liability if any action taken by it shall prove to be inadequate or invalid, nor shall they confer any obligations upon such attorney-in-fact in any manner whatsoever, except to the extent arising out of the negligence or willful misconduct of such attorney-in-fact.
Section 4.5 Responsibilities of the Seller . Anything herein to the contrary notwithstanding, the Seller shall (i) perform all of its obligations, if any, and cause each Originator to perform all of such Originators obligations, under the Contracts related to the Pool Receivables to the same extent as if the Purchased Assets had not been sold hereunder or, in the case of the Originators, under the Purchase and Sale Agreements, and the exercise by the Agent or the Purchaser of its rights hereunder shall not relieve the Seller or any Originator from any such obligations and (ii) pay when due any Taxes payable by the Seller when due. The Agent and the Purchaser shall not have any obligation or liability with respect to any Pool Receivable, any Related Security or any related Contract, nor shall any of them be obligated to perform any of the obligations of the Seller, any Originator or any Servicer under any of the foregoing.
Section 4.6 Servicing Fee . Each Servicer (other than Garland) shall be paid a fee, through distributions permitted by Section 1.6(d) , which shall accrue for each day, equal to the result of (a) one percent (1%) multiplied by (b) the Outstanding Balance of all Pool Receivables on such day for which such Servicer is the Applicable Servicer, multiplied by (c) a fraction, the numerator of which is one (1) and the denominator of which is three hundred sixty-five (365). Servicing Fees with respect to each Pool Receivable shall accrue and be payable in the Approved Currency of such Pool Receivable. The parties hereto acknowledge that Canadian Receivables sold by Garland to the Seller under the Canadian Purchase and Sale Agreement have been sold on a servicing-included basis and no additional compensation is payable to Garland for acting as the Applicable Servicer of the Canadian Receivables hereunder.
ARTICLE V
MISCELLANEOUS
Section 5.1 Amendments, Etc . No amendment or waiver of any provision of this Agreement or consent to any departure by the Seller or any Servicer therefrom shall be effective unless in a writing signed by the Agent, and, in the case of any amendment, by the Seller and the Servicers and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Purchaser or the Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
24
Section 5.2 Notices, Etc . All notices and other communications hereunder shall, unless otherwise stated herein, be in writing (which shall include facsimile communication) and sent or delivered, to each party hereto, at its address set forth under its name on Schedule I hereto, or at such other address as shall be designated by such party in a written notice to the other parties hereto. Notices and communications by facsimile shall be effective when sent (and shall be followed by hard copy sent by first class mail), and notices and communications sent by other means shall be effective when received.
Section 5.3 Assignability . (a) This Agreement and the Purchasers rights and obligations herein (including ownership of the Purchased Assets) shall be assignable, in whole or in part, by the Purchaser and its successors and assigns with the prior written consent of the Seller; provided , however , that such consent shall not be unreasonably withheld, and no such consent shall be required if (i) such assignment is to an Affiliate of the Purchaser or (ii) a Termination Event or an Unmatured Termination Event has occurred and is continuing. Subject to Section 5.6 , each assignor may, in connection with the assignment, disclose to the applicable assignee any information relating to the Seller, the Servicers or the Pool Receivables furnished to such assignor by or on behalf of the Seller, the Servicers, the Purchaser or the Agent.
Upon such an assignment the assignee shall have all of the rights of the Purchaser with respect to the Transaction Documents, the Purchased Assets, the Pool Assets and the Capital (or such portion thereof as has been assigned).
(b) [ Reserved ].
(c) This Agreement and the rights and obligations of the Agent hereunder shall be assignable, in whole or in part, by the Agent and its successors and assigns.
(d) Except as provided in Section 4.1(d) , neither the Seller nor any Servicer may assign its rights or delegate its obligations hereunder or any interest herein without the prior written consent of the Agent.
(e) Without limiting any other rights that may be available under applicable law, the rights of the Purchaser may be enforced through it or by its agents (including, without limitation, the Agent).
Section 5.4 Costs, Expenses and Taxes . (a) In addition to the rights of indemnification granted under Section 3.1 hereof, the Seller agrees to pay, upon demand, all reasonable costs and expenses in connection with the preparation, execution, delivery and administration (including auditing Receivables prior to the Closing Date, periodic auditing of Receivables and the servicing thereof from and after the Closing Date) of this Agreement and the other Transaction Documents, including all reasonable costs and expenses relating to the amending, amending and restating, modifying or supplementing of this Agreement and the other Transaction Documents and the waiving of any provisions hereof or thereof (whether or not any such amendment, amendment and restatement, modification, supplement or waiver becomes effective), and including in all cases, without limitation, Attorney Costs for the Agent, the Purchaser and their
25
respective Affiliates and agents with respect thereto and with respect to advising the Agent, the Purchaser and their respective Affiliates and agents as to their rights and remedies under this Agreement and the other Transaction Documents, and all costs and expenses, if any (including Attorney Costs), of the Agent, the Purchaser and their respective Affiliates and agents, in connection with the enforcement of this Agreement and the other Transaction Documents.
(b) In addition, the Seller shall pay on demand any and all stamp and other Taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other Transaction Documents, and agree to save each Indemnified Party harmless from and against any liabilities with respect to or resulting from any delay in paying or omission to pay such Taxes and fees.
Section 5.5 Severability . Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 5.6 Confidentiality . Unless otherwise required by applicable law (including the disclosure requirement of applicable securities laws), each of the Seller and the Servicers agrees to maintain the confidentiality of this Agreement and the other Transaction Documents (and all drafts thereof) in communications with third parties and otherwise; provided that this Agreement may be disclosed to (a) third parties to the extent such disclosure is made pursuant to a written agreement of confidentiality in form and substance reasonably satisfactory to the Agent and (b) the Sellers and/or the Servicers legal counsel and auditors if they agree to hold it confidential; provided that only the terms and conditions of this Agreement may be revealed to such parties and not the details of any fees, pricing or interest rates. Unless otherwise required by applicable law, each of the Agent and the Purchaser agrees to maintain the confidentiality of non-public financial information regarding Manitowoc and its Subsidiaries and other information marked as confidential by the Servicers or the Seller; provided , that such information may be disclosed to: (i) third parties to the extent such disclosure is made pursuant to a written agreement of confidentiality in form and substance reasonably satisfactory to Manitowoc, (ii) legal counsel and auditors of the Purchaser or the Agent if they agree to hold it confidential, (iii) any nationally recognized statistical rating organization, (iv) any Affiliate of the Purchaser or the Agent and (v) any regulatory authorities having jurisdiction over the Agent or the Purchaser. Nothing in this Section shall prevent disclosure of information as part of a legal proceeding relating to litigation in respect of this Agreement or any other Transaction Document.
Section 5.7 GOVERNING LAW AND JURISDICTION . (a) THIS AGREEMENT (WITH THE EXCEPTION OF SECTION 1.3 AS FAR AS IT RELATES TO THE ASSIGNMENT OF EURO RECEIVABLES GOVERNED BY GERMAN LAW WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE FEDERAL REPUBLIC OF GERMANY), INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICT OF LAWS PROVISIONS THEREOF).
26
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PURCHASER, THE SELLER, THE SERVICERS AND THE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PURCHASER, THE SELLER, THE SERVICERS AND THE AGENT IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE PURCHASER, THE SELLER, THE SERVICERS AND THE AGENT EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 5.8 Execution in Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.
Section 5.9 Survival of Termination . The provisions of Sections 1.9 , 1.10 , 1.11 , Article III and this Article V shall survive any termination of this Agreement.
Section 5.10 WAIVER OF JURY TRIAL . THE PURCHASER, THE SELLER, THE SERVICERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PURCHASER, THE SELLER, THE SERVICERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 5.11 Entire Agreement . This Agreement and the other Transaction Documents embodies the entire agreement and understanding between the Purchaser, the Seller, the Servicers and the Agent, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof.
27
Section 5.12 Headings . The captions and headings of this Agreement and in any Exhibit hereto are for convenience of reference only and shall not affect the interpretation hereof or thereof.
Section 5.13 Purchasers and Agents Liabilities . The obligations of the Purchaser and the Agent under this Agreement are solely the corporate obligations of such Person. No recourse shall be had for any obligation or claim arising out of or based upon this Agreement against any stockholder, employee, officer, director or incorporator of the Purchaser or the Agent; provided , however , that this Section 5.13 shall not relieve any such Person of any liability it might otherwise have for its own gross negligence or willful misconduct. The agreements provided in this Section 5.13 shall survive termination of this Agreement.
Section 5.14 Mutual Negotiations . This Agreement and the other Transaction Documents are the product of mutual negotiations by the parties thereto and their counsel, and no party shall be deemed the draftsperson of this Agreement or any other Transaction Document or any provision hereof or thereof or to have provided the same. Accordingly, in the event of any inconsistency or ambiguity of any provision of this Agreement or any other Transaction Document, such inconsistency or ambiguity shall not be interpreted against any party because of such partys involvement in the drafting thereof.
Section 5.15 USA Patriot Act . Each of the Agent and the Purchaser hereby notifies the Seller and the Servicers that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the PATRIOT Act ), the Agent and the Purchaser may be required to obtain, verify and record information that identifies the Seller, the Servicers and Manitowoc, which information includes the name, address, tax identification number and other information regarding the Seller, the Servicers and Manitowoc that will allow the Agent and the Purchaser to identify the Seller, the Servicers and Manitowoc in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act. Each of the Seller, the Servicers and Manitowoc agrees to provide the Agent and the Purchaser, from time to time, with all documentation and other information required by bank regulatory authorities under know your customer and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act.
Section 5.16 Register . The Seller or Manitowoc, on the Sellers behalf, shall maintain a register for the recordation of the names and addresses of the Purchasers and Investments (and Discount, fees and other similar amounts under this Agreement) pursuant to the terms hereof from time to time (the Register ). The entries in the Register shall be conclusive absent manifest error, and the parties hereto shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a lender solely for U.S. federal income tax purposes. The Register shall be available for inspection by the Purchasers, at any reasonable time and from time to time upon reasonable prior notice.
[SIGNATURES FOLLOW]
28
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written.
MANITOWOC CAYMAN ISLANDS FUNDING LTD., as the Seller | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Vice President and Secretary |
S-1 |
Sixth A&R Receivables Purchase Agreement |
MANITOWOC FOODSERVICE, INC., as a Servicer | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Senior Vice President, General Counsel and Secretary |
S-2 |
Sixth A&R Receivables Purchase Agreement |
GARLAND COMMERCIAL RANGES LIMITED, as a Servicer | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Vice President and Secretary |
S-3 |
Sixth A&R Receivables Purchase Agreement |
CONVOTHERM-ELEKTROGERÄTE GMBH, as a Servicer | ||
By: |
/s/ Ralf Klein |
|
Name: | Ralf Klein | |
Title: | Geschäftsführer |
S-4 |
Sixth A&R Receivables Purchase Agreement |
MANITOWOC DEUTSCHLAND GMBH, as a Servicer | ||
By: |
/s/ Ralf Klein |
|
Name: | Ralf Klein | |
Title: | Geschäftsführer |
S-5 |
Sixth A&R Receivables Purchase Agreement |
MANITOWOC FOODSERVICE UK LIMITED, as a Servicer | ||
By: |
/s/ Adrian Gray |
|
Name: | Adrian Gray | |
Title: | Director |
S-6 |
Sixth A&R Receivables Purchase Agreement |
MANITOWOC FOODSERVICE ASIA PACIFIC PRIVATE LIMITED, as a Servicer | ||
By: |
/s/ Maurice D. Jones |
|
Name: | Maurice D. Jones | |
Title: | Authorized Representative |
S-7 |
Sixth A&R Receivables Purchase Agreement |
WELLS FARGO BANK, N.A., as Agent | ||
By: |
/s/ Ryan C. Tozier |
|
Name: | Ryan C. Tozier | |
Title: | Vice President |
S-8 |
Sixth A&R Receivables Purchase Agreement |
WELLS FARGO BANK, N.A., as Purchaser | ||
By: |
/s/ Ryan C. Tozier |
|
Name: | Ryan C. Tozier | |
Title: | Vice President |
S-9 |
Sixth A&R Receivables Purchase Agreement |
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits, Schedules and Annexes), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined). Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to the Agreement.
Account Pledge Agreement means each German Account Pledge Agreement, each UK Account Charge and each Singapore Account Charge.
Adverse Claim means a lien, security interest, restriction on transfer or other pledge, charge or encumbrance, or any other type of preferential arrangement, including the interest of a consignor, it being understood that a lien, security interest or other pledge, charge or encumbrance, or any other type of preferential arrangement, in favor of or granted to the Seller or the Purchaser pursuant to this Agreement and the other Transaction Documents shall not constitute an Adverse Claim and excluding (i) liens for taxes, assessments or other governmental charges which are not yet due and payable, and (ii) liens granted to any Lock-Box Bank and/or the Collection Account Bank in the Collections held by such bank in the related Lock-Box Account and/or Collection Account, as the case may be, and solely for and relating to the payment of fees and other charges to such bank and the ability of such bank to recover for returned items, in each case, to the extent described and provided for in the agreement, if any, relating to such account and/or the applicable Lock-Box Agreement, Collection Account Agreement and/or Account Pledge Agreement.
Affected Person has the meaning set forth in Section 1.9 of the Agreement.
Affiliate means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person.
Affiliate Obligor means any Obligor that is a Subsidiary of a Parent Obligor or that is an Affiliate of a Parent Obligor.
Agent shall have the meaning set forth in the preamble to the Agreement.
Aggregate Capital means the U.S. Dollar Equivalent of all Capital (including, without limitation, the CAD Capital, the Euro Capital, the GBP Capital and the U.S. Capital).
Agreement Currency has the meaning set forth in Section 3.1(c) .
Anti-Corruption Laws means all laws, rules, and regulations of any jurisdiction applicable to Manitowoc, the Seller, any Servicer or any of their respective Subsidiaries from time to time concerning or relating to bribery or corruption, including the Foreign Corrupt Practices Act of 1977, as amended, and any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
I-1
Anti-Terrorism Laws has the meaning set forth in Section 1(w) of Exhibit III .
Applicable Creditor has the meaning set forth in Section 3.1(c) .
Applicable Servicer means, with respect to any Pool Receivable, the Person from time to time designated as the Servicer thereof pursuant to Section 4.1(a) .
Approved Currency means U.S. Dollars, Euro, GBP and CAD.
Approved Foreign Countries means each country listed on Schedule X hereto.
Attorney Costs means and includes all fees and disbursements of any law firm or other external counsel, the allocated cost of internal legal services and all disbursements of internal counsel.
Bank Rate for any day for any Portion of Capital, means an interest rate per annum equal to the Eurodollar Rate on such day; provided , that if the Eurodollar Rate is determined to be unavailable on such day during any Discount Accrual Period pursuant to Section 1.11 , the Bank Rate for such day shall be equal to the Base Rate in effect on such day; provided further that the Bank Rate for each day occurring during the continuance of a Termination Event shall be an interest rate equal to plus two and one-half percent (2.50%) per annum above the Base Rate in effect on such day.
Bankruptcy Code means the United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq .), as amended from time to time.
Base Concentration Limit means, for any day, a percentage, not to exceed five percent (5.0%), determined by the Servicer.
Base Rate means for any day, a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the greatest of (i) the rate of interest most recently announced by Wells at its principal office in Atlanta, Georgia as its prime rate, which rate is not necessarily intended to be the lowest rate of interest determined by Wells in connection with extensions of credit plus one percent (1.00%) per annum , (ii) the latest Federal Funds Rate plus one and one-half percent (1.50%) per annum and (iii) the Eurodollar Rate applicable for such day.
BASEL Accord means, the second accord adopted by the BASEL Committee on Banking Supervision (as defined below), to the extent and in the manner implemented as an applicable law, guideline or request (or any combination thereof) from any Governmental Authority (whether or not having the force of law), as such accord and any related law, guideline or request may be amended, supplemented, restated or otherwise modified, including, but not limited to, each similar and subsequent accord that may be adopted by the BASEL Committee on Banking Supervision (including, but not limited to, BASEL III) and all related laws, guidelines or requests implementing each such accord as may be adopted and amended or supplemented
I-2
from time to time. As used herein, BASEL Committee on Banking Supervision means, the committee created in 1974 by the central bank governors of the Group of Ten nations. For purposes hereof Group of Ten shall mean the eleven countries of Belgium, Canada, France, Germany, Switzerland, the United States, Italy, Japan, the Netherlands, Sweden and the United Kingdom, which are commonly referred to as the Group of Ten or G-10, and any successor thereto.
Benefit Plan means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Internal Revenue Code or Section 302 of ERISA, and in respect of which the Seller, Originator, or any ERISA Affiliate thereof is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
BMO Account Collections means Collections received in or deposited in the BMO Accounts.
BMO Accounts means each account held at Bank of Montreal and identified in Schedule II to the Agreement.
Bond Administration Agreement means the Bond Administration Agreement dated as of March 3, 2016 between Manitowoc and Finacity, as amended, amended and restated, supplemented or otherwise modified from time to time.
Breakage Costs is defined in Section 3.1 of the Agreement.
Business Day means any day that is not a Saturday or Sunday on which both (A) the Agent at its branch office in Atlanta, Georgia is open for business and (B) commercial banks in New York City are not authorized or required to be closed for business; provided , that if this definition of Business Day is utilized in connection with (i) the Eurodollar Rate, Business Day shall exclude any day that dealings are not carried out in the London interbank market, (ii) any Euro Capital and the Eurodollar Rate, Business Day shall exclude any date that is not a TARGET 2 Day, (iii) any CAD Capital and the Eurodollar Rate, Business Day shall exclude any date that commercial banks in Toronto, Canada are authorized or required to be closed for business, (iv) any GBP Capital, Business Day shall exclude any date that commercial banks in London, England are authorized or required to be closed for business and (v) transactions to be (or contemplated to be) conducted in the United Kingdom, Business Day shall exclude any day on which banks in London, England are closed for the purposes of making wire transfers or any other electronic transfer of funds.
CAD Capital means Capital initially funded by the Purchaser in Canadian Dollars.
Calculation Period means a calendar month.
Canadian Dollar or CAD means lawful currency of Canada.
Canadian Originator means Garland and any other Originator incorporated or organized as a company under the laws of Ontario.
I-3
Canadian Originator Receivables means each of the Pool Receivables originated by a Canadian Originator.
Canadian Purchase and Sale Agreement means the Purchase and Sale Agreement, dated as of September 27, 2011, among Garland, as an Originator, the various other Originators that may from time to time become a party thereto, and the Seller, as the same may be modified, supplemented, amended and amended and restated from time to time in accordance with its terms and this Agreement.
Canadian Receivable means a Receivable (a) that is denominated and payable in Canadian Dollars or (b) the Obligor of which is a resident of Canada.
Capital means the amount paid to the Seller in respect of Investments made by the Purchaser pursuant to the Agreement, or such amount divided or combined in order to determine the Discount applicable to any Portion of Capital, in each case, reduced from time to time by Collections distributed and applied on account of such Capital pursuant to Section 1.6(d) of the Agreement; provided , however , that if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution, as though it had not been made.
Change in Control means:
(a) with respect to Manitowoc, (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the Closing Date) of Equity Interests representing more than thirty percent (30%) of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Manitowoc, (ii) occupation of a majority of the seats (other than vacant seats) on the board of directors of Manitowoc by Persons who were neither (x) nominated by the board of directors of Manitowoc nor (y) appointed by directors so nominated, (iii) the acquisition of direct or indirect Control of Manitowoc by any Person or group or (iv) a Change in Control as defined in the Credit Agreement;
(b) with respect to any Originator, (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the Closing Date), other than Manitowoc (or a Subsidiary of Manitowoc), of any membership interests or Equity Interests of such Originator, (ii) occupation of a majority of the seats (other than vacant seats) on the board of directors of such Originator by Persons who were neither (x) nominated by the board of directors of such Originator nor (y) appointed by directors so nominated, or (iii) the acquisition of direct or indirect Control of such Originator by any Person or group other than Manitowoc (or a Subsidiary of Manitowoc);
(c) with respect to the Seller, (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the
I-4
Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the Closing Date), other than Manitowoc, of any shares or Equity Interests of the Seller, (ii) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Seller by Persons who were neither (x) nominated by the board of directors of the Seller nor (y) appointed by directors so nominated, (iii) the acquisition of direct or indirect Control of the Seller by any Person or group other than Manitowoc or (iv) any Person, other than Manitowoc, has an Adverse Claim in any shares or Equity Interests of the Seller; and
(d) with respect to the Company Notes, any Company Note ceases to be 100% owned directly by an Originator, free and clear of any Adverse Claim (other than any Adverse Claim in favor of the Credit Agreement Agent, but only so long as such Person is a party to the Intercreditor Agreement).
For purposes of this definition of Change in Control, Control and Equity Interests have the meanings assigned thereto in (or by reference in) the Credit Agreement.
Closing Date means March 3, 2016.
Collection Account means each deposit account or securities account identified on Schedule II hereto as a Collection Account.
Collection Account Agreement means, with respect to any Collection Account, an agreement, in form and substance satisfactory to the Agent, among the Seller, the Agent, the Collection Account Bank, and such other Persons as may be acceptable to the Agent, as the same may be amended, supplemented, amended and restated, or otherwise modified from time to time in accordance with the Agreement and with the consent of the Agent, which agreement establishes the Agents control (and right to assume exclusive control) of such Collection Account and funds on deposit therein.
Collection Account Bank means, with respect to any Collection Account, the bank holding the Collection Account.
Collections means, with respect to any Pool Receivable, (a) all funds which are received by the Seller, any Servicer or any Originator in payment of any amounts owed in respect of such Receivable (including, without limitation, purchase price, finance charges, interest, all other charges and, if applicable, any value added or sales taxes), or applied to amounts owed in respect of such Receivable (including, without limitation, insurance payments and net proceeds of the sale or other disposition of repossessed goods or other collateral or property of the related Obligor or any other Person directly or indirectly liable for the payment of such Pool Receivable and available to be applied thereon), (b) all Collections deemed to have been received pursuant to Section 1.4(e) of the Agreement, (c) all other proceeds of such Receivable and (d) if applicable, all recoveries of value added taxes from any relevant Governmental Authority relating to any Pool Receivable that is a Defaulted Receivable.
Company Note means any subordinated promissory note issued by the Seller to an Originator under, or in connection with the transactions contemplated by, a Purchase and Sale Agreement.
I-5
Concentration Percentage means, on any day: (a) for any Group A Obligor, a percentage equal to four (4) times the Base Concentration Limit, (b) for all Group B Obligors, a percentage equal to three (3) times the Base Concentration Limit, (c) for all Group C Obligors, a percentage equal to two (2) times the Base Concentration Limit, (d) for all Group D Obligors, a percentage equal to the Base Concentration Limit and (e) for all Group E Obligors, a percentage equal to 3.00%.
Consolidated Interest Coverage Ratio has the meaning set forth in the Credit Agreement, without giving effect to any amendment, amendment and restatement, supplement or other modification to the Credit Agreement (unless such amendment, amendment and restatement, supplement or other modification has been consented to in writing by the Agent).
Consolidated Total Leverage Ratio has the meaning set forth in the Credit Agreement, without giving effect to any amendment, amendment and restatement, supplement or other modification to the Credit Agreement (unless such amendment, amendment and restatement, supplement or other modification has been consented to in writing by the Agent).
Contract means, with respect to any Receivable, any and all contracts, understandings, instruments, agreements, invoices, notes, purchase orders or other writings pursuant to which such Receivable arises or which evidences such Receivable or under which an Obligor becomes or is obligated to make payment in respect of such Receivable.
Contractual Dilution means any Dilution that is contractually limited prior to the sale or contribution to the Seller, pursuant to the applicable Purchase and Sale Agreement, of the Receivable(s) that gave rise to such Dilution, such as discounts or rebates.
Convotherm has the meaning set forth in the preamble.
Country Rating means, for any country, the Transfer and Convertibility Assessment Rating for such country, or if such rating is not available for such country, the long-term sovereign debt rating for such country, in each case, as provided by S&P; provided , however , if such rating is unavailable, Country Rating shall be such other rating provided by an authoritative source selected by the Agent in its sole discretion.
Country Specific Percentage means, with respect to any Approved Foreign Country and at any time of determination, (i) for any Tier 1 Country, the percentage set forth on Schedule IX that corresponds to such Tier 1 Countrys Country Rating at such time and (ii) for any Tier 2 Country, the percentage set forth on Schedule X that corresponds to such Tier 2 Countrys Country Rating at such time.
CRD means, the Capital Requirements Directive which is comprised of Directives 2006/48/EC of the European Parliament of June 14, 2006 relating to the taking up and pursuit of the business of credit institutions and Directive 2006/49/EC of the European Parliament of June 14, 2006 on the capital adequacy of investment firms and credit institutions, as amended from time to time.
Credit Agreement means the Credit Agreement, dated as of March 3, 2016, among Manitowoc, the Subsidiary Borrowers party thereto, the Lenders party thereto, and
I-6
JPMorgan Chase Bank, N.A., as administrative agent (the Credit Agreement Agent ), as amended, supplemented or otherwise modified from time to time; provided , however , that for purposes of any reference herein to a defined term set forth in the Credit Agreement, such reference shall be deemed to be a reference to the Credit Agreement as in effect on March 3, 2016 without giving effect to any amendment, supplement or other modification thereto entered into without the Agents written consent.
Credit and Collection Policy means those receivables credit and collection policies and practices of the Servicer in effect on the Closing Date and attached as Schedule IV to the Agreement, as modified in compliance with the Agreement.
Cutoff Date means, (a) for any Settlement Date, the final day of a preceding Calculation Period, or (b) for any other date, the Cutoff Date for the immediately preceding Settlement Date.
Daily Report has the meaning set forth in Section 4.2(b) of the Agreement.
Days Sales Outstanding means, for any calendar month, an amount computed as of the last day of such calendar month equal to: (a) the average of the Outstanding Balance of all Pool Receivables as of the last day of each of the three most recent calendar months ended on the last day of such calendar month, divided by (b)(i) the aggregate credit sales made by the Originators giving rise to Pool Receivables during the three calendar months ended on or before the last day of such calendar month divided by (ii) ninety (90).
Debt means Indebtedness as defined in the Credit Agreement without giving effect to any amendment, amendment and restatement, supplement or other modification to the Credit Agreement.
Default Horizon means the number four (4).
Default Horizon Calculation Period means, for any day, a number, equal to the Default Horizon, of consecutive Calculation Periods ending with the Cutoff Date.
Default Ratio means, for any day, the ratio computed as of the Cutoff Date by dividing (i) the sum (without duplication) of the Net Outstanding Balances of Pool Receivables that (a) were Defaulted Receivables as of the Cutoff Date, and (b) were not Defaulted Receivables as of the previous Cutoff Date, and (c) were Eligible Receivables on at least one day during the Calculation Period by (ii) the Eligible Sales during the Loss Horizon Lookback Period.
Defaulted Receivable means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid for at least ninety-one (91) days from the original due date, or, if applicable, the adjusted due date, provided that any such adjustments are consistent with the Credit and Collection Policy therefor;
(ii) as to which the Obligor thereof or any other Person obligated thereon or owning any Related Security in respect thereof has taken any action, or suffered any event to occur, of the type described in paragraph (g) of Exhibit V to the Agreement; or
(iii) which has been, or, consistent with the Credit and Collection Policy, which should be, written off as uncollectible.
I-7
Deferred Purchase Price has the meaning set forth in Section 1.4(c) of the Agreement.
Delinquent Receivable means a Receivable which is not a Defaulted Receivable and:
(i) as to which any payment, or part thereof, remains unpaid for at least 61 days from the original due date therefor; or
(ii) which, consistent with the Credit and Collection Policy, would be classified as delinquent.
Dilution means any non-cash credit granted to an Obligor for the purpose of reducing or canceling the Net Outstanding Balance of any Eligible Receivable of such Obligor, except to the extent that such credit is offset by the sale or contribution of an Eligible Receivable(s) to the Seller pursuant to the applicable Purchase and Sale Agreement, as part of a transfer, cancellation (of invoice, not product), replacement (of invoice, not product), correction, or any artifact of A/R tracking, or as part of a buyback/resell arrangement between such Obligor and the applicable Originator.
Dilution Component means, for any day, the product of (i) the average of the Dilution Ratios for the twelve most recent Calculation Periods and (ii) the Dilution Horizon Ratio.
Dilution Horizon means the number one (1) (or such other number reasonably determined by the Agent from time to time following any audit performed pursuant to clause (h) of Exhibit IV and/or any other time in consultation with the Seller or the Servicers, in each case determined based upon the performance of the Receivables Pool).
Dilution Horizon Calculation Period means, for any day, a number, equal to the Dilution Horizon, of consecutive Calculation Periods ending with the Cutoff Date.
Dilution Horizon Lookback Period means, for any day, the Calculation Period preceding the Calculation Period containing the Cutoff Date by a number, equal to the Dilution Horizon, of Calculation Periods.
Dilution Horizon Ratio means, for any Settlement Date (and any subsequent date until the following Settlement Date), the result of (i) the Eligible Sales during the Dilution Horizon Calculation Period, divided by (ii) the Net Eligible Pool Balance as of such date.
Dilution Ratio means, for any day, the ratio computed as of the Cutoff Date by dividing: (a) the Eligible Dilution during the Calculation Period by (b) the Eligible Sales during the Dilution Horizon Lookback Period.
Dilution Reserve Percentage means, on any Settlement Date (and any subsequent date until the following Settlement Date), the product of (i) the Dilution Horizon Ratio multiplied by (ii) the sum of (x) the Dilution Reserve Stress Factor times the average of the Dilution Ratios for the twelve most recent Calculation Periods and (y) the Spike Factor.
I-8
Dilution Reserve Stress Factor means the number one and one half (1.5).
