Document:

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of April 15, 2015 (this “Agreement”) is entered into by and among GENTHERM INCORPORATED, a Michigan corporation (the “Company”), GENTHERM GMBH, a German limited liability company (“Gentherm Germany”), GENTHERM (TEXAS), INC., a Texas corporation (“Gentherm Texas” and together with the Company, the “U.S. Borrowers”), GENTHERM CANADA LTD., an Ontario corporation (“Gentherm Canada”), GLOBAL THERMOELECTRIC INC., an Alberta corporation (“Global” and, together with Gentherm Canada, the “Canadian Borrowers” and, together with Gentherm Canada, the U.S. Borrowers and Gentherm Germany, the “Borrowers” and each, a “Borrower”), GENTHERM PROPERTIES II, LLC, a Michigan limited liability company (the “New Subsidiary”), each Lender party hereto and BANK OF AMERICA, N.A., as Administrative Agent (the “Administrative Agent”) and L/C Issuer.

W I T N E S S E T H:

WHEREAS, the Borrowers, the Lenders and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer are all parties to that certain Credit Agreement, dated as of August 7, 2014 (as amended or otherwise modified prior to the date hereof, the “Existing Credit Agreement”, and as amended by this Agreement and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrowers have requested that the Lenders, the L/C Issuer and the Administrative Agent amend certain provisions of the Existing Credit Agreement as set forth herein; and

WHEREAS, the Lenders, the L/C Issuer and the Administrative Agent are willing to effect such amendments, subject to the terms and conditions of this Agreement.

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

ARTICLE I.

DEFINITIONS

SECTION 1.1. Definitions.  Terms for which meanings are provided in the Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Agreement with such meanings.

ARTICLE II.

AMENDMENTS TO EXISTING CREDIT AGREEMENT

SECTION 2.1. Section 1.01.

SECTION 2.1.1. The definition of “Excluded Subsidiary” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated as follows:

“Excluded Subsidiary” means (a) Gentherm Electronics (Shenzen) Ltd., (b) Gentherm Automotive Systems (China) Ltd. (formerly known as W.E.T. Automotive Systems (China) Ltd.), (c) Gentherm Automotive Technologies (Shanghai) Co. Ltd., (d) Gentherm Ukraine TOV (formerly known as W.E.T. Automotiv Ukraine TOV), (e) Gentherm Korea Inc., (f) Gentherm Vietnam Co. Ltd., (g) Gentherm Macedonia DOOEL import – export Skopje, (h) any Foreign Subsidiary that is prohibited by applicable Law from providing a Guaranty or if the provision of such Guaranty by such Foreign Subsidiary would require governmental consent, approval, license or authorization and (i) any other Foreign Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the Company), the cost or other consequences of providing a Guaranty would be excessive in view of the benefits to be obtained by the Lenders therefrom.

 

 

SECTION 2.1.2. The definition of “Material Subsidiary” in Section 1.01 of the Existing Credit Agreement is hereby amended by amending the second to last sentence thereof as follows:

Notwithstanding the foregoing, each of (i) Gentherm Holding (Malta) Limited, (ii) Gentherm Automotive Systems (Malta) Ltd., (iii) Gentherm Hungary Kft., (iv) each Luxembourg Reorganization Subsidiary, (v) Gentherm Ukraine TOV (formerly known as W.E.T. Automotiv Ukraine TOV), (vi) Gentherm Vietnam Co. Ltd., (vii) Gentherm Macedonia DOOEL import – export Skopje, and (viii) each Loan Party (other than, for purposes of clarification, the Company) shall be deemed to be a “Material Subsidiary” at all times.

SECTION 2.1.3. The following defined term is hereby added to Section 1.01 in the appropriate alphabetical order to read as follows:

“Designated L/C Subsidiary” has the meaning set forth in Section 2.03(b)(i).

SECTION 2.2. Section 2.03.

SECTION 2.2.1. Section 2.03(a)(i) of the Existing Credit Agreement is hereby amended by amending and restating the second sentence thereof as follows:

Each request pursuant to Section 2.03(b)(i) for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence.

