UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): October 4, 2016

 

 

Horizon Global Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

 

001-37427

 

47-3574483

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

2600 West Big Beaver Road, Suite 555

Troy, Michigan

 

48084

(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (248) 593-8820

Not Applicable

 

(Former name or former address, if changed since last report)

 

 

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 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 1.01. Entry into a Material Definitive Agreement.

Amendment to Amended and Restated Loan Agreement

On October 4, 2016, Horizon Global Corporation (the “Company”) entered into the Waiver and First Amendment to Amended and Restated Loan Agreement (the “Amendment”) with Bank of America, N.A. (“BofA”), as administrative agent, and the other institutions named on the signature pages thereto, to amend the Amended and Restated Loan Agreement, dated as of December 22, 2015 (the “Loan Agreement”), by and among the Company, Cequent Performance Products, Inc., Cequent Consumer Products, Inc., Cequent UK Limited, Cequent Towing Products of Canada Ltd., each as a borrower, the other parties thereto, BofA, as administrative agent, and the other lenders that are parties thereto. The Amendment, among other things, (i) amended the Loan Agreement to (a) provide for an incremental revolving facility in an aggregate principal amount of $25,000,000 and (b) modify the calculation of Consolidated EBITDA (as defined in the Loan Agreement) to include certain adjustments related to certain acquisitions and (ii) waived the requirement of joining certain subsidiaries acquired pursuant to the Share Purchase Agreement (as defined below) to certain Loan Documents (as defined in the Loan Agreement) as otherwise required by the Loan Agreement.

Certain lenders and agents that are parties to the Amendment have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending or commercial banking services for the Company and its subsidiaries and affiliates, for which they have received, and may in the future receive, customary compensation and reimbursement of expenses.

Amendment to Term Loan Credit Agreement

As previously disclosed in the Company’s Current Report on Form 8-K, filed on September 23, 2016, the Company entered into the First Amendment to Credit Agreement, dated as of September 19, 2016 (the “Term Loan Amendment”), with JPMorgan Chase Bank, N.A. (“JPM”), as administrative agent, and the other institutions named on the signature pages thereto, which amended the Term Loan Credit Agreement, dated as of June 30, 2015 (the “Credit Agreement”), by and among the Company, as borrower, JPM, as administrative agent, and the other lenders that are parties thereto. The Term Loan Amendment, among other things, amended the Credit Agreement to provide for incremental term loan commitments in an aggregate principal amount of $152,000,000 (the “Incremental Term Loans”). In connection with the consummation of the acquisition of the Westfalia Group (as defined below), JPM extended the Incremental Term Loans to the Company on October 3, 2016.

Investors’ Rights Agreement

On October 4, 2016, pursuant to the terms of the Share Purchase Agreement, dated as of August 24, 2016 (the “Share Purchase Agreement”), among the Company, its wholly-owned subsidiary, Blitz K16-102 GmbH (now known as, HG Germany Holdings GmbH) (the “Purchaser”), and Parcom Deutschland I GmbH & Co. KG (“Parcom”), Co-Investment Partners Europe L.P., BaryernLB Private Equity GmbH, Walter Gnauert, Dr. Bernd Welzel, Frank Klebedanz, Jürgen Lotter and Westfalia Mitarbeiterbeteiligungs GmbH & Co. KG. (collectively, the “Sellers”), the Company entered into an Investors’ Rights Agreement with Parcom (the “Investors’ Rights Agreement”). The Investors’ Rights Agreement provides for (i) certain registration rights with respect to shares of the Company’s common stock issued as consideration under the Share Purchase Agreement, as described below, (ii) a prohibition on resales of the Company’s common stock by Parcom and certain persons controlled by Parcom for twelve months following the closing date under the Share Purchase Agreement (the “Lock-up Period”), (iii) a limitation that Parcom and certain persons controlled by Parcom will not sell an aggregate of 104,504 or more shares of the Company’s common stock in the six months following the expiration of the Lock-up Period, (iv) a right of first acceptance for the Company if Parcom or certain entities controlled by Parcom intend to sell an aggregate of more than 630,000 shares of the Company’s common stock, (v) standstill provisions prohibiting Parcom and certain persons controlled by Parcom from acquiring voting securities of the Company and engaging in certain other transactions related to the Company for eighteen months following the closing date under the Share Purchase Agreement and (vi) indemnification and other provisions customary for transactions of this type.


The foregoing descriptions are qualified in their entirety by reference to the Amendment, the Term Loan Amendment and the Investors’ Rights Agreement, copies of which are filed as Exhibits 10.1, 10.2 and 10.3 hereto, respectively, and are incorporated by reference into this Item 1.01.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

On October 4, 2016, the Company completed its previously announced acquisition of Westfalia-Automotive Holding GmbH and TeIJs Holding B.V. (collectively, the “Westfalia Group”) pursuant to the Share Purchase Agreement. Pursuant to the Share Purchase Agreement, the Company, through the Purchaser, acquired all of the outstanding equity interests of Westfalia Group for consideration of approximately €167 million, which consisted of: (1) a cash payment of approximately €89 million; (2) the issuance to certain of the Sellers of 2,704,310 shares of the Company’s common stock, having an approximate aggregate value of €36 million, in a transaction exempt from registration requirements under Section 4(a)(2) of the Securities Act of 1933; and (3) assumed debt of approximately €42 million.

The Westfalia Group is a leading global towing company. The Company funded the cash payment, as well as the repayment of certain of Westfalia Group’s debt, through a combination of cash on hand and proceeds of the Incremental Term Loans.

The foregoing description is qualified in its entirety by reference to the Share Purchase Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated by reference into this Item 2.01.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.

 

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 2.01 is incorporated by reference into this Item 3.02.

 

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The Company will file the financial statements required by Item 9.01(a) of Form 8-K as an amendment to this Current Report on Form 8-K no later than the 71st day after the required filing date for this Current Report on Form 8-K.

(b) Pro forma financial information.

The Company will file the pro forma financial information required by Item 9.01(b) of Form 8-K as an amendment to this Current Report on Form 8-K no later than the 71st day after the required filing date for this Current Report on Form 8-K.


(d) Exhibits.

 

Exhibit Number

  

Description

  2.1    Share Purchase Agreement, dated as of August 24, 2016, among Horizon Global Corporation and Blitz K16-102 GmbH and Parcom Deutschland I GmbH & Co. KG, Co-Investment Partners Europe L.P., BaryernLB Private Equity GmbH, Walter Gnauert, Dr. Bernd Welzel, Frank Klebedanz, Jürgen Lotter and Westfalia Mitarbeiterbeteiligungs GmbH & Co. KG.*
10.1    Waiver and First Amendment to Amended and Restated Loan Agreement, dated as of October 4, 2016, to the Amended and Restated Loan Agreement, dated as of December 22, 2015, by and among Horizon Global Corporation, Cequent Performance Products, Inc., Cequent Consumer Products, Inc., Cequent UK Limited, Cequent Towing Products of Canada Ltd., the other parties thereto, the lenders party thereto and Bank of America, N.A., as administrative agent.
10.2    First Amendment, dated as of September 19, 2016, to the Term Loan Credit Agreement, dated as of June 30, 2015, among Horizon Global Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.
10.3    Investors’ Rights Agreement, dated as of October 4, 2016, by and between Horizon Global Corporation and Parcom Deutschland I GmbH & Co. KG.

 

* Annexes omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of such annexes, or any section thereof, to the Securities and Exchange Commission upon request.


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.

 

Horizon Global Corporation
By:   /s/ Jay Goldbaum
  Name:   Jay Goldbaum
  Title:     Legal Director and Corporate Secretary

October 11, 2016


EXHIBIT INDEX

 

Exhibit Number

  

Description

  2.1    Share Purchase Agreement, dated as of August 24, 2016, among Horizon Global Corporation and Blitz K16-102 GmbH and Parcom Deutschland I GmbH & Co. KG, Co-Investment Partners Europe L.P., BaryernLB Private Equity GmbH, Walter Gnauert, Dr. Bernd Welzel, Frank Klebedanz, Jürgen Lotter and Westfalia Mitarbeiterbeteiligungs GmbH & Co. KG.*
10.1    Waiver and First Amendment to Amended and Restated Loan Agreement, dated as of October 4, 2016, to the Amended and Restated Loan Agreement, dated as of December 22, 2015, by and among Horizon Global Corporation, Cequent Performance Products, Inc., Cequent Consumer Products, Inc., Cequent UK Limited, Cequent Towing Products of Canada Ltd., the other parties thereto, the lenders party thereto and Bank of America, N.A., as administrative agent.
10.2    First Amendment, dated as of September 19, 2016, to the Term Loan Credit Agreement, dated as of June 30, 2015, among Horizon Global Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.
10.3    Investors’ Rights Agreement, dated as of October 4, 2016, by and between Horizon Global Corporation and Parcom Deutschland I GmbH & Co. KG.

 

* Annexes omitted pursuant to Item 601(b)(2) of Regulation S-K. Horizon Global Corporation agrees to furnish supplementally a copy of such annexes, or any section thereof, to the Securities and Exchange Commission upon request.

Exhibit 2.1

Deed Register No. H 2128/16

R e c o r d e d

in Munich on 24 August 2016

Before me, the undersigning Notary in the district of the Higher Regional Court ( Oberlandesgericht ) of Munich

Sebastian Herrler

with my official place of business in 80333 Munich, Brienner Str. 13/IV,

appeared today:

 

1. Mr. Volker Hichert , born 09/03/1965, with business address at Ludwigstr. 7, 80539 Munich, personally known, according to his declarations acting in the name and on behalf of

DEUTSCHE PRIVATE EQUITY ADMINISTRATION GMBH , a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Munich under registration no. HRB 169783 with registered offices at Ludwigstr. 7, 80539 Munich, as its managing director.

Deutsche Private Equity Administration GmbH is acting as general partner (Komplementär) of

PARCOM DEUTSCHLAND I GMBH & CO. KG , a limited partnership (Kommanditgesellschaft) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Munich under registration no. HRA 91460 with registered offices at Ludwigstraße 7, 80539 Munich, Germany,

 

2. Dr. Julius Wedemeyer , born 10/07/1979, with business address at c/o HEUKING KÜHN LÜER WOJTEK, Neuer Wall 63, 20354 Hamburg, personally known, according to his declarations acting under exclusion of any personal liability in the name and on behalf of

CO-INVESTMENT PARTNERS EUROPE L.P., a limited partnership organised under the laws of the Cayman Islands and being registered with the Register of Limited Partnerships of the Cayman Islands under no. 18395 with registered offices at c/o Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KYI-9005, Cayman Islands,

pursuant to a power of attorney the original of which was available during the notarisation of this deed and a certified copy thereof is attached to this deed,


3. Mr. Mark Suderow , born 11/01/1982, with business address at Ludwigstr. 7, 80539 Munich, identified by his identity card, according to his declarations acting under exclusion of any personal liability in the name and on behalf of

WALTER GNAUERT, born on 18 June 1937 whose address is Via San Michele 26, 37010 Cavaion, Italy,

pursuant to a power of attorney the original of which was available during the notarisation of this deed and a certified copy thereof is attached to this deed,

 

4. Mr. Karsten Buckenauer , born 28/05/1961, resident Fliederstr. 10, 85591 Vaterstetten, identified by his identity card, according to his declarations acting under exclusion of any personal liability in the name and on behalf of

BAYERNOLB PRIVATE EQUITY GMBH , a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Munich under registration no. HRB 128587 with registered offices at Ottostr. 21, 80333 Munich,

pursuant to a power of attorney the original of which was available during the notarisation of this deed and a certified copy thereof is attached to this deed,

 

5. Mr. Jürgen Lotter , born 12/10/1954, resident Nonnenweg 104 B, 51503 Rösrath, identified by his identity card, according to his declarations acting

 

  a) in his own name,

 

  b) in the name and on behalf of FRANK KLEBEDANZ, Born 02/06/1963, Resident Gosepathweg 6, 45968 Gladbeck, Germany ,

pursuant to powers of attorney the originals of which were available during the notarisation of this deed and certified copies thereof are attached to this deed,

 

6. Dr. Bernd Welzel , born 17/07/1961, resident Schleptruper Strang 58, 49565 Bramsche, identified by his identity card, according to his declarations acting

 

  a) in his own name,

 

  b) in the name and on behalf of HENRICHS BETEILIGUNGSGESELLSCHAFT MBH , a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Gütersloh under registration no. HRB 7255 with registered offices at Am Sandberg 45, 33378 Rheda-Wiedenbrück, as its managing director.

Henrichs Beteiligungsgesellschaft mbH is acting as general partner (Komplementär) of

WESTFALIA MITARBEITERBETEILIGUNGS GMBH & CO. KG , a limited partnership (Kommanditgesellschaft) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Gütersloh under number HRA 6636 with registered offices at Am Sandberg 45, 33378 Rheda-Wiedenbrück, Germany,

 

II


7. Dr. Christian Mense, born 23/08/1976, with business address at c/o Eversheds Deutschland LLP, Brienner Str. 12, 80333 Munich, personally known, according to his declarations acting under exclusion of any personal liability in the name and on behalf of

 

  a) BLITZ K16-102 GMBH (IN FUTURE: HG GERMANY HOLDINGS GMBH) a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of Germany and being registered with the Commercial Register of Cologne under registration no. HRB 87906,

 

  b) HORIZON GLOBAL CORPORATION , a Delaware corporation whose principal business address is at 2600 West Big Beaver Road, Suite 555, Troy, Michigan 48084, USA,

to a) and b) pursuant to powers of attorney copies of which were available during the notarisation of this deed, promising to submit the originals subsequently.

Neither the Notary nor the proxies assume any liability as to the validity and/or the scope of the powers of attorney presented.

The Notary convinced himself that the persons appearing are in adequate command of the English language and declared that he is in command of the English language as well.

The persons appearing stated that the parties represented by them requested that this instrument be recorded in the English language.

On being asked whether there had been any prior involvement by the Notary in terms of Section 3 para 1 no 7 of the German Notarisation Act ( Beurkundungsgesetz ) the provisions of which had been explained by the Notary, the persons appearing said that there had been no such prior involvement.

To the extent that reference is made to Annexes, this relates to the Annexes notarised in Deed number H 2126/2016 of the officiating notary, dated 23 and 24/08/2016 (“Reference Deed”). Reference is herewith made to the Reference Deed, the original of which was available for inspection prior to and during today’s notarisation. The notary instructed the persons appearing about the legal consequences of the reference. The persons appearing declared that they were familiar with the contents of the Reference Deed, and they approved of all declarations made in the Reference Deed on behalf of the Parties by Mrs. Lucia Eckel as representative without authority. After having been instructed by the notary, they waived the Reference Deed being read aloud and officially issued with this Deed.

The persons appearing declared as follows requesting that it be notarized:

 

III


Project Zebra

 

 

SALE AND PURCHASE AGREEMENT

 

 

regarding the sale and transfer of all shares

in

WESTFALIA-Automotive Holding GmbH

and in

TeIJs Holding B.V.

 

LOGO


SHARE PURCHASE AGREEMENT (“Agreement”)

between

 

(1) PARCOM DEUTSCHLAND I GMBH & CO. KG , a limited partnership (Kommanditgesellschaft) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Munich under registration no. HRA 91460 with registered offices at Ludwigstraße 7, 80539 Munich, Germany (“ Seller 1” ), and

 

(2) CO-INVESTMENT PARTNERS EUROPE L.P., a limited partnership organised under the laws of the Cayman Islands and being registered with the Register of Limited Partnerships of the Cayman Islands under no. 18395 with registered offices at c/o Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KYI-9005, Cayman Islands (“ Seller 2” ), and

 

(3) BAYERNLB PRIVATE EQUITY GMBH, a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Munich under registration no. HRB 128587 with registered offices at Ottostr. 21, 80333 Munich, Germany (“ Seller 3” ), and

 

(4) WALTER GNAUERT, born on 18 June 1937 whose address is Via San Michele 26, 37010 Cavaion, Italy (“ Seller 4” ), and

 

(5) DR BERND WELZEL , born on 17 July 1961 whose address is Schleptruper Strang 58, 49565 Bramsche, Germany (“ Seller 5” ), and

 

(6) FRANK KLEBEDANZ, born on 2 June 1963 whose address is Gosepathweg 6, 45968 Gladbeck, Germany (“ Seller 6” ), and

 

(7) JÜRGEN LOTTER , born on 12 October 1954 whose address is Nonnenweg 104 b, 51503 Rösrath, Germany, (“ Seller 7” ), and

 

(8) WESTFALIA MITARBEITERBETEILIGUNGS GMBH & CO. KG , a limited partnership (Kommanditgesellschaft) organised under the laws of Germany and being registered with the Commercial Register of the Lower Court (Amtsgericht) of Gütersloh under number HRA 6636 with registered offices at Am Sandberg 45, 33378 Rheda-Wiedenbrück, Germany (“ Seller 8” ), and

 

(9) BLITZ K16-102 GMBH (IN FUTURE: HG GERMANY HOLDINGS GMBH) a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of Germany and being registered with the Commercial Register of Cologne under registration no. HRB 87906 ( “Purchaser” )

 

(10) HORIZON GLOBAL CORPORATION , a Delaware corporation whose principal business address is at 2600 West Big Beaver Road, Suite 555, Troy, Michigan 48084, USA (“ Guarantor ”)

- the Sellers 4, 5, 6 and 7 together referred to as “ Manager Shareholders” , Seller 1 to Seller 8 hereinafter collectively referred to as the “ Sellers ”, Sellers, Purchaser and Guarantor hereinafter individually referred to as a “ Party” and collectively as the “ Parties ” -

 

2


TABLE OF CONTENTS

 

TABLE OF DEFINITIONS

     4   

TABLE OF ANNEXES

     7   

PREAMBLE

     9   
1   

SALE AND PURCHASE

     12   
2   

CLOSING CONDITIONS AND CLOSING

     14   
3   

PURCHASE PRICE

     17   
4   

REPRESENTATIONS AND INDEMNITIES OF SELLERS

     21   
5   

REMEDIES FOR BREACH OF REPRESENTATIONS

     32   
6   

TAXES [SUBJECT TO REVIEW OF TAX COUNSEL]

     34   
7   

GENERAL LIMITATION OF SELLERS’ LIABILITY

     40   
8   

UNDERTAKING OF PURCHASER ON SHAREHOLDER LOANS

     43   
9   

REPRESENTATIONS OF PURCHASER; INDEMNITY

     44   
10   

COVENANT PRIOR TO THE CLOSING

     47   
11   

OTHER UNDERTAKINGS

     49   
12   

NON-COMPETITION

     50   
13   

CONFIDENTIALITY

     50   
14   

NOTIFICATIONS, INFORMATION, NOTIFICATION AUTHORISATION

     51   
15   

ASSIGNMENT

     52   
16   

PRE-MERGER NOTIFICATION

     52   
17   

ACCESSION OF GUARANTOR

     53   
18   

MISCELLANEOUS

     53   

 

3


TABLE OF DEFINITIONS

 

DEFINITIONS

  

REFERENCES

Agreement    as defined on page 2
AStG    as defined in clause 4.14(ix)
BGB    as defined in clause 1.9
Breach    as defined in clause 5.1
Breach Notice    as defined in clause 5.7
Break-Up Fee    as defined in clause 2.10
Business Day    as defined in clause 2.3
Cap    as defined in clause 7.3(i)
Cash Consideration    as defined in clause 3.2(i)
Collective Agreements    as defined in clause 4.20.4
Consolidated TeIJs Financial Statements    as defined in clause 4.10.1
Consolidated WHO Financial Statements    as defined in clause 4.10.1
Closing    as defined in clause 2.3
Closing Actions    as defined in clause 2.3
Closing Cash Consideration    as defined in clause 3.2(i)
Closing Condition    as defined in clause 2.1
Closing Date    as defined in clause 2.4
Closing Memorandum    as defined in clause 2.7
Completion Date    as defined in clause 2.4
Covered Properties    as defined in clause 4.21.2
Damages    as defined in clause 5.3
De Minimis Amount    as defined in clause 7.2(i)
Effective Date    as defined in clause 1.6
Effective Date Financial Statements    as defined in clause 3.3(ii)
Effective Date Net Working Capital    as defined in clause 3.3(i)
Environmental Laws    as defined in clause 4.21.4
Environmental Liabilities    as defined in clause 4.21.1
Environmental Remediation Measures    as defined in clause 4.21(a)
Exchange Act    as defined in clause 9.1(ix)(c)
Existing Environmental Condition    as defined in clause 4.21.2
FCO    as defined in clause 2.1
Financial Statements    as defined in clause 4.10.1
GAAP    as defined in clause 9.1(ix)(d)
GmbHG    as defined in clause 2.7
Guarantor    as defined on page 2 (10)
Guarantor Common Stock    as defined in clause 9.1(viii)(a)
Guarantor Preferred Stock    as defined in clause 9.1(viii)(a)
Guarantor Options    as defined in clause 9.1(viii)(a)
Guarantor SEC Filings    as defined in clause 9.1(ix)(a)
Guarantor Stock Awards    as defined in clause 9.1(viii)(a)
Guarantor Stock Plan    as defined in clause 9.1 (viii)(a)
Hazardous Materials    as defined in clause 4.21.3
HGB    as defined in clause 3.3(iii)
Indemnifiable Taxes    as defined in clause 6.2(i)
Information Technology    as defined in clause 4.19
Insurance Policies    as defined in clause 4.22
IP Rights    as defined in clause 4.15
Key Employees    as defined in clause 4.20.1
Key Personnel Contracts    as defined in clause 4.20.1
Knowledge of the Sellers    as defined in clause 4.32
Leased Real Estate    as defined in clause 4.13
Licensed IP Rights    as defined in clause 4.16

 

4


DEFINITIONS

  

REFERENCES

Material Adverse Change    as defined in clause 2.5
Material Agreements    as defined in clause 4.14.1
Material Target Group Entity/Material Target Group Entities    as defined in Preamble (D)
Manager Shareholders    as defined on page 2
Neutral Auditor    as defined in clause 3.3(vii)
Owned IP Rights    as defined in clause 4.15
Owned Real Estate    as defined in clause 4.12
Party/Parties    as defined on page 2
Pension Commitments    as defined in clause 4.20.3
Permits    as defined in clause 4.23
Public Subsidies    as defined in clause 4.26
Purchase Price    as defined in clause 3.1(i)
Purchase Price Determination Statement    as defined in clause 3.3(iv)
Purchaser    as defined on page 2 (9)
Relevant Tax Returns    as defined in clause 6.4(i)(b)
Representation/Representations    as defined in clause 4.1
Representation Insurance    as defined in clause 11.4
Reversal Effect    as defined in clause 6.2(iii)
Revised Purchase Price Determination Statement    as defined in clause 3.3(v)
Scheduled Closing Date    as defined in clause 2.3
Security Deposit    as defined in clause 3.2(i)
Seller 1    as defined on page 2 (1)
Seller 1-Shares    as defined in Preamble (C)
Seller 1-TeIJs-Shares    as defined in Preamble (C)
Seller 1-WHO-Shares    as defined in Preamble (C)
Seller 2    as defined on page 2 (2)
Seller 2-Shares    as defined in Preamble (C)
Seller 2-TeIJs-Shares    as defined in Preamble (C)
Seller 2-WHO-Shares    as defined in Preamble (C)
Seller 3    as defined on page 2 (3)
Seller 3-Shares    as defined in Preamble (C)
Seller 4    as defined on page 2 (4)
Seller 4-Shares    as defined in Preamble (C)
Seller 5    as defined on page 2 (5)
Seller 5-Shares    as defined in Preamble (C)
Seller 6    as defined on page 2 (6)
Seller 6-Shares    as defined in Preamble (C)
Seller 7    as defined on page 2 (7)
Seller 7-Shares    as defined in Preamble (C)
Seller 8    as defined on page 2 (8)
Seller 8-Shares    as defined in Preamble (C)
Sellers    as defined on page 2
Sellers’ Representative    as defined in clause 14.2
Shareholders’ Agreement    as defined in clause 2.3(iii)
Shareholder Loan/Shareholder Loans    as defined in Preamble (F)
Shortfall    as defined in clause 3.3(i)(b)
Signing Date    as defined in clause 4.1
Stock Consideration    as defined in clause 3.2(ii)
Target Company/Target Companies    as defined in Preamble (A)
Target-Companies-Shares    as defined in Preamble (I)
Target Group Entity/Target Group Entities    as defined in Preamble (D)
Tax/Taxes    as defined in clause 6.1
Tax Authority    as defined in clause 6.1

 

5


DEFINITIONS

  

REFERENCES

Tax Consolidations    as defined in clause 4.27(v)
Tax Proceeding    as defined in clause 6.1
Tax Refund    as defined in clause 6.4(i)
Tax Return / Tax Returns    as defined in clause 4.27
TeIJs    as defined in Preamble (A)
TeIJs-Effective Date Financial Statements    as defined in clause 3.3(ii)
TeIJs Group Entities    as defined in Preamble (D)
TeIJs-Shares    as defined in Preamble (C)
TeIJs Shareholder Loan/TeIJs Shareholder Loans    as defined in Preamble (F)
Threshold Amount    as defined in clause 7.2(ii)
Transaction    as defined in Preamble (I)
Undisbursed Shareholder Loans    as defined in Preamble (G)
WAM    as defined in Preamble (B)
WHO    as defined in Preamble (A)
WHO-Effective Date Financial Statements    as defined in clause 3.3(ii)
WHO Group Entities    as defined in Preamble (D)
WHO-Shares    as defined in Preamble (C)
WHO Shareholder Loan/WHO Shareholder Loans    as defined in Preamble (F)
Withdrawal Notice    as defined in clause 2.10

 

6


TABLE OF ANNEXES [TO BE ADJUSTED]

 

Annex

  

Description

Annex (D)/1    List of subsidiaries wholly or partially owned by WHO
Annex (D)/2    List of subsidiaries wholly or partially owned by TeIJs
Annex (D)/3    List of Material Target Group Entities
Annex (F)    Outstanding amounts of shareholder loans at the Effective Date
Annex (G)    Undisbursed Shareholder Loans
Annex (H)    External Debt Financing
Annex 1.7/1    Shareholders’ resolution WHO
Annex 1.7/2    Shareholders’ resolution TeIJs
Annex 1.8    Declaration of consent WHO and TeIJs and resolution of advisory board of WHO
Annex 1.9    Approval of spouses of Manager Shareholders
Annex 1.10    Approval WHO and TeIJs concerning the transfer of the Shareholder Loans
Annex 2.3(ii)    Share transfer agreement concerning TeIJs-Shares
Annex 2.3(iii)    Shareholders Agreement
Annex 2.7    Closing Memorandum
Annex 2.11    Withdrawal Notice
Annex 3.3(i)    Description of Effective Date Net Working Capital
Annex 3.3(ii)    Rules and items for Effective Date Financial Statements
Annex 3.3(iii)/1    Rules agreed by the Parties for preparing the WHO-Effective Date Financial Statements
Annex 3.3(iii)/2    Rules agreed by the Parties for preparing the TeIJs-Effective Date Financial Statements
Annex 3.3(iv)    Purchase Price Determination Statement
Annex 3.6    Escrow and Deposit Agreement
Annex 4.3    Articles of Association of the Target Companies
Annex 4.4    Third party rights regarding the Target-Companies-Shares
Annex 4.8    Third party rights regarding the Shareholder Loans
Annex 4.10.1(i)    Consolidated WHO Financial Statements
Annex 4.10.1(ii)    Consolidated TeIJs Financial Statements
Annex 4.10.5    Undisclosed Liabilities
Annex 4.11    Enterprise agreements
Annex 4.12    Owned Real Estate
Annex 4.13    Leased Real Estate
Annex 4.14.1    Material Agreements
Annex 4.14.2    Material Agreements that are not in full force and effect
Annex 4.15    Owned IP Rights
Annex 4.16    Licensed IP Rights
Annex 4.17    Challenges and proceedings with respect to IP Rights
Annex 4.20.1    List of Key Employees
Annex 4.20.2    Status of Key Personnel Contracts
Annex 4.20.3    List of Pension Commitments
Annex 4.20.4    List of Collective Agreements
Annex 4.20.5    Labor Disputes
Annex 4.21    Environmental Liabilties
Annex 4.22    List of Insurance Policies
Annex 4.23    List of missing Permits
Annex 4.24    List of litigation proceedings and disputes
Annex 4.25    List of Product Liabilities
Annex 4.26    List of Public Subsidies
Annex 4.27(iv)    Corporate tax credit and corporate tax increase amount
Annex 4.27(v)    Tax Consolidations

 

7


Annex

  

Description

Annex 4.27(viii)    Permanent Establishment
Annex 4.27(ix)    Agreements/Arrangements with Tax Authority
Annex 4.28    Payment Obligation relating to Change of Control
Annex 4.29    Exceptions of ordinary course of business
Annex 4.31    Finders’ Fees and Management Incentives
Annex 4.32/1    Persons relevant for “Knowledge of the Sellers”
Annex 4.32/2    Members of management of the Target Group Entities relevant for “Knowledge of the Sellers”
Annex 5.5(ii)    Items relating to exclusion of Sellers’ liability
Annex 5.8    ZEBRA – Clean Room Index
Annex 9.1(i)    Excerpts from the Commercial Register of Purchaser and Guarantor
Annex 9.1(xi)    Litigation proceedings of Guarantor
Annex 10.1(iv)    Permitted Capital Expenditure
Annex 10.1(x)    Lease Agreement
Annex 14.2    Notification form regarding the change of Sellers’ Representative

 

8


PREAMBLE

 

(A) Target Companies. Sellers are the sole shareholders of WESTFALIA-Automotive Holding GmbH, a limited liability company ( Gesellschaft mit beschränkter Haftung ) organised under the laws of Germany with registered seat at Am Sandberg 45, 33378 Rheda-Wiedenbrück, Germany, being registered with the Commercial Register of the Lower Court ( Amtsgericht ) of Gütersloh, under number HRB 9077 (“ WHO ”). The registered nominal share capital of WHO amounts to EUR 348,981.00 and is fully paid up and has not been repaid. WHO is the parent company of WESTFALIA-Automotive Group, one of the leading manufacturers of towbars and vehicle specific wiring kits.

Seller 1 and Seller 2 are the sole shareholders of TeIJs Holding B.V., a private company with limited liability organised under the laws of the Netherlands with registered seat in Amsterdam, the Netherlands and its business address at Kamerlingh Onneslaan 1, 3401MZ IJsselstein, the Netherlands, being registered with the Dutch Trade Register under number 61829595 (“ TeIJs ”, WHO and TeIJs hereinafter individually a “ Target Company ” and jointly “ Target Companies ”). The registered nominal share capital of TeIJs amounts to EUR 13,000,000.00. TeIJs is the parent company of a group of subsidiaries that do business in the production of metal components for the construction industry, particularly for towbars and other transport solutions for the automotive market.

 

(B) Manager Shareholders are (or have been) part of the management in WHO and in its 100% subsidiary WESTFALIA-Automotive GmbH, a limited liability company ( Gesellschaft mit beschränkter Haftung ) organised under the laws of Germany with registered seat at Am Sandberg 45, 33378 Rheda-Wiedenbrück, Germany, being registered with the Commercial Register of the Lower Court ( Amtsgericht ) of Gütersloh, under number HRB 8808 (“ WAM ”), Seller 5 is the CEO, Seller 6 is the COO and Seller 7 is the CFO of WHO as well as of WAM.

 

(C) Shares. The shares in WHO are held as follows:

 

Shareholder

   Participation
in nominal
share capital

in EUR
     Numbers of
the shares
according to the
shareholders’ list
   Participation
in nominal
share capital
in per cent

(rounded)
 

Seller 1

     258,320.00       1-47,500

75,501-81,250

92,251-104,000

110,401-111,454

111,485-111,855

112,211-112,323

112,401-113,230

114,501-115,719

116,328-305,421

346,998-347,636

     74.02   

Seller 2

     62,748.00       47,501-57,500

81,251-86,250

105,401-110,400

111,455-111,484

     17.98   

 

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Shareholder

   Participation
in nominal
share capital

in EUR
     Numbers of
the shares
according to the
shareholders’ list
   Participation
in nominal
share capital
in per cent

(rounded)
 
      112,207-112,210

112,366-112,400

113,869-114,400

115,720-115,940

305,422-346,997

347,737-348,086

  

Seller 3

     24,946.00       57,501-75,500

86,251-92,250

112,324-112,365

113,231-113,868

115,941-116,206

     7.15   

Seller 4

     653.00       348,087-348,739      0.19   

Seller 5

     363.00       116,207-116,327

348,740-348,981

     0.1   

Seller 6

     100.00       114,401-114,500      0.03   

Seller 7

     100.00       347,637-347,736      0.03   

Seller 8

     1,751.00       104,001-105,400

111,856-112,206

     0.5   

Total

     348,981.00       348,981      100   

The shares held by Seller 1 in WHO are hereinafter referred to as “ Seller 1-WHO-Shares ”, the shares held by Seller 2 in WHO are hereinafter referred to as “ Seller 2-WHO-Shares ”, the shares held by Seller 3 in WHO are hereinafter referred to as “ Seller 3-Shares ”, the shares held by Seller 4 in WHO are hereinafter referred to as “ Seller 4-Shares ”, the shares held by Seller 5 in WHO are hereinafter referred to as “ Seller 5-Shares ”, the shares held by Seller 6 in WHO are hereinafter referred to as “ Seller 6-Shares ”, the shares held by Seller 7 in WHO are hereinafter referred to as “ Seller 7-Shares ” and the shares held by Seller 8 in WHO are hereinafter referred to as “ Seller 8-Shares ”.

Seller 1-WHO-Shares, Seller 2-WHO-Shares and Seller 3-Shares through Seller 8-Shares are hereinafter referred to as the “ WHO-Shares ”.

The shares in TeIJs are held as follows:

 

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Shareholder

   A-Shares      B-Shares      Total
Participation in
nominal share
capital in

EUR
     Participation
in nominal
share capital
in per cent
(rounded)
 

Seller 1

     821,297         9,855,562         10,676,859.00         82.1   

Seller 2

     178,703         2,144,438         2,323,141.00         17.9   

Total

     1,000,000         12,000,000         13,000,000.00         100   

The shares held by Seller 1 in TeIJs are hereinafter referred to as “ Seller 1-TeIJs-Shares ” and the shares held by Seller 2 in TeIJs are hereinafter referred to as “ Seller 2-TeIJs-Shares ”.

Seller 1-TeIJs-Shares and Seller 2-TeIJs-Shares are hereinafter referred to as the “ TeIJs-Shares ”.

Seller 1-WHO-Shares and Seller 1-TeIJs-Shares are hereinafter collectively referred to as “ Seller 1-Shares ”; Seller 2-WHO-Shares and Seller 2-TeIJs-Shares are hereinafter collectively referred to as “ Seller 2-Shares ”.

 

(D) Target Group Entities .

WHO holds, either directly or indirectly, the shares and interests in the wholly-owned or partially owned subsidiaries listed in Annex (D)/1.

TeIJs holds, either directly or indirectly, the shares and interests in the wholly-owned or partially owned subsidiaries listed in Annex (D)/2.

WHO and the subsidiaries listed in Annex (D)/1 are hereinafter collectively referred to as “ WHO Group Entities ” and TeIJs and the subsidiaries listed in Annex (D)/2 are hereinafter collectively referred to as “ TeIJs Group Entities ”. WHO Group Entities and TeIJs Group Entities are hereinafter individually referred to as “ Target Group Entity ” and collectively referred to as “ Target Group Entities ”.

The entities listed in Annex (D)/3 are hereinafter individually referred to as “ Material Target Group Entity ” and collectively referred to as “ Material Target Group Entities ”.

 

(E) Domination and Profit and Loss Transfer Agreements. WHO and WAM have entered into a domination and profit and loss transfer agreement ( Beherrschungs- und Gewinnabführungsvertrag ) as at 31 August 2011.

 

(F) Shareholder Loans. Sellers have extended certain shareholder loans to WHO (such loans hereinafter individually referred to as a “ WHO Shareholder Loan ” and collectively as the “ WHO Shareholder Loans ”) and to TeIJs (such loans hereinafter individually referred to as a “ TeIJs Shareholder Loan ” and collectively as the “ TeIJs Shareholder Loans ”). The principal amounts, the interest rates and the exact amounts outstanding at the Effective Date are shown in Annex (F)  (the WHO Shareholder Loans and the TeIJs Shareholder Loans hereinafter individually referred to as a “ Shareholder Loan ” and collectively as the “ Shareholder Loans ”).

 

(G) Undisbursed Loans . Seller 1, Seller 2, Seller 4 and Seller 5, as lenders, and WHO, as borrower, have entered into certain loan agreements (shown in Annex (G) ) which are undisbursed as of today (hereinafter referred to as the “ Undisbursed Shareholder Loans ”).

 

(H) External Debt Financing. Certain banks have extended loans to the Target Group Entities. The principal amounts, the interest rates and the exact amounts outstanding at the Signing Date are shown in Annex (H) .

 

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(I) Purchase . The Sellers intend to sell and transfer the WHO-Shares and the Seller 1 and the Seller 2 intend to sell and transfer the TeIJs-Shares (hereinafter collectively referred to as “Target-Companies-Shares ”) to Purchaser. Further, Sellers intend to sell and transfer all rights and obligations under the Shareholder Loans to Purchaser. Purchaser intends to acquire the Target-Companies-Shares from Sellers and all rights and obligations under the Shareholder Loans from Sellers (the “ Transaction ”).

Now and therefore, the Parties agree as follows:

 

1 SALE AND PURCHASE

 

1.1 Sale of Target-Companies-Shares. Sellers hereby sell ( verkaufen ) to Purchaser on the terms of this Agreement the Target-Companies-Shares. In detail, the following Sellers sell the following Target-Companies-Shares:

 

  (i) Seller 1 hereby sells to Purchaser the Seller 1-WHO-Shares and the Seller 1-TeIJs-Shares;

 

  (ii) Seller 2 hereby sells to Purchaser the Seller 2-WHO-Shares and the Seller 2-TeIJs-Shares;

 

  (iii) Seller 3 hereby sells to Purchaser the Seller 3-Shares;

 

  (iv) Seller 4 hereby sells to Purchaser the Seller 4-Shares;

 

  (v) Seller 5 hereby sells to Purchaser the Seller 5-Shares;

 

  (vi) Seller 6 hereby sells to Purchaser the Seller 6-Shares;

 

  (vii) Seller 7 hereby sells to Purchaser the Seller 7-Shares;

 

  (viii) Seller 8 hereby sells to Purchaser the Seller 8-Shares;

and Purchaser hereby accepts such sales. The liability of the Sellers in respect of their capacity and title to sell the Target-Companies-Shares to Purchaser shall be several ( teilschuldnerisch ) and limited to the share or shares which the respective Seller sells to Purchaser pursuant to this clause.

 

1.2 Transfer of WHO-Shares . Subject to the condition precedent of the occurrence of Closing and in particular subject, but not limited to, the receipt of the Cash Consideration in accordance with clause 3.2 (i) and the receipt of the Stock Consideration pursuant to clause 3.2 (ii), Sellers hereby transfer to Purchaser the following WHO-Shares:

 

  (i) Seller 1 transfers to Purchaser the Seller 1-WHO-Shares.

 

  (ii) Seller 2 transfers to Purchaser the Seller 2-WHO-Shares.

 

  (iii) Seller 3 transfers to Purchaser the Seller 3-Shares.

 

  (iv) Seller 4 transfers to Purchaser the Seller 4-Shares.

 

  (v) Seller 5 transfers to Purchaser the Seller 5-Shares.

 

  (vi) Seller 6 transfers to Purchaser the Seller 6-Shares.

 

  (vii) Seller 7 transfers to Purchaser the Seller 7-Shares.

 

  (viii) Seller 8 transfers to Purchaser the Seller 8-Shares.

 

12


and Purchaser hereby accepts such transfers.

 

1.3 Sale of Shareholder Loans. Upon the terms and conditions of this Agreement each of the Sellers hereby sells and, subject to the conditions precedent of the occurrence of Closing and in particular, but not limited to, the receipt of the Cash Consideration in accordance with clause 3.2 (i) and the receipt of the Stock Consideration pursuant to clause 3.2 (ii) assigns to Purchaser, who accepts such sales and assignments, all its rights and claims under the Shareholder Loans set forth in the relevant column in Annex F including interest accrued thereon in accordance with the shareholder loan agreements set forth in Annex F. The Parties further agree that, subject to the transfer of the Shareholder Loans at the Closing Date, Purchaser shall enter into all rights and obligations under or in connection with the Shareholder Loans instead of the relevant Seller ( Vertragsübernahme ).

 

1.4 Separate Transfer Documents. Sellers 1 and 2 and Purchaser agree that the TejIJs-Shares are not transferred by virtue of this Agreement but will be transferred with effect in rem ( mit dinglicher Wirkung ) at the Closing by way of separate documents.

 

1.5 Sale of Undisbursed Shareholder Loans . Upon the terms and conditions of this Agreement, each of Seller 1, Seller 2, Seller 4 and Seller 5 hereby sells and, subject to the conditions precedent of the occurrence of Closing and in particular, but not limited to, the receipt of the Cash Consideration in accordance with clause 3.2 (i) and the receipt of the Stock Consideration pursuant to clause 3.2 (ii), assigns to Purchaser, who accepts such sales and assignments, all its rights and claims under the Undisbursed Shareholder Loans set forth in the relevant column in Annex G. The Parties further agree that, subject to the transfer of the Undisbursed Shareholder Loans, Purchaser shall enter into all rights and obligations under or in connection with the Undisbursed Loans instead of the relevant Seller ( Vertragsübernahme ).