Discount means for any Portion of Capital for any Discount Accrual Period, the sum of the following amounts calculated for each day in such Discount Accrual Period,
BR x I x (1/Year)
where:
BR | = | the Bank Rate for such Portion of Capital for such day | ||
I | = | the Portion of Capital for such day | ||
Year | = | (i) if the Bank Rate for such day and such Portion of Capital is being calculated based upon the Eurodollar Rate, then three hundred sixty (360) days, and (ii) if the Bank Rate for such day and such Portion of Capital is being calculated based upon the Base Rate, then three hundred sixty-five (365) or three hundred sixty-six (366) days, as applicable |
provided , however , that no provision of the Agreement shall require the payment or permit the collection of Discount in excess of the maximum permitted by applicable law; and provided , further , that Discount for the Portion of Capital shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.
Discount Accrual Period means, with respect to each Portion of Capital:
(a) initially the period commencing on the Investment Date of the related Investment and ending the last day of the calendar month in which such Investment Date occurred; and
(b) thereafter, each calendar month;
provided , however , that on and after the Facility Termination Date, the Agent may, from time to time and in its sole discretion, select any shorter or longer Discount Accrual Period for any Portion of Capital (including a period of one day).
Discount Reserve at any time means the sum of (i) the Termination Discount at such time, and (ii) the then accrued and unpaid Discount.
Dividends means any dividend or distribution (in cash or obligations) on any of the Sellers membership or other equity interests or any warrants, options or other rights with respect to any of the Sellers membership or other equity interests.
Eligible Dilution means, for any Calculation Period, the sum of all Variable Dilutions occurring during the Calculation Period except to the extent that such credits have been applied to any Obligor in excess of the amount of any Net Outstanding Balances owed on Eligible Receivables for any such Obligor.
I-9
Eligible Receivables means, at any time, Receivables:
(i) the Obligor of which is (a) a resident of the United States, (b) a resident of Canada, (c) a resident of the United Kingdom or (d) is a resident of any Tier 1 Country or Tier 2 Country;
(ii) the Obligor of which is not, nor has at any time during the life of such Receivable been, subject to any bankruptcy, insolvency or any other action, circumstance or proceeding of the type described in paragraph (g) of Exhibit V to the Agreement;
(iii) the Obligor of which is neither (a) an Affiliate of Manitowoc nor (b) a Sanctioned Person;
(iv) which if constitutes (a) a U.S. Originator Receivable, is denominated and payable in U.S. Dollars in the United States, (b) a Canadian Originator Receivable, is denominated and payable in Canadian Dollars or U.S. Dollars, (c) a UK Originator Receivable, is denominated and payable in GBP or U.S. Dollars, (d) a German Originator Receivable, is denominated and payable in Euros or U.S. Dollars and (e) a Singapore Originator Receivable, is denominated and payable in Euros, GBP or U.S. Dollars;
(v) which have a stated maturity; and the invoice relating thereto has been sent to the related Obligor;
(vi) which arise under a Contract which is in full force and effect and which is a legal, valid and binding obligation of the related Obligor, enforceable against such Obligor in accordance with its terms and which contains an obligation to pay a specified amount of money, and, without limiting the foregoing, such Receivables (A) constitute legal, valid, binding and irrevocable payment obligations of the related Obligor, enforceable against such Obligor in accordance with their terms and (B) have not been terminated (according to the Applicable Servicers records) and whose termination is not pending;
(vii) which were created in compliance with all laws, rulings and regulations applicable to the transactions under which such Receivables were generated;
(viii) which conform with all applicable laws, rulings and regulations in effect; which are not the subject of or to any dispute, offset, hold back defense, Adverse Claim, counterclaim, warranty claim or other claim or defense (including as a result of any liability of the applicable Originator to any such Obligor that is also a supplier to such Originator); and which do not arise from the sale of inventory which is subject to any Adverse Claim (it being understood that only the portion of any Receivable equal to the amount of any such dispute, offset, hold back defense, Adverse Claim, counterclaim, warranty claim or other claim or defense shall be deemed not to satisfy this clause (viii) );
I-10
(ix) which were created in accordance with, and which comply with, the requirements of the Credit and Collection Policy;
(x) which arise from the sale and delivery of goods or services in the ordinary course of business of an Originator;
(xi) which do not require the consent of the related Obligor to be sold, transferred or assigned, under the related Contract or otherwise, and the Contract relating thereto does not contain any provision that restricts the ability of the Purchaser or the Agent to exercise rights thereunder or under the Transaction Documents, except in each case as consented to or waived by the related Obligor pursuant to a written consent or waiver in form and in substance satisfactory to the Agent;
(xii) which have not been modified, extended, renegotiated or restructured since their creation in any way not provided for in the Credit and Collection Policy;
(xiii) (A) except as Eligible Receivables is used in the Purchase and Sale Agreements, in which the Seller owns good and valid title, free and clear of any Adverse Claim, and which are freely assignable by the Seller, and (B) as Eligible Receivables is used in the Purchase and Sale Agreements, in which the applicable Originator owns good and valid title, free and clear of any Adverse Claim, and which are freely assignable by such Originator;
(xiv) for which the Purchaser shall have a valid and enforceable first priority perfected ownership (or in the case of any UK Originator Receivable, good title) or security interest therein and in the Related Security and Collections with respect thereto, in each case free and clear of any Adverse Claim;
(xv) which (i) if a U.S. Originator Receivable, constitutes accounts as defined in the UCC, and which are not evidenced by instruments or chattel paper as defined in the UCC, (ii) if a Canadian Originator Receivable, constitutes accounts as defined in the PPSA, and which are not evidenced by instruments or chattel paper as defined in the PPSA, and (iii) if a German Originator Receivable, a Singapore Originator Receivable or a UK Originator Receivable, is not evidenced or otherwise payable by chattel paper, a promissory note, a bill of exchange or other instrument (other than a cheque);
(xvi) which are neither Defaulted Receivables nor Delinquent Receivables;
(xvii) which are not Receivables in any Parent Obligor Pool where the aggregate Outstanding Balance of all Defaulted Receivables in such Parent Obligor Pool exceeds fifty percent (50%) of the aggregate Outstanding Balance of all Receivables in such Parent Obligor Pool;
(xviii) which, in the case of a Receivable subject to the laws of a jurisdiction within the U.S., are accounts receivable representing all or part of the sales price of merchandise, insurance or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, and are eligible assets as defined in Rule 3a-7 under such Act;
I-11
(xix) the Originator of which (A) is not in default in any material respect under the terms of the related Contract from which such Receivable arose, (B) is wholly-owned by Manitowoc and (C) is not Manitowoc FSG Holdings, Inc.;
(xx) that represent amounts earned and payable by the related Obligor and that are not subject to the performance of additional services or to the delivery of additional goods by the Originator thereof;
(xxi) which have not been disqualified by the Agent or the Purchaser for any other reason;
(xxii) for which the Obligor has been directed to make all payments to (A) a Lock-Box Account which is subject to either a Lock-Box Agreement or an Account Pledge Agreement or (B) an Excluded Account;
(xxiii) which are not bill and hold Receivables, unless (A) the applicable Originator has received a letter from the applicable Obligor identifying the goods relating to such Receivables and stating that such Obligor accepts such goods, (B) such goods have been placed in a gated area on the premises of such Originator that does not contain any goods owned by such Originator and (C) such Originator has fulfilled all of its obligations under the applicable Contract with respect to such goods and such Receivables (and, without limiting the generality of the foregoing, such Originator has no delivery obligation with respect to such goods);
(xxiv) which are not payable in installments;
(xxv) for which the related goods have been shipped to the applicable Obligor and for which the related services have been performed;
(xxvi) which are governed by German law in the case of German Originator Receivables;
(xxvii) which if constitute German Originator Receivables, are not subject to a current account agreement ( kontokorrentgebundene Forderung ) within the meaning of section 355 of the German Commercial Code ( Handelsgesetzbuch );
(xxviii) which arise out of a related Contract the terms of which do not expressly permit the relevant Obligor to exercise any right of set-off with respect thereto;
(xxix) which are governed by English law in the case of UK Originator Receivables;
(xxx) which are governed by Singapore law in the case of Singapore Originator Receivables;
(xxxi) which at any time prior to the Subject Termination Date, the Obligor of which is not GAR International Corporation (or any successor thereto) (each such Receivable, a Gar Receivable ). For purposes of this clause (xxxi) , Subject Termination Date means the date, if any, that the Agent in its sole discretion provides written notice to the Seller that no Gar Receivable shall be excluded solely based on this clause (xxxi) .
I-12
Eligible Sales means, for any Calculation Period, the sum of the Net Outstanding Balances of all Pool Receivables that were originated during or prior to the Calculation Period and were Eligible Receivables at any time during the Calculation Period but were not Eligible Receivables during any previous Calculation Period.
Eligible Unapplied Cash and Credits means the sum of (i) all cash and non-cash credits not applied to any Obligor, and the sum of (ii) for each Obligor, the smaller of (a) the sum of all cash and non-cash credits applied to such Obligor but not yet applied to any particular Receivable, or (b) the sum of the Net Outstanding Balance of all Eligible Receivables for which such Obligor is the Obligor.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections.
ERISA Affiliate means with respect to any Person, at any time, each trade or business (whether or not incorporated) that would, at the time, be treated together with such Person as a single employer under Section 4001 of ERISA or Sections 414(b), (c), (m) or (o) of the Code.
EU Insolvency Regulation means Article 5/1 of Council Regulation (EC) No. 1346/2000.
Euro or means the official lawful currency of the eurozone.
Euro Capital means Capital initially funded by the Purchaser in Euro.
Eurodollar Rate means, for any day, an interest rate per annum determined by Agent pursuant to the following formula:
Eurodollar Rate | = |
LIBOR |
||||
1.00 - Eurodollar Reserve Percentage |
Eurodollar Reserve Percentage means, for any day, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day applicable to member banks under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as Eurocurrency liabilities). The Eurodollar Rate for each applicable Portion of Capital shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
Euro Purchase and Sale Agreement means the European Purchase and Sale Agreement, dated as of September 27, 2011, among Convotherm, as an Originator, Manitowoc Deutschland, as an Originator, the various other Originators that may from time to time become a party thereto, and the Seller, as the same may be modified, supplemented, amended and amended and restated from time to time in accordance with its terms and this Agreement.
I-13
Euro Receivable means a Receivable (a) that is denominated and payable in Euros, (b) the Obligor of which is a resident of a Permitted EU Country or (c) that is governed by German law.
European and Singapore Accounts means the German Accounts, the UK Accounts and the Singapore Accounts.
European Collection Account means each Collection Account maintained in the name of the Seller.
Excess Concentration means, (i) for the Largest Group D Parent Obligor Pool, the amount by which the sum of the Net Outstanding Balances, or portions thereof, of the Eligible Receivables in such Largest Group D Parent Obligor Pool exceeds an amount equal to: (a) five multiplied by the Base Concentration Limit, multiplied by (b) the Outstanding Balance of all Eligible Receivables then in the Receivables Pool and (ii) for any other Parent Obligor Pool, the amount by which the sum of the Net Outstanding Balances, or portions thereof, of the Eligible Receivables in such Parent Obligor Pool exceeds an amount equal to: (a) the Concentration Percentage for such Parent Obligor multiplied by (b) the Outstanding Balance of all Eligible Receivables then in the Receivables Pool.
Excluded Account means each account, lock-box or post office box listed on Schedule VIII hereto; provided , however , that any such account, lock-box or post office box shall cease to be an Excluded Account on the date, if any, specified in a Lock-Box Notice Request with respect to such account, lock-box or post office box if a Lock-Box Agreement has not been entered into with respect to such account, lock-box or post office by such date in accordance with clause (bb) of Exhibit IV ; provided , further , however , that any such account, lock-box or post office box shall immediately be deemed to be added to Schedule II hereto (and cease to be an Excluded Account) on the date a Lock-Box Agreement is entered into with respect to such account, lock-box or post office box in accordance with clause (bb) of Exhibit IV hereto.
Excluded Account Collections means Collections received in or deposited in an Excluded Account.
Existing Agreement has the meaning set forth in the preamble to the Agreement.
Existing Agreement Outstanding Amounts has the meaning set forth in the preamble to the Agreement.
Facility Termination Date means the earliest of (a) March 1, 2019, (b) the declaration or occurrence of the Facility Termination Date pursuant to Section 2.2 of the Agreement and (c) the Purchase and Sale Termination Date under any Purchase and Sale Agreement.
Federal Funds Rate means, for any period, the per annum rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the
I-14
Federal Reserve Board (including any such successor, H.15(519)) for such day opposite the caption Federal Funds (Effective). If on any relevant day such rate is not yet published in H.15(519), the rate for such day will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, the Composite 3:30 p.m. Quotation) for such day under the caption Federal Funds Effective Rate. If on any relevant day the appropriate rate for such previous day is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be the arithmetic mean as determined by the Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Agent.
Federal Reserve Board means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.
Fee Letter has the meaning set forth in Section 1.7 of the Agreement.
Finacity means Finacity Corporation, a Delaware corporation.
Final Payout Date means the date following the Facility Termination Date on which (i) the Investment Limit has been reduced to zero ($0), (ii) no Capital or Discount remains outstanding and (iii) all other amounts then due and payable by the Originators, the Seller, Manitowoc or the Servicers to the Purchaser, the Agent or any other Purchaser Party under the Transaction Documents (including, without limitation, all Existing Agreement Outstanding Amounts) have been paid in full.
Foodservice Asia shall have the meaning set forth in the preamble.
Foodservice UK has the meaning set forth in the preamble.
Foreign Branch has the meaning set forth in Section 1.2(b) of the Agreement.
Foreign Country Receivables Group means, with respect to any Approved Foreign Country and at time of determination, all Receivables then in the Receivables Pool, the Obligor of which is a resident of such Approved Foreign Country at such time.
Foreign Obligor means an Obligor that is not a resident of the United States, Canada or the United Kingdom.
GAAP means generally accepted accounting principles in the United States.
Garland has the meaning set forth in the preamble.
GBP or £ means the official lawful currency of the United Kingdom.
GBP Capital means Capital initially funded by the Purchaser in GBP.
I-15
German Account Pledge Agreement means each agreement in form and substance acceptable to the Agent granting security in favor of the Agent or the Purchaser over any German Account or German Collection Account.
German Accounts means the Lock-Box Accounts identified as German Accounts on Schedule II hereto, in each case, so long as such Lock-Box Account is subject to German law.
German Collection Account means each Collection Account maintained in the name of the Seller, so long as such Collection Account is subject to German law.
German Insolvency Event means, with respect to any German Servicer or German Originator, the occurrence of any event described in clause (g) of the definition of Termination Event set forth in Exhibit V with respect to such Person.
German Originator means Convotherm, Manitowoc Deutschland and any other Originator incorporated or organized as a company under the laws of Germany.
German Originator Receivables means each of the Pool Receivables originated by a German Originator.
German Servicer means Convotherm, Manitowoc Deutschland and any other Servicer incorporated or organized as a company under the laws of Germany.
Governmental Authority means any nation or government, any state, municipal or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any court or arbitrator, and any accounting board or authority (whether or not a part of government) which is responsible for the establishment or interpretation of national or international accounting principles, in each case whether foreign or domestic. Without limiting the foregoing, Governmental Authority shall include any Person owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
Group A Obligor means any Obligor that has a short-term rating of at least: (a) A-1 by S&P, or if such Obligor does not have a short-term rating from S&P, a rating of AA- or better by S&P on its long-term senior unsecured and uncredit-enhanced debt securities, and (b) P-1 by Moodys, or if such Obligor does not have a short-term rating from Moodys, Aa3or better by Moodys on its long-term senior unsecured and uncredit-enhanced debt securities; provided that if an Obligor is not rated by both S&P and Moodys, then such Obligor shall be deemed to be a Group D Obligor (or if it is a Foreign Obligor, a Group E Obligor).
Group B Obligor means any Obligor that is not a Group A Obligor, and has a short-term rating of at least: (a) A-2 by S&P, or if such Obligor does not have a short-term rating from S&P, a rating of A- or better by S&P on its long-term senior unsecured and uncredit-enhanced debt securities, and (b) P-2 by Moodys, or if such Obligor does not have a short-term rating from Moodys, A3 or better by Moodys on its long-term senior unsecured and uncredit-enhanced debt securities; provided that if an Obligor is not rated by both S&P and Moodys, then such Obligor shall be deemed to be a Group D Obligor (or if it is a Foreign Obligor, a Group E Obligor).
I-16
Group C Obligor means any Obligor that is neither a Group A Obligor nor a Group B Obligor, and has a short-term rating of at least: (a) A-3 by S&P, or if such Obligor does not have a short-term rating from S&P, a rating of BBB- or better by S&P on its long-term senior unsecured and uncredit-enhanced debt securities, and (b) P-3 by Moodys, or if such Obligor does not have a short-term rating from Moodys, Baa3 or better by Moodys on its long-term senior unsecured and uncredit-enhanced debt securities; provided that if an Obligor is not rated by both S&P and Moodys, then such Obligor shall be deemed to be a Group D Obligor (or if it is a Foreign Obligor, a Group E Obligor).
Group D Obligor means any Obligor that is not a Group A Obligor, nor a Group B Obligor, nor a Group C Obligor, nor a Foreign Obligor.
Group E Obligor means any Obligor that is a Foreign Obligor and is not a Group A Obligor, nor a Group B Obligor, nor a Group C Obligor.
Hedge Agreements means all interest rate swaps, caps or collar agreements or similar arrangements dealing with interest rates or currency exchange rates or the exchange of nominal interest obligations, either generally or under specific contingencies, in each case entered into in connection with this Agreement or any other Transaction Document.
Indemnified Amounts has the meaning set forth in Section 3.1 of the Agreement.
Indemnified Party has the meaning set forth in Section 3.1 of the Agreement.
Insolvency Proceeding means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidations, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors or the commencement of negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or, for any of the reasons set out in §§ 17 to 19 (inclusive) of the German Insolvency Code ( Insolvenzordnung ); in each case, undertaken under the federal laws of the United States of America, Canada, England, Singapore, Germany or any other country (including, without limitation, the Bankruptcy Code), state or provincial law or any other foreign law.
Intercreditor Agreement means the Fourth Amended and Restated Intercreditor Agreement, dated as of the Closing Date, among Manitowoc, the Originators, the Seller, the Agent and JPMorgan Chase Bank, N.A., as the same may be amended, restated, supplemented or otherwise modified from time to time.
Investment has the meaning set forth in Section 1.4(a) of the Agreement.
Investment Date means the date on which an Investment or a Reinvestment is made pursuant to the Agreement.
I-17
Investment Limit means $110,000,000, as such amount may be reduced pursuant to Section 1.1(b) of the Agreement. References to the unused portion of the Investment Limit means, at any time, the Investment Limit minus the aggregate then outstanding Capital.
Investment Notice has the meaning set forth in Section 1.2(a) of the Agreement.
Joinder Agreement means any joinder agreement entered into by the Seller and another Person, pursuant to which such Person becomes a party to a Purchase and Sale Agreement as an Originator thereunder in accordance with the applicable terms of such Purchase and Sale Agreement.
Largest Group D Parent Obligor Pool means, at any time, all Receivables then in the Receivables Pool owed by any of the Parent Obligors with respect to the five largest Group D Obligors based on Outstanding Balance of Receivables or any Affiliate Obligor of any such Parent Obligor.
LIBOR means, for any day for any Capital denominated in any Approved Currency, an interest rate per annum equal to:
(a) in the case of U.S. Capital, the greater of (i) 0.0% and (ii) the one-month Eurodollar rate for U.S. dollar deposits as reported on the Reuters Screen LIBOR01 Page or any other page that may replace such page from time to time for the purpose of displaying offered rates of leading banks for London interbank deposits in United States dollars, as of 11:00 a.m. (London time) on such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if not so reported, then as determined by the Agent from another recognized source for interbank quotation), in each case, changing when and as such rate changes;
(b) in the case of CAD Capital, the greater of (i) 0.0% and (ii) the average rate which appears on the display designated as the CDOR Page on the Reuters Monitor Money Rate Service (or such other page as may replace the CDOR Page on that service for the purpose of displaying Canadian Dollar bankers acceptance rates or as may be used to display average rates, any such replacement page to be acceptable to the Agent, in its reasonable discretion) at or about 10:30 a.m. (Toronto time), or so soon thereafter as is practicable, on such day in respect of Canadian Dollar bankers acceptances having a term equal to one-month, or if such day is not a Business Day, then the immediately preceding Business Day. If such average rate does not appear on such page, but such rates for particular financial institutions appear on such page unaveraged, the rate shall be determined by the Agent on such date using such rates displayed on such page in the same manner as such average rate currently is determined on such page. If such rate or rates do not appear on such page, the rate shall be determined on the basis of the arithmetic average, rounded to the nearest multiple of 0.01%, of the bid rates quoted by the principal Toronto office of each of four major Canadian Schedule I chartered banks selected by the Agent as of 10:30 a.m. (Toronto time) on such day in respect of Canadian Dollar bankers acceptances having a term equal to one-month. For the purposes hereof, a bankers acceptance means a draft in Canadian Dollars drawn by a corporation, accepted by a Canadian chartered bank and issued for value to an investor;
I-18
(c) in the case of Euro Capital, the greater of (i) 0.0% and (ii) either the one-month Eurodollar rate for Euro deposits as reported on the Reuters Screen EURIBOR-01 Page or any other page that may replace such page from time to time for the purpose of displaying offered rates of leading banks for London interbank deposits in Euros, as of 11:00 a.m. (Brussels time) on such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if not so reported, then as determined by the Agent from another recognized source for interbank quotation), in each case, changing when and as such rate changes; and
(d) in the case of GBP Capital, the greater of (i) 0.0% and (ii) either the one-month Eurodollar rate for GBP deposits as reported on the Reuters Screen LIBOR-01 Page or any other page that may replace such page from time to time for the purpose of displaying offered rates of leading banks for London interbank deposits in GBP, as of 11:00 a.m. (London time) on such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if not so reported, then as determined by the Agent from another recognized source for interbank quotation), in each case, changing when and as such rate changes.
Lien means, with respect to any Property, any mortgage, lien, pledge, claim, charge, security interest or encumbrance of any kind, any other type of preferential arrangement in respect of such Property having the effect of a security interest or any filing consented to by any Person of any financing statement under the UCC or any other similar notice of Lien under any similar notice or recording statute of any Governmental Authority consented to by any Person, including any easement, right-of-way or other encumbrance on title to real property, and any agreement to give any of the foregoing.
Lock-Box Account means each account maintained at a bank or other financial institution for the purpose of receiving Collections.
Lock-Box Agreement means, with respect to any Lock-Box Account, an agreement, in form and substance satisfactory to the Agent, among an Originator, the Seller, the applicable Lock-Box Bank, the Agent, and such other Persons as may be acceptable to the Agent, as the same may be amended, supplemented, amended and restated, or otherwise modified from time to time in accordance with the Agreement and with the consent of the Agent, which agreement establishes the Agents control (and right to assume exclusive control) of such Lock-Box Account and funds on deposit therein.
Lock-Box Bank means any of the banks or other financial institutions holding one or more Lock-Box Accounts.
Loss Horizon means the number four (4) (or such other number reasonably determined by the Agent from time to time following any audit performed pursuant to clause (h) of Exhibit IV and/or any other time in consultation with the Seller or the Servicers, in each case determined based upon the performance of the Receivables Pool).
I-19
Loss Horizon Lookback Period means, for any day, the Calculation Period preceding the Calculation Period containing the Cutoff Date by a number, equal to the Loss Horizon, of Calculation Periods.
Loss Horizon Ratio means, for any Settlement Date (and any subsequent date until the following Settlement Date), the result of (i) the Eligible Sales during the Default Horizon Calculation Period, divided by (ii) the Net Eligible Pool Balance as of such date.
Loss Reserve Percentage means, on any Settlement Date (and any subsequent date until the following Settlement Date), the result of (i) the Loss Reserve Stress Factor times (ii) the highest average of the Default Ratios for any three consecutive Calculation Periods from among the twelve most recent such averages prior to such Settlement Date, multiplied by (iii) the Loss Horizon Ratio.
Loss Reserve Stress Factor means the number one and one half (1.5).
Manitowoc has the meaning set forth in the preamble to the Agreement.
Manitowoc Deutschland has the meaning set forth in the preamble.
Material Adverse Effect means, with respect to any event or circumstance and any Person, a material adverse effect on:
(a) the business, operations, assets, financial condition or other condition of the Seller, any Originator or any Servicer;
(b) the ability of the Seller, any Originator or any Servicer (if such Servicer is Manitowoc or an Affiliate of Manitowoc) to perform its obligations under the Transaction Documents to which it is a party or the performance of any such obligations;
(c) the validity or enforceability of any portion of, or collectibility of amounts payable under, the Agreement or any other Transaction Document;
(d) the rights and remedies of the Purchaser, the Agent or any of their respective Affiliates under the Agreement or any other Transaction Document;
(e) the status, existence, perfection, priority or enforceability of the Sellers or the Purchasers interest in the Pool Receivables, Contracts, or Related Security; or
(f) the validity, enforceability or collectibility of a material portion of the Pool Receivables.
Monthly Report means a report, in substantially the form of Annex C hereto, furnished by the Servicer to the Agent pursuant to paragraph (l)(iii) and (l)(iv) of Exhibit IV to the Agreement.
Monthly Reporting Date means the Business Day immediately following the 14 th calendar day of each calendar month.
I-20
Moodys means Moodys Investors Service, Inc.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which Seller, Originator, or any ERISA Affiliate thereof is, or was within the preceding 5 years, a contributing employer.
Net Eligible Pool means, on any date of calculation, a set, determined by the Servicers, of Eligible Receivables (or portions thereof) then in the Receivables Pool, provided that such set has (a) no Excess Concentrations and (b) other than Special Term Receivables, no Receivables then due more than sixty (60) days thereafter.
Net Eligible Pool Balance means, at any time, (a) the sum of the Net Outstanding Balances of the Receivables in the Net Eligible Pool, minus (b) the sum of (i) Eligible Unapplied Cash and Credits, (ii) the amount by which (A) the sum of the Net Outstanding Balances of the Receivables in the Net Eligible Pool having due dates that have been adjusted and that have been outstanding for more than ninety (90) days from their original due dates, exceeds (B) an amount equal to five percent (5%) of the Net Outstanding Balances of the Receivables in the Net Eligible Pool, (iii) the amount by which (A) the sum of the Net Outstanding Balances of the Receivables in the Net Eligible Pool for which the Obligors are Governmental Authorities, exceeds (B) an amount equal to one percent (1%) of the Net Outstanding Balances of the Receivables in the Net Eligible Pool, (iv) the amount by which (A) the sum of the Net Outstanding Balances of the Special Term Receivables, exceeds (B) an amount equal to four percent (4%) of the Net Outstanding Balances of the Receivables in the Net Eligible Pool, (v) the amount by which (A) the sum of the Net Outstanding Balances of the Receivables in the Net Eligible Pool for which the Obligors are a resident of Quebec, Canada, exceeds (B) an amount equal to one percent (1%) of the Net Outstanding Balances of the Receivables in the Net Eligible Pool, (vi) the amount by which (A) the sum of the Net Outstanding Balances of the German Originator Receivables in the Net Eligible Pool, exceeds (B) an amount equal to twelve percent (12%) of the Net Outstanding Balances of the Receivables in the Net Eligible Pool, (vii) the amount by which (A) the sum of the Net Outstanding Balances of Singapore Originator Receivables, exceeds (B) an amount equal to eighteen percent (18%) of the Net Outstanding Balances of the Receivables in the Net Eligible Pool and (viii) with respect to each Foreign Country Receivables Group, the amount by which (A) the sum of the Net Outstanding Balances of the Eligible Receivables in such Foreign Country Receivables Group, exceeds (B) an amount equal to the applicable Country Specific Percentage of the Net Outstanding Balances of the Receivables in the Net Eligible Pool.
Net Investment Limit means the lesser of (i) Investment Limit and (ii) the Net Eligible Pool Balance. References to the unused portion of the Net Investment Limit means, at any time, the Net Investment Limit minus the aggregate then outstanding Capital.
Net Outstanding Balance means, for any Receivable, at any time, (i) the Outstanding Balance of such Receivable reduced by the amount of any and all available, unused discounts or credits relating to such Receivable, provided that the result is greater than zero, or (ii) zero, otherwise.
Obligations means, with respect to the Seller, all the Sellers obligations hereunder and under the other Transaction Documents (including, without limitation, any payment obligations (including in respect of Discount, Capital, fees, costs, expenses and indemnities), representations, warranties and covenants).
I-21
Obligor means, with respect to any Receivable, the Person obligated to make payments pursuant to the Contract relating to such Receivable.
Originators means each of the Persons from time to time party to a Purchase and Sale Agreement as Originators (including Persons that become a party to a Purchase and Sale Agreement as Originators pursuant to a Joinder Agreement).
Outstanding Balance of any Receivable at any time means the then outstanding principal balance thereof.
PATRIOT Act has the meaning set forth in Section 5.15 of the Agreement.
PPSA means the Personal Property Security Act (Ontario).
Parent Obligor means any Obligor so designated by the Servicers; provided that each Obligor must be either a Parent Obligor or an Affiliate Obligor but not both.
Parent Obligor Pool means, for any Parent Obligor, all Receivables in the Receivables Pool owed either by such Parent Obligor or by any Affiliate Obligor of such Parent Obligor.
Paydown Date has the meaning set forth in Section 1.6(f) of the Agreement.
Paydown Notice has the meaning set forth in Section 1.6(f) of the Agreement.
Performance Guaranty means that certain Performance Guaranty, dated as of the date hereof, executed and delivered by Manitowoc in favor of the Purchaser and the Agent (on behalf of itself and the other Purchaser Parties), as the same may be amended, restated, supplemented or otherwise modified from time to time.
