Document:

layn-ex1018_251.htm

 

Exhibit 10.18

 

Layne Christensen Company
Long-Term Incentive Plan 

 

 

 

 

Section I.Effective Date.  

 

This Layne Christensen Company Long-Term Incentive Plan (the "LTI Plan" or "Plan") is effective as of February 1, 2015.  This Plan supersedes and replaces the Layne Christensen Company Long-Term Incentive Compensation Plan in effect on February 1, 2014.

 

Section II.Purpose of Plan and plan overview.  

 

Layne Christensen Company ("Company") has created the LTI Plan to provide a general framework for the Company's Compensation Committee to use in determining annual equity incentive awards to selected employees ("Participants"). The LTI Plan is structured to provide incentive compensation in line with the Company's stated pay philosophy.  Awards of equity under the LTI Plan relate to the Company's common stock ("Company Stock"), and are made pursuant to a separate, shareholder-approved Company equity plan (the "Company Equity Plan").  

 

During the first 90 days of each fiscal year (the "Award Year") the Company's Board of Directors (the "Board") will establish an annual equity pool ("Annual Equity Pool") for the LTI Plan. The Annual Equity Pool represents the total value of awards for the Award Year to be granted to LTI Plan participants.  The total value of each Annual Equity Pool is based on and expressed as a percentage of the Company's market capitalization.  The Annual Equity Pool is allocated among eligible Participants based on each eligible Participant's long-term incentive target percentage ("LTI Percentage"), which is a percentage of a Participant's base salary in effect on LTI award determination date.  The product of each eligible Participant's LTI Percentage and base salary is that Participant's "LTI Target Opportunity." Each eligible Participant receives a grant from the Annual Equity Pool with an approximate value equal to that Participant's LTI Target Opportunity.  Such equity grant will be composed of a mix of one or more of the following equity awards, each in percentages as determined by the Committee: time-vested nonqualified stock option awards (a "Time-Vested Options"); time-vested restricted stock unit awards ("Time-Vested RSUs"); and performance-vested performance shares award ("Performance Shares"). The Committee may elect for the equity grant to not have any of one type of equity award (e.g., no Time-Vested Options) for a particular year but, collectively, the applicable Time-Vested Options, Time-Vested RSUs and Performance Shares award percentages shall total 100% of the Participant's LTI Target Opportunity and collectively, all such awards are referred to herein as the “LTI Awards.”  The term “Grant” or “Granting” as used herein shall refer to the Committee’s act of issuing or Granting the LTI Awards under the Company Equity Plan.

 

Section III.Administration.

 

The administration of this Plan shall be established and overseen by the Compensation Committee (the "Committee") of the Board.  Subject to the terms of the 

 

 

Company Equity Plan, the Committee, with the approval of the Board, shall have complete discretion to determine the terms of all LTI Awards, including the amount and vesting conditions thereof.  LTI Percentages shall initially be determined by the Chief Executive Officer ("CEO") of the Company, recommended by the CEO to the Committee, and, if recommended and approved by the Committee, approved by the Board.  The Board may accept or may elect to change any LTI Percentage for any eligible Participant.  The Committee shall have full power to delegate to one or more members of senior management of the Company, or a committee thereof, all or a part of the Committee's power and authority to calculate and track actual financial performance of one or more targeted goals and validation of other non-financial measures.  All audited financial results and any performance measurement related thereto will be presented to the Committee for review and approval and, if approved by the Committee, submitted for approval by the Board.  Subject to the approval of the Board, the Committee shall have the full power, in its sole discretion, to interpret, construe and administer this Plan and to adopt rules and regulations relating to this Plan.  Decisions made by the Board (or its designee) in good faith and in the exercise of its powers and duties hereunder shall be final and binding upon all parties concerned.  No member of the Board (or its designee) shall be liable to anyone for any action taken or decision made in good faith pursuant to the power or discretion vested in such member or the Board or any designee under this Plan.   

 

SECTION IV.Eligibility.

 

Eligibility for participation in this Plan is limited solely to those persons selected by the Committee and recommended for approval by the Board.  Eligibility shall initially be limited to the Company's executives and division presidents.  Selection as a Participant does not guarantee receipt of any LTI Award and participation for an Award Year does not entitle such person to be a Participant for any future Award Year.  Generally, the Board shall select and designate the Participants who will be eligible for an LTI Award for a specific Award Year no later than the ninetieth (90th) day of such Award Year; provided, however, the Board may, in its sole discretion be permitted to add new Participants at any time during such Award Year. 

 

SECTION V.  DETERMINATION of Annual Equity Pool.

 

For each Award Year the Board shall establish that year's Annual Equity Pool and such Annual Equity Pool shall generally have a value equal to 2% of the Company's average market capitalization for the 30-day period ending January 31 of that Award Year.  For each Award Year, the total value of LTI Awards Granted to eligible Participants (such LTI Awards' value determined pursuant to Section VII) shall not exceed the value of that Award Year's Annual Equity Pool.  Advance Board approval must be obtained if LTI Awards having a value in excess of the Annual Equity Pool are to be Granted to Participants at any point during the Award Year.