SECTION 2.2.2. Section 2.03(b)(i) of the Existing Credit Agreement is hereby amended by amending and restating the first sentence thereof as follows:

Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Company (or, if designated by the Company in writing to the L/C Issuer, any Subsidiary (other than any Foreign Subsidiary domiciled in a jurisdiction where the L/C Issuer is prohibited from issuing a Letter of Credit or would be required to obtain any license, permit or approval from any Governmental Authority to issue a Letter of Credit) (such Subsidiary, a “Designated L/C Subsidiary”)) delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Company (or such Designated L/C Subsidiary).

SECTION 2.2.3. Section 2.03(b)(i) of the Existing Credit Agreement is hereby amended by amending and restating the last sentence thereof as follows:

Additionally, the Company (or, if applicable, a Designated L/C Subsidiary) shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.

SECTION 2.2.4. Section 2.03(b)(ii) of the Existing Credit Agreement is hereby amended by amending and restating the first sentence thereof as follows:

Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Company (or, if applicable, a Designated L/C Subsidiary) and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof.

SECTION 2.2.5. Section 2.03(b)(iii) of the Existing Credit Agreement is hereby amended by amending and restating the first and second sentences thereof as follows:

If the Company (or, if applicable, a Designated L/C Subsidiary) so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Company (or such Designated L/C Subsidiary) shall not be required to make a specific request to the L/C Issuer for any such extension.

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SECTION 2.2.6. Section 2.03(e) of the Existing Credit Agreement is hereby amended by amending and restating the last paragraph thereof as follows:

The Company (or, if applicable, a Designated L/C Subsidiary) shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Company’s (or such Designated L/C Subsidiary’s) instructions or other irregularity, the Company (or such Designated L/C Subsidiary) will immediately notify the L/C Issuer. The Company (and, if applicable, such Designated L/C Subsidiary) shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

SECTION 2.3. Section 2.05.  Section 2.05(b)(i) of the Existing Credit Agreement is hereby amended by amending and restating the first parenthetical thereof as follows:

(other than (x) any Disposition of any property permitted by Section 7.05(a), (b), (c), or (d) or (y) any Disposition of any property permitted by Section 7.05(g), provided that, upon giving effect to such Disposition on a Pro Forma Basis, the Consolidated Leverage Ratio is less than or equal to 1.50:1.0)

SECTION 2.4. Section 5.28.  Section 5.28 of the Existing Credit Agreement is hereby amended and restated as follows:

5.28 Anti-Corruption Laws.  The Loan Parties and their Subsidiaries have conducted their business in compliance with the United States Foreign Corrupt Practices Act of 1977, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Corruption of Foreign Public Officials Act (Canada), the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

SECTION 2.5. Section 6.13.  Section 6.13 of the Existing Credit Agreement is hereby amended by amending and restating clause (iv) contained in the last paragraph thereof as follows:

(iv) the Collateral shall not include (and no actions under clause (b) and (c) above shall be required with respect thereto) (x) any assets as to which the Administrative Agent and the Company agree that the costs or other consequences of obtaining a security interest or perfection thereof are excessive in view of the benefits to be obtained by the Secured Parties therefrom, (y) that certain fee owned real property of Westridge Haggerty, LLC located at 21680-21700 Haggerty Road, Northville, Michigan and constituting the Company’s headquarters or (z) that certain fee owned real property of Gentherm Properties II, LLC located at 38455 Hills Tech Drive, Farmington Hills, Michigan.

SECTION 2.6. Article VI.  A new Section 6.20 is hereby added to the Existing Credit Agreement to read as follows:

6.20 Anti-Corruption Laws.  Conduct its business in compliance with the United States Foreign Corrupt Practices Act of 1977, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Corruption of Foreign Public Officials Act (Canada), the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions and maintain policies and procedures designed to promote and achieve compliance with such laws.

SECTION 2.7. Section 7.01.