Permitted EU Country means, at any time, any country that is then a member of the European Union.
Person means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof.
Pool Assets has the meaning set forth in Section 1.4(e) of the Agreement.
Pool Receivable means a Receivable in the Receivables Pool.
Portion of Capital means each portion of the Capital pursuant to which the Discount with respect thereto is calculated by reference to a different interest rate.
Property means any right, title or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including ownership interests of any Person.
I-22
Purchase and Sale Agreement means each of the U.S. Foodservice Purchase and Sale Agreement, the Canadian Purchase and Sale Agreement, the UK Purchase and Sale Agreement, the Singapore Purchase and Sale Agreement and the Euro Purchase and Sale Agreement.
Purchase and Sale Termination Date has the meaning set forth in the applicable Purchase and Sale Agreement.
Purchased Assets has the meaning set forth in Section 1.3(a) of the Agreement.
Purchased Assets Coverage Percentage means, at any time, a fraction, expressed as a percentage and calculated pursuant to the following formula:
C + TR + DR + SFR + UFR
NEPB + AC
where:
C | = | the Aggregate Capital outstanding at such time. | ||
TR | = | the Total Reserve at such time. | ||
DR | = | the Discount Reserve at such time. | ||
SFR | = | the Servicing Fee Reserve at such time. | ||
UFR | = | the Unused Fee Reserve at such time. | ||
NEPB | = | the Net Eligible Pool Balance at such time. | ||
AC | = | the lesser of (x) cash in the Collection Account at such time, solely to the extent that such cash, if representing Collections, has been applied to reduce the Net Eligible Pool Balance included in such calculation and (y) $7,000,000. |
The Purchased Assets Coverage Percentage shall be determined from time to time pursuant to the provisions of Section 1.5 of the Agreement.
Purchaser has the meaning set forth in the preamble to the Agreement.
Purchaser Parties means, collectively, the Agent, the Purchaser, the Affected Persons and the Indemnified Parties.
Purchasers Account means the applicable account set forth on Schedule VI , or such other account as may be so designated in writing by the Agent to the Seller and the Servicers.
RBS GBP Collection Account means that certain GBP denominated account maintained in the name of the Seller at The Royal Bank of Scotland plc, as notified by the Seller to Agent in writing.
I-23
RBS USD Collection Account means that certain USD denominated account maintained in the name of the Seller at The Royal Bank of Scotland plc, as notified by the Seller to Agent in writing.
Receivable means any indebtedness and other obligations owed to an Originator or the Seller or any right of any Originator or the Seller to payment from or on behalf of an Obligor, whether constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale of goods or the rendering of services by any Originator, and includes, without limitation, the obligation to pay any finance charges, fees and other charges and any value added taxes or sales taxes with respect thereto; provided , however , that any right of Garland to payment from an Obligor, arising in connection with the sale of goods or the rendering of services by Garland to such Obligor, that has been directed by or on behalf of Garland to make such payment in Canadian dollars by way of a credit card shall not constitute a Receivable. Indebtedness and other obligations arising from any one transaction, including, without limitation, indebtedness and other obligations represented by an individual invoice or agreement, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other obligations arising from any other transaction.
Receivables Pool means at any time all of the then outstanding Receivables in which the Seller has an interest.
Reinvestment has the meaning set forth in Section 1.4(b) of the Agreement.
Related Rights is defined in Section 1.1 of each Purchase and Sale Agreement.
Related Security means, with respect to any Receivable:
(a) all of the Sellers and any Originators interest in any goods (including returned goods), and documentation or title evidencing the shipment or storage of any goods (including returned goods), relating to any sale giving rise to such Receivable;
(b) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all UCC financing statements or similar filings relating thereto or PPSA registered assignments and/or any other financing statements, verification statements, registrations of charge or similar filings relating thereto, as applicable;
(c) all guaranties, indemnities, insurance and other agreements (including the related Contract) or arrangements of whatever character from time to time supporting or securing payment of such Receivable or otherwise relating to such Receivable whether pursuant to the Contract related to such Receivable or otherwise; and
(d) all proceeds of the foregoing.
Release Agreement means that certain Release, Assignment and Assumption Agreement, dated as of the date hereof, among the Originators, the Seller, the Agent, Wells Fargo Bank, N.A., Manitowoc Funding, LLC, The Manitowoc Company, Inc. and the other parties thereto, as the same may be amended, restated, supplemented or otherwise modified from time to time.
I-24
Requirement of Law means as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
Responsible Officer means the Chief Executive Officer of the Seller or a Servicer, as the case may be, or the President of the Seller or a Servicer, as the case may be, or the managing director ( Geschäftsführer ) in case of a German Originator or German Servicer or, with respect to financial matters, the Chief Financial Officer of Manitowoc, any Vice President-Finance or Treasurer (or an equivalent officer); it being understood , that for purposes of this definition if the Seller or a Servicer, as applicable, does not have or no longer has an officer with one of the titles set forth above, a Responsible Officer for purposes of this Agreement and the other Transaction Documents shall be the officer or officers of the Seller or such Servicer, as applicable, designated to perform the duties of the officers described above.
Sanctioned Country means a country or territory that is, or whose government is, the subject of territorial-based Sanctions.
Sanctioned Person means a Person that is, or is owned or controlled by Persons that are: (i) the subject of any Sanctions, or (ii) located, organized or resident in a Sanctioned Country.
Sanctions means any sanctions administered or enforced by the U.S. Department of Treasurys Office of Foreign Assets Control, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majestys Treasury, or other relevant sanctions authority.
S&P means Standard & Poors Ratings Services, a Standard and Poors Financial Services LLC business.
Seller has the meaning set forth in the preamble to the Agreement.
Servicer means each Person appointed as such pursuant to Section 4.1 of the Agreement.
Servicer Default means any of the following:
(a) any Servicer shall fail to make when due any payment or deposit to be made by it under the Agreement or any other Transaction Document and such failure shall continue unremedied for two Business Days; or
(b) Manitowoc (or any Affiliate thereof) shall fail to transfer to any successor Servicer when required any rights, pursuant to the Agreement, which Manitowoc (or such Affiliate) then has as Servicer; or
I-25
(c) any representation or warranty or certification made or deemed made by any Servicer (or any of its officers) under or in connection with the Agreement or any other Transaction Document or any information or report delivered by any Servicer pursuant to the Agreement shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered; or
(d) any Servicer shall fail to perform or observe any of the covenants set forth in clause (s) (Financial Covenants) of Exhibit IV to the Agreement; or
(e) any Servicer shall fail to perform or observe any other term, covenant or agreement contained in the Agreement or any other Transaction Document on its part to be performed or observed and any such failure shall remain unremedied for thirty (30) days after any Servicer has notice or knowledge thereof (or, with respect to a failure to deliver the Monthly Report pursuant to the Agreement or the Daily Report pursuant to Section 4.2(b) of the Agreement, such failure shall remain unremedied for two (2) Business Days); or
(f) any Servicer shall fail to pay any principal of or premium or interest on any of its Debt which is outstanding in a principal amount of at least ten million dollars ($10,000,000) in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement, mortgage, indenture or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement, mortgage, indenture or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement, mortgage, indenture or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an offer to repay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or
(g) any Servicer shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally as such debts become due ( Zahlungsunfähigkeit ), is threatened with insolvency ( drohende Zahlungsunfähigkeit ) or is overindebted ( überschuldet ), or shall make a general assignment for the benefit of creditors or commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or, for any of the reasons set out in §§ 17 to 19 (inclusive) of the German Insolvency Code ( Insolvenzordnung ); or any proceeding shall be instituted by or against any Servicer seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, receivership, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, insolvency administrator, custodian or other similar official for it or for any substantial part of its property or with respect to the German Servicer (i) the commencement of insolvency proceedings ( Eröffnung des Insolvenzverfahrens ) pursuant to the provisions of the
I-26
German Insolvency Code ( Insolvenzordnung ), or (ii) the ordering by the insolvency court of a general prohibition of disposal ( allgemeines Verfügungsverbot ) or the order by the insolvency court that such German Servicer may only dispose of its assets with the consent of a preliminary insolvency administrator pursuant to Section 21 para. 2 No. 2 of the German Insolvency Code ( Insolvenzordnung ) and, in the case of any such proceeding instituted against it (but not instituted by it), either (a) such proceeding shall remain undismissed or unstayed for a period of sixty (60) days, or (b) in any such proceeding, there is entered an order for relief against, or there is appointed a receiver, trustee, insolvency administrator, custodian or other similar official for, it or for any substantial part of its property; or any Servicer shall take any corporate action to authorize any of the actions set forth above in this paragraph (i) ; or
(h) in the judgment of the Agent, there shall have occurred a material adverse change in (x) the ability of any Servicer to adequately service the Receivables or (y) the ability of the Purchaser to enforce or otherwise realize upon its interest in the Receivables, the Related Security or the Collections.
Servicing Fee means the fee referred to in Section 4.6 of the Agreement.
Servicing Fee Reserve at any time means the sum of (i) the unpaid Servicing Fee accrued to such time, plus (ii) an amount equal to (a) the aggregate Outstanding Balance of Pool Receivables at the time of computation multiplied by (b) the product of (x) one percent (1%) and (y) a fraction having two (2) times the Days Sales Outstanding as its numerator and three hundred sixty (360) as its denominator.
Singapore Account Charge means each agreement in form and substance acceptable to the Agent granting security in favor of the Agent or the Seller over any Singapore Account.
Singapore Accounts means the Lock-Box Accounts identified as Singapore Accounts on Schedule II hereto.
Singapore Originator means Foodservice Asia and any other Originator incorporated or organized as a company under the laws of Singapore.
Singapore Originator Receivables means each of the Pool Receivables originated by a Singapore Originator.
Singapore Purchase and Sale Agreement means the Singapore Purchase and Sale Agreement, dated as of August 31, 2015, among Foodservice Asia, as an Originator, the various other Originators that may from time to time become a party thereto, and the Seller, as the same may be modified, supplemented, amended and amended and restated from time to time in accordance with its terms and this Agreement.
Settlement Date means the second (2 nd ) Business Day following each Monthly Reporting Date.
Solvent means, with respect to any Person at any time, a condition under which:
(ii) the fair value and present fair saleable value of such Persons total assets is, on the date of determination, greater than such Persons total liabilities (including contingent and unliquidated liabilities) at such time;
I-27
(iii) the fair value and present fair saleable value of such Persons assets is greater than the amount that will be required to pay such Persons probable liability on its existing debts as they become absolute and matured ( debts , for this purpose, includes all legal liabilities, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent);
(iv) such Person is and shall continue to be able to pay all of its liabilities as such liabilities mature; and
(v) such Person does not have unreasonably small capital with which to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Persons contingent or unliquidated liabilities at any time shall be that amount which, in light of all the facts and circumstances then existing, represents the amount which can reasonably be expected to become an actual or matured liability;
(B) the fair value of an asset shall be the amount which may be realized within a reasonable time either through collection or sale of such asset at its regular market value;
(C) the regular market value of an asset shall be the amount which a capable and diligent business person could obtain for such asset from an interested buyer who is willing to Purchase such asset under ordinary selling conditions; and
(D) the present fair saleable value of an asset means the amount which can be obtained if such asset is sold with reasonable promptness in an arms-length transaction in an existing and not theoretical market.
Special Term Receivable means, as of any date of determination, any Receivable then due more than sixty (60) days but not more than one hundred eighty (180) days thereafter.
Specified Law means (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act ), (ii) the BASEL Accord, and (iii) any existing or future rules, regulations, guidance, interpretations or directives promulgated or issued relating to the Dodd-Frank Act or the BASEL Accord (whether or not having the force of law).
Spike Factor means on any Settlement Date (and any subsequent date until the following Settlement Date), the product of (i) the excess, if any, of (a) the arithmetic average Dilution Ratio for any three consecutive Calculation Periods during the twelve most recent Calculation Periods over (b) the arithmetic average of the Dilution Ratios for such twelve Calculation Periods, times (ii)(a) the highest arithmetic average Dilution Ratio for any three consecutive Calculation Periods during the twelve most recent Calculation Periods, divided by (b) the arithmetic average of the Dilution Ratios for such twelve Calculation Periods.
I-28
Spot Rate means on any day, for the purpose of determining the U.S. Dollar Equivalent of any Approved Currency, the rate determined by Agent to be the rate quoted by Agent acting in such capacity as the spot rate for the purchase by Agent of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. (New York time) on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided , that Agent may obtain such spot rate from another financial institution designated by Agent if Agent acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.
Sub-Servicer shall have the meaning set forth in Section 4.1(d) of the Agreement.
Subsidiary means, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. Unless the context clearly requires otherwise, all references to any Subsidiary means a Subsidiary of Manitowoc.
Tangible Net Worth means, with respect to any Person, the net worth of such Person after subtracting therefrom the aggregate amount of such Persons intangible assets, including, without limitation, goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks and brand names.
TARGET 2 Day means any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET 2) payment system which utilizes a single shared platform which was launched on November 19, 2007 (or, if such payment system ceases to be operative, such other payment system (if any) determined by Agent to be a suitable replacement) is open for the settlement of payments in Euro.
Tax or Taxes means any and all present or future taxes (including value added and sales taxes), levies, imposts, duties, deductions, withholdings or other charges (including any fines, penalties or interest) imposed by any Governmental Authority.
Termination Date means the earlier of (i) the Business Day which the Seller so designates by notice to the Agent at least thirty (30) days in advance and (ii) the Facility Termination Date.
Termination Day means (i) each day on which the conditions set forth in Section 2 of Exhibit II to the Agreement are not satisfied and (ii) each day which occurs on or after the Termination Date.
I-29
Termination Discount means, on any date of determination, an amount determined pursuant to the following formula:
C x {(COF x 1.50) + UFR} x (2 x DSO/360)
Where:
C | = | the Aggregate Capital outstanding on such date | ||
AD | = | the U.S. Dollar Equivalent of the aggregate amount of Discount that accrues on all outstanding Capital on such date | ||
COF | = | AD x 360 | ||
C | ||||
DSO | = | Days Sales Outstanding on such date | ||
UFR | = | the Used Fee Rate (as defined in the Fee Letter on such date) |
Termination Event has the meaning specified in Exhibit V to the Agreement.
Tier 1 Country means any country set forth on Schedule IX to the Agreement.
Tier 2 Country means any country set forth on Schedule X to the Agreement.
Total Reserve means, (a) the Total Reserve Percentage multiplied by (b) the Net Eligible Pool Balance.
Total Reserve Percentage means the greatest of (i) the sum of (a) the Loss Reserve Percentage and (b) the Dilution Reserve Percentage, (ii) the sum of (a) the Base Concentration Limit multiplied by three and (b) the Dilution Component and (iii) 15.0%.
Transaction Documents means the Agreement, the Fee Letter, the Purchase and Sale Agreements, each Company Note, the Performance Guaranty, the Lock-Box Agreements, the Collection Account Agreements, the Account Pledge Agreements, the Release Agreement, the Intercreditor Agreement, the Bond Administration Agreement, each Joinder Agreement and all other certificates, instruments, UCC financing statements, PPSA registered assignments and/or financing statements, verification statements or similar filings, reports, notices, agreements and documents executed or delivered under or in connection with the Agreement, in each case as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the Agreement.
UCC means the Uniform Commercial Code as from time to time in effect in the applicable jurisdiction.
UK Account Charge means each agreement in form and substance acceptable to the Agent granting security in favor of the Agent or the Seller over any UK Account or UK Collection Account.
I-30
UK Accounts means the Lock-Box Accounts identified as UK Accounts on Schedule II hereto, in each case, so long as such Lock-Box Account is subject to English law.
UK Collection Account means each Collection Account maintained in the name of the Seller, so long as such Collection Account is subject to English law.
UK Originator means Foodservice UK and any other Originator incorporated or organized as a company under the laws of England.
UK Originator Receivables means each of the Pool Receivables originated by a UK Originator.
UK Purchase and Sale Agreement means the Purchase and Sale Agreement, dated as of December 15, 2014, among Foodservice UK, as an Originator, the various other Originators that may from time to time become a party thereto, and the Seller, as the same may be modified, supplemented, amended and amended and restated from time to time in accordance with its terms and this Agreement.
United States Federal Government means the government of the United States of America, and any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of the government of the United States of America. For avoidance of doubt, this definition includes, without limitation, agencies of the government of the United States of America that are subject to the Federal Assignment of Claims Act.
Unmatured Purchase and Sale Termination Event means any event which, with the giving of notice or lapse of time, or both, would become a Purchase and Sale Termination Event.
Unmatured Termination Event means an event which, with the giving of notice or lapse of time, or both, would constitute a Termination Event.
Unused Fee has the meaning set forth in the Fee Letter.
Unused Fee Rate has the meaning set forth in the Fee Letter.
Unused Fee Reserve means on any date of determination, an amount equal to the product of (a) the Unused Fee Rate, times (b) two (2) times the Days Sales Outstanding at such time, times (c) the result of (1) the Investment Limit at such time minus (2) the Aggregate Capital at such time, divided by (d) three hundred sixty (360).
U.S. Capital means Capital initially funded by the Purchaser in U.S. Dollars.
U.S. Dollar or $ means lawful currency of the United States of America.
U.S. Dollar Equivalent means, at any date on which a specified amount denominated in an Approved Currency for which a determination thereof is to be made, (a) such amount, with respect to any amount denominated in U.S. Dollars and (b) the U.S. Dollar equivalent of such specified amount of such Approved Currency determined by reference to the Spot Rate determined as of such date.
I-31
U.S. Originator Receivables means each of the Pool Receivables originated by a U.S. Originator.
U.S. Foodservice Purchase and Sale Agreement means the US Foodservice Purchase and Sale Agreement, dated as of August 31, 2015, among various Originators and the Seller, as the same may be modified, supplemented, amended and amended and restated from time to time in accordance with its terms and this Agreement.
U.S. Originator means each Originator incorporated or otherwise organized under the laws of any State of the United States.
U.S. Originator Receivables means each of the Pool Receivables originated by a U.S. Originator.
Used Fee has the meaning set forth in the Fee Letter.
Used Fee Rate has the meaning set forth in the Fee Letter.
Variable Dilution means any Dilution other than Contractual Dilution.
Volcker Rule means Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder.
Wells has the meaning set forth in the preamble.
Other Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. All terms used in the PPSA, and not specifically defined herein, are used herein as defined in the PPSA. Unless the context otherwise requires, or means and/or, and including (and with correlative meaning include and includes) means including without limiting the generality of any description preceding such term.
I-32
EXHIBIT II
CONDITIONS OF INVESTMENTS AND REINVESTMENTS
1. Conditions Precedent to Effectiveness of this Agreement . This Agreement shall become effective as of the Closing Date, provided that the Agent shall have received on or before the Closing Date, each in form and substance (including the date thereof) satisfactory to the Agent:
(a) Counterparts of the Agreement, the Fee Letter, the Performance Guaranty, the Lock-Box Agreements, the Joinder Agreement, the Collection Account Agreements, the Account Pledge Agreements, the Intercreditor Agreement and the other Transaction Documents, signed by the parties thereto.
(b) Certified copies of (i) the resolutions of the Board of Directors (or the shareholders, as applicable) of the Seller and Manitowoc authorizing the execution, delivery, and performance by the Seller and Manitowoc, as the case may be, of the Transaction Documents to which they are a party, (ii) all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement and the other Transaction Documents and (iii) the certificate of incorporation, by-laws or articles of association of the Seller and Manitowoc.
(c) A certificate of the Secretary or Assistant Secretary of the Seller and Manitowoc certifying the names and true signatures of its officers authorized to sign the Agreement and the other Transaction Documents to which it is a party. Until the Agent receives a subsequent incumbency certificate from the Seller or Manitowoc in form and substance satisfactory to the Agent, the Agent shall be entitled to rely on the last such certificate delivered to it by the Seller or Manitowoc, as the case may be.
(d) Good standing certificates with respect to the Seller and Manitowoc issued by the Secretaries of State (or comparable office) of the jurisdiction of such Persons organization.
(e) Financing statements or amendments thereto (or any equivalent filings or recordings in the relevant jurisdiction) duly filed on or before the Closing Date under the UCC, PPSA or the equivalent (if any) of all jurisdictions that the Agent may deem necessary or desirable in order to perfect the interests of the Purchaser contemplated by this Agreement and the other Transaction Documents.
(f) UCC financing statements, amendments thereto or termination statements, if any, necessary to release or assign to the Purchaser all ownership interests, security interests and other rights of any Person in the Receivables, Contracts or Related Security previously granted by the Seller or any Originator.
(g) Completed UCC requests for information, dated on or before the Closing Date, listing all effective financing statements filed in the jurisdictions referred to in subsection (e) above that name the Seller as debtor, showing no liens on any of the Receivables, Contracts or Related Security of such Person.
II-1
(h) Favorable opinions of Quarles & Brady LLP and Conyers Dill & Pearman, in form and substance acceptable to the Agent, as to corporate, enforceability, UCC and such other matters (including absence of conflict with the Credit Agreement) as the Agent may reasonably request.
(i) Favorable opinions of Quarles & Brady LLP and Conyers Dill & Pearman, in form and substance acceptable to the Agent, as to true sale and non-consolidation matters, as the Agent may reasonably request.
(j) A pro-forma Monthly Report.
(k) Any amounts payable on or prior to the Closing Date under, and in accordance with the terms of, the Fee Letter shall have been paid in full.
(l) In the event that any lender, purchaser or agent under any debt or purchase facility to which an Originator or the Servicer is a party must consent to the execution, delivery or performance of the Transaction Documents by such Originator or such Servicer, or to the consummation of any of the transactions contemplated thereby, evidence that such consent has been obtained.
(m) Internal credit approval of Wells with respect to the transactions contemplated hereby.
(n) Receipt by the Agent of the most recent audit (the Field Exam ) of the performance of the Seller, the Servicers and the Originators hereunder and under each of the related Transaction Documents performed by Protivity Inc. ( Protivity ) and confirmation from Protivity to the effect that the Agent and the Purchaser shall be entitled to rely upon the Field Exam.
(o) Such other approvals, opinions or documents as the Agent may reasonably request.
2. Conditions Precedent to All Investments and Reinvestments . Each Investment (including the initial Investment, but excluding the deemed Investment made as of the Closing Date pursuant to Section 1.3(a) ) and each Reinvestment shall be subject to the further conditions precedent that:
(a) in the case of each Investment, the Agent shall have received, by the time of such Investment, in form and substance satisfactory to the Agent, (x) a completed Monthly Report with respect to the period ending on the close of business on the Business Day immediately preceding the date of the related Investment Notice and a completed Monthly Report with respect to the calendar month ended immediately prior to such Investment, and (y) all other reports and information required to be delivered under this Agreement by the Seller or the Servicers; and
(b) on the date of such Investment or Reinvestment, as the case may be, and both immediately before and immediately after giving effect thereto, the following statements shall be true (and acceptance of the proceeds of such Investment or Reinvestment shall be deemed a representation and warranty by the Seller that such statements are then true):
(i) the representations and warranties contained in Exhibit III and Exhibit VI to the Agreement are true and correct on and as of the date of such Investment or Reinvestment as though made on and as of such date;
II-2
(ii) each Originator, Servicer and Seller has performed and observed all terms, covenants and agreements contained in this Agreement or any other Transaction Document on its part to be performed or observed (including, without limitation, the delivery of each completed Daily Report required hereunder);
(iii) without limiting the foregoing, no event has occurred and is continuing, or would result from such Investment or Reinvestment or from the application of proceeds therefrom, that constitutes a Termination Event or an Unmatured Termination Event;
(iv) without limiting the foregoing or Section 1.1(a) :
B. (I) the Aggregate Capital will not exceed the Investment Limit and (II) solely with respect to (x) any Investment and (y) the first Reinvestment occurring on or after each Settlement Date, the Aggregate Capital would exceed the Net Investment Limit;
C. the Purchased Assets Coverage Percentage will not exceed 100%;
D. solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the U.S. Capital will not exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in U.S. Dollars that are then included in the Receivables Pool;
E. solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the CAD Capital will not exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in Canadian Dollars that are then included in the Receivables Pool;
F. solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the Euro Capital will not exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in Euro that are then included in the Receivables Pool; and
G. solely with respect to (A) any Investment and (B) the first Reinvestment occurring on or after each Settlement Date, the GBP Capital will not exceed the aggregate Net Outstanding Balance of all Eligible Receivables denominated in GBP that are then included in the Receivables Pool.
(v) without limiting the foregoing, no contribution failure has occurred with respect to any Benefit Plan sufficient to give rise to a lien under Section 303(k) of ERISA or Section 430(k) of the Internal Revenue Code, and the Internal Revenue Service has not
II-3
filed notice of a lien pursuant to Section 6323 of the Internal Revenue Code with regard to any asset of the Seller or any Originator, and the Pension Benefit Guaranty Corporation has not filed any notice of a lien pursuant to Section 4068 of ERISA with regard to any assets of the Seller or any Originator, unless, in either case, such lien shall have been released prior to the date of such Investment or Reinvestment; and
(vi) the Facility Termination Date has not occurred.
II-4
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Seller . The Seller represents and warrants as follows:
(a) The Seller is an exempted company with limited liability duly formed, validly existing and in good standing under the laws of the Cayman Islands, and is duly qualified to do business, and is in good standing, as a foreign limited liability company in every jurisdiction where the nature of its business requires it to be so qualified if any failure to be so qualified would be reasonably likely to have a Material Adverse Effect.
(b) The execution, delivery and performance by the Seller of the Agreement and the other Transaction Documents to which it is a party, including the Sellers use of the proceeds of Investments, Reinvestments and the Deferred Purchase Price, (i) are within the Sellers corporate or organizational powers, (ii) have been duly authorized by all necessary corporate or organizational action on the part of the Seller, (iii) do not contravene or result in a default under or conflict with (1) the Sellers articles of organization, limited liability company agreement, operating agreement, bylaws or similar organizational documents, (2) any law, rule or regulation applicable to the Seller, (3) any contractual restriction binding on or affecting the Seller or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting the Seller or its property unless, in each case, such contravention, default or conflict could not reasonably be expected to have a Material Adverse Effect, and (iv) do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties. The Agreement and the other Transaction Documents to which it is a party have been duly executed and delivered by the Seller.
(c) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required for the due execution, delivery and performance by the Seller of the Agreement or any other Transaction Document to which it is a party other than those previously obtained or UCC filings.
(d) Each of the Agreement and the other Transaction Documents to which it is a party constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.
(e) The Seller is the legal and beneficial owner of, and has good and marketable title to the Receivables purporting to be in the Receivables Pool and all Related Security with respect thereto, free and clear of any Adverse Claim. Upon each Investment or Reinvestment under the Agreement (including, without limitation, the deemed Investment occurring on the Closing Date pursuant to Section 1.3(a) ), the Purchaser shall acquire a valid and enforceable perfected ownership or security interest in each Pool Receivable then existing or thereafter arising, and in the Related Security and Collections and other proceeds with respect thereto, free and clear of
III-1
any Adverse Claim. The Agreement creates a valid ownership or security interest in favor of the Purchaser in the Pool Assets, and the Purchaser has a first priority perfected ownership or security interest in the Pool Assets, free and clear of any Adverse Claims. No effective financing statement or other instrument similar in effect covering any Contract or any Pool Receivable or the Related Security or Collections with respect thereto or any Lock-Box Account is on file in any recording office, except those filed in favor of the Seller and the Purchaser pursuant to this Agreement and the other Transaction Documents. No Adverse Claim on any Contract or any Pool Receivable or the Related Security or Collections with respect thereto or any Lock-Box Account is recorded on the Sellers register of mortgages and charges.
(f) Each Monthly Report, Daily Report, information, exhibit, financial statement, document, book, record or report furnished or to be furnished at any time by or on behalf of the Seller to the Agent or the Purchaser in connection with the Agreement is or will be accurate in all material respects as of its date or as of the date so furnished, and no such item contains or will contain any untrue statement of a material fact.
(g) The principal place of business and chief executive office (as such terms are used in the UCC) of the Seller and the office where the Seller keeps its records concerning the Receivables are located at the address referred to in Section 1(b) of Exhibit IV .
(h) The names and addresses of all the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at such Lock-Box Banks and any lock-boxes or post office boxes relating to such Lock-Box Accounts, are specified in Schedules II and VIII to the Agreement (except as otherwise consented by the Agent in accordance with clause (i) of Exhibit IV to the Agreement) and all such Lock-Box Accounts, lock-boxes and post office boxes (other than the Excluded Accounts) are subject to Lock-Box Agreements or with respect to European and Singapore Accounts, Account Pledge Agreements. All Obligors have been directed to make all payments with respect to each Contract to such a Lock-Box Account or to such a lock-box or post office box.
(i) The Seller is not in violation of any law, rule or regulation or of any order of any court, arbitrator or Governmental Authority that could be reasonably be expected to have a Material Adverse Effect.
(j) No proceeds of any Investment or Reinvestment will be used by the Seller for any purpose that violates any applicable law, rule or regulation, including, without limitation, Regulations T, U or X of the Federal Reserve Board.
(k) Each Receivable included in the calculation of the Net Eligible Pool Balance is an Eligible Receivable as of the date of such calculation.
(l) No event has occurred and is continuing, or would result from any Investment or Reinvestment or from the application of the proceeds therefrom, which constitutes a Termination Event or an Unmatured Termination Event.
(m) The Seller has complied in all material respects with the Credit and Collection Policy with regard to each Pool Receivable.
III-2
(n) The Seller has complied with all of the terms, covenants and agreements contained in the Agreement and the other Transaction Documents.
(o) The Sellers complete corporate name is set forth in the preamble to the Agreement, and the Seller does not use and has not during the last five (5) years used any other corporate name, trade name, doing-business name or fictitious name, and except for names first used after the Closing Date and set forth in a notice delivered to the Agent pursuant to Section 1(l)(vii) of Exhibit IV .