 

1.6 Effective Date. The sale of the Target-Companies-Shares pursuant to clause 1.1 and the sale of the Shareholder Loans pursuant to clause 1.3 shall occur with economic effect as of 01 October 2016, 0:00 hours (“ Effective Date ) . The sale of the Target-Companies-Shares shall include all ancillary rights ( Nebenrechte ) pertaining thereto, in particular, the rights to any undistributed profits pertaining to financial years prior to the Effective Date.

 

1.7 Approval of Shareholders’ Meetings. With shareholders’ resolution dated 18 August 2016, solely for evidence purposes an executed copy of which is attached hereto as Annex 1.7/1 , the shareholders’ meeting of WHO has unanimously approved the Transaction and in particular the sale of the WHO-Shares in accordance with Section 11.1 of the articles of association of WHO.

With shareholders’ resolution dated 17 August 2016, solely for evidence purposes an executed copy of which is attached hereto as Annex 1.7/2 , the shareholders’ meeting of TeIJs has unanimously approved the Transaction and in particular the sale of the TeIJs-Shares in accordance with Section 13.1 of the articles of association of TeIJs.

 

1.8 Consent of WHO. WHO and the advisory board of WHO have already consented to the sale and assignment of the WHO-Shares. Copies of declarations of consent of WHO and of the resolution of the advisory board of WHO are attached hereto as Annex 1.8.

 

1.9 Approval of spouses. With declarations dated 17 August 2016, 18 August 2016 and 21 August 2016, solely for evidence purposes executed copies of which are attached as Annex 1.9 , the spouses of Sellers 4, 5, 6 and 7 have consented to the sale and transfer of the WHO-Shares held by such Sellers pursuant to Section 1365 German Civil Code ( Bürgerliches Gesetzbuch , BGB ).

 

1.10

Approval of WHO AND TEIJS. With declaration dated 17 August 2016, an executed copy of which is attached hereto as Annex 1.10 , WHO as party to the shareholder loan agreements has approved the transfer of the rights and obligations under the Shareholder Loans and the Undisbursed Shareholder Loans to and the assumption of contract

 

13


  ( Vertragsübernahme ) by Purchaser. With declaration dated 18 August 2016, an executed copy of which is also attached hereto as Annex 1.10 , TeIJs as party to the shareholder loan agreements has approved the transfer of the rights and obligations under the Shareholder Loans to and the assumption of contract ( Vertragsübernahme ) by Purchaser.

 

1.11 German Terms. Any reference in this Agreement to a German legal term or statutory reference will, in respect of any jurisdiction other than Germany, be deemed to include a reference to the relevant jurisdictional term or statute that most closely approximates to such German legal term or statutory reference in that jurisdiction.

 

2 CLOSING CONDITION AND CLOSING

 

2.1 Closing Condition. The obligation of the Parties to take the Closing Actions set out in clause 2.3 shall be conditional upon and subject to the following condition (the “ Closing Condition ) having been fulfilled:

The German Federal Cartel Office ( Bundeskartellamt , “ FCO ”) has given notice that the requirements for a rejection according to Section 36 subsection 1 German Antitrust Act ( Gesetz gegen Wettbewerbsbeschränkungen , “GWB”) are not fulfilled or one month after receipt of the complete application of the intended merger by the FCO no notice of the FCO according to Section 40 subsection 1 sentence 1 German Antitrust Act ( Gesetz gegen Wettbewerbsbeschränkungen , GWB) was issued or the FCO has not – after the issuing of such notice – rejected the merger within the period as set forth in Section 40 subsection 2 German Antitrust Act ( Gesetz gegen Wettbewerbsbeschränkungen , GWB). The Purchaser shall use best commercial efforts to obtain such approval but shall not be required to agree any undertakings or commit to any disposals in order to obtain such approval or indication not to refer.

 

2.2 Withdrawal based on Non-Fulfilment of the Closing Condition. In the event that the Closing Condition is not completely fulfilled by 27 December 2016, Sellers and/or Purchaser may withdraw ( zurücktreten ) from this Agreement by written notice to the other Parties, unless the non-fulfilment is (i) within the control of any or all Seller(s), if Sellers seek to withdraw, or (ii) within the control of Purchaser, if Purchaser seeks to withdraw. Any purported withdrawal shall be deemed void and shall not have any effect if, at the time when the notice from the withdrawing Parties or Party is received by the other Parties, the Closing Condition has already been fulfilled. The effect of a withdrawal shall be limited to eliminating the obligations of the withdrawing Parties or Party to perform the Closing Actions and shall not limit or prejudice any claims of the withdrawing Parties or Party that may arise from any circumstances related to the non-fulfilment of the Closing Conditions.

 

2.3 Closing, Closing Actions. Within five (5) Business Days (a “ Business Day” shall be a day on which banks in Munich, Germany, are open for the transaction of normal banking business) following the day on which the Closing Condition has been fulfilled, or on any other day as agreed upon between the Parties but in any event not before 1 October 2016 (hereinafter referred to as the “ Scheduled Closing Date ”), the Parties shall meet at the offices of Eversheds LLP in Munich, Germany, or at another location mutually agreed upon by the Parties in writing and take the following actions, hereinafter referred to as the “ Closing Actions ”, which in their entirety shall constitute the “ Closing ”:

 

  (i) The mandates of the members of the advisory board of WHO and the supervisory board of TeIJs shall be terminated with immediate effect and the members of the WHO advisory board and the supervisory board of TeIJs shall be acquitted and discharged by Sellers. Purchaser hereby consents to this release;

 

  (ii) Seller 1 and Seller 2 shall transfer the TeIJs-Shares to Purchaser and Purchaser shall accept such transfer of the TeIJs-Shares, by execution of the deed of transfer in the form as set out in Annex 2.3(ii) in front of a Dutch notary public. Seller1 and Seller 2 shall procure that TeIJs acknowledges the transfer of the TeIJs-Shares;

 

14


  (iii) Seller 1 and the Guarantor shall enter into the shareholders’ agreement relating to the participation in Guarantor, substantially in a form set out in Annex 2.3(iii) (the “ Shareholders’ Agreement ”);

 

  (iv) Purchaser shall pay to the Sellers’ Representative the Closing Cash Consideration pursuant to clause 3.5;

 

  (v) Purchaser shall pay the Security Deposit to the Escrow Account pursuant to clause 3.6;

 

  (vi) Purchaser shall deliver to Sellers 1 and 2 evidence of shares in book entry form representing the respective number of shares which represent the Stock Consideration pursuant to clause 3; and

 

  (vii) the Sellers shall provide written evidence to the Purchaser that the domination and profit and loss transfer agreement (as referred to in Preamble E) has been terminated after 31 August 2016 but prior to September 30 2016;

 

  (viii) having been provided by the Sellers with the balances of the External Debt Financing as referred to in Preamble H together with appropriate pay off instructions from the respective lenders to enable the Purchaser to effect payment of such balances at Closing, the Purchaser shall pay off such balances upon simultaneous release of the security relating to such debt;

 

  (ix) To the extent no longer necessary for the purpose the letter was issued and not then utilised, Seller 1 shall deliver to Bank of America the original signed bank guarantee letter that has been issued to the Sellers by Bank of America in order to secure any possible payment in relation to the Break-Up Fee, with a copy of the notice of receipt signed by the bank to the Purchaser.

 

2.4 Closing Date. The date (exact time of day) immediately prior to the fulfilment or waiver of all Closing Actions shall be the “ Closing Date ”. The date on which all Closing Actions have been taken or have been waived shall be the “ Completion Date ”.

 

2.5 Material Adverse Change . Neither Sellers nor Purchaser is / are obligated to carry out the Closing if at any time prior to Closing a fact, matter or event comes to its attention, whether existing or occurring on or before the Signing Date or existing or occurring afterwards until the Scheduled Closing Date (being a “ Material Adverse Change ”). For the purpose of this Agreement Material Adverse Change shall mean one or a series of related events (for example a product recall claim or a significant litigation matter) in any of the Material Target Group Entities, having a negative impact (after consideration of any funds which can be obtained by any Target Group Entity under the current insurance policies of the Target Group Entities existing on the Signing Date) on the cumulated EBITDA (earnings before interest (income and expenses) of the Target Group Entities and taxes (on income and revenue) and depreciation and amortization of the Material Target Group Entities in excess of EUR 4,500,000.00 (in words: Euro four million five hundred thousand) during the current fiscal year, provided, however, that any such adverse change or effect shall not be taken into account for purposes of determining the presence of a Material Adverse Change if and to the extent it results from (i) general economic conditions (including general developments of capital markets) or conditions or events affecting companies generally in the industries in which the Target Group Entities operate, (ii) changes in laws or regulations not known at the Signing Date (iii) the announcement of the Transaction, (iv) any action or measure permitted under the Agreement (v) the execution or consummation of the Agreement. The Purchaser’s rights pursuant to this clause 2.5 are without prejudice to any other rights that the Purchaser may have under this Agreement, however, in no event may Purchaser or the Sellers raise any claims based on an (alleged) occurrence of a Material Adverse Change after the Closing Date.

 

15


2.6 Withdrawal based on Non-Fulfilment of Closing Actions. In the event that any Closing Action has not been taken or waived within two (2) Business Days after the Scheduled Closing Date, the Sellers and/or the Purchaser may withdraw from this Agreement by written notice to the other Parties, unless the respective Closing Action is (i) within the control of any or all Seller(s), if Sellers seek to withdraw, or (ii) within the control of Purchaser, if Purchaser seeks to withdraw. Any purported withdrawal shall be deemed void and shall not have any effect if, at the time when the notice of withdrawal is received by the other Parties, all Closing Actions have been taken or waived. The withdrawal shall not prejudice any claims of the withdrawing Parties or Party that may arise from any circumstances related to the Closing Actions not being taken.

 

2.7 Closing Memorandum. On the Completion Date, the Parties shall execute a “ Closing Memorandum ” substantially in the form as set out in Annex 2.7 . The executed Closing Memorandum shall be deemed to evidence that Closing has occurred, in particular that the Closing Condition has been fulfilled and all Closing Actions have been taken (or waived).

 

2.8 New List of Shareholders. Immediately after execution of the Closing Memorandum the Parties shall provide the recording notary with a copy thereof. The Parties and the notary are in agreement that such copy shall constitute the evidence of the transfer of the shares in WHO as required by section 40 (paragraph 1, sentence 2) of the German Limited Liabilities Companies Act ( GmbHG ). Upon receipt of the copy the notary is obliged to submit in due course the new shareholder’s list to the competent commercial register together with its certification pursuant to section 40 (paragraph 2 sentence 2) of the German Limited Liability Companies Act ( GmbHG ).

 

2.9 Power of Attorney. The Sellers hereby grant to the Purchaser a power of attorney, valid as from the Completion Date, authorising the Purchaser to hold one or several shareholder meetings and exercise their voting rights therein and to give instructions to the management, until registration of the new shareholder’s list in the commercial register.

 

2.10 No limitation. For the avoidance of doubt, the legal effect of the Closing Memorandum shall not – unless specifically provided for – limit or prejudice the rights of the Parties arising under this Agreement.

 

2.11 Withdrawal based on Unability to Achieve Financing. Break-Up Fee. Following the signing of this Agreement, in the event that the Purchaser is unable to achieve the necessary financing for the Transaction, the Purchaser may withdraw from this Agreement by providing a written notice to the recording notary in the form contained in Annex 2.11 (the “ Withdrawal Notice ”). Following the service of the Withdrawal Notice the Purchaser shall pay to the Sellers a break-up fee of EUR 3,500,000.00 (in words: three million five hundred thousand Euros) (the “ Break-Up Fee ”). The right of withdrawal shall however only apply from the Signing Date until 7 October 2016 and the Withdrawal Notice has to be received by the Recording notary on or prior to 7 October 2016. After the lapse of such period or after the occurrence of Closing, the Purchaser shall have no right of withdrawal under this Clause 2.11. The provisions in relation to payment of the Break-Up Fee and Clauses 13, 14, 17 and 18 shall survive the Withdrawal Notice and remain applicable. Upon occurrence of Closing the right of Sellers to the Break-Up Fee shall automatically terminate.

 

2.12

Break-Up Fee in Case of Non-Fulfilment of Closing Actions. Notwithstanding the Purchaser’s rights under Clause 2.11, provided that the Sellers have taken all Closing Actions under their control and confirmed to the Purchaser that they are prepared to undertake the Closing Actions which require actions from the Sellers and the Purchaser, if on the Scheduled Closing Date the Purchaser does not take all actions under its control or which require actions from the Purchaser in relation to the Closing Actions then the Sellers shall also be entitled to the Break-Up Fee. In the event that there is a Material Adverse Change in accordance with Clause 2.5 then the Sellers shall not be entitled to the Break-Up Fee. For the avoidance of doubt, the Sellers shall also be entitled to the Break-Up Fee if the Sellers withdraw from the Agreement pursuant to Clause 2.6. It being understood that the withdrawal right pursuant to Clause 2.6 cannot be exercised before the end of day of

 

16


  7 October 2016. The provisions in relation to payment of the Break-Up Fee and Clauses 13, 14, 17 and 18 shall survive the Withdrawal Notice and remain applicable. The final sentence of Clause 2.11 shall apply mutatis mutandis .

 

3 PURCHASE PRICE

 

3.1 Purchase Price.

 

  (i) The consideration for the sale and assignment of the Target-Companies-Shares and the Shareholder Loans payable by Purchaser to Sellers shall be, in the aggregate, equal to EUR 125,000,000.00 (in words: Euro one hundred and twenty five million) (“ Purchase Price ”). The Sellers agree that the costs of the Representation Insurance in the amount of EUR 434,000.00 shall be deducted from the Purchase Price.

 

  (ii) EUR 95,000,000.00 (in words: Euro ninety five million) of the Purchase Price shall be attributed to the sale and assignment of the WHO-Shares and the WHO Shareholder Loans and EUR 30,000,000.00 (in words: Euro thirty million) shall be attributed to the sale and assignment of the TeIJs-Shares and the TeIJs Shareholder Loans.

 

3.2 Payments. The Purchase Price consists of a cash part and a stock part as follows:

 

  (i) An amount of EUR 88,559,470.00 (in words: Euro eighty eight million five hundred and fifty nine thousand and four hundred and seventy) shall be payable in cash on the Scheduled Closing Date as follows: EUR 87,934,470.00 (in words: Euro eighty seven million nine hundred and thirty four thousand and four hundred and seventy) (hereinafter the “ Closing Cash Consideration ”) shall be payable on the Scheduled Closing Date in cash into the bank account of the Sellers’ Representative pursuant to clause 3.5 with debt releasing effect vis a vis all Sellers and EUR 625,000.00 (in words: Euro six hundred and twenty five thousand) shall be payable in cash into the Escrow Account in accordance with clause 3.6 (the “ Security Deposit ”, the Closing Cash Consideration and the Security Deposit are hereinafter referred to as the “ Cash Consideration ”).

 

  (ii) In addition to the Cash Consideration under (i) above Guarantor shall allot in aggregate to Seller 1 2,173,340 shares and to Seller 2 530,970 shares in Guarantor as is equal to the sum of EUR 36,006,530.00 (“ Stock Consideration ”). The number of shares has been calculated according to the weighted average share price as at the closings of the ten trading days up to and including 19 August 2016; it is hereby agreed between the Parties that the weighted average share price as at the closings of the ten trading days up to and including 19 August 2016 shall be an amount of USD 15.08 per share. For the calculation of the number of shares to be provided as Stock Consideration, the exchange rate has been used for converting USD into EUR at the end of day rate for the purchase of EUR with USD as provided by Thomson Reuters on 19 August 2016, it being 1.1326.

 

3.3 Net Working Capital Adjustment.

 

  (i) The Purchase Price shall be subject to an adjustment of the net working capital of the Target Companies as at the Effective Date (“ Effective Date Net Working Capital ”) as described in more detail in Annex 3.3(i) .

 

  (1) The Purchase Price shall be increased by the amount by which the Effective Date Net Working Capital exceeds the amount of EUR 15,500,000.00 (in words: fifteen million five hundred thousand Euros).

 

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  (b) The Purchase Price shall be reduced by the amount by which the Effective Date Net Working Capital is lower than the amount of EUR 9,500,000.00 (in words: nine million five hundred thousand Euros) (the “ Shortfall ”).

 

  (ii) The Effective Date Net Working Capital shall be calculated on the basis of the WHO-Effective Date Financial Statements and the TeIJs-Effective Date Financial Statements (the “ Effective Date Financial Statements ”) applying the rules and items as set forth in Annex 3.3(ii) .

The “ WHO-Effective Date Financial Statements ” shall correspond to the audited consolidated annual accounts ( Konzernabschluss in the meaning of Sec. 290 German Commercial Code ( HGB )) of WHO as at 30 September 2016.

The “ TeIJs-Effective Date Financial Statements ” shall correspond to the audited consolidated financial statements ( jaarrekening ) of TeIJs as at 30 September 2016.

 

  (iii) The WHO-Effective Date Financial Statements shall be prepared in accordance with the German Commercial Code ( Handelsgesetzbuch, HGB ) and the accounting standards and practises of WHO as consistently applied with past practice during the 12-months-period before the Signing Date, maintaining the same accounting and valuation principles, methods and rules used in the preparation of the Consolidated WHO Financial Statements. In addition, the rules agreed by the Parties in Annex 3.3(iii)/1 shall be applied.

The TeIJs-Effective Date Financial Statements shall be prepared in accordance with (i) all applicable statutory and legal requirements in force at the time of their preparation and adoption and (ii) in accordance with Dutch GAAP as consistently applied with past practice during the 12-months-period before the Signing Date, maintaining the same accounting and valuation principles, methods and rules used in the preparation of the Consolidated TeIJs Financial Statements. In addition, the rules agreed by the Parties in Annex 3.3(iii)/2 shall be applied.

 

  (iv) Within ninety (90) Business Days after the Completion Date, Purchaser shall prepare, or cause to be prepared, and deliver to the Sellers’ Representative (i) the Effective Date Financial Statements and, (ii) the audited consolidated annual accounts of WHO as at 30 September 2016 and (iii) the audited consolidated financial statements ( jaarrekening ) of TeIJs as at 30 September 2016 and (iv) a determination of the Purchase Price in a form as set forth in Annex 3.3(iv) (“ Purchase Price Determination Statement ”) setting forth a calculation of

 

  (a) the Effective Date Net Working Capital; and

 

  (b) the Purchase Price (adjusted if required);

in each case as set forth in clause 3.3. (i) through (iii) above. The Effective Date Financial Statements and the Purchase Price Determination Statement have to be audited by PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft. After the Completion Date, Purchaser shall procure that the Target Group Entities (i) make available to the Sellers’ Representative and their professional advisors all documents and other data (also by means of providing access to the bookkeeping ( Finanzbuchhaltung ) reasonably required to review the Effective Date Financial Statements and the Purchase Price Determination Statement and (ii) allow reasonable access upon reasonable notice to the Target Group Entities’ sites, employees and books and records during regular business hours. The Sellers’ Representative may be assisted (at its expense) by advisors in the context and procedure of such review of the accounts.

 

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  (v) Any objections of the Sellers’ Representative to the Effective Date Financial Statements or to the Purchase Price Determination Statement must be stated within twenty-five (25) Business Days after receipt of both the Effective Date Financial Statements and the Purchase Price Determination Statement by providing Purchaser with (i) a written statement of objections, specifying in reasonable detail the grounds for the objections; and (ii) a revised version of the Purchase Price Determination Statement (“ Revised Purchase Price Determination Statement ”) taking such objections into account. If and to the extent that the Sellers’ Representative do not state their objections in accordance with the requirements of this clause 3.3(v), the Effective Date Financial Statements and the Purchase Price Determination Statement shall with the expiration of such period be final and binding upon the Parties for the purposes of the determination of the Effective Date Net Working Capital and the Purchase Price.

 

  (vi) Each Party shall bear the costs of the preparation of, its own review of, and preparation of objections to the Effective Date Financial Statements, the Purchase Price Determination Statement and preparation of the Revised Purchase Price Determination Statement. For the avoidance of doubt the costs for the preparation of the Effective Date Financial Statements shall be borne by WHO and TeIJs respectively.

 

  (vii) In case of any objections of the Sellers’ Representative to the Effective Date Financial Statements or to the Purchase Price Determination Statement in accordance with the requirements of clause 3.3(v) the Parties shall attempt in good faith to resolve such objections. If the Parties cannot resolve such objections within twenty-five (25) Business Days of receipt by Purchaser of the Sellers’ Representative written statement of objections and the Revised Purchase Price Determination Statement, either Party may present the matter to a neutral auditor from an auditing firm of international standing to be jointly instructed by the Parties (“ Neutral Auditor ”). If the Parties cannot agree on the Neutral Auditor within ten (10) Business Days of either Party’s written request for such instruction, the Neutral Auditor shall at the request of either Party be appointed by the German Institute of Chartered Accountants ( Institut der Wirtschaftsprüfer in Deutschland e.V. ) after consideration of the proposals and comments by the Parties. The Parties shall jointly instruct the Neutral Auditor to decide the issues in dispute in accordance with the provisions of this Agreement.

 

  (viii) Unless jointly instructed otherwise by the Parties, the Neutral Auditor shall limit its decisions to the issues in dispute, but shall on the basis of such decisions and the undisputed parts of the Effective Date Financial Statements and the Purchase Price Determination Statement determine the Effective Date Financial Statements and the Purchase Price Determination Statement in their entirety. In respect of the issues in dispute, the decisions of the Neutral Auditor shall fall between the positions taken by the Parties which may be the position of one of the Parties. To the extent necessary to determine the Purchase Price, the Neutral Auditor shall also be entitled to decide on the interpretation of this Agreement. The Neutral Auditor shall act as an expert ( Schiedsgutachter ) and not as an arbitrator.

 

  (ix)

The Parties shall make available to the Neutral Auditor the Effective Date Financial Statements and the Purchase Price Determination Statement, the statement of objections, the Revised Purchase Price Determination Statement and all other documents and other data reasonably required by the Neutral Auditor to make the required decisions and determination. The Neutral Auditor shall to the extent legally permitted submit as soon as reasonably possible copies of all documents and other data made available by a Party to the respective other Party. Before deciding on the issues put to it by the Parties, the Neutral Auditor shall grant the Parties the opportunity to present their respective positions, which shall

 

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  include the opportunity of at least one oral hearing in the presence of both Parties and their professional advisors. The Parties shall instruct the Neutral Auditor to use its reasonable efforts to deliver its written opinion with reasons for the decisions as soon as reasonably practical, but not later than within sixty (60) Business Days of the issues in dispute having been referred to the Neutral Auditor. Subject to applicable law, the Neutral Auditor´s decisions, the Effective Date Financial Statements and the Purchase Price Determination Statement as determined by the Neutral Auditor shall be final and binding upon the Parties for the purpose of determining the Purchase Price.

 

  (x) The costs of the Neutral Auditor shall be borne by Purchaser and Sellers pro rata to the amount by which the Purchase Price as determined by the Parties in their respective (Revised) Purchase Price Determination Statement deviates from the Purchase Price set out in the Purchase Price Determination Statement as determined by the Neutral Auditor. The Parties shall be obliged to make reasonable advance payments that are equally split between the Parties.

 

  (xi) The Purchase Price shall be considered finally determined once the Effective Date Financial Statements and the Purchase Price Determination Statement have become final and binding upon the Parties. In case of an increase of the Purchase Price in accordance with clause 3.3(i), Purchaser shall pay to Sellers an amount equal to such excess; in case of a reduction of the Purchase Price, Sellers shall transfer to Purchaser shares in Guarantor representing the amount of the reduction to be calculated on the basis of the value of the Purchaser shares as determined under clause 3.3(ii) above, in each case with interest from the Completion Date to, but not including, the date of actual payment by Sellers or Purchaser, as the case may be, at an interest rate of LIBOR plus five (5) percentage points per annum. Any such amount shall be paid within ten (10) Business Days after the Effective Date Financial Statements and the Purchase Price Determination Statement having become final and binding upon the Parties.

If and to the extent that any undisputed breach of an obligation pursuant to clause 10.1 has resulted in the Effective Date Cash and the Effective Date Net Working Capital being higher and the Effective Date Debt being lower than they were but for such breach of obligation, the breach of obligation shall for the purposes of preparing the Purchase Price Determination Statement be ignored; i.e. the Purchase Price Determination Statement shall be prepared as if such breach of obligation had not occurred.

 

3.4 No Set-off. Neither the Sellers nor the Purchaser may set-off any claims either may have against the other under this Agreement, in particular – but not limited to – the Purchase Price. Neither the Purchaser nor the Sellers may exercise a right of retention ( Zurückbehaltungsrecht ) against the foregoing claims of Sellers or the Purchaser, unless any such counterclaim or right of the Purchaser or the Sellers, as the case may be, is acknowledged in writing by the Sellers or the Purchaser or is final and in a binding fashion adjudicated.

 

3.5 Bank Account of Sellers’ Representative .

The payment of the Closing Cash Consideration and any other payments to Sellers under this Agreement shall be made into the following bank account with debt releasing effect vis a vis all Sellers:

 

Account Holder:    Parcom Deutschland I GmbH & Co. KG
Name of Bank:    Deutsche Bank
Bank Account Number:    5029020

 

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Sort Code:    200 700 24
SWIFT:    DEUTDEDBHAM
IBAN:    DE66 2007 0024 0502 9020 00

or into another bank account of which Sellers have notified Purchaser in writing at least three (3) Business Days prior to the date the instructions for the respective wire transfer have been given.

 

3.6 Escrow Account.

The Security Deposit shall be paid on the Scheduled Closing Date into a bank account, the details of which shall be confirmed by the recording notary public to the Sellers’ Representative and the Purchaser.

The Sellers, the Purchaser and the recording notary public will enter into the Escrow and Deposit Agreement attached hereto as Annex 3.6 on or prior to the Scheduled Closing Date pursuant to which the recording notary as Escrow Agent shall hold the Security Deposit in escrow. The Security Deposit shall serve as collateral for all claims of the Purchaser under this Agreement.

 

3.7 Modes of Payment. Any payments under this Agreement shall be made by electronic transfer in immediately available funds, irrevocably credited, value as of the relevant due date set out in this Agreement or as otherwise provided by law, free of bank and other charges, and without any restrictions (other than bank and other charges and restrictions of the recipient’s bank or third parties).

 

3.8 Default Interest. In the event and to the extent that Purchaser or the Sellers are in default ( Verzug ) with the payment of the Closing Cash Consideration or any other payment under this Agreement to Sellers or Purchaser as the case may be, Purchaser and Sellers shall pay default interest with effect from the relevant payment date at a rate of 8% (in words: eight per cent) per annum. Interest shall be calculated on the basis of actual days elapsed divided by 360. Sellers’ and Purchaser’s right to claim further damages, if any, shall remain unaffected. For the avoidance of doubt: Purchaser and Sellers shall automatically and without any further notice requirements be regarded as being in default with payments if such payments are not effected when due under the provisions of this Agreement.

 

4 REPRESENTATIONS OF SELLERS

 

4.1 Representations. Each Seller hereby represents ( garantiert ) to Purchaser that the following statements (the “ Representations ” or individually a “ Representation ”) are complete and correct, in each case as at the date of this Agreement (the “ Signing Date ”), unless it is specifically provided that a representation shall be made in respect of a different date in which case the representation shall be made as at such different date, whereby it is understood by the Parties that:

 

  (i) any such Representation shall be an individual Representation of each Seller and not a joint representation of all Sellers;

 

  (ii) the liability of each Seller shall be subject to the modalities and limitations, including without limitations the De Minimis Amount, Threshold Amount, the maximum amount of liability and the procedural and time limitations as set forth in clauses 5 and 7;

 

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  (iii) in view of these modalities and limitations the Representations shall not constitute a warranty of condition ( Beschaffenheitsgarantie ) within the meaning of Section 444 German Civil Code ( Bürgerliches Gesetzbuch, BGB ) but a contractual liability regime of its own kind ( selbstständiges Garantieversprechen ) pursuant to Section 311 subsection 1 German Civil Code ( Bürgerliches Gesetzbuch, BGB );

 

  (iv) the Representations in clauses 4.2, 4.4 and 4.6 shall be given by each Seller only with regard to himself and the share or shares the respective Seller holds in WHO respectively TeIJs;

 

  (v) the Representation in clause 4.8 shall be given only with regard to the Shareholder Loan which the respective Seller sold to Purchaser pursuant clause 1.2 and

 

  (vi) entities other than the Material Target Group Entities are excluded from the representations of clauses 4.10 through 4.31;

 

  (vii) the Representations of Sellers 3 through 8 solely refer to WHO and the Material Target Group Entities to the extent they are subsidiaries of WHO.

Other than expressed in the Representations hereinafter, no Seller assumes further representations and warranties. Without limiting the liability of Seller 2 and Seller 3 under clauses 4 to 6 and only with respect to their liability under intentional misconduct ( Vorsatz ), Purchaser acknowledges that the Representations of Sellers, to the extent, Seller 2 and/or 3 are concerned, are given on the grounds ( Geschäftsgrundlage ) that for the purpose of giving the Representations of the Sellers, (a) neither Seller 2 and/or Seller 3 nor any of its respective directors, employees or advisers have independently examined or verified the underlying facts, matters, circumstances or statements made in such Representations of Sellers or the disclosures as prepared by WHO and its management and that (b) nothing in this Agreement shall imply a duty of Seller 2 and/or Seller 3 (including its directors, employees or advisers) to make specific or other enquiries or researches of whatever nature and (c) that the lack of such examinations or verifications of Seller 2 and Seller 3 shall as such in no event be regarded as acting in a fraudulent manner ( keine Arglist aufgrund Angaben “ins Blaue hinein” wegen unterbliebener Untersuchungen oder Überprüfungen der Verkäufer ).

 

4.2 Enforceability, No Conflict. As at the Signing Date and the Closing Date this Agreement and all other documents to be executed by the Sellers in connection with the Transaction constitute legal, valid, and binding obligations of Sellers, enforceable against Sellers in accordance with their terms. Sellers have the absolute and unrestricted right, power, authority, and capacity to execute this Agreement and the related documents and to perform their obligations under this Agreement and the related documents, which actions have been duly authorized and approved by all necessary (corporate) action of Sellers. The execution and consummation of this Agreement and the transactions contemplated therein by the Sellers do not violate the articles of association, partnership agreements or other corporate documents, as the case may be, or any other legal obligations of Sellers and is not subject to challenges ( Anfechtung ) by any third party on any legal basis, including any creditor protection laws. There is no action, suit, investigation or other proceeding pending or threatened against or affecting Sellers or any Target Group Entity before any court, arbitrator, governmental body, agency or official that in any manner challenges or seeks to prevent, enjoin, alter or materially delay the execution or consummation of this Agreement or the transactions contemplated therein, and to Knowledge of the Sellers there are no circumstances likely to give rise to any of the foregoing. No insolvency or similar proceedings have been opened over the assets of a Seller, and to Knowledge of the Sellers there are no circumstances that would require or justify the opening of or application for such proceedings. No Seller is either illiquid (zahlungsunfähig) or over-indebted (überschuldet). All representations given pursuant to this clause 4.2 are stated as at the Signing Date and the Closing Date.

 

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4.3 Existence of the Target Group Entities. As at the Signing Date and the Closing Date, the Target Group Entities are duly incorporated and validly existing under the laws of their respective jurisdiction and are in good standing. Each Target Group Entity has the unrestricted right, power, authority and capacity to own its assets and to conduct its business as conducted on the date of this Agreement and on the Closing Date. The articles of association of WHO set forth in Annex 4.3 constitute the current, authentic and complete articles. The articles of association of TeIJs as of 06/11/2014 constitute the current, authentic and complete articles which are attached in Annex 4.3 for reasons of proof only. No resolutions or other statements to amend the articles of association have been made by the Sellers, and no filings with any commercial register (or with an equivalent corporate authority) in respect of any Target Group Entity are pending. No shareholders’ or partners’ resolution of any Target Group Entity is void or has been challenged ( angefochten ) or threatened to be challenged by any shareholder or partner of such Target Group Entity or any third party.

 

4.4 Ownership of Shares. As at the Signing Date and the Closing Date, the Target-Companies-Shares and the shares and interests in the Target Group Entities (i) are beneficially owned by Sellers or by one or more Target Group Entities each as set forth in Preamble (C) and (D), (ii) have been duly authorized and validly issued, (iii) are fully paid-up, either in cash or in kind, and have not been repaid, either in whole or in part and (iv) are free and clear of any third party rights (including, but not limited to (i) trust arrangement ( Treuhandverhältnis ), silent partnership ( stille Beteiligung ), sub-participation ( Unterbeteiligung ) or similar arrangement; (ii) pending transfer or other disposition ( Verfügung ); (iii) sale, contribution or other contractual arrangement creating an obligation to transfer or encumber; or (iv) shareholders’ resolution providing for their redemption ( Einziehung ); and they are not pledged, assigned, charged or used as a security, no dispositions ( Verfügunge n) are pending, nosale, contribution or other contractual arrangements creating an obligation to transfer or encumber shares are pending, each except as disclosed in Annex 4.4. Seller 1 represents ( garantiert ) to Purchaser that Mr Ulrich Biffar will not object the sale of the shares beneficially held by him.

 

4.5 No Other Interests . The shares set out in Preamble (C) and (D) of the Target Group Entities constitute the entire issued share or other equity capital of the respective Target Group Entity. Neither Sellers, nor any affiliate of Sellers (in the meaning of Sec. 15 et seq. German Stock Corporation Act), nor any third party has any pre-emptive right ( Vorkaufsrecht ), right of first refusal ( Vorerwerbsrecht ), subscription right ( Bezugsrecht ), option right ( Optionsrecht ), conversion right ( Wandlungsrecht ) or similar right in respect of the aforementioned shares. There are no agreements, which require the allotment, issue or transfer of any debentures in or securities of the Target Group Entities.

 

4.6 Contribution s. The shares in the Target Group Entities are fully paid up. All contributions have been made in compliance with applicable law and have not been repaid or returned, in whole or in part, whether open or disguised, directly or indirectly. There are no obligations to make further contributions ( keine Nachschußpflichten ) and – in relation to the Target Companies – the mandatory capital maintenance rules under applicable law (e.g. section 30 et seq of the German Limited Liability Companies Act (GmbHG)) have not been breached.

 

4.7 No Pending Business Transactions . No Target Group Entity is a party to any agreement relating to the acquisition or sale of, or an economically equivalent transaction involving, any interests in other legal entities or any business ( Betrieb ) or parts thereof ( Betriebsteile ), other than agreements where the material obligations ( Hauptleistungspflichten ) have already been fully performed by all parties thereto.

 

4.8 Shareholder Loans. As at the Signing Date and the Closing Date, and subject always to ongoing accrual of interest thereon, the statements in Preamble (F) regarding the Shareholder Loans are complete and correct. Sellers are the creditors of the respective Shareholder Loan as disclosed in Annex (F). The claims of Sellers under these loans, in particular, the loan repayment claims, are owned by Sellers and are not subject to any third party rights, except as disclosed in Annex 4.8 .

 

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4.9 Insolvency Proceedings. No insolvency or similar proceedings have been, or have been threatened to be, opened over the assets of any Target Group Entity, and there are no circumstances that would require or justify the opening of or application for such proceedings. No Target Group Entity is illiquid ( zahlungsunfähig ) or over-indebted ( überschuldet ).

 

4.10 Financial Statements.

 

  4.10.1 Compliance with GAAP and Laws, True and Fair View

 

  (i) The consolidated financial statements of WHO (taking into account the Material Target Group Entities to the extent they belong to the WHO Group Entities) for the business year ending on 30 September 2015 (the “ Consolidated WHO Financial Statements ”) (including a balance sheet ( Bilanz ), profit and loss statement ( Gewinn- und Verlustrechnung ), notes ( Anhang ), business report ( Lagebericht ) and cash flow statement) which are attached as Annex 4.10.1(i) for reasons of proof only have been prepared in all material respects in accordance with German GAAP ( Grundsätze ordnungsgemäßer Buchführung (GoB)) and applicable laws;

 

  (ii) the preliminary consolidated financial statements of TeIJs (including the Material Target Group Entities to the extent they belong to the TeIJs Group Entities) for the business year ending on 30 September 2015 (the “ Consolidated TeIJs Financial Statements ”, together with the Consolidated WHO Financial Statements the “ Financial Statements ”) (including a balance sheet, profit and loss statement, notes, business report and cash flow statement) which are attached as Annex 4.10(ii) for reasons of proof only have been prepared in all material respects in accordance with generally accepted accounting principles applicable to such Material Target Group Entity and applicable laws and to Knowledge of Sellers will not materially differ from the final consolidated financial statements.

 

  4.10.2 The Financial Statements present a true and fair view of the assets and liabilities ( Vermögenslage ), financial position ( Finanzlage ) and earnings position ( Ertragslage ) of the Material Target Group Entities ( ein den tatsächlichen Verhältnissen entsprechendes Bild der Vermögens-, Finanz- und Ertragslage ) taken as a whole as of their respective dates.

 

  4.10.3 The Consolidated WHO Financial Statements have been properly audited and an unqualified auditor’s certificate ( uneingeschränkter Bestätigungsvermerk ) has been received.

 

  4.10.4 Books and Records . In all material respects the books and accounting and other records of each Material Target Group Entity (i) are up to date and contain complete and accurate details of the business activities of such Material Target Group Entity and of all matters to be recorded under applicable law or applicable GAAP; and (ii) have been maintained in accordance with applicable legal requirements on a proper and consistent basis.

 

  4.10.5 No Undisclosed Liabilities . Except as disclosed in Annex 4.10.5 , no Material Target Group Entity has any liabilities or obligations, whether accrued or contingent ( Haftungsverhältnisse ), except (i) as disclosed in the Financial Statements; (ii) incurred since the date of the Financial Statements in the ordinary course of business consistent with past practice; or (iii) contractual or other liabilities incurred in the ordinary course of business, which are not required to be recorded on a balance sheet according to GAAP as set out in clause 4.10.1.

 

4.11

Affiliates, Enterprise Agreements. Except as described in Preamble (D) the Target Group Entities do not hold any participation or sub-participation in any other company. Except as

 

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  listed in Annex 4.11 the Target Group Entities are not part of an enterprise agreement within the meaning of Section 291 et seq. of the German Stock Corporation Act or a similar agreement under the laws of any other jurisdiction except as otherwise disclosed in this Agreement.

 

4.12 Owned Real Estate . Annex 4.12 includes for each Material Target Group Entity a correct and complete list of all real estate owned or co-owned by such Material Target Group Entity, or subject to an inheritable building right ( Erbbaurecht ), in-rem lease ( Dauernutzungsrecht ) or similar right in favour of such Material Target Group Entity, and correctly states for each such piece of real estate the location, applicable land register, and encumbrances (the Owned Real Estate ”). Except as disclosed in Annex 4.12, each Material Target Group Entity is the unrestricted legal and beneficial owner of the Owned Real Estate, and no piece of Owned Real Estate is (i) encumbered with any land charges or mortgages ( Grundpfandrechte ), planning obligations, covenants, options or other encumbrances ( Belastungen ); or to the Knowledge of the Sellers (ii) subject to any unregistered or otherwise pending transfer ( Auflassung ) or other disposition ( Verfügung ) or any sale, contribution or other contractual arrangement creating an obligation to transfer any real estate or to create, change or remove any encumbrances. No real estate other than the Owned Real Estate and the Leased Real Estate (as defined below) is currently used by any Material Target Group Entity to conduct its business as conducted on the Effective Date.

 

4.13 Leased Real Estate . Annex 4.13 includes for each Material Target Group Entity a correct and complete list of all real estate leased by such Material Target Group Entity from any third party (including, without limitation, Sellers or entities affiliated with a Seller), and correctly states for each such piece of real estate the location, the landlord and the date of the lease agreement (the Leased Real Estate ”).

