PRIOR
WRITTEN CONSENT, BORROWER MUST NOT ENGAGE IN OR DO ANY OF THE FOLLOWING:
(A)
SELL ANY ASSETS FOR LESS THAN FAIR MARKET
PRICE EXCEPT IN THE ORDINARY COURSE OF BUSINESS;
(B)
CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY
FURTHER INDEBTEDNESS, WHETHER SECURED OR UNSECURED, OR PERMIT ANY OF ITS
SUBSIDIARIES TO CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY FURTHER
INDEBTEDNESS, WHETHER SECURED OR UNSECURED, OTHER THAN (1) INDEBTEDNESS EXISTING
AT MAGNETEK S.P.A OR ANY SUBSIDIARY THEREOF AS OF THE CLOSING (THE "ACQUISITION
DEBT"), (2) INDEBTEDNESS DESCRIBED IN THE FINANCIAL STATEMENTS DESCRIBED IN
SECTION 4.6, AND (3) ADDITIONAL JUNIOR OR SUBORDINATED INDEBTEDNESS OF NO MORE
THAN FIVE MILLION US DOLLARS (US$5,000,000) IN THE AGGREGATE;
(C)
MERGE, DISSOLVE, LIQUIDATE, COMBINE,
CONSOLIDATE WITH OR INTO ANOTHER ENTITY, LEASE OR DISPOSE OF (WHETHER IN ONE
TRANSACTION OR IN A SERIES OF RELATED TRANSACTIONS) ALL OR SUBSTANTIALLY ALL OF
ITS ASSETS (WHETHER NOW OWNED OR HEREAFTER ACQUIRED) TO OR IN FAVOR OF ANY OTHER
PERSON OR ENTITY, EXCEPT FOR (1) TRANSACTIONS IN WHICH BORROWER IS THE SURVIVOR
THAT DO NOT CAUSE A MATERIAL ADVERSE EFFECT, AND (2) TRANSACTIONS BY AND AMONG
BORROWER'S SUBSIDIARIES AS PART OF A REORGANIZATION;
(D)
ENGAGE IN ANY MATERIAL LINE OF BUSINESS
SUBSTANTIALLY DIFFERENT FROM THOSE LINES OF BUSINESS CONDUCTED BY BORROWER OR
ANY LINES OF BUSINESS ACQUIRED BY BORROWER PURSUANT TO THE ACQUISITION AGREEMENT
AS OF THE CLOSING OF THE LOAN OR ANY BUSINESS REASONABLY RELATED OR INCIDENTAL
THERETO;
(E)
ENGAGE IN ANY PRIVATE OR OPEN-MARKET
PURCHASE OF ITS OUTSTANDING CAPITAL STOCK OR PAY ANY DIVIDENDS WITH RESPECT TO
ITS OUTSTANDING CAPITAL STOCK, EXCEPT PURSUANT TO THE STOCK REPURCHASE PROGRAM
CURRENTLY AUTHORIZED BY BORROWER; OR
(F)
AMEND, MODIFY OR CHANGE ITS CERTIFICATE
OF INCORPORATION OR BYLAWS IN A MANNER MATERIALLY ADVERSE TO LENDER.
SECTION 4
REPRESENTATIONS AND WARRANTIES BY BORROWER
Borrower represents and warrants to Lender that:
4.1.
FORMATION.
BORROWER (A) IS A CORPORATION DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
DELAWARE, (B) HAS ALL REQUISITE POWER AND AUTHORITY AND ALL REQUISITE
GOVERNMENTAL LICENSES, AUTHORIZATIONS, CONSENTS AND APPROVALS TO (I) OWN ITS
ASSETS AND CARRY ON ITS BUSINESS, AND (II) EXECUTE, DELIVER AND PERFORM ITS
OBLIGATIONS UNDER THE LOAN DOCUMENTS TO WHICH IT IS A PARTY, AND (C) IS DULY
QUALIFIED AND IS LICENSED AND IN GOOD STANDING UNDER THE LAWS OF EACH
JURISDICTION WHERE ITS OWNERSHIP, LEASE OR OPERATION OF PROPERTIES OR THE
CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION OR LICENSE, EXCEPT WHERE THE
FAILURE TO BE SO LICENSED WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.
4
4.2.
AUTHORITY.
THE EXECUTION, DELIVERY AND
PERFORMANCE BY BORROWER OF EACH LOAN DOCUMENT TO WHICH IT IS PARTY HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE, COMPANY OR OTHER ORGANIZATIONAL
ACTION, AND DO NOT (A) CONTRAVENE THE TERMS OF BORROWER'S CERTIFICATE OF
INCORPORATION OR BYLAWS; (B) CONFLICT WITH OR RESULT IN ANY BREACH OR
CONTRAVENTION OF, OR THE CREATION OF ANY LIEN UNDER (I) ANY CONTRACTUAL
OBLIGATION TO WHICH