(p) The Seller has filed or caused to be filed all U.S. federal income tax returns and all other returns, statements, forms and reports for Taxes, domestic or foreign (including, without limitation, under the laws of the Cayman Islands), required to be filed by it and has paid all Taxes payable by it which have become due or any assessments made against it or any of its Property and all other Taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority (other than those the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with generally accepted accounting principles have been provided on the books of the Seller).
(q) The Seller (i) is not an investment company within the meaning of the Investment Company Act of 1940, as amended and (ii) is not a covered fund under the Volcker Rule.
(r) The consolidated balance sheet of Manitowoc as at September 30, 2015, a copy of which has been furnished to the Agent, fairly presents the financial condition of Manitowoc in all material respects, as at such date, and since the date of such balance sheet, there has been no material adverse change in the financial condition of the Seller or Manitowoc or the ability of the Seller, any Servicer or any Originator to perform its material obligations under the Agreement or the other Transaction Documents to which it is a party or the collectibility of the Pool Receivables, or which affects the legality, validity or enforceability of the Agreement or the other Transaction Documents.
(s) There is no pending action, suit or proceeding and, to the Sellers knowledge, no threatened action, suit or proceeding, affecting the Seller, the Servicer or any Originator before any Governmental Authority or arbitrator which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or which questions the validity of any of the transactions contemplated by any Transaction Document.
(t) The facts and assumptions relating to the Seller set forth in the opinions rendered by Quarles & Brady LLP, Borden Ladner Gervais LLC, Noerr LLP, Bond Dickinson LLP, Rodyk & Davidson LLP, Allen & Gledhill LLP and Conyers Dill & Pearman and relating to true sale and non-consolidation matters, and in the officers certificates referred to in such opinions, are true and correct in all material respects.
(u) [Reserved].
(v) The Seller is not in default under any of its contractual obligations.
III-3
(w) Neither the Seller nor any director, officer, employee, agent or Affiliate of the Seller (i) is an enemy or an ally of the enemy within the meaning of Section 2 of the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), (ii) is in violation of (A) any of the laws, regulations and executive orders administered by the U.S. Department of Treasurys Office of Foreign Assets Control, including the International Emergency Economic Powers Act (50 U.S.C. §§ 1701-1705), the Trading with the Enemy Act (50 U.S.C. App. §§ 1-44), and the Office of Foreign Assets Control, Department of the Treasury regulations (31 C.F.R. Parts 500 et seq.), or (B) the PATRIOT Act (collectively, the Anti-Terrorism Laws ) or (iii) is a Sanctioned Person. No part of the proceeds of any Investment or Reinvestment will be unlawfully used directly or, to the knowledge of the Seller, indirectly (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country, or (iii) in any other manner that will result in any violation by the Seller or, to the knowledge of the Seller, by any other Person (including any Indemnified Party) of any Anti-Terrorism Laws or any Anti-Corruption Laws.
(x) The Seller has implemented and will maintain in effect and enforce policies and procedures designed in good faith and in a commercially reasonable manner to promote and achieve compliance, by the Seller and its directors, officers, employees and agents with applicable Anti-Corruption Laws and Sanctions.
(y) The Seller is not required to account to any Governmental Authority for any value added or similar Tax in respect of the sale by it of any Receivable and no withholding or other Tax is deductible or payable on any payment made by an Obligor with respect to any Receivable.
2. Representations and Warranties of the Servicer . Each Servicer represents and warrants as follows:
(a) Such Servicer is a corporation (in the case of Manitowoc), a corporation (in the case of Garland), a limited liability company ( GmbH ) (in the case of Convotherm and Manitowoc Deutschland), and a private limited company (in the case of Foodservice UK and Foodservice Asia), duly incorporated, organized or amalgamated, validly existing and in active status under the laws of the State of Wisconsin (in the case of Manitowoc), the Province of Ontario (in the case of Garland), England (in the case of Foodservice UK), Singapore (in the case of Foodservice Asia) and the Federal Republic of Germany (in the case of Convotherm and Manitowoc Deutschland). Such Servicer is duly qualified to do business, and is in good standing, as a foreign corporation in every jurisdiction where the nature of its business requires it to be so qualified unless any failure to be so qualified would not have a Material Adverse Effect.
(b) The execution, delivery and performance by such Servicer of the Agreement and the other Transaction Documents to which it is a party, (i) are within such Servicers corporate or organizational powers, (ii) have been duly authorized by all necessary corporate or organizational action on the part of such Servicer, (iii) do not contravene or result in a default under or conflict with (1) the Servicers charter or by-laws (or other organizational documents of such Servicer serving a similar purpose), (2) any law, rule or regulation applicable to such Servicer, (3) any contractual restriction binding on or affecting such Servicer or its property or
III-4
(4) any order, writ, judgment, award, injunction or decree binding on or affecting such Servicer or its property, unless in each case such continuation, default or conflict could not reasonably be expected to have a Material Adverse Effect, and (iv) with respect to such Servicer, do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties. Without limiting the foregoing, the transactions contemplated by the Transaction Documents constitute a Permitted Securitization (as that term is defined in the Credit Agreement). The Agreement and the other Transaction Documents to which it is a party have been duly executed and delivered by such Servicer.
(c) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required for the due execution, delivery and performance by such Servicer of the Agreement or any other Transaction Document to which it is a party, other than those previously obtained.
(d) Each of the Agreement and the other Transaction Documents to which it is a party constitutes the legal, valid and binding obligation of such Servicer enforceable against such Servicer in accordance with its terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.
(e) The consolidated balance sheets of Manitowoc and its subsidiaries as at September 30, 2015, a copy of which has been furnished to the Agent, fairly presents the financial condition of such Servicer and Manitowoc and its other subsidiaries in all material respects, as at such date, and since September 30, 2015, no event has occurred that has had, or could be reasonably expected to have, a Material Adverse Effect.
(f) There is no pending action or proceeding and, to such Servicers knowledge, no threatened action or proceeding, affecting such Servicer before any Governmental Authority or arbitrator which could reasonably be expected to have a Material Adverse Effect.
(g) Such Servicer has complied in all material respects with the Credit and Collection Policy with regard to each Pool Receivable.
(h) Each Monthly Report, Daily Report, information, exhibit, financial statement, document, book, record or report furnished or to be furnished at any time by or on behalf of such Servicer to the Agent in connection with the Agreement is or will be accurate in all material respects as of its date or (except as otherwise disclosed to the Agent at such time) as of the date so furnished, and no such item contains or will contain any untrue statement of a material fact.
(i) Such Servicer is not in violation of any law, rule or regulation or of any order of any court, arbitrator or Governmental Authority that could reasonably be expected to have a Material Adverse Effect.
(j) Each Receivable included in the calculation of the Net Eligible Pool Balance is an Eligible Receivable as of the date of such calculation.
III-5
(k) No event has occurred and is continuing, or would result from an Investment, Reinvestment or payment of the Deferred Purchase Price or from the application of proceeds therefrom, which constitutes a Termination Event or an Unmatured Termination Event.
(l) The Seller is the legal and beneficial owner of, and has good and marketable title to the Receivables purporting to be in the Receivables Pool and all Related Security with respect thereto, free and clear of any Adverse Claim. Upon each Investment or Reinvestment under the Agreement (including, without limitation, the deemed investment occurring on the Closing Date pursuant to Section 1.3(a) ), the Purchaser shall acquire a valid and enforceable perfected ownership or security interest in each Pool Receivable then existing or thereafter arising, and in the Related Security and Collections and other proceeds with respect thereto, free and clear of any Adverse Claim. The Agreement creates a valid ownership or security interest in favor of the Purchaser in the Pool Assets, and the Purchaser has a first priority perfected ownership or security interest in the Pool Assets, free and clear of any Adverse Claims. No effective financing statement or other instrument similar in effect covering any Contract or any Pool Receivable or the Related Security or Collections with respect thereto or any Lock-Box Account is on file in any recording office, except those filed in favor of the Seller and the Purchaser pursuant to this Agreement and the other Transaction Documents. No Adverse Claim on any Contract or any Pool Receivable or the Related Security or Collections with respect thereto or any Lock-Box Account is recorded on the Sellers register of mortgages and charges.
(m) The names and addresses of all the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts at such Lock-Box Banks and the numbers of any lock-boxes or post office boxes relating to such Lock-Box Accounts, are specified in Schedules II and VIII to the Agreement (except as otherwise consented by the Agent in accordance with clause (i) of Exhibit IV to the Agreement) and all such Lock-Box Accounts and all such lock-boxes and post office boxes (other than the Excluded Accounts) are subject to Lock-Box Agreements or with respect to European and Singapore Accounts, Account Pledge Agreements. All Obligors have been directed to make all payments with respect to each Contract to such a Lock-Box Account or to such a lock-box or post office box.
(n) Such Servicer has filed or caused to be filed all federal income tax returns and all other returns, statements, forms and reports for Taxes, domestic or foreign, required to be filed by it (including, without limitation, under the laws of the United States of America, Canada, England, Singapore or Germany, as applicable, or of any state, province or territory thereof) and has paid all Taxes payable by it which have become due or any assessments made against it or any of its Property and all other Taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority other than: (i) those the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of such Servicer; and (ii) in the case of taxes (designated taxes) other than income or similar taxes, if the failure to pay such designated taxes could not reasonably be expected to result in a Material Adverse Effect.
(o) The facts and assumptions relating to such Servicer set forth in the opinions rendered by Quarles & Brady LLP, Borden Ladner Gervais LLC, Noerr LLP, Torys LLP, Bond Dickinson LLP, Rodyk & Davidson LLP, Allen & Gledhill LLP and Conyers Dill & Pearman and relating to true sale and non-consolidation matters, and in the officers certificates referred to in such opinions, are true and correct.
III-6
(p) Neither such Servicer nor any director, officer, employee, agent or Affiliate of such Servicer (i) is an enemy or an ally of the enemy within the meaning of Section 2 of the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), (ii) is in violation of any Anti-Terrorism Laws or (iii) is a Sanctioned Person. No part of the proceeds of any Investment or Reinvestment will be unlawfully used directly or, to the knowledge of such Servicer, indirectly (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country, or (iii) in any other manner that will result in any violation by such Servicer or, to the knowledge of such Servicer, by any other Person (including any Indemnified Party) of any Anti-Terrorism Laws or any Anti-Corruption Laws.
(q) Such Servicer has implemented and will maintain in effect and enforce policies and procedures designed in good faith and in a commercially reasonable manner to promote and achieve compliance, by such Servicer, its Subsidiaries and their directors, officers, employees and agents with applicable Anti-Corruption Laws and Sanctions.
III-7
EXHIBIT IV
COVENANTS
1. Covenants of the Seller and Servicers. Until the Final Payout Date :
(a) Compliance with Laws, Etc. The Seller and each Servicer shall comply in all material respects with all applicable laws, rules, regulations and orders, and preserve and maintain its company or corporate existence, rights, franchises, qualifications, and privileges except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve and maintain such existence, rights, franchises, qualifications, and privileges would not adversely affect the collectibility of the Receivables or the enforceability of any related Contract or materially adversely affect the ability of the Seller or any Servicer to perform its obligations under any related Contract or under the Agreement or any other Transaction Document.
(b) Offices, Records and Books of Account, Etc. The Seller (i) shall keep its principal place of business, chief executive office and state of formation (as such terms are used in the UCC) and the office where it keeps its records concerning the Receivables at the address of the Seller set forth under its name on Schedule I to the Agreement or, upon at least thirty (30) days prior written notice of a proposed change to the Agent, at any other locations in jurisdictions where all actions reasonably requested by the Agent to protect and perfect the interest of the Purchaser in the Receivables and related items (including the Pool Assets) of the Agreement have been taken and completed and (ii) shall provide the Agent with at least sixty (60) days written notice prior to making any change in (A) the Sellers name or making any other change in the Sellers identity or company structure (including a merger) or (B) the Sellers jurisdiction of formation. Each notice to the Agent pursuant to this sentence shall set forth the applicable change and the effective date thereof. The Seller and the Servicers also will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables and related Contracts in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records, computer tapes and disks and other information reasonably necessary or advisable for the collection of all Receivables in the ordinary course of business (including, without limitation, records adequate to permit the daily identification of each Receivable and all Collections of and adjustments to each Receivable). Without limiting the foregoing, each Servicer shall maintain adequate computer and other systems in order to service the Receivables.
(c) Performance and Compliance with Contracts and Credit and Collection Policy . The Seller and each Servicer shall, at its expense, timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and timely and fully comply in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract.
(d) Ownership Interest, Etc . The Seller shall, at its expense, take all action necessary or desirable to establish and maintain a valid and enforceable ownership or security interest in the Pool Receivables and the Related Security and Collections and other proceeds with respect thereto, and a first priority perfected ownership or security interest in the Pool Assets, in each
IV-1
case free and clear of any Adverse Claim, in favor of the Purchaser, including, without limitation, taking such action to perfect, protect or more fully evidence the interest of the Purchaser under the Agreement as the Purchaser, through the Agent, may request.
(e) Sales, Liens, Etc . Except for retransfers of Pool Receivables to the Originators in accordance with the Purchase and Sale Agreements, neither the Seller nor any Servicer shall sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to, any Pool Asset (including the Sellers interest in any Receivable, Related Security or Collections, or upon or with respect to any account to which any Collections of any Receivables are sent) or assign any right to receive income in respect of any items contemplated by this paragraph (e) .
(f) Extension or Amendment of Receivables . Except as provided in the Agreement and the Credit and Collection Policy, neither the Seller nor any Servicer shall extend the maturity or adjust the Outstanding Balance or otherwise modify the terms of any Pool Receivable in any material respect, or amend, modify or waive in any material respect any term or condition of any related Contract.
(g) Change in Business or Credit and Collection Policy . Neither the Seller nor any Servicer shall make any material change in the character of its business, or make any change in the Credit and Collection Policy that would adversely affect the collectibility of the Receivables Pool or the enforceability of any related Contract or materially adversely affect the ability of the Seller or any Servicer to perform its obligations under any related Contract or under the Agreement. Neither the Seller nor any Servicer shall make any material change in the Credit and Collection Policy without the prior written consent of the Agent.
(h) Audits . The Seller and each Servicer shall, at its own expense and at any time and from time to time (but, so long as no Termination Event or Unmatured Termination Event has occurred and is continuing, not more than once during any calendar year), during regular business hours, upon reasonable advance notice as requested by the Agent, permit the Agent, or its agents or representatives, (i) to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of the Seller or such Servicer relating to Receivables and the Related Security, including, without limitation, the related Contracts and (ii) to visit the offices and properties of the Seller or such Servicer for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to Receivables and the Related Security or the Sellers or the Servicers performance hereunder or under the Contracts with any of the officers, employees, agents or contractors of the Seller or such Servicer having knowledge of such matters; provided , however , that if in connection with the performance of any such audit conducted pursuant to this Section, the Agent is notified of any event or circumstance that (I) in the Agents reasonable determination has caused, or is reasonably likely to cause, a Material Adverse Effect or (II) the Agent reasonably believes has resulted in (A) a breach of any term, condition or agreement of the Agreement or any other Transaction Document or (B) any Termination Event or Unmatured Termination Event, in any case, the Agent, or its agents or representatives, shall be permitted to take additional actions of the type permitted under clauses (i) and (ii) above at the expense of the Seller and the Servicers.
IV-2
(i) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to Obligors . Neither the Seller nor any Servicer shall add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account from those listed in Schedules II and VIII to the Agreement, or make any change in its instructions to Obligors regarding payments to be made to the Seller or any Servicer or payments to be made to any Lock-Box Account (or related lock-box or post office box), unless the Agent shall have consented thereto in writing and the Agent shall have received copies of all agreements and documents (including, without limitation, Lock-Box Agreements and Account Pledge Agreements, as applicable) that it may request in connection therewith.
(j) Lock-Box Accounts; Lock-Boxes; Post Office Boxes . The Seller or the Servicers shall: (i) instruct all Obligors of Pool Receivables to make payments of Receivables only to (A) one or more Excluded Accounts or (B) one or more Lock-Box Accounts subject to Lock-Box Agreements and or an Account Pledge Agreement in case of European and Singapore Accounts or to lock-boxes or post office boxes subject to Lock-Box Agreements or an Account Pledge Agreement in case of European and Singapore Accounts to which only Lock-Box Banks have access (and shall instruct the Lock-Box Banks to cause all items and amounts relating to such Receivables received in such lock-boxes or post office boxes to be removed and deposited into such Lock-Box Account on a daily basis); and (ii) deposit, or cause to be deposited, any Collections of Pool Receivables received by the Seller or the Servicer into Lock-Box Accounts subject to Lock-Box Agreements or an Account Pledge Agreement in case of European and Singapore Accounts not later than one Business Day (or, in the case of amounts received by the Seller or Servicer after 3:00 p.m. on any Business Day, the second Business Day following such receipt) after receipt thereof. Notwithstanding the foregoing, the Seller and the Servicers shall promptly, from time to time, instruct all Obligors of Pool Receivables that have made payments of Receivables to one or more Excluded Accounts to redirect such payments to one or more Lock-Box Accounts subject to Lock-Box Agreements, if during any calendar month amounts received in respect of payments of Receivables in such Excluded Accounts exceed $250,000. Neither the Seller nor any Servicer will deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Pool Receivables.
(k) Marking of Records . At its expense, the Seller (or a Servicer on its behalf) shall mark its master data processing records relating to Pool Receivables and related Contracts, with a legend or other notation evidencing that the Pool Receivables and related Contracts have been pledged or assigned, as applicable, and the Purchased Assets have been sold and assigned, in each case, to the Purchaser in accordance with the Agreement.
(l) Reporting Requirements . The Seller or the Servicers shall provide to the Agent (in multiple copies, if requested by the Agent) the following:
(i) as soon as available and in any event within forty-five (45) days after the end of the first three quarters of each fiscal year of the Seller and Manitowoc (separately for each), consolidated balance sheets of the Seller and Manitowoc, respectively, and (in the case of Manitowoc) its subsidiaries as of the end of such quarter and statements of operations, cash flows and shareholders equity of the Seller and Manitowoc, respectively, and (in the case of Manitowoc) its subsidiaries for the period commencing
IV-3
at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer of the Seller and Manitowoc as applicable, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition, results or operations and cash flows of such Person in accordance with GAAP, as of the end of, and for, such period (subject to normal year-end audit adjustments), as applicable;
(ii) if requested by the Agent, as soon as available and in any event within thirty (30) days after the end of each fiscal month of the Seller and Manitowoc (separately for each), consolidated balance sheets of the Seller and Manitowoc, respectively, and (in the case of Manitowoc) its subsidiaries as of the end of such month and statements of operations, cash flows and shareholders equity of the Seller and Manitowoc, respectively, and (in the case of Manitowoc) its subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such month, certified by the chief financial officer of the Seller and Manitowoc as applicable, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition, results or operations and cash flows of such Person in accordance with GAAP, as of the end of, and for, such period (subject to normal year-end audit adjustments), as applicable;
(iii) as soon as available and in any event within ninety (90) days after the end of each fiscal year of the Seller and Manitowoc (separately for each), consolidated statements of operations, cash flows and stockholder equity of the Seller and Manitowoc, respectively, and (in the case of Manitowoc) its subsidiaries for such year and the related consolidated balance sheets of the Seller and Manitowoc, respectively, and (in the case of Manitowoc) its subsidiaries as at the end of such year, accompanied by an opinion of independent certified public accountants of recognized national standing (without a going concern or like qualification or exception and without any qualification or exception as to the scope of such audit), which opinion shall state that said consolidated financial statements fairly present the consolidated financial conditions, results or operations and cash flows of the Seller and Manitowoc as applicable and (in the case of Manitowoc) its subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;
(iv) on each Monday of each calendar week (or if such day is not a Business Day, the next succeeding Business Day), a report, substantially in the form of the Monthly Report described in the next paragraph, summarizing the Receivables activity pertinent to the transactions contemplated by the Transaction Documents since the last such report;
(v) as soon as available and in any event not later than the Monthly Reporting Date, a Monthly Report as of the calendar month ended immediately prior to such Monthly Reporting Date;
(vi) as soon as possible and in any event within two Business Days after an officer of the Seller or any Servicer obtains knowledge of the occurrence of a Termination Event or Unmatured Termination Event, a statement of a Responsible
IV-4
Officer of the Seller or such Servicer setting forth details of such Termination Event or event and the action that the Seller and/or Servicers have taken and propose to take with respect thereto;
(vii) promptly after the filing or receiving thereof, copies of all reports and notices that the Seller, Originator or any ERISA Affiliate thereof files under ERISA or the Internal Revenue Code with the Internal Revenue Service or the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or that the Seller, Originator or any ERISA Affiliate thereof receives from any of the foregoing or from any Multiemployer Plan;
(viii) at least sixty (60) days prior to any change in the Sellers name, jurisdiction of formation or any other change requiring the amendment of a UCC financing statement or PPSA registered assignments and/or financing statements, verification statements or similar filings, as applicable, in order to maintain the perfection of an ownership and security interest, a notice setting forth such changes and the effective date thereof;
(ix) such other information respecting the Receivables or the condition or operations, financial or otherwise, of the Seller, any Servicer or any of their respective Affiliates as the Agent may from time to time reasonably request, including any information available to the Seller or any Servicer as the Purchaser or the Agent may reasonably require in order to assist such Person in complying with the requirements of Article 122a(4) and (5) of the CRD as may be applicable to such Person;
(x) promptly after a Responsible Officer of the Seller or any Servicer obtains notice or knowledge thereof, notice of any litigation, investigation or proceeding which would be reasonably expected to have a material adverse effect on the business, operations, assets, financial condition or other condition of the Seller, any Originator or any Servicer;
(xi) promptly after a Responsible Officer of the Seller or any Servicer obtains notice or knowledge thereof, notice of a material adverse change in the business, operations, assets, financial condition or other condition of the Seller, any Originator or any Servicer;
(xii) promptly after the same become publicly available, copies of all periodic reports (including reports on Form 8-K), proxy statements and other financial materials filed by Manitowoc, any Servicer or any of their respective Affiliates with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by Manitowoc, any Servicer or any of their respective Affiliates to its shareholders generally, as the case may be; and
(xiii) promptly following delivery under or in connection with the Credit Agreement, a copy of each certificate of a financial officer or other officer of Manitowoc or any Affiliate thereof, delivered under or in connection with the Credit Agreement and certifying or otherwise demonstrating compliance with financial or other covenants under the Credit Agreement.
IV-5
(m) Separate Existence . The Seller and each Servicer hereby acknowledges that the Purchaser and the Agent are entering into the transactions contemplated by the Agreement and the Transaction Documents in reliance upon the Sellers identity as a legal entity separate from each Servicer, Manitowoc and each Originator. Therefore, the Seller and each Servicer shall at all times take all reasonable steps to continue the Sellers identity as a separate legal entity and to make it apparent to third Persons that the Seller is an entity with assets and liabilities distinct from those of any Servicer, Manitowoc, any Originator and any other Person, and is not a division of any Servicer, Manitowoc, any Originator and any other Person. Without limiting the generality of the foregoing and in addition to and consistent with the covenant set forth in paragraph (a) of this Exhibit IV , the Seller and each Servicer shall take such actions as shall be required in order that:
(i) The Seller will be a limited purpose company whose sole activities are restricted in its limited liability company agreement (or its other organizational documents serving a similar purpose) to purchasing Receivables from the Originators, entering into agreements for the servicing of such Receivables, selling and pledging or assigning, as applicable, such Receivables (and related Pool Assets) as contemplated by the Agreement and conducting such other activities as it deems necessary or appropriate to carry out its primary purpose;
(ii) Not less than one member of the Sellers Board of Directors (the Independent Director ) shall be an individual who (A) has (1) prior experience as an Independent Director for a corporation or limited liability company whose organizational documents required the unanimous consent of all Independent Directors thereof before such entity could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (2) at least three years of employment experience and is currently employed with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities and who are not (except as members of the Sellers Board of Directors) direct, indirect or beneficial stockholders, officers, directors, employees, affiliates, associates, customers or suppliers of the Seller, Manitowoc or any Originator or any of their respective Affiliates (B) is not, and has not been for a period of five years prior to his or her appointment as an Independent Director of the Seller: (1) a director, officer, employee, partner, manager, attorney, supplier or customer of Manitowoc or any Affiliate thereof, (2) a stockholder (whether direct, indirect or beneficial), associate, advisor or supplier of Manitowoc or any Affiliate thereof, (3) a person related to any person referred to in clauses (1) or (2) above, (4) a person or other entity controlling or under common control with any such stockholder, partner, manager, customer, supplier, employee, officer or director or (5) a trustee, conservator or receiver for any member of Manitowoc or any Affiliate thereof (it being understood that, as used in this definition, control means the possession directly or indirectly of the power to direct or cause the direction of management policies or activities of a person or entity whether through ownership of voting securities, by
IV-6
contract or otherwise); provided , however , that an individual shall not be deemed to be ineligible to be an Independent Director solely because such individual serves or has served in the capacity of an independent director or similar capacity for special purpose entities formed by Manitowoc or any of its Affiliates and (C) is agreed to by the Agent. The limited liability company agreement (or other organizational documents serving a similar purpose) of the Seller shall provide (i) that the Sellers Board of Directors shall not approve, or take any other action to cause the commencement of a voluntary case or other proceeding with respect to the Seller under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law, or the appointment of or taking possession by, a receiver, liquidator, assignee, trustee, custodian, or other similar official for the Seller unless in each case the Independent Director shall approve the taking of such action in writing prior to the taking of such action, (ii) for the same definition of Independent Director as used herein and (iii) that the provisions required by clauses (i) and (ii) above cannot be amended without the prior written consent of each Independent Director and the Agent. The Independent Directors fiduciary duty shall be to the Seller (and its creditors) and not to the Sellers members or other equityholders in respect of any decision of the type described in the preceding sentence. In the event an Independent Director resigns or otherwise ceases to be a director of the Seller, there shall be selected a replacement Independent Director who (x) shall not be an individual within the proscriptions of the first sentence of this subparagraph (ii) or any individual who has any other type of professional relationship with the Seller, Manitowoc or any Originator or any of their respective Affiliates or any management personnel of any such Person or Affiliate and (y) shall be acceptable to the Agent;
(iii) No Independent Director shall at any time serve as a trustee in bankruptcy for any Originator or any Affiliate thereof;
(iv) Any employee, consultant or agent of the Seller will be compensated from the Sellers own bank accounts for services provided to the Seller except as provided herein in respect of the Servicing Fee. The Seller will not engage any agents other than a servicer for the Receivables, which servicer will be fully compensated for its services to the Seller by payment of the Servicing Fee;
(v) The Seller will not incur any material indirect or overhead expenses for items shared between the Seller and the Originators or any Affiliate thereof which are not reflected in the Servicing Fee or otherwise appropriately allocated between such Persons based on usage in accordance with the next sentence. To the extent, if any, that the Seller and the Originators or any Affiliate thereof share items of expenses not reflected in the Servicing Fee, such as legal, auditing and other professional services, such expenses will be allocated to the extent practical on the basis of actual use or the value of services rendered, and otherwise on a basis reasonably related to the actual use or the value of services rendered, it being understood that Manitowoc shall pay all expenses relating to the preparation, negotiation, execution and delivery of the Transaction Documents, including, without limitation, legal and other fees;
IV-7
(vi) The Sellers operating expenses will not be paid by any Originator or any Affiliate thereof unless the Seller shall have agreed in writing with such Person promptly to reimburse such Person for any such payments;
(vii) The Seller will have its own separate mailing address and stationery;
(viii) The Sellers books and records will be maintained separately from those of the Servicers, Manitowoc and the Originators or any respective Affiliate thereof;
(ix) Any financial statements of any Servicer, Manitowoc, any Originator or any respective Affiliate thereof which are consolidated to include the Seller will contain detailed notes clearly stating that the Seller is a separate corporate entity and has sold and assigned ownership interests in the Sellers accounts receivable;
(x) The Sellers assets will be maintained in a manner that identifies and segregates them from those of the Servicers, Manitowoc, the Originators and any of their respective Affiliates;
(xi) The Seller will strictly observe limited liability company formalities in its dealings with the Servicers, Manitowoc, the Originators and any respective Affiliate thereof, and funds or other assets of the Seller will not be commingled with those of the Servicers, Manitowoc, the Originators or any respective Affiliate thereof. The Seller shall not maintain joint bank accounts or other depository accounts to which the Servicers, Manitowoc, the Originators or any respective Affiliate thereof (other than Manitowoc or any Affiliate thereof in their capacities as Servicers) has independent access. The Sellers funds will not at any time be pooled with any funds of the Servicers, Manitowoc, the Originators or any respective Affiliate thereof;
(xii) The Seller shall pay to the Originators the marginal increase (or, in the absence of such increase, the market amount of its portion) of the premium payable with respect to any insurance policy that covers the Seller and any Affiliate thereof, but the Seller shall not, directly or indirectly, be named or enter into an agreement to be named, as a direct or contingent beneficiary or loss payee, under any such insurance policy, with respect to any amounts payable due to occurrences or events related to the Servicers, Manitowoc, the Originators or any respective Affiliate thereof; and
(xiii) The Seller will maintain arms length relationships with the Servicers, Manitowoc, the Originators and any respective Affiliate thereof and, except as contemplated by the Transaction Documents, will have no other dealings, contractual, financial or otherwise, among themselves. Any Originator or any Affiliate thereof that renders or otherwise furnishes services to the Seller will be compensated by the Seller at market rates for such services. The Seller, Originators or any Affiliate thereof will not be or will not hold itself out to be responsible for the debts of the other or the decisions or actions respecting the daily business and affairs of the other.