 

4.14 Material Agreements.

 

  4.14.1 Annex 4.14.1 hereto sets forth a complete and correct list of any of the following agreements or commitments (hereinafter collectively “ Material Agreements ”), a Material Target Group Entity is a party to and which are still in force as at the Signing Date and/or have not yet been fully performed by all parties:

 

  (i) loan and credit agreements with third parties (i.e., other than Sellers and the Material Target Group Entity), finance leases with payment obligations of the Material Target Group Entities in excess of EUR 200,000.00 (in words: Euro two hundred thousand) p.a. in the individual case, sale-and-lease-back-arrangements, asset-backed financing or securitization agreements;

 

  (ii) agreements or commitments securing indebtedness of third parties not belonging to the Material Target Group Entity, such as indemnities, pledges, guarantees, securities ( Bürgschaften ) or letters of comfort ( Patronatserklärungen ) extended to any third parties in excess of EUR 50,000.00 (in words: fifty thousand Euros) in the individual case;

 

  (iii) non-compete, restrictive covenants or other agreements that restrict any of the Material Target Group Entities from operating its business as conducted on the Signing Date except for customary vertical restrictions under distributorship, agency- or license agreements and other such agreements;

 

  (iv) patent, trademark and know-how-license agreements (in-license or out-license) excluding, for the avoidance of doubt, software licenses;

 

  (v) research and product development agreements excluding any agreements with customers on research and development;

 

  (vi) intentionally left blank

 

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  (vii) agreements entered into in the last three (3) years, relating to the acquisition, divestiture, encumbrance or disposal (whether by stock or asset purchase, merger or otherwise) of any business, intellectual property, real estate or any equity interest with a volume in excess of EUR 200,000.00 (in words: Euro two hundred thousand) in the individual case;

 

  (viii) contracts or other agreements relating to the construction, divestiture, encumbrance or acquisition of fixed assets or other capital expenditures with outstanding payment obligations of any of the Material Target Group Entities in excess of 200,000.00 (in words: Euro two hundred thousand) in the individual case;

 

  (ix) agreements with Sellers or any entity affiliated with a Seller ( nahestehende Personen ) within the meaning of Section 1 paragraph 2 of the German Foreign Transaction Tax Act ( Gesetz über die Besteuerung bei Auslandsbeziehungen, “ AStG ) excluding (i) service agreements ( Anstellungsverträge ), including related agreements on bonuses and expenses, (ii) agreements on the remuneration for services as members of the advisory/supervisory board ( Beirat ), including expenses payable, (iii) any agreements relating to the Shareholder Loans, and (iv) any subordination agreements relating to bank loans;

 

  (x) contracts that would automatically terminate or could be terminated or substantially amended by a contracting party as a result of the consummation of the transactions contemplated under this Agreement due to a specific contractual provision addressing a share transfer;

 

  (xi) agreements with consultants or advisors which provide for annual (fixed or minimum) fees in excess of EUR 50,000.00 (in words: Euro fifty thousand Euros) in the individual case or which cannot be terminated within a period of six (6) months after the Signing Date without further payment, penalty or liability;

 

  4.14.2 Except as disclosed in Annex 4.14.2 (i) the Material Agreements are in full force and effect and are enforceable against the parties thereto in accordance with their terms, unless this would not cause a material adverse change to the Material Target Group Entities taken as a whole; (ii) no party to a Material Agreement has given written notice of termination or indicated in writing that it will give notice of termination, and to the Knowledge of the Sellers no circumstances exist which give any party to a Material Agreement the right to terminate or modify such Material Agreement; and (iii) to the Knowledge of the Sellers no party to a Material Agreement is in material breach of a Material Agreement.

 

4.15

Owned IP Rights . Annex 4.15 includes for each Material Target Group Entity a correct and complete list of all patents, utility models ( Gebrauchsmuster ), registered designs ( Geschmacksmuster ), trademarks ( Marken ), copyrights, trade, business and domain names, software protection rights and other intellectual property rights ( gewerbliche Schutzrechte ) and applications with respect to such rights (the IP Rights ”) (i) owned by such Material Target Group Entity; or (ii) owned by a Seller or an entity affiliated with a Seller and to be transferred to such Material Target Group Entity on, prior to or after the Closing Date pursuant to this Agreement, and correctly states for each such IP Right the type, subject matter, applicable register or other identification data and encumbrances (the Owned IP Rights ”). Except as shown in Annex 4.15, the Material Target Group Entities have not entered into license agreements as licensor with respect to any of the Owned IP Rights. To the Knowledge of the Sellers, each Material Target Group Entity is the unrestricted legal and beneficial owner of the Owned IP Rights listed for such Material Target Group Entity in Annex 4.15 and no Owned IP Right is (i) encumbered ( durch die Target Group Entities belastet ) with any rights of any third party, including, without limitation, Sellers or entities affiliated with a Seller; or (ii) subject to any non-registered or otherwise pending transfer or

 

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  other disposition or any sale, contribution or other contractual arrangement creating an obligation to transfer or to create, change or abolish any encumbrances. To the Knowledge of the Sellers, the Target Group Entities are free to dispose of the Owned IP Rights in any manner, and such dispositions do not violate any legal obligations of any Target Group Entity. To the Knowledge of the Sellers, the Target Group Entities have properly maintained and are continuing until the Closing Date to properly maintain the Owned IP Rights, in particular in relation to applications in a timely manner for renewals and the payment when due of all registration and renewal fees as well as all annuities.

 

4.16 Licensed IP Rights . Annex 4.16 includes for each Material Target Group Entity a correct and complete list of all IP Rights (i) licensed or sub-licensed by any third party (including, without limitation, Sellers or an entity affiliated with a Seller) to such Material Target Group Entity; and (ii) to be licensed or sub-licensed by any third party to such Target Group Entity on, prior to or after the Closing Date pursuant to this Agreement, and correctly states for each such IP Right the type, subject matter, applicable register or other identification data, if any, the licensor and the date of the license agreement (the Licensed IP Rights ”). To the Knowledge of the Sellers, all agreements providing for a license to a Material Target Group Entity of any rights to use any Licensed IP Rights are in full force and effect and enforceable against the licensor in accordance with their terms. To the Knowledge of the Sellers no IP Rights other than the Owned IP Rights and the Licensed IP Rights are currently used by any Material Target Group Entity.

 

4.17 No Challenges, Proceedings, etc. with respect to IP Rights . Except as disclosed in Annex 4.17 and to the Knowledge of the Sellers, (i) the Owned IP Rights and Licensed IP Rights have not been challenged ( angegriffen ) by any third party; (ii) no such challenge has been threatened in writing; and (iii) there are no circumstances which would give rise to such challenge. None of the IP Rights is subject to any pending judgment, injunction, order or decree issued against a Seller or a Material Target Group Entity restricting the use thereof by it or restricting the licensing thereof by it to any third party. To the Knowledge of the Sellers, no Material Target Group Entity infringes upon ( verletzt ) any IP Right of any third party (including without limitation those of a Seller or an entity affiliated with a Seller). No such infringement has been asserted in writing. To the Knowledge of the Sellers, no third party (including without limitation Seller or an entity affiliated with a Seller) infringes upon any of the Owned IP Rights.

 

4.18 Employee Invention Act . To the Knowledge of the Sellers, each Material Target Group Entity with its registered seat in Germany has duly complied with, to the extent required by law, contract or otherwise, the provisions of the German Act on Employee Inventions ( Arbeitnehmererfindungsgesetz ). All such Material Target Group Entities have paid all remuneration to persons entitled to any compensation under the German Act on Employee Inventions or agreements entered into under such Act up to and including the Closing Date.

 

4.19 Information Technology . To the Knowledge of the Sellers, each Material Target Group Entity either owns or holds valid leases and/or licenses to all material computer hardware, software, networks and other information technology (collectively “ Information Technology ”) which is essential for such Material Target Group Entity to conduct its business as conducted on the Signing Date. Such leases or licenses are effective for, and cannot be terminated by the respective other party thereto with a notice period of less than 6 months after the Signing Date. To the Knowledge of the Sellers, during the last 6 months prior to the Signing Date, there have been no interruptions, data losses or similar incidents attributable to the Information Technology owned or used by such Target Group Entity which had a material adverse effect on such Material Target Group Entity’s business.

 

4.20 Employees.

 

  4.20.1

Directors; Officers; Material Employees. Annex 4.20.1 includes for each Material Target Group Entity a correct and complete list of its (i) directors; (ii) officers; and (iii) employees with (a) a fixed annual gross salary in excess of EUR 100,000.00 (in words Euro one hundred thousand) other than in respect those

 

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  employees of WAM at the Rheda, Germany location where the relevant figure shall be EUR 80,000.00 (in words: Euro eighty thousand); (c) a contractually agreed notice period of more than twelve (12) months (other than notice periods under mandatory provisions of statutory law); and (d) a contractual entitlement to a severance payment in excess of EUR 50,000.00 (in words Euro fifty thousand) (collectively the “ Key Employees ”, the contracts with the Key Employees together the “ Key Personnel Contracts ”).

 

  4.20.2 Status of Key Personnel Contracts . Except as disclosed in Annex 4.20.2 , (i) no party to a Key Personnel Contract has given notice of termination, and no circumstances exist which give any party to a Key Personnel Contract a special right to terminate or modify such Key Personnel Contract; and (ii) the execution or consummation of this Agreement or the transactions contemplated therein do not trigger any such rights of any director, officer or Key Employee.

 

  4.20.3 Pensions . Annex 4.20.3 includes for each Material Target Group Entity a correct and complete list of all agreements and other commitments, whether of an individual or collective nature, regarding pensions (betriebliche Altersversorgung) under which such Material Target Group Entity has any obligations (the Pension Commitments ”). All obligations under or in connection with the Pension Commitments, including obligations arising by operation of law that have become due, have been fulfilled by the Material Target Group Entities.

 

  4.20.4 Collective Agreements . Annex 4.20.4 includes for each Material Target Group Entity a correct and complete list of (i) all reconciliation of interest agreements (Interessenausgleiche) and social plans (Sozialpläne); and (ii) any collective arrangements, whether in the form of general commitments (Gesamtzusagen), standard terms of employment (vertragliche Einheitsregelungen), shop agreements (Betriebsvereinbarungen), collective bargaining agreements (Tarifverträge) or in any other legal form under the laws of any jurisdiction which restrict the Material Target Group Entities’ freedom to dismiss any of their employees (including restrictions in the form of an obligation to make, in the case of dismissals or changes to terms of employment, any payments) (the Collective Agreements ”).

 

  4.20.5 Labor Disputes . Except as disclosed in Annex 4.20.5 , in the last three (3) years the Material Target Group Entities have not experienced any disputes with any authorities (in particular regarding disabled persons and repayment duties) or any strike or labour interruption.

 

  4.20.6 Payment of Compensation . All compensation and withholding obligations of the Material Target Group Entities to or in respect of their current and former employees for periods until the Signing Date have been paid by the Material Target Group Entities or have been properly provided in the Financial Statements.

 

4.21 Environmental Law. To the Knowledge of the Sellers and except as disclosed in Annex 4.21 , none of the Material Target Group Entities is subject to any Environmental Liabilities or infringes any Environmental Laws as at the Signing Date.

 

  4.21.1 Environmental Liabilities ” shall mean all damages (including, without limitation, reasonable fees and expenses of environmental consultants and, legal and other advisors, but excluding lost profit and consequential damages) resulting from:

 

  (a)

obligations of Purchaser or any Material Target Group Entity to carry out investigation measures for purposes of risk assessment ( Maßnahmen zur Gefährdungsabschätzung ), clean-up measures ( Sanierungsmaßnahmen ), securing measures ( Sicherungsmaßnahmen ), protective containment measures ( Schutz und Beschränkungsmaßnahmen ) or measures to eliminate, reduce or otherwise remedy an immediate danger to life or

 

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  health ( Maßnahmen zur Abwehr von unmittelbar drohenden Gefahren für Leben und Gesundheit ), in each case relating to an Existing Environmental Condition ( Environmental Remediation Measures ”), provided, however, that such measures (x) have to be performed pursuant to a final or immediately enforceable order by an authority ( bestandskräftiger oder sofort vollziehbarer Verwaltungsakt ), a final court judgment, or arbitral award ( rechtskräftiges Urteil oder Schiedsspruch ), or an agreement with an authority relating to clean-up measures ( öffentlich-rechtlicher Sanierungsvertrag ); (y) have been consented to in writing by a Seller; or (z) are necessary to eliminate, reduce or otherwise remedy an immediate danger to life or health; and

 

  (b) claims of third parties for compensation of damages suffered as a result of Existing Environmental Conditions.

 

  4.21.2 Existing Environmental Condition ” shall mean the presence on the Signing Date of Hazardous Materials in the soil, leachate ( Sickerwasser ), soil-vapor ( Bodenluft ), ground water, surface water ( Oberflächenwasser ), or building of the Owned Real Estate, the Leased Real Estate or any other real properties which have been owned, occupied ( Inhaberschaft der tatsächlichen Gewalt ) or used by any Material Target Group Entity on or prior to the Effective Date (collectively the Covered Properties ”).

 

  4.21.3 Hazardous Materials ” shall mean any pollutants, contaminants or hazardous substances according to the Environmental Laws including, without limitation, oil, petroleum, asbestos, hazardous wastes or toxic, explosive or radioactive substances.

 

  4.21.4 Environmental Laws ” shall mean all applicable laws ( Gesetze , Verordnungen, Satzungen ), ordinances ( Verwaltungsvorschriften ), rules, directives and regulations ( technische Normen und Regelwerke ) relating to environmental matters and being applicable to the Material Target Group Entities or the Covered Properties, as the case may be.

 

4.22 Insurance. Annex 4.22 includes a correct and complete list of all insurance policies – with the exception of three policies (PZU, InterRisk and Allianz) which are known to Purchaser and attached for for reasons of proof only – maintained by or on behalf of the Material Target Group Entities including details of the insured, insured risk, insurance company, policy number, date, term, annual premium and maximum amount of coverage (the Insurance Policies ”).The Insurance Policies are and will remain in full force and effect until the Closing Date. All premiums due under the Insurance Policies have been duly paid and there has been no breach of any material obligation of any Material Target Group Entities under the Insurance Policies.

 

4.23 Permits. Except as disclosed in Annex 4.23 , (i) each Material Target Group Entitiy holds all material permits, licenses and other public law approvals ( öffentlich-rechtliche Erlaubnisse ), including, for the avoidance of doubt all permits, licenses or other public law approvals required under Environmental Laws, which are necessary to conduct its business (the Permits ”); (ii) the Permits are in full force and effect ( bestandskräftig ), and to Knowledge of the Sellers they have not been challenged ( angefochten ) by any third party; and (iii) to the Knowledge of the Sellers no proceedings regarding a revocation ( Widerruf ) or withdrawal ( Rücknahme ) of any Permit have been initiated or to the Knowledge of the Sellers threatened.

 

4.24 Litigation, Disputes. Except as disclosed in Annex 4.24 , the Material Target Group Entities are not involved in any court or administrative proceedings, including arbitration proceedings, either as plaintiff or defendant which involves an amount in excess of EUR 500,000.00 (in words: Euro five hundred thousand) in each individual case.

 

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4.25 Product Liability . To the Knowledge of the Sellers and except as disclosed in Annex 4.25 and/or except as accounted for as a specific liability or accrual or pursuant to the general provision in respect of product liability contained in the financial statements in the respective fiscal year, the products manufactured and distributed by the Material Target Group Entities in the period between 1 August 2012 and the Signing Date do not suffer from any defects which give or could rise to any product liability or warranty claims and no such claims have been made against any Material Target Group Entity.

 

4.26 Subsidies. All public grants ( Zuschüsse ), allowances, aids and other subsidies ( Subventionen ) in whatever form (the Public Subsidies ”) received by (i) the Material Target Group Entities of the WHO Group Entities within the period of five (5) years prior to the Signing Date and (ii) the Material Target Group Entities of the TeIJs Group Entities since the acquisition of Terwa Holding B.V. by TeIJs B.V. and TeIJs are listed in Annex 4.26 and such list indicates the nature of the Public Subsidy and dates of any administrative orders, agreements or other instruments on which basis the Public Subsidy was given, the Material Target Group Entity which received the Public Subsidy and the amounts received. To the Knowledge of the Sellers, no proceedings regarding a revocation or withdrawal of a Public Subsidy have been initiated or, to Knowledge of the Sellers, threatened, and to the Knowledge of the Sellers there are no circumstances, which would justify the initiation of such proceedings. To the Knowledge of the Sellers, each Material Target Group Entity of the WHO Group Entities is in full compliance with its obligations under or in connection with the Public Subsidies, including the obligations under any ancillary provisions in the respective orders or agreements thereto. Except as disclosed in Annex 4.26, no Material Target Group Entity of the WHO Group Entities is obliged under the Public Subsidies to maintain a certain level of employees or to make any investments.

 

4.27 Tax Matters.

 

  (i) Each Material Target Group Entity has duly and timely filed in accordance with applicable law all returns, forms and other statements required to be filed by such Material Target Group Entity for Taxes (collectively the Tax Returns ”), taking into account any extensions of the due date granted by a Tax Authority before the Signing Date. No Material Target Group Entity is currently subject to any audit, examination or similar proceedings by any Tax Authorities. The books and other records of each Material Target Group Entity relating to Taxes have been properly maintained in compliance with all applicable laws.

 

  (ii) All Taxes due to be paid or withheld and remitted by any Material Target Group Entity have been duly paid or withheld and remitted to the appropriate tax authority.

 

  (iii) No retention periods ( Sperrfristen ) or holding periods ( Halte- oder Beibehaltungsfristen ) in connection with Taxes (e.g. as regards Germany sec. 22 para 1 and para 2 German Reorganisation Tax Code ( UmwStG ), sec. 5 para. 3 German Real Estate Transfer Tax Code ( GrEStG ) etc.) have been triggered at the Material Target Group Entities and have not yet expired prior to the earlier of the Effective Date or the Closing Date

 

  (iv) The corporate tax credit within the meaning of Sec. 37 German Corporate Income Tax Act ( KStG ) ( Körperschaftsteuerguthaben ) and the corporate tax increase amount in the meaning of Sec. 38 German Corporate Income Tax Act ( KStG ) ( Körperschaftsteuererhöhungsbetrag ) of the German Material Target Group Entities as of Signing Date is correctly reflected in Annex 4.27(iv) . The contribution account for tax purposes ( steuerliches Einlagekonto ) of the Company amounted to EUR 232,897 as of 30 September 2015, and has not been reduced since.

 

  (v)

Except as disclosed in Annex 4.27(v) , no Material Target Group Entity is a member of any consolidated or unitary group or a party to any arrangement as a

 

30


  result of which any income, loss, asset or liability or VAT of any Material Target Group Entity is allocated for tax purposes to any other Material Target Group Entity or a third party, or is otherwise taken into account in determining any Tax payable by any Material Target Group Entity or a third party, or vice versa (the Tax Consolidations ”).

 

  (vi) There have been no events or transactions at the German Material Target Group Entitys which are to be classified as a hidden profit distribution in the sense of sec. 8 para 3 sentence 2 German Corporate Income Tax Act ( KStG ) and which were initiated or caused otherwise intentionally or with gross negligence with respect to the qualification as hidden distribution of profits in this sense.

 

  (vii) No Material Target Group Entity is in breach of its statutory obligations to duly and thoroughly documents transfer prices for dealings and transactions of any kind in which any of the Material Target Group Entities is involved.

 

  (viii) Except as disclosed in Annex 4.27(vi) none of the Material Target Group Entities has a permanent establishment (within the meaning of an applicable Tax treaty) or otherwise has an office or fixed place of business in a country other than the country in which it has its registered office.

 

  (ix) Except as disclosed in Annex 4.27(ix) , none of the Material Target Group Entities has entered into an agreement or arrangement with any Tax Authority that requires such Group Company to take any action or refrain from taking any action in order to secure any Tax saving or advantage.

 

4.28 Payment Obligations relating to Change of Control. Except as disclosed in Annex 4.27 neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will result in any obligation of the Material Target Group Entities to grant any compensation, severance or other payment or benefit to any (current or former) managing director or employee of any Material Target Group Entity or any third party.

 

4.29 Ordinary Course . In the period between 1 October 2015 and the Signing Date, except as disclosed in Annex 4.29 or otherwise in this Agreement or its Annexes, the Target Group Entities have conducted their business in accordance with the past practice.

 

4.30 No Unlawful Business Practices . The Sellers, entities affiliated with Sellers, the Material Target Group Entities and the managing directors ( Geschäftsführer ) and, to the Knowledge of the Sellers, employees of the Material Target Group Entities have not, directly or indirectly, in connection with the business of the Material Target Group Entities (i) used any funds of the Material Target Group Entities for bribes ( Schmiergelder ), other unlawful purposes or political contributions in violation of applicable laws; (ii) requested or accepted any bribes or other unlawful benefits; or (iii) established or maintained any funds or assets that have not been properly recorded in the books and records of the Material Target Group Entities. The Target Group Entities do not directly sell any goods into the following jurisdictions: Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan, Syria.

 

4.31 Finders’ Fees and Management Incentives . Except as disclosed in Annex 4.31 , the Material Target Group Entities have not (i) incurred any obligation for brokerage or finders’ fees, agents’ commissions or similar payments to be made in connection with this transaction; or (ii) paid or promised to their officers, directors or employees any bonus or other special incentives in connection with this Agreement or the transactions contemplated therein.

 

4.32

Knowledge of the Sellers. For the purpose of this Agreement, Sellers shall be deemed to have “ Knowledge of the Sellers ” if, as of the date of this Agreement, any of the persons listed in Annex 4.32/1 , had actual knowledge ( positive Kenntnis ) or could have obtained such knowledge after due inquiry of the members of the management of the Target Group Entities listed in Annex 4.32/2 on the occasion and in preparation of this Agreement

 

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  applying the standard of care of a prudent businessman pursuant to Section 43 of the German law on Limited Liability Companies ( GmbHG )( fahrlässige Unkenntnis ), whereas the inquiry relating to the TeIJs Group Entities shall be made by Sellers 1 and 2.

 

5 REMEDIES FOR BREACH OF REPRESENTATIONS

 

5.1 Breach, remediation in kind. Subject to the provisions of this clause 5 and clause 7, if any Representation of Sellers in clause 4 is incorrect (a “ Breach ”), Sellers shall put Purchaser, or at Purchaser’s election, the Target Group Entity concerned into the same position they would have been in if the Breach had not occurred. Sellers shall be entitled to provide remediation in kind ( Naturalrestitution ), i.e., to restore Purchaser or at Purchaser’s election, the Target Group Entity concerned to such a position, unless remediation in kind (i) is not permitted by the nature of the Breach or (ii) cannot be effected by Sellers with reasonable efforts.

Any obligation of each Seller under this clause 5 shall only apply for incorrect Representations which the respective Seller has given, i.e. the obligation of Sellers 3 through 8 shall be limited to Breaches relating to WHO and the Material Target Group Entities to the extent they are subsidiaries of WHO.

 

5.2 Compensation in Cash. If and to the extent that (a) remediation in kind pursuant to clause 5.1 is not permitted by the nature of Breach or (b) in spite of Sellers being entitled to provide remediation in kind, such remediation in kind has not been effected by Sellers within a period of three (3) months after a written notification of the Breach has been made by Purchaser, or (c) if remediation in kind would be grossly inconsistent with significant business interests of the Purchaser or the Target Group Entities Purchaser – subject to clause 5.3 – any claim of Purchaser for remediation in kind shall lapse and instead Purchaser shall be entitled to request from Sellers compensation in cash ( Schadensersatz in Geld ) by payment of the amount of all losses, costs and expenses (including, without limitation reasonable legal, accounting and other fees and expenses of professional advisors) and other damages which the Purchaser and other Target Group Entities respectively have suffered or incurred and would not have suffered or incurred if the representation in question had been correct and section 249(II) of the German Civil Code shall apply accordingly.

 

5.3 Damages. For purpose of determining the liability of the Sellers, only the actual losses incurred by the Target Group Entity concerned (i.e. losses which it would not have suffered if the representations of Sellers in clause 4 were true and correct and fully complied with) or by Purchaser (but only with respect to Purchaser’s investment in the Target Group Entities, thus excluding Purchaser’s investments in other entities) and the costs and expenses (as set out above) shall be taken into account, excluding (i) any potential or actual reduction in value ( Wertminderung ) of the Target Group Entities beyond the actual damage incurred (ii) any consequential damages ( Folgeschäden ) or indirect damages ( mittelbare Schäden ), (iii) any lost profits ( entgangener Gewinn ), (iv) any lost opportunity costs, or (v) any internal costs and expenses, or (vi) Taxes as result of a breach of any Representation of Sellers according to Clauses 4.20.6 or 4.27 incurred by a Target Group Entity or Purchaser (collectively the “ Damages ”). For the avoidance of doubt, Taxes as result of a breach of any Representation of Sellers according to Clauses 4.20.6 or 4.27 incurred by a Target Group Entity or Purchaser shall be exclusively governed by clause 6. Any loss or damage shall not be based on any arguments that the Purchase Price were calculated using incorrect assumptions in particular the Purchaser shall not be entitled to claim for a multiple applied in Purchaser’s Purchase Price calculation. The statutory regulations regarding the calculation of damages, mitigation of damages and offsetting of losses by advantages due to the damaging event ( Schadensberechnung, Schadensminderung, Vorteilsausgleich ) according to Section 249 et seq. of the German Civil Code (Bürgerliches Gesetzbuch, BGB ) shall apply. If and to the extent Damages are paid to Purchaser, such payments shall be construed and deemed as a reduction of the Purchase Price as between the Parties.

 

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5.4 No Double Counting. If and to the extent that Damages suffered or incurred by Purchaser or a Target Group Entity as the result of a Breach are duplicative, such Damages shall not be recoverable more than once. If and to the extent that a set of facts ( Lebenssachverhalt ) has been addressed in and allows for recovery under clause 5, any related claims based on other provisions of this Agreement shall be excluded.

 

5.5 Exclusions. Without prejudice to clause 7, any liability of Sellers hereunder shall be excluded if and to the extent that:

 

  (i) claims of Purchaser or the underlying circumstances (a) are actually compensated by recovering such damages against insurances in place at signing of this Agreement by the Target Group Entities (excluding for the avoidance of doubt any claims under the Warranty and Indemnity insurance policy with AIG), (b) are actually compensated by recovering against third parties or (c) are reflected as a specific liability or accrual with regard to that specific Breach in the Consolidated Financial Statements;

 

  (ii) it directly relates to one of the items contained in Annex 5.5(ii) or has been taken into account in determining the Effective Date Net Working Capital pursuant to clause 3.3;

 

  (iii) the underlying facts or circumstances have been specifically disclosed as an exception to the Representation by way of a cross-reference in the Representation, by way of a specific reference in this Agreement or an Annex thereto to a general section in the virtual data room made available to the Purchaser, or as an Annex of this Agreement (it being acknowledged by the Purchaser that a disclosure in one Representation or the relevant Annex to such Representation shall be deemed a disclosure to another Representation to the extent that a reasonable purchaser would understand such disclosure as being relevant to the respective Representation). Section 442 paragraph 1 of the German Civil Code shall not apply;

 

  (iv) the Damages, or a portion thereof, are the result of a failure by Purchaser or a Target Group Entity of their obligation to avoid or mitigate damages after the Closing Date pursuant to Section 254 German Civil Code ( Bürgerliches Gesetzbuch, BGB ) and for the avoidance of doubt the Purchaser’s obligation to mitigate damage shall include the provisions of clauses 5.6 and 5.7; or

 

  (v) the asserted claim is based on laws or regulations enacted or amended after the Signing Date.

 

5.6 Court Actions. Sellers’ liability under this Agreement with regard to court judgments, public orders or claims of third parties that are asserted against Purchaser or a Target Group Entity shall be determined as follows:

 

  (i) In the event that such matter has or could have a material adverse effect on the goodwill of the Purchaser or a Target Group Entity (for example if it concerns material customer relationship(s) or reputational issues), the Purchaser shall have conduct of such claim and shall be obliged to provide Sellers with copies of all documents and all information that may reasonably be considered important in that respect and shall reasonably involve the Sellers’ Representative in the defense against such claim at the Sellers’ own expense. For the avoidance of doubt, the Sellers’ Representative shall not have the right to require the Purchaser or a Target Group Entity to take any action which, in the Purchaser’s reasonable opinion, would be detrimental to the claim.

 

  (ii)

In the event that such matter would not have a material adverse effect on the goodwill of the Purchaser or a Target Group Entity, the Sellers’ Representative shall have conduct of such claim and shall be obliged to provide Purchaser with

 

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  copies of all documents and all information that may reasonably be considered important in that respect and will take account of any reasonable representation of the Purchaser in respect of the conduct of such claim but the Sellers’ Representative shall not have the right to settle any claim without the prior written consent of the Purchaser which the Purchaser shall not unreasonably withhold.

 

  (iii) Sellers (through Sellers’ Representative) and the Purchaser shall each have the right to participate in the court actions conducted by the other party in accordance with the above provisions at their own cost.

 

5.7 Breach Notice; Access to Information. If the Purchaser or any of the Target Group Entities becomes aware of a Breach or potential Breach of any Representation, Purchaser shall give, without undue delay after becoming aware, the Sellers’ Representative written notice of such a (potential) Breach (the “ Breach Notice ”). The Breach Notice shall state in reasonable detail the nature of the Breach and the amount of Damages resulting therefrom if and to the extent that such Damages can be determined at the time the Breach Notice is given. To the extent reasonably required by the Sellers’ Representative to assess the alleged Breach and the resulting Damages, and subject to Purchaser and the Target Group Entity being paid their reasonable out-of-pocket costs and expenses by the Sellers’ Representative, Purchaser shall provide, and shall procure that any Target Group Entity provides, to the Sellers’ Representative and their professional advisors reasonable access upon the giving of reasonable notice during normal business hours to their relevant books, other records and copies of relevant documents and other information regardless of whether kept in paper form, electronic form or otherwise but subject always to an overriding duty of confidentiality as evidenced by the written reasonable advice of the Purchaser’s legal advisor. Purchaser shall ensure that the Target Group Entities’ books and all other information mentioned in this clause 5.7 will be retained for a period of ten (10) years after Closing Date.

 

5.8 Virtual Data Room. For evidentiary purposes only with regard to the virtual information being referred to pursuant to clause 5.5(iii), the content of the electronic data room hosted by Ansarada in respect of the transaction which is the subject of this Agreement as of Friday 12 August 2016, as listed in the index of such data room information contained in Annex 5.8 , has been electronically stored on Friday 12 August 2016 on a USB stick which have been handed over for storage to the acting notary public. The notary public shall maintain such USB stick for a period of eight (8) years from the date of this Agreement, unless otherwise jointly instructed in writing by the Parties, and is entitled to destroy the USB stick after that period without further notice. The USB stick handed over to the notary has the following password:

Nu*z&2-R.

 

6 TAXES

 

6.1 Definitions.

Tax ” and “ Taxes ” shall mean (i) any tax ( Steuer ) within the meaning of Section 3 of the German Tax Code ( Abgabenordnung ) and comparable payments under the laws of any other jurisdiction, in each case together with any interest, surcharges, fines, penalties or additions hereto, but, for the avoidance of doubt, shall neither include deferred taxes ( latente Steuern ) nor notional tax losses (e.g., partial or full reductions of loss carry forwards or future depreciations), (ii) social security contributions and (iii) any liability for taxes resulting from a secondary liability for taxes of any person, company, entity or taxpayer other than a Material Target Group Entity or as a result of an obligation to indemnify for, or succeed to, the taxes of a third party under any applicable law or contract.

Tax Authority ” shall mean any competent domestic or foreign authority in charge of imposing any Tax.

 

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Tax Proceeding ” shall mean any administrative or judicial proceeding or action relating directly or indirectly, fully or in part to Taxes for the Tax periods (or portions thereof) ending before the Effective Date (including, for the avoidance of doubt, the fiscal year 2015) in relation to the Material Target Group Entities (including but not limited to Tax assessments, Tax audits, court proceedings or decisions relating to Tax, meetings with Tax Authorities, correspondence by letter, fax message or email with any Tax Authority).

Tax Return ” shall mean any return, declaration, report, notice, form or information relating to any Tax, including any schedule or attachment thereto.

 

6.2 Tax Indemnity .

 

  (i) Subject to, and limited by, the provisions set forth in this clause 6.2 or otherwise in this Agreement, Sellers, as regards Sellers 3 – 8 however subject to the limitations set out in clause 6.8 (i), shall indemnify Purchaser, or upon Purchaser’s request the respective Material Target Group Entity, from and against the following Taxes (“ Indemnifiable Taxes ”)

 

  (a) all due Taxes to be paid by any of the Material Target Group Entities relating to Tax periods (or portions thereof) ending before the Effective Date if and to the extent the Indemnifiable Taxes have not been paid until the Effective Date,

 

  (b) German wage tax and social security contributions payable for payments made to managers of the WHO Group Entities by the Sellers or related parties (with the exception of the Target Group Entities) in connection with the sale of the WHO Shares before, on or after the Effective Date, unless and to the extent respective German wage tax and social security contribution amounts were withheld and paid to the respective WHO Group Entity or the Purchaser,

 

  (c) all due Taxes to be paid by any of the WHO Group Entities relating to Tax periods after the Effective Date, arising as a result of (x) a debt-to-equity swap of the WHO Shareholder Loans or (y) the WHO Shareholder Loans remaining in the status as is on the Effective Date (for the avoidance of doubt, no indemnification shall apply in case of a repayment of the WHO Shareholder Loans), however excluding any Taxes on interest accruing under the WHO Shareholder Loans,

provided however, only to the extent that the total of all Indemnifiable Taxes payable by the Material Target Group Entities exceed the aggregate amount of (x) the balance of (aa) all Tax liabilities which are reflected as deductible items in the calculation of the Effective Date Net Working Capital less (bb) all Tax receivables which are reflected as items to be added in the calculation of the Effective Date Net Working Capital and (y) the balance of (aa) the Effective Date Net Working Capital less (bb) EUR 9,500,000.00 (in words: nine million five hundred thousand Euros). The provision of clause 6.2 (i) (y) shall only apply if and to the extent a claim for Indemnifiable Taxes under this clause 6.2 (i) is asserted ( geltend gemacht ) prior to the expiration of two (2) years following the Effective Date.

If a Tax period for which Purchaser claims indemnification pursuant to this clause 6.2 ends after the Effective Date, the amount of the Indemnifiable Taxes shall be determined in accordance with the following “as-if assessment” and shall be equal to (i) the amount that would be payable (for instance, for Taxes based upon income sales, gross receipts, wages, capital expenditures or a similar Tax base) if the Tax period ended on (including) the day preceding the Effective Date, or (ii) if an allocation pursuant to (i) is not possible, the amount of Taxes for the entire period multiplied by a fraction in which the numerator is the

 

35


number of days in the portion of the Tax period that falls within the indemnification period and the denominator is the number of days of the entire Tax period.

 

  (ii) Purchaser shall not be entitled to any Tax indemnification (or other payments in respect of a Tax) if and to the extent that

 

  (a) the relevant Taxes are the result of (i) any change in the accounting and taxation principles or practices of any of the Target Group Entities (including the methods of submitting Tax Returns) introduced after the Closing Date for any Tax period (or a portion thereof) ending prior to the Effective Date unless required by any applicable laws, or (ii) any transaction, action or omission (including the change in the exercise of any Tax election right, the approval or implementation of any reorganization measure or the sale of any asset) initiated or executed by Purchaser or any of the Target Group Entities after the Closing Date having impact on any Tax period (or a portion thereof) ending before the Effective Date unless and to the extent Sellers’ are in breach of the Representations made in clauses 4.27 (iii) or 4.27 (viii) provided such breach is relevant for incurring the relevant Tax (e.g. existence of holding periods or of a permanent establishment not disclosed in Annex 4.27(viii)); or

 

  (b) Purchaser has failed to comply with its obligations under this Agreement (in particular, this clause 6); or

 

  (c) a Material Target Group Entity, Purchaser or an Affiliate of Purchaser (i) has actually recovered or been compensated or indemnified by a third party or (ii) Sellers requested from Purchaser to cause a Material Target Group Entity to sell and assign its actual or alleged claim for recovery or compensation of Indemnifiable Taxes (or a portion thereof) against the third party to the Sellers against indemnification from such Indemnifiable Taxes in accordance with the provisions of this entire clause 6 and such Material Target Group Entity has not entered into such sale and purchase agreement within a reasonable period of time with the Sellers. The Material Target Group Entity is not required to give any representations and warranties and the terms and the sale of such claim shall be subject to the statutory provisions under German law for the sale and purchase of claims unless agreed otherwise in this Agreement and is only required to sell and assign any claim for recovery or compensation of Indemnifiable Taxes (or a portion thereof) against the third party to the extent that the face value of the sold claim or a portion thereof is equal to the cash payment to be made by Sellers to the selling Material Target Group Entity. In case the assignment of such a claim is not legally possible, Sellers are, at their own costs, entitled to enforce the claim in the name of the respective Material Target Group Entity provided that Sellers indemnify the respective Material Target Group entity from any third party claims.

 

  (iii) If and to the extent that the Indemnifiable Tax or the circumstances which caused the Indemnifiable Tax has/have a reversal effect ( Umkehreffekt ) at the level of Purchaser, an Affiliate of Purchaser or any of the Target Group Entities in a Tax period (or a portion thereof) after the Effective Date (e.g., due to the lengthening of any amortization or depreciation periods, higher amortization/depreciation allowances, a step-up in Tax basis of assets, the transfer of items relevant for Taxes (e.g., turnover, income, expenses, VAT payable corresponding with a VAT refund etc.) (the “ Reversal Effect ”), the Indemnifiable Tax shall be reduced. The amount of the reduction shall be determined by

 

36


  (a) the face value of the Tax reduction if and to the extent the Tax reduction relates to other Taxes than income, profit or gain, i.e. without any discounting effect, but minus any income tax thereon, if any, and

 

  (b) the relevant net present value of the Tax reduction if and to the extent the Tax reduction relates to Taxes on income, profit or gain whereby the relevant net present value shall be calculated on the basis of

 

  (t) an applied discount rate of 6 (six) per cent per annum,

 

  (x) Tax reductions which could be realised within a period beginning on the Effective Date and ending on 30 September 2021 assuming that the respective Material Target Group entity is in a tax paying position, and

 

  (y) a Tax rate applicable at the time when the respective Tax indemnity claim is raised on the aggregate amount of the Tax base reductions caused by the Reversal Effect.

 

  (iv) However, no such discounting shall apply to the extent a Reversal Effect has already led to an actual reduction in Taxes when Purchaser raises the respective Indemnity claim pursuant to clause 6.2, in which case the Indemnifiable Tax shall be reduced by the amount of the Tax reduction caused by the Reversal Effect without any discounting. Any indemnification payments under this clause 6.2 by Sellers shall be made at the later of (i) fifteen (15) Business Days after the date at which Sellers have been notified in writing by Purchaser about the payment obligation and have been provided with a copy of the relevant Tax assessment notice ( Steuerbescheid ) or other payment notice, or (ii) five (5) Business Days before the Tax falls due. If at that time any Material Target Group Entity has received a Tax Refund as set forth in clause 6.3(i) Sellers shall be entitled to set-off their claim against Purchaser against their indemnification obligation and Purchaser shall be entitled to set-off his claim for indemnification against Sellers claim for payment of an amount equal to such Tax Refund regardless of whether Sellers’ or Purchaser’s claim is due for payment or not.

 

  (v) If an Indemnifiable Tax is reduced after an indemnification payment has been made, the difference between the higher indemnification payment and the lower Tax amount shall be reimbursed by Purchaser to Sellers; any respective payment to Sellers shall be due within fifteen (15) Business Days after the date at which the relevant Target Group Entity has received the respective amount from the Tax Authorities (including by way of set-off, deduction or credit).

 

6.3 Tax Refunds, Overprovisions and Tax Benefits.

 

  (i) Purchaser shall pay to Sellers the amount of any refund of Taxes which exceed the aggregate of all Tax receivables actually reflected in the calculation of the Effective Date Net Working Capital including interest thereon received by any of the Material Target Group Entities by cash payment, set-off, deduction or otherwise, after the Effective Date relating to any Tax period (or a portion thereof) ending before the Effective Date (“ Tax Refund ”) minus reasonable costs and expenses (including internal costs) for any proceeding, litigation or other actions taken in order to realize the Tax Refund on or after the Effective Date, provided, however, such costs and expenses have not already to be borne by the Sellers pursuant to Section 6.4 (i) (d). If no set-off pursuant to clause 6.2(iv) occurs any such payment shall be due and payable within ten (10) Business Days after such Tax Refund has been received by the recipient.

 

  (ii)

Purchaser shall, and shall cause ( steht dafür ein ) the Material Target Group Entities to, (i) within 20 Banking Days notify Sellers in writing of the receipt

 

37


  (including, but not limited to, by way of set-off or deduction) of any Tax Refund and (ii) upon Sellers’ request and at Sellers’ expense deliver to Sellers within six (6) months following a request to be made not later than 40 Banking Days following notification by Purchaser a written statement of a German certified accounting firm ( Wirtschaftsprüfungsgesellschaft ), to be elected by Sellers, confirming that Purchaser has fully complied with these notification obligations including a confirmation of the notified amounts. Such accounting firm has to agree in writing with the respective Material Target Group Company and the Purchaser to be bound by professional secrecy on all information obtained from such review.

 

6.4 Cooperation on Tax matters.

 

  (i) Purchaser shall, and shall cause ( steht dafür ein ) the Material Target Group Entities to, fully cooperate with Sellers and Sellers’ Representatives in connection with any Tax matter relating to a Tax period (or portion thereof) ending before the Effective Date including, without limitation, any inquiry, examination, audit, investigation, negotiation, dispute, appeal or litigation with respect to such period.

 

  (a) Purchaser shall (and shall cause ( steht dafür ein ) that the Material Target Group Entities do) keep and make available for inspection to Sellers all books, records and information relating (wholly or partly) to or which are relevant for Tax periods (or portions thereof) ending before the Effective Date at the head office of a Material Target Group Entity and to give Sellers notice prior to discarding or destroying any such books, records or information and allow Sellers to take possession of any such books, records or information to be destroyed otherwise unless claims under clause 6 can no longer be brought or be enforced against the Sellers.