 

	
SECTION VI.
	
Determination of Participant's target Lti Opportunity.

 

Subject to and in accordance with the conditions set forth in this Section VI, for any Award Year the Board allocates the Annual Equity Pool by Granting any combination of Options, Restricted Stock and Performance Shares to selected Participants.  The manner in which each Award Year's Annual Equity Pool is allocated among Participants, and the  number of 

 

 

shares underlying the LTI Awards, shall be based upon each Participant's Target LTI Opportunity calculated as follows: 

 

(A)First, each Participant's LTI Percentage will be determined based on the Participant's Title and Level and as outlined in Appendix A to this Plan; and

 

(B) Second, each Participant's LTI Target Opportunity will be determined by multiplying the Participant's LTI Percentage by the Participant's then current base salary.

 

Notwithstanding the above, if either the Plan is revised to include additional Participants or the size of the Annual Equity Pool increases or decreases due to changes in the Company's market capitalization, and the calculated Participant LTI Target Opportunities exceed or are below the Annual Equity Pool, the Participants' LTI Percentages will be adjusted up or down to meet the Annual Equity Pool for that year. 

 

SECTION VII.Form and Timing of LTI awardS.

Each Participant's LTI Target Opportunity shall be converted into LTI Awards in accordance with this Section VII.  In all cases, a Participant must be employed by the Company or one of its subsidiaries on the date the LTI Awards for that Award Year are Granted (the "Grant Date") to be eligible to receive the LTI Awards.   

 

	
 
	
(A)
	
Shares Subject to LTI Awards.  For each Award Year:

 

(i)A Committee-determined percentage, if any, of each Participant's LTI Target Opportunity may be granted in the form of a Time-Vested Option.  Under the current Plan, no portion of a Participant's LTI Target Opportunity is expected to be granted in the form of Time-Vested Options, but the Committee has sole discretion to award Time-Vested Options recognizing that circumstances surrounding annual LTI grants will change from year to year.  To the extent a portion of a Participant's LTI Target Opportunity is granted in Time-Vested Options, the number of Shares covered by the Time-Vested Option shall be the quotient of (A) the Committee-determined percentage of the Participant's LTI Target Opportunity allocated for a Time-Vested Option Award, divided by (B) the Grant Date per share fair value (determined using a lattice valuation model selected by the Board or Committee) of a 10-year stock option to purchase a share of Company Stock with an exercise price equal to the closing price of the Company Stock on the date of grant of the LTI Awards.  The option exercise price for the Time-Vested Option shall, in all cases, be the "Fair Market Value" (as determined under the Company Equity Plan) of a share of Company Stock on the Time-Vested Option's Grant Date; 

 

(ii)A Committee-determined percentage, if any, of each Participant's LTI Target Opportunity shall be granted in the form of Time-Vested RSUs.  Under the current Plan, the percentage is generally expected to be 20% of each Participant's LTI Target Opportunity, but the Committee has sole discretion to increase or decrease this percentage recognizing that circumstances surrounding annual LTI grants will change from year to year.  To the extent a portion of a Participant's LTI Target Opportunity is granted in Time-Vested RSUs, the number of Shares subject to the Time-Vested RSU award shall be the quotient of (A) the Committee-determined percentage of the 

 

 

Participants' LTI Target Opportunity allocated for a Time-Vested RSU Award, divided by (B) the Grant Date "Fair Market Value" (as determined under the Company Equity Plan) of a share of Company Stock on the Time-Vested RSU's Grant Date; and  

 

(iii)A Committee-determined percentage, if any, of each Participant's LTI Target Opportunity shall be granted in the form of Performance Shares. Under the current Plan, the percentage is generally expected to be 80% of each Participant's LTI Target Opportunity, but the Committee has sole discretion to increase or decrease this percentage recognizing that circumstances surrounding annual LTI grants will change from year to year.  To the extent a portion of a Participant's LTI Target Opportunity is granted in Performance Shares, the number of Performance Shares covered by the Performance Shares award shall be the quotient of (A) the Committee-determined percentage of the Participant's LTI Target Opportunity allocated for a Time-Vested Performance Share Award, divided by (B) the Grant Date per share value of a Performance Share award (as determined by the Board or Committee) as of the Performance Shares' Grant Date. 

 

All fractional Shares subject to any LTI Award may be rounded up or down as determined by the Board. 

 

(B)General Vesting/Payment Terms.  The LTI Awards shall become exercisable, vest and be settled as set forth below in this Section VII (B).  All LTI Awards will also be subject to the terms and conditions of the Company Equity Plan and the respective LTI Award agreement.  

 

(i)Time-Vested Option. Provided the Participant has remained continuously employed by the Company through the applicable vesting date, any Time-Vested Option award shall vest (i.e., become exercisable) in ratable 1/3 increments on the first, second and third anniversaries of the option's Grant Date. 