The Seller shall cause the facts and assumptions relating to the Seller, and each Servicer shall cause the facts and assumptions relating to such Servicer, in each case set forth in the opinions rendered by Quarles & Brady LLP, Borden Ladner Gervais LLC,
IV-8
Noerr LLP, Bond Dickinson LLP, Rodyk & Davidson LLP, Allen & Gledhill LLP and Conyers Dill & Pearman and relating to true sale and non-consolidation matters, and in the officers certificates referred to in such opinions, to remain true and correct in all material respects at all times.
(n) Mergers, Acquisitions, Sales, etc .
(i) The Seller shall not:
(A) be a party to any merger or consolidation, or directly or indirectly purchase or otherwise acquire, whether in one or a series of transactions, all or substantially all of the assets or any stock of any class of, or any partnership or joint venture interest or equity interest in, any other Person, or sell, transfer, assign, convey or lease any of its property and assets (including, without limitation, any Pool Receivable or any interest therein) other than pursuant to this Agreement;
(B) acquire Receivables from any Person other than an Originator (and all such Receivables shall be acquired pursuant to the Purchase and Sale Agreement);
(C) make, incur or suffer to exist an investment in, equity contribution to, loan, credit or advance to, or payment obligation in respect of the deferred purchase price of property from, any other Person, except for obligations incurred pursuant to the Transaction Documents;
(D) create any direct or indirect Subsidiary or otherwise acquire direct or indirect ownership of any equity interests in any other Person; or
(E) issue any membership or equity interest any Person, or take any other action, that would cause a Change in Control.
(ii) No Servicer shall be a party to any merger or consolidation or sell, transfer, assign, convey or lease all or substantially all of its property or assets.
(o) Restricted Payments .
(i) General Restriction . Except in accordance with subparagraph (ii) below, the Seller shall not (A) purchase or redeem any of its membership or other equity interests, (B) declare or pay any dividend or set aside any funds for any such purpose, (C) prepay, purchase or redeem any subordinated indebtedness of the Seller, (D) lend or advance any funds or (E) repay any loans or advances to, for or from any Originator. Actions of the type described in this clause (i) are herein collectively called Restricted Payments .
IV-9
(ii) Types of Permitted Payments . Subject to the limitations set forth in clause (iii) below, the Seller may make Restricted Payments so long as such Restricted Payments are made only to the Originators and only in one or more of the following ways:
(A) the Seller may make cash payments (including prepayments) on the Company Notes in accordance with their terms; and
(B) if no amounts are then outstanding under the Company Notes, the Seller may declare and pay Dividends.
(iii) Specific Restrictions . The Seller may make Restricted Payments only out of Collections paid or released to the Seller pursuant to Section 1.6 of the Agreement. Furthermore, the Seller shall not pay, make or declare any Restricted Payment (including any Dividend) if, after giving effect thereto, any Termination Event or Unmatured Termination Event shall have occurred and be continuing.
(p) Use of Sellers Share of Collections . The Seller shall apply the Collections that are available to the Seller in accordance with the Agreement to make payments in the following order of priority: first , the payment of its expenses (including, without limitation, the obligations payable to the Purchaser, the Agent and the other Purchaser Parties under the Transaction Documents), second , the payment of accrued and unpaid interest on the Company Notes, third , the payment of the outstanding principal amount of the Company Notes, and fourth , other legal and valid company purposes.
(q) Amendments to Certain Documents .
(i) The Seller and each Servicer shall not terminate, amend, supplement, amend and restate, or otherwise modify (or add any Person as a party to) any Purchase and Sale Agreement, the Company Notes, any other document executed under any Purchase and Sale Agreement, any Collection Account Agreement, any Lock-Box Agreement or Account Pledge Agreement or the Sellers articles of organization or limited liability company agreement (or similar organizational documents serving a similar purpose) or any other Transaction Document to which it is a party, except (A) in accordance with the terms of such document, instrument or agreement and (B) with the advance written consent of the Agent.
(ii) Neither the Seller nor any Servicer shall enter into or otherwise become bound by any agreement, instrument, document or other arrangement that restricts its right to amend, supplement, amend and restate or otherwise modify, or to extend or renew, or to waive any right under, this Agreement or any other Transaction Document.
(iii) Neither the Seller nor any Servicer shall terminate, amend, supplement, amend and restate, or otherwise modify (or add any Person as a party to) the Bond Administration Agreement or otherwise vary, modify or assign (or consent to any of the foregoing) any obligations of Finacity under the Bond Administration Agreement or otherwise with respect to this Agreement or any other Transaction Documents, in each case, without the advance written consent of the Agent in its sole discretion.
(r) Incurrence of Indebtedness . The Seller shall not (i) create, incur or permit to exist, any Debt (or any Buy-Back Obligations, as defined in the Credit Agreement) or (ii) cause or permit to be issued for its account any letters of credit or bankers acceptances, except for indebtedness incurred pursuant to the Company Notes or incurred pursuant to or in connection with the Agreement or otherwise permitted by the Agreement.
IV-10
(s) Financial Covenants .
(i) [Reserved].
(ii) Maximum Consolidated Total Leverage Ratio . Manitowoc shall cause the Consolidated Total Leverage Ratio at all times during the fiscal quarters of Manitowoc set forth below to be less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending |
Ratio | |||
March 31, 2016 |
6.25:1.00 | |||
June 30, 2016 |
6.25:1.00 | |||
September 30, 2016 |
6.00:1.00 | |||
December 31, 2016 |
5.75:1.00 | |||
March 31, 2017 |
5.50:1.00 | |||
June 30, 2017 |
5.25:1.00 | |||
September 30, 2017 |
5.00:1.00 | |||
December 31, 2017 |
4.75:1.00 | |||
March 31, 2018 |
4.50:1.00 | |||
June 30, 2018 |
4.25:1.00 | |||
September 30, 2018 and each fiscal quarter thereafter |
4.00:1.00 |
(iii) Minimum Consolidated Interest Coverage Ratio . Manitowoc shall not permit the Consolidated Interest Coverage Ratio for any fiscal quarter of Manitowoc set forth below to be less than or equal to the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending |
Ratio | |||
March 31, 2016 |
2.00:1.00 | |||
June 30, 2016 |
2.00:1.00 | |||
September 30, 2016 |
2.25:1.00 | |||
December 31, 2016 |
2.25:1.00 | |||
March 31, 2017 |
2.50:1.00 | |||
June 30, 2017 |
2.50:1.00 | |||
September 30, 2017 |
2.75:1.00 | |||
December 31, 2017 and each fiscal quarter thereafter |
3.00:1.00 |
IV-11
(t) Additional Financing Statements; Performance by the Agent . The Seller hereby authorizes the Agent or the Agents designee (which may be counsel for the Seller or counsel for the Agent) to file one or more UCC financing or continuation statements on or after the Closing Date, and amendments thereto and assignments thereof, relative to all or any of the Pool Receivables and the Related Security (and the other Pool Assets) whether now existing or hereafter arising. Without limiting the foregoing, the Seller hereby authorizes the Agent to file any financing statement that (i) indicates the property or collateral covered thereby (x) as all assets of the Seller or words of similar effect, regardless of whether any particular asset in the collateral falls within the scope of Article 9 of the UCC of the jurisdiction in which such financing statement is filed, or (y) as being of an equal or lesser scope or with greater detail, and (ii) contains any other information permitted or required by Article 9 of the UCC of the jurisdiction in which such financing statement is filed regarding the sufficiency or filing office acceptance of any financing statement, including whether the Seller is an organization, the type of organization and any organizational identification number issued to the Seller. If the Seller fails to perform any of its agreements or obligations under the Agreement or any other Transaction Documents, the Agent or its designee may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Agent or its designee incurred in connection therewith shall be payable by the Seller as provided in Section 5.4 of the Agreement.
(u) Commercial Tort Claims . The Seller and each Servicer shall promptly, and in any event within two (2) Business Days after the same is acquired by the Seller or such Servicer, notify the Agent of any commercial tort claim (as defined in the UCC) acquired by the Seller and, unless otherwise consented by the Agent, the Seller shall enter into a supplement to the Agreement granting to the Purchaser a security interest in such commercial tort claim.
(v) Risk Retention . The Seller shall (i) on an ongoing basis retain a net economic interest in the Pool Receivables assigned or pledged by the Seller to the Purchaser hereunder in an amount at least equal to 5% of the aggregate Outstanding Balance of such Pool Receivables at such time in accordance with Paragraph 1 of Article 122a of the CRD, (ii) not change the manner in which it retains such net economic interest since the Closing Date, except to the extent permitted under such Paragraph 1 and (iii) not enter into any credit risk mitigation, short position or any other hedge with respect to such net economic interest, except to the extent permitted under such Paragraph 1.
(w) No Petition Agreement by Servicers . Each Servicer hereby agrees that it will not institute, or join any other Person in instituting, against the Seller any Insolvency Proceeding for at least two years and one day following the Final Payout Date. Each Servicer further agrees that notwithstanding any provisions contained in the Agreement to the contrary, the Seller shall not, and shall not be obligated to, pay any amount in respect of any Servicing Fee or otherwise to such Servicer pursuant to the Agreement unless the Seller has received funds which are available therefore pursuant to Section 1.6 of the Agreement. Any amount which the Seller does not pay pursuant to the operation of the preceding sentence shall not constitute a claim against or
IV-12
corporate obligation of the Seller for any such insufficiency unless and until the provisions of the foregoing sentence are satisfied. The agreements in this clause shall survive any termination of the Agreement.
(x) [Reserved.]
(y) Certain Tax Matters regarding the Seller . Neither the Servicers nor the Seller will take any action or omit to take any action that could, individually or in the aggregate, reasonably likely cause the Seller to be treated as engaged in the conduct of a trade or business in the United States for U.S. federal income tax purposes or otherwise be subject to U.S. federal, state, or local income or franchise tax. The Seller will maintain compliance with any applicable law implementing or associated with the intergovernmental agreements that the Cayman Islands has entered into with each of the United States and the United Kingdom with respect to foreign account tax compliance and will not be subject to withholding tax as a result of any laws relating to foreign account tax compliance.
(z) [Reserved.]
(aa) OFAC . The Seller will not use any proceeds of any Receivable or any Investment under the Agreement to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country.
(bb) Lock-Box Agreements . Upon receipt of a request from the Agent (in its sole discretion) (a Lock-Box Notice Request ) the Seller and the Servicers (if requested) shall promptly enter into one or more Lock-Box Agreements, as specified in such Lock-Box Notice Request, covering the Excluded Accounts with the applicable Lock-Box Bank. The Seller and the Servicers (if requested) shall enter into such Lock-Box Agreement in accordance with the applicable Lock-Box Notice Request no later than the date, if any, specified in such Lock-Box Notice Request, and shall delivered fully executed copies thereof to the Agent promptly following execution thereof.
(cc) Further Assurances . The Seller and each Servicer (i) shall provide, at its own expense, such cooperation, information and assistance, and prepare and supply the Agent with such data regarding the Receivables and the performance by the Seller and each Servicer of their respective obligations under the Agreement and each of the other Transaction Documents, as may be reasonably requested by the Agent from time to time and (ii) hereby authorizes and hereby agrees from time to time, at its own expense, promptly to execute (if necessary) and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable, or that the Agent may reasonably request, to perfect, protect or more fully evidence the purchases made under the Agreement and/or security interest granted pursuant to the Agreement or any other Transaction Document, or to enable the Agent (on behalf of the Purchaser) to exercise and enforce the Purchasers rights and remedies under the Agreement and any other Transaction Document.
IV-13
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a Termination Event :
(a) any Servicer, any Originator or the Seller shall fail to make when due any payment or deposit to be made by it under the Agreement or any other Transaction Document and such failure shall continue unremedied for two (2) Business Days; or
(b) Manitowoc (or any Affiliate thereof) shall fail to transfer to any successor Servicer when required any rights, pursuant to the Agreement, which Manitowoc (or such Affiliate) then has as Servicer; or
(c) any representation or warranty or certification made or deemed made by the Seller, any Originator or any Servicer (or any of their respective officers) under or in connection with the Agreement or any other Transaction Document or any information or report delivered by the Seller or any Servicer pursuant to the Agreement shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered; or
(d) the Seller, any Originator or any Servicer shall fail to perform or observe any other term, covenant or agreement contained in the Agreement or any other Transaction Document on its part to be performed or observed, or the Seller shall fail to enforce any rights under any Transaction Document against any Originator or shall give up any such rights, and any such failure (or such giving up) shall remain unremedied for ten (10) Business Days after the Seller, such Originator or such Servicer, as applicable, has notice or knowledge thereof (or, with respect to a failure to deliver a Monthly Report or Daily Report pursuant to the Agreement, such failure shall remain unremedied for two (2) Business Days); or
(e) the Seller, any Originator or any Servicer shall fail to pay any principal of or premium or interest on any of its Debt (or Buy-Back Obligations, as defined in the Credit Agreement) which is outstanding in a principal amount of at least (x) in the case of any Originator or Servicer, twenty-five million dollars ($25,000,000) or, in the case of the Seller, ten thousand dollars ($10,000), in any case, in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement, mortgage, indenture or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement, mortgage, indenture or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement, mortgage, indenture or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an offer to repay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or
(f) the Agreement or any Investment or Reinvestment pursuant to the Agreement (including, without limitation, the deemed Investment occurring on the Closing Date pursuant to
V-1
Section 1.3(a) of the Agreement) shall for any reason (other than pursuant to the terms hereof) (i) cease to create, or cease to be, a valid and enforceable perfected ownership or security interest in each Pool Receivable and the Related Security and Collections and other proceeds with respect thereto, free and clear of any Adverse Claim or (ii) cease to create with respect to the Pool Assets, or the interest of the Purchaser with respect to the Pool Assets shall cease to be, a valid and enforceable first priority perfected ownership or security interest, free and clear of any Adverse Claim; or
(g) the Seller, Manitowoc, any Originator, any Servicer that is an Affiliate of Manitowoc or any other Subsidiary of Manitowoc or any Originator shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally as such debts become due ( Zahlungsunfähigkeit ), is threatened with insolvency ( drohende Zahlungsunfähigkeit ) or, solely with respect to any German Originator, any German Servicer or any such Affiliate organized under German law or whose chief executive office or principal place of business is in Germany, is overindebted ( überschuldet ; provided that overindebted in this case is used with a meaning equivalent to, and not broader than, überschuldet ), or shall make a general assignment for the benefit of creditors or commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or, for any of the reasons set out in §§ 17 to 19 (inclusive) of the German Insolvency Code ( Insolvenzordnung ); or any proceeding shall be instituted by or against the Seller, Manitowoc, any Originator or any such Servicer seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, receivership, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, insolvency administrator, custodian or other similar official for it or for any substantial part of its property or with respect to any German Servicer or German Originator (i) the commencement of insolvency proceedings ( Eröffnung des Insolvenzverfahrens ) pursuant to the provisions of the German Insolvency Code ( Insolvenzordnung ), or (ii) the ordering by the insolvency court of a general prohibition of disposal ( allgemeines Verfügungsverbot ) or the order by the insolvency court that such German Servicer or German Originator may only dispose of its assets with the consent of a preliminary insolvency administrator pursuant to Section 21 para. 2 No. 2 of the German Insolvency Code ( Insolvenzordnung ) and, in the case of any such proceeding instituted against it (but not instituted by it), either (a) such proceeding shall remain undismissed or unstayed for a period of sixty (60) days, or (b) in any such proceeding, there is entered an order for relief against, or there is appointed a receiver, trustee, insolvency administrator, custodian or other similar official for, it or for any substantial part of its property) or the Seller, Manitowoc, any Originator or any such Servicer shall take any corporate action to authorize any of the actions set forth above in this paragraph (g) ; or
(h) as of the last day of any calendar month, the arithmetic average for the most recent three calendar months of (A) the Default Ratios shall exceed four percent (4.0%), or (B) the Dilution Ratios shall exceed ten percent (10.0%); or
(i) the Purchased Assets Coverage Percentage shall exceed one hundred percent (100%) and such condition shall continue unremedied for more than two (2) consecutive Business Days; or
V-2
(j) a Change in Control shall occur with respect to Manitowoc, any Originator, any Company Notes or the Seller; or
(k) any contribution failure has occurred with respect to a Benefit Plan sufficient to give rise to a lien under Section 303(k) of ERISA or Section 430(k) of the Internal Revenue Code and such failure is not cured and any related lien released within five (5) Business Days, the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Internal Revenue Code with regard to any assets of the Seller or any Originator and such lien or any other lien filed thereunder shall not have been released within ten (10) Business Days, or the Pension Benefit Guaranty Corporation shall file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of the Seller or any Originator and such lien shall not have been released within five (5) Business Days; or
(l) a Servicer Default shall occur; or
(m) a Purchase and Sale Termination Event shall occur; or
(n) one or more judgments for the payment of money in an aggregate amount in excess of twenty-five million dollars ($25,000,000) shall be rendered against Manitowoc, any Subsidiary of Manitowoc or any combination thereof (or in excess of ten thousand dollars ($10,000) shall be rendered against the Seller) and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of Manitowoc or any Subsidiary of Manitowoc or the Seller to enforce any such judgment; or
(o) the Receivables Indebtedness (as such term is defined in the Credit Agreement, as the Credit Agreement may be amended, amended and restated, supplemented, or otherwise modified from time to time) exceeds the amount thereof permitted under the Credit Agreement (as the Credit Agreement may be amended, amended and restated, supplemented, or otherwise modified from time to time); or
(p) the aggregate uncollected amount of accounts receivable sold pursuant to Permitted Securitizations and Factoring Agreements (as such terms in quotation marks are defined in the Credit Agreement, as the Credit Agreement may be amended, amended and restated, supplemented or otherwise modified from time to time) exceeds the amount thereof permitted under the Credit Agreement (as the Credit Agreement may be amended, amended and restated, supplemented or otherwise modified from time to time); or
(q) the net worth of the Seller is less than one million U.S. Dollars ($1,000,000); or
(r) a Material Adverse Effect shall occur; or
(s) any Originator for any reason ceases to transfer, or is legally unable to transfer, Receivables to the Seller under any Purchase and Sale Agreement to which such Originator and the Seller are a party, or the Seller ceases to acquire Receivables from the Originators.
V-3
EXHIBIT VI
SUPPLEMENTAL REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained in Exhibits III and IV of the Agreement, to induce the Purchaser and the Agent to enter into the Agreement and, in the case of the Purchaser, to make Investments and Reinvestments, the Seller hereby represents, warrants, and covenants as follows:
A. | The Receivables . |
1. | The Agreement creates a valid and continuing ownership or security interest (as defined in the applicable UCC) in the Pool Receivables in favor of the Purchaser, which ownership or security interest is prior to all other Adverse Claims, and is enforceable as such as against creditors of and purchasers from the Seller. |
2. | (w) The Pool Receivables transferred to the Seller pursuant to the U.S. Foodservice Purchase and Sale Agreement constitute accounts within the meaning of the applicable UCC, (x) the Pool Receivables transferred to the Seller pursuant to the Canadian Purchase and Sale Agreement (and any Pool Receivables transferred to the Seller by Garland prior to the Closing Date) constitute accounts within the meaning of the PPSA and (y) the Pool Receivables transferred to the Seller pursuant to the Euro Purchase and Sale Agreement are not evidenced or otherwise payable by chattel paper, a promissory note, a bill of exchange or other instrument (other than a cheque). |
3. | The Seller owns and has good and marketable title to the Pool Receivables free and clear of any Adverse Claim. |
4. | The Seller has caused (and will cause each Originator to cause), within ten days after the first transfer of Receivables by such Originator to the Seller, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the sale and contribution of the Receivables from each applicable Originator to the Seller pursuant to the applicable Purchase and Sale Agreement, and the ownership and security interests transferred and granted by the Seller to the Purchaser under the Agreement. During the period from the Closing Date to the Final Payout Date, the Seller shall cause the Purchasers ownership and security interest in the Purchased Assets to be recorded on the Sellers register of mortgages and charges maintained at the Sellers registered office in the Cayman Islands. |
B. | The Lock-Box Accounts and the Collection Account . |
1. | Each of the Lock-Box Accounts and Collection Accounts (other than any European and Singapore Accounts or European Collection Account) constitute deposit accounts within the meaning of the applicable UCC. |
2. | The Seller (or in the case of (i) any German Account, the Seller or a German Originator, (ii) any UK Account, the Seller or a UK Originator or (iii) any Excluded Account, the Seller or an Originator) (individually or together) owns and has good and marketable title to the Lock-Box Accounts and Collection Accounts free and clear of any Adverse Claim. |
VI-1
3. | The Seller has delivered to the Purchaser a fully executed Lock-Box Agreement relating to each Lock-Box Account (other than the Excluded Accounts) (or, with respect to each European and Singapore Account, an Account Pledge Agreement) and a fully executed Collection Account Agreement relating to each Collection Account (or, with respect to each European Collection Account, an Account Pledge Agreement), in each case, pursuant to which the applicable Lock-Box Bank and/or Collection Account Bank, as the case may be, has agreed, following notice from the Agent, to comply with all instructions originated by the Agent (on behalf of the Purchaser) directing the disposition of funds in such Lock-Box Account or Collection Account, as the case may be, without further consent by the Seller or any Servicer. |
C. | Priority . |
1. | Other than the transfer of the Receivables to the Seller and the Purchaser under the Purchase and Sale Agreements and the Agreement, respectively, and/or the ownership or security interest transferred or granted to the Seller and the Purchaser pursuant to the Purchase and Sale Agreements and this Agreement, respectively, neither the Seller nor any Originator has pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Pool Receivables, any Lock-Box Account, any related lock-box or post office box, any Collection Account or any subaccount thereof, except for any such pledge, grant or other conveyance which has been released or terminated. Neither the Seller nor any Originator has authorized the filing of, or is aware of any financing statements against the Seller or any Originator that include a description of Receivables or any Lock-Box Account, any Collection Account or any subaccount thereof, other than any financing statement (i) relating to the sale thereof by the Originators to the Seller under the Purchase and Sale Agreements, (ii) relating to the ownership or security interest granted to the Purchaser under the Agreement, or (iii) that has been released or terminated. |
2. | The Seller is not aware of any judgment, ERISA or tax lien filings against either the Seller or any Originator. |
3. | Neither the Lock-Box Accounts nor the Collection Accounts are in the name of any Person other than the Seller, the Purchaser or, with respect to (i) any German Account, a German Originator, (ii) any UK Account, a UK Originator or (iii) any Excluded Account, an Originator. The Seller, the Originators and the Servicers have not consented to any bank maintaining such accounts to comply with instructions of any Person other than the Purchaser or the Agent on its behalf, or with respect to any Excluded Account, any Originator. |
4. | Notwithstanding any other provision of the Agreement or any other Transaction Document, the representations contained in this Exhibit VI shall survive, continue, and remain in full force and effect in each case until the Final Payout Date. |
VI-2
5. | [ Reserved ]. |
6. | In order to evidence the interests of the Purchaser under the Agreement, each Servicer shall, from time to time take such action, or execute and deliver such instruments (other than filing financing statements) as may be necessary or advisable (including, without limitation, such actions as are reasonably requested by the Purchaser or the Agent) to maintain and perfect, as a first-priority interest, the Purchasers ownership or security interest in the Pool Receivables, Related Security and Collections with respect thereto. Each Servicer shall, from time to time and within the time limits established by law, prepare and present to the Agent for the Agents authorization and approval all financing statements, amendments, continuations or initial financing statements in lieu of a continuation statement, or other filings necessary to continue, maintain and perfect the Purchasers ownership or security interest as a first-priority interest. The Agents approval of such filings shall authorize the applicable Servicer to file such financing statements under the UCC or PPSA registered assignments and/or financing statements, verification statements or similar filings, as applicable, without the signature of the Seller, any Originator or the Purchaser where allowed by applicable law. Notwithstanding anything else in the Transaction Documents to the contrary, no Servicer shall have any authority to file a termination, partial termination, release, partial release, or any amendment that deletes the name of a debtor or excludes collateral of any such financing statements, without the prior written consent of the Agent. |
VI-3
ANNEX A
FORM OF INVESTMENT NOTICE
[Date]
Wells Fargo Bank, N.A.
1100 Abernathy Road
Suite 1600
Atlanta, GA 30328
Attention: Ryan Tozier
Wells Fargo Bank, N.A., London Branch
5th Floor, Bow Bells House
1 Bread Street
London EC4M 9BE
Attention: Tania Saldanha
Re: | Manitowoc Cayman Islands Funding Ltd. Investment Notice |
Ladies and Gentlemen:
Please refer to the Sixth Amended and Restated Receivables Purchase Agreement dated as of March 3, 2016 (as amended, amended and restated, supplemented or otherwise modified from time to time, the Agreement ) among Manitowoc Cayman Islands Funding Ltd. (the Seller ), as the Seller, Manitowoc Foodservice, Inc., Garland Commercial Ranges Limited, Manitowoc Foodservice UK Limited, Manitowoc Deutschland GmbH, Manitowoc Foodservice Asia Pacific Private Limited and Convotherm-Elektrogeräte GmbH, as initial Servicers, Wells Fargo Bank, N.A., as Agent and as Purchaser. Capitalized terms defined in the Agreement and used herein without definition have the meanings set forth in the Agreement.
Pursuant to Section 1.2(a) of the Agreement:
1. The [Seller] [Servicer identified on the signature page hereto on behalf of the Seller] (such Person, the Notice Person ) hereby gives notice to the Agent of a proposed Investment with the requested amount of Capital and Investment Date below:
Amount of Capital: | $[ ] | |
Amount of Capital: | [ ] | |
Amount of Capital: | CAD[ ] | |
Amount of Capital: | £[ ] | |
Investment Date: | [ ] |
2. The Notice Person hereby represents and warrants that:
(a) | The Net Outstanding Balances of the Receivables in the Net Eligible Pool is $[ ]. |
A-1
(b) | The Eligible Unapplied Cash and Credits is $[ ]. |
(c) | The Net Eligible Pool Balance is $[ ]. |
(d) | Immediately after giving effect to such requested Investment the following statements will be true and correct: |
(i) | (A) The Aggregate Capital will be $[ ], (B) the Net Investment Limit will be $[ ], and (C) the Aggregate Capital will not exceed the Net Investment Limit. |
(ii) | (A) The Purchased Assets Coverage Percentage will be [ ]%, and (B) the Purchased Assets Coverage Percentage will not exceed 100%. |
(iii) | (A) The U.S. Capital will be $[ ], (B) the Net Outstanding Balance of all Eligible Receivables denominated in U.S. Dollars that are then included in the Receivables Pool will be $[ ], and (C) the U.S. Capital will not exceed the Net Outstanding Balance of all Eligible Receivables denominated in U.S. Dollars that are then included in the Receivables Pool. |
(iv) | (A) The CAD Capital will be CAD [ ], (B) the Net Outstanding Balance of all Eligible Receivables denominated in Canadian Dollars that are then included in the Receivables Pool will be CAD [ ], and (C) the CAD Capital will not exceed the Net Outstanding Balance of all Eligible Receivables denominated in Canadian Dollars that are then included in the Receivables Pool. |
(v) | (A) The Euro Capital will be [ ], (B) the Net Outstanding Balance of all Eligible Receivables denominated in Euros that are then included in the Receivables Pool will be [ ], and (C) the Euro Capital will not exceed the Net Outstanding Balance of all Eligible Receivables denominated in Euros that are then included in the Receivables Pool. |
(vi) | (A) The GBP Capital will be £[ ], (B) the Net Outstanding Balance of all Eligible Receivables denominated in GBP that are then included in the Receivables Pool will be £[ ], and (C) the GBP Capital will not exceed the Net Outstanding Balance of all Eligible Receivables denominated in GBP that are then included in the Receivables Pool. |
3. | The Notice Person hereby direct the Agent to wire transfer the Capital of such requested Investment to the following account(s): |
[Insert Wiring Instructions]
A-2
Very truly yours, | ||||
MANITOWOC CAYMAN ISLANDS FUNDING LTD., as the Seller | ||||
By |
|
|||
Name: | ||||
Title:] | ||||
[MANITOWOC FOODSERVICE, INC., as a Servicer | ||||
By |
|
|||
Name: | ||||
Title:] |
A-3
ANNEX B
FORM OF MONTHLY REPORT
(Attached)
B-1
ANNEX C
FORM OF PAYDOWN NOTICE
[Date]
Wells Fargo Bank, N.A.
1100 Abernathy Road
Suite 1600
Atlanta, GA 30328
Attention: Ryan Tozier
Wells Fargo Bank, N.A.
5th Floor, Bow Bells House
1 Bread Street
London EC4M 9BE
Attention: Tania Saldanha
Re: | Manitowoc Cayman Islands Funding Ltd. Paydown Notice |
Ladies and Gentlemen:
Please refer to the Sixth Amended and Restated Receivables Purchase Agreement dated as of March 3, 2016 (as amended, amended and restated, supplemented or otherwise modified from time to time, the Agreement ) among Manitowoc Cayman Islands Funding Ltd. (the Seller ), as Seller, Manitowoc Foodservice, Inc., Garland Commercial Ranges Limited, Manitowoc Foodservice UK Limited, Manitowoc Deutschland GmbH, Manitowoc Foodservice Asia Pacific Private Limited and Convotherm-Elektrogeräte GmbH, as initial Servicers, Wells Fargo Bank, N.A., as Agent and as Purchaser. Capitalized terms defined in the Agreement and used herein without definition have the meanings set forth in the Agreement.
This letter constitutes a Paydown Notice pursuant to Section 1.2(f) of the Agreement.