SECTION 2.7.1. Section 7.01(l) of the Existing Credit Agreement is hereby amended and restated as follows:

(l) Liens on the assets and Equity Interests of Gentherm Vietnam Co. Ltd. securing Indebtedness of Gentherm Vietnam Co. Ltd. permitted by Section 7.03(k);

SECTION 2.7.2. Section 7.01(m) of the Existing Credit Agreement is hereby amended and restated as follows:

(m) Liens on the real property owned by Westridge Haggerty LLC securing the Indebtedness permitted by Section 7.03(h); and

SECTION 2.7.3. Section 7.01 of the Existing Credit Agreement is hereby amended by (a) deleting the “and” at the end of clause (m) thereof, (b) deleting the “.” at the end of clause (n) thereof and (c) inserting a new clause (o) and clause (p) as follows:

(o) Liens on the real property owned by Gentherm Properties II, LLC securing the Indebtedness permitted by Section 7.03(j); and

(p) Liens on the assets and Equity Interests of Gentherm Macedonia DOOEL import – export Skopje securing Indebtedness of Gentherm Macedonia DOOEL import – export Skopje permitted by Section 7.03(l).

SECTION 2.8. Section 7.02.

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SECTION 2.8.1. Section 7.02(h) of the Existing Credit Agreement is hereby amended and restated as follows:

(h) Investments made in Subsidiaries of the Company that are organized in Vietnam; provided, that, the aggregate outstanding amount of such Investments made in reliance on this Section 7.02(h) and not in reliance on any other subsection of this Section 7.02 plus the aggregate outstanding amount of Indebtedness incurred in reliance on Section 7.03(k) shall not exceed $35,000,000 at any one time outstanding;

SECTION 2.8.2. Section 7.02(i) of the Existing Credit Agreement is hereby amended and restated as follows:

(i) Investments made after the Closing Date in Subsidiaries of the Company that are organized in the Ukraine or Macedonia; provided, that, the aggregate outstanding amount of such Investments made in reliance on this Section 7.02(i) and not in reliance on any other subsection of this Section 7.02 plus the aggregate outstanding amount of Indebtedness incurred in reliance on Section 7.03(l) shall not exceed $17,000,000 at any one time outstanding;

SECTION 2.8.3. Section 7.02(j) of the Existing Credit Agreement is hereby amended and restated as follows:

(j) other Investments made after the Closing Date not exceeding $20,000,000 in the aggregate at any one time outstanding anytime thereafter; provided, that, no such Investments shall be made in Subsidiaries of the Company that are organized in Vietnam, the Ukraine or Macedonia; and

SECTION 2.9. Section 7.03.

SECTION 2.9.1. Section 7.03(c) of the Existing Credit Agreement is hereby amended and restated as follows:

(c) Guarantees of the Company or any Loan Party in respect of (i) Indebtedness otherwise permitted hereunder of the Company or any other Loan Party, (ii) Indebtedness of Excluded Subsidiaries permitted by Section 7.03(g), (iii) Indebtedness of Gentherm Vietnam Co. Ltd. permitted by Section 7.03(k), and (iv) Indebtedness of Gentherm Macedonia DOOEL import – export Skopje permitted by Section 7.03(l);

SECTION 2.9.2. Section 7.03(i) of the Existing Credit Agreement is hereby amended and restated as follows:

(h) Indebtedness of Westridge Haggerty, LLC secured only by that certain fee owned real property of Westridge Haggerty, LLC located at 21680-21700 Haggerty Road, Northville, Michigan and constituting the headquarters of the Company, in an aggregate amount not to exceed $20,000,000 at any one time outstanding;

SECTION 2.9.3. Section 7.03 of the Existing Credit Agreement is hereby amended by (a) deleting the “.” at the end of clause (j) thereof, (b) restyling clause (j) as clause (i) and (c) inserting a new clause (j), clause (k) and clause (l) as follows:

(j) Indebtedness of Gentherm Properties II, LLC secured only by that certain fee owned real property of Gentherm Properties II, LLC located at 38455 Hills Tech Drive, Farmington Hills, Michigan, in an aggregate amount not to exceed $5,000,000 at any one time outstanding; and

(k) Indebtedness of Gentherm Vietnam Co. Ltd. in an aggregate principal amount not to exceed $15,000,000 at any time outstanding; and

(l) Indebtedness of Gentherm Macedonia DOOEL import – export Skopje in an aggregate principal amount not to exceed $10,000,000 at any time outstanding.