 

(ii)Time-Vested RSUs.  Provided the Participant has remained continuously employed by the Company through the applicable vesting date, any Time-Vested RSU's shall vest and be settled upon the earliest to occur of (a) the third (3rd) anniversary of the Time-Vested RSUs Grant Date, or (b) subject to Section XI(C), the Participant's separation from service with the Company after attaining the age of 60 and after having been employed by the Company or one of its affiliates for five years or more (a "Retirement").  Any Time-Vested RSUs shall remain nontransferable and subject to forfeiture restrictions until such vesting; provided, however, if upon a Participant's separation from service all or a portion of the Time-Vested RSUs would otherwise be forfeited, the Board may, in its sole discretion, agree to vest all or a portion of such Time-Vested RSUs if in its judgment the performance of Participant has warranted such vesting and/or such vesting is in the best interests of the Company.  Any such accelerated vesting and issuance of shares of Company Stock shall be subject to potential delay in accordance with Section XI(C).  All shares of Company Stock received in connection with the settlement of a vested RSU shall be subject to a transferability restriction such that no such shares may be sold or transferred until the Participant's separation from service with the Company; provided, however, the Committee may elect to withhold shares of Company Stock at the time a vested RSU is settled to the extent necessary to satisfy the Company's payroll and tax withholding obligations. 

 

 

 

(iii)Performance Shares.   Provided the Participant has remained continuously employed by the Company through the end of applicable three (3) year performance period upon which the payment of the Performance Shares will be based, any Performance Shares will vest and be payable based on the level of achievement of one or more performance goals eligible to be used for equity awards granted under a Company Equity Plan (the "Performance Goal") for such performance period, as set forth in the Performance Shares' award agreement.  

 

(C)Other Equity Grants.Nothing in this Plan shall prevent or restrict the Board from making additional equity award grants to the extent permissible under the Company Equity Plan. 

 

SECTION VIII.RIGHTS TO LTI BONUSES ARE UNSECURED.  

 

A Participant's potential right to an LTI Award does not constitute an equity or other ownership interest in the Company.  The Company shall not be required to and shall not segregate any funds representing any LTI Award and nothing in this Plan shall be construed as providing for such segregation.  Nothing in this Plan and no action taken pursuant to its terms, shall create or be construed to create a trust or escrow account of any kind, or a fiduciary relationship between the Company, on the one hand, and a Participant, or any other person, on the other hand.  Employee has no preferred claim on, or any beneficial ownership in, any assets of the Company.

 

	
SECTION IX.
	
Amendment and Termination of Plan; Term of Plan.

 

The Board may, at any time or times, amend this Plan, pursuant to written resolution adopted by the Board.  The Board may, with respect to any Award Year, terminate this Plan by written resolution adopted by the Board.  In the event this Plan is terminated, no further LTI Awards will be Granted under this Plan except that all LTI Awards Granted before the termination of this Plan shall continue in accordance with this Plan until such LTI Award either becomes exercised, vested and payable, or is forfeited. 

 

SECTION X.Non-Assignability.  

 

A Participant's rights pursuant to this Plan may not be transferred, alienated, assigned, pledged, hypothecated or otherwise disposed of other than by will or by the laws of descent and distribution.  If a Participant attempts to alienate, assign, pledge, hypothecate, or otherwise dispose of the Participant's rights to any LTI Award or any other right pursuant to this Plan, or in the event of any levy, attachment, execution, or similar process upon the right or interest conferred by this Plan, the Board may terminate all of the Participant's rights under this Plan and all LTI Awards granted to such Participant, and all of such Participant's rights under this Plan will thereupon become null and void.

 

SECTION XI.Miscellaneous.

 

(A)The Company's obligation to make any payment, or deliver any shares of Company Stock, pursuant to this Plan shall be subject to the Participant's satisfaction of all applicable federal, state and local income and other tax withholding requirements. 

 

 

 

(B)Nothing in this Plan shall be construed to give any person any benefit, right or interest except as expressly provided herein, and nothing in this Plan shall be construed as establishing any right of continued employment by the Company.   

 

(C)Notwithstanding any provision in this Plan or any LTI Award to the contrary, this Plan and all LTI Awards shall be interpreted and administered in accordance with Section 409A of the Internal Revenue Code and regulations and other guidance issued thereunder.  For purposes of determining whether any payment made pursuant to this Plan or an LTI Award results in a "deferral of compensation" within the meaning of Treasury Regulation §1.409A-1(b), the Company shall maximize the exemptions described in such section, as applicable.  Any reference to a “termination of employment” or similar term or phrase shall be interpreted as a “separation from service” within the meaning of Section 409A and the regulations issued thereunder. If any deferred compensation payment is payable due to a "specified employee" under Section 409A on account of a separation from service for any reason other than death, then such payment shall be delayed for a period of six months and paid immediately following the expiration of such six month period.  A Participant or beneficiary, as applicable, shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on the Participant or beneficiary in connection with any payments to such Participant or beneficiary pursuant to this Plan, including but not limited to any taxes, interest and penalties under Section 409A, and neither the Company nor any of its subsidiaries shall have any obligation to indemnify or otherwise hold a Participant or beneficiary harmless from any and all of such taxes and penalties.   