1. The Seller hereby gives notice to the Agent of a proposed reduction in the Aggregate Capital in the amount and on the Paydown Date set forth below:
Amount of Capital: | $[ ] | |
Amount of Capital: | [ ] | |
Amount of Capital: | CAD[ ] | |
Amount of Capital: | £[ ] | |
Paydown Date 1 : | [ ] |
1 | Notice must be given at least one (1) Business Day prior to the requested Paydown Date for a reduction of U.S. Capital and three (3) Business Days prior to the requested Paydown Date for the reduction of Capital of any other Approved Currency. |
C-1
2. After giving effect to the above requested reduction in the Aggregate Capital, the Aggregate Capital will be $[ ], the U.S. Capital will be $[ ], the CAD Capital will be CAD[ ],the GBP Capital will be £[ ] and the Euro Capital will be [ ].
C-2
IN WITNESS WHEREOF, the undersigned has caused this Paydown Notice to be executed by its duly authorized officer as of the date first above written.
Very truly yours, | ||||
MANITOWOC CAYMAN ISLANDS FUNDING LTD., as the Seller | ||||
By |
|
|||
Name: | ||||
Title: |
C-3
Exhibit 10.8
THE MANITOWOC FOODSERVICE
DEFERRED COMPENSATION PLAN
Amended and Restated Through March 4, 2016
Table of Contents
Page | ||||||
ARTICLE 1 |
PURPOSE AND EFFECTIVE DATE | 1 | ||||
ARTICLE 2 |
DEFINITIONS | 2 | ||||
ARTICLE 3 |
AGREEMENTS AND ELECTIONS TO DEFER | 8 | ||||
ARTICLE 4 |
INVESTMENT DIRECTIONS | 11 | ||||
ARTICLE 5 |
DISTRIBUTIONS | 11 | ||||
ARTICLE 6 |
ACCOUNTS | 13 | ||||
ARTICLE 7 |
EMPLOYER CONTRIBUTIONS | 15 | ||||
ARTICLE 8 |
EMPLOYER STOCK | 15 | ||||
ARTICLE 9 |
GENERAL PROVISIONS | 16 |
March 4, 2016 | Foodservice Plan |
i of 19
ARTICLE 1
PURPOSE AND EFFECTIVE DATE
Section 1.1 Purpose .
The purpose of The Manitowoc Foodservice Deferred Compensation Plan (the Plan) is to promote the best interests of Manitowoc Foodservice, Inc. (the Company) and its subsidiaries and affiliates and the stockholders of the Company by: (1) attracting and retaining well-qualified persons for service as non-employee directors of the Company and promoting identity of interest between directors and stockholders of the Company; and (2) attracting and retaining key management employees possessing a strong interest in the successful operation of the Company and its subsidiaries and affiliates (collectively referred to herein as the Employer) and encouraging their continued loyalty, service, and counsel to the Employer. It is intended that the Plan will allow participants to elect to voluntarily to defer and convert, in the case of non-employee directors, all or a portion of their retainer and meeting fees for services as a director and, in the case of key employees, a portion of their compensation, into Employer Stock and other investments for payment upon retirement, death, disability, or designated distribution date. On and after March 4, 2016, this Plan is intended to be interpreted and administered in accordance with a certain Employee Matters Agreement entered into between the Company and The Manitowoc Company, Inc. on or about March 3, 2016 (the Employee Matters Agreement).
Section 1.2 Effective Date of Plan .
The effective date of the Plan (then known as The Manitowoc Company, Inc. Deferred Compensation Plan) was June 30, 1993. The effective date of this restatement is January 1, 2016, and this restatement reflects a separation of the Plan into two components: this Plan for employees and former employees of The Manitowoc Companys Foodservice business and a corresponding plan for employees and former employees of the Companys Cranes business. This Plan is intended for individuals who first provide services to an Employer on or after January 1, 2016 and other individuals whose account balance under The Manitowoc Company, Inc. 401(k) Retirement Plan was transferred (or whose account balance would have been transferred if such an account existed) to the Manitowoc Foodservice 401(k) Retirement Plan on or about January 1, 2016. Other individuals who provide services to The Manitowoc Company, Inc. will participate in only The Manitowoc Company, Inc. Deferred Compensation Plan rather than this Plan on and after January 1, 2016.
Section 1.3 Grandfathered Accounts and Code Section 409A .
Effective December 31, 2008, the Plan was amended and restated to reflect the requirements of Code Section 409A, the Companys good faith compliance with Code Section 409A between October 3, 2004 and December 31, 2008 and other interim Plan amendments. All benefits that were earned and vested on or before December 31, 2004 are grandfathered within the meaning of IRS Notice 2005-1 and any provision in this restated Plan document that would otherwise cause such grandfathered amounts to be materially modified at anytime after October 3, 2004 shall be deemed amended or deleted to the extent necessary to ensure that those amounts do not become subject to Code Section 409A.
March 4, 2016 | Foodservice Plan |
1 of 19
ARTICLE 2
DEFINITIONS
The following terms have the following meanings unless the context clearly indicates otherwise:
Section 2.1 Administrator .
Administrator means a committee of the Board composed of not less than two directors, each of whom shall qualify as a Non-Employee Director within the meaning of Rule 16b-3, or such other committee or officer of the Company designated by the Board. If the Board does not designate such a committee or officer, then the Board shall serve as the Administrator. Administrator shall, for actions taken before January 1, 2016, also refer to the successor to the current Administrator.
Section 2.2 Agreement .
Agreement means the agreement (as approved as to form by the Administrator) entered into between the Employer and a Participant, whereby the Participant agrees to defer a portion of the Participants Compensation pursuant to the provisions of the Plan and the Employer agrees to make benefit payments in accordance with the terms of the Plan. An Agreement may be an Initial Agreement applicable to a Participant or a Modified Agreement. An Agreement previously entered into between the Participant and an individual Employer will continue to apply to the Company and any successor.
Section 2.3 Beneficiary .
Beneficiary means the person or entity designated by the Participant to be the beneficiary of the Deferred Compensation Account of the Participant. If a valid designation of Beneficiary is not in effect at the time of the death of a Participant, the estate of the Participant is deemed to be the sole Beneficiary of such Account. If a Participant dies before receiving full distribution of such Participants Account, any remaining distributions shall be made to the Beneficiary. If a Beneficiary dies while entitled to receive distributions from the Plan, any remaining payments shall be paid to the estate of the Beneficiary. Beneficiary designations shall be in writing, filed with the Administrator, and in such form as the Administrator may prescribe for this purpose.
Section 2.4 Board .
Board means the Board of Directors of the Company.
Section 2.5 Change of Control .
Change of Control means, for Grandfathered Accounts, the first to occur of the following:
(a) The acquisition by any person or entity, or group thereof acting in concert, of beneficial ownership of securities of the Company which, together with securities previously owned, confer upon the holder the voting power, on all matters brought to a vote of stockholders, of thirty percent (30%) or more of all the then outstanding shares of the Company.
March 4, 2016 | Foodservice Plan |
2 of 19
(b) The sale, assignment or transfer of assets (or earning power) of the Company or any subsidiary or subsidiaries, in a transaction or series of transactions, to a twenty percent (20%) stockholder (as herein defined) or any affiliate of a twenty percent (20%) stockholder, if the aggregate market value thereof exceeds fifty percent (50%) of the aggregate book value, determined by the Company in accordance with generally accepted accounting principles, of all the assets (or earning power) of the Company determined on a consolidated basis before such transaction or the first of such transactions, unless the Board approved such transaction or transactions before the date on which the twenty percent (20%) stockholder became a twenty percent (20%) stockholder. For purposes of this definition of Change of Control, a twenty percent (20%) stockholder means any person, entity, or group of persons and/or entities acting in concert, who or which, together with such stockholder, and its or their affiliates and associates, is the beneficial owner of securities of the Company which confer upon the holder the voting power, on all matters brought to a vote of stockholders, of twenty percent (20%) or more of all the then outstanding shares of the Company.
(c) The merger or consolidation of the Company (or of one or more subsidiaries of the Company, in a transaction or series of transactions, if the aggregate book value of the assets thereof exceeds fifty percent (50%) of the aggregate book value of all the assets of the Company determined on a consolidated basis before such transaction or the first of such transactions), with or into a twenty percent (20%) stockholder or any affiliate of a twenty percent (20%) stockholder, unless the Board approved such merger or consolidation before the date on which the twenty percent (20%) stockholder first became a twenty percent (20%) stockholder.
(d) The dissolution of the Company, unless the Board approved such dissolution before the date on which the twenty percent (20%) stockholder first became a twenty percent (20%) stockholder.
(e) Change in the composition of the Board after which a majority of the members thereof are not continuing directors. Continuing director, for this purpose, means (i) any member of the Board while such person is a member of the Board, who is not an acquiring person, or an affiliate or associate of an acquiring person, or a representative of an acquiring person or of any such affiliate or associate, and was a member of the Board prior to July 4, 1993, or (ii) any person who subsequently becomes a member of the Board, who is not an acquiring person, or an affiliate or associate of an acquiring person, or a representative of an acquiring person or of any such affiliate or associate, if such persons nomination for election or election to the Board is recommended or approved by a majority of the continuing directors. As used herein, affiliate and associate shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Exchange Act.
(f) The commencement (within the meaning of Rule 14d-2 of the General Rules and Regulations under the Exchange Act) of a tender or exchange offer which, if successful, would result in a change of control of the Company.
March 4, 2016 | Foodservice Plan |
3 of 19
(g) A determination by the Board, in view of then current circumstances or impending events, that a change of control of the Company has occurred or is imminent, which determination shall be made for the specific purpose of triggering the operative provisions of the Companys contingent employment agreements.
For Non-Grandfathered Accounts, a Change of Control means the first event that would be a Change of Control for a Grandfathered Account and which would also satisfy the requirements of Code Section 409A(a)(2)(A)(v).
The separation of The Manitowoc Company, Inc.s Cranes and Foodservice businesses is not a Change of Control for purposes of this Plan.
Section 2.6 Company .
Company means Manitowoc Foodservice, Inc., a Delaware corporation headquartered in Florida. Where appropriate, Company shall also refer to Manitowoc FSG U.S. Holding, LLC and/or The Manitowoc Company, Inc. each of which previously sponsored this Plan and for which prior service is recognized consistent with the Employee Matters Agreement. Company shall also refer to any future successor
Section 2.7 Code .
Code means the Internal Revenue Code of 1986, as interpreted by regulations and rulings issued pursuant thereto, all as amended and in effect from time to time.
Section 2.8 Compensation .
Compensation means (i) for non-employee director Participants, the Retainer Fee and (ii) for key employee Participants, Compensation has the same meaning as Plan Compensation, used for purposes of making allocations under the Manitowoc Foodservice 401(k) Retirement Plan and incorporated herein by this reference, without regard to the dollar limits applied to that definition by Code Section 401(a)(17), and without regard to whether such Participants are eligible to participate in the Manitowoc Foodservice 401(k) Retirement Plan.
Section 2.9 Date .
Date means the date an Initial Agreement, a Modified Agreement, or a Form is received by the Administrator.
Section 2.10 Deferred Compensation Account; Account; Sub-Account .
Deferred Compensation Account generally refers to a Participants entire interest in the Plan. Account generally refers to a Participants entire interest in Program A and Program B, separately. Sub-Account means the separate accounts maintained under Program B.
March 4, 2016 | Foodservice Plan |
4 of 19
Section 2.11 Disability .
Disability means: (a) for Grandfathered Accounts, a disability as set forth in Code Section 22(e)(3); and (b) for Non-Grandfathered Accounts, a situation that would allow a distribution under Code Section 409A(a)(2)(A)(ii). Code Sections 409A(a)(2)(A)(ii) and 409A(a)(2)(C) provide that a Participant shall be considered disabled only when he or she: (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Employer.
Section 2.12 Distribution Date .
Distribution Date means the date designated by a Participant in the Participants Distribution Election Form for the commencement of payment of amounts credited to the Participants Accounts.
Section 2.13 Employer .
Employer means the Company and each subsidiary and affiliate of the Company which adopts this Plan and any successor thereto.
Section 2.14 Employer Contribution .
Employer Contribution means the amount of contribution which may be made each year on behalf of key employee Participants, as described in Article 7.
Section 2.15 Employer Stock
Employer Stock means common stock, $.01 par value, of the Company, provided that Employer Stock shall also refer to common stock,$.01 par value, of The Manitowoc Company, Inc. that was assumed by this Plan as part of the separation of the Company from The Manitowoc Company, Inc. on or about March 4, 2016, and consistent with the Employee Matters Agreement.
Section 2.16 Exchange Act .
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time.
March 4, 2016 | Foodservice Plan |
5 of 19
Section 2.18 Forms .
Each of the following, as approved by the Administrator and properly completed by the Participant, is a Form under the Plan:
(a) Beneficiary Designation Form is used to designate a Participants Beneficiaries. A Beneficiary Designation may, but is not required, to specify the form of payment from those available under the Plan. A Beneficiary Designation may, but is not required, to designate contingent Beneficiaries.
(b) Distribution Election Form is used to designate the form and timing of distributions to be made to a Participant from the Participants Accounts in the Plan. Separate Distribution Election Forms may be filed for a Participants Program A Account and Program B Account. If only one Distribution Election Form is on file with the Plan it shall apply to Accounts of the Participant in both Program A and Program B. No Distribution Election Form other than the Form filed at the commencement of Plan participation can be given effect until it has been on file with the Administrator for 12 months. For Non-Grandfathered Accounts, a new or modified Distribution Election Form must either: (i) meet one of the exemptions set forth in IRS Notice 2007-86, Notice 2006-79 or Notice 2005-1; or (ii) further delay the commencement of any amount previously deferred by a minimum of 5 additional years.
(c) Hardship Distribution Request Form is used to request a hardship distribution of amounts credited to a Participants Accounts. Hardship distributions shall be drawn from Program B and then Program A Accounts, in that order.
(d) New Investment Direction Form is used to change investment directions prospectively under the Plan as to new deferral amounts.
(e) Investment Transfer Form is used to transfer funds from one Program B Sub-Account to another. Investment Transfer Forms cannot be used in Program A after March 31, 2002.
Section 2.19 Grandfathered Account .
Grandfathered Account refers to all or any part of a Participants Account that was earned and fully vested as of December 31, 2004. If, at any time, this Plan, any Agreement, any Form or any other administrative policy is amended or interpreted to cause a material modification that would cause a Grandfathered Account to be subject to Code Section 409A, such amendment, interpretation or change shall be deemed amended or modified to the extent that no Grandfathered Amount will be subject to Code Section 409A. If necessary to avoid the application of Code Section 409A or to provide guidance as the result of the application of the preceding provisions, the terms of the Plan, as in effect on October 3, 2004, shall apply to all Grandfathered Accounts.
Section 2.21 Non-Grandfathered Account .
Non-Grandfathered Account refers to all or any part of a Participants Account that was not earned and fully vested as of December 31, 2004. Non-Grandfathered Accounts are
March 4, 2016 | Foodservice Plan |
6 of 19
subject to Code Section 409A and the provisions of this Plan shall be interpreted and applied with the intent to ensure that no benefits are subject to taxation before the date when such benefits are paid to a Participant or Beneficiary. Nothing in this Plan, any Agreement, any Form or related document shall be construed or interpreted as a guarantee of any particular tax consequences.
Section 2.22 Participant .
Participant means any non-employee member of the Board, any eligible employee of an Employer who has executed an Agreement and any Transferred Employee, as defined under the Employee Matters Agreement (Transferred Employee). Key employee status for a Plan Year is determined as of the last day of the immediately preceding Plan Year, or, as to newly-hired employees in their first year of employment, at time of hire based on current base rate of pay. Key employees, for all Plan purposes, include only elected officers of the Company and other highly compensated employees. For purposes of this Section, highly compensated employees means any employee of an Employer who has been employed by one or more Employer(s) (including, for this purpose, The Manitowoc Company, Inc. and its affiliates prior to the Spin-Off) for at least one year at a salary grade of 210 or higher (or equivalent salary grade of the Company) and who continues to be employed by an Employer at such a salary grade on the last day of the preceding Plan Year. A Participant who ceases to be a non-employee director or a key employee shall cease making deferrals as of the first day of the Plan Year following such loss of eligibility, but shall remain an inactive Participant until all amounts due such person under the Plan have been distributed in full.
Section 2.23 Plan Year .
Plan Year means the fiscal year of the Company.
Section 2.24 Program A .
Program A, is deemed to be solely invested in Employer Stock issued by the Company (Foodservice Stock); provided that, solely to the extent that Transferred Participants had accounts in Program A in the ParentCo Plan prior to the Spin-Off, such pre-Spin-Off accounts shall be deemed to be invested a combination of Foodservice Stock and shares of the common stock of The Manitowoc Company, Inc. (ParentCo Stock) due to the conversion described in Article VI of the Employee Matters Agreement. Any dividends paid on shares of Foodservice Stock or ParentCo Stock deemed to be held under Program A are deemed to be reinvested in Foodservice Stock or ParentCo Stock, as applicable, under Program A, in accordance with rules and procedures established by the Administrator. There are no investment options in Program A. The funds in Program A cannot be transferred at any time to Program B. All distributions under the Plan from Program A relating to Foodservice Stock units must be made in Foodservice Stock, except fractional shares may be paid in cash. Any Foodservice Stock or ParentCo Stock that may be held in trust pursuant to the Plan in connection with Program A will be held in a trust or sub-trust that is separate from any trust or sub-trust that may hold assets pursuant to the Plan in connection with Program B.
March 4, 2016 | Foodservice Plan |
7 of 19
Section 2.25 Program B .
Program B, is deemed to consist of Sub-Accounts, each of which is deemed to be invested in a designated mutual fund. Any dividends paid on such mutual funds shall be deemed to be reinvested in the applicable Sub-Account. Neither Foodservice Stock nor ParentCo Stock is an investment option in Program B. Funds deemed to be invested pursuant to Program B cannot be transferred at any time to Program A. All distributions from Program B must be made in cash. Any assets that may be held in trust pursuant to the Plan in connection with Program B will be held in a trust that is completely separate from any trust that may hold assets pursuant to the Plan in connection with Program A.
Section 2.26 Retainer Fee .
Retainer Fee means those fees paid by the Company to non-employee directors for services rendered on the Board or any committee of the Board, including attendance fees and fees for serving as committee chair. Any Retainer Fee payable for services during a month is deemed to accrue to the non-employee director on the first day of such month for Plan purposes.
Section 2.27 Rule 16b-3 .
Rule 16b-3 means Rule 16b-3 of the General Rules and Regulations under the Exchange Act as promulgated by the Securities Exchange Commission or its successor, as amended and in effect from time to time.
Section 2.28 Separation .
Separation means a separation from service within the meaning of Code Section 409A(2)(A)(i).
Section 2.29 Transferred Participant .
Transferred Participant shall mean each Manitowoc Foodservice Deferred Compensation Beneficiary as defined in the Employee Matters Agreement between The Manitowoc Company, Inc. and the Company.
ARTICLE 3
AGREEMENTS AND ELECTIONS TO DEFER
Section 3.1 Initial Deferrals .
Each new non-employee director and new key employee shall be entitled to defer Compensation accruing on and after the first day of the month following such persons Initial Agreement Date, provided such Initial Agreement Date is not more than thirty (30) days after the Date such person initially becomes eligible under the Plan. Thereafter, such persons shall be eligible to commence deferrals only with respect to compensation that is earned, in whole or in part, as of the first day of any subsequent Plan Year, provided their Initial Agreement Date is before such date. Notwithstanding the preceding limitation, Participants were allowed to revoke and modify their existing elections for Non-Grandfathered Benefits between October 3, 2004 and
March 4, 2016 | Foodservice Plan |
8 of 19
December 31, 2008, in accordance with transitional guidance issued by the Internal Revenue Service, including IRS Notice 2005-1, Notice 2006-79, Notice 2007-86 and the proposed regulations issued under Code Section 409A. For Plan Years beginning after December 31, 2006, Participants may make a separate election with respect to such performance-based compensation until 6 months before the end of the measurement period for such compensation. For purposes of this provision, performance-based compensations has the meaning provided in Code Section 409A(a)(4)(B)(iii).
Section 3.2 Termination of Employment, Service or Status and Reinstatement .
A Participant has no further right to defer Compensation under the Plan after termination of service to the Company as a non-employee director, or after termination of employment in the case of all other Participants, or, if earlier, upon receipt of written notice from the Administrator of revocation of an employees status as a key employee. Such revocations by the Administrator are effective only upon the first day of the Plan Year following the date that the employee is provided such written notice. If a Participant terminates service with the Employer and subsequently returns to service, the Participant shall be treated as a new employee (or director if applicable) for all Plan purposes.
Section 3.3 Deferral Percentages and Limitations .
A non-employee director Participant may make a deferral election with respect to all or part of the non-employee director Participants Compensation, in increments of five percent (5%). A key employee Participant may make separate deferral elections, in whole percentages, with respect to regular pay and incentive bonuses. Deferral elections shall not exceed forty percent (40%) of regular pay for any Plan Year and deferral elections with regard to incentive bonuses are not subject to a percentage maximum; provided, however, that the maximum amount of Compensation of a key employee Participant for any Plan Year which may be considered for purposes of determining the Employer contribution authorized by Section 7.1 shall not exceed twenty-five percent (25%) for any Plan Year. Deferral elections remain in effect from year to year until modified or revoked in accordance with Plan rules.
Section 3.4 Necessary Election Information and Documentation .
Each Participant shall provide as a part of an Initial Agreement, and in a Modified Agreement, as necessary, supplemented by appropriate Forms, the following information:
(a) the percentage of Compensation to be deferred;
(b) the percentage of deferred Compensation to be directed to Program A (the Employer Stock Program) or Program B (the Diversified Investment Program);
(c) the Program B Sub-Accounts to which deferred amounts are to be allocated;
(d) the Distribution Date;
(e) whether distributions are to be in a lump sum, in installments, or a combination thereof; and
(f) the Participants Beneficiaries.
March 4, 2016 | Foodservice Plan |
9 of 19
Persons subject to Section 16 of the Exchange Act shall be afforded a further opportunity to determine in advance whether applicable withholding requirements on amounts distributed from Program A are to be satisfied by an Employer through withholding of shares of Employer Stock or whether the Participant will provide cash from other sources for this purpose.
Section 3.5 Increasing Deferral Elections .
A Participant may increase the deferral amount specified in the Participants Initial Agreement by completing and executing a Modified Agreement and submitting it to the Administrator. Such Modified Agreement shall be effective with respect to Compensation accruing on and after the first day of the Plan Year beginning after the Date of the Modified Agreement. For Plan Years beginning on or after 2007, Participants may make a separate election with respect to such performance-based compensation until 6 months before the end of the measurement period for such compensation. For purposes of this provision, performance-based compensations has the meaning provided in Code Section 409A(a)(4)(B)(iii).
Section 3.6 Reducing or Revoking Deferral Elections .
A Participant may reduce, or completely revoke, such Participants deferral election by completing and executing a Modified Agreement and submitting it to the Administrator. Such Modified Agreement shall be effective with respect to Compensation accruing on and after the first day of the Plan Year beginning after the Date of the Modified Agreement; provided, however, that the effective date of such an election shall be the first day of the month following the Date of the Modified Agreement if the Participant establishes to the Administrator that the reason for the reduction/revocation constitutes an unforeseeable emergency within the meaning of Code Section 409A(a)(2)(A)(vi). Further, to the extent permitted under Internal Revenue Service Notice 2005-1, an election to reduce or completely revoke a pre-2005 deferral election shall become effective as soon as administratively feasible. In the event that the Administrator allows a Participant to reduce or cease making deferral contributions under the Plan other than on the first day of a Plan Year, the Participant shall forfeit any Employer Contributions to which the Participants Account would otherwise be entitled for the Plan Year in which such reduction or revocation occurred. For Plan Years beginning on or after 2007, Participants may make a separate election with respect to such performance-based compensation until 6 months before the end of the measurement period for such compensation. For purposes of this provision, performance-based compensations has the meaning provided in Code Section 409A(a)(4)(B)(iii) .
Section 3.7 Change of Beneficiary .
A Participant shall be permitted at any time to modify the Participants Beneficiary Designation Form.
March 4, 2016 | Foodservice Plan |
10 of 19
ARTICLE 4
INVESTMENT DIRECTIONS
Section 4.1 New Investment Direction Form .
In connection with an Initial Agreement and thereafter, from time to time as determined by the Participant (or a Beneficiary after the Participants death), in accordance with Administrator rules, each Participant shall file a New Investment Direction Form applicable to new deferral amounts to be credited to the Participants Program B Account. Such instructions shall be effective on the first day of the month following the new Investment Direction Form Date.
Section 4.2 Sub-Account Transfers .
A Participant (or a Beneficiary after the Participants death) may transfer to one or more different Sub-Accounts in Program B all or a part (not less than ten percent (10%)) of the amounts credited to the Participant in other Program B Sub-Accounts by completing and executing an Investment Transfer Form and submitting it to the Administrator. Such transfers among Program B Sub-Accounts shall become effective on the first day of the calendar month following the Investment Transfer Form Date.
Section 4.3 No Transfers Out of Program A After March 31, 2002 .
Effective March 31, 2002, transfers into or out of Accounts in Program A are not permitted.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Distribution Forms .
Each Distribution Election Form shall designate the Distribution Date applicable to the Participants Account governed by the election, and whether distributions are to be made in a lump sum, in installments, or in a combination thereof. Each installment in a series of installment distributions from a Non-Grandfathered Account shall be treated as a separate individual distribution for purposes of applying the change in distribution provisions set forth in this Plan and under Code Section 409A. Distribution Election Forms are to be completed at the time a Participant completes the Participants Initial Agreement and may be modified thereafter, as the Participant may elect. Modified Distribution Election Forms for Grandfathered Accounts must be filed with the Administrator not less than 12 months before the modification can be permitted to be effective and modifications by insiders must be approved in advance by the Administrator; modified Distribution Election Forms for Non-Grandfathered Accounts that apply to distributions made for any reason other than death, Disability or an unforeseeable emergency must also provide that the new distribution date will be at least 5 years after the date when the distribution would have been made under the prior Distribution Election Form. Separate Distribution Election Forms may be filed for each Program A Account and Program B Account. If only one Distribution Election Form is on file with the Plan it shall apply to Accounts of the Participant in both Program A and Program B.
March 4, 2016 | Foodservice Plan |
11 of 19
Section 5.2 Distribution Dates .
A Participant may designate as a Distribution Date the first day of the calendar month following the date of the Participants death; the first day of the calendar month following the date of the Participants Disability; the first day of the calendar month following the date of termination of the Participants service as a member of the Board if the Participant is a non-employee director; or, if the Participant is an employee of an Employer, the first day of the calendar month following the date of termination of the Participants employment with the Employer; the first day of any calendar month specified by the Participant; or the earliest to occur of these dates. For purposes of Non-Grandfathered Accounts: (a) a distribution may only commence as a result of a termination of employment or service if such termination is also a Separation, as defined above; and (b) to the extent that the Participant is a key employee, as defined in Code Section 416(i), a distribution from any Non-Grandfathered Account that is made as a result of a Separation may not commence until at least 6 months after such Separation.
Section 5.3 Distribution Forms .
A Participant shall direct whether distributions from an Account are to be made in a lump sum, in no more than 180 monthly, 60 quarterly, or 15 annual installments. Each installment is determined by dividing the applicable Account balance by the number of remaining payments. Each installment in a series of installment distributions from a Non-Grandfathered Account shall be treated as a separate individual distribution for purposes of applying the change in distribution provisions set forth in this Plan and under Code Section 409A. If a Participant receives a distribution on an installment basis, amounts remaining in that Account before payment in full is completed shall continue to accrue earnings and incur losses in accordance with the terms of the Plan. Except as provided in Section 5.4, all distributions shall be made to the Participant. Installment payments shall be made pro rata from each Account (including any Sub-Accounts) holding assets subject to the installment method of payment. Separate payment method elections for Sub-Accounts in Program B are not permitted. The Administrator may determine minimum amounts applicable to any periodic payment method to facilitate convenient administration of the Plan.
Section 5.4 Distributions After Death .
If the Distribution Date is the first day of the month following the Participants death or a fixed date which in fact occurs after the Participants death or if at the time of death the Participant was receiving distributions in installments, the balance remaining in the Participants Account shall be payable to the Participants Beneficiary. All distributions to Beneficiaries shall be in a lump sum except when the Distribution Date is the first day of the month following the Participants death and the Beneficiary Designation specifies installment payments to the Beneficiary.
Section 5.5 Distributions of Employer Stock .
All distributions from Program A shall be made in those shares of Employer Stock held in a Participants Program A account, except that fractional shares may be paid in cash. All distributions from Program B shall be made in cash. Any brokerage commissions or transaction fees applicable to the sale of shares of Employer Stock distributed from Program A are the responsibility of the recipient of the distribution.
March 4, 2016 | Foodservice Plan |
12 of 19
Section 5.6 Hardship .
Notwithstanding the foregoing, a Participant (or Beneficiary after the death of the Participant) may request an extraordinary distribution of all or part of the amount credited to the Participants Account because of hardship. A distribution from a Grandfathered Account shall be deemed to be because of hardship if such distribution is necessary due to unanticipated events beyond the control of the Participant (or Beneficiary) that would result in severe financial hardship to the Participant (or Beneficiary) if the extraordinary distribution is not permitted. Any request by an insider for a hardship distribution must be approved in advance by the Administrator. A distribution from a Non-Grandfathered Account shall be deemed to be because of hardship only if the circumstances also constitute an unforeseeable emergency within the meaning of Code Section 409A(a)(2)(A)(vi). In accordance with Code Section 409A(a)(2)(B)(ii), such an unforeseeable emergency exists if the Participant suffers a severe financial hardship resulting from: (a) an illness or accident of the Participant, the Participants spouse or the Participants dependent (as defined in Code Section 152(a)); (b) the Participants loss of property due to casualty; or (c) other similar extraordinary and unforeseeable circumstances arising from events beyond the control of the Participant. Any hardship distribution from a Non-Grandfathered Account may not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship may is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participants assets (to the extent that the liquidation of such assets would not itself cause severe financial hardship).