 

  (b)

Purchaser shall prepare and file, or cause ( steht dafür ein ) the Material Target Group Entities to prepare and file, all Tax Returns relating to the Tax periods (or portions thereof) ending before the Effective Date (“ Relevant Tax Returns ”) in compliance with the terms of this Agreement. Purchaser shall cause ( steht dafür ein ) that (i) any Relevant Tax Returns are filed when due (taking into account any extension of the due date granted by a Tax Authority) and in accordance with applicable laws and with past practice provided and to the extent that past practice has been compliant with applicable laws and interpretation of the tax laws by Tax courts and by competent Tax Authorities (it being understood that interpretation by Tax Authorities is not relevant with respect to deduction of interest pursuant to the interest deduction ceiling rule ( Zinsschranke ) if and to the extent that such deduction is made in the same way as deductions which were reflected in Tax Returns filed before the Effective Date, (ii) any Relevant Tax Returns (except for Tax Returns to be filed on a monthly basis such as VAT advance declarations or for periods which are shorter than a fiscal year; such Tax Returns needn’t be forwarded to Sellers) are forwarded at least twenty five (25) Business Days prior to filing to Sellers for review and comments, (iii) any Relevant Tax Returns (other than those Tax Returns which needn’t be forwarded to Sellers) are not filed without the prior written consent of Sellers which shall not be unreasonably withheld and shall be deemed to be given if Sellers do not object within twenty (20) Business Days in writing describing the factual and legal reasons for their objection in reasonable detail and shall be amended in accordance with Sellers’ instructions to be given in writing (together with the factual background and the rationale of their instruction) provided and to the extent, however, that such instructions are

 

38


  compliant with applicable laws and interpretation of the relevant laws by Tax courts and by competent Tax Authorities (it being understood that interpretation by Tax Authorities is not relevant with respect to deduction of interest pursuant to the interest deduction ceiling rule ( Zinsschranke ) if and to the extent that such deduction is made in the same way as deductions which were reflected in Tax Returns filed before the Effective Date and (iv) any Relevant Tax Returns are not amended without the prior written consent of Sellers, unless and to the extent an amendment is required according to (x) applicable laws or interpretation of the relevant laws by Tax courts or by competent Tax Authorities (it being understood that interpretation by Tax Authorities is not relevant with respect to deduction of interest pursuant to the interest deduction ceiling rule ( Zinsschranke ) if and to the extent that such deduction is made in the same way as deductions which were reflected in Tax Returns filed before the Effective Date) or (y) a reasonable interest of a managing director, director or other manager competent for Tax affaires of the relevant Material Target Group Entity to avoid personal liability including criminal liability in the event of unclear factual circumstances. In cases, where Purchaser does not follow Sellers’ view, Purchaser shall disclose, or cause ( steht dafür ein ) the Material Target Group Entities to disclose, the diverting instructions of Sellers to the Tax Authorities within the Relevant Tax Return if and to the extent that such instructions are given by Sellers in writing and explain the factual and legal circumstances on which Sellers base their view in reasonable detail. If no such instructions are given then Sellers’ consent for filing such Relevant Tax Return shall be deemed to be given.

 

  (c) Purchaser shall notify Sellers of any announcement, commencement or enforcement of any Tax Proceedings without undue delay which shall be the earlier of 10 Banking Days before a legal deadline for taking any action in such Tax Proceeding expires (unless the period between receipt of such announcement, commencement or enforcement and the expiration of the legal deadline is less than 15 Banking Days; then notification shall be made within 5 Banking Days from such receipt, commencement or enforcement and Purchaser shall take legal remedy to avoid expiration of deadline) or 20 Banking Days after Purchaser became aware of such event. The notification shall be made in writing, and shall include copies of any assessment notice or other document received from any Tax Authority. On request of Sellers, Purchaser shall procure that Sellers obtain any additional document or information (including any books and records) and description of the object of the Tax Proceeding which Sellers reasonably require in this respect. Such additional documents and information as well as books and records shall be made available for inspection by the Sellers at the head office of a Material Target Group Entity.

 

  (d)

Purchaser shall, and shall cause ( steht dafür ein ) the relevant Material Target Group Entity to, (i) ensure that Sellers and/or Sellers’ Representatives are given the opportunity to fully participate in (including the participation in all meetings and other material conversations or material exchanges with the Tax Authorities and review any reports and all relevant tax audit, administrative or legal procedure documents) any Tax Proceedings which take place after the Closing Date, (ii) upon Sellers’ request that is not disproportionate ( unverhältnismäßig ) or querulent file objections or other protests or appeals against Tax assessments or challenge and litigate any Tax assessment or other decision of any Tax Authority and (iii) comply with any lawful instructions given by Sellers in relation to the conduct of the

 

39


  Tax Proceedings. In any case, Purchaser shall not and shall cause ( steht dafür ein ) the Material Target Group Entities not to, furnish any material information relating to Tax Proceedings, compromise, dispose of or settle any Tax Proceeding or to let them become time-barred without the prior written consent of Sellers. Sellers shall confirm in advance and in writing to the Purchaser that they will indemnify the Purchaser and/or – at the Purchaser’s discretion – the relevant Material Target Group Entity for any external expenses (including, for the avoidance of doubt, fees for tax advisors, lawyers, accountants, experts and other service providers to the relevant Material Target Group Entity which shall not be limited to statutory fees to the extent that such statutory fees exists) caused by the Tax Proceeding including objections, protests or appeals against Tax assessments or other decision taken by a Tax Authority or any other action taken that is made due to a Sellers’ request or instruction, unless and to the extent such expenses are (i) borne by the Tax Authorities or (ii) considerably exceed the amount of external expenses regularly expectable based on Sellers´ written request. Upon Purchaser’s request in writing Sellers shall make an advance payment to Purchaser for court fees, retainer for or advance payments to lawyers, tax advisors, accountants and other experts (e.g. valuation experts) and service providers if any.

 

6.5 Time Limitation. Claims of Sellers pursuant to clause 6.3 shall become time-barred ( verjähren ) six (6) months after Purchaser has notified Sellers of the relevant claim in writing.

 

6.6 Adjustment of Purchase Price . Sellers and Purchaser agree that regardless of clause 3.3 all payments made pursuant to this clause 6 constitute adjustments of the Purchase Price for the WHO-Share and TeIJs-Shares, and to the extent permitted by applicable Tax law are also to be treated as such adjustments for Tax purposes.

 

6.7 Occurrence of Closing . For the avoidance of doubt, the obligations of Sellers and Purchaser under this clause 6 shall be subject to the occurrence of the Completion Date.

 

6.8 Limitation.

 

  (i) Clause 6 shall apply to all Sellers with regard to WHO Group Entities and to Sellers 1 and 2 with regard to TelJs Group Entities (excluding any liability of Sellers 3 to 8).

 

  (ii) Sellers do not grant any further warranties, guarantees or indemnities with respect to Taxes with the exception of those under clause 4.27.

 

7 GENERAL LIMITATION OF SELLERS’ LIABILITY

 

7.1 General.

The Purchaser may request payment from the Escrow Account up to the full amount of a claim it may have against one or several Sellers on a joint and several liability basis, regardless of whether one, several or all Sellers are liable for such claim. If and to the extent the balance on the Escrow Account is sufficient to cover claims of the Purchaser under this Agreement such balance shall be the sole remedy excluding any direct claiming against Sellers. Notwithstanding the above, with the exception of the Escrow Account where liability of the Sellers shall be joint and several, any further liability of Sellers under this Agreement shall be several ( teilschuldnerisch ) and pro-rata based on the proportion of the following percentage rates:

 

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  (i) As far as claims relating to WHO Group Entities (in particular but without prejudice to claims under clause 4, 5 and 6) are concerned the proportion of liability shall be as follows:

Seller 1: 70.38 per cent

Seller 2: 17.88 per cent

Seller 3: 10.10 per cent

Seller 4: 0.19 per cent

Seller 5: 0.10 per cent

Seller 6: 0.04 per cent

Seller 7: 0.04 per cent

Seller 8: 1.27 per cent

 

  (ii) As far as claims are relating to TeIJs Group Entities (in particular but without prejudice to claims under clause 4, 5 and 6) are concerned the proportion of liability shall be as follows:

Seller 1: 82.1 per cent

Seller 2: 17.9 per cent

 

  (iii) As far as claims are concerned which not only relate to the WHO Group Entities or the TeIJs Group Entities the proportion of liability shall be as follows:

Seller 1: 72.81 per cent

Seller 2: 17.79 per cent

Seller 3: 7.68 per cent

Seller 4: 0.14 per cent

Seller 5: 0.31 per cent

Seller 6: 0.15 per cent

Seller 7: 0.15 per cent

Seller 8: 0.97 per cent

 

7.2 De Minimis and Threshold Amount. Claims of Purchaser under this Agreement – except for claims under 10.1 – may only be asserted against Sellers,

 

  (i) if the value of an individual claim exceeds EUR 50,000.00 (in words: Euro fifty thousand) (“ De Minimis Amount ”) and

 

  (ii) if the value of the aggregate of all claims individually exceeding the De Minimis Amount exceeds EUR 500,000.00 (in words: Euro five hundred thousand) (“ Threshold Amount ”). In case the Threshold Amount is exceeded, Purchaser shall be entitled to claim payment of the full amount.

 

7.3 Maximum Amount of Liability.

 

  (i) Any liability of the Sellers under this Agreement, other than (aa) for a Breach of the Representations referred to in clause 7.3(ii), 7.3(iii) and 7.3(iv) and (bb) for Taxes under Clause 6.2(i)(c) to the extent such Indemnifiable Taxes pertain to the tax treatment of the WHO-Shareholder Loans shall be limited to a total amount of EUR 625,000.00 (in words: six hundred and twenty five thousand Euro) (“ Cap ”). Due to the several liability ( teilschuldnerische Haftung ) of Sellers under this Agreement according to clause 7.1 the liability of each individual Seller under this Agreement shall be limited to the following amounts;

Seller 1: EUR 455,096.00

Seller 2: EUR 111,189.00

Seller 3: EUR 47,972.00

Seller 4: EUR 879.00

 

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Seller 5: EUR 1,930.00

Seller 6: EUR 948.00

Seller 7: EUR 946.00

Seller 8: EUR 6,040.00

 

  (ii) The liability of each individual Seller for the Representations assumed under clauses 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.9 shall be limited to the following amounts:

Seller 1: EUR 61,766,116.00

Seller 2: EUR 15,091,077.00

Seller 3: EUR 9,561,146.00

Seller 4: EUR 175,252.00

Seller 5: EUR 384,586.00

Seller 6: EUR 188,871.00

Seller 7: EUR 188,587.00

Seller 8: EUR 1,203,835.00

In addition to such amounts if and to the extent the claims of Purchaser are higher than such amounts, each Seller shall transfer its shares in Guarantor it has received as consideration under clause 3, whereas the value of such shares shall be calculated in accordance with clause 3.2(ii).

 

  (iii) The liability of each individual Seller for the Representations assumed under clause 4.8 shall be limited the following amounts.

Seller 1: EUR 66,633,197.00

Seller 2: EUR 16,923,404.00

Seller 3: EUR 9,561,146.00

Seller 4: EUR 175,252.00

Seller 5: EUR 97,774.00

Seller 6: EUR 37,918.00

Seller 7: EUR 37,634.00

Seller 8: EUR 1,203,835.00

 

  (iv) In any case Sellers’ aggregate liability under this Agreement shall not exceed an amount equal to the Purchase Price. In any case the liability of each individual Seller under this Agreement shall not exceed the following amounts:

Seller 1: EUR 90,703,044.00

Seller 2: EUR 22,160,679.00

Seller 3: EUR 9,561,146.00

Seller 4: EUR 175,252.00

Seller 5: EUR 384,586.00

Seller 6: EUR 188,871.00

Seller 7: EUR 188,587.00

Seller 8: EUR 1,203,835.00

Clause 7.3(ii) final sentence shall apply, i.e. Sellers shall only be obliged to pay the amount set out in Clause 7.3(ii) in cash and any exceeding amount in shares.

 

  (v) Any liability of the Sellers under clause 6.2 (i) (c) shall be limited to a total amount of EUR 350,000.00 (in words: three hundred and fifty thousand Euro). Due to the several liability ( teilschuldnerische Haftung ) of Sellers under this Agreement according to clause 7.1 the liability of each individual Seller under this Agreement shall be limited to the following amounts;

Seller 1: EUR 246,346.00

Seller 2: EUR 62,567.00

 

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Seller 3: EUR 35,348.00

Seller 4: EUR 648.00

Seller 5: EUR 361.00

Seller 6: EUR 140.00

Seller 7: EUR 139.00

Seller 8: EUR 4,451.00

 

7.4 Time Limitations. Claims of Purchaser arising under this Agreement shall become time-barred ( verjähren ) as follows, whereas Section 203 German Civil Code ( Bürgerliches Gesetzbuch, BGB ) shall not apply:

 

  (i) claims arising from a Breach of Representations set forth in clauses 4.2 through 4.7 and clause 4.26: five (5) years after the Closing Date;

 

  (ii) claims arising from a Breach of Representations set forth in clause 4.27 and claims under clause 6.2 (Tax Indemnity): a period of six (6) months after the respective Tax which is subject to German Tax law has become non-appealable ( unanfechtbar ) without being subject to re-examination (Vorbehalt der Nachprüfung ), provisional assessment ( vorläufige Steuerfestsetzung ), cancelation ( Aufhebung ) or amendment ( Änderung ) in Germany and for the avoidance of doubt the ability to bring claims under clause 6.2 in respect of any Tax in any jurisdiction shall become time barred upon expiry of this period, whereas the Purchaser shall cause the German Material Target Group Entities to apply for a tax audit in Germany to be conducted earlier than the regular audit schedule of the competent Tax Authority within 6 (six) months from the Closing Date;

 

  (iii) all other claims of Purchaser under this Agreement within eighteen (18) months after the Closing Date.

 

7.5 Exclusion of other Remedies. The Parties agree that Purchaser’s rights in connection with the acquisition of the Target-Companies-Shares and the Shareholder Loans are exclusively laid down in this Agreement. All other contractual, semi-contractual, statutory or other rights of Purchaser – irrespective of their legal character – are excluded to the extent admissible under the applicable law. Unless expressly provided otherwise in connection with the representations in clause 4 or elsewhere in this Agreement, in particular Purchaser’s right to challenge the Agreement ( Anfechtung ), the right for re-performance ( Nacherfüllung ), the right for rescission ( Rücktritt ), to wind-up the Agreement (also in the form of comprehensive compensation ( großer Schadensersatz ), to make deductions from the purchase price ( Minderung ) or to adjust the Agreement ( Störung der Geschäftsgrundlage ) are excluded. The same applies to claims for compensation based on a positive violation of a right ( Positive Forderungsverletzung ) and fault during pre-contractual negotiations (culpa in contrahendo) (Section 311 subsection 2 no. 1 and 2 German Civil Code ( Bürgerliches Gesetzbuch, BGB ). The liability of any Seller and any claims against any Seller based on fraudulent concealment of defects ( arglistig verschwiegener Mangel ) or intentional breach of contract ( vorsätzliche Vertragsverletzung ) shall remain unaffected; Sellers’ liability for negligent behaviour or behavior with dolus eventualis of auxiliary persons ( Erfüllungsgehilfen ) within the meaning of sec. 278 German Civil Code ( Bürgerliches Gesetzbuch, BGB ) shall be excluded. Sellers shall amongst each other not be regarded as auxiliary persons ( Erfüllungsgehilfen ).

 

8 UNDERTAKING OF PURCHASER ON SHAREHOLDER LOANS

 

8.1

No Repayment . Purchaser and Guarantor shall not and shall procure that WHO (or any affiliated entity within the meaning of section 15 et seq. of the German Stock Corporation Act) shall not repay any of the Shareholder Loans (neither partly nor in full) during a time period of 12 (twelve) months from the Closing Date. The Purchaser shall be entitled to

 

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  restructure the Shareholder Loans at any point following the Closing Date provided always that any such restructuring does not qualify as a repayment of the Shareholder Loans.

 

8.2 Indemnifications .

 

  (i) If on whatever ground, insolvency proceedings over any WHO Group Entity are applied for or are opened and an insolvency administrator or another competent person (e.g., trustee ( Sachwalter )) or body claims from one or more of the Sellers payments in connection with an alleged repayment of the Shareholder Loans by the Purchaser after the Closing Date, the Purchaser shall hold harmless and indemnify Sellers upon first demand ( auf erstes Anfordern ) the respective Seller against all and any such claims up to the amount of the alleged repayment plus accrued interest; as a consequence, the indemnity shall also cover Sellers’ reasonable lawyers’ and court fees. In the event that subsequently, after Purchaser having indemnified the respective Seller in accordance with sentence 1, it is determined that the claim from the insolvency administrator or other competent person is wholly or partly invalid then the Sellers shall upon first demand ( auf erstes Anfordern ) forward any amounts received from the insolvency administrator or other competent person after deduction of Sellers’ own payments and/or reasonable disbursements to the Purchaser. For the avoidance of doubt, any repayment of Shareholder Loans or interest thereon made prior to the Closing Date shall not trigger this indemnification obligation by the Purchaser. In the latter case the Sellers shall hold harmless and indemnify the Purchaser and any WHO Group Entity against all and any such claims up to the amount of the repayment plus accrued interest; as a consequence, the indemnity shall also cover the Purchaser’s or any WHO Group Entity’s reasonable lawyers’ and court fees.

 

  (ii) Any claims under this clause 8.2 shall not become time barred prior to the expiration of six months after any payment claims, which Purchaser shall hold harmless and indemnify Sellers against pursuant to this clause 8.2 (or vice versa) have become time-barred. The obligation of Purchaser to indemnify Sellers shall be time-barred ten (10) years after Closing.

 

9 REPRESENTATIONS OF PURCHASER; INDEMNITY

 

9.1 Representations. Each of Purchaser and Guarantor represent to Sellers by way of an independent promise of guarantee pursuant to Section 311 para. 1 of the German Civil Code ( Bürgerliches Gesetzbuch , BGB) ( selbständiges Garantieversprechen im Sinne des § 311 Abs. 1 BGB ) that the following statements are true and correct at the Signing Date and the Closing Date:

 

  (i) Corporate Status. Each of Purchaser and Guarantor were formed in accordance with the laws of the jurisdiction in which it was formed and is validly existing in good standing under the laws of such jurisdiction. Current certified excerpts from the Commercial Register of Purchaser are attached hereto as Annex 9.1(i) .

 

  (ii) Insolvency Proceedings . No insolvency or similar proceedings have been, or have been threatened to be, opened over the assets of Purchaser and/or Guarantor, and there are no circumstances which would require or justify the opening of or application for such proceedings. Purchaser or Guarantor are neither insolvent ( zahlungsunfähig ) nor over-indebted ( überschuldet ).

 

  (iii) Due Authorisation . This Agreement constitutes valid and binding obligations of Purchaser and Guarantor according to the statutory regulations applicable to them.

 

  (iv)

No Violation. The execution, delivery and performance of this Agreement does not violate any of the respective articles of association, certificate of

 

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  incorporation, rules of procedure or bylaws of Purchaser or Guarantor or any agreement, mortgage, deed of trust, indenture, license, permit or any other agreement or instrument or any order, judgment, decree, statute or regulation to which Purchaser or Guarantor is a party or by which Purchaser or Guarantor or any of their respective assets may be bound and no consent or permission of a third party or governmental authority is necessary with regard to execution, delivery and performance of this Agreement, unless provided otherwise expressly herein.

 

  (v) No Interference. There is no action, suit, investigation or other proceeding pending or threatened against or affecting Purchaser or Guarantor before any court, arbitrator, governmental body, agency or official which in any manner challenges or seeks to prevent, enjoin, alter or materially affect the consummation of the transactions contemplated therein, and there are no circumstances likely to give rise to any of the foregoing.

 

  (vi) Due Diligence . Based on the due diligence that has been carried out, Purchaser is not actually aware of any Breach. For the purposes of this clause actual awareness of the Purchaser shall mean the actual knowledge as at the Signing Date of one or more of the following individuals from the Purchaser’s corporate group: Mark Zeffiro, Dave Rice, Jay Goldbaum, Paul Caruso and Maria Duey.

 

  (vii) Authority. The execution and delivery of this Agreement and the Shareholders’ Agreement by Guarantor and the consummation by Guarantor of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action of Guarantor, and no other corporate proceedings, on the part of Guarantor, and no vote of the holders of any class or series of capital stock of Guarantor are necessary to authorize the Guarantor’s entry into this Agreement or the Shareholders’ Agreement or the Guarantor’s consummation of the transactions contemplated hereby and thereby.

 

  (viii) Capitalization .

 

  (a) The authorized capital stock of Guarantor consists of 500,000,000 shares of capital stock, of which 400,000,000 are designated common stock, par value $0.01 per share (“ Guarantor Common Stock ”), and 100,000,000 are designated preferred stock, par value $0.01 per share (“ Guarantor Preferred Stock ”). As of 24 August 2016, (A) 18,193,019 shares of Guarantor Common Stock were issued and outstanding, all of which were duly authorized and validly issued and are fully paid, non-assessable and free of preemptive rights, (B)  zero (0)  shares of Guarantor Common Stock were held in the treasury of Guarantor, and (C) 1,869,008 shares of Guarantor Common Stock were reserved for issuance under the Guarantor’s Amended and Restated 2015 Equity and Incentive Compensation Plan (the “ Guarantor Stock Plan ”). As of 24 August 2016, (i) 355,808 shares of Guarantor Common Stock were subject to issuance pursuant to the exercise of options to purchase Guarantor Common Stock (“ Guarantor Options ”) outstanding under the Guarantor Stock Plan and (ii) there were 635,647 shares of Guarantor Common Stock reserved for issuance upon the settlement of restricted stock, restricted stock units and performance based units granted under the Guarantor Stock Plan (“ Guarantor Stock Awards ”). As of August 24, 2016, zero (0) shares of Guarantor Preferred Stock are issued and outstanding.

 

  (b)

As of 24 August 2016, except for Guarantor Options issued under the Guarantor Stock Plan to purchase 355,808 shares of Guarantor Common Stock in the aggregate and Guarantor Stock Awards providing for the issuance of up to 635,647 shares of Guarantor Common Stock in the aggregate, there were no outstanding (A) options, warrants or other rights to acquire capital stock of Guarantor, (B) securities convertible into or exchangeable for capital stock of Guarantor or (C) other rights, instruments or obligations issued by the Guarantor

 

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  that derive value based upon Guarantor Common Stock but are not settled solely in shares of Guarantor Common Stock that require the Guarantor to issue, directly or indirectly, Guarantor Common Stock or other securities, other than in connection with this Agreement. The shares of Guarantor Common Stock to be issued as Stock Consideration at the Closing, when issued as contemplated herein, will be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.

 

  (ix) SEC Filings; Financial Statements; Other Reports.

 

  (a) [Reserved].

 

  (b) Guarantor has timely filed all registration statements, information statements, prospectuses, forms, reports, definitive proxy statements, schedules and other documents required to be filed with the SEC by it under the Securities Act or the Securities Exchange Act of 1934 (the “ Exchange Act ”), as the case may be, from and after June 22, 2015, which are collectively referred to herein as the “ Guarantor SEC Filings .” Each Guarantor SEC Filing, (A) as of its date, or, if amended or supplemented, as of the date of the most recent amendment or supplement thereto prior to the date hereof, and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively, complied in all material respects with the requirements of the Securities Act or the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, as the case may be, and (B) did not, at the time it was filed (or became effective or was mailed in the case of registration statements and proxy statements, respectively), or, if amended or supplemented prior to the date hereof, as of the date of the most recent amendment or supplement thereto, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

 

  (c) [Reserved].

 

  (d) Guarantor maintains a system of “internal control over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances to Guarantor and the Guarantor Board (A) that transactions of Guarantor and its subsidiaries are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles consistently applied (“ GAAP ”), (B) that receipts and expenditures of Guarantor and its subsidiaries are made only in accordance with the authorizations of management and the Guarantor Board and (C) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of Guarantor’s assets that would have an effect on Guarantor’s financial statements. The books and records of Guarantor and its subsidiaries have been, and are being, maintained in all material respects in accordance with applicable legal and accounting requirements and reflect only actual transactions.

 

  (e)

Guarantor has not received any written notification from its outside auditors of any “significant deficiency” or “material weakness” in Guarantor’s internal control over financial reporting. To the knowledge of Guarantor, there is no outstanding “significant deficiency” or “material weakness” (in each case, as defined by the applicable Public Company Accounting Oversight Board rule) that has not been appropriately and

 

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  adequately remedied by Guarantor that has materially and adversely affected, or is reasonably likely to materially and adversely affect, the Guarantor’s internal control over financial reporting.

 

  (f) Each of the consolidated financial statements (including any notes thereto) contained in the Guarantor SEC Filings, as amended, supplemented or restated, if applicable prior to the date hereof, was prepared in accordance with generally accepted accounting principles in the US GAAP applied on a consistent basis throughout the periods indicated (except as may be otherwise indicated therein), and each of such consolidated financial statements, presented fairly, in all material respects, the consolidated financial condition, results of operations and cash flows of Guarantor as of the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments).

 

  (g) [Reserved].

 

  (x) Investment Company Act . Guarantor is not an “investment company” or an entity directly or indirectly “controlled” by or acting on behalf of an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.

 

  (xi) Litigation . Except as disclosed in Annex 9.1(xi) , neither Guarantor nor any of its subsidiaries are involved in any court or administrative proceedings, including arbitration proceedings, either as plaintiff or defendant which involves an amount in excess of US$500,000 (in words: five hundred thousand US dollars) in each individual case.

 

9.2 Indemnification.

 

  (i) In the event that Purchaser and/or Guarantor are in breach of any representation in this clause 9, Purchaser and Guarantor shall indemnify and hold harmless the Sellers from all losses resulting from such breach, whereas the respective claim of Sellers shall become time-barred ( verjähren ) within eighteen (18) months after the Closing Date.

 

  (ii) The indemnification shall also include reimbursement of any amounts paid to the third party to fulfil its claim and any reasonable costs and expenses incurred in the handling and defence of the alleged third party claim.

 

  (iii) Any indemnification claims under this clause 9 shall not become time-barred prior to the expiration of six months after any payment claims, which Purchaser shall hold harmless and indemnify Sellers against pursuant to this clause 9 have become time-barred.

 

10 COVENANT PRIOR TO THE CLOSING

 

10.1

Business of Target Group Entities. The Sellers and the Purchaser acknowledge that the remaining provisions of this clause 10 shall at all times be subject to the ability of the Purchaser to interact with the Target Group Entities in the period between the Signing Date and Closing Date in compliance with the provisions of German antitrust law. Notwithstanding this requirement from Signing Date until Closing Date the Sellers shall, except as approved by the Purchaser in writing (such approval not to be unreasonably withheld or delayed), exercise their shareholder rights in such a manner that the business operations of the Target Group Entities are carried on in accordance with past practice during the 18-month-period before the Signing Date, having due regard to the interests of the Purchaser and will advise and consult with the Purchaser in relation to any matter which could have a material effect on any of the Target Group Entities and shall in addition keep

 

47


  the Purchaser reasonably apprised of the status of the proposed move of certain manufacturing operations. Further, without prejudice to the generality of the foregoing, the Sellers shall exercise their shareholder rights in such a manner that each of the Target Group Entities will except as approved by the Purchaser in writing (such approval not to be unreasonably withheld or delayed):

 

  (i) carry on its business in the ordinary course so as to maintain that business as a going concern;

 

  (ii) notwithstanding the respective rights of the Sellers and the Purchaser contained in clause 2.5 in relation to Material Adverse Change, use commercially reasonable efforts to avoid an adverse change in the financial or trading position or prospects of its business;

 

  (iii) enforce all contractual rights in accordance with past practice during the 18 month period prior to the Signing Date in order to protect its assets and minimise its liabilities;

 

  (iv) not incur capital expenditure on any single item in excess of EUR 50,000.00 (in words: fifty thousand Euros) and not enter into any commitment to do so, each unless explicitly set out as a line item in the budget of the respective Target Group Entity. The Parties acknowledge that the capital expenditure as set out in Annex 10.1(iv) shall be permitted to be made after the date hereof;

 

  (v) not dispose of any part of its assets except in the ordinary course of business;

 

  (vi) not borrow any money and not take up any additional shareholder loans (including but not limited to the exercise of any rights in relation to the Undisbursed Shareholder Loans), except under its existing overdraft facilities from its bankers where the borrowing does not exceed the amount available to be drawn under those facilities, or amend or agree to amend the terms of its borrowings under its existing finance documentation or overdraft facilities, and except under suppliers’ credits in the ordinary course of business ( Verlängerung von Zahlungszielen );

 

  (vii) not enter into any guarantee or indemnity or other agreement to secure, or incur financial or other obligations with respect to, another person’s obligations;

 

  (viii) not enter into any customer or supplier contracts outside the ordinary course of business;

 

  (ix) not make any loans with the exception of the ability to issue customer credits as part of ordinary course of business;

 

  (x) not enter into any leasing, hire purchase or other agreement or arrangement for payment on deferred terms with an annual payment obligation of more than EUR 50,000.00 (in words: fifty thousand Euros). The Parties acknowledge that the lease agreement as set out in Annex 10.1(x) shall be permitted to be made after the date hereof;

 

  (xi) not declare, make or pay any dividend or other distribution or pay any cash to any of the Sellers other than due under employment contracts;

 

  (xii) not create any encumbrance other than statutory encumbrances and retention of title arrangements in operation as part of the ordinary course of business;

 

  (xiii) not create, allot, issue, grant or agree to grant any option over, acquire, repay, or redeem any class of share or loan capital and not vary or agree to vary the rights of, any class of share or loan capital nor repay any Shareholder Loan; and

 

48


  (xiv) not make any change in its business structure or organisation.

To the extent payments have been made to one or more Sellers which are not in compliance with this clause 10.1 only the Seller(s) that have received such payments shall be obliged to repay the respective amounts.

In the event that there is a breach between the Signing Date and the Closing Date by any of the Sellers of their obligations under this clause 10 the Sellers shall indemnify and hold harmless the Purchaser from and against any damages, costs, losses and expenses incurred by the Purchaser or the Target Group Entities arising from such breach and the Sellers acknowledge that the remedies available to the Purchaser under this clause 10 may not be sufficient to indemnify the Purchaser and the Target Group Entities fully against all damage and that therefore the Purchaser shall be entitled to enforce any claims for specific performance ( Unterlassungs- und Beseitigungsansprüche ) by injunctive relief ( einstweiliger Rechtsschutz ) without having to re-establish irreparable harm and without having to provide a bond or other collateral ( ohne Sicherheitsleistung ). Without limiting their liability under this clause 10.1, Seller 1’s, Seller 2’s and Seller 3’s obligations as shareholders shall be limited to (i) denial of voting at shareholders’ resolutions in favour of approval and (ii) refraining from instructions to the management, each in relation to the measures under clause 10.1 above.

 

10.2 Payables to third parties . The Sellers acknowledge that in the period between the Signing Date and Closing Date, they will procure (to the extent legally permissible) that the Target Group Entities do not annoy any third parties by the respective Target Group Entity not paying invoices when due.

 

10.3 Access to Customers and Suppliers . Sellers will, to the extent permitted under relevant anti-trust laws, use reasonable efforts to introduce representatives of the Purchaser and the Guarantor access to the Target Group Entities customers, suppliers and financial institutions as soon as possible following the date hereof.

 

10.4 Business of Guarantor. From Signing Date until Closing Date, Guarantor shall except as approved by Seller 1 in writing (such approval not to be unreasonably withheld or delayed) ensure that the business operations of Guarantor are carried on in accordance with past practice during the 12-months-period before the Signing Date.

 

11 OTHER UNDERTAKINGS

 

11.1 Transition of the Target Group Entities. The Parties are obliged to provide each other with all information and to carry out all measures and legal acts that are necessary for the execution and consummation ( Vollzug ) of this Agreement. Purchaser is particularly obliged to provide Sellers with reasonable access to all documents prepared prior to Completion Date and information with regard to issues of the Target Group Entities relating to the time prior to Completion Date to the extent necessary for pursuing tax related issues.

 

11.2 Discharge of Management/Advisory Board . Without prejudice to clause 2.3(i), Sellers may procure that prior to the Completion Date the Target Group Entities (acting through their managing directors, advisory/supervisory board ( Beirat ) or shareholders’ meeting, as the case may be), acquit and discharge their managing directors and the members of their advisory/supervisory board ( Beirat ), in each case from, and waive, any and all liabilities, in particular based on a breach of their duties in their capacity as managing directors or members of the advisory board prior to Completion Date, as far as legally permissible. The Purchaser consents to the foregoing release. For the avoidance of doubt, the waiver pursuant to this clause 11.2 shall not affect the liability of a Seller towards the Purchaser pursuant to this Agreement.

 

11.3

D&O . After the Closing Date Purchaser will ensure that the Target Group Entities keep, and comply with the obligations under the terms of, the existing D&O insurance or, alternatively, provide equivalent coverage (in no aspect detrimental for the managing

 

49


  directors and of the members of the advisory/supervisory board of the Target Group Entities compared to existing D&O insurance) in favour of the managing directors and of the members of the advisory/supervisory board of the Target Group Entities. This clause 11.3 is intended for the benefit of and grants a direct right to act against the Purchaser ( echter Vertrag zugunsten Dritter ) to the managing directors and the members of the advisory/supervisory board of the Target Group Entities.

 

11.4 Representations Insurance. Purchaser will obtain a market standard insurance covering Sellers’ representations under this Agreement (“ Representation Insurance ”), the terms of which shall be acknowledged by the Sellers. The costs of such insurance have been taken into account in the calculation of the Purchase Price.

 

12 NON-COMPETITION

 

12.1 Non-Competition. For a period of three (3) years after the Closing Date, each Seller shall and shall procure that no entity controlled by such Seller shall not – directly or indirectly – (i) engage in any business competing with the business of any Material Target Group Entity conducted as of the Signing Date (for the purpose of business of any Material Target Group Entity the business of WHO shall mean the manufacturing of tow bars and carrier systems for cars and light utility vehicles and the business of TeIJs shall mean the manufacturing of tow bar components as well as of construction products for lifting, fixing and connecting concrete structures) in the current geographical area of activities of the Material Target Group Entities, (ii) form, acquire or hold any interest in a business competing with the current activities of the Material Target Group Entities or (iii) advise or assist any competing business. Further, the acquisition by a Seller of a mere capital investment of shares of up to 10 percent in competitive companies which are quoted on a national stock exchange are exempt from the non-compete restraint.

 

12.2 Non-Solicitation. The Sellers agree that for a period of two (2) years from the Closing Date, they shall not solicit or entice away from the Purchaser or any Material Target Group Entity any person who has worked as an officer, managing director, board member or member of senior management ( leitender Angestellter ) for any Material Target Group Entity at any time during the two (2) years prior to the Closing Date. The Sellers shall also not offer to or execute with such persons any employment, service or consultancy agreements.

 

12.3 Exception. Clause 12.1 and 12.2 shall not apply to Seller 2.

 

13 CONFIDENTIALITY

 

13.1 Confidentiality . The Parties mutually agree to treat as strictly confidential, and to prevent the disclosure to any third parties of, the contents of this Agreement, the circumstances concerning its negotiation, its execution and its consummation as well as any and all information which they have obtained and which relates to the other Party. The foregoing duties shall not apply to any facts which are in the public domain, which have entered the public domain without a violation of this obligation or the disclosure of which is required by law or by the applicable securities laws or capital markets rules or which are usually given to investors. In that case, however, each Party will be obligated to inform the respective other Party about such disclosure and to limit the disclosure to the minimum required under law or by the applicable capital markets rules. Seller 1 and its managing limited partner, Seller 2 and Seller 3 shall be entitled to share aggregated information concerning the Target Group Entities with current or potential future investors.

 

13.2

Passing on information. Sellers may disclose any information that is protected under clause 13.1 to third parties, if and to the extent that such disclosure is required in order to perform this Agreement and the transactions stipulated herein. Purchaser may disclose any information that is protected under clause 13.1 to the companies affiliated with it at the relevant time within the meaning of sec. 15 of the AktG and to third parties, if and to the extent that such disclosure is necessary to perform this Agreement and the transactions

 

50


  stipulated herein or otherwise required to protect the Purchaser’s fair interest ( berechtigte Interessen ). Before disclosing any information, the Parties and/or the Guarantor shall obtain from the recipients of the information a written undertaking by which such recipients commit to confidentiality according to clause 13.1.

 

13.3 Prior to issuing any press release or making any similar voluntary announcement with respect to this Agreement, its formation or its performance, the Parties shall agree on the form and content of such press release or similar announcement. If a public announcement is required by law or under the applicable capital markets rules, then the Parties and the Guarantor shall endeavour to coordinate with one another in advance.

 

13.4 Return of Documents . If the Sellers and/or Purchaser withdraw from this Agreement in accordance with clause 2.2, clause 2.6, clause 2.11 or clause 16.1, the Parties undertake to keep confidential all information in respect of each other and to return or, at the relevant Party’s election and to the extent reasonably feasible, destroy all documents and information in whatever material form, which it received from the other Party, together with any copies thereof, as well as all documents and information it produced, in whatever material form, based on information received from the other, unless such information is in the public domain without breaching a confidentiality obligation towards the other, provided, however, that (i) the obligation to destroy any electronic copies of any confidential information shall not apply to any automatic back-up copies and (ii) the Party’s advisors may in any case retain a copy of any confidential information for their files to the extent required to comply with statutory obligations. The Parties shall not be entitled to a right of retention ( Zurückbehaltungsrecht ) with respect to such documents or information.

 

14 NOTIFICATIONS, INFORMATION, NOTIFICATION AUTHORISATION

Unless otherwise provided in this Agreement, notifications, declarations and information with regard to the terms of this Agreement shall be made according to the following rules:

 

14.1 Notifications to Sellers. All notifications, declarations and information by Purchaser to Sellers with regard to this Agreement shall be addressed to and sent by registered mail, telefax or hand-delivery:

Parcom Deutschland I GmbH & Co. KG

Volker Hichert

Ludwigstrasse 7, 80539 München, Germany

Facsimile:+49 89 20 00 38 11123

E-mail: Volker@dpe.de

With a copy to:

Heuking Kühn Lüer Wojtek

Dr Peter Christian Schmidt

Neuer Wall 63

20354 Hamburg, Germany

Facsimile: +49 40 35 52 80 80

E-mail: p.schmidt@heuking.de

Sellers may jointly at any time replace their recipients by another competent party.

 

14.2

Sellers’ Representative. Sellers can exercise any rights under this Agreement and make any notices provided for by this Agreement only jointly. For this purpose, Sellers hereby irrevocably nominate Seller 1 as a joint representative (the “ Sellers’ Representative ”). Sellers’ Representative shall be authorized to make any legal declarations and notices vis-à-vis the Purchaser or Guarantor and exercise any rights and accept any such declarations by Purchaser or Guarantor relating to this Agreement. This authority conferred to Sellers’ Representative is binding on the Sellers until another joint representative is notified to Purchaser in the form substantially as provided for in Annex 14.2 . The Sellers hereby

 

51


  authorise the Sellers’ Representative to make any notification or claim submitted to Bank of America on behalf of the Sellers pursuant to or under the bank guarantee letter dated 24 August 2016 issued by Bank of America in favour of the Sellers. In the event that the Sellers’ Representative notifies the Purchaser that another joint representative has been appointed in substitution for the Sellers’ Representative pursuant to this clause 14.2 then the Sellers’ Representative shall at the same time, for the period of time that the bank guarantee letter dated 24 August 2016 issued by Bank of America remains in issue, also notify Bank of America in addition to the Purchaser.

 

14.3 Notifications to Purchaser and Guarantor. All notifications, declarations and information by Sellers to Purchaser and to Guarantor with regard to this Agreement shall be jointly addressed to and sent by registered mail, facsimile, email or hand-delivery:

For the attention of Jay Goldbaum

Horizon Global Corporation

2600 West Big Beaver Road

Suite 555

Troy, Michigan

48084

United States of America

Facsimile: +1248-480-4175

E-mail: jgoldbaum@horizonglobal.com

With a copy to:

For the attention of Sven Schweneke

Eversheds Deutschland LLP

Brienner Straße 12

80333 Munich

Germany

Facsimile: 0049-89-545-65-204

E-mail: sven.schweneke@eversheds.de

Purchaser and Guarantor may at any time replace its recipients by another competent party in Germany.

 

14.4 Written Form. All notifications, declarations and information have to be in writing (notifications by facsimile are sufficient).

 

15 ASSIGNMENT

This Agreement, or rights deriving from this Agreement, may only be assigned with the prior written consent of the respective other party. The Sellers hereby consent to the assignment of any claims of the Purchaser under this Agreement to any banks or other lenders as a collateral to any debt incurred by the Purchaser or any entity affiliated with the Purchaser in connection with the financing of the Purchase Price.

 

16 PRE-MERGER NOTIFICATION

 

16.1 Filing. The notification to the relevant antitrust authorities shall be prepared and submitted by Purchaser. Purchaser shall file the merger control notification with the relevant antitrust authorities within three (3) Business Days after the Signing Date. In case Purchaser does not timely fulfil its aforementioned obligation, Sellers shall have the right to rescind this Agreement by written notice to Purchaser and clause 2.6 shall apply accordingly. The Sellers shall reasonably co-operate with the Purchaser in relation to any information which is required for a merger notification.

 

16.2

Correspondence; Cooperation. A copy of all correspondence with the relevant antitrust authorities received by Purchaser shall be forwarded promptly to Sellers and a copy of all

 

52


  correspondence with the relevant antitrust authorities received by Sellers shall be forwarded promptly to Purchaser. In case third parties, who are not parties to this Agreement, shall support Sellers or Purchaser, as the case may be, with regard to the notification, Sellers or Purchaser, as the case may be, shall be liable for such party’s acts, in particular, that all necessary declarations and information are/is provided on time, in full and correctly. Sellers shall procure that the Target Group Entities provide the necessary cooperation. In case of requests from the relevant antitrust authorities for additional information in connection with the abovementioned notification and the connected procedure, Purchaser shall respond to such request and provide the requested information within a period of seven (7) Business Days after receipt of such request.

 

17 ACCESSION OF GUARANTOR

Guarantor hereby accedes ( Schuldbeitritt ) according to Section 311 subsection 1 German Civil Code ( Bürgerliches Gesetzbuch, BGB ) to all obligations of Purchaser under this Agreement. Purchaser and Guarantor shall be jointly and severally liable ( gesamtschuldnerisch ) with regard to all obligations resulting from this Agreement.