 

(D)The provisions of this Plan, except where otherwise required by law, will be governed, construed, enforced, and administered in accordance with the laws of the State of Delaware.

 

 

 

Appendix A – Target LTI Percentages

 

 

			
	
Title / Band 
	
Level 
	
Target LTI Percentage 

	
CEO 
	
0 
	
200% 

	
Corporate Executives (COO, CFO, GC, CAO) 
	
1 Corp. 
	
100% 

	
Division Presidents 
	
1 Div. 
	
60% 

	
Non-Executive Corporate Officers 
	
2 Corp. 
	
30% 

	
Corporate VPs
	
3 Corp. 
	
30% 

	
Field VP’s
	
3 Div.
	
30%

	
Corporate Directors
	
4 Corp.
	
15%

	
Field Directors
	
4 Div.
	
15%afn-ex1033_493.htm

EXECUTION VERSION

 

 

 

 

			
	
 
	
Euro 140,000,000

TERM LOAN FACILITY AGREEMENT
	
 

 

dated March 7, 2016

for

 

AFFINIA GROUP INC.

as Borrower

with

MANN+HUMMEL INC.

as Lender

 

 

 

 

 

203403422.3 

 

Table of Contents

	
 
	
1.
	
DEFINITIONS3
	
 

	
 
	
2.
	
THE FACILITY5
	
 

	
 
	
3.
	
PURPOSE5
	
 

	
 
	
4.
	
UTILISATION5
	
 

	
 
	
5.
	
REPAYMENT5
	
 

	
 
	
6.
	
PREPAYMENT AND CANCELLATION5
	
 

	
 
	
7.
	
INTEREST AND PAYMENT OF INTEREST6
	
 

	
 
	
8.
	
TAX GROSS-UP AND INDEMNITIES6
	
 

	
 
	
9.
	
COSTS AND EXPENSES6
	
 

	
 
	
10.
	
REPRESENTATIONS6
	
 

	
 
	
11.
	
UNDERTAKINGS8
	
 

	
 
	
12.
	
EVENTS OF DEFAULT AND ACCELERATION9
	
 

	
 
	
13.
	
CHANGES TO PARTIES11
	
 

	
 
	
14.
	
NOTICES11
	
 

	
 
	
15.
	
PARTIAL INVALIDITY AND UNINTENTIONAL GAPS13
	
 

	
 
	
16.
	
AMENDMENTS14
	
 

	
 
	
17.
	
CONFIDENTIALITY14
	
 

	
 
	
18.
	
GOVERNING LAW14
	
 

	
 
	
19.
	
JURISDICTION14
	
 

	
 
	
Schedule 1 Utilisation Request
	
16
	
 

 

2/

 

 

THIS AGREEMENT (the "Agreement") is dated March 7, 2016 and made between:

	
1.
	
AFFINIA GROUP INC., a Delaware corporation, as borrower (the "Borrower");

	
2.
	
MANN+HUMMEL INC., a Delaware corporation, as lender (the "Lender"),

each being a "Party" and together, the "Parties".

WHEREAS:

The Borrower and JPMORGAN CHASE BANK, N.A. as administrative agent, entered into a credit agreement together with the lenders and other parties party thereto dated 25 April 2013, as amended by the First Amendment dated 4 February 2014, as may be further amended, supplemented or otherwise modified from time to time (collectively, the “JPM Loan”);

The Tranche B-1 Maturity Date (as defined in the JPM Loan) is on 25 April 2016 and the Borrower needs funds to repay the amount due under the JPM Loan on such date; and

The Lender has agreed to lend funds to the Borrower to pay the required amount under the JPM Loan on the Tranche B-1 Maturity Date.

IT IS AGREED as follows:

	
1.
	
DEFINITIONS

"Available Commitment" means, in relation to the Facility, the Lender's Commitment under the Facility minus the amount of any outstanding Loans under the Facility.

"Availability Period" means the period from 7 March 2016 (including) to 31 December 2016 (including). 

"BoA Loan" means the ABL credit agreement dated 25 April 2013, entered into between Affinia Group Intermediate Holdings Inc., the Borrower and certain of its subsidiaries, the lenders party thereto and Bank of America, N.A., as administrative agent, as amended by the First Amendment dated 4 February 2014, as may be further amended, supplemented or otherwise modified from time to time.  

"Bond Indenture" means the indenture dated 25 April 2013, entered into between the Borrower, the guarantors party thereto and Wilmington Trust, National Association, as trustee, as may be amended, supplemented or otherwise modified from time to time.

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Stuttgart, London and New York and which is a TARGET Day.

"Event of Default" means any event or circumstance specified as such in Clause 12 (Events of Default and Acceleration).

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203403422.3 

 

"Facility" means the term loan facility made available under this Agreement.

"Interest Period" means, in relation to a Loan, the period starting on the Utilisation Date and ending on the Termination Date. 

"Interest Rate" means:

	
 
	
a)
	
the Margin plus

	
 
	
b)
	
an interbank lending rate, agreed between the Parties to be zero.

"JPM Loan" is defined in the recital paragraphs.

"Loan" means a loan made or to be made under this Agreement or the principal amount outstanding for the time being of that loan.