Section 5.7 Exchange Act Compliance .
The Administrator may adopt any additional rules and modify existing rules and procedures, as necessary, to assure compliance with the insider trading liability rules under Section 16 of the Exchange Act, as in effect from time to time.
Section 5.8 Change of Control .
Any remaining balance in a Participants Account shall be distributed in a single lump sum amount to the Participant, or the Participants Beneficiary if applicable, upon the occurrence of a Change in Control of the Company. Such distribution shall occur not later than thirty (30) days following the date on which the Change in Control of the Company occurred and shall include the accelerated distribution of any installment payments otherwise to be paid.
ARTICLE 6
ACCOUNTS
Section 6.1 Participant Program A and Program B Accounts .
The Employer shall establish Accounts under Program A and Program B for each Participant having an interest in each Program. Accounts in Program B shall be divided into
March 4, 2016 | Foodservice Plan |
13 of 19
Sub-Accounts for each Participant as indicated by the Participants investment directions in effect from time to time. The Employer shall credit to each Account and applicable Sub-Accounts, any amounts deferred by a Participant under the Plan, including for key employees any Employer Contribution allocable to the Participants Account under Section 7.1. Such credits for deferred Compensation are to be made within a reasonable time (not to exceed thirty (30) days) following the time that the deferred Compensation, but for the Participants deferral election, would otherwise have been paid or made available to the Participant. The credits for Employer Contributions, if any, shall be made as provided in Section 7.1. The Employer shall deduct amounts it is required to withhold on the deferred Compensation at the time it is credited to a Participants Account, under any state, federal, or local law for payroll or other taxes or charges, from the Participants Compensation which is not deferred, to the maximum extent possible, before reducing the amount of the Participants deferrals.
Section 6.2 Immediate Vesting .
The Accounts of Participants in the Plan are immediately vested and non-forfeitable.
Section 6.3 Account Investments .
Accounts, including Sub-Accounts, established for Participants shall be deemed to be fully invested at all times in the investment assigned to the Account or Sub-Account. The Employer shall separately account for credited amounts as units of the designated investment, having the value attributable to units of the designated investment at all times, taking into account reinvestment of all dividends pertaining to such investment, but without adjustment for any income tax consequences attributable to deemed Employer ownership of such investments.
Section 6.4 Participant Account Statements .
The Administrator shall provide to each Participant, not less frequently than semiannually, a statement with respect to each of the Participants Accounts, including Sub-Accounts, in such form as the Administrator determines to be appropriate, setting forth credited amounts added during the reporting period, any units of each designated investment attributable to each Account or Sub-Account and their current value, amounts distributed to the Participant since the last report, the current balance to the credit of such Participant in each Account and Sub-Account, and other appropriate information.
Section 6.5 Investment Options .
Program A is deemed to be invested solely in Employer Stock. Program B is divided into Sub-Accounts, each of which is deemed to be invested in a designated mutual fund. Each such Sub-Account is a separate investment option under Program B. The investment options associated with Program B that are currently available are set forth in the Summary Plan Information that is provided to each Participant. The Administrator shall, from time to time, review the investment options available under Program B and may on a prospective basis, eliminate, modify, or otherwise change such investment options.
March 4, 2016 | Foodservice Plan |
14 of 19
ARTICLE 7
EMPLOYER CONTRIBUTIONS
Section 7.1 Amount of Employer Contributions .
The Employer shall credit to the Accounts of key employee Participants, in accordance with their investment directions on file with the Plan, an Employer Contribution equal to the amount of deferred compensation of a key employee for a Plan Year multiplied by the rate, determined as a percentage of eligible compensation, of fixed and variable profit sharing contributions, if any, that the Participant has received from the Participants Employer for the Plan Year under the Manitowoc Foodservice 401(k) Retirement Plan, subject to the restrictions of Section 3.3 and Section 3.6. If the Participant is not a participant in the Manitowoc Foodservice (401(k) Retirement Plan, the amount of Employer contribution made on behalf of the Participant shall be determined in a similar manner but with regard to the qualified defined contribution retirement program in which the Participant does participate, as determined by the Administrator. Effective as of January 1, 2005, the Employer also reserves the right to make such additional contributions as it deems necessary or advisable to compensate any Participant who is adversely and unexpectedly affected by any forfeitures, adjustments or other limitations under any qualified retirement plan(s) maintained by the Employer. Such contributions are wholly within the discretion of the Employer and need not be made on a uniform or consistent basis.
Section 7.2 Crediting Employer Contributions .
Such Employer Contribution, if any, shall be credited to the Account of the eligible Participant within a reasonable time (not to exceed thirty (30) days) following the time the Employer deposits its similar contributions to the Manitowoc Foodservice 401(k) Retirement Plan.
ARTICLE 8
EMPLOYER STOCK
Section 8.1 Employer Stock Allocation and Adjustment .
The amount of Employer Stock which may be allocated to Participants Accounts under the Plan is determined by the amount of Compensation deferred under the Plan and the investment directions provided by Participants. In the event of any merger, share exchange, reorganization, consolidation, recapitalization, stock dividend, stock split or other change in corporate structure affecting Employer Stock, appropriate adjustments shall be made to the units credited to Program A for each Participant, except that any such adjustments to units credited to Program A for each Participant subject to Section 16 shall be only such as is necessary to maintain the proportionate interest of such Participant and preserve, without exceeding, the value reflected by such Participants Program A Account.
Section 8.2 Employer Stock Value .
Plan record keeping pertaining to Employer Stock shall be based on the fair market value of Employer Stock. Fair market value per share of Employer Stock on any given date is defined
March 4, 2016 | Foodservice Plan |
15 of 19
for Plan purposes as the value, as determined by the Administrator, at which shares were traded on that date in representative trades reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on The New York Stock Exchange on such date or, if no Employer Stock is traded on such date, the most recent date on which Employer Stock was traded. To the extent that Employer Stock includes ParentCo Stock, the fair market value per share of ParentCo Stock on any given date is defined for Plan purposes as the value, as determined by the Administrator, at which shares were traded on that date in representative trades reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on The New York Stock Exchange on such date or, if no ParentCo Stock is traded on such date, the most recent date on which ParentCo Stock was traded.
Section 8.3 No Stockholder Rights .
Participants shall have no rights as a stockholder pertaining to Employer Stock units credited to their Program A Accounts. No Employer Stock unit nor any right or interest of a Participant under the Plan in any Employer Stock unit may be assigned, encumbered, or transferred, except by will or the laws of descent and distribution. The rights of a Participant hereunder with respect to any Employer Stock unit are exercisable during the Participants lifetime only by the Participant or the Participants guardian or legal representative.
Section 8.4 Employer Stock Distributions .
Any shares of Employer Stock distributed to Participants under the Plan shall be subject to such stock transfer orders and other restrictions as the Administrator may deem advisable under the rules, regulations and other requirements of the Company, any stock exchange upon which Employer Stock is then listed and any applicable Federal, state or foreign securities law, and the Administrator may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1 Administration and Administrator Authority
The Administrator shall administer and interpret the Plan, and supervise preparation of Agreements, forms, and any amendments thereto. Interpretation of the Plan shall be within the sole discretion of the Administrator and shall be final and binding upon each Participant and Beneficiary. The Administrator may adopt and modify rules and regulations relating to the Plan as it deems necessary or advisable for the administration of the Plan. If the Administrator shall also be a Participant or Beneficiary, any determinations affecting such persons participation in the Plan which would otherwise be made by the Administrator shall be made by the Board or its delegate for this purpose. If at any time the Administrator is not composed of at least two Non-Employee Directors within the meaning of Rule 16b-3, then all determinations affecting participation by persons subject to Section 16 of the Exchange Act shall be made by the Board. Headings are given to the sections of the Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any
March 4, 2016 | Foodservice Plan |
16 of 19
amendment to or successor of such provision of law. With regard to persons subject to Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successor under the Exchange Act. The Plan shall be construed so that transactions under the Plan will be exempt from Section 16 of the Exchange Act pursuant to regulations and interpretations issued from time to time by the Securities and Exchange Commission.
Section 9.2 General Creditor Status, No Assignment and Exercise of Rights .
The right of the Participant or the Participants Beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company or any Employer and neither the Participant nor any Beneficiary shall have any rights in or against any amount credited to the Participants Account or any other specific assets of the Company or any Employer. The right of a Participant or Beneficiary to the payment of benefits under this Plan shall not be assigned, encumbered, or transferred, except by will or the laws of descent and distribution. The rights of a Participant hereunder are exercisable during the Participants lifetime only by the Participant or the Participants guardian or legal representative.
Section 9.3 Unfunded Plan .
This Plan is unfunded and is maintained by Employers primarily for the purpose of providing deferred compensation for non-employee directors of the Company and a select group of management and highly compensated employees. Nothing contained in this Plan and no action taken pursuant to its terms shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company or any Employer and any Participant or Beneficiary, or any other person. The Employers may authorize the creation of one or more trusts or other arrangements to assist the Employers in meeting the obligations created under the Plan. Any liability to any person with respect to the Plan shall be based solely upon any contractual obligations that may be created pursuant to the Plan. No obligation of an Employer hereunder shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company or any Employer.
Section 9.4 Payment and Withholding of Taxes .
No later than the date as of which an amount first becomes includible in the gross income of the Participant for Federal income tax purposes with respect to any participation under the Plan, the Participant shall pay to the Employer, or make arrangements satisfactory to the Employer regarding the payment of, any Federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount.
Section 9.5 Amendment and Termination .
There shall be no time limit on the duration of the Plan. The Board may, at any time, amend or terminate the Plan without the consent of the Participants or Beneficiaries, provided, however, that no amendment or termination may reduce any Account balance accrued on behalf of a Participant based on deferrals already made, or divest any Participant of rights to which such Participant would have been entitled if the Plan had been terminated immediately prior to the effective date of such amendment. This Section shall not, however, restrict the right of the
March 4, 2016 | Foodservice Plan |
17 of 19
Board to cause all Accounts to be distributed in the event of Plan termination, provided all Participants and Beneficiaries are treated in a uniform and nondiscriminatory manner in such event.
Section 9.6 Initial Approval .
The restated Plan will become effective on March 4, 2016. Any shares of Manitowoc Foodservice Stock to be issued under the Plan shall be issued under the Manitowoc Foodservice 2016 Omnibus Incentive Plan or a successor equity plan of the Company.
Section 9.7 Administrative Costs .
Costs of establishing and administering the Plan will be paid by the Employers in such proportion as determined by the Administrator.
Section 9.8 Limitations on Compensation Under the Plan .
Compensation and Employer Contributions credited to an Account hereunder shall not be considered compensation for the purpose of computing benefits under any qualified retirement plan maintained by an Employer, but shall be considered compensation for welfare benefit plans, such as life and disability insurance programs sponsored by the Employers.
Section 9.9 Severability .
If any of the provisions of the Plan shall be held to be invalid, or shall be determined to be inconsistent with the purpose of the Plan, the remainder of the Plan shall not be affected thereby.
Section 9.10 Binding Effect .
This Plan shall be binding upon and inure to the benefit of the Company and each Employer, their successors and assigns and the Participants and their heirs, executors, administrators, and legal representatives.
Section 9.11 Applicable Law .
This Plan shall be construed in accordance with and governed by the law of the State of Wisconsin to the extent not preempted by federal law.
Section 9.21 409A Compliance .
Notwithstanding anything to the contrary in this Plan document or any accompanying forms or related material, the Plan is, with respect to Non-Grandfathered Benefits, designed and intended to operate in compliance with the requirements set forth in Internal Revenue Code § 409A and any regulations or guidance issued thereunder. Any provisions of this Plan document, or any related material which conflict with or would be deemed to violate Internal Revenue Code § 409A shall be deemed limited, as determined by the Board in order to comply with such requirements. Notwithstanding such intentions and provisions, nothing in this Plan or
March 4, 2016 | Foodservice Plan |
18 of 19
any related document is intended to provide individual Participants or Beneficiaries with any guaranty, warranty or assurance of particular tax treatment for benefits hereunder.
IN WITNESS WHEREOF, and as evidence to the adoption of the foregoing Plan, the Company has caused the same to be executed by its duly authorized representative.
MANITOWOC FOODSERVICE, INC. | ||||
By: |
/s/ Daniel Glezer |
|||
Name: | Daniel Glezer | |||
Title: | Director of Talent, Compensation and Benefits | |||
Date: | March 4, 2016 |
March 4, 2016 | Foodservice Plan |
19 of 19
Exhibit 10.9
MANITOWOC FOODSERVICE
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
Amended and Restated Through March 4, 2016
Table of Contents
Page | ||||||
ARTICLE 1 |
PLAN PURPOSE | 1 | ||||
ARTICLE 2 |
DEFINITIONS | 2 | ||||
ARTICLE 3 |
ANNUAL CONTRIBUTION CREDIT | 6 | ||||
ARTICLE 4 |
ACCOUNT BALANCE | 7 | ||||
ARTICLE 5 |
BENEFIT ELIGIBILITY AND PAYMENT | 8 | ||||
ARTICLE 6 |
GENERAL PROVISIONS | 11 |
March 4, 2016 | Foodservice SERP |
i
Manitowoc Foodservice
Supplemental Executive Retirement Plan
This Supplemental Executive Retirement Plan (this Plan) of Manitowoc Foodservice, Inc. (the Company) was formed as a result of a spin-off and transfer of the liabilities, effective January 1, 2016, from the Supplemental Executive Retirement Plan (the ParentCo Plan) of The Manitowoc Company, Inc. (ParentCo) attributable to the benefits accrued for Transferred Participants under the ParentCo Plan. This Plan is a continuation of and a successor plan to the ParentCo Plan solely with respect to such Transferred Participants. Effective as of the Split Date, the Transferred Participants shall cease to be participants in the ParentCo Plan and shall become participants under this Plan (Participants), and the terms of this Plan will govern the benefits accrued by Transferred Participants under the ParentCo Plan prior to the Split Date. Any election, waiver, consent, or designation made under the ParentCo Plan prior to the Split Date that was recognized as valid by the ParentCo Plan immediately prior to the Split Date will be recognized by this Plan as a valid election, waiver, consent, or designation, as applicable.
ARTICLE 1
Plan Purpose
The purpose of this Plan is to attract and retain Transferred Participants by supplementing their retirement income. No additional Participants will be added to the Plan.
This Plan is an unfunded target benefit plan. A target benefit plan is similar to a defined contribution plan. An annual contribution credit is calculated for each Participant as a level percent of pay. Such accumulated Annual Contribution Credit, accumulated at the Plans assumed rate of investment return, is expected to fund a life annuity in an amount equal to a target benefit payable as a life annuity under assumptions defined in this Plan. A Participants benefit is the Account Balance maintained for a Participant by the Company. Distributions from this Plan shall be processed as set forth in Article 5.
The Plan is hereby amended and restated to reflect the requirements of Code Section 409A as of January 1, 2005, the Companys good faith compliance with Code Section 409A
March 4, 2016 | Foodservice SERP |
1 of 14
between October 3, 2004 and December 31, 2008 and other interim Plan amendments. All benefits that were earned and vested on or before December 31, 2004 are grandfathered within the meaning of IRS Notice 2005-1 and any provision in this restated Plan document that would otherwise cause such grandfathered amounts to be materially modified at anytime after October 3, 2004 shall be deemed amended or deleted to the extent necessary to ensure that those amounts do not become subject to Code Section 409A.
Effective January 1, 2016, the Plan was bifurcated and split into two separate Plans, this Plan and a corresponding Plan adopted by The Manitowoc Company, Inc. This Plan is intended for individuals who first provide services to the Company on or after January 1, 2016 and individuals who both (1) participated in the Plan before January 1, 2016; and (2) whose account balance under The Manitowoc Company, Inc. 401(k) Retirement Plan was transferred (or whose account balance would have been transferred if such an account existed) to the Manitowoc FSG U.S. Holding, LLC 401(k) Retirement Plan on or about January 1, 2016. Other individuals who provide services to The Manitowoc Company, Inc. will not participate in this Plan on and after January 1, 2016.
ARTICLE 2
Definitions
2.1. | Account Balance is an account maintained for each Participant which reflects the accumulation of the Annual Contribution Credits and the Investment Credits earned under the Plan. |
2.2. | Actuarial Equivalent shall mean a single payment or a series of payments that have the same value as another single payment or series of payments. For purposes of this Plan, any Actuarial Equivalence for payments made shall reflect a 9.0% interest rate and life annuity values shall reflect mortality based upon the 1994 Uninsured Pensioners Mortality Table. |
2.3. | Actuary is an enrolled actuary hired by the Plan Administrator to calculate the Annual Contribution Credit under the Plan. |
2.4. | Administrator shall mean the Plans administrator, as defined in Article 6. |
March 4, 2016 | Foodservice SERP |
2 of 14
2.5. | Annual Contribution Credit is the amount calculated under Article 3 and credited to each Participants Account Balance. |
2.6. | Board refers to the Board of Directors of Manitowoc Foodservice, Inc. |
2.7. | Change in Control means: (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) of the ownership of 25% or more of either (i) the then outstanding shares of common stock of the Company or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; (b) a change in the majority of the Board; or (d) a major corporate transaction, such as a merger, sale of substantially all of the Companys assets or a liquidation, which results in a change in the majority of the Board or a majority of stockholders. For Non-Grandfathered Accounts, a Change of Control means the first event that would be a Change of Control under the preceding definition and which would also satisfy the requirements of Code Section 409A(a)(2)(A)(v). The separation of The Manitowoc Company, Inc.s Cranes and Foodservice businesses is not a Change in Control for purposes of this Plan. |
2.8. | Code means the Internal Revenue Code of 1986, as interpreted by regulations and rulings issued pursuant thereto, all as amended and in effect from time to time. |
2.9. | Company shall mean Manitowoc Foodservice, Inc. and its successors. For the period between January 1, 2016 and the effective date that this section was amended on or about March 4, 2016, Company referred to Manitowoc FSG U.S. Holding, LLC and its parent organization, The Manitowoc Company, Inc. For any period prior to January 1, 2016, Company refers to The Manitowoc Company, Inc. Manitowoc Foodservice, Inc. is a successor to FSG U.S. Holdings, LLC, which was a successor to The Manitowoc Company, Inc. |
2.10. |
Compensation shall mean, for any Plan Year, a Participants regular base salary established by the Company as of December 31 (including elective deferrals that are excluded from gross income and are payable to a plan described in Section 401(k) or |
March 4, 2016 | Foodservice SERP |
3 of 14
Section 125 of the Internal Revenue Code) plus actual bonus awards earned for the Plan Year. Compensation shall not include commissions, the value of fringe benefits and other special awards or payments. Compensation shall be determined taking into account the Participants base salary and actual bonus awards from ParentCo that were considered Compensation under the terms of the ParentCo Plan prior to the Split Date, as well as Compensation from the Company and its affiliates. |
2.11. | Final Average Compensation Target shall mean the average of the Participants projected Compensation for the five consecutive calendar year period when the Participant receives or is projected to receive his highest average Compensation prior to the Participants Target Retirement Date. Projected Compensation will be determined by increasing the current Compensation for each year in the future by 6.0%, compounded annually, until the Plan Year preceding the Participants Target Retirement Date. To the extent that a Participant works past his Target Retirement Date, his Final Average Compensation Target will continue to be adjusted for increases in Compensation after the Target Retirement Date. |
2.12. | Grandfathered Account refers to all or any part of a Participants Account Balance that was earned and fully vested as of December 31, 2004, calculated based upon the terms of the Plan in effect on October 3, 2004. If, at any time, this Plan, any agreement, any form or any other administrative policy is amended or interpreted to cause a material modification that would cause a Grandfathered Account to be subject to Code Section 409A, such amendment, interpretation or change shall be deemed amended or modified to the extent that no Grandfathered Amount will be subject to Code Section 409A. If necessary to avoid the application of Code Section 409A or to provide guidance as the result of the application of the preceding provisions, the terms of the Plan, as in effect on October 3, 2004, shall apply to all Grandfathered Accounts. |
2.13. | Investment Credit is the annual increase in a Participants Account Balance on December 31 equal to 9.0% of the Account Balance as of January 1 of the same Plan Year. |
March 4, 2016 | Foodservice SERP |
4 of 14
2.14. | Non-Grandfathered Account refers to all or any part of a Participants Account Balance that was not earned and fully vested as of December 31, 2004, according to the terms of the Plan in effect on October 3, 2004. Non-Grandfathered Accounts are subject to Code Section 409A and the provisions of this Plan shall be interpreted and applied with the intent to ensure that no benefits are subject to taxation before the date when such benefits are paid to a Participant or Beneficiary. Nothing in this Plan, any agreement, any form or related document shall be construed or interpreted as a guarantee of any particular tax consequences. |
2.15. | Normal Retirement Date is the first day of the month following age 65. |
2.16. | Plan means this Manitowoc Foodservice Supplemental Executive Retirement Plan. Prior to January 1, 2016, the Plan was known as The Manitowoc Company, Inc. Supplemental Executive Retirement Plan. |
2.17. | Plan Year shall be the calendar year. |
2.18. | Substantial Employment Change shall mean following a Change in Control: (a) a Participants employment is terminated without cause; (b) a negative, fundamental or material change is made in a Participants duties or responsibilities; (c) a Participants salary or other material compensation or benefits are reduced and such decrease is not related to Company or individual performance; (d) a Participant is required to materially relocate his or her residence or principal office location against his or her will; or (e) a Participant is not offered a comparable position with a successor entity. |
2.19. |
Target Retirement Benefit is fifty-five percent (55%) of a Participants Final Average Compensation Target. For any executive who becomes a Participant after December 31, 2008 and whose projected total service at his Target Retirement Date is less than 25 years, his Target Retirement Benefit will be 55% of the Participants Final Average Compensation Target times the Participants projected total service with the Company at his Target Retirement Date divided by 25. If a Participant whose Target Retirement Benefit was reduced under the preceding provision works past his Target Retirement Date, then his Target Retirement Benefit will be 55% of the Participants Final Average |
March 4, 2016 | Foodservice SERP |
5 of 14
Compensation Target times the Participants actual years of service with the Company, not to exceed a total of 25 actual and projected years, divided by 25. Total service is all service as an employee of the Company and will be based upon complete months and years of projected or actual service. If the Company adopts any other employer-provided defined benefit retirement plan, the actuarial equivalent of such benefit payable as a level life annuity will be subtracted from the Target Retirement Benefit. |
2.20. | Target Retirement Date is the earlier of the Normal Retirement Date and the first of the month following the date on which the Participants attained age plus years of service with the Company equals 80. Attained age and years of service will be calculated in years and complete months. |
2.21. | Transferred Participant is a Participant who was a participant in the ParentCo Plan immediately prior to the Split Date and who was an executive officer of the Company thereafter. |
ARTICLE 3
Annual Contribution Credit
3.1. | The Company shall have an Actuary calculate the Annual Contribution Credit in accordance with this Article 3. Such Annual Contribution Credit shall be credited to a Participants Account Balance as of December 31 of each Plan Year prior to the Participants Target Retirement Date, provided the Participant is an employee on December 31 of the Plan Year. |
3.2. | The Annual Contribution Credit shall be calculated at the end of each Plan Year as follows: |
(a) | Calculate the Target Retirement Benefit. |
(b) | Calculate the lump sum Actuarial Equivalent of the Target Benefit payable as a life annuity beginning at the Target Retirement Date. |
(c) | Calculate the present value of the lump sum Actuarial Equivalent to the Target Benefit for the Plan Year. |
March 4, 2016 | Foodservice SERP |
6 of 14
(d) | Calculate the Participants Account Balance as of December 31 of the Plan Year after the Account Balance has been increased by the 9.0% Investment Credit. |
(e) | The Annual Contribution Credit shall equal the annual amount required to fund the difference in (c) and (d) by the Target Retirement Date assuming the contribution increases 6.0% a year and earns 9.0% a year. In no event can the Annual Contribution Credit be less than zero. |
ARTICLE 4
Account Balance
The Administrator shall cause an Account Balance to be maintained for each Plan Participant. As of the Effective Date, the Administrator shall credit to each Transferred Participants Account Balance an opening balance equal to the total amount credited to such Transferred Participants Account Balance under the ParentCo Plan as of immediately prior to the Effective Date. On December 31 of each Plan Year, the Account Balance at the beginning of the Plan Year will be increased by a 9.0% interest credit. Following the Investment Credit the Account Balance will be credited with the Annual Contribution Credit calculated for a Participant. No Annual Contribution Credit will be provided if the Participant has reached his or her Target Retirement Date. However, the Account Balance will continue to be increased annually by the 9.0% Investment Credit. In addition, the Account Balance will be reviewed periodically after the Target Retirement Date to ensure that the Account Balance is not less than the Actuarial Equivalent of the Target Retirement Benefit reflecting changes in Compensation and actual service. If after the Target Retirement Date the Account Balance is less than the Actuarial Equivalent of the Target Retirement Benefit the Administrator will notify the Compensation Committee of the Board (the Compensation Committee) of the shortfall and credit the Participants Account Balance annually with the entire amount of such shortfall until the Account Balance is at least Actuarially Equivalent to the Target Benefit.
March 4, 2016 | Foodservice SERP |
7 of 14
ARTICLE 5
Benefit Eligibility and Payment
5.1. | Voluntary Termination of Employment or Retirement . If a Participant terminates employment or retires from the Company, the Participant is eligible to receive his Account Balance. |
5.2. | Death . A Participants spouse will be the designated beneficiary under this Plan. If the Participant is not married, the Participant may designate anyone else as his or her designated beneficiary. Such designated beneficiary will be entitled to receive as a death benefit the Participants Account Balance. |
5.3. | Disability . If a Participant shall become permanently and totally disabled the Participant will be eligible to receive his Account Balance. For Non-Grandfathered Accounts, a disability will only include a situation that would allow a distribution under Code Section 409A(a)(2)(A)(ii). Code Sections 409A(a)(2)(A)(ii) and 409A(a)(2)(C) provide that a Participant shall be considered disabled only when he or she: (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Employer. Except as noted above with respect to Non-Grandfathered Accounts, the Administrator will have the authority to determine if the Participant is totally and permanently disabled. The Administrator shall have the right to request any information the Administrator deems necessary so as to determine if the if Participant is permanently and totally disabled. The Participant must submit the information requested by the Administrator in order to be eligible for a distribution. |
5.4. | Payment of Benefits. |
(a) | If the Participant or the designated survivor of a Participant is entitled to a Grandfathered Account, it shall be paid in a single lump sum within 60 days following termination of employment, death or disability. |
March 4, 2016 | Foodservice SERP |
8 of 14
(b) | With respect to Non-Grandfathered Accounts: (i) a distribution shall be made (or commence, in the case of amounts as to which installments have been elected in accordance with Section 5.4(c)) as a result of a termination of employment or service within 60 days of such termination if such termination is also a separation from service within the meaning of Code Section 409A(2)(a)(1) (Separation); provided that (ii) to the extent that the Participant is a key employee, as defined in Code Section 416(i), a distribution from any Non-Grandfathered Account that is made as a result of a Separation may not commence until at least 6 months after such Separation. Distributions following death or disability will be made in a single lump sum within 60 days. |
(c) | In lieu of a single payment the Participant may elect to receive his Account Balance over a fixed number of years not to exceed 10 years. To the extent that all or any portion of a Participants Account Balance is paid in installments, each payment will equal the Account Balance divided by the remaining number of years elected for payment. During this payout period the Account Balance will continue to be credited with a 9.0% Investment Credit for each year adjusting for the timing of the payments made. |
(i) | With respect to Grandfathered Accounts, a Participant may make such an election at any time prior to the first day of the calendar year when payments commence. |
(ii) | With respect to Non-Grandfathered Accounts, a Participant shall receive his Non-Grandfathered Accounts in a lump sum except to the extent that, prior to the first day of the calendar year in which the services to which any portion of such Non-Grandfathered Accounts relate were provided, the Participant made an irrevocable election to receive such portion over a fixed number of years not to exceed 10 years. |
March 4, 2016 | Foodservice SERP |
9 of 14
5.5. | Change in Control . If a Participant experiences a Substantial Employment Change following a Change in Control, the Participants Account Balance will be immediately increased so that the Account Balance is not less than the lump sum Actuarial Equivalent of the present value of the Target Retirement Benefit. The Participant will receive a distribution of his or her revised Account Balance upon termination, death or disability on the same basis as any other Participant. |
5.6. | Termination for Cause . Notwithstanding anything in this Plan to the contrary, if the Company terminates a Participants employment for Cause, then the Company shall have no obligation to such Participant or his or her spouse pursuant to this Plan, and no payments of any kind shall thereafter be made by the Company to the Participant hereunder. |
For purposes of the foregoing, Cause means:
(a) | any act or acts of the Participant constituting a felony (or its equivalent) under the laws of the United States, any state thereof or any foreign jurisdiction; |
(b) | any material breach, as determined by the Company, by the Participant of any employment agreement with the Company or the policies of the Company or any of its subsidiaries or the willful and persistent (after written notice to the Participant) failure or refusal, as determined by the Company, of the Participant to perform his duties or employment or comply with any lawful directives of the Board. |
(c) | Conduct which the Company determines amounts to gross neglect, willful misconduct or dishonesty; or |
(d) | Any misappropriation of material property of the Company by the Participant or any misappropriation of a corporate or business opportunity of the Company by the Participant, all as determined by the Company. |
March 4, 2016 | Foodservice SERP |
10 of 14
ARTICLE 6
General Provisions
6.1. | Administration . The Administrator of the Plan shall be the Company, which shall be the named fiduciary responsible for the administration of the Plan. The Vice President Employee of Human Resources of The Manitowoc Company, Inc. or his delegate shall perform the responsibilities for the Administrator. All decisions and determinations made by the Administrator, the Compensation Committee or their delegates pursuant to their duties and powers described in the Plan shall be conclusive and binding upon all parties, The Administrator, the Compensation Committee and their delegates shall have sole discretion in carrying out their responsibilities. Notwithstanding anything to the contrary herein, the Compensation Committee shall have responsibility for making decisions regarding the compensation of executive officers of the Company to the extent contemplated by its charter or required by applicable regulations. |
6.2. | Claims. |
(a) | A Participant or the designated survivor of a Participant shall make an application for benefits to the Administrator. |
(b) | In the event that the Administrator denies, in whole or part, a claim for benefits by a Participant or his designated survivor, the Administrator shall furnish notice of the denial to the claimant, setting forth: |
(1) | the specific reasons for the denial, |
(2) | specific reference to the pertinent Plan provisions on which the denial is based, |
(3) | a description of any additional information necessary for the claimant to perfect the claim and an explanation of why such information is necessary, and |
(4) | appropriate information as to the steps to be taken if the claimant wishes to submit his claim for review. |
March 4, 2016 | Foodservice SERP |
11 of 14
Such notice shall be forwarded to the claimant within 90 days of the Administrators receipt of the claim; provided, however, that in special circumstances the Administrator may extend the response period for up to an additional 90 days, in which event it shall notify the claimant in writing of the extension and shall specify the reason or reasons for the extension.