SECTION 2.10. Section 7.04.  Section 7.04 of the Existing Credit Agreement is hereby amended by (a) deleting the “and” at the end of clause (b) thereof, (b) restyling clause (c) as clause (d) and (c) inserting a new clause (c) as follows:

(c) any Disposition contemplated by Section 7.05(g); and

SECTION 2.11. Section 7.05.  Section 7.05 of the Existing Credit Agreement is hereby amended by (a) deleting the “and” at the end of clause (f) thereof, (b) restyling clause (g) as clause (h) and (c) inserting a new clause (g) as follows:

(g) the Disposition (including any sale and leaseback transaction) by (i) Westridge Haggerty LLC of the fee owned real property located at 21680-21700 Haggerty Road, Northville, Michgan and constituting the Company’s headquarters and (ii) Gentherm Properties II, LLC of the fee owned real property located at 38455 Hills Tech Drive, Farmington Hills, Michigan; and

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ARTICLE III.

CONDITION TO EFFECTIVENESS

SECTION 3.1. Conditions to Effectiveness.  This Agreement shall become effective on and as of the date first written above upon:

SECTION 3.1.1. Counterparts.  Receipt by the Administrative Agent of counterparts of this Agreement duly executed by each of the Borrowers, the New Subsidiary, the Required Lenders, the L/C Issuer and Bank of America, N.A., as Administrative Agent.

SECTION 3.1.2. New Subsidiary.  In the case of the New Subsidiary, receipt by the Administrative Agent of:

(i) Opinions of Counsel.  Favorable opinions of legal counsel to the New Subsidiary, addressed to the Administrative Agent and each Lender, dated as of the date hereof, and in form and substance reasonably satisfactory to the Administrative Agent.

(ii) Organization Documents, Resolutions, Etc.  The following, each of which shall be originals or facsimiles (followed promptly by originals), in form and substance satisfactory to the Administrative Agent and its legal counsel: (A) copies of the Organization Documents of the New Subsidiary certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state of its organization, and certified by a secretary or assistant secretary of the New Subsidiary to be true and correct as of the date hereof; (B) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the New Subsidiary as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which the New Subsidiary is a party; and (C) such documents and certifications as the Administrative Agent may reasonably require to evidence that the New Subsidiary is duly organized or formed, and that the New Subsidiary is validly existing, in good standing and qualified to engage in business in its jurisdiction or organization or formation; and

(iii) Perfection and Priority of Liens.  The following: (A) Account Control Agreements, as may be required by the Security Agreement; (B) proper financing statements in form appropriate for filing under the UCC of all jurisdictions that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Security Agreement, covering the Collateral described in the Security Agreement; (C) completed requests for information, dated on or before the date hereof, listing all effective financing statements filed in the jurisdictions referred to in clause (B) above that name the New Subsidiary as debtor, together with copies of such other financing statements; (D) certificates representing any Equity Interests required to be pledged pursuant to the terms of the Security Agreement accompanied by undated stock powers (or other transfers, stock transfer forms or the equivalent thereof) executed in blank and instruments evidencing any Indebtedness required to be pledged pursuant to the terms of the Security Agreement indorsed in blank; (E) searches of ownership of, and Liens on, intellectual property of the New Subsidiary in the appropriate governmental offices; (F) duly executed notices of grant of security interest in the form required by the Security Agreement as are necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s security interest in the intellectual property of the New Subsidiary; (G) in the case of any personal property Collateral located at a premises leased by the New Subsidiary (excluding locations owned by a Domestic Loan Party and leased to the New Subsidiary), such estoppel letters, consents and waivers from the landlords on such real property as may be required by the Administrative Agent; and (H) evidence of the completion of all other actions, recordings and filings of or with respect to the Security Agreement (including the payment of any recording or filing fees) that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created thereby.

SECTION 3.1.3. Payment of Fees and Expenses.  Receipt by Moore & Van Allen, PLLC, as counsel to the Administrative Agent, of its fees and expenses in connection with this Agreement.

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ARTICLE IV.

JOINDER OF NEW SUBSIDIARY

SECTION 4.1. Joinder of New Subsidiary.  The New Subsidiary hereby agrees with the Administrative agent, for the benefit of each Secured Party, as follows:

SECTION 4.1.1. Joinder to Guaranty.