"Margin" means 3.25 per cent per annum.

"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

"Subsidiary" means with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, is Controlled by the person specified. For purposes of the preceding, the term "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies, or the dismissal or appointment of the management, of a person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling” and “Controlled" have meanings correlative thereto. For purposes of this Agreement, the term "Subsidiary" and "Control" shall be determined as of the date of this Agreement regardless of subsequent events.

"TARGET2" means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007.

"TARGET Day" means any day on which TARGET2 is open for the settlement of payments in euro.

"Termination Date" means 31 December 2016.

"Total Commitment" means the total amount the Lender shall make available to the Borrower under this Agreement, being at the date of this Agreement EUR 140,000,000. 

"Tranche B-1 Term Loans" means the total outstanding amount of Tranche B-1 Term Loans (as defined in the JPM Loan), including without limitation accrued and unpaid interest and fees and expenses thereon, as of the Tranche B-1 Maturity Date (as defined in the JPM Loan).

4/

203403422.3 

 

"Utilisation Date" means the date of a utilisation of the Facility, being the date on which the relevant Loan is to be made.

"Utilisation Request" means a notice substantially in the form set out in Schedule 1 (Utilisation Request).

	
2.
	
THE FACILITY

Subject to the terms of this Agreement the Lender makes available to the Borrower a term loan facility in an aggregate amount equal to the Total Commitment. 

	
3.
	
PURPOSE

	
 
	
a)
	
The Borrower shall apply all amounts borrowed by it under the Facility solely towards repayment of the Tranche B-1 Term Loans.

	
 
	
b)
	
The Borrower undertakes to provide to the Lender, within five (5) Business Days after a utilisation of the Facility, evidence that all amounts utilised under the relevant Loan have been applied in accordance with the purpose of the Facility.

	
4.
	
UTILISATION

	
 
	
a)
	
The Borrower may utilise the Facility by delivery to the Lender of a duly completed Utilisation Request not later than five (5) Business Days before the proposed Utilisation Date. 

	
 
	
b)
	
The proposed Utilisation Date may only be a Business Day within the Availability Period.  The amount of the proposed Loan must be a minimum of EUR 5,000,000.

	
 
	
c)
	
The Borrower shall not make more than three (3) Utilisations.

	
5.
	
REPAYMENT

The Loans shall be repaid in full by the Borrower on the Termination Date at the latest or in accordance with Clause 6.2 (Voluntary cancellation or prepayment). The Borrower may not re-borrow any part of the Facility which is repaid or prepaid.

	
6.
	
PREPAYMENT AND CANCELLATION

	
6.1
	
Illegality

If, in any applicable jurisdiction, it becomes unlawful for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain any Loan, then, to the extent 

5/

203403422.3 

 

mandated by law, the Lender may, by notice to the Borrower, immediately cancel the Available Commitment and the Borrower shall, upon notice by the Lender, repay the Loans on or before the later of (i) the date mandated by such law or (ii) ten (10) Business Days following Borrower’s receipt of such repayment notice.

	
6.2
	
Voluntary cancellation or prepayment

The Borrower may, if it gives not less than five (5) Business Days’ notice to the Lender prepay the whole or part of any Loan (together with accrued interest on the amount prepaid) and/or cancel the whole or part of the Available Commitment, in any case without any prepayment premium or penalty. 

	
7.
	
INTEREST AND PAYMENT OF INTEREST

The Loans shall bear interest at the Interest Rate and the Borrower shall pay to the Lender accrued interest on each Loan for the applicable Interest Period on the Termination Date or, if earlier, on the date the Borrower makes a prepayment pursuant to Clause 6.2 (Voluntary cancellation or prepayment).

	
8.
	
TAX GROSS-UP AND INDEMNITIES

	
 
	
a)
	
The Borrower shall make all payments to be made by it without deduction or withholding for or on account of any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) from a payment under this Agreement, unless such deduction is required by law.

	
 
	
b)
	
If such deduction is required by law to be made by the Borrower or the Lender, the amount of the payment due from the Borrower shall be increased to an amount which (after making this deduction) leaves an amount equal to the payment which would have been due if no such deduction had been required. 

	
9.
	
COSTS AND EXPENSES

The Borrower shall within three (3) Business Days on demand pay the Lender the amount of all reasonable and documented costs and expenses (including legal fees) incurred by it in connection with the negotiation, preparation and execution of this Agreement not to exceed US$25,000 (or its equivalent in any other currency or currencies) in the aggregate.

	
10.
	
REPRESENTATIONS 

The Borrower makes the representations and warranties set out in this Clause 10 to the Lender on the date of this Agreement.

6/

203403422.3 

 

	
10.1
	
Status 

	
 
	
a)
	
It is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

	
 
	
b)
	
It has the power to own its assets and carry on its business as it is being conducted.

	
10.2
	
Binding obligations

This Agreement constitutes valid, binding and enforceable obligations of the Borrower, enforceable against the Borrower in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, 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.