 

18 MISCELLANEOUS

 

18.1 Governing Law. This Agreement including all appendices and the terms contained in these documents are exclusively governed by the laws of the Federal Republic of Germany (under exclusion of UN Law on the Sale of Goods). For the avoidance of doubt the Shareholders’ Agreement shall be governed by and construed and enforced exclusively in accordance with the internal laws of the State of New York without giving effect to the principles of conflicts of laws thereof.

 

18.2 Annexes. All Annexes to this Agreement constitute an integral part of this Agreement.

 

18.3 Entire Agreement. This Agreement comprises the entire agreement between the Parties concerning its subject matter and shall supersede all prior agreements, oral and written declarations of intent and other legal arrangements (whether binding or non-binding) made by the Parties in respect thereof.

 

18.4 Amendments. Amendments and addendums to this Agreement, including this subsection, shall be in writing unless a different form is required according to mandatory law.

 

18.5 German Terms. Wherever this Agreement includes English terms after which either in the same provision or elsewhere in this Agreement German terms have been inserted in brackets and/or italics, the respective German terms alone and not the English terms shall be authoritative for the interpretation of the respective provisions.

 

18.6 Arbitration. Any dispute under or in connection with this Agreement or any measures for its implementation, including any dispute regarding the validity of this Agreement or of this arbitration clause shall be finally settled by arbitration according to the arbitration rules of the German Institution for Arbitration e.V. ( Deutsche Institution für Schiedsgerichtsbarkeit e.V. – DIS ) as amended from time to time. The jurisdiction of the ordinary courts shall be excluded. The arbitration shall be held in Munich. The arbitration tribunal shall consist of three arbitrators.

 

18.7

Costs. The costs of the antitrust procedures and of the notarisation of this Agreement and any transfer taxes (in particular but not limited to real estate transfer tax) resulting from the signing of this Agreement or the consummation of the transactions contemplated in the Agreement shall be borne by Purchaser. The Escrow Fee as well as of any accrued costs and expenses arising in connection with the Escrow Account, shall be borne by the Sellers. Apart from that, each Party to this Agreement shall bear its own costs, including the costs for its advisors. None of the costs resulting from the signing of this Agreement or the consummation of the transactions

 

53


  contemplated in the Agreement shall be borne by the Target Companies unless the bearing of such costs by the Target Companies have been agreed in advance between the Parties.

 

18.8 No Double Dip. Claims of Purchaser against Sellers under this Agreement can only be raised if and to the extent that the underlying fact or circumstances giving rise to such claim (i) have not already given rise to a claim of Purchaser arising from another provision under this Agreement for which Purchaser has been compensated and (ii) directly relates to one of the items contained in Annex 5.5(ii) or has been taken into account in determining the Effective Date Net Working Capital pursuant to clause 3.3. The Purchaser will procure that the respective German WHO Entities will not bring a claim against the Sellers and/or the members of the advisory board of WHO and/or the supervisory board of TeIJs if and to the extent the Purchaser has a claim against the Sellers based on the same set of facts ( Lebenssachverhalt ) under this Agreement. This clause 18.8 is also intended for the benefit of and grants a direct right to act against the Purchaser ( echter Vertrag zugunsten Dritter ) to the members of the advisory/supervisory board of the Target Group Entities.

 

18.9 Severability. If any provision of this Agreement is invalid, incomplete or unenforceable, the remaining provisions shall remain unaffected. In such case, the Parties shall agree on a provision that comes – within the scope of the legally admissible – regarding the commercial purpose as close as possible to what the Parties intended or would have intended had they thought of the respective point.

 

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This deed was read aloud to the persons appearing,

approved by them and signed by them

and the acting notary in their own hands as follows:

 

/s/ Volker Hichert     /s/ A. Mark Zeffiro
/s/ Bernd Welzel     /s/ Jürgen Lotter
/s/ Mark Suderow     /s/ Karsten Buckenauer
/s/ Dr. Julius Wedemeyer     /s/ Dr. Christian Mense

 

Notary:   /s/ Sebastian Herrier

 

IV

Exhibit 10.1

WAIVER AND FIRST AMENDMENT TO

AMENDED AND RESTATED LOAN AGREEMENT

This WAIVER AND FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this “ Amendment ”) is dated as of October 4, 2016, and is entered into by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (“ Parent Borrower ”), CEQUENT PERFORMANCE PRODUCTS, INC. , a Delaware corporation (“ Cequent Performance ”), CEQUENT CONSUMER PRODUCTS, INC. , an Ohio corporation (“ Cequent Consumer ”), CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Cequent Performance, Cequent Consumer, and Cequent UK, collectively, “ Borrowers ”), the other Persons party to this Amendment as Obligors, the financial institutions party to this Amendment as Lenders, and BANK OF AMERICA, N.A. , a national banking association, in its capacity as agent for itself and the other Secured Parties (“ Agent ”).

WHEREAS, the Borrowers, the other Obligors party hereto, the Agent and the Lenders have entered into that certain Amended and Restated Loan Agreement dated as of December 22, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”);

WHEREAS, Parent Borrower, Cequent Performance, Cequent Consumer, Horizon Global Company LLC, a Delaware limited liability company, and Agent entered into that certain ABL Guarantee and Collateral Agreement dated as of June 30, 2015 in order to secure the Obligations;

WHEREAS, Cequent Performance, Horizon International Holdings LLC, a Delaware limited liability company, Cequent UK, Cequent Canada, Cequent Nederland Holdings B.V., a company formed under the laws of the Netherlands, Cequent Mexico Holdings B.V., a company formed under the laws of the Netherlands, Cequent Sales Company de Mexico, S. DE R.L. DE C.V., a limited liability company formed under the laws of Mexico, Cequent Electrical Products de Mexico, S. DE R.L. DE C.V., a limited liability company formed under the laws of Mexico, and Agent entered into that certain Foreign Facility Guarantee and Collateral Agreement dated as of December 22, 2015 in order to secure the Foreign Facility Obligations; and

WHEREAS, the Borrowers and the other Obligors have requested that the Agent and the Lenders agree to (a) enter into certain amendments to the Loan Agreement and (b) waive certain of the requirements of Section 10.1.9(a) of the Loan Agreement with respect to Subsidiaries acquired pursuant to the Westfalia Acquisition (as defined below).

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Loan Documents and this Amendment, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Initially capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Loan Agreement, as amended hereby.


ARTICLE II

LIMITED WAIVER

The Obligors have requested that Agent and Lenders waive the provisions of Section 10.1.9(a) of the Loan Agreement that would require the Subsidiaries to be acquired by means of the Westfalia Acquisition that are organized, incorporated, or formed in a Permitted Jurisdiction to satisfy each applicable Collateral and Guarantee Requirement to the extent required by such Section 10.1.9(a). The Obligors hereby represent and warrant to the Agent and the Lenders that Schedule 1 to this Amendment sets forth the name of, and the ownership interest of the Parent Borrower in, each Subsidiary of the Parent Borrower and identifies each Subsidiary that is an Obligor, in each case as of the date of this Amendment after giving effect to the Westfalia Acquisition. The Agent and the Lenders hereby waive the provisions of Section 10.1.9(a) of the Loan Agreement that would require the Subsidiaries to be acquired by means of the Westfalia Acquisition that are organized, incorporated, or formed in a Permitted Jurisdiction to satisfy each applicable Collateral and Guarantee Requirement to the extent required by such Section 10.1.9(a) (the “ Waiver ”). Such Waiver is conditioned upon the terms and conditions set forth in this Amendment, shall be limited precisely as described herein and shall relate solely to the Subsidiaries to be acquired by means of the Westfalia Acquisition. Agent and Lenders expressly do not waive the notice requirements of Section 10.1.9(a) concerning the formation or acquisition of any Subsidiary at any time. Other than as expressly set forth in this Article II, nothing in this Amendment shall be construed to (i) constitute a waiver of compliance or default by the Borrowers with respect to the Loan Documents in any other instance or any other instrument or agreement referred to in the Loan Documents; or (ii) prejudice any right or remedy that the Agent or any Lender may now have or may have in the future under or in connection with any Loan Document or any other instrument or agreement referred to therein.

ARTICLE III

AMENDMENTS TO LOAN AGREEMENT

3.01. Existing Definitions . The following definitions set forth in Section 1.1 of the Loan Agreement are hereby amended to read in their entirety as follows:

Base Incremental Amount ” as of any date, an amount equal to (a) $75,000,000 less (b) the aggregate principal amount of Incremental Term Commitments established prior to such date under the Term Loan Agreement in reliance on the Base Incremental Amount less (c) the aggregate principal amount of Alternative Incremental Debt established prior to such date in reliance on the Base Incremental Amount.

Canadian BA Rate ” with respect to each Interest Period for a Canadian BA Rate Loan, the rate of interest per annum equal to the average rate applicable to Canadian Dollar bankers’ acceptances having an identical or comparable term as the proposed Canadian BA Rate Loan displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at approximately 10:00 a.m. Toronto time on such day (or, if such day is not a Business Day, as of 10:00 a.m. Toronto time on the immediately preceding Business Day), provided that if such rate does not appear on the CDOR Page at such time on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Local Time on such day at which a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) as selected by Agent is then offering to purchase Canadian Dollar bankers’ acceptances accepted by it having such specified term (or a term as closely as possible comparable to such specified term). In no event shall the Canadian BA Rate be less than zero.

 

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Canadian Base Rate ” on any date, the highest of (a) a fluctuating rate of interest per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) as its “Base Rate”, (b) the sum of 0.50% plus the Federal Funds Rate for such day, and (c) the sum of 1.00% plus the LIBOR rate for a thirty (30) day Interest Period as of such day. The “Base Rate” is a rate set by Bank of America (Canada) based upon various factors including Bank of America (Canada)’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans made in Dollars in Canada, which may be priced at, above, or below such announced rate. Any change in such rate shall take effect at the opening of business on the day of such change. In the event Bank of America (Canada) (including any successor or assignee) does not at any time announce a “Base Rate”, clause (a) of Canadian Base Rate shall mean the “Base Rate” (being the rate for loans made in Dollars in Canada) publicly announced by a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) selected by Agent. In no event shall the Canadian Base Rate be less than zero.

Canadian Prime Rate ” on any date, the highest of (i) a fluctuating rate of interest per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) as its “Prime Rate”, (ii) the sum of 0.50% plus the Bank of Canada overnight rate, which is the rate of interest charged by the Bank of Canada on one-day loans to financial institutions, for such day, and (iii) the sum of 1.00% plus the Canadian BA Rate for a 30 day Interest Period as of such day. The “Prime Rate” is a rate set by Bank of America (Canada) based upon various factors including the costs and desired return of Bank of America (Canada), general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate shall take effect at the opening of business on the day specified in the public announcement of such change. Each interest rate based on the Canadian Prime Rate hereunder shall be adjusted simultaneously with any change in the Canadian Prime Rate. In the event Bank of America (Canada) (including any successor or assignee) does not at any time announce a “Prime Rate”, clause (i) of Canadian Prime Rate shall mean the “Prime Rate” (being the rate for loans made in Canadian Dollars in Canada) publicly announced by a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) selected by Agent. In no event shall the Canadian Prime Rate be less than zero.

Consolidated EBITDA ” for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period, (ii) consolidated income tax expense for such period (including all single business tax expenses imposed by state law), (iii) all amounts attributable to depreciation and amortization for such period, (iv) any extraordinary noncash charges for such period, (v) interest-equivalent costs associated with any Specified Vendor Receivables Financing for such period, whether accounted for as interest expense or loss on the sale of receivables, and all Preferred Dividends, (vi) all losses during such period that relate to the retirement of Debt, (vii) noncash expenses during such period resulting from the grant of Equity Interests to management and employees of the Parent Borrower or any of the Subsidiaries, (viii) the aggregate amount of deferred financing expenses for such period, (ix) all other noncash expenses or losses of the Parent Borrower or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), (x) any nonrecurring fees, expenses or charges realized by the Parent Borrower or any of the Subsidiaries for such period related

 

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to any offering of Equity Interests or incurrence of Debt, whether or not consummated, (xi) fees and expenses in connection with the Original Closing Date Transactions, (xii) any nonrecurring costs and expenses arising from the integration of any business acquired pursuant to any Permitted Acquisition consummated after the Original Closing Date, (xiii) the amount of reasonably identifiable and factually supportable “run rate” cost savings, operating expense reductions, and other synergies not to exceed $12,500,000 resulting from the Westfalia Acquisition that are projected by the Parent Borrower in good faith and certified by a Financial Officer of the Parent Borrower in writing to the Agent to result from actions either taken or expected to be taken within eighteen (18) months of the Westfalia Acquisition Closing Date, net of the amount of actual benefits realized prior to or during such period from such actions (which cost savings, operating expense reductions, and synergies shall be calculated on a pro forma basis as though such cost savings, operating expense reductions, or synergies had been realized on the first day of such period), (xiv) any nonrecurring expenses or similar costs relating to cost savings projects, including restructuring and severance expenses, (xv) net losses from discontinued operations, (xvi) losses associated with the prepayment of leases (whether operating leases or capital leases) outstanding on January 1, 2015 from discontinued operations, and (xvii) losses or charges associated with asset sales otherwise permitted hereunder, minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) any non-cash income, profits or gains for such period and (iii) any gains realized from the retirement of Debt after the Original Closing Date, all determined on a consolidated basis in accordance with GAAP; provided, however that the amounts added to Consolidated Net Income pursuant to clauses (xii) through (xvii) above for any period shall not exceed twenty percent (20%) of Consolidated EBITDA for such period (determined without including amounts added to Consolidated Net Income pursuant to clauses (xii) through (xvii) above for such period). If any Borrower or any Subsidiary has made any Permitted Acquisition or Significant Investment or any sale, transfer, lease or other disposition of assets outside of the ordinary course of business permitted by Section 10.2.5 during the relevant period for determining any leverage ratio hereunder, Consolidated EBITDA for the relevant period shall be calculated only for purposes of determining such leverage ratio after giving pro forma effect thereto, as if such Permitted Acquisition or Significant Investment or sale, transfer, lease or other disposition of assets had occurred on the first day of the relevant period for determining Consolidated EBITDA; provided that with respect to any Significant Investment, (x) any pro forma adjustment made to Consolidated EBITDA shall be in proportion to the percentage ownership of such Borrower or such Subsidiary, as applicable, in the Subject Person (e.g. if such Borrower acquires 70% of the Equity Interests of the Subject Person, a pro forma adjustment to Consolidated EBITDA shall be made with respect to no more than 70% of the EBITDA of the Subject Person) and (y) pro forma effect shall only be given to such Significant Investment if the Debt of the Subject Person is included in Total Debt for purposes of calculating the applicable leverage ratio in proportion to the percentage ownership of such Borrower or such Subsidiary, as applicable, in such Subject Person. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any Permitted Acquisition, or sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments (a) would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“Regulation S-X”) or (b) are reasonably consistent with the purpose of Regulation S-X as determined in good faith by the Borrowers in consultation with Agent.

 

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Defaulting Lender ” any Lender that (a) has failed to comply with its funding obligations hereunder, and such failure is not cured within two Business Days; (b) has notified Agent or any Borrower that such Lender does not intend to comply with its funding obligations hereunder or under any other credit facility, or has made a public statement to that effect; (c) has failed, within three Business Days following request by Agent or any Borrower, to confirm in a manner satisfactory to Agent and Borrowers that such Lender will comply with its funding obligations hereunder; or (d) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Proceeding (including reorganization, liquidation, or appointment of a receiver, custodian, administrator or similar Person by the Federal Deposit Insurance Corporation or any other regulatory authority) or (ii) become the subject of a Bail-in Action; provided , however , that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an equity interest in such Lender or parent company unless the ownership provides immunity for such Lender from jurisdiction of courts within the United States or from enforcement of judgments or writs of attachment on its assets, or permits such Lender or Governmental Authority to repudiate or otherwise to reject such Lender’s agreements; and provided further , that a Lender shall not be deemed to be a Defaulting Lender under clauses (a), (b) or (c) if it has notified Agent and Borrowers in writing that it will not make a funding because a condition to funding (specifically identified in the notice) is not or cannot be satisfied.

First Lien Net Leverage Ratio ” on any date, the ratio of (a) First Lien Secured Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

Net Leverage Ratio ” on any date, the ratio of (a) Total Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

Secured Net Leverage Ratio ” on any date, the ratio of (a) Secured Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

Specified Vendor Receivables Financing ” the sale by the Parent Borrower and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “ true sales ”; provided that the aggregate amount of all such receivables financings shall not exceed $50,000,000 at any time outstanding.

 

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Subsidiary Obligor ” a Canadian Subsidiary Obligor, a UK Subsidiary Obligor, a U.S. Subsidiary Obligor and/or any other Obligor that is a Subsidiary, as the context requires.

U.S. Revolver Commitment ” for any U.S. Lender, its obligation to make U.S. Revolver Loans and to participate in U.S. LC Obligations up to the maximum principal amount shown on Schedule 1.1(B) , as hereafter modified pursuant to Section 2.1.4 , Section 2.1.7 , Section 2.1.8 or an Assignment to which it is a party. “ U.S. Revolver Commitments ” means the aggregate amount of such commitments of all Lenders.

3.02. New Definitions . The following new definitions are hereby added to Section 1.1 of the Loan Agreement in appropriate alphabetical order to read in their entirety as follows:

Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

Unrestricted Foreign Cash ” as of any date, unrestricted cash and unrestricted Permitted Investments of the Obligors (other than Parent Borrower and its Domestic Subsidiaries) as of such date.

Westfalia Acquisition ” the acquisition of all Equity Interests of Westfalia-Automotive Holding GmbH, a limited liability company organized under the laws of Germany, and TeIJs Holding B.V., a private company with limited liability organized under the laws of the Netherlands (collectively, the “ Westfalia Group ”), by Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, and the guarantee by Parent Borrower of the obligations of Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, under the Westfalia Purchase Agreement, all pursuant to the Westfalia Purchase Agreement and all in accordance with the terms of the Westfalia Purchase Agreement without giving effect to any amendment thereto.

 

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Westfalia Acquisition Closing Date ” means October 4, 2016.

Westfalia Group ” as defined in the definition of “Westfalia Acquisition”.

Westfalia Purchase Agreement ” that certain Sale and Purchase Agreement, recorded in Munich on August 24, 2016, by and among Parcom Deutschland I GmbH & Co. KG, a limited partnership organized under the laws of Germany, as a seller; Co-Investment Partners Europe L.P., a limited partnership organized under the laws of the Cayman Islands, as a seller; Bayernlb Private Equity GmbH, a limited liability company organized under the laws of Germany, as a seller; Walter Gnauert, an individual resident of Cavaion, Italy, as a seller; Dr. Bernd Welzel, an individual resident of Bramsche, Germany, as a seller; Frank Klebedamz, an individual resident of Gladbeck, Germany, as a seller; Jurgen Lotter, an individual resident of Rosrath, Germany, as a seller; Westfalia Mitarbeiterbeteiligungs GmbH & Co. KG, a limited partnership organized under the laws of Germany, as a seller; Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, as purchaser; and Parent Borrower, as guarantor.

Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

3.03. Increase in U.S. Revolver Commitments . A new Section 2.1.8 is hereby added to the Loan Agreement to read in its entirety as follows:

“2.1.8 Increase in U.S. Revolver Commitments . U.S. Borrowers may request an increase in U.S. Revolver Commitments from time to time upon notice to Agent, as long as (a) the requested increase is in a minimum amount of $10,000,000 and is offered on the same terms as existing U.S. Revolver Commitments, except for a closing fee specified by U.S. Borrowers, (b) increases under this Section 2.1.8 do not exceed $25,000,000 in the aggregate and no more than five (5) increases are made, (c) no reduction in Commitments pursuant to Section 2.1.4 has occurred prior to the requested increase, (d) the requested increase does not cause the Commitments to exceed 90% of any applicable cap under any Subordinated Debt agreement, (e) the requested increase does not cause the Commitments to exceed 90% of any applicable cap contained in the Term Loan Documents (excluding the effect of any provision permitting Revolver Loans or Letters of Credit in amounts exceeding any expressed dollar cap in reliance upon the Borrowing Base), and (f) the Obligors deliver such resolutions, acknowledgements, and reaffirmations as are requested by the Agent in connection with such increase. Agent shall promptly notify U.S. Lenders of the requested increase and, within ten (10) Business Days thereafter, each U.S. Lender shall notify Agent if and to what extent such U.S. Lender commits to increase its U.S. Revolver Commitment. Any U.S. Lender not responding within such period shall be deemed to have declined an increase. If U.S. Lenders fail to commit to the full requested increase, other Lenders or Eligible Assignees may issue additional U.S. Revolver Commitments and become U.S. Lenders hereunder. Agent may allocate, in its discretion, the increased U.S. Revolver Commitments among committing U.S. Lenders and, if necessary, other Lenders and Eligible Assignees.

 

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Provided the conditions set forth in Section 6.2 are satisfied, total U.S. Revolver Commitments shall be increased by the requested amount (or such lesser amount committed by U.S. Lenders, other Lenders and Eligible Assignees) on a date agreed upon by Agent and Borrower Agent, but no later than 45 days following U.S. Borrowers’ increase request. Agent, Obligors, and new and existing Lenders shall execute and deliver such documents and agreements as Agent deems appropriate to evidence the increase in and allocations of U.S. Revolver Commitments. On the effective date of an increase, the U.S. Revolver Usage and other exposures under the U.S. Revolver Commitments shall be reallocated among U.S. Lenders, and settled by Agent if necessary, in accordance with U.S. Lenders’ adjusted shares of such Commitments.”

3.04. EEA Financial Institution . A new Section 9.1.27 is hereby added to the Loan Agreement to read in its entirety as follows:

“9.1.27 EEA Financial Institution . No Obligor is an EEA Financial Institution.”

3.05. Debt . The word “and” is hereby removed from the end of Section 10.2.1(a)(xx) of the Loan Agreement, the period at the end of Section 10.2.1(a)(xxi) of the Loan Agreement is hereby replaced with a semicolon and the word “and”, and the following new clause (xxii) is hereby added to the end of Section 10.2.1(a) of the Loan Agreement to read in its entirety as follows:

“(xxii) any Capital Lease Obligations of a Person that becomes a Subsidiary pursuant to the Westfalia Acquisition; provided that (A) such Capital Lease Obligation exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Debt permitted by this clause (xxii) shall not exceed $15,000,000 at any time outstanding.”

3.06. Restricted Payments . The word “and” is hereby removed from the end of Section 10.2.8(a)(iii) of the Loan Agreement, the period at the end of Section 10.2.8(a)(iv) of the Loan Agreement is hereby replaced with a semicolon and the word “and”, and the following new clause (v) is hereby added to the end of Section 10.2.8(a) of the Loan Agreement to read in its entirety as follows:

“(v) each of the Parent Borrower and Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, may pay purchase price adjustments required to be paid by such Person pursuant to the Westfalia Purchase Agreement, without giving effect to any amendment thereto not specifically described in the definition of “Westfalia Purchase Agreement”.”

3.07. Bail-In of EEA Financial Institutions . A new Section 14.21 is hereby added to the Loan Agreement to read in its entirety as follows:

“14.21 Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

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(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

 

  (i) a reduction in full or in part or cancellation of any such liability;

 

  (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

  (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.”

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each Obligor hereby represents and warrants to each Lender and the Agent, as of the date hereof and at each time that the following representations and warranties are made or deemed to be made thereafter, as follows:

4.01. Authority . The execution, delivery and performance by such Obligor of each Loan Document described in Section 6 hereof (and, with respect to the Parent Borrower, the Term Loan Agreement Amendment (as defined below)), and the transactions contemplated hereby or thereby (including, without limitation, the Westfalia Acquisition, the borrowing of the 2016 Incremental Term Loans and the extension of the 2016 Incremental Term Loan Commitments (each as defined in the Term Loan Agreement Amendment)), have been duly authorized by all necessary action, and this Amendment and each other Loan Document described in Section 6 hereof is a legal, valid and binding obligation of such Obligor enforceable against such Obligor 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.

4.02. Representations and Warranties . Each representation and warranty of such Obligor in the Loan Documents is true and correct as of the date hereof, after giving effect to this Amendment (except for representations and warranties that expressly relate to an earlier date).

4.03. Governmental Approvals; No Conflicts . The execution, delivery, and performance by such Obligor of the Loan Documents described in Section 6 hereof (and, with respect to the Parent Borrower, the Term Loan Agreement Amendment (as defined below)), and the consummation of the transactions contemplated hereby or thereby (including, without limitation, the Westfalia Acquisition, the borrowing of the 2016 Incremental Term Loans and the extension of the 2016 Incremental Term Loan Commitments

 

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(each as defined in the Term Loan Agreement Amendment)), (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of any Obligor or any Subsidiary of any Obligor or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, or give rise to a right thereunder to require any payment to be made by any Obligor or any Subsidiary of any Obligor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of any Obligor or any Subsidiary of any Obligor, except Liens created under the Loan Documents and Liens permitted by Section 10.2.2 of the Loan Agreement, as amended by this Amendment, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect.

4.04. Solvency . Immediately after the consummation of the Westfalia Acquisition and the other transactions contemplated by this Amendment and the Term Loan Agreement Amendment to take place on the date of this Amendment, and immediately following the making of each 2016 Incremental Term Loan and after giving effect to the application of the proceeds thereof, (a) the fair value of the assets of each Obligor, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of each Obligor will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) each Obligor will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or fall due and (d) the Obligors, on a consolidated basis, will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Amendment Effective Date.

4.05. No Defaults . No Default or Event of Default has occurred and is continuing.

ARTICLE V

CERTIFICATIONS

The Obligors hereby certify to Agent and Lenders that (a) the Westfalia Acquisition constitutes a Permitted Acquisition and is permitted pursuant to the Loan Agreement (including without limitation Sections 10.2.4 and 10.2.8 thereof), (b) the 2016 Incremental Term Loans and the 2016 Incremental Term Loan Commitments (each as defined in the Term Loan Agreement Amendment, as defined below) made available to the Parent Borrower pursuant to the Term Loan Agreement Amendment are permitted pursuant to the Loan Agreement (including without limitation Section 10.2.1(a) thereof), (c) the Term Loan Agreement Amendment is not prohibited by Section 10.2.11 of the Loan Agreement, in each case after giving effect to this Amendment, (d) neither the execution or performance of the Loan Documents described in Article VI of this Amendment, nor the incurrence of any Obligations by Obligors pursuant to such Loan Documents, violates the Term Loan Documents, and (e) the Commitments and the Obligations, as modified by this Amendment, constitute “Indebtedness” permitted under the Term Loan Agreement.

 

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ARTICLE VI

CONDITIONS PRECEDENT AND FURTHER ACTIONS

6.01. Conditions Precedent . This Amendment shall be deemed effective as of the date first set forth above when each of the following conditions precedent have been satisfied in form and substance satisfactory to the Agent and its counsel (such date, the “ Amendment Effective Date ”):

(a) The Agent shall have received duly executed counterparts of this Amendment which, when taken together, bear the authorized signatures of the Obligors, the Agent and the Lenders;

(b) The Agent shall have received (i) an amendment to the Intercreditor Agreement, executed and delivered by Agent and Term Loan Agent, (ii) an amendment to the Guarantee and Collateral Agreement, executed and delivered by Agent and the U.S. Obligors, and (iii) a copy of an amendment to the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), executed by the Term Loan Agent and the U.S. Obligors;

(c) The Agent shall have received executed copies of any Term Loan Document or modification to any of the Term Loan Documents executed in connection with this Amendment (including, without limitation, that certain First Amendment to Credit Agreement, dated as of September 19, 2016, by and among Parent Borrower, the Term Loan Lenders party thereto, and the Term Loan Agent (the “ Term Loan Agreement Amendment ”)), which shall be in full force and effect, or any of the transactions contemplated by this Amendment (including, without limitation, the Westfalia Acquisition), which shall be in full force and effect, and all conditions precedent set forth in Section 4 of the Term Loan Agreement Amendment shall have been met or waived by the Term Loan Agent and/or the Term Loan Lenders in accordance with the terms of the Term Loan Documents;

(d) The Agent shall have received executed copies of the Westfalia Purchase Agreement and all other agreements, certificates and instruments executed by any Obligor or Subsidiary in connection with the Westfalia Acquisition, which shall be in full force and effect, and all conditions precedent set forth therein shall have been met;

(e) The Agent shall have received evidence of the filing with the PTO of an update to the “Owner Name” to reflect the proper Obligor (Cequent Consumer Products, Inc. or Cequent Performance Products, Inc., as applicable) as owner for each of the following Patents and Trademarks: (i) adjustable enclosure and mounting box for a trailer hitch electrical connector (Reg. # 6,076,691) (currently assigned to Mascotech, Inc.), (ii) trailer hitch with load adjustment (Reg. # 6,722,682) (current owner is Hidden Hitch International), and (iii) sealed multiple-contact electrical connector (Reg. # 6,338,644) (current owner is Theodore Bargman, Inc. D/B/A The Bargman Company);

(f) The Agent shall have received such other documents, legal opinions, instruments, and certificates relating to this Amendment as it shall reasonably request and such other documents, legal opinions, instruments and certificates that shall be satisfactory in form and substance to the Agent and the Lenders;

(g) The Borrowers shall have paid all fees and expenses (provided that legal fees required to be paid as a condition precedent to the occurrence of the Amendment Effective Date shall be limited to such legal fees as to which Borrowers have received a summary invoice) owed to and/or incurred by the Agent in connection with this Amendment; and

 

11


(h) All proceedings taken in connection with the transactions contemplated by this Amendment and all documentation and other legal matters incident thereto shall be satisfactory to the Agent in its sole and absolute discretion.

6.02. Further Actions . Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.

ARTICLE VII

REAFFIRMATION

Each Obligor hereby (i) acknowledges and consents to this Amendment; (ii) reaffirms its obligations under the Guaranties, the Security Documents and the other Loan Documents; (iii) reaffirms the Liens granted by it pursuant to the Security Documents; and (iv) confirms that the Guaranties, the Security Documents and the other Loan Documents remain in full force and effect, without defense, offset or counterclaim. Although each Guarantor has been informed of the terms of the Amendment, such Guarantor hereby confirms that it understands and agrees that the Agent and the Lenders have no duty to so notify such Guarantor or any other guarantor or to seek this or any future acknowledgment, consent or reaffirmation, and nothing contained herein shall create or imply any such duty as to any transaction, past or future.

ARTICLE VIII

MISCELLANEOUS

8.01. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective successors and assigns. The successors and assigns of the Obligors include, without limitation, their respective receivers, trustees, and debtors-in-possession.

8.02. Further Assurances . Each Obligor party hereto hereby agrees from time to time, as and when requested by the Agent or any Lender, to execute and deliver or cause to be executed and delivered all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Agent or such Lender may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment and the other Loan Documents.

8.03. Loan Document . This Amendment shall be deemed to be a “Loan Document” for all purposes under the Loan Agreement.

8.04. Governing Law . THIS AMENDMENT AND, UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

8.05. Consent to Forum.

(a) Forum . EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY

 

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LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. A FINAL JUDGMENT IN ANY PROCEEDING OF ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR ANY OTHER MANNER PROVIDED BY APPLICABLE LAW.

(b) Other Jurisdictions . Nothing herein shall limit the right of Agent, any Security Trustee or any Lender to bring proceedings against any Obligor (other than a Mexican Domiciled Obligor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Obligors). Nothing in this Amendment shall be deemed to preclude enforcement by Agent or any Security Trustee of any judgment or order obtained in any forum or jurisdiction. Final judgment against an Obligor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Obligor is domiciled, by suit on the judgment.

(c) Each Mexican Domiciled Obligor waives any right to any jurisdiction (other than as provided under Section 8.04 above and this Section 8.05) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Obligors, and waives any objection to those courts on the ground of venue or forum non conveniens .

8.06. Severability . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Amendment shall remain in full force and effect.

8.07. Entire Agreement . Time is of the essence of this Amendment. This Amendment constitutes 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.

8.08. Execution in Counterparts . This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment shall become effective on the Amendment Effective Date. Delivery of a signature page of this Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement.

8.09. Costs and Expenses . The Borrowers agree to reimburse Agent for all fees, costs and expenses, including the reasonable fees, costs and expenses of counsel or other advisors for advice, assistance, or other representation in connection with this Amendment.

8.10. Reference to and Effect upon the Loan Documents . The amendments and modifications described in this Amendment shall apply and be effective only with respect to the provisions of the Loan Agreement specifically identified in this Amendment. Except as expressly amended herein, the Loan Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof, and are hereby ratified and confirmed. In each case except as expressly provided in

 

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this Amendment, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver or amendment of any provision of any of the Loan Documents. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Loan Agreement as amended hereby.

8.11. Section Headings . The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

Balance of Page Intentionally Left Blank

Signature Pages Follow

 

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IN WITNESS WHEREOF, duly authorized representatives of the parties have executed this Amendment and the parties have delivered this Amendment, each as of the day and year first written above.

 

OBLIGORS :

 

HORIZON GLOBAL CORPORATION ,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor and the Borrower Agent

By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Chief Financial Officer

 

CEQUENT PERFORMANCE PRODUCTS, INC. ,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Vice President

 

 

CEQUENT CONSUMER PRODUCTS, INC. ,

an Ohio corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Vice President

 

 

CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641, as UK Borrower, a UK Facility Obligor, a Canadian Facility Guarantor and a Canadian Facility Obligor
By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Director
  [Signatures continue on next page.]


CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario, as Canadian Borrower, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor
By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Vice President

 

 

HORIZON GLOBAL COMPANY LLC ,

a Delaware limited liability company, as a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Vice President

 

 

HORIZON INTERNATIONAL HOLDINGS LLC ,

a Delaware limited liability company, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Vice President

 

 

CEQUENT NEDERLAND HOLDINGS B.V. ,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ R.I.L. van Dijk
Name:  R.I.L. van Dijk
Title:    Director A

 

 

By:   /s/ Jay Goldbaum
Name:  Jay Goldbaum
Title:    Director B
[Signatures continue on next page.]


CEQUENT MEXICO HOLDINGS B.V. ,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ R.I.L. van Dijk
Name:  R.I.L. van Dijk
Title:    Director A
By:   /s/ Jay Goldbaum
Name:  Jay Goldbaum
Title:    Director B

 

 

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V. ,

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Vice President

 

 

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V. ,

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:   /s/ David G. Rice
Name:  David G. Rice
Title:    Vice President
[Signatures continue on next page.]


AGENT AND LENDERS :

 

BANK OF AMERICA, N.A. ,

as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender

By:   /s/ Steven M Siravo
Name:  Steven M Siravo
Title:    Senior Vice President

 

 

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender
By:   /s/ Sylwia Durkiewicz
Name:  Sylwia Durkiewicz
Title:    Vice President

 

 

BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee
By:   /s/ Steven M Siravo
Name:  Steven M Siravo
Title:    Senior Vice President
[Signatures continue on next page.]


WELLS FARGO BANK, NATIONAL ASSOCIATION , as a U.S. Lender
By:   /s/ Peter Shin
Name:  Peter Shin
Title:    Authorized Signatory

 

 

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA , as a Canadian Lender
By:   /s/ Diego Arp
Name:  Diego Arp
Title:    Vice President

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION , (London branch), as a UK Lender
By:   /s/ N B Hogg
Name:  N B Hogg
Title:    Authorized Signatory
[Signatures continue on next page.]


BANK OF MONTREAL , as a U.S. Lender, a Canadian Lender and a UK Lender
By:   /s/ Craig Thistlethwarte
Name:  Craig Thistlethwarte
Title:    Managing Director


SCHEDULE 1

See attached.


SCHEDULE I

to

Waiver and First Amendment to Amended and Restated Loan Agreement

SUBSIDIARIES

 

Corporate Name

  

Ownership Interest of Parent Borrower (direct and indirect)

   Is the
Subsidiary an
Obligor?
C.P. Witter Limited    100% owned by Horizon Global European Holdings Limited    No
Cequent Bermuda Holdings Ltd.    100% owned by Horizon Euro Finance LLC    No
Cequent Brazil Holdings Coöperatief W.A.    99.99 % owned by Horizon Real Finance LLC and approx. 0.01% owned by Cequent Bermuda Holdings Ltd. (such ownership totaling 100%)    No
Cequent Consumer Products, Inc.    100% owned by Horizon Global Company LLC    Yes
Cequent Electrical Products de Mexico, S. de R.L. de C.V.    99.97% owned by Cequent Mexico Holdings B.V. and approx. 0.03% owned by Cequent Sales Company de México, S. de R.L. de C.V. (such ownership totaling 100%)    Yes
Cequent Indústria E Comércio Ltda.    99.99% owned by Cequent Brazil Holdings Coöperatief W.A. and 0.01% owned by Horizon Real Finance LLC (such ownership totaling 100%)    No
Cequent Mexico Holdings B.V.    100% owned by Cequent UK Limited    Yes
Cequent Nederland Holdings B.V.    100% owned by Horizon International Holdings LLC    Yes
Cequent Performance Products, Inc.    100% owned by Horizon Global Company LLC    Yes
Cequent Sales Company de México, S. de R.L. de C.V.    99.97% owned by Cequent Nederland Holdings B.V. and approx. 0.03% owned by Cequent Mexico Holdings B.V. (such ownership totaling 100%)    Yes
Cequent Towing Products of Canada, Ltd.    100% owned by Cequent Nederland Holdings B.V.    Yes
Cequent UK Limited    100% owned by Cequent Nederland Holdings B.V.    Yes
HG Germany Holdings GmbH    100% owned by Cequent Nederland Holdings B.V.    No
HGHK Services C.V.    99.99% owned by Horizon Sourcing Holdings LLC and approx. 0.01% owned by Horizon Euro Finance LLC (such ownership totaling 100%)    No
HZN FinCo IRL Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    No
HZN Sourcing Oy    100% owned by Cequent Nederland Holdings B.V.    No
Henrichs Beteiligungsgesellschaft mbH    100 % owned by Westfalia-Automotive GmbH    No
Horizon Euro Finance LLC***    100% owned by Cequent Nederland Holdings B.V.    No
Horizon GBP Finance LLC    100% owned by Cequent Bermuda Holdings Ltd.    No
Horizon Global Company LLC    100% owned by Horizon Global Corporation    Yes
Horizon Global European Holdings Limited    100% owned by Horizon Global Holdings Australia Pty. Ltd.    No
Horizon Global Germany GmbH    100% owned by C.P. Witter Limited    No
Horizon Global Holdings Australia Pty. Ltd.    100% owned by Cequent Bermuda Holdings Ltd.    No
Horizon Global Hong Kong Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    No


Horizon Global (NZ) Limited    100% owned by Horizon Global Holdings Australia Pty Ltd.    No
Horizon Global Pty. Ltd.    100% owned by Horizon Global Holdings Australia Pty. Ltd.    No
Horizon Global (Shanghai) Trading Co. Ltd.    100% owned by Horizon Global Hong Kong Holdings Limited    No
Horizon Global (South Africa) (PTY) LTD.    100% owned by Horizon Global Holdings Australia Pty. Ltd.    No
Horizon Global Sourcing Operations and Innovation Center India Pvt. Ltd.    99.99% owned by Cequent Nederland Holdings B.V. and approx. 0.01% owned by Horizon Euro Finance LLC (such ownership totaling 100%)    No
Horizon International Holdings LLC**    100% owned by Cequent Performance Products, Inc.    Yes
Horizon Real Finance LLC    100% owned by Cequent Bermuda Holdings Ltd.    No
Horizon Sourcing B.V.    100% owned by Cequent Nederland Holdings B.V.    No
Horizon Sourcing Holdings LLC***    100% owned by Horizon Euro Finance LLC    No
Kovil Oy    100% owned by Horizon Global (Germany) GmbH    No
Monoflex Nordic AB    100% owned by Westfalia Nordic AB    No
Parkside Towbars Pty. Ltd.    100% owned by Horizon Global Pty. Ltd.    No
S.I.A.R.R. SAS    100% owned by Westfalia-Automotive SAS    No
Teljs Automotive Srl Unit 2    100% owned by Teljs B.V.    No
Teljs B.V.    100% owned by Teljs Holding B.V.    No
Teljs Holding B.V.    100% owned by HG Germany Holdings GmbH    No
Terwa B.V.    100% owned by Terwa Holdings B.V.    No
Terwa China (China Rep Office)    100% owned by Terwa B.V.    No
Terwa Construction Systems Poland Sp.zo.o    100% owned by Terwa Construction Systems Srl    No
Terwa Construction Systems Srl    100% owned by Terwa B.V.    No
Terwa Holdings B.V.    100% owned by Teljs B.V.    No
Terwa Innovation B.V.    100% owned by Terwa Holdings B.V.    No
Terwa Investors B.V.    100% owned by Terwa Holdings B.V.    No
Terwa Romania Srl Unit 1    100% owned by Terwa B.V.    No
Westfalia American Hitch Inc.    100% owned by Westfalia-Automotive GmbH    No
Westfalia-Automotive Beteiligungsgesellschaft mbH    100% owned by Westfalia-Automotive GmbH    No
Westfalia-Automotive Denmark ApS    100% owned by Monoflex Nordic AB    No
Westfalia-Automotive GmbH    100% owned by Westfalia-Automotive Holding GmbH    No
Westfalia-Automotive Holding GmbH    100% owned by HG Germany Holdings GmbH    No
Westfalia-Automotive Italia S.r.l.    100% owned by Westfalia-Automotive GmbH    No
Westfalia-Automotive Polska Sp.Zo.o    100% owned by Westfalia-Automotive GmbH    No


Westfalia-Automotive Russland OOO    99.1% owned by Westfalia-Automotive GmbH and approx. 0.9% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH (such ownership totaling 100%)    No
Wedstfalia-Automotive SAS    100% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH    No
Westfalia Nordic AB    100% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH    No
Westfalia UK Ltd.    100% owned by Westfalia-Automotive GmbH    No
TriMotive Asia Pacific Limited    99.99% owned by Horizon Global Holdings Australia Pty. Ltd. and approx. 0.001% owned by Horizon Euro Finance LLC (and 1 de minimus holder), (such ownership totaling 100%)    No
** CFC Holdco
***Special Purpose Entity

Exhibit 10.2

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT (this “ Amendment ”), dated as of September 19, 2016, to the Term Loan Credit Agreement dated as of June 30, 2015 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time party thereto (the “ Lenders ”), JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, the parties hereto are parties to the Credit Agreement;

WHEREAS, the Borrower has notified the Administrative Agent that it is requesting the establishment of Incremental Term Loans pursuant to Section 2.21 of the Credit Agreement;

WHEREAS, pursuant to Section 2.21 of the Credit Agreement, the Borrower may obtain Incremental Term Loan Commitments by, among other things, entering into one or more Incremental Facility Agreements in accordance with the terms and conditions of the Credit Agreement;

WHEREAS, pursuant to that certain Sale and Purchase Agreement, dated as August 24, 2016 (together with all exhibits and schedules thereto, collectively, as may be amended, the “ Westfalia Purchase Agreement ”), entered into among the Borrower, Blitz K16-102 GmbH and the certain seller parties identified therein (collectively, the “ Sellers ”), the Borrower, intends, directly or indirectly, to acquire Westfalia-Automotive Holding GmbH and TeIJs Holding B.V. (collectively, the “ Westfalia Group ”) pursuant to the terms of the Westfalia Purchase Agreement (the “ Westfalia Acquisition ”); and

WHEREAS, the Borrower has requested Incremental Term Loans in an aggregate principal amount of $152,000,000 (the “ 2016 Incremental Term Loans ”, and the commitments relating thereto, the “ 2016 Incremental Term Loan Commitments ”) in order to finance a portion of the consideration for the Westfalia Acquisition and to finance other payments under the Westfalia Purchase Agreement, to pay certain fees and expenses and for general corporate purposes (the transactions described above, the “ Westfalia Transactions ”).