(i) Party to Guaranty, etc.  In accordance with the terms of the Closing Date Guaranty, by execution hereof, the New Subsidiary hereby irrevocably agrees to become a U.S. Guarantor under the Closing Date Guaranty with the same force and effect as if it were an original signatory thereto and (A) agrees to be bound by and comply with all of the terms and provisions of the Closing Date Guaranty applicable to it as a U.S. Guarantor and (B) represents and warrants that the representations and warranties made by it as a Guarantor under the Closing Date Guaranty, including such representations and warranties set forth in Article III of the Closing Date Guaranty, are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of the date hereof, and further represents and warrants that this Agreement has been duly authorized, executed and delivered by the New Subsidiary and that this Agreement and the Closing Date Guaranty constitute the legal, valid and binding obligation of the New Subsidiary, enforceable against it in accordance with its terms.  In furtherance of the foregoing, each reference to a “U.S. Guarantor”, “Guarantor”, “U.S. Guarantors” and/or “Guarantors” in the Closing Date Guaranty and the other Loan Documents shall be deemed to include the New Subsidiary.

(ii) Waiver, Agreements, etc.

(A) The New Subsidiary hereby irrevocably waives promptness, diligence, presentment, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations, this Agreement and the Closing Date Guaranty and any requirement that any Secured Party protect, secure, perfect or insure any Lien, or any property subject thereto, or exhaust any right or take any action against any Loan Party or any other Person (including any other Guarantor) or entity or any Collateral securing the Guaranteed Obligations, as the case may be.

(B) The New Subsidiary understands and acknowledges that if the Secured Parties foreclose judicially or nonjudicially against any Collateral, including real property security, if any, for the Guaranteed Obligations, that foreclosure could impair or destroy any ability that such Person may have to seek reimbursement, contribution, or indemnification from the other Loan Parties or others based on any right such Person may have of subrogation, reimbursement, contribution, or indemnification for any amounts paid by such Person under this Agreement and the Closing Date Guaranty.  By executing this Agreement, each of the undersigned freely, irrevocably, and unconditionally (1) waives and relinquishes that defense and agrees that such Person will be fully liable under this Agreement and the Closing Date Guaranty even though the Secured Parties may foreclose, either by judicial foreclosure or by exercise of power of sale, any deed of trust or other Collateral Document securing the Guaranteed Obligations, (2) agrees that such Person will not assert that defense in any action or proceeding which the Secured Parties may commence to enforce this Agreement and the Closing Date Guaranty, and (3) acknowledges and agrees that the Secured Parties are relying on this waiver in creating the Guaranteed Obligations, and that this waiver is a material part of the consideration which the Secured Parties are receiving for creating the Guaranteed Obligations.

(C) The New Subsidiary waives all rights and defenses that it may have because any of the Guaranteed Obligations is secured by any Collateral, including real property, if any.  This means, among other things, that (1) the Secured Parties may collect from such Person without first foreclosing on any real or personal property Collateral pledged by the other Loan Parties, and (2) if the Secured Parties foreclose on any Collateral, including real property, if any, pledged by the other Loan Parties (x) the amount of the Guaranteed Obligations may be reduced only by the price for which that Collateral is sold at the foreclosure sale, even if the Collateral is worth more than the sale price, and (y) the Secured Parties may collect from such Person even if the Secured Parties, by foreclosing on such Collateral, have destroyed any right such Person may have to collect from the other Loan Parties.  This is an unconditional and irrevocable waiver of any rights and defenses such Person may have because any of the Guaranteed Obligations are secured by such Collateral, including real property, if any.

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(iii) Incorporation.  The provisions of Sections 6.7 thru 6.15, inclusive, of the Closing Date Guaranty are incorporated into this Agreement as if fully set forth herein, mutatis mutandis; provided that (A) references to any U.S. Guarantor shall be deemed to be references to the New Subsidiary and (B) references to the Closing Date Guaranty shall be deemed to be references to this Agreement.

SECTION 4.1.2. Joinder to Pledge and Security Agreement.

(i) Party to Security Agreement, etc.  In accordance with the terms of the Security Agreement, by execution hereof, the New Subsidiary hereby irrevocably agrees to become a Grantor under the Security Agreement with the same force and effect as if it were an original signatory thereto and the New Subsidiary hereby (a) creates and grants to the Administrative Agent, its successors and assigns, a security interest in all of the New Subsidiary’s right, title and interest in and to