	
10.3
	
Non-conflict with other obligations

The entry into and performance by it of this Agreement does not conflict with: 

	
 
	
a)
	
any law or regulation applicable to it, except with respect to any conflict that would not materially impair its ability to perform its obligations under this Agreement;

	
 
	
b)
	
its constitutional documents; or

	
 
	
c)
	
any agreement or instrument binding upon it or any of its assets, except with respect to any conflict that would not materially impair its ability to perform its obligations under this Agreement.

	
10.4
	
Power and authority

It has the power to enter into and perform, and has taken all necessary action to authorise its entry into and performance of this Agreement.

	
10.5
	
Pari passu ranking

Its payment obligations under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

	
10.6
	
Repeating representations

The representations made by the Borrower under this Clause 10 shall be made by the Borrower by reference to the facts and circumstances then existing on the date of each Utilisation Request and each Utilisation Date, as applicable. 

7/

203403422.3 

 

	
11.
	
UNDERTAKINGS  

	
11.1
	
Compliance with laws

The Borrower shall comply in all respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its obligations under this Agreement.

	
11.2
	
Negative Pledge

	
 
	
a)
	
The Borrower shall not (and shall ensure that no Subsidiary will) create or permit to subsist any Security over any of its assets.

	
 
	
b)
	
Paragraph a) above does not apply to any Security below: 

	
 
	
aa)
	
any Security existing on the date of this Agreement or any Security permitted under the terms of the JPM Loan, BoA Loan and/or Bond Indenture;

	
 
	
bb)
	
any Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security given by the Borrower other than indebtedness which has the benefit of Security permitted under paragraph aa) above) does not exceed US$1,000,000 (or its equivalent in another currency or currencies).

	
11.3
	
Financial indebtedness 

The Borrower shall not (and shall ensure that no Subsidiary will) incur or allow to remain outstanding any financial indebtedness except for:

	
 
	
a)
	
financial indebtedness incurred under the JPM Loan, the BoA Loan and the Bond Indenture;

	
 
	
b)
	
financial indebtedness permitted under the terms of the JPM Loan, the BoA Loan and/or the Bond Indenture; and

	
 
	
c)
	
financial indebtedness, which (when aggregated with the amount of any other indebtedness not falling under paragraphs a) and b) above) does not exceed US$1,000,000 (or its equivalent in another currency or currencies).

	
11.4
	
Disposals 

The Borrower shall not (and shall ensure that no Subsidiary will) sell, assign, lease, transfer or otherwise dispose of any material portion of any property or asset to any non-affiliated third party having a replacement cost in excess of: (i) the sum of US$5,000,000 (or its equivalent in another currency or currencies) at all times through midnight on July 31, 2016; or (ii) the sum of US$10,000,000 (or its equivalent in another currency or currencies) from and after 12:01 AM on August 1, 2016, provided, however, that neither of the limitations in clause (i) and (ii) shall  

8/

203403422.3 

 

apply to the sale, assignment, lease, transfer or other disposition of property or asset in the ordinary course of business or for the purpose of disposing of obsolete, worthless or damaged assets.

	
11.5
	
Change of business

The Borrower shall procure that no substantial change is made to the general nature of the business of the Borrower and its Subsidiaries from that carried on at the date of this Agreement. 

	
11.6
	
Pari passu ranking

The Borrower shall ensure that its payment obligations under this Agreement rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

	
12.
	
EVENTS OF DEFAULT AND ACCELERATION

Each of the events or circumstances set out in this Clause 12 is an Event of Default (save for Clause 12.9 (Acceleration)).

	
12.1
	
Use of Loans

The Borrower is in breach of the express purpose of the Facility set out in Clause 3 (Purpose).

	
12.2
	
Other obligations

The Borrower does not comply with any provision of this Agreement, unless the failure to comply is capable of remedy and is remedied within thirty (30) days after the earlier of (i) the Lender giving a notice to the Borrower or (ii) the Borrower becoming aware of the failure to comply.

	
12.3
	
Misrepresentation

Any representation or statement made or deemed to be made by the Borrower in this Agreement is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

	
12.4
	
Cross default

	
 
	
a)
	
Subject to paragraph (c) below, the Borrower fails to pay any financial indebtedness when due nor within any originally applicable grace period.

	
 
	
b)
	
Subject to paragraph (c) below, any financial indebtedness of the Borrower is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

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c)
	
No Event of Default will occur under this Clause 12.4 if the aggregate amount of financial indebtedness or commitment for financial indebtedness falling within paragraphs a) and b) above is less than US$25,000,000 (or its equivalent in any other currency or currencies). 

	
12.5
	
Insolvency

	
 
	
a)
	
The Borrower: 

	
 
	
aa)
	
is unable or admits in writing its inability to pay its debts as they fall due; or 

	
 
	
bb)
	
fails generally to pay its debts as they become due.  

	
12.6
	
Insolvency proceedings

	
 
	
a)
	
An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking liquidation, reorganization or other relief in respect of the Borrower or its debts or of a substantial portion of its assets, under any Federal, State or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower or for a substantial part of its assets and, in any such case, the proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

	
 
	
b)
	
The Borrower shall voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, State or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in paragraph a) above, apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower or for a substantial part of its assets, file an answer admitting the material allegations of a petition filed against it in any such proceeding, or make a general assignment for the benefit of creditors, or the board of directors (or similar governing body) of the Borrower (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to above in paragraph a) above or this paragraph b).  