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1.      DEFINITIONS .  Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.

SECTION 2.      AMENDMENTS .  The Credit Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto.

SECTION 3.      INCREMENTAL TERM LOANS .

3.1        Borrowing of Incremental Term Loans .  The Lenders set forth on Schedule A annexed hereto (the “ 2016 Incremental Term Lenders ”) hereby agree to provide the 2016 Incremental Term Loan Commitments set forth opposite their names on Schedule A, on the terms set forth in this Amendment


2

 

and, subject to the conditions set forth in Section 4.2 below, to make 2016 Incremental Term Loans on the 2016 Incremental Funding Date (as defined below) to the Borrower in an aggregate principal amount equal to the aggregate 2016 Incremental Term Loan Commitments of the 2016 Incremental Term Loan Lenders. Pursuant to Section 2.21 of the Credit Agreement, the 2016 Incremental Term Loans shall be Term B Loans for all purposes under the Credit Agreement and each other Loan Document and shall, except as otherwise set forth in the Credit Agreement (after giving effect to this Amendment), have terms identical to the Initial Term B Loans outstanding under the Credit Agreement immediately prior to the date hereof.

3.2        Fees .  In addition to the fees set forth in any other Loan Document (including any fee letter), if the 2016 Incremental Term Loans have not been funded within 30 days after the Effective Date, commencing on the date that is 31 days after the Effective Date and ending on the funding of the 2016 Incremental Term Loans, the Borrower shall pay to each 2016 Incremental Term Lender an unused commitment fee of 50% of the sum of (i) the Adjusted LIBO Rate and (ii) the Applicable Rate on the aggregate amount of such Lender’s 2016 Incremental Term Loan Commitments as if such Commitments were made as Eurocurrency Term B Loans.

3.3        Escrow Funding .

(a)        If the 2016 Incremental Term Loans have not been funded within 60 days after the Effective Date (the “ Escrow Funding Event ”), the 2016 Incremental Term Loans shall be funded into escrow (“ Escrow Funding ”) pursuant to escrow arrangements acceptable to the Administrative Agent. If an Escrow Funding Event occurs, the Borrower agrees that (i) it shall immediately enter into any amendment to the Credit Agreement or other agreements reasonably necessary to complete the Escrow Funding, (ii) it shall, and shall cause any other relevant person to, satisfy the conditions set forth below in Section 4.2 (except to the extent provided in Section 3.3(b) below), (iii) upon Escrow Funding, the funded amount shall accrue interest at the same rates and manner as Term B Loans (after giving effect to this Amendment) and (iv) the Borrower shall contribute to the escrow account funds sufficient to pay interest and fees of the funded amount under the Credit Agreement during the escrow period or otherwise provide credit support for the payment of such amount in a manner reasonably satisfactory to the Administrative Agent; provided that the failure by the Borrower to comply with this Section 3.3 will result in (x) the termination of any 2016 Incremental Term Commitments and (y) any 2016 Incremental Term Loans becoming immediately due and payable.

(b)        Notwithstanding anything to the contrary herein, upon an Escrow Funding Event, (i) the conditions set forth in Section 4.2(f) and (g) (the “ Acquisition Conditions ”) shall not be a condition to the Escrow Funding, (ii) the Borrower shall use commercially reasonable efforts to promptly satisfy the Acquisition Conditions and (iii) the release from escrow of the proceeds of any Escrow Funding shall remain subject to the Acquisition Conditions. For the avoidance of doubt, the “2016 Incremental Funding Date” shall be the date on which all of the conditions set forth in Section 4, including the Acquisition Conditions, are satisfied.

3.4         Additional Amendments . The Administrative Agent is authorized, with the consent of the Required Lenders, to enter into the First Amendment to Intercreditor Agreement and the First Amendment to Term Loan Guarantee and Collateral Agreement substantially in the forms attached hereto as Exhibit B and Exhibit C, respectively.

SECTION 4.      CONDITIONS PRECEDENT .

4.1        Conditions Precedent to Effectiveness .  This Amendment shall become effective on the date (the “ Effective Date ”) on which all of the following conditions have been satisfied or waived:

(a)         Execution and Delivery .  The Administrative Agent shall have received counterparts of this Amendment duly executed by (i) the Borrower, (ii) the Required Lenders and (iii) each 2016 Incremental Term Lender (if not also a Required Lender).


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(b)         No Default .  Both prior to and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the Effective Date.

(c)         Representations and Warranties .  As of the Effective Date (both prior to and after giving effect to this Amendment) all representations and warranties contained in Section 5 shall be true and correct in all material respects.

4.2        Conditions Precedent to Funding the 2016 Incremental Term Loans .  The 2016 Incremental Term Lenders shall make 2016 Incremental Term Loans on the date (the “ 2016 Incremental Funding Date ”) on which all of the following conditions have been satisfied or waived:

(a)         Legal Opinion .  The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Jones Day in form and substance reasonably satisfactory to the Administrative Agent. The Borrower hereby requests such counsel to deliver such opinions.

(b)         Certificates .  The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party and the authorization by the Loan Parties of the Westfalia Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(c)         Solvency Certificate .  The Administrative Agent shall have received a certificate, in form and substance reasonably satisfactory to the Administrative Agent, dated the Effective Date and signed by the chief financial officer of the Borrower, certifying that it and its Subsidiaries, on a consolidated basis after giving effect to the Westfalia Transactions, are solvent.

(d)         Notice of Borrowing .  The Administrative Agent shall have received a Borrowing Request meeting the requirements of Section 2.03 of the Credit Agreement with respect to the 2016 Incremental Term Loans.

(e)         No Material Adverse Effect .  Since the Signing Date (as defined in the Westfalia Purchase Agreement), there shall not have been any Material Adverse Change (as defined in the Westfalia Purchase Agreement) with respect to any of the Material Target Group Entities (as defined in the Westfalia Purchase Agreement).

(f)         Consummation of Westfalia Acquisition .  All conditions precedent to the consummation of the Westfalia Acquisition set forth in the Westfalia Purchase Agreement shall have been satisfied in all material respects without any amendment or waiver thereof that would be materially adverse to the Lenders.

(g)         Fees and Expenses .  The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the 2016 Incremental Funding Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under any Loan Document.

(h)         KYC .  The Administrative Agent shall have received all documentation and other information reasonably requested by the Administrative Agent and required by regulatory authorities under applicable “Know Your Customer” and anti-money laundering rules and regulations, including the PATRIOT Act, in each case relating to the Material Target Group


4

 

Entities and to the extent requested in writing at least five business days prior to the 2016 Incremental Funding Date.

4.3        Post-Effective Date Condition Subsequent .  The Borrower shall have consummated the Westfalia Acquisition (the date on which the Westfalia Acquisition is consummated, the “ Westfalia Acquisition Closing Date ”) by 9:00 a.m. New York City time on the second Business Day following the 2016 Incremental Funding Date. The failure by Borrower to so perform or cause to be performed this condition subsequent when required shall constitute an Event of Default under the Credit Agreement.

For the purpose of determining compliance with the conditions specified in this Section 4, each Lender that has signed this Amendment shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 4.

SECTION 5.      REPRESENTATIONS AND WARRANTIES .  In order to induce the Required Lenders and the 2016 Incremental Term Lenders to enter into this Amendment, the Borrower hereby represents and warrants to the Required Lenders and the 2016 Incremental Term Lenders that (a) this Amendment has been duly authorized by all necessary organizational actions and, if required, actions by equity holders of the Borrower and (b) this Amendment 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 6.      CONTINUING EFFECT .  Except as expressly amended, waived or modified hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their respective terms. This Amendment shall not constitute an amendment, waiver or modification of any provision of any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or modification of any action on the part of the Borrower or the other Loan Parties that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein, or be construed to indicate the willingness of the Administrative Agent or the Lenders to further amend, waive or modify any provision of any Loan Document amended, waived or modified hereby for any other period, circumstance or event. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents are ratified and confirmed and are, and shall continue to be, in full force and effect in accordance with their respective terms. Except as expressly set forth herein, each Lender and the Administrative Agent reserves all of its rights, remedies, powers and privileges under the Credit Agreement, the other Loan Documents, applicable law and/or equity. Any reference to the “Credit Agreement” in any Loan Document or any related documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment and the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include this Amendment.

SECTION 7.      GOVERNING LAW .  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 8.      SUCCESSORS AND ASSIGNS .  This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Administrative Agent, the other Agents and the Lenders, and each of their respective successors and assigns, and shall not inure to the benefit of any third parties. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.


5

 

SECTION 9.      ENTIRE AGREEMENT .  This Amendment, the Credit Agreement and the other Loan Documents represent the entire agreement of the Loan Parties, the Administrative Agent, the Agents, the Lenders and the Lenders, as applicable, with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any other Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Credit Agreement or the other Loan Documents.

SECTION 10.     LOAN DOCUMENT .  This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

SECTION 11.     COUNTERPARTS .  This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment may be delivered by facsimile transmission or electronic PDF of the relevant signature page hereof.

SECTION 12.     HEADINGS .  Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first written above.

 

HORIZON GLOBAL CORPORATION,
as the Borrower
By:  

 /s/ Jay Goldbaum

   Name: Jay Goldbaum
   Title: Legal Director, Chief Compliance Officer and  Corporate Secretary
JPMORGAN CHASE BANK, N.A., as Administrative Agent
By:  

/s/ Thomas A. Gamm

  Name: Thomas A. Gamm
  Title: Managing Director
AMMC CLO 16, LIMITED,
as a Lender
By:   American Money Management Corp.,
as Collateral Manager
By:  

/s/ David P. Meyer

  Name: David P. Meyer
  Title: Senior Vice President
AMMC CLO XI, LIMITED,
as a Lender
By:   American Money Management Corp.,
as Collateral Manager
By:  

/s/ David P. Meyer

  Name: David P. Meyer
  Title: Senior Vice President
JFIN CLO 2013 LTD
as a Lender
By:   Apex Credit Partners, LLC
as Portfolio Manager
By:  

/s/ Andrew Stern

  Name: Andrew Stern
  Title: Managing Director

 

[Signature Page to First Amendment]


JFIN CLO 2014-II LTD

as a Lender

By: Apex Credit Partners, LLC

as Portfolio Manager

By:  

/s/ Andrew Stern

  Name: Andrew Stern
  Title: Managing Director

JFIN CLO 2014 LTD

as a Lender

By: Apex Credit Partners, LLC

as Portfolio Manager

By:  

/s/ Andrew Stern

  Name: Andrew Stern
  Title: Managing Director
BABSON CLO LTD. 2012-II
BABSON CLO LTD. 2013-I
BABSON CLO LTD. 2013-II
BABSON CLO LTD. 2014-II
BABSON CLO LTD. 2015-I
each as a Lender
By:   Barings LLC as Collateral Manager
By:  

/s/ Michael Best

  Name: Michael Best
  Title: Director


BABSON CAPITAL CREDIT 2 LIMITED,

As a Lender

By: Barings LLC as Sub-Investment Manager
By:  

  /s/ Michael Best

    Name: Michael Best
    Title: Director

BEL-AIR LOAN FUND LLC,

As a Lender

By: Barings LLC as Sub-Investment Adviser
By:  

  /s/ Michael Best

    Name: Michael Best
    Title: Director

Saranac CLO I Limited,

as a Lender

By: Canaras Capital Management, LLC

As Sub-Investment Adviser

By:  

  /s/ Marc McAfee

    Name: Marc McAfee
    Title: Analyst

Saranac CLO II Limited,

as a Lender

By: Canaras Capital Management, LLC

As Sub-Investment Adviser

By:     /s/ Marc McAfee
    Name: Marc McAfee
    Title: Analyst

Saranac CLO III Limited,

as a Lender

By: Canaras Capital Management, LLC

As Sub-Investment Adviser

By:  

  /s/ Marc McAfee

    Name: Marc McAfee
    Title: Analyst

Cent CLO 16, L.P.,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver


 

 

    Name: Steven B. Staver
    Title: Assistant Vice President

Cent CLO 17 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Cent CLO 18 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Cent CLO 19 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Cent CLO 20 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Cent CLO 21 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver


    Title: Assistant Vice President

Cent CLO 22 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Cent CLO 23 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Cent CLO 24 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC

As Collateral Manager

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Columbia Floating Rate Fund, a series of Columbia Funds Series Trust I,

as a Lender

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President

Columbia Floating Rate Fund, a series of Columbia Funds Series Trust II,

as a Lender

By:  

  /s/ Steven B. Staver

    Name: Steven B. Staver
    Title: Assistant Vice President


JMP CREDIT ADVISORS CLO II LTD.,

as a Lender

By: JMP Credit Advisors LLC, As Attorney-in-Fact
By:  

  /s/ Christopher R. Bellany

    Name: Christopher R. Bellany
    Title: Director

JMP CREDIT ADVISORS CLO III LTD.,

as a Lender

By: JMP Credit Advisors LLC, As Attorney-in-Fact
By:  

  /s/ Christopher R. Bellany

    Name: Christopher R. Bellany
    Title: Director

ATRIUM IX,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

ATRIUM XI,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

CREDIT SUISSE FLOATING RATE HIGH INCOME FUND,

as a Lender

By: Credit Suisse Asset Management, LLC, as investment advisor
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director


CREDIT SUISSE NOVA (LUX),

as a Lender

By: Credit Suisse Asset Management, LLC or Credit Suisse Asset Management Limited, each as Co-Investment Adviser to Credit Suisse Fund Management S.A., management company for Credit Suisse Nova (Lux)
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

KP FIXED INCOME FUND,

as a Lender

By: Credit Suisse Asset Management, LLC, as Sub-Adviser for Callan Associates Inc., the Adviser for The KP Funds, the Trust for KP Fixed Income Fund
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

Madison Park Funding XII, Ltd.,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

Madison Park Funding XIII, Ltd.,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

MADISON PARK FUNDING XIV, LTD.,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

Madison Park Funding XV, Ltd.,

as a Lender


By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

Madison Park Funding XVI, Ltd.,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

MADISON PARK FUNDING XVII, LTD.,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

Madison Park Funding XVIII, Ltd.,

as a Lender

By: Credit Suisse Asset Management, LLC, as Collateral Manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

Madison Park Funding XX, Ltd.,

as a Lender

By: Credit Suisse Asset Management, LLC, as portfolio manager
By:  

  /s/ Louis Farano

    Name: Louis Farano
    Title: Director

Cutwater 2014-I, Ltd.

as a Lender

By:  

  /s/ Alex Jackson

    Name: Alex Jackson
    Title: Authorized Signatory


Cutwater 2014-II, Ltd.

as a Lender

By:  

  /s/ Alex Jackson

    Name: Alex Jackson
    Title: Authorized Signatory

Cutwater 2015-I, Ltd.

as a Lender

By:  

  /s/ Alex Jackson

    Name: Alex Jackson
    Title: Authorized Signatory

AGF Floating Rate Income Fund,

as a Lender

By: Eaton Vance Management as Portfolio Manager
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

DaVinci Reinsurance Ltd.,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance CLO 2013-1 Ltd

as a Lender

By: Eaton Vance Management

Portfolio Manager

By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance CLO 2014-1 Ltd

as a Lender

By: Eaton Vance Management

Portfolio Manager

By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President


Eaton Vance CLO 2015-1 Ltd

as a Lender

By: Eaton Vance Management

Portfolio Manager

By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Floating Rate Portfolio

as a Lender

By: Boston Management and Research as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Floating-Rate Income Plus Fund,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Floating-Rate Income Trust,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Institutional Senior Loan Fund,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President


Eaton Vance International (Cayman Islands) Floating-Rate Income Portfolio,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Limited Duration Income Fund,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Loan Holding Limited,

as a Lender

By: Eaton Vance Management

as Investment Manager

By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Senior Floating-Rate Trust,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance Senior Income Trust,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President


Eaton Vance Short Duration Diversified Income Fund.

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Eaton Vance VT Floating-Rate Income Fund,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

MET Investors Series Trust-Met/Eaton Vance Floating Rate Portfolio

as a Lender

By: Eaton Vance Management as Investment Sub-Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Pacific Select Fund Floating Rate Loan Portfolio,

as a Lender

By: Eaton Vance Management as Investment Sub-Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

Renaissance Investment Holdings Ltd,

as a Lender

By: Eaton Vance Management as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President


Senior Debt Portfolio,

as a Lender

By: Boston Management and Research as Investment Advisor
By:  

  /s/ Michael Brotthof

    Name: Michael Brotthof
    Title: Vice President

JPMORGAN CHASE BANK, NA

as a Lender

By:  

  /s/ Michael Willett

    Name: Michael Willett
    Title: Authorized Signatory
LCM XII Limited Partnership

By: LCM Asset Management LLC

As Collateral Manager

as a Lender

By:  

  /s/ Alexander B. Kenna

    Name: Alexander B. Kenna
    LCM Asset Management LLC
LCM XIII Limited Partnership

By: LCM Asset Management LLC

As Collateral Manager

as a Lender

By:  

  /s/ Alexander B. Kenna

    Name: Alexander B. Kenna
    LCM Asset Management LLC
LCM XV Limited Partnership

By: LCM Asset Management LLC

As Collateral Manager

as a Lender

By:  

  /s/ Alexander B. Kenna

    Name: Alexander B. Kenna
    LCM Asset Management LLC


LCM XVI Limited Partnership

By: LCM Asset Management LLC

As Collateral Manager

as a Lender

By:  

  /s/ Alexander B. Kenna

    Name: Alexander B. Kenna
    LCM Asset Management LLC
LCM XVIII Limited Partnership

By: LCM Asset Management LLC

As Collateral Manager

as a Lender

By:  

  /s/ Alexander B. Kenna

    Name: Alexander B. Kenna
    LCM Asset Management LLC
LCM XIX Limited Partnership

By: LCM Asset Management LLC

As Collateral Manager

as a Lender

By:  

  /s/ Alexander B. Kenna

    Name: Alexander B. Kenna
    LCM Asset Management LLC
LCM XXI Limited Partnership

By: LCM Asset Management LLC

As Collateral Manager

as a Lender

By:  

  /s/ Alexander B. Kenna

    Name: Alexander B. Kenna
    LCM Asset Management LLC

MAIN STREET CAPITAL CORPORATION

as a Lender

By:  

  /s/ Nick Meserve

    Name: Nick Meserve
    Title: Managing Director


HMS FUNDING I LLC,

as a Lender

By: HMS Income Fund, Inc.
       Its Designated Manager
By:  

  /s/ Alejandro Palomo

    Name: Alejandro Palomo
    Title: Authorized Agent

Marathon CLO V Ltd.,

as a Lender

By:  

  /s/ Louis Hanover

    Name: Louis Hanover
    Title: Authorized Signatory

Marathon CLO VI Ltd.,

as a Lender

By:  

  /s/ Louis Hanover

    Name: Louis Hanover
    Title: Authorized Signatory

Marathon CLO VII Ltd.,

as a Lender

By:  

  /s/ Louis Hanover

    Name: Louis Hanover
    Title: Authorized Signatory


Marathon CLO VIII Ltd.,

as a Lender

 
By:   

 /s/ Louis Hanover

 

     Name:  Louis Hanover

     Title:  Authorized Signatory

Venture XI CLO, Limited,

as a Lender

 

BY:  its investment advisor,

MJX Asset Management LLC

By:   

 /s/ Frederick Taylor

 

     Name:  Frederick Taylor

     Title:  Managing Director

Venture XII CLO, Limited,

as a Lender

 

BY:  its investment advisor,

MJX Asset Management LLC

By:   

 /s/ Frederick Taylor

 

     Name:  Frederick Taylor

     Title:  Managing Director


Venture XIII CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 

     Name:  Frederick Taylor

     Title:  Managing Director

Venture XIV CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director
Venture XV CLO, Limited,
as a Lender
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director


Venture XVI CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director

Venture XVII CLO, Limited,

as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director
Venture XVIII CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director


Venture XIX CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director
Venture XX CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director
Venture XXI CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director


Venture XXIII CLO, Limited,
as a Lender  
BY:  its investment advisor,
MJX Asset Management LLC
By:   

 /s/ Frederick Taylor

 
     Name:  Frederick Taylor
     Title:  Managing Director
Monroe Capital BSL CLO 2015-1, Ltd.
By:  Monroe Capital Management LLC,
as Collateral Manager and Attorney-in-fact,
as a Lender  
By:   

 /s/ Seth Friedman

 
     Name:  Seth Friedman
     Title:  Vice President
OZLM Funding III, Ltd.,
as a Lender  
By:  Och-Ziff Loan Management LP,
its collateral manager
By:  Och-Ziff Loan Management LLC,
its general partner  
By:   

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer


OZLM Funding IV, Ltd.,
as a Lender  
By:     Och-Ziff Loan Management LP,
its collateral manager
By:     Och-Ziff Loan Management LLC,
its general partner  
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer
OZLM Funding V, Ltd.,
as a Lender  
By:     Och-Ziff Loan Management LP,
its collateral manager  
By:     Och-Ziff Loan Management LLC,
its general partner  
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer
OZLM VI, Ltd.,
as a Lender  
By:     Och-Ziff Loan Management LP,
its collateral manager  
By:     Och-Ziff Loan Management LLC,
its general partner  
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer


OZLM VII, Ltd.,
as a Lender  
By:     Och-Ziff Loan Management LP,
its collateral manager  
By:     Och-Ziff Loan Management LLC,
its general partner  
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer
OZLM VIII, Ltd.,
as a Lender  
By:     Och-Ziff Loan Management LP,
its collateral manager  
By:     Och-Ziff Loan Management LLC,
its general partner  
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer
OZLM IX, Ltd.,
as a Lender  
By:     Och-Ziff Loan Management LP,
its collateral manager  
By:     Och-Ziff Loan Management LLC,
its general partner
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer


OZLM XI, Ltd.,
as a Lender
By:     Och-Ziff Loan Management LP,
its collateral manager  
By:   Och-Ziff Loan Management LLC,
its general partner
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer
OZLM XII, Ltd.,
as a Lender
By:   Och-Ziff Loan Management LP,
its collateral manager
By:   Och-Ziff Loan Management LLC,
its general partner
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer
OZLM XIII, Ltd.,
as a Lender
By:   Och-Ziff Loan Management LP,
its collateral manager
By:   Och-Ziff Loan Management LLC,
its general partner
By:  

 /s/ Joel Frank

 
     Name:  Joel Frank
     Title:  Chief Financial Officer


Dryden XXIV Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:    

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden XXV Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:    

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden XXVI Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:    

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden XXVIII Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:    

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President


Dryden 30 Senior Loan Fund,
as a Lender
By:     PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 31 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 33 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 34 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President


Dryden 36 Senior Loan Fund,
as a Lender
By:     PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 37 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 38 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 40 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President


Dryden 41 Senior Loan Fund,
as a Lender
By:     PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 42 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 43 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Dryden 45 Senior Loan Fund,
as a Lender
By:   PGIM, Inc., as Collateral Manager
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President


Prudential Investment Portfolios, Inc. 14 – Prudential Floating Rate Income Fund,
as a Lender
By:     PGIM, Inc., as Investment Advisor
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
Prudential Bank Loan Fund of the Prudential Trust Company Collective Trust,
as a Lender
By:   PGIM, Inc., as Investment Advisor
By:  

 /s/ Parag Pandya

 
     Name:  Parag Pandya
     Title:  Vice President
BOWERY FUNDING ULC,
as a Lender
By:  

 /s/ Vrushant Shah

 
     Name:  Vrushant Shah
     Title:  Authorized Signatory


American Beacon Sound Point Floating Rate Income Fund, a series of American Beacon Funds,
as a Lender
By:   Sound Point Capital Management, LP as Sub-Advisor
By:    

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
Commonwealth of Pennsylvania, Treasury Department,
as a Lender
By:   Sound Point Capital Management, LP as Investment Advisor
By:  

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
Commonwealth of Pennsylvania, Treasury Department – Tuition Account Program,
as a Lender
By:   Sound Point Capital Management, LP as Investment Advisor
By:  

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
Kaiser Foundation Hospitals,
as a Lender
By:   Sound Point Capital Management, LP as Manager
By:  

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
Kaiser Permanente Group Trust,
as a Lender
By:   Sound Point Capital Management, LP as Manager
By:  

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate


Privilege Underwriters Reciprocal Exchange,
as a Lender
By:   Sound Point Capital Management, LP as Manager
By:    

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate


PURE Insurance Company,
as a Lender
By:   Sound Point Capital Management, LP as Manager
By:    

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
Sound Point CLO IX, Ltd.,
as a Lender
By:  

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
SOUND POINT FLOATING RATE FUND, A SERIES OF TAYLOR INSURANCE SERIES LP,
as a Lender

By:   Sound Point Capital Management, LP as

Investment Manager

By:  

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate


Sound Point Senior Floating Rate Master Fund, L.P.,
as a Lender
By:   Sound Point Capital Management, LP as Investment Advisor
By:    

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
Teamsters Pension Trust Fund of Philadelphia & Vicinity,
as a Lender
By:   Sound Point Capital Management, LP as Investment Advisor
By:   

 /s/ Misha Shah

 
     Name:  Misha Shah
     Title:  CLO Operations Associate
Steele Creek CLO 2014-1, LTD
Steele Creek CLO 2015-1, LTD
Steele Creek CLO 2016-1, LTD
as a Lender
By:   

 /s/ Glenn Duffy

 
     Name:  Glenn Duffy
     Title:  Chief Investment Office


Nelder Grove CLO, Ltd.

By:   Tall Tree Investment Management, LLC

as Collateral Manager

By:    

 /s/ Michael J. Starshak Jr.

 
     Name:  Michael J. Starshak Jr.
     Title:  Officer
Tuolumne Grove CLO, Ltd.

By:   Tall Tree Investment Management, LLC

as Collateral Manager

By:   

 /s/ Michael J. Starshak Jr.

 
     Name:  Michael J. Starshak Jr.
     Title:  Officer
Lockwood Grove CLO, Ltd.

By:   Tall Tree Investment Management, LLC

as Collateral Manager

By:   

 /s/ Michael J. Starshak Jr.

 
     Name:  Michael J. Starshak Jr.
     Title:  Officer
Crown Point CLO III, Ltd.,
as a Lender

by   Valcour Capital Management, LLC,

as its Collateral Manager

By:   

 /s/ John D’Angelo

 
     Name:  John D’Angelo
     Title:  Sr. Portfolio Manager


SCHEDULE A

 

Lender    2016 Incremental Term Commitment

JPMorgan Chase Bank, N.A.

   $152,000,000.00        

TOTAL     

   $152,000,000.00        


EXHIBIT A

See attached.


Execution Copy AMENDMENT NO. 1

EXECUTION VERSION

 

 

 

TERM LOAN CREDIT AGREEMENT

dated as of June 30, 2015,

among

HORIZON GLOBAL CORPORATION,

The Lenders Party Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Collateral Agent,

BMO CAPITAL MARKETS CORP.,

and

WELLS FARGO SECURITIES, LLC,

as Syndication Agents,

KEYBANC CAPITAL MARKETS INC.,

SIDOTI & COMPANY, LLC

and

ROTH CAPITAL PARTNERS, LLC

as Documentation Agents

 

 

J.P. MORGAN SECURITIES LLC,

BMO CAPITAL MARKETS CORP.,

WELLS FARGO SECURITIES, LLC,

as Joint Lead Arrangers and Joint Bookrunners

 

 

 


TABLE OF CONTENTS

 

         Page  

ARTICLE I

  

DEFINITIONS

  

SECTION 1.01  

Defined Terms

     1   
SECTION 1.02  

Classification of Loans and Borrowings

     29 30   
SECTION 1.03  

Terms Generally

     30   
SECTION 1.04  

Accounting Terms; GAAP

     30 31   

ARTICLE II

  

THE CREDITS

  

SECTION 2.01  

Commitments

     30 31   
SECTION 2.02  

Loans and Borrowings

     31   
SECTION 2.03  

Requests for Borrowings

     31 32   
SECTION 2.04  

[Reserved]

     32 33   
SECTION 2.05  

[Reserved]

     32 33   
SECTION 2.06  

Funding of Borrowings

     32 33   
SECTION 2.07  

Interest Elections

     32 33   
SECTION 2.08  

Termination and Reduction of Commitments

     33 34   
SECTION 2.09  

Repayment of Loans; Evidence of Debt

     34 35   
SECTION 2.10  

Amortization of Term Loans

     34 35   
SECTION 2.11  

Prepayment of Loans

     35 36   
SECTION 2.12  

Fees

     37 38   
SECTION 2.13  

Interest

     37 38   
SECTION 2.14  

Alternate Rate of Interest

     38   
SECTION 2.15  

Increased Costs

     38 39   
SECTION 2.16  

Break Funding Payments

     39 40   
SECTION 2.17  

Taxes

     39 40   
SECTION 2.18  

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     42 43   
SECTION 2.19  

Mitigation Obligations; Replacement of Lenders

     43 44   
SECTION 2.20  

[Reserved]

     44 45   
SECTION 2.21  

Incremental Facilities

     44 45   
SECTION 2.22  

[Reserved]

     46 47   
SECTION 2.23  

Extensions

     46 47   

ARTICLE III

  

REPRESENTATIONS AND WARRANTIES

  

SECTION 3.01  

Organization; Powers

     47 48   
SECTION 3.02  

Authorization; Enforceability

     48 49   
SECTION 3.03  

Governmental Approvals; No Conflicts

     48 49   
SECTION 3.04  

Financial Condition; No Material Adverse Change

     48 49   
SECTION 3.05  

Properties

     49 50   

 

-i-


         Page  
SECTION 3.06  

Litigation and Environmental Matters

     49 50   
SECTION 3.07  

Compliance with Laws and Agreements

     50 51   
SECTION 3.08  

Investment Company Status

     50 51   
SECTION 3.09  

Taxes

     50 51   
SECTION 3.10  

ERISA

     50 51   
SECTION 3.11  

Disclosure

     50 51   
SECTION 3.12  

Subsidiaries

     51   
SECTION 3.13  

Insurance

     51 52   
SECTION 3.14  

Labor Matters

     51 52   
SECTION 3.15  

Solvency

     51 52   
SECTION 3.16  

Senior Indebtedness

     51 52   
SECTION 3.17  

Security Documents

     51 52   
SECTION 3.18  

Federal Reserve Regulations

     52 53   
SECTION 3.19  

Anti-Corruption Laws and Sanctions

     52 53   
SECTION 3.20  

Material Contracts

     53   
SECTION 3.21  

EEA Financial Institutions

     54   
ARTICLE IV   
CONDITIONS   
SECTION 4.01  

Closing Date

     53 54   
ARTICLE V   
AFFIRMATIVE COVENANTS   
SECTION 5.01  

Financial Statements and Other Information

     55 56   
SECTION 5.02  

Notices of Material Events

     57 58   
SECTION 5.03  

Information Regarding Collateral

     58 59   
SECTION 5.04  

Existence; Conduct of Business

     59 60   
SECTION 5.05  

Payment of Obligations

     59 60   
SECTION 5.06  

Maintenance of Properties

     59 60   
SECTION 5.07  

Insurance

     59 60   
SECTION 5.08  

Casualty and Condemnation

     59 60   
SECTION 5.09  

Books and Records; Inspection and Audit Rights

     60 61   
SECTION 5.10  

Compliance with Laws

     60 61   
SECTION 5.11  

Use of Proceeds

     60 61   
SECTION 5.12  

Additional Subsidiaries

     60 61   
SECTION 5.13  

Further Assurances

     60 61   
SECTION 5.14  

Ratings

     61 62   
ARTICLE VI   
NEGATIVE COVENANTS   
SECTION 6.01  

Indebtedness; Certain Equity Securities

     61 62   
SECTION 6.02  

Liens

     63 65   
SECTION 6.03  

Fundamental Changes

     65 66   
SECTION 6.04  

Investments, Loans, Advances, Guarantees and Acquisitions

     66 67   

 

-ii-


         Page  
SECTION 6.05  

Asset Sales

     67 68   
SECTION 6.06  

Sale and Leaseback Transactions

     68 69   
SECTION 6.07  

Hedging Agreements

     68 70   
SECTION 6.08  

Restricted Payments; Certain Payments of Indebtedness

     69 70   
SECTION 6.09  

Transactions with Affiliates

     70 72   
SECTION 6.10  

Restrictive Agreements

     71 72   
SECTION 6.11  

Amendment of Material Documents

     71 72   
SECTION 6.12  

[Reserved]

     72 73   
SECTION 6.13  

Net Leverage Ratio

     72 73   
SECTION 6.14  

Use of Proceeds

     72 74   
ARTICLE VII   
EVENTS OF DEFAULT   
ARTICLE VIII   
THE AGENTS   
ARTICLE IX   
[RESERVED]   
ARTICLE X   
MISCELLANEOUS   
SECTION 10.01  

Notices

     77 78   
SECTION 10.02  

Waivers; Amendments

     77 79   
SECTION 10.03  

Expenses; Indemnity; Damage Waiver

     80 81   
SECTION 10.04  

Successors and Assigns

     81 82   
SECTION 10.05  

Survival

     84 85   
SECTION 10.06  

Counterparts; Integration; Effectiveness

     84 85   
SECTION 10.07  

Severability

     84 85   
SECTION 10.08  

Right of Setoff

     84 85   
SECTION 10.09  

Governing Law; Jurisdiction; Consent to Service of Process

     84 86   
SECTION 10.10  

WAIVER OF JURY TRIAL

     85 86   
SECTION 10.11  

Headings

     85 86   
SECTION 10.12  

Confidentiality

     85 86   
SECTION 10.13  

Interest Rate Limitation

     86 87   
SECTION 10.14  

Intercreditor Agreements

     87   
SECTION 10.15  

Release of Liens and Guarantees

     87   
SECTION 10.16  

PATRIOT Act

     87 88   
SECTION 10.17  

No Fiduciary Duty

     87 88   
SECTION 10.18  

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     89   

 

-iii-


TERM LOAN CREDIT AGREEMENT dated as of June 30, 2015 (this “ Agreement ”), among HORIZON GLOBAL CORPORATION, the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent.

RECITALS:

In consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01       Defined Terms .  As used in this Agreement, the following terms have the meanings specified below:

“2016 Incremental Term Loans” has the meaning set forth in the First Amendment.

“2016 Incremental Term Loan Commitments” has the meaning set forth in the First Amendment.

ABL Agent ” means Bank of America, N.A., as administrative agent and/or collateral agent, as applicable, under the ABL Credit Agreement, and its successors and assigns.

ABL Credit Agreement ” means the ABL Credit Agreement to be dated as of the Closing Date, among the Borrower, the Subsidiaries party thereto as borrowers, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, as such document or the credit facility thereunder may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

ABL Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement as defined in the ABL Credit Agreement.

ABL Foreign Loan Party ” means any Foreign Subsidiary that is a party to the ABL Loan Documents as a borrower thereunder and/or is a party to any ABL Security Document as a grantor or guarantor thereunder.

ABL Loan ” means a loan made pursuant to the ABL Credit Agreement.

ABL Loan Documents ” means collectively (a) the ABL Credit Agreement, (b) the ABL Security Documents, (c) any promissory note evidencing loans under the ABL Credit Agreement and (d) any amendment, waiver, supplement or other modification to any of the documents described in clauses (a) through (c), in each case as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

ABL Priority Collateral ” has the meaning assigned to such term in the Intercreditor Agreement.

ABL Security Documents ” means the collective reference to the ABL Guarantee and Collateral Agreement, the Mortgages (as defined in the ABL Credit Agreement) and all other security


Alternative Incremental Debt the proceeds of which shall be used to finance a Limited Conditionality Acquisition, as of the date of entry into the applicable Limited Conditionality Acquisition Agreement (i) no Default or Event of Default shall have occurred and be continuing and (ii) the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date, and

(f)        such Indebtedness is not guaranteed by any Person other than Loan Parties.

Alternative Incremental Debt will include any Registered Equivalent Notes issued in exchange therefor.

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 Law ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

Applicable Rate ” means, for any day, (a) with respect to (i) any ABR Term B Loan or any ABR 2016 Incremental Term Loan , 5.00% per annum and (ii) any Eurocurrency Term B Loan or any Eurocurrency 2016 Incremental Term Loan, 6.00% per annum and (b) with respect to any Incremental Term Loan of any Series, the rate per annum specified in the Incremental Facility Agreement establishing the Incremental Term Commitments of such Series.

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 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.

Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

Assumed Preferred Stock ” means any preferred stock or preferred equity interests of any Person that becomes a Subsidiary after the Closing Date; provided that (a) such preferred stock or preferred equity interests exist at the time such Person becomes a Subsidiary and are not created in contemplation of or in connection with such Person becoming a Subsidiary and (b) the aggregate liquidation value of all such outstanding preferred stock and preferred equity interests shall not exceed $10,000,000 at any time outstanding, less the aggregate principal amount of Indebtedness incurred and outstanding pursuant to Section 6.01(a)(x).

Available Amount ” means, as of any date of determination, an amount equal to:

(a)        the sum of (without duplication):

(i)        if positive, the Cumulative Retained Excess Cash Flow Amount; and

 

-4-


(ii)        the Net Proceeds received by the Borrower from (A) cash contributions (other than from a Subsidiary) to the Borrower or (B) the issuance and sale of its Equity Interests (other than a sale to a Subsidiary);

minus

(b)        the amount of any investments made in reliance on Section 6.04(s) prior to such date and any prepayments of Indebtedness made in reliance on Section 6.08(b)(vii) prior to such date;

minus

(c)        the portion of Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d) that is used pursuant to Section 6.08(a)(v) or Section 6.08(a)(vii).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

Base Incremental Amount ” means, as of any date, an amount equal to (a) $ 25,000,000 75,000,000 less (b) the aggregate principal amount of Incremental Term Commitments established prior to such date in reliance on the Base Incremental Amount less (c) the aggregate principal amount of Alternative Incremental Debt established prior to such date in reliance on the Base Incremental Amount.

Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

Borrower ” means Horizon Global Corporation, a Delaware corporation.

Borrower Registration Statement ” means the registration statement on Form S-1 filed by the Borrower with the Commission on March 31, 2015, including all exhibits and schedules thereto, in each case, as amended, supplemented or otherwise modified prior to the Closing Date.

Borrowing ” means Loans of the same Class and Type, made, converted or continued on the same date and as to which a single Interest Period is in effect.

Borrowing Base ” shall have the meaning ascribed to such term in the ABL Credit Agreement (as defined in the ABL Credit Agreement on the Closing Date).

Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be, in the case of any such written request, in the form of Exhibit B or any other form approved by the Administrative Agent.