6.3. | Payment to Guardian . If an amount is payable under this Plan to a minor or a person declared incompetent or to a person incapable of handling the disposition of property, the Administrator may direct payment of such amount to the guardian, legal representative or person having the care and custody of such minor or incompetent person. The Administrator may require proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to the distribution of the amount. Such distribution shall completely discharge the Company from all liability with respect to such amount. |
6.4. | Withholding, Payroll Taxes . A Company shall withhold from payments made under the Plan any taxes required to be withheld from a Participants wages for the federal or any state or local government. |
6.5. | Source of Funds . This Plan shall be unfunded, and payment of benefits hereunder shall be made from the general assets of the Company. Any such asset that may be set aside, earmarked or identified as being intended for the provision of benefits hereunder shall remain an asset of the Company and shall be subject to the claims of its general creditors. Each Participant shall be a general creditor of the Company to the extent of the value of his benefit accrued hereunder, but he shall have no right, title, or interest in any specific asset that the Company may set aside or designate as intended to be applied to the payment of benefits under this Plan. The Companys obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future. |
6.6. |
Nonalienation of Benefits . Except as hereinafter provided with respect to marital disputes, none of the benefits or rights of a Participant or any beneficiary of a Participant shall be subject to the claim of any creditor, and in particular, to the fullest extent permitted by law, all such benefits and rights shall be free from attachment, garnishment |
March 4, 2016 | Foodservice SERP |
12 of 14
or any other legal or equitable process available to any creditor of the Participant and the beneficiary. Neither the Participant nor the beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber, or assign any of the benefit or payments which he may expect to receive, contingency or otherwise, under this Plan, except insofar as the form in which benefits are paid under Article 4 involves the Participants designation of a beneficiary to received payments after the Participants death. In cases of marital dispute, the Administrator will observe the terms of the Plan unless and until ordered to do otherwise by a state or federal court. As a condition of participation, a Participant agrees to hold the Company harmless from any harm that arises out of the Companys obeying the final order of any state or federal court, whether such order effects a judgment of such court or is issued to enforce a judgment or order of another court. |
6.7. | Amendment and Termination. |
(a) | The Company reserves the right to amend this Plan at any time and from time to time in any fashion and to terminate it at will, by or pursuant to action of the Board or other governing body. The Company reserves the right to terminate its participation in this Plan at any time, by or pursuant to action of its Board or other governing body. |
(b) | No amendment or termination of the Plan shall (without the Participants or beneficiarys consent) alter the Participants right to monthly payments that have commenced prior to the effective date of such termination or amendment. The Company specifically reserves the right to terminate or amend this Plan to eliminate the right of any Participant to receive payment hereunder prior to the time when payments are in pay status under this Plan. Notwithstanding the above, if the Company is liquidated, the Administrator shall have the right to determine any amounts payable to a Participant or a beneficiary and to cause the amount so determined to be paid in one or more installments or upon such other terms and conditions and at such other time as the Administrator determines to be just and equitable. |
6.8. | No Contract of Employment . Nothing contained herein shall be construed as conferring upon any person the right to be employed or continue in the employ of the Company. |
March 4, 2016 | Foodservice SERP |
13 of 14
6.9. | Applicable Law . The provisions of this Plan shall be construed and interpreted according to the laws of the State of Delaware. |
6.10. | Successors . The provisions of this Plan shall bind and inure to the benefit of each Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity |
6.11. | 409A Compliance . To the extent applicable, the Company intends that this Plan and any payments or benefits due hereunder comply with the provisions of Code Section 409A. This Plan shall be administered by the Company in a manner consistent with this intent, and any provision that would cause this Plan to fail to satisfy Code Section 409A shall have no force or effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by Code Section 409A). |
IN WITNESS WHEREOF, and as evidence to the adoption of the foregoing Plan, the Company has caused the same to be executed by its duly authorized representative.
MANITOWOC FOODSERVICE, INC. | ||
By: |
/s/ Daniel Glezer |
|
Name: | Daniel Glezer | |
Title: | Director of Talent, Compensation and Benefits | |
Date: | March 4, 2016 |
March 4, 2016 | Foodservice SERP |
14 of 14
Supplemental Executive Retirement Plan
For Manitowoc Foodservice Employees
Appendix A
As of March 4, 2016, the following employees and former employees are Participants in the Supplemental Executive Retirement Plan for Manitowoc Foodservice Employees
Maurice Jones
March 4, 2016 | Foodservice SERP |
Exhibit 10.10
M ANITOWOC F OODSERVICE
S EVERANCE P AY P LAN
M ANITOWOC F OODSERVICE
S EVERANCE P AY P LAN
TABLE OF CONTENTS
Introduction |
1 | |||
This document sets forth the terms of the Manitowoc Foodservice Severance Pay Plan as it applies to individuals employed in the United States. You should review this document carefully so that you will better understand your rights and benefits under the Plan. |
||||
Terms and Conditions |
2 | |||
This document uses a number of specific legal terms when defining your rights under the Plan. Whenever a word begins with a capital letter, you should assume that the word has a specific legal meaning and that the word is defined somewhere in this document. This section defines many of the key terms and conditions that are necessary to your understanding of the Plan. |
||||
Severance Benefits |
4 | |||
The Plan will provide selected Eligible Employees with severance benefits that are designed to meet the specific facts and circumstances of each such termination. Severance benefits do not need to be uniform and no Employee shall have any right to any benefits or to any form of benefits except to the extent provided in a valid written severance offer from an authorized representative of Manitowoc and, if applicable, subject to the terms of a required Release Agreement. |
||||
Application for Benefits |
6 | |||
In order to receive your benefits, you must file an application for such benefits with the Plan Administrator. This section describes the application process and your right to have a decision regarding your benefits reviewed. |
||||
Miscellaneous Information |
8 | |||
The following information is important to your understanding of the Plan and is provided to further clarify how the Plan operates. |
||||
Legal Rights and Obligations |
12 | |||
This section describes your rights under the Employee Retirement Income Security Act of 1974 (as amended) (ERISA). |
||||
Plan Administration |
14 | |||
You may need to contact Manitowoc or the Plan Administrator if you have any questions regarding the Plan. The following information will help you to do this. |
This document sets forth the terms of the Manitowoc Foodservice Severance Pay Plan as it applies to individuals employed in the United States. You should review this document carefully so that you will better understand your rights and benefits under the Plan.
Manitowoc Foodservice, Inc. (Manitowoc) has adopted the Manitowoc Foodservice Severance Pay Plan (the Plan), as set forth herein. The Plan is designed to help employees of Manitowoc and Related Employers to understand how severance benefits are determined and administered. No employee is guaranteed to receive any benefits under this Plan.
The Plan is an unfunded welfare benefit plan for purposes of ERISA and a severance pay plan within the meaning of United States Department of Labor regulations Section 2510.3-2(b). The Plan is also intended to be exempt from the application of Code Section 409A.
This booklet serves as both the Plan document and summary plan description effective as of March 4, 2016. This booklet supersedes any prior version of the Plan and the Plan itself supersedes any other severance plan, program, policy or other similar arrangement, whether formal or informal, if any, previously maintained by Manitowoc or any other Related Employer. To the extent that any provision in this booklet is ambiguous or to the extent that it is unclear how the terms should apply in a specific situation, then Manitowoc has the sole discretionary authority to interpret and apply this Plan.
This booklet is not intended to provide you with tax or legal advice regarding your benefits under the Plan.
1
This document uses a number of specific legal terms when defining your rights under the Plan. Whenever a word begins with a capital letter, you should assume that the word has a specific legal meaning and that the word is defined somewhere in this document. This section defines many of the key terms and conditions that are necessary to your understanding of the Plan.
Unless a different meaning is clearly required by the context, the following words, when used in this Plan, shall have the meaning(s) set forth below.
(a) Code . The Code refers to the Internal Revenue Code of 1986, as amended from time to time, and as interpreted by applicable regulations and rulings.
(b) Eligible Employees . The Plan is available only to employees of Manitowoc and other Related Employers. An employee who is covered under a collective bargaining agreement is not eligible to receive any benefits under this Plan.
(c) ERISA . The Employee Retirement Income Security Act of 1974, as amended from time to time, and as interpreted by applicable regulations and rulings.
(d) Manitowoc . Manitowoc refers to Manitowoc Foodservice, Inc. and any successor thereto. Any action or authority designated to Manitowoc under this Plan may be exercised by Manitowocs Board of Directors or any delegate or designee of the Board of Directors.
(e) Participant . A Participant shall refer only to an Eligible Employee who is entitled to receive severance benefits in accordance with a written communication from an authorized representative of Manitowoc. That written communication will describe all benefits that will be provided for an individual Participant in this Plan. Eligible Employees may also be required to execute a valid Release Agreement in order to become a Participant in the Plan and receive severance benefits under the Plan.
(g) Plan . The Manitowoc Foodservice Severance Pay Plan, as stated herein and as amended from time to time.
(h) Plan Administrator . Manitowoc serves as the Plan Administrator and shall be the named fiduciary that controls and manages the operation and administration of the Plan.
(i) Plan Year . The calendar year.
(j) Related Employer . Any entity that is related to Manitowoc (as determined under Code Sections 414(b), (c) or (m)) which, consistent with written authorization of Manitowocs Board of Directors or its express delegate(s), has adopted this Plan. As of the date of this Plan
2
document, the following entities are Related Employers under this Plan: All Manitowoc subsidiaries with employees in the United States. By its adoption of this Plan, a Related Employer shall be deemed to appoint Manitowoc as its exclusive agent to exercise on its behalf all power and authority conferred under this Plan. Manitowocs authority to act as such agent shall continue until this Plan is terminated by Manitowoc or as to that respective Related Employer.
(k) Release Agreement . A written agreement prepared by an authorized representative of Manitowoc which sets forth the specific severance benefits offered to the Eligible Employee and requires a release of any claims that the Eligible Employee might have against Manitowoc and/or any Related Employer(s) and employees, agents and officers of Manitowoc and all Related Employers and other similarly situated individuals. When preparing a Release Agreement, Manitowoc shall act in its capacity as an employer and not in any fiduciary capacity under ERISA. Manitowoc need not use the same Release Agreement for each Eligible Employee.
3
SEVERANCE BENEFITS
The Plan will provide selected Eligible Employees with severance benefits that are designed to meet the specific facts and circumstances of each such termination. Severance benefits do not need to be uniform and no Employee shall have any right to any benefits or to any form of benefits except to the extent provided in a valid written severance offer from an authorized representative of Manitowoc and, if applicable, subject to the terms of a required Release Agreement.
SEVERANCE BENEFITS
All severance benefits under this Plan are provided at Manitowocs sole discretion and need not be uniform among all employees. In deciding whether to offer any benefits under this Plan, Manitowoc shall act in its capacity as an employer, and not in any fiduciary capacity under ERISA. No employee of Manitowoc or any Related Employer shall receive any severance, termination or other similar benefits unless offered under this Plan.
Notwithstanding the fact that this Plan does not offer or guarantee any specific benefits for any Eligible Employee, Manitowoc will generally consider two different types of severance benefits: (a) taxable Severance Pay; and (b) Reimbursement of COBRA Expenses. The Board of Directors and the Compensation Committee of Manitowoc have the exclusive authority to authorize severance benefits for elected officers of Manitowoc. The Board of Directors and the Compensation Committee have also granted both the Chief Executive Officer and the Senior Vice President of Human Resources and Administration of Manitowoc the power to individually authorize Plan benefits to other employees of Manitowoc and each Related Employer. No one other than the Board of Directors or the Compensation Committee of Manitowoc, or the individuals designated above shall have any authority to offer or authorize any severance benefits to any employee of Manitowoc or any Related Employer.
(a) Severance Pay . Manitowoc may agree to provide cash severance payments to a Participant in either a single lump-sum or in a series of ongoing payments. Ongoing payments may be limited such that they will end or be reduced to the extent that a Participant secures alternative employment. The Plan Administrator shall be responsible for determining whether Manitowoc has agreed to provide an Eligible Employee with such benefits and determining whether a Participant continues to be eligible to receive any ongoing benefits under that arrangement. Without limiting its discretion not to pay any severance hereunder, in accordance with the Employee Matters Agreement between Manitowoc and The Manitowoc Company, Inc., to the extent Manitowoc agrees to provide any cash severance payments to U.S. Transferred Employees (as defined in the Employee Matters Agreement), it will credit such U.S. Transferred Employees with their service with The Manitowoc Company, Inc. and its affiliates prior to the Manitowoc Foodservice Employment Date (as defined in the Employee Matters Agreement).
4
(b) Reimbursement of COBRA Expenses . Manitowoc may also agree to reimburse a Participant for some or all of his or her COBRA Expenses for a specified period of time. In order to be eligible for the Reimbursement of COBRA Expenses, the Participant must execute a valid election pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) within the applicable time requirements. The Participant must submit proof of COBRA expenditures to the Plan Administrator, and the Plan Administrator shall issue appropriate reimbursements in a timely manner. Reimbursements for COBRA Expenses may be provided for any period of time and need not be tied to the length or duration of severance benefits noted above.
(c) Additional Benefits or Perquisites . Manitowoc shall have the authority to provide additional or alternative benefits in addition to or in lieu of the Severance Pay and/or Reimbursement of COBRA Expenses referenced above.
Manitowoc intends for the payments under this Agreement to be exempt from the application of Code Sections 409A and 280G, but does not guarantee any specific tax results for any individual employee. With the preceding intent in mind, Manitowoc shall not knowingly provide any benefit under this Plan unless such benefit, when considered together with all other compensation and benefits, qualifies for one or more of the exemptions set forth in Treasury Regulation Sections 1.409A-1(b)(4) (short-term deferrals), 1.409A-1(b)(5) (stock and equity-based compensation exclusions), 1.409A-1(b)(9) (separation pay plans) and/or 1.409A-1(b)(10) (legal settlements). Similarly, Manitowoc shall not knowingly provide any benefit under this Plan unless, when considered together with all other compensation and benefits, such benefits will not constitute excess parachute payments under Code Section 280G.
WAIVER AND RELEASE
Some or all of any benefits provided under this Plan may be conditioned upon the Participants execution of a valid and binding Release Agreement. If Manitowoc does require a Release Agreement and that Release Agreement allows the Participant to revoke his or her release after it has been signed, then all benefits that have been conditioned upon the execution of that Release Agreement shall be deferred until after that revocation period has expired, and such benefits will be conditioned upon the individual not revoking that Release Agreement.
PAYMENT
Severance benefits will be paid in accordance with such schedule as Manitowoc establishes at the time that severance benefits are offered under this Plan. All legally required taxes and any sums owing to Manitowoc or any other Related Employer shall be deducted from the severance benefits otherwise paid under this Plan.
5
In order to receive your benefits, you must file an application for such benefits with the Plan Administrator. This section describes the application process and your right to have a decision regarding your benefits reviewed.
FILING AN APPLICATION
If you (or your beneficiary) believe that you are entitled to a benefit under the Plan, you should submit an application for benefits (a claim) to the Plan Administrator. Your application should be in writing, and may be required to be on a form provided by the Plan Administrator.
DECISION ON APPLICATION
Unless special circumstances exist, the Plan Administrator will process an application within ninety (90) days after the application is filed. Within that ninety- (90-) day period, you should receive either a notice of the decision or a notice that: (a) explains the special circumstances which are causing the delay; and (b) sets a date, no later than one hundred and eighty (180) days after the Administrator received your application, by which the Administrator expects to render the final decision.
LACK OF NOTICE
If you do not receive a notice within the time described above, you can assume that your claim has been denied, and you may file a request for appeal as described below.
DENIAL OF CLAIM
If the Plan Administrator partially or wholly denies your application for benefits, you will receive a written notice which will include: (a) the specific reason or reasons for the denial; (b) specific references to pertinent provisions of the Plan document on which the denial is based; (c) a description of any additional material or information which you must provide to prove your claim, and an explanation of why that material or information is needed; and (d) the steps you must take to appeal the denial of your claim. You may file a request for appeal as described below.
6
RIGHT TO APPEAL A DENIED CLAIM
You or your duly authorized representative may file a written appeal of the denial with the Plan Administrator no later than sixty (60) days after you receive the notice that your claim has been partially or wholly denied. You may include any issues, comments, statements or documents that you wish to provide with your written appeal. You or your duly authorized representative may review all pertinent Plan documents when preparing your request.
FINAL DECISION ON APPEALED CLAIM
In most instances, the Plan Administrator will issue a final decision on an appeal within sixty (60) days after the Plan Administrator receives the appeal request. If the Plan Administrator is unable to process your appeal within sixty (60) days, you will receive an extension notice before the sixty- (60-) day period expires. The extension notice will include: (a) the special circumstances (such as the need to hold a hearing) which are causing the delay; and (b) the date, no later than one hundred and twenty (120) days after the date the Plan Administrator received your written appeal, by which the Administrator expects to render the final decision. The Plan Administrators decision will explain the reasons for the decision and will refer to the provisions of the Plan document on which the decision is based. If you do not receive a notice within the time periods described in this paragraph, you may assume that your appeal has been denied on review. If you do not follow the claim application and appeal procedures set forth in this section, you will be precluded from later bringing any action, in either state or federal court or any other forum, for benefits under this Plan.
7
The following information is important to your understanding of the Plan and is provided to further clarify how the Plan operates.
PLAN ADMINISTRATOR
Manitowoc has the exclusive right to serve as the Plan Administrator or to appoint another individual, entity, or group of individuals or entities to serve as the Plan Administrator. Any person or entity appointed to serve in lieu of Manitowoc may resign at any time by filing a written notice of resignation with Manitowoc and may be removed at any time by Manitowoc.
The Plan Administrator shall administer the Plan in accordance with its terms and shall have all powers necessary to effectuate the provisions of the Plan. The Plan Administrator shall have the exclusive right to interpret the Plan, shall determine all questions arising in the administration, interpretation and application of the Plan documents, to resolve ambiguities, inconsistencies and omissions related thereto, and shall, from time to time, formulate and issue such rules and regulations as may be necessary for the purpose of administering the Plan. Any interpretation, determination, rule or regulation issued by the Plan Administrator shall be conclusive and binding on all persons. In any review of such an interpretation, determination, rule or regulation, the Plan Administrators decision shall be given deference and shall be set aside by a reviewing tribunal only in the event the Plan Administrator acted in an arbitrary and capricious manner.
The Plan Administrator and all fiduciaries of this Plan shall discharge their duties with respect to the Plan solely in the interest of the Eligible Employees, for the exclusive purpose of providing benefits to Eligible Employees and their beneficiaries and deferring reasonable expenses of administering the Plan with care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use and in accordance with the Plan documents and instruments, insofar as such documents and instruments are consistent with the provisions of ERISA and any acts amendatory thereto.
The Plan Administrator shall maintain accounts showing the fiscal transactions of the Plan and such books and records as may be necessary to comply with ERISA, governmental regulations issued thereunder and other applicable law. The Plan Administrator shall timely file or cause to be timely filed, all annual reports, financial and other statements as may be required of the Plan Administrator by any federal or state statute, agency or authority. The Plan Administrator shall timely furnish or cause to be furnished, all such reports, statements and other documents as may be required by any federal or state statute, agency or authority to be furnished by the Plan Administrator to any Eligible Employee, beneficiary or interested party.
The Plan Administrator shall have the authority to accept service of process on behalf of the Plan.
8
To the extent that a fiduciary may be relieved of liability under Section 410(a) of ERISA for a breach of any responsibility, obligation or duty imposed by Title 1, Part 4 of ERISA, no fiduciary shall be liable for any action or failure to act hereunder, except for bad faith, willful misconduct or gross negligence. To the extent that a fiduciary may be relieved of liability under Section 410(a) of ERISA for a breach of another fiduciary of any responsibility, obligation or duty imposed by Title 1, Part 4 of ERISA, no fiduciary shall be personally liable for a breach committed by any other fiduciary, unless the fiduciary: (a) knowingly participated in or knowingly concealed a breach by such other fiduciary; (b) by his failure to comply with his fiduciary duties, has enabled such other fiduciary to commit a breach; or (c) has failed to make reasonable efforts under the circumstances to remedy the breach of another fiduciary of which he has knowledge. To the same extent, no fiduciary shall be personally liable for the acts or omissions of any attorney or agent employed by a fiduciary hereunder, if such attorney or agent shall have been selected with reasonable care.
PLAN PERMANENCY
Manitowoc reserves the right to amend the Plan in every respect at any time, either before or after termination hereof, or from time to time (and retroactively if deemed necessary or appropriate to conform to governmental regulations or other policies). Manitowoc also reserves the right to terminate this Plan at any time. Any action to amend or terminate this Plan may be taken by Manitowocs Board of Directors or its express delegate(s).
LIMITATION ON LIABILITY
In no event shall the Plan Administrator or any employee, officer or director of the Plan Administrator incur any liability for any act or failure to act unless such act or failure to act constitutes a lack of good faith, willful misconduct or gross negligence with respect to the Plan.
COMPLIANCE WITH ERISA
Notwithstanding any other provisions of this Plan, a fiduciary or other person shall not be relieved of any responsibility or liability for any responsibility, obligation or duty imposed upon such person pursuant to ERISA.
NONALIENATION OF BENEFITS
Neither Eligible Employees nor Participants have any vested right to benefits under this Plan. Plan benefits shall not be subject to anticipation, alienation, pledge, sale, transfer, assignment, garnishment, attachment, execution, encumbrance, levy, lien or charge. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to Plan benefits shall be void, except to the extent required by law.
9
EMPLOYMENT NOT GUARANTEED
The establishment of this Plan, its amendments and the granting of a benefit pursuant to the Plan shall not give any individual the right to continued employment with Manitowoc or any Related Employer, or limit the right of Manitowoc or any Related Employer to dismiss or impose penalties upon the individual or modify the terms of employment of any individual.
ERRONEOUS OR EXCESSIVE PAYMENTS
In the event any payment is made under this Plan to any individual who is not entitled to such payment (whether such payment is made as the result of a mistake of fact or law), the individual shall return such erroneous or excessive payment(s). The Plan Administrator shall have the right to bring legal action to recover such amounts and/or reduce future payments due to such individual by the amount of any such erroneous or excessive payment(s). This provision shall not limit the rights of the Plan Administrator to recover such overpayments in any other manner.
CONTRARY REPRESENTATIONS
No employee, officer, or director of Manitowoc or any Related Employer has the authority to alter, vary, or modify the terms of the Plan except by means of an authorized written amendment to the Plan that is approved by Manitowocs Board of Directors or its express delegate(s). No verbal representations contrary to the terms of the Plan and its written amendments shall be binding upon the Plan, the Plan Administrator, Manitowoc or any Related Employer.
NO FUNDING
No individual shall acquire, by reason of this Plan, any right in or title to any assets, funds, or property of Manitowoc or any Related Employer. Any severance pay benefits that become payable under the Plan are unfunded obligations of Manitowoc and shall be paid from Manitowocs general assets. No employee, officer, director or agent of Manitowoc or any Related Employer guarantees in any manner the payment of benefits under this Plan.
APPLICABLE LAW
This Plan shall be governed and construed in accordance with ERISA and in the event that any references shall be made to state law, the internal laws of the State of Wisconsin shall apply.
10
OFFSET
The benefits payable under this Plan, if any, are the maximum amount made available to any employee of Manitowoc and each Related Employer due to an involuntary termination of employment. To the extent that a federal, state or local law may mandate that Manitowoc or a Related Employer make a payment to any individual due to his or her involuntary termination of employment, that individuals benefit(s) under this Plan, if any, shall be reduced by such amount.
SEVERABILITY
If any provision of the Plan is found, held, or deemed by a court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or other controlling law, the remainder of the Plan shall continue in full force and effect.
11
This section describes your rights under the Employee Retirement Income Security Act of 1974 (as amended) (ERISA).
Eligible Employees are entitled to certain rights and protections pursuant to the Employee Retirement Income Security Act of 1974 (ERISA). Each Employer and the Plan Administrator intends to operate the Plan fairly and to comply fully with ERISA. If you have a question about the Plan, how it is run and how it affects you, you should contact the Plan Administrator. ERISA provides that all Plan participants shall be entitled to:
(a) Examine without charge at Manitowocs office and at each Related Employer location, all Plan documents, including insurance contracts and copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions.
(b) Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator; the Plan Administrator may make a reasonable charge for the copies.
(c) Receive a summary of the Plans annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.
In addition to creating rights for Plan participants, ERISA imposes duties on the people who are responsible for the operation of the Plan. The people who operate the Plan, the Plan Administrator and other appointed advisors, called fiduciaries of the Plan, have a duty to operate the Plan prudently and in the interest of you and other Eligible Employees. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a payment or exercising your rights under ERISA. If your claim for payment is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Plan review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees. (For example, if it finds your claim is frivolous.)
12
If you have any questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights pursuant to ERISA, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor.
13
You may need to contact Manitowoc or the Plan Administrator if you have any questions regarding the Plan. The following information will help you to do this.
Plan Sponsor | Manitowoc Foodservice, Inc. | |
2227 Welbilt Boulevard | ||
New Port Richey, FL 34655 | ||
Plan Administrator and Agent | Manitowoc Foodservice, Inc. | |
For Service of Legal Process | 2227 Welbilt Boulevard | |
New Port Richey, FL 34655 | ||
Employer Identification Number | 47-4625716 | |
Plan Identification Number | 503 | |
Plan Year | January 1 through December 31 |
14
Exhibit 99.1
News Release
Date | From | |
March 4, 2016 NEWS RELEASE |
Rich Sheffer 1.727.853.3079 Vice President Investor Relations & Treasury Manitowoc Foodservice, Inc. |
Manitowoc Foodservice Debuts Today as Independent, Publicly Traded Company
Ringing Opening Bell at New York Stock Exchange
New Port Richey, FL. March 4, 2016 Manitowoc Foodservice, Inc. (NYSE: MFS), a leading global supplier of commercial foodservice equipment, debuts today as a standalone, publicly traded company following its spinoff from The Manitowoc Company, Inc. (NYSE: MTW). To celebrate the companys independence, Hubertus Muehlhaeuser, President and CEO of Manitowoc Foodservice, will ring the Opening Bell at the New York Stock Exchange today at 9:30 am ET. Muehlhaeuser and the companys executive leadership team will be joined by Cindy Egnotovich, the companys Chairperson of the Board, and world-famous Chef Daniel Boulud.
For more than 70 years, we have been innovation leaders in the commercial foodservice equipment industry, said Muehlhaeuser. Today we carry this legacy forward as an independent company with one of the broadest portfolios of both hot and cold foodservice equipment in the industry, from ovens, fryers, steamers, grills, ranges and induction cooktops to beverage dispensing, blending, refrigeration and ice-making equipment. With our global footprint and leading products and systems, we are uniquely positioned to help our customers grow.
Manitowoc Foodservice has a strong foundation on which to build. The company has an array of award-winning brands that make it a supplier of choice for many of the worlds largest quick service, fast casual and fine dining restaurants. The company focuses its innovation on providing its customers with equipment that improves the quality and taste of food while lowering costs through reduced space, energy, labor and waste. The company released 30 new product innovations in 2015.
Manitowoc Foodservice is regularly recognized for its innovation leadership worldwide. The company has won many awards globally including 31 National Restaurant Association Kitchen Innovation Awards since 2005 in North America, a 2014 Red Dot Industrial Design Award, two 2015 Gulfood Awards and a 2015 EuroGastro Award, among others. Manitowoc Foodservice has also been an Energy Star Partner for six consecutive years, earning four consecutive Sustained Excellence Awards.
###
Page 2
March 4, 2016
Manitowoc Foodservice Debuts Today as Independent, Publicly Traded Company
About Manitowoc Foodservice, Inc.
Manitowoc Foodservice, Inc. designs, manufactures and supplies best-in-class food and beverage equipment for the global commercial foodservice market, offering customers unparalleled operator and patron insights, collaborative kitchen solutions, culinary expertise and world-class implementation support and service. Headquartered in Tampa, Florida, and operating 20 facilities throughout the Americas, Europe and Asia, the company sells through a global network of over 3,000 distributors and dealers in over 100 countries. The company has more than 5,000 employees and generated sales of $1.5 billion in 2015. Its portfolio of 23 award-winning brands includes Cleveland, Convotherm ® , Delfield ® , Fabristeel, Frymaster ® , Garland ® , INDUCS, Kolpak ® , Koolaire ® , Lincoln, Manitowoc ® Beverage Systems, Manitowoc ® Ice, Merrychef, Multiplex ® , Servend ® and Welbilt ® . For more information, visit www.manitowocfoodservice.com.