	
12.7
	
Creditors' process

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of the Borrower having an aggregate value of US$25,000,000 (or its equivalent in any other currency or currencies) and is not discharged within 20 days.

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12.8
	
Unlawfulness 

It is or becomes unlawful for the Borrower to perform any of its material obligations under this Agreement.

	
12.9
	
Acceleration

On and at any time after the occurrence of an Event of Default the Lender may, by notice to the Borrower:

	
 
	
a)
	
cancel the Total Commitment whereupon it shall immediately be cancelled; and

	
 
	
b)
	
declare that all or part of the Loans, together with accrued interest be immediately due and payable, whereupon they shall become immediately due and payable.

	
13.
	
CHANGES TO PARTIES

	
 
	
a)
	
The Lender may:

	
 
	
aa)
	
assign or pledge any of its rights (without transferring its obligations hereunder); or

	
 
	
bb)
	
transfer its contractual position as a whole or in part by way of assumption of contract (Vertragsübernahme),

to a bank, financial institution, security trustee, insurance company, or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets with the prior written consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed).

	
 
	
b)
	
The Borrower may not assign any of its rights or transfer any of its rights or obligations under this Agreement.

	
14.
	
NOTICES

	
 
	
a)
	
All notices and other communications that are required or may be given pursuant to this Agreement must be in writing and delivered in the accordance with the terms below to the Parties at the following addresses (or to the attention of such other person or such other address as any Party may provide to the other Party by notice in accordance with this Clause 14):

If to the Lender, to each of:

MANN+HUMMEL INC.

6400 S. Sprinkle Road 

Portage MI 49002-9706, USA 

Attention: Bill Liacone

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Email: bill.liacone@mann-hummel.com

and

MANN+HUMMEL International GmbH & Co.KG 

Grönerstraße 50, 

71636 Ludwigsburg, Germany 

Attention: Jürgen Gabriel

Facsimile: +49 (7141) 98-2985

Email: Juergen.Gabriel@mann-hummel.com

and

MANN+HUMMEL International GmbH & Co.KG 

Grönerstraße 50, 

71636 Ludwigsburg, Germany 

Attention: Christian Aue

Facsimile: +49 7141 98-18 2859

Email: Christian.Aue@mann-hummel.com

with a copy (which shall not constitute notice) to:

Gleiss Lutz 

Taunusanlage 11

60329 Frankfurt am Main, Germany

Attention: Dr. Eva Reudelhuber

Facsimile: +49 69 95514-198

Email: eva.reudelhuber@gleisslutz.com

and 

Manatt, Phelps & Phillips, LLP

7 Times Square

New York, NY 10036

Attention: Aydin S. Caginalp

Facsimile: 212-790-4545

Email: acaginalp@manatt.com

if to the Borrower, to each of:

Affinia Group Holdings Inc.

c/o Affinia Group Inc. – Legal Department

1 Wix Way 

Gastonia, NC 28054 USA

Attention: David Sturgess and Maggie Drozd

Facsimile: +1 704-869-3493

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Email: dave.sturgess@affiniagroup.com

 maggie.drozd@affiniagroup.com

and 

Affinia Group Inc. – Chief Financial Officer

1 Wix Way 

Gastonia, NC 28054 USA

Attention: Steven P. Klueg

Facsimile: +1 704-869-3493

Email: steve.klueg@affiniagroup.com

with a copy (which shall not constitute notice) to:

Chadbourne & Parke LLP

1301 Avenue of the Americas

New York, New York 10019-6022

Attention: Scott D. Berson, Esq. 

Facsimile: + 1 646 710 1144

Email: sberson@chadbourne.com

 

	
 
	
b)
	
Any such notice or other communication will be deemed to have been given:

	
 
	
aa)
	
if personally delivered, when delivered, against a written receipt;

	
 
	
bb)
	
if sent by a nationally recognized overnight courier delivery service which guarantees next day delivery, one (1) Business Day after being so sent; and

	
 
	
cc)
	
if given by facsimile or email transmission, once such notice or other communication is transmitted to the facsimile number specified in this Clause 14 and the appropriate answer back or telephonic confirmation is received, or at the time and on the date of such email transmission, provided, that such notice or other communication is promptly thereafter delivered in accordance with the provisions of paragraphs aa) and bb) of this Clause 14.

	
 
	
dd)
	
Any notice or other communication given hereunder using any other means (including ordinary mail) shall not be deemed to have been duly received unless and until such notice or other communication actually is received by the individual for whom it is needed.

	
15.
	
PARTIAL INVALIDITY AND UNINTENTIONAL GAPS

The Parties agree that, should at any time, any provisions of this Agreement be or become void (nichtig), invalid or due to any reason ineffective (unwirksam), this will indisputably (unwiderlegbar) not affect the validity or effectiveness of the remaining provisions and this Agreement 

13/

203403422.3 

 

will remain valid and effective, save for the void, invalid or ineffective provisions, without any Party having to argue (darlegen) and prove (beweisen) the Parties' intent to uphold this Agreement even without the void, invalid or ineffective provisions.