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

 

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Subsidiaries for such period related to any offering of Equity Interests or incurrence of Indebtedness, whether or not consummated, (xi) fees and expenses in connection with the Transactions, (xii) any unusual or nonrecurring costs and expenses arising from the integration of any business acquired pursuant to any Permitted Acquisition consummated after the Closing Date not to exceed $7,500,000 in any fiscal year and $20,000,000 in the aggregate, (xiii) any unusual or nonrecurring costs and expenses arising from the integration of the Westfalia Group not to exceed $10,000,000 in any fiscal year and $30,000,000 in the aggregate, (xiv) the amount of reasonably identifiable and factually supportable “run rate” cost savings, operating expense reductions, and other synergies not to exceed $12,500,000 resulting from the Westfalia Acquisition that are projected by Borrower in good faith and certified by a Financial Officer of the Borrower in writing to the Administrative Agent to result from actions either taken or expected to be taken within eighteen (18) months of the Westfalia Acquisition Closing Date to take such action, net of the amount of actual benefits realized prior to or during such period from such actions (which cost savings, operating expense reductions, and synergies shall be calculated on a pro forma basis as though such cost savings, operating expense reductions, or synergies had been realized on the first day of such period), (xv) any unusual or nonrecurring expenses or similar costs relating to cost savings projects, including restructuring and severance expenses, not to exceed $ 15,000,000 20,000,000 in the aggregate from and after January 1, 2015; provided that no more than $5,000,000 may be counted in any fiscal year commencing on or after January 1, 2015, ( xiv xvi ) net losses from discontinued operations, not to exceed in any fiscal year $ 5,000,000 7,500,000 , ( xv xvii ) losses associated with the prepayment of leases (whether operating leases or capital leases) outstanding on January 1, 2015 from discontinued operations, and ( xvi xviii ) losses or charges associated with asset sales otherwise permitted hereunder and any unusual or nonrecurring charges, so long as the amount added back pursuant to this clause ( xvi xviii ) does not exceed in the aggregate $5,000,000, minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) any non-cash income, profits or gains for such period and (iii) any gains realized from the retirement of Indebtedness after the Closing Date, all determined on a consolidated basis in accordance with GAAP; provided, however, that the amounts added to Consolidated Net Income pursuant to clauses (xii) through ( xvi xviii ) above for any period shall not exceed 25% of Consolidated EBITDA for such period (determined without including amounts added to Consolidated Net Income pursuant to clauses (xii) through ( xvi xviii ) above for such period). If the Borrower or any Subsidiary has made any Permitted Acquisition or Significant Investment or any sale, transfer, lease or other disposition of assets outside of the ordinary course of business permitted by Section 6.05 during the relevant period for determining any leverage ratio hereunder, Consolidated EBITDA for the relevant period shall be calculated only for purposes of determining such leverage ratio after giving pro forma effect thereto, as if such Permitted Acquisition or Significant Investment or sale, transfer, lease or other disposition of assets had occurred on the first day of the relevant period for determining Consolidated EBITDA; provided that with respect to any Significant Investment, (x) any pro forma adjustment made to Consolidated EBITDA shall be in proportion to the percentage ownership of the Borrower or such Subsidiary, as applicable, in the Subject Person (e.g. if the Borrower acquires 70% of the Equity Interests of the Subject Person, a pro forma adjustment to Consolidated EBITDA shall be made with respect to no more than 70% of the EBITDA of the Subject Person) and (y) pro forma effect shall only be given to such Significant Investment if the Indebtedness of the Subject Person is included in Total Indebtedness for purposes of calculating the applicable leverage ratio in proportion to the percentage ownership of the Borrower or such Subsidiary, as applicable, in such Subject Person. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any Permitted Acquisition, or sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments (a) would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“ Regulation S-X ”) or (b) are reasonably consistent with the purpose of Regulation S-X as determined in good faith by the Borrower in consultation with the Administrative Agent.

 

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Consolidated Net Income ” means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than the Borrower or a Significant Investment) in which any other Person (other than the Borrower or any Subsidiary or any director holding qualifying shares in compliance with Applicable Law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of the Subsidiaries during such period, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or the date that such Person’s assets are acquired by the Borrower or any Subsidiary and (c) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income.

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.

Credit Facility ” means a category of Commitments and extensions of credit thereunder.

Cumulative Retained Excess Cash Flow Amount ” means, at any date of determination, an amount equal to the aggregate cumulative sum of the Retained Percentage of Excess Cash Flow for the Excess Cash Flow Periods ended on or prior to such date.

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.

Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

Documentation Agents ” means KeyBanc Capital Markets Inc., Sidoti & Company, LLC and Roth Capital Partners, LLC.

dollars ” or “ $ ” refers to lawful money of the United States of America.

Domestic Subsidiary ” means any Subsidiary, other than the Foreign Subsidiaries.

ECF Percentage ” means 50%; provided , that, with respect to any fiscal year of the Borrower commencing with the fiscal year ending December 31, 2016 2017 , the ECF Percentage shall be reduced to (a) 25% if the Net Leverage Ratio as of the last day of such fiscal year is no greater than 3.00 to 1.00 but greater than 2.50 to 1.00 and (b) 0% if the Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 2.50 to 1.00.

“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

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“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

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 liabilities, obligations, damages, losses, claims, actions, suits, judgments, or orders, contingent or otherwise (including any liability for damages, costs of environmental remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), directly or indirectly resulting from or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Notice ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

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 or any warrants, options or other rights to acquire such interests.

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(b), (c), (m) or (o) 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) a failure by any Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such Plan in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) a determination that any Plan is, or is expected to be, in “ at risk ” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; (e) 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; (f) 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; (g) 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 (h) 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, within the meaning of Title IV of ERISA or in

 

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endangered ” or “ critical ” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

Eurocurrency ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

Event of Default ” has the meaning assigned to such term in Article VII.

Excess Cash Flow ” means, for any fiscal year, the sum (without duplication) of:

(a)        Consolidated Net Income for such fiscal year, adjusted to exclude any gains or losses attributable to Prepayment Events; plus

(b)        the excess, if any, of the Net Proceeds received during such fiscal year by the Borrower and its consolidated Subsidiaries in respect of any Prepayment Events over (x) amounts permitted to be reinvested pursuant to Section 2.11(c) and (y) the aggregate principal amount of Term Loans prepaid pursuant to Section 2.11(c) in respect of such Net Proceeds; plus

(c)        depreciation, amortization and other noncash charges or losses deducted in determining such consolidated net income (or loss) for such fiscal year; plus

(d)        the sum of (i) the amount, if any, by which Net Working Capital (adjusted to exclude changes arising from Permitted Acquisitions and Significant Investments) decreased during such fiscal year plus (ii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) decreased during such fiscal year; minus

(e)        the sum of (i) any noncash gains included in determining such consolidated net income (or loss) for such fiscal year plus (ii) the amount, if any, by which Net Working Capital (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) decreased during such fiscal year plus (iv) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year; minus

(f)        the sum of (i) Capital Expenditures for such fiscal year and Capital Expenditures to be made within 90 days following the end of such fiscal year pursuant to binding agreements entered into by the Borrower or any of its consolidated Subsidiaries prior to the end of such fiscal year; provided that to the extent any such Capital Expenditure is not made (or if the amount of any such Capital Expenditures less than the amount deducted with respect hereto) within 90 days after such fiscal year, the amount (or such portion of the amount) thereof shall be added back to Excess Cash Flow for the subsequent period (except to the extent

 

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attributable to the incurrence of Capital Lease Obligations or otherwise financed by incurring Long-Term Indebtedness) plus (ii) cash consideration paid during such fiscal year to make acquisitions or other capital investments (except to the extent financed by incurring Long-Term Indebtedness or through the use of the Available Amount); minus

(g)        the aggregate principal amount of Long-Term Indebtedness repaid or prepaid by the Borrower and its consolidated Subsidiaries during such fiscal year, excluding (i) Indebtedness in respect of ABL Loans and other revolving Indebtedness (in each case except to the extent the revolving credit commitments in respect thereof are permanently reduced in the amount of and at the time of any such payment) and letters of credit, (ii) Term Loans prepaid pursuant to Section 2.11(c) or (d), (iii) optional prepayments of Term Loans (including purchases of Term Loans pursuant to Section 10.04(h)), (iv) repayments or prepayments of Long-Term Indebtedness financed by incurring other Long-Term Indebtedness or through the use of the Available Amount, (v) optional prepayments of Pari Passu Alternative Incremental Debt in the form of loans or Pari Passu Permitted Term Loan Refinancing Indebtedness in the form of loans and (vi) any prepayments of Pari Passu Alternative Incremental Debt or Pari Passu Permitted Term Loan Refinancing Indebtedness in lieu of mandatory prepayments of Term Loans in accordance with Section 2.11(c); minus

(h)        the noncash impact of currency translations and other adjustments to the equity account, including adjustments to the carrying value of marketable securities and to pension liabilities, in each case to the extent such items would otherwise constitute Excess Cash Flow.

Excess Cash Flow Period ” means each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2016 2017 .

Excluded Taxes ” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its net or overall gross income (or net worth or similar Taxes imposed in lieu thereof) by the United States of America, or by any other jurisdiction as a result of such recipient being organized in or having its principal office in or applicable lending office in such jurisdiction, or as a result of any other present or former connection (other than a connection arising solely from this Agreement or any other Loan Document) between such recipient and such jurisdiction, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction described in clause (a) above and (c) 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 United States withholding Taxes resulting from any law in effect (x) at the time such Non-U.S. Lender becomes a party to this Agreement or, with respect to any additional position in any Loan acquired after such Non-U.S. Lender becomes a party hereto, at the time such additional position is acquired by such Non-U.S. Lender or (y) at the time such Non-U.S. Lender designates a new lending office, except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, immediately prior to designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such United States withholding Tax pursuant to Section 2.17(a), (d) any United States withholding Tax imposed pursuant to FATCA and (e) any withholding Tax that is attributable to a recipient’s failure to comply with Section 2.17(g).

Extended Term Loans ” has the meaning assigned to such term in Section 2.23(a).

Extension ” has the meaning assigned to such term in Section 2.23(a).

 

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Extension Offer ” has the meaning assigned to such term in Section 2.23(a).

FATCA ” means (i) Sections 1471 through 1474 of the Code as of the date of this Agreement or any amended or successor provision that is substantively comparable and not materially more onerous to comply with, and, in each case, any regulations or official interpretations thereof, (ii) any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the date of this Agreement or any amended or successor provision as described in clause (i) above and (iii) any law, regulation, rule, promulgation or official agreement implementing an official government agreement with respect to the foregoing.

Federal Funds Effective Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it; provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“First Amendment” means that certain First Amendment to Credit Agreement, dated as of September 19, 2016, among the Borrower, the Administrative Agent and the Lenders party thereto.

“First Amendment Effective Date” means the “Effective Date” as set forth in the First Amendment.

First Lien Secured Indebtedness ” means Total Indebtedness that is secured by a first priority Lien on any asset of the Borrower or any of its Subsidiaries (it being understood that any Indebtedness outstanding under this Agreement and any Indebtedness outstanding under the ABL Credit Agreement is First Lien Secured Indebtedness).

First Lien Net Leverage Ratio ” means, on any date, the ratio of (a) First Lien Secured Indebtedness as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date , to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

FLSA ” means the Fair Labor Standards Act of 1938, as amended from time to time.

Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

GAAP ” means generally accepted accounting principles in the United States of America.

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,

 

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Series and effecting such other amendments hereto and to the other Loan Documents as are contemplated by Section 2.21.

Incremental Term Commitment ” means, with respect to any Lender, the commitment, if any, of such Lender, established pursuant an Incremental Facility Agreement and Section 2.21, to make Incremental Term Loans of any Series hereunder, expressed as an amount representing the maximum principal amount of the Incremental Term Loans of such Series to be made by such Lender.

Incremental Term Lender ” means a Lender with an Incremental Term Commitment or an outstanding Incremental Term Loan.

Incremental Term Loans ” means any term loans made pursuant to Section 2.21(a).

Incremental Term Maturity Date ” means, with respect to Incremental Term Loans of any Series, the scheduled date on which such Incremental Term Loans shall become due and payable in full hereunder, as specified in the applicable Incremental Facility Agreement.

Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) solely for purposes of Section 6.01 hereof, any and all payment obligations of such Person under or Guarantee by such Person with respect to any Hedging Agreement. 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 Person’s 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. Notwithstanding anything to the contrary in this paragraph, the term “ Indebtedness ” shall not include (a) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or capital stock and (b) trade payables and accrued expenses in each case arising in the ordinary course of business.

Indemnified Taxes ” means (a) any Taxes, other than Excluded Taxes, and (b) Other Taxes.

Intercreditor Agreement ” means the Intercreditor Agreement, substantially in the form of Exhibit C, among the Borrower, the other Loan Parties, the Collateral Agent and the ABL Agent.

Information Memorandum ” means the Confidential Information Memorandum dated May 1, 2015, relating to the Borrower and the Transactions , and the Confidential Information Memorandum dated September 5, 2016, relating to the Borrower and the Westfalia Transactions .

 

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“Initial Term B Loan” means a Loan made pursuant to Section 2.01(a).

Intellectual Property Claim ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07.

Interest Payment Date ” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (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.

Interest Period ” means, 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 thereafter (or twelve months thereafter if, at the time of the relevant Borrowing, all Lenders participating therein agree to make an interest period of such duration available), as the Borrower may elect; provided that (a) 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 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 (b) any Interest Period 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, the rate per annum (rounded to the same number of decimal places as the 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 Screen Rate (for the longest period for which that Screen Rate is available for dollars) that is shorter than the Impacted Interest Period and (b) the Screen Rate (for the shortest period for which that Screen Rate is available for dollars) that exceeds the Impacted Interest Period, in each case, as of the Specified Time on the Quotation Day for such Interest Period. When determining the rate for a period which is less than the shortest period for which the Screen Rate is available, the Screen Rate for purposes of clause (a) above shall be deemed to be the overnight rate for dollars determined by the Administrative Agent from such service as the Administrative Agent may select.

IRS ” means the United States Internal Revenue Service.

JPMCB ” means JPMorgan Chase Bank, N.A.

Latest Maturing Term Loans ” has the meaning assigned to such term in the definition of “Latest Maturity Date”.

Latest Maturity Date ” means, as of any date of determination, the latest Maturity Date applicable to any Loans outstanding or Commitments in effect hereunder (such latest maturing Loans or Commitments, the “ Latest Maturing Term Loans ”).

 

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Minimum Extension Condition ” has the meaning assigned to such term in Section 2.23(b).

Minimum Tranche Amount ” has the meaning assigned to such term in Section 2.23(b).

Moody’s ” means Moody’s Investors Service, Inc.

Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be in form and substance reasonably satisfactory to the Administrative Agent.

Mortgaged Property ” means each parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

Net Leverage Ratio ” means, on any date, the ratio of (a) Total Indebtedness as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date , to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

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 noncash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds in excess of $1,000,000 and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and the 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 required to be made by the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than Loans, Pari Passu Alternative Incremental Debt or any Permitted Term Loan Refinancing Indebtedness) 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 Borrower and the Subsidiaries, and the amount of any reserves established by the Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the 24-month period immediately following such event and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Borrower) to the extent such liabilities are actually paid within such applicable time periods.

Net Working Capital ” means, at any date, (a) the consolidated current assets of the Borrower and its consolidated Subsidiaries as of such date (excluding cash and Permitted Investments) minus (b) the consolidated current liabilities of the Borrower and its consolidated Subsidiaries as of such date (excluding current liabilities in respect of Indebtedness). Net Working Capital at any date may be a positive or negative number. Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.

 

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Secured Net Leverage Ratio ” means, on any date, the ratio of (a) Secured Indebtedness as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date , to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

Secured Parties ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

Securities Act ” means the Securities Act of 1933, as amended.

Security Documents ” means the Guarantee and Collateral Agreement, the Intercreditor Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

Series ” has the meaning assigned to such term in Section 2.21(b).

Significant Investment ” means any acquisition by the Borrower or a Subsidiary of more than 50% (but less than 100%) of the Equity Interests in a Person (such Person, the “ Subject Person ”), so long as such acquisition is permitted by Section 6.04.

Specified Time ” means 11:00 a.m., London time.

Specified Vendor Payables Financing ” means the sale by one or more vendors of the Borrower and certain Subsidiaries of accounts receivable (which such accounts receivable are accounts payable of the Borrower and such Subsidiaries) to one or more financial institutions pursuant to third-party financing agreements, to which the Borrower and such Subsidiaries are party, in transactions constituting “true sales”; provided that the aggregate amount of all such vendor payables financings shall not exceed $30,000,000 at any time outstanding.

Specified Vendor Payables Financing Documents ” means all documents and agreements relating to the Specified Vendor Payables Financing.

Specified Vendor Receivables Financing ” means the sale by the Borrower and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “true sales”; provided that the aggregate amount of all such receivables financings shall not exceed $ 30,000,000 50,000,000 at any time outstanding.

Specified Vendor Receivables Financing Documents ” means all documents and agreements relating to the Specified Vendor Receivables Financing.

Spin-Off ” means a “spin-off” transaction with respect to the Borrower such that all of the Equity Interests in the Borrower are “spun-off” from TriMas ratably to the holders of all the Equity Interests in TriMas and the Borrower ceases to be a Subsidiary of TriMas and becomes a public company.

Spin-Off Agreement ” means a Separation and Distribution Agreement, dated as of or prior to the Closing Date, by and between the Borrower and TriMas.

 

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consultants, advisors or employees of the Borrower or the Subsidiaries (or to their heirs or estates) shall not be deemed to be Synthetic Purchase Agreements.

Taxes ” means any and all present or future taxes (of any nature whatsoever), levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Term B Lender ” means a Lender with a Term Commitment or an outstanding Term B Loan.

Term B Loan ” means a (i) an Initial Term B Loan made pursuant to Section 2.01 and ( a ii ) the 2016 Incremental Term Loans .

Term Collateral Proceeds Account ” means a deposit account identified to the ABL Agent in writing from time to time and in the name of the Company and for which JPMCB is the depositary bank which contains (or was established to contain) only those proceeds with respect to Term Priority Collateral.

Term Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make a Term B Loan hereunder on the Closing Date, expressed as an amount representing the maximum principal amount of the Term B Loan to be made by such Lender hereunder, as such commitment may be (a) reduced 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 10.04. The initial amount of each Lender’s Term Commitment on the Closing Date is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Term Commitment, as applicable. The initial aggregate amount of the Lenders’ Term Commitments on the Closing Date is $200,000,000.

Term Lender ” means a Lender with outstanding Term Loans or a Commitment.

Term Loan ” means a Term B Loan or an Incremental Term Loan of any Series.

Term Loan Maturity Date ” means the date that is the sixth anniversary of the Closing Date (or if such date is not a Business Day, the immediately preceding Business Day).

Term Priority Collateral ” has the meaning assigned to such term in the Intercreditor Agreement.

Total Indebtedness ” means, as of any date, the aggregate principal amount of Indebtedness for borrowed money of the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

Transactions ” means, collectively, (a) the consummation of the Spin-Off in accordance with the terms of the Spin-Off Agreement, (b) the payment of a dividend on the Closing Date from the Borrower to TriMas in accordance with the Spin-Off Agreement (the “ Closing Date Dividend ”), (c) the execution, delivery and performance by each Loan Party of the ABL Loan Documents to which it is to be a party, the borrowing (if any) of the ABL Loans on the Closing Date and issuance (if any) of letters of credit thereunder on the Closing Date and the use of the proceeds of the foregoing, (d) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the

 

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borrowing of the Loans on the Closing Date and the use of proceeds thereof and (e) the payment of the fees and expenses payable in connection with the foregoing.

TriMas ” means TriMas Company LLC, a Delaware limited liability company.

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 LIBO Rate or the Alternate Base Rate.

Unrestricted Domestic Cash ” means, as of any date, domestic unrestricted cash and domestic unrestricted Permitted Investments of the Borrower and its Domestic Subsidiaries as of such date.

“Unrestricted Foreign Cash” means, as of any date, unrestricted cash and unrestricted Permitted Investments of the Foreign Subsidiaries as of such date.

U.S. Holdco ” means any existing or future Domestic Subsidiary the Equity Interests of which are held solely by Foreign Subsidiaries; provided that such existing or newly formed Subsidiary shall not engage in any business or own any assets other than the ownership of Equity Interests in Foreign Subsidiaries and intercompany obligations that are otherwise permitted hereunder.

U.S. Person ” means a “ United States person ” within the meaning of Section 7701(a)(30) of the Code.

U.S. Tax Certificate ” has the meaning assigned to such term in Section 2.17(f)(i)(D)(2).

“Westfalia Acquisition” has the meaning set forth in the First Amendment.

“Westfalia Acquisition Closing Date” has the meaning set forth in the First Amendment.

“Westfalia Purchase Agreement” has the meaning set forth in the First Amendment.

“Westfalia Transactions” has the meaning set forth in the First Amendment.

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.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

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 “Term B Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Term B Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Term B Loan Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency Term B Loan Borrowing”).

 

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SECTION 2.10      Amortization of Term Loans .

(a)        Subject to adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay (i) the Initial Term B Loans on the last day of each March, June, September and December, beginning on the last day of the first full fiscal quarter to occur after the Closing Date, in an aggregate principal amount for each such date equal to 1.25% of the aggregate principal amount of the Initial Term B Loans outstanding on the Closing Date .

and (ii) the 2016 Incremental Term Loans on the last day of each March, June, September and December, beginning on the last day of the first full fiscal quarter to occur after the Westfalia Acquisition Closing Date, in an aggregate principal amount for each such date equal to one and thirteen thirty-sevenths percent (1  13 37 %) of the aggregate principal amount of the 2016 Incremental Term Loans outstanding on the Westfalia Acquisition Closing Date.

(b)        The Borrower shall repay Incremental Term Loans of any Series in such amounts and on such date or dates as shall be specified therefor in the Incremental Facility Agreement establishing the Incremental Term Commitments of such Series (as such amounts may be adjusted pursuant to paragraph (d) of this Section or pursuant to such Incremental Facility Agreement).

(c)        To the extent not previously paid, (i) all Term B Loans shall be due and payable on the Term Loan Maturity Date and (ii) all Incremental Term Loans of any Series shall be due and payable on the Incremental Term Maturity Date applicable thereto.

(d)        Any mandatory prepayment of a Borrowing of Term Loans of any Class shall be applied to reduce the subsequent scheduled repayments of the Borrowings of such Class to be made pursuant to this Section to the next eight scheduled repayments in direct order and thereafter ratably. Any optional prepayment of a Borrowing of Term Loans of any Class shall be applied to the scheduled repayments of the Borrowings of such Class as directed by the Borrower.

(e)        Prior to any repayment of any Term Loan Borrowings of any Class hereunder, the Borrower shall select the Borrowing or Borrowings of the applicable Class to be repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not later than 11:00 a.m., New York City time, three Business Days before the scheduled date of such repayment. Each repayment of a Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Repayments of Term Loan Borrowings shall be accompanied by accrued interest on the amount repaid.

SECTION 2.11      Prepayment of Loans .

(a)        The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section.

(b)        All (i) optional prepayments of Term B Loans pursuant to Section 2.11(a) or prepayments pursuant to Section 2.11(c) as a result of an event described in clause (c) of the definition of the term Prepayment Event, in each case effected on or prior to the date that is the second first anniversary of the Westfalia Acquisition Closing Date with the proceeds of a Repricing Transaction and (ii) amendments, amendments and restatements or other modifications of this Agreement on or prior to the date that is the second first anniversary of the Westfalia Acquisition Closing Date constituting Repricing Transactions shall, in each case, be accompanied by a fee payable to the Term B Lenders in an amount equal to 1.00% of the aggregate principal amount of the Term B Loans so prepaid, in the case of a transaction described in clause (i) of this paragraph, or 1.00% of the aggregate principal

 

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amount of Term B Loans affected by such amendment, amendment and restatement or other modification (including any such Loans assigned in connection with the replacement of a Term B Lender not consenting thereto), in the case of a transaction described in clause (ii) of this paragraph. Such fee shall be paid by the Borrower to the Administrative Agent, for the account of the Lenders in respect of the Term B Loans, on the date of such prepayment.

(c)        In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, within three Business Days after such Net Proceeds are received, prepay Borrowings of Term B Loans in an aggregate amount equal to such Net Proceeds; provided that in the case of any event described in clause (a) of the definition of the term Prepayment Event (other than sales, transfers or other dispositions pursuant to Section 6.05(j) in excess of $15,000,000), if the Borrower shall deliver, within such three Business Days, to the Administrative Agent a certificate of a Financial Officer to the effect that the Borrower and the Subsidiaries, intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 365 days after receipt of such Net Proceeds, to acquire real property, equipment or other tangible assets to be used in the business of the Borrower and the Subsidiaries, and certifying that no 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 to the extent of any such Net Proceeds therefrom that have not been so applied by the end of such 365-day period, at which time a prepayment shall be required in an amount equal to such Net Proceeds that have not been so applied; provided further that a portion of the Net Proceeds required to prepay Borrowings of Term B Loans (but in no event more than a ratable portion thereof (such ratable share to be calculated by reference to the outstanding amount of Pari Passu Alternative Incremental Debt, Pari Passu Permitted Term Loan Refinancing Indebtedness and Loans, in each case immediately prior to such prepayment)) may, in lieu of prepaying Term B Loans hereunder, be applied to redeem or prepay any Pari Passu Alternative Incremental Debt or any Pari Passu Permitted Term Loan Refinancing Indebtedness, in each case if required under the terms of the applicable documents governing such Pari Passu Alternative Incremental Debt or such Pari Passu Permitted Term Loan Refinancing Indebtedness.

(d)        Following the end of each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2016 2017 , the Borrower shall prepay Borrowings of Term B Loans in an aggregate amount equal to the excess of (i) the ECF Percentage of Excess Cash Flow for such fiscal year over (ii) the sum of (x) aggregate amount of optional prepayments of Term Loans and purchases of Term Loans pursuant to Section 10.04(h) (other than optional prepayments or purchases made with the proceeds of Long-Term Indebtedness) made by the Borrower during such fiscal year ( provided that the aggregate amount of any such prepayment or purchase shall be the amount of the Borrower’s cash payment in respect of such purchase) and (y) the aggregate amount of optional prepayments of Pari Passu Alternative Incremental Debt in the form of loans and Pari Passu Permitted Term Loan Refinancing Indebtedness in the form of loans made by the Borrower during such fiscal year. Each prepayment pursuant to this paragraph shall be made within 95 days after the end of such fiscal year.

(e)        Prior to any optional or mandatory 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 (f) of this Section.

(f)        The Borrower shall notify the Administrative Agent by (x) in the case of prepayment of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment and (y) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify (i) whether the prepayment is of Eurocurrency Loans

 

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Closing Date), other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement.

(d)        Each Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages are filed in the appropriate offices, the Lien created by each Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement.

SECTION 3.18      Federal Reserve Regulations .

(a)        None of the Borrower or any of the Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b)        No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the Regulations of the Board, including Regulation U or X.

SECTION 3.19      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. None of (a) the Borrower, any Subsidiary or 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, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.20      Material Contracts . Schedule 3.20 hereto sets forth for the Borrower and each Subsidiary Loan Party, as of the Closing Date, a list of all of the material contracts and agreements to which such Loan Party is a party, including all Specified Vendor Receivables Financing Documents (other than agreements disclosed to the Administrative Agent pursuant to Section 5.01(f), agreements relating to Indebtedness described on Schedule 6.01, real property leases identified on Schedule 2.03 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date, and Licenses identified on Schedule 4.04 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date).

SECTION 3.21       EEA Financial Institutions. No Loan Party is an EEA Financial Institution.

 

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material portion of any Collateral having a book value or fair market value of $1,000,000 or more or the commencement of any action or proceeding for the taking of any Collateral having a book value or fair market value of $1,000,000 or more or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Security Documents.

SECTION 5.09      Books and Records; Inspection and Audit Rights .  The Borrower will, and will cause each of the 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 the 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 5.10      Compliance with Laws .  The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to 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. 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 5.11      Use of Proceeds .  The Borrower will use the proceeds of the Term Loans on the Closing Date solely (i) to consummate the Transactions, (ii) to pay the fees and expenses in connection with the Transactions and (iii) for general corporate purposes. The proceeds of the 2016 Incremental Term Loans shall be used finance a portion of the consideration for the Westfalia Acquisition and to finance other payments under the Westfalia Purchase Agreement, to pay certain fees and expenses and for general corporate purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 5.12      Additional Subsidiaries .  If any additional Subsidiary is formed or acquired after the Closing Date (or any existing Subsidiary becomes a Subsidiary Loan Party after the Closing Date), the Borrower will, within five Business Days after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), notify the Administrative Agent and the Lenders thereof and, within 30 days (or such longer period as may be agreed to by the Administrative Agent) after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, including with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.

SECTION 5.13     Further Assurances .

(a)        The Borrower will, and will cause each Subsidiary Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust, landlord waivers and other documents), which may be required under any Applicable Law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence

 

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bonds and completion guarantees provided by the Borrower and the Subsidiaries in the ordinary course of their business;

(xii) other unsecured Indebtedness of the Borrower or any Subsidiary in an aggregate principal amount not exceeding $15,000,000 at any time outstanding, less the liquidation value of any applicable Qualified Borrower Preferred Stock issued and outstanding pursuant to clause (b) of the definition of Qualified Borrower Preferred Stock;

(xiii)            secured Indebtedness in an aggregate amount not exceeding $35,000,000 at any time outstanding, in each case in respect of Indebtedness of Foreign Subsidiaries;

(xiv)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; provided , however , that such Indebtedness is extinguished within 10 days of incurrence;

(xv) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(xvi)Indebtedness incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy, if applicable;

(xvii)           contingent obligations to financial institutions, in each case to the extent in the ordinary course of business and on terms and conditions which are within the general parameters customary in the banking industry, entered into to obtain cash management services or deposit account overdraft protection services (in an amount similar to those offered for comparable services in the financial industry) or other services in connection with the management or opening of deposit accounts or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes and other customary, contingent obligations, including obligations under Bank Products (as defined in the ABL Credit Agreement as in effect on the date hereof) other than Hedging Agreements, of the Borrower and its Subsidiaries incurred in the ordinary course of business;

(xviii)          unsecured guarantees by the Borrower or any Subsidiary Loan Party of facility leases of any Loan Party;

(xix)payment obligations of or Guarantees by the Borrower or any Subsidiary Loan Party with respect to any Hedging Agreement permitted under Section 6.07 hereof; provided that if such Hedging Agreement is related to interest rates, (A) such Hedging Agreement shall relate to payment obligations on Indebtedness otherwise permitted to be incurred by the Loan Documents and (B) the notional amount of such Hedging Agreement shall not exceed the principal amount of the Indebtedness to which such Hedging Agreement relates;

(xx) Indebtedness of the Borrower, any Subsidiary Loan Party or any ABL Foreign Loan Party under the ABL Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed the greater of (i) $ 110,000,000 150,000,000 and (ii) the Borrowing Base as of the date of such incurrence; and

(xxi)Alternative Incremental Debt; provided that the aggregate principal amount of any Alternative Incremental Debt established on any date shall not exceed (i) (together with the

 

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aggregate amount of all Incremental Term Commitments established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount on such date and (ii) an additional amount subject to the Maximum Alternative Incremental Debt Amount as of such date . ; and

(xxii)            any Capital Lease Obligations of a Person that becomes a Subsidiary pursuant to the Westfalia Acquisition; provided that (A) such Capital Lease Obligation exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Indebtedness permitted by this clause (xxii) shall not exceed $15,000,000 at any time outstanding.

(b)        The Borrower will not, nor will it permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests, except (i) Qualified Borrower Preferred Stock, (ii) Assumed Preferred Stock and (iii) preferred stock or preferred Equity Interests held by the Borrower or any Subsidiary.

SECTION 6.02         Liens .  The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a)        Liens created under the Loan Documents and Liens in respect of any Permitted Term Loan Refinancing Indebtedness;

(b)        Permitted Encumbrances;

(c)        Liens in respect of the Specified Vendor Receivables Financing;

(d)        any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)        any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Closing Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be;

(f)        Liens on fixed or capital assets acquired, constructed or improved by, or in respect of Capital Lease Obligations of, the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (viii) of Section 6.01(a), (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving

 

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total unused amount of such permitted sales, transfers and other dispositions for the immediately preceding fiscal year (without giving effect to the amount of any unused permitted sales, transfers and other dispositions that were carried forward to such preceding fiscal year) and (ii) 35% of the aggregate fair market value of all assets of the Borrower as of the Closing Date, including any Equity Interests owned by it, during the term of this Agreement subsequent to the Closing Date;

provided that (x) all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by clauses (b) or (h) above) shall be made for fair value and (y) all sales, transfers, leases and other dispositions permitted by clauses (i), (j) and (k) above shall be for at least 75% cash consideration.

SECTION 6.06      Sale and Leaseback Transactions .  The Borrower will not, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for (a) any such sale of any fixed or capital assets (other than any such transaction to which (b) or (c) below is applicable) that is made for cash consideration in an amount not less than the cost of such fixed or capital asset in an aggregate amount less than or equal to $10,000,000, so long as the Capital Lease Obligations associated therewith are permitted by Section 6.01(a)(viii), (b) in the case of property owned as of or after the Closing Date, any such sale of any fixed or capital assets that is made for cash consideration in an aggregate amount not less than the fair market value of such fixed or capital assets not to exceed $20,000,000 in the aggregate, in each case, so long as the Capital Lease Obligations (if any) associated therewith are permitted by Section 6.01(a)(viii) and (c) any Acquisition Lease Financing.

SECTION 6.07      Hedging Agreements .  The Borrower will not, nor will it permit any Subsidiary to, enter into any Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business and which are not speculative in nature to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its assets or liabilities (including Hedging Agreements that effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)) (it being understood that the Borrower and its Foreign Subsidiaries may enter into Hedging Agreements consisting of cross-currency swaps related to intercompany loans between the Borrower and/or its Foreign Subsidiaries) .

SECTION 6.08      Restricted Payments; Certain Payments of Indebtedness .

(a)       The Borrower will not, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i)    the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional Equity Interests in the Borrower;

(ii)   Subsidiaries may declare and pay dividends ratably with respect to their capital stock;

(iii)  the Borrower may make Restricted Payments, not exceeding $5,000,000 from and after the date hereof, pursuant to and in accordance with stock option plans, equity purchase programs or agreements or other benefit plans, in each case for management or employees or former employees of the Borrower and the Subsidiaries;

 

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(iv)  the Borrower may pay the Closing Date Dividend;

(v)   the Borrower may pay cash dividends in respect of Qualified Borrower Preferred Stock issued pursuant to clauses (b) and (c) of the definition thereof; provided that such dividends in respect of Qualified Borrower Preferred Stock issued pursuant to clause (c) of the definition thereof may only be made after the fiscal year ending December 31, 2016 and only with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d)) (without duplication of amounts used pursuant to Section 6.08(a)(vii) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii));

(vi)  [reserved];

(vii) the Borrower may make payments in respect of the repurchase, retirement or other acquisition of Equity Interests of the Borrower or any Subsidiary using the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(d) (without duplication of amounts used pursuant to Section 6.08(a)(v) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii));

(viii)            the Borrower may make Restricted Payments; provided that (x) if after giving effect to such Restricted Payments (and any Indebtedness incurred in connection therewith (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash) and any related repayment of Indebtedness), the Net Leverage Ratio at the time of the making such payments (the date of the making of such payments, the “ RP Date ”) would be (1) less than or equal to 2.25 to 1.00, but greater than 2.00 to 1.00, the aggregate amount of Restricted Payments made pursuant to this clause (viii) during the period from the date 12 months prior to the RP Date through (and including) the RP Date (such period, the “ RP Period ”) shall not exceed $40,000,000, (2) less than or equal to 2.75 to 1.00, but greater than 2.25 to 1.00, the aggregate amount of Restricted Payments made pursuant to this clause (viii) during the RP Period shall not exceed $25,000,000, (3) less than or equal to 3.25 to 1.00 but greater than 2.75 to 1.00, the aggregate amount of Restricted Payments made pursuant to this clause (viii) during the RP Period shall not exceed $15,000,000 and (4) greater than 3.25 to 1.00, the aggregate amount of Restricted Payments made pursuant to this clause (viii) during the RP Period shall not exceed $10,000,000; provided further that at the time of any payment pursuant to this clause (viii), no Default or Event of Default shall have occurred and be continuing . ; and

(ix)    the Borrower may make payments in respect of any purchase price adjustment required to be made under the Westfalia Purchase Agreement.

(b)       The Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (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 Indebtedness, except:

(i)    payment of Indebtedness created under the Loan Documents;

 

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SECTION 6.12       [Reserved] .

SECTION 6.13       Net Leverage Ratio .  The Borrower will not permit the maximum Net Leverage Ratio as of the last day of any fiscal quarter ending after the Closing Date to exceed the ratio set forth below opposite such fiscal quarter:

 

     Fiscal Quarter   

Net

Leverage Ratio

    
   June 30, 2015    5.25:1.00   
   September 30, 2015    5.25:1.00   
   December 30, 2015    5.25:1.00   
   March 31, 2016    5.25:1.00   
   June 30, 2016    5.25:1.00   
   September 30, 2016    5.25:1.00   
   December 31, 2016    5.00 5.25 :1.00   
   March 31, 2017    5.00 5.25 :1.00   
   June 30, 2017    5.00 5.25 :1.00   
   September 30, 2017    5.00 5.25 :1.00   
   December 31, 2017    4.75 5.00 :1.00   
   March 31, 2018    4.75 5.00 :1.00   
   June 30, 2018    4.75:1.00   
   September 30, 2018    4.75:1.00   
   December 31, 2018 and each fiscal quarter ending thereafter    4.50:1.00   

SECTION 6.14       Use of Proceeds .  The Borrower will not request any Borrowing, 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 (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, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a Person organized in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

ARTICLE VII

Events of Default

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

(a)        the Borrower shall fail to pay any principal of any Loan 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;

(b)        the Borrower 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 Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

 

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nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and the Borrower, its stockholders or its affiliates, on the other. The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and there under) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower, its stockholders or its Affiliates on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other Person. The Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such borrower, in connection with such transaction or the process leading thereto.

SECTION 10.18      Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)          the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)          the effects of any Bail-In Action on any such liability, including, if applicable:

(i)           a reduction in full or in part or cancellation of any such liability;

(ii)          a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)         the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

[ Signature Pages Follow ]

 

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EXHIBIT B

Form of First Amendment to Intercreditor Agreement

See attaced.


FIRST AMENDMENT

TO

INTERCREDITOR AGREEMENT

This FIRST AMENDMENT TO INTERCREDITOR AGREEMENT (this “ Amendment ”), dated as of [ ], 2016, is entered into by and among BANK OF AMERICA, N.A ., in its capacity as administrative agent and collateral agent for the ABL Lenders (as defined in the Intercreditor Agreement defined below) (the “ ABL Agent ”) and JPMORGAN CHASE BANK, N.A. , in its capacity as administrative agent and collateral agent for the Term Lenders (as defined in the Intercreditor Agreement defined below) (the “ Initial Term Agent ”). Capitalized terms used herein and not otherwise defined shall have the meaning assigned such term in the Intercreditor Agreement (as defined below).

RECITALS:

A. WHEREAS, the ABL Agent and the Initial Term Agent are parties to that certain Intercreditor Agreement, dated as of June 30, 2015 (the “ Intercreditor Agreement ”); and

B. WHEREAS, the parties hereto have agreed to amend the Intercreditor Agreement as set forth herein on the terms and conditions set forth herein.

NOW, THEREFORE , in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto agree as follows:

SECTION 1.01 Amendments to Intercreditor Agreement .

(a) Section 1.2 of the Intercreditor Agreement is hereby amended by adding thereto in appropriate alphabetical order, a new definition of “CFC Holdco” to read as follows:

CFC Holdco ” any Subsidiary, other than a Foreign Subsidiary, substantially all the assets of which consist of Equity Interests of one or more Foreign Subsidiaries.

(b) Section 1.2 of the Intercreditor Agreement is hereby amended by deleting the definition of “Non-US Loan Parties” in its entirety and inserting the following in replacement thereof:

Non-US Loan Parties ” any CFC Holdco, any Foreign Borrower and/or any Foreign Subsidiary that may from time to time guaranty the obligations under the ABL Credit Agreement.

(c) Section 1.2 of the Intercreditor Agreement is hereby amended by deleting the definition of “Offshore Facilities Refinancing” in its entirety and inserting the following in replacement thereof:

Offshore Facilities Refinancing ” shall mean the amendment, amendment and restatement, and/or other modification of the ABL Documents solely in order to implement (a) the addition of certain Non-US Loan Parties and related Dollar or non-


Dollar denominated credit facilities (the “ Offshore Facilities ”) and (b) the granting of Liens in favor of the ABL Secured Parties on certain assets of the Non-US Loan Parties and/or the ABL Loan Parties as security for the Offshore Facilities in connection therewith, such refinancing to include the addition of terms and provisions and additional loan documentation for the Non-US Loan Parties and the Offshore Facilities customary for multicurrency cross-border credit agreements generally in connection therewith and the additional Liens in support thereof; provided that (i) such Offshore Facilities Refinancing shall be consummated no later than the 12-month anniversary of the date hereof, and (ii) any amendments or modifications to the ABL Documents contained in such Offshore Facilities Refinancing shall be permitted under Section 6.11(b)(ii) of the Term Credit Agreement except (with respect to clause (z) thereof) to the extent of additional covenants and events of default applying only to Non-US Loan Parties or the Offshore Facilities.

SECTION 1.02 Cross-References . References in this Amendment to any Section are, unless otherwise specified, to such Section of this Amendment.

SECTION 1.03 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .

(a) THE VALIDITY, PERFORMANCE, AND ENFORCEMENT OF THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF BUT INCLUDING SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, 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 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 AMENDMENT SHALL AFFECT ANY RIGHT THAT ANY ABL SECURED PARTY OR ANY TERM SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AMENDMENT, ANY TERM DOCUMENTS, OR ANY ABL DOCUMENTS AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

2


(c) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AMENDMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

SECTION 1.04 Counterparts . This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts and by facsimile or other electronic transmission, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

SECTION 1.05 Confirmation . Except as expressly amended or waived by the terms hereof, all of the terms of the Intercreditor Agreement shall continue in full force and effect and are hereby ratified and confirmed in all respects.

[Remainder of page intentionally left blank.]