The void, invalid or ineffective provision shall be deemed replaced by such valid and effective provision that in legal and economic terms comes closest to what the Parties intended or would have intended in accordance with the purpose of this Agreement if they had considered the point at the time of conclusion of this Agreement.

	
16.
	
AMENDMENTS/SIGNING

Any amendment, modification or waiver of the terms of this Agreement including an amendment of this Clause 16 shall be made in writing and signed by the Borrower and the Lender.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  All signatures of the parties to this Agreement may be transmitted by facsimile or electronic transmission in portable document format (.pdf), and such facsimile or .pdf will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces, and will be binding upon such party.

	
17.
	
CONFIDENTIALITY

The Parties agree to keep the terms and conditions of this Agreement confidential and not to disclose them to anyone, except with the explicit consent of the other party, as required by law or regulation (including, without limitation, any applicable United States securities laws), or in connection with the enforcement of this Agreement.  Notwithstanding the preceding sentence to the contrary, the Lender agrees that the Borrower may disclose the terms and conditions of this Agreement to the financing parties (and their counsel) under the JPM Loan, BoA Loan and/or the Bond Indenture to the extent required.  

	
18.
	
GOVERNING LAW

This Agreement will be governed by and construed and interpreted in accordance with the substantive Laws of the State of New York, without giving effect to any conflicts of law, rule or principle that might require the application of the laws of another jurisdiction.

	
19.
	
CONSENT TO JURISDICTION SERVICE OF PROCESS

EACH PARTY HERETO CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK (A “SPECIFIC COURT”) AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT, ANY AGREEMENT DELIVERED IN CONNECTION 

14/

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HEREWITH OR THE TRANSACTION SHALL BE LITIGATED IN ONLY IN A SPECIFIED COURT. EACH PARTY HERETO ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF ANY SPECIFIED COURT AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, OR ANY OTHER DEFENSE THAT WOULD HINDER OR DELAY THE LEVY, EXECUTION OR COLLECTION OF ANY AMOUNT WHICH ANY PARTY HERETO IS ENTITLED PURSUANT TO ANY FINAL JUDGEMENT OF ANY SPECIFIED COURT HAVING JURISDICTION, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGEMENT RENDERED BY A SPECIFIED COURT IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY SPECIFIED COURT IN ANY SUCH ACTION OR PROCEEDING BY THE DELIVERY OF COPIES THEREOF BY A NATIONALLY RECOGNIZED OVERNIGHT COURIER DELIVERY SERVICE, TO SUCH PARTY AT THE ADDRESS SPECIFIED IN THIS AGREEMENT. ANY SUCH SERVICE OF PROCESS SHALL BE EFFECTIVE UPON DELIVERY. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

	
20.
	
WAIVER OF JURY TRIAL

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF RELATING TO THIS AGREEMENT. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.

Schedule 1

15/

203403422.3 

 

Utilisation Request

		
	
From:
	
AFFINIA GROUP INC.

	
To:
	
MANN+HUMMEL INC.

	
Dated:
	
[●]

 

Dear Sirs

EUR 140,000,000 Term Loan Facility Agreement
dated [●] (the "Facility Agreement")

	
3.
	
We refer to the Facility Agreement (as defined therein). This is a Utilisation Request. Terms defined in the Facility Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

	
4.
	
We wish to borrow a Loan on the following terms:

		
	
Proposed Utilisation Date:
	
[●] (or, if that is not a Business Day, the next Business Day)

	
Amount:
	
[●] or, if less, the Available Commitment

 

	
5.
	
We confirm that the representations in Clause 10 of the Facility Agreement are true in all material respects as of today and will be on the proposed Utilisation Date (subject to Clause 10.6 of the Facility Agreement).

	
6.
	
The proceeds of this Loan should be credited to [insert account details].

Yours faithfully

[●]

 

Authorised signatory

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203403422.3 

 

 

SIGNATORIES

The Borrower

							
	
AFFINIA GROUP INC.
	
 

	
Address:

Fax No:

Attention: 
	
 

	
Date:
	
___March 7, 2016___________
	
 

	
 
	
_/s/ Steven P. Klueg __________
	
 

	
Name:
	
Steven P. Klueg
	
 

	
Position:
	
Chief Financial Officer
	
 

	
 

	
 
	
 

 

 

The Lender 

							
	
MANN+HUMMEL INC.

	
Address:

Fax No:

Attention: 
	
 

	
Date:
	
_ March 7, 2016____________
	
 
	
Date:
	
_ March 7, 2016_________

	
 
	
__/s/ William D. Liacone__
	
 
	
 
	
__/s/ Alfred Weber_____________

	
Name:
	
William D. Liacone
	
 
	
Name:
	
Alfred Weber

	
Position:
	
Group VP Americas
	
 
	
Position:
	
President & CEO

	
 

 

 

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