 

3


IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL Lenders, and the Term Agent, for and on behalf of itself and the Term Lenders, have caused this Amendment to be duly executed and delivered as of the date first above written.

 

ABL AGENT :

 

BANK OF AMERICA, N.A.,

as ABL Agent

By:    
Title:    

 

 

[Signature Page to First Amendment to Intercreditor Agreement]


INITIAL TERM AGENT :

 

JPMORGAN CHASE BANK, N.A.,

as Initial Term Agent

By:    
Title:    

 

 

[Signature Page to First Amendment to Intercreditor Agreement]


ACKNOWLEDGMENT

Each Borrower, each ABL Guarantor and each Term Guarantor hereby acknowledges that it has received a copy of this Amendment and consents thereto, agrees to recognize all rights granted thereby to the ABL Agent and each Term Agent, and will not do any act or perform any obligation which is not in accordance with the agreements set forth in this Amendment. Each Borrower, each ABL Guarantor and each Term Guarantor further acknowledges and agrees that, except as set forth in Section 7.10 in the Intercreditor Agreement, it is not an intended beneficiary or third party beneficiary under this Amendment or the Intercreditor Agreement and (i) as between the ABL Secured Parties and the ABL Loan Parties, the ABL Documents remain in full force and effect as written and are in no way modified hereby, and (ii) as between the Term Secured Parties, the Company and Term Guarantors, the Term Documents remain in full force and effect as written and are in no way modified hereby. For the avoidance of doubt, the consent and acknowledgement of the Borrowers, the ABL Guarantors and the Term Guarantors herein, shall not constitute a waiver of any of their rights available under the Credit Documents, at law or in equity.

 

CEQUENT CONSUMER PRODUCTS, INC.
By:    
  Name:
  Title:
CEQUENT PERFORMANCE PRODUCTS, INC.
By:    
  Name:
  Title:
HORIZON GLOBAL CORPORATION
By:    
  Name:
  Title:
HORIZON GLOBAL COMPANY LLC
By:    
  Name:
  Title:

 

[Signature Page to First Amendment to Intercreditor Agreement]


EXHIBIT C

Form of Term Loan Guarantee and Collateral Agreement

See attached.


FIRST AMENDMENT

TO

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

This First Amendment to Term Loan Guarantee and Collateral Agreement (this “ Amendment ”) is dated as of [            ], 2016, and is by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (the “ Borrower ”), certain of its Subsidiaries signatory hereto (the Borrower and each such Subsidiary a “ Grantor ”, and collectively, the “ Grantors ”) and JPMORGAN CHASE BANK, N.A. (the “ Collateral Agent ”), as collateral agent for the Secured Parties.

RECITALS:

WHEREAS, the Collateral Agent and the Grantors are party to a Term Loan Guarantee and Collateral Agreement dated as of June 30, 2015 (as amended, restated, supplemented, or otherwise modified before the date of this Amendment, the “ Guarantee and Collateral Agreement ”).

WHEREAS, the parties desire to modify the Guarantee and Collateral Agreement in certain respects.

NOW, THEREFORE, in consideration of the premises, the parties agree as follows:

1. Definitions . Defined terms used but not defined in this Amendment are as defined in the Guarantee and Collateral Agreement or the Credit Agreement referenced therein, as applicable.

2. Amendments to Guarantee and Collateral Agreement .

(a) Section 4.9 to the Guarantee and Collateral Agreement is hereby amended and restated in its entirety to read as follows:

 

       “4.9 Intellectual Property . Exhibit C sets forth a true and complete list of (i) each registered or applied for United States Patent, Trademark or Copyright owned by each Grantor as of the Closing Date (other than expired, abandoned or lapsed properties) and (ii) all Licenses under which a Grantor is an exclusive licensee of a registered or applied for Patent, Trademark or Copyright as of the Closing Date . All Intellectual Property listed on Exhibit C is subsisting and unexpired, and to the knowledge of such Grantor, valid and enforceable.”

(b) The cells in table titled “PLEDGED EQUITY” contained within Exhibit D to the Guarantee and Collateral Agreement in the columns titled “Percentage Pledged” and “Issued Certificate (Class & No.)” in the row containing “Horizon International Holdings LLC**” in the column titled “Corporate Name”, which such cells correspond to Cequent Performance Products, Inc.’s ownership of the equity of Horizon International Holdings LLC, are hereby amended and restated in their entirety to read as provided on Exhibit D to this Amendment.


3. Representations . To induce the Collateral Agent to enter into this Amendment, each Grantor hereby represents to the Collateral Agent and the Lenders as follows:

 

(1) that such Grantor (A) is duly authorized to execute and deliver this Amendment; and (B) is and will continue to be duly authorized to perform its obligations under the Guarantee and Collateral Agreement, as amended by this Amendment;

 

(2) that the execution and delivery of this Amendment and the performance by such Grantor of its obligations under the Guarantee and Collateral Agreement, as amended by this Amendment, will not (A) violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of such Grantor or any order of any Governmental Authority or (B) violate or result in a default under any indenture, agreement or other instrument binding upon such Grantor or its assets, or give rise to a right thereunder to require any payment to be made by such Grantor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect;

 

(3) that each of this Amendment and the Guarantee and Collateral Agreement, as amended by this Amendment, is a legal, valid, and binding obligation of such Grantor, 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;

 

(4) that the representations and warranties set forth in in Article IV of the Guarantee and Collateral Agreement, as amended by this Amendment, are true and correct in all material respects (but if any such representation or warranty is by its terms qualified or modified by materiality in the text thereof, that representation or warranty is true and correct in all respects), on and as of the date of this Amendment, as though made on and as of such date (except to the extent that any such representation or warranty relates solely to an earlier date, in which case that representation or warranty is true and correct in all material respects as of such earlier date (but if any such representation or warranty is by its terms qualified or modified by materiality in the text thereof, that representation or warranty is true and correct in all respects as of such earlier date));

 

(5) that such Grantor has complied with and is in compliance with all of the covenants set forth in the Guarantee and Collateral Agreement, as amended by this Amendment, in all material respects, including those set forth in Article V of the Guarantee and Collateral Agreement; and

 

(6) that as of the date of this Amendment, no Default or Event of Default has occurred and is continuing.

4. Conditions . The effectiveness of this Amendment is subject to satisfaction of the following conditions:

 

(1) that the Collateral Agent has received this Amendment executed by the Collateral Agent and the Grantors; and

 

2


(2) that the Collateral Agent has received a fully executed copy of a first amendment to ABL Guarantee and Collateral Agreement having terms and conditions substantially similar to those contained in this Amendment.

5. Miscellaneous .

(a) This Amendment is governed by, and is to be construed in accordance with laws of the State of New York, without giving effect to any conflict of law principles except federal laws relating to national banks. Each provision of this Amendment is severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

(b) This Amendment binds the Collateral Agent and each Grantor and their respective successors and assigns, and will inure to the benefit of the Collateral Agent, the Lenders, and each Grantor and the successors and assigns of the Collateral Agent and each Lender.

(c) Except as specifically modified or amended by the terms of this Amendment, all other terms and provisions of the Guarantee and Collateral Agreement are incorporated by reference in this Amendment and in all respects continue in full force and effect. Each Grantor, by execution of this Amendment, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions that are contained in the Guarantee and Collateral Agreement.

(d) Each reference in the Guarantee and Collateral Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Guarantee and Collateral Agreement in any and all instruments or documents delivered in connection therewith, will be deemed to refer to the Guarantee and Collateral Agreement, as amended by this Amendment.

(e) This Amendment is a Loan Document. Each Grantor hereby acknowledges that the Collateral Agent’s reasonable costs and expenses (including reasonable documented attorneys’ fees and expenses) incurred in drafting this Amendment and in amending the Guarantee and Collateral Agreement as provided in this Amendment constitute Obligations owing pursuant to Section 10.03(a) of the Credit Agreement.

(f) The parties may sign this Amendment in several counterparts, each of which will be deemed to be an original but all of which together will constitute one instrument.

[Signature pages to follow]

 

3


IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this Amendment as of the date first above written.

 

GRANTORS:

HORIZON GLOBAL CORPORATION,

a Delaware corporation

By:    
Name:  
Title:  

CEQUENT PERFORMANCE PRODUCTS, INC. ,

a Delaware corporation

By:    
Name:  
Title:  

CEQUENT CONSUMER PRODUCTS, INC. ,

an Ohio corporation

By:    
Name:  
Title:  
HORIZON GLOBAL COMPANY LLC ,
A Delaware limited liability company
By:    
Name:  
Title:  

 

Signature page to First Amendment to Term Loan Guarantee and Collateral Agreement


JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
By:    
Name:  
Title:  

 

Signature page to First Amendment to Term Loan Guarantee and Collateral Agreement


EXHIBIT D

 

Percentage
Pledged

  

Issued Certificate (Class & No.)

65%

  

Membership Interest [ ]

Units Certificate No. [ ];

 

Membership Interest [ ]

Units Certificate No. [ ]

Exhibit 10.3

INVESTORS’ RIGHTS AGREEMENT

THIS INVESTORS’ RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of the 4 th day of October, 2016, by and between Horizon Global Corporation, a Delaware corporation (the “ Company ”), and Parcom Deutschland I GmbH & Co. KG, a German limited partnership with a limited liability company as general partner (the “ Investor ”).

RECITALS

A. WHEREAS , on August 24, 2016, the Investor, together with various other affiliated sellers, the Company, and Blitz K16-102 GmbH (in future: HG Germany Holdings GmbH) a limited liability company (Gesellschaft mit beschränkter Haftung) organised under the laws of Germany and being registered with the Commercial Register of Cologne under registration no. HRB 87906, entered into a Stock Purchase Agreement (the “ Stock Purchase Agreement ”), which provides for the purchase and sale of WESTFALIA-Automotive Holding GmbH and its subsidiary companies (collectively, “ Westfalia ”); and (ii) TeIJs Holding B.V. and its subsidiary companies (together with Westfalia, the “ Target ”) to the Company (the “ Acquisition ”);

B. WHEREAS , pursuant to the Stock Purchase Agreement, the Company will issue to the Investor 2,173,340 shares of its common stock, $0.01 par value per share (the “ Common Shares ”);

C. WHEREAS , as an inducement to the Investor entering into the Stock Purchase Agreement and as an inducement to the Investor selling the Target to the Company pursuant to the Stock Purchase Agreement, the Investor and the Company hereby agree that this Agreement shall govern certain rights of the Investor and the Company, including rights related to the voting of such Common Shares and the resale of such Common Shares under the Securities Act.

Unless otherwise provided, all capitalized terms shall have the meaning ascribed to them in Section 1 of this Agreement.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.  Definitions . For purposes of this Agreement:

(a) “ Affiliate ” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person.

(b) “ beneficially own ” shall have the meaning ascribed to such term under Rule 13d-3 of the Exchange Act.

(c) “ Blackout Period ” means a period of time, not to exceed 30 days, during which the Company may postpone the preparation, filing or effectiveness or suspend the effectiveness of a registration statement, if the Company, in good faith, determines that the registration and/or distribution of Registrable Securities (i) would materially impede, delay or interfere with any financing, acquisition, corporate reorganization or other significant transaction, or any negotiations, discussions or pending proposals with respect thereto, involving the Company or any of its subsidiaries or their respective assets, including, without limitation, any primary offering of securities by the Company, or (ii) would require the disclosure of material nonpublic information, the disclosure of which could adversely affect the Company; provided that all such Blackout Periods shall not exceed 90 days in the aggregate in any 12 month period; provided further that no Blackout Period may be implemented unless the same or more onerous restrictions are imposed on all of the Company’s directors and officers and all other holders of registration rights granted by the Company.

(d) “ Damages ” means any loss, claim, damage, liability (joint or several), penalties, judgments, suits, costs or expenses (including reasonable legal fees and disbursements, which shall be reimbursed periodically as incurred) to which a party referred to herein may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company filed pursuant to the terms of this Agreement, including any preliminary prospectus or prospectus contained therein or any amendments (including post-effective amendments) or supplements thereto and all material incorporated by reference into the foregoing, or (ii) an omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (with respect to any preliminary prospectus or prospectus or any amendments or supplements thereto, in the light of the circumstances under which they were made) not misleading.


(e) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(f) “ Form S-3 ” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

(g) “ Investor Group ” means the Investor and any partnership, firm, corporation, association, trust, unincorporated organization, joint venture, limited liability company or other legal entity, in which the Investor holds (either directly or indirectly) more than 50% of the voting rights or more than 50% of the equity capital of any such partnership, firm, corporation, association, trust, unincorporated organization, joint venture, limited liability company or other legal entity.

(h) “ Person ” means a natural person or any legal, commercial or governmental entity, such as, but not limited to, a corporation, general partnership, joint venture, limited partnership, limited liability company, limited liability partnership, trust, business association, group acting in concert, or any person acting in a representative capacity.

(i) “ Registrable Securities ” means Common Shares beneficially owned by the Investor Group in an amount equal to the aggregate number of Common Shares issued by the Company to the Investor and its assignees pursuant to the Stock Purchase Agreement, plus any Common Shares distributed to the Investor Group by the Company as a dividend on or other distribution with respect to such Common Shares, and any securities issued in exchange for such Common Shares in any merger, reorganization, consolidation, share exchange, recapitalization, restructuring or other comparable transaction of the Company.

(j) “ SEC ” means the United States Securities and Exchange Commission.

(k) “ SEC Rule 144 ” means Rule 144 promulgated by the SEC under the Securities Act.

(l) “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(m) “ Selling Expenses ” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities and the fees and disbursements of counsel to the Investor and any other member of the Investor Group in connection with the sale of Registrable Securities.

2.  Solicitations Prohibited; Voting . As of the date of this Agreement, except as previously disclosed in writing to the Company, if any, the Investor represents that neither it nor any of its Affiliates beneficially owns any securities entitled to be voted generally in the election of the Company’s Board of Directors or any direct or indirect options or other rights to acquire any such securities (collectively, “ Voting Securities ”). Commencing on the Closing Date (as defined in the Stock Purchase Agreement) and continuing thereafter for a period of 18 months, the Investor will, and will cause each member of the Investor Group to: (i) with respect to the Company or its Common Shares, not make, engage or in any way participate in, directly or indirectly, any “solicitation” (as such term is used in the proxy rules of the SEC) of proxies or consents (whether or not relating to the election or removal of directors), (ii) except as otherwise agreed to in writing by the Company, not seek, alone or in concert with others, election or appointment to, or representation on, or nominate or propose the nomination of any candidate to, the Board of Directors of the Company, and (iii) not initiate, propose or otherwise “solicit” (as such term is used in the proxy rules of the SEC) shareholders of the Company for the approval of shareholder proposals made to the Company whether made pursuant to Rule 14a-8 or Rule 14a-4 under the Exchange Act or otherwise, or cause or encourage or attempt to cause or encourage any other person to initiate any such shareholder proposal, regardless of its purpose.

3.  Public Sale of Registrable Securities .

3.1 Registration Rights; Resale Limitations; Standstill .

(a)  Form S-3 .

(i) The Company shall, no later than one year following the Closing Date (as defined in the Stock Purchase Agreement), file and cause to be declared effective a shelf registration

 

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statement on Form S-3 under the Securities Act registering the resale of the Registrable Securities on a continuous and delayed basis pursuant to Rule 415 under the Securities Act. No later than 15 days prior to filing such a registration statement, the Company shall notify the Investor of the intended filing date. The Investor shall provide such information and other cooperation as the Company reasonably requests in connection with the preparation, filing and use of any registration statement pursuant to this Section 3.1(a), including, without limitation, information required by Item 507 of Regulation S-K promulgated under the Securities Act; provided , that the Company may refuse to proceed with the registration of Registrable Securities if the Investor fails to provide information within the scope of this sentence within a reasonable time after receiving a request. In connection with all underwritten offerings registered on a registration statement that is filed and declared effective pursuant to this Section 3.1(a), the managing underwriter or underwriters, as well as other investment banks involved in the offering as underwriters or otherwise, shall be selected by mutual agreement of the Company and the Investor. In the event that a shelf registration statement filed pursuant to Section 3.1(a)(i) may no longer be used for offers and sales of any Registrable Securities, the Company shall prepare, file and cause to be declared effective within a reasonable amount of time a new shelf registration statement on Form S-3 under the Securities Act registering the resale of the Registrable Securities on a continuous and delayed basis pursuant to Rule 415 under the Securities Act. From and after the date hereof, the Company shall use its commercially reasonable best efforts to qualify under the provisions of the Securities Act, and thereafter, to continue to qualify at all times, for registration on Form S-3 or any successor thereto. In the event the Company fails to so qualify, the Company shall be required to use its commercially reasonable best efforts to effect registrations pursuant to this Section 3.1(a) on Form S-1 or any successor form thereto to the same extent as the Company would be required to effect registrations on Form S-3.

(ii) At any time that a shelf registration statement filed pursuant to Section 3.1(a)(i) is effective, if Investor delivers a notice to the Company (a “ Take-Down Notice ”) stating that it intends to sell all or part of its Registrable Securities included by it on such shelf registration statement (a “ Shelf Offering ”), then the Company shall reasonably promptly take all actions reasonably required, including preparing and, if required by applicable law, filing any amendment or supplement to the related prospectus or an amendment or supplement to any document incorporated therein by reference or any other required document in such a manner as to permit the Investor to deliver or be deemed to deliver such prospectus to purchasers of Registrable Securities in accordance with applicable law and to enable such Registrable Securities to be offered, sold and distributed in the Shelf Offering; provided that the Company shall not be required to take any action under this Section 3.1(a)(ii) during the pendency of any Blackout Period.

(iii) Any Take-Down Notice with respect to an underwritten public offering shall be for an amount of Registrable Securities having an aggregate value of at least $10,000,000 based on the anticipated offering price as reasonably determined in good faith by the Investor; provided that the Investor shall deliver no more than one such Take-Down Notice with respect to an underwritten public offering in any six-month period. In connection with any such underwritten public offering, the Company shall be entitled to include additional Common Shares to be offered by the Company (that are subject to a then-effective registration statement) up to an amount equal to 25% of the number of Common Shares to be offered by the Investor. If the managing underwriter or underwriters of such underwritten offering have informed the Investor in writing that it is their good faith opinion that the total amount of securities that the Investor and the Company intend to include in such offering exceeds the number that can be sold in such offering without adversely affecting the success of such offering, then there shall be included in such offering the number or dollar amount of such securities that in the good faith opinion of such managing underwriter or underwriters can be sold without adversely affecting such offering, and such number of securities shall be allocated as follows:

(a) first, to the Investor, the number of securities proposed by the Investor for inclusion in such offering; and

 

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(b) second, to the Company, the number of securities proposed by the Company for inclusion in such offering; provided, that in any event the Company shall be entitled to register the offer and sale of up to the number of securities equal to the lesser of (X) 25% of the total number of securities to be included in any such offering as determined by such managing underwriter, and (Y) the number of securities originally proposed by the Company to be included in such offering.

(b) Right to Piggyback . If (i) the executive officers of the Company have actual knowledge that one or more members of the Investor Group beneficially owns Registrable Securities and (ii) the Company intends to file a registration statement under the Securities Act with respect to an offering of Common Shares, whether or not for sale for its own account (other than a registration statement (a) on Form S-4, Form S-8 or any successor forms thereto or (b) filed solely in connection with an exchange offer or any employee benefit or dividend reinvestment plan), then, at least 20 business days prior to the filing such a registration statement, the Company shall give written notice (the “ Piggyback Notice ”) to the Investor of its intention to file a registration statement. The Piggyback Notice shall offer such holders of Registrable Securities the opportunity to include (or cause to be included) in such registration statement the number of Registrable Securities of as each such holder may request (a “ Piggyback Registration ”). Subject to Section 3.1(c), the Company shall include in each such Piggyback Registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein from the Investor within ten business days after the Piggyback Notice has been provided to the Investor (the “ Piggyback Response ”). The Company shall not be required to maintain the effectiveness of a registration statement for a Piggyback Registration beyond the earlier to occur of (i) 180 days after the effective date thereof, and (ii) consummation of the distribution by the holders of the Registrable Securities included in such Registration Statement. The Investor shall provide such information and other cooperation as the Company reasonably requests in connection with the preparation, filing and use of any registration statement pursuant to this Section 3.1(b), including, without limitation, information required by Item 507 of Regulation S-K promulgated under the Securities Act; provided that the Company may refuse to proceed with the registration of Registrable Securities if the Investor fails to provide information within the scope of this sentence within a reasonable time after receiving a request.

(c) Priority on Piggyback Registrations . The Company shall use commercially reasonable efforts to cause the managing underwriter or underwriters of a proposed underwritten offering within the scope of Section 3.1(b) to permit holders of Registrable Securities whose Registrable Securities have been included in a duly completed and delivered Piggyback Response to include in the offering in connection with which the Piggyback Response was delivered all Registrable Securities included in each holder’s Piggyback Response on the same terms and conditions as any other Common Shares included in such offering. Notwithstanding the foregoing, if the managing underwriter or underwriters of such underwritten offering have informed the Company in writing that it is their good faith opinion that the total amount of securities that such holders, the Company and any other Persons having rights to participate in such registration intend to include in such offering exceeds the number that can be sold in such offering without adversely affecting the success of such offering, then there shall be included in such offering the number or dollar amount of such securities that in the good faith opinion of such managing underwriter or underwriters can be sold without adversely affecting such offering, and such number of securities shall be allocated as follows, unless such managing underwriter or underwriters requires a different allocation:

(i) if such offering was initiated by the Company with respect to securities proposed to be registered for the Company’s own account, then:

(a) first, to the Company, the number of securities proposed by the Company for inclusion in such offering;

(b) second, to the holders of Registrable Securities that have been included in a duly completed and delivered Piggyback Response pursuant to Section 3.1(b), pro rata on the basis of the number of Registrable Securities of the class or series to be registered directly or indirectly held by each such holder; provided, that in any event the holders of Registrable Securities shall be entitled to register the offer and sale of at least 25% of the securities to be included in any such offering;

(c) third, to any other Persons, other Common Shares requested by such other Persons for inclusion in such offering pursuant to any other registration rights granted by the Company; or

 

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(ii) if such offering was not initiated by the Company with respect to securities proposed by the Company to be registered for the Company’s own account, then:

(a) first, the holders of Registrable Securities that have been included in a duly completed and delivered Piggyback Response pursuant to Section 3.1(b), pro rata on the basis of the number of Registrable Securities of the class or series to be registered directly or indirectly held by each such holder of Registrable Securities;

(b) second, to the Company, the number of securities proposed by the Company for inclusion in such offering; and

(c) third, to any other Persons, other Common Shares requested by such other Persons for inclusion in such offering pursuant to any other registration rights granted by the Company.

In connection with all underwritten offerings registered on a registration statement that is filed and declared effective pursuant to Section 3.1(b) and which includes Registrable Securities, the managing underwriter or underwriters, as well as other investment banks involved in the offering as underwriters or otherwise, shall be selected by the Company, in its sole discretion.

(d) The Investor shall provide such information and other cooperation as the Company reasonably requests in connection with the offering of any Registrable Securities pursuant to this Section 3.1(d), including, without limitation, information required by Item 507 of Regulation S-K promulgated under the Securities Act, provided that the Company may refuse to proceed with the offering of Registrable Securities if the Investor fails to provide information within the scope of this sentence within ten business days.

(e) Notwithstanding the foregoing obligations, the Company shall not be required to file a registration statement under the following circumstances:

(i) the Company has already effected one or more registrations pursuant to Section 3.1(a) and/or Section 3.1(b) covering all of the Registrable Securities and such registration statement or registration statements is or are still effective;

(ii) with respect to Sections 3.1(a) and (b), a registration statement is effective at the time such request is made and such registration statement may be utilized for the offering and sale of the Registrable Securities requested to be registered; and

(iv) during the pendency of any Blackout Period.

(f) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 3.1(a) during the period that is 30 days before the Company’s good faith estimate of the date of filing of, and ending on a date that is 90 days (or such shorter time period as the managing underwriter of any underwritten offering shall agree to, but in no case less than 30 days) after the effective date of, a Company-initiated registration statement, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.

(g) Limitation on Sales and Purchases of Common Shares .

(i) Public Resale Limitations . The Investor hereby agrees, and will cause each member of the Investor Group, not to sell (a) any Common Shares prior to the twelve-month anniversary of the Closing Date and (b) an aggregate of 104,504 or more Common Shares during the period commencing on the day following the twelve-month anniversary of the Closing Date and ending on the 18-month anniversary of the Closing Date. Furthermore, the Investor hereby agrees, and will cause each member of the Investor Group, not to engage in any hedging or other transaction that is designed or could be reasonably expected to result in a transfer of Common Shares that would not otherwise be permitted under this Section 3.1(g)(i), even if such Common Shares would be transferred by a Person other than a member of the Investor Group.

(ii) Limitations on Resales to Controlling Stockholders . Subject to the limitations of Section 3.1(g)(i), the Investor hereby agrees, and will cause each member of the Investor Group, not to sell more than 630,000 Common Shares to any Person in any single transaction, other than in an open market transaction, without first providing written notice to the Company of such contemplated sale (a “ Resale

 

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Notice ”) as provided below. Any Person expected to receive Common Shares in a transaction in connection with which the Investor is required to deliver a Resale Notice is referred to in this Agreement as a “ Designated Transferee .”

(a) Such Resale Notice will specify (A) the number of Common Shares proposed to be sold (the “ Subject Shares ”) to the Designated Transferee, as determined by the Investor in good faith, (B) the identity of the Designated Transferee and (C) the price per share, denominated as a dollar amount per share (the “ Target Price ”), at which the Investor or applicable member of the Investor Group intends to sell the Subject Shares to the Designated Transferee, as determined by the Investor in good faith. The Resale Notice will offer to sell the Subject Shares to the Company at the Target Price.

(b) In order to accept the offer to purchase the Subject Shares, the Company must deliver to the Investor a written notice of acceptance within 30 days following the date the Resale Notice was given to the Company (a “ Company Acceptance Notice “) agreeing to purchase all, but not less than all, of the Subject Shares at a cash price per share equal to the Target Price and not conditioning the purchase upon the receipt of financing or other conditions to closing other than as provided in subsection 3.1(g)(ii)(d) below.

(c) A duly completed and delivered Company Acceptance Notice shall constitute a binding irrevocable agreement by the Company to purchase the Subject Shares at the Target Price. If a Company Acceptance Notice meeting the requirements specified above is not delivered within the period specified in Section 3.1(g)(ii)(b), then the Company will be deemed to have rejected the offer of the Subject Shares.

(d) Upon delivery of a Company Acceptance Notice in compliance with the terms of this Agreement, the Investor or applicable member of the Investor Group will be obligated to sell, and the Company will be obligated to buy, all of the Subject Shares at the Target Price, payable in cash by wire transfer of immediately available funds. The closing of such purchase and sale shall occur at such time and place as the parties thereto may agree, but in any event no later than the 90th day after the Resale Notice is given to the Company. The purchase and sale will be without representation or warranty, except that each party to the transaction will represent and warrant that it has all requisite power and authority to enter into such transaction, and Investor and any applicable member of the Investor Group will represent and warrant that it is transferring valid title to the Subject Shares and the Subject Shares are being transferred free and clear of any lien or restriction other than applicable securities laws or those created by this Agreement.

(e) If the Company rejects or is deemed to reject the offer of the Subject Shares set forth in the Resale Notice, then the Investor or applicable member of the Investor Group will be free to enter into an agreement with a Designated Transferee during the period of 90 days following the date of the rejection or deemed rejection of the offer represented by the Resale Notice, so long as the price per share to be paid by such Designated Transferee is equal to or greater than the Target Price.

(iii) Standstill . The Investor hereby agrees that for a period of 18 months commencing on the Closing Date (the “ Standstill Period ”) that it will not, and that it will cause each member of the Investor Group, its Affiliates and other Persons acting at its behalf not to, propose or publicly announce or otherwise disclose an intent to propose, or enter into or agree to enter into, singly or with any other person: (a) any form of business combination, acquisition or other transaction relating to the Company or any of its Affiliates; or (b) any form of restructuring, recapitalization or similar transaction with respect to the Company or any of its Affiliates. Furthermore, during the Standstill Period the Investor will not, and it will cause its Affiliates and other Persons acting on its behalf not to, singly or with any other person: (a) acquire, or offer, propose or agree to acquire, by purchase or otherwise, any Voting Securities; (b) otherwise act, alone or in concert with others (including by providing financing for another person), seek or offer to control or influence the Company’s management, Board of Directors or policies, provided, however, that this sub-clause (b) shall not limit the Investor’s ordinary course communications, discussions or meetings with the Company’s management or Board of Directors; or (c) make any proposal or other communication designed to compel the Company to make a public announcement in respect of any matter contemplated by this Section 3.1(g)(iii).

 

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(iv) Lock-up Agreements . If (a) requested by the managing underwriter or underwriters in an underwritten offering, whether or not such offering includes Registrable Securities and (b) the executive officers and directors of the Company enter into substantially similar agreements in connection with an underwritten offering, the Investor shall, and will cause each member of the Investor Group to, not effect any public sale or distribution of Common Shares (except as part of such underwritten offering), including a sale pursuant to Rule 144 or any swap or other economic arrangement that transfers to another Person any of the economic consequences of owning Common Shares, during the period commencing on the date of the request (which shall be no earlier than 14 days prior to the expected “pricing” of such offering) and continuing for not more than 90 days after the date of the prospectus relating to such offering (or final prospectus supplement if such offering is made pursuant to a shelf registration statement), pursuant to which such offering shall be made, plus an extension period, which shall be no longer than 34 days, as may be determined by the managing underwriter to address regulations of the Financial Industry Regulatory Authority or any successor agency having jurisdiction under the Exchange Act regarding the publishing of research. In the event that a managing underwriter or underwriters requests that members of the Investor Group not make public sales or distributions pursuant to this Section 3.1(g)(iv), the Investor will, and the Investor will cause applicable members of the Investor Group to, enter into a written agreement memorializing such obligations, which agreement will otherwise be on customary terms.

3.2 Obligations of the Company . Whenever required under Section 3.1 to effect the registration of any Registrable Securities, the Company shall:

(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective under the Securities Act;

(b) use its commercially reasonable efforts to keep a registration statement that has become effective continuously effective if it is on Form S-3 until the date on which all Registrable Securities covered by such registration statement have been disposed of pursuant to such registration statement;

(c) furnish to the Investor such number of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Investor may reasonably request in order to facilitate the disposition of Registrable Securities;

(d) promptly following its actual knowledge thereof, notify the Investor:

(i) of the time when such registration statement has been declared effective or when a supplement or amendment to any prospectus forming a part of such registration statement has been filed (other than any deemed amendment of such registration statement by means of a document filed by the Company under the Exchange Act);

(ii) after such registration statement becomes effective, of any request by the SEC that the Company amend or supplement such registration statement or prospectus forming a part of such registration statement or for additional information;

(iii) of the issuance by the SEC or any other governmental authority of any stop order suspending the effectiveness of such registration statement or the initiation of any proceeding for such purpose; and

(iv) of the occurrence of any event that makes any statement made in the registration statement or any prospectus forming a part of such registration statement untrue in any material respect or which requires the making of any changes in such registration statement or prospectus so that it will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made;

(e) use its commercially reasonable efforts to register and qualify the Registrable Securities covered by such registration statement under the securities or blue-sky laws of such jurisdictions within the United States as shall be reasonably requested by the Investor; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or otherwise become subject to taxation or service of process in suits in any such jurisdictions where it is not already so qualified or subject;

 

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(f) in the event of any underwritten public offering of Registrable Securities, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

(g) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on each national securities exchange or trading system on which the Common Shares are then listed;

(h) provide a transfer agent and registrar for all Registrable Securities and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration statement; and

(i) promptly make available for inspection by the Investor or his representatives and agents, any managing underwriter(s) participating in any underwritten offering pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the Investor, all financial and other records, pertinent corporate documents and properties of the Company during normal business hours at the offices where such information is typically kept, or as otherwise agreed, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by the Investor or any such underwriter, attorney, accountant, agent or other representative, in each case, as reasonably necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith as is customary for similar due diligence examinations, provided that, any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Investor or any such underwriter, attorney, accountant, agent or other representative.

(j) within a reasonable time before filing any registration statement, prospectus or amendments or supplements thereto with the SEC, furnish to one counsel selected by the Investor copies of such documents proposed to be filed, which documents shall be subject to the review and reasonable comment of such counsel.

3.3 Obligations of the Investor and Other Members of the Investor Group. Whenever the Investor has requested that the Company effect the registration of any Registrable Securities under Section 3.1:

(a) upon receipt of any notice from the Company of the occurrence of any event of the type described in Sections 3.2(d)(ii), 3.2(d)(iii) or 3.2(d)(iv), the Investor shall, and shall cause any other member of the Investor Group whose Registrable Securities are included in a registration statement to, discontinue disposition of Registrable Securities covered by a registration statement and suspend use of such registration statement or prospectus forming a part of such registration statement until the Company has provided an amendment or supplement to such registration statement or prospectus or the Company has advised that the use of the registration statement or prospectus may be resumed, provided that, in the event that the Company shall give any such notice, the period of time for which a registration statement must remain effective as set forth in Section 3.2(b) will be extended by the number of days during the time period from and including the date of the giving of such notice to and including the date when the Company has either provided an amendment to such registration statement or prospectus or advised that the use of the registration statement or prospectus may be resumed;

(b) upon receipt of any notice from the Company of a Blackout Period, the Investor shall, and shall cause any other member of the Investor Group whose Registrable Securities are included in a registration statement to, discontinue disposition of Registrable Securities covered by a registration statement and suspend use of such registration statement or prospectus forming a part of such registration statement until the Company has provided an amendment or supplement to such registration statement or prospectus or the Company has advised that the use of the registration statement or prospectus may be resumed, provided that, in the event that the Company shall give any such notice, the period of time for which a registration statement must remain effective as set forth in Section 3.2(b) will be extended by the number of days during the time period from and including the date of the giving of such notice to and including the date when the Company has either provided an amendment to such registration statement or prospectus or advised that the use of the registration statement or prospectus may be resumed;

(d) in the event of any underwritten public offering of Registrable Securities, the Investor shall, and shall cause any other member of the Investor Group whose Registrable Securities are included in a registration statement to, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering; and

 

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(e) in the event of any underwritten public offering of securities by the Company, the Investor shall, and shall cause any other member of the Investor Group whose Registrable Securities are included in a registration statement to, if requested by the Company and any managing underwriter, not directly or indirectly offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of or otherwise dispose of or transfer any Common Share held by them for such period that the executive officers and directors of the Company agree to with the managing underwriter.

3.4 Expenses of Registration . All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to this Section 3, including all registration, filing, and qualification fees, printers’ and accounting fees, FINRA fees, blue sky fees and expenses, expenses incurred in connection with making road show presentations and holding meetings with potential investors, including travel, meals and lodging, and fees and disbursements of counsel for the Company, shall be borne and paid by the Company. All Selling Expenses relating to Registrable Securities registered pursuant to this Section 3 shall be borne and paid by the Investor.

3.5 Indemnification . If any Registrable Securities are included in a registration statement under this Section 3:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each member of the Investor Group that has included Registrable Securities in a registration statement and such member’s officers, directors, managers, partners and shareholders, and each Person who controls such member (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) against any Damages, and the Company will reimburse each such member of the Investor Group, controlling Person or other aforementioned Person for any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however , that the indemnity agreement contained in this Section 3.5(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such member of the Investor Group, controlling Person or other aforementioned Person expressly for use in connection with such registration statement.

(b) To the extent permitted by law, the Investor will indemnify and hold harmless the Company, its directors, its officers who have signed the registration statement and each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) against any Damages, and the Investor will reimburse the Company, controlling Person or other aforementioned Person for any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any member of the Investor Group that has included Registrable Securities in a registration statement expressly for use in connection with such registration statement; provided, however , that the indemnity agreement contained in this Section 3.5(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Investor, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by the Investor by way of indemnity or contribution under Section 3.5(b) exceed the proceeds from the offering received by such member of the Investor Group (net of any underwriting discounts and commissions paid by such member of the Investor Group), except in the case of fraud or willful misconduct by such member of the Investor Group.

(c) Promptly after receipt by an indemnified party under this Section 3.5 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 3.5, give the indemnifying party notice of the commencement thereof. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party shall be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel selected by the indemnifying party that is reasonably satisfactory to such indemnified party; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the

 

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indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 3.5 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless the indemnified party shall have employed separate counsel in accordance with the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the fees and expenses of more than one separate firm of attorneys (together with local counsel), representing all of the indemnified parties who are parties to such action). The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 3.5, except to the extent that the indemnifying party would be materially prejudiced as a proximate result of such failure to notify.

(d) If the indemnification provided for in Sections 3.5(a) and 3.5(b) is unavailable to the indemnified parties or insufficient in respect of any Damages, then each indemnifying party, in lieu of indemnifying such indemnified party, will contribute to the amount paid or payable by such indemnified party as a result of such Damages in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the applicable indemnified party, on the other hand, in connection with such actions which resulted in such Damages, as well as any other relevant equitable considerations. The relative fault of such indemnifying party, on the one hand, and the indemnified party, on the other hand, will be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to information supplied by, such indemnifying party or indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The parties agree that it would not necessarily be just and equitable if contribution pursuant to this Section 3.5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in this paragraph. The amount paid or payable by a party as a result of the Damages referred to in this paragraph will include any legal or other expenses reasonably incurred by a party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 3.5(d), Investor will not be required to contribute any amount in excess of the net proceeds (after deducting the underwriters’ discounts and commissions) received by the Investor Group in the offering. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

3.6 Reports Under Exchange Act by the Company . With a view to making available to the Investor Group the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a member of the Investor Group to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3 or Form S-1, the Company shall:

(a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144;

(b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

(c) furnish upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Securities Act, and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3; (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents filed by the Company with the SEC; and (iii) such other information as may be reasonably requested in availing any member of the Investor Group of any rule or regulation of the SEC that permits the selling of any such securities without registration.

3.7 Reports Under Exchange Act by the Investor and Other Members of the Investor Group . The Investor acknowledges and agrees that the Investor and the other members of the Investor Group shall be solely responsible for any required filings under Sections 13 and 16 of the Exchange Act in connection with any acquisition or disposition of Common Shares. The Investor shall provide the Company with a copy of any such filing contemporaneously with such filing being submitted to the SEC.

3.8 Termination of Registration Rights . Notwithstanding anything to the contrary in this Agreement, the right of the Investor and any other member of the Investor Group to the inclusion of Registrable Securities in any

 

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registration statement pursuant to Section 3.1 shall automatically terminate when the Investor, together with its Affiliates, or any assignee of the Investor pursuant to Section 4(a) of this Agreement, together with such assignee’s Affiliates, no longer beneficially owns at least 2.5% of the outstanding Common Shares.

4.  Miscellaneous .

(a)  Successors and Assigns. Any assignment of this Agreement or any of the rights or obligations under this Agreement by either of the parties hereto (whether by operation of law or otherwise) shall be void, invalid and of no effect without the prior written consent of the other party; provided , however , that the rights under this Agreement may be assigned (but only with all related obligations) by the Investor to one or more member(s) of the Investor Group so long as the assignee(s) agree in writing to be bound by the terms and conditions of this Agreement; provided , further , that any such assignment shall not release, or be construed to release, the Investor from its duties and obligations under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

(b)  Termination . This Agreement shall automatically terminate at such time as the Investor, together with its Affiliates, or any assignee of the Investor pursuant to Section 4(a) of this Agreement, together with such assignee’s Affiliates, no longer beneficially owns at least 2.5% of the outstanding Common Shares. Upon such termination, no party shall have any further obligations or liabilities hereunder other than pursuant Section 3.5 hereof; provided that such termination shall not relieve any party from liability for any breach of this Agreement prior to such termination.

(c)  Governing Law . This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the laws of the State of New York as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of New York, without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York.

(d)  Counterparts; Facsimile . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed and delivered by portable document format (pdf) and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(e)  Titles and Subtitles . The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

(f)  Notices All notices, requests, demands, and other communications hereunder shall be in writing (which shall include communications by e-mail) and shall be delivered (a) in person or by courier or overnight service, or (b) by e-mail with a copy delivered as provided in clause (a), as follows:

If to the Company:

2600 West Big Beaver Road, Suite 555

Troy, Michigan 48084

USA

Attention: Jay Goldbaum

Telephone: (248) 593-8838

E-mail: jgoldbaum@horizonglobal.com

with a copy (which shall not constitute notice) to:

Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114

USA

Attention: Michael J. Solecki

Telephone: (216) 586-7103

E-mail: mjsolecki@jonesday.com

 

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If to Investor:

Parcom Deutschland I GmbH & Co. KG

Volker Hichert

Ludwigstrasse 7, 80539 München, Germany

Facsimile:+49 89 20 00 38 11123

with a copy (which shall not constitute notice) to:

Heuking Kühn Lüer Wojtek

Dr Peter Christian Schmidt

Neuer Wall 63

20354 Hamburg, Germany

Facsimile: +49 40 35 52 80 80

(g)  Amendments and Waivers . Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of both parties. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition or provision.

(h)  Severability . In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

(i)  Remedies . Each holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. The Company acknowledges that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and the Company hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

(j) Entire Agreement . This Agreement constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

[Signatures follow.]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

HORIZON GLOBAL CORPORATION
By:   /s/ A. Mark Zeffiro
Name:   A. Mark Zeffiro
Title:   President and Chief Executive Officer
PARCOM DEUTSCHLAND I GmbH & Co. KG
By:   /s/ Volker Hichert
Name:   Volker Hichert
Title:   Managing Partner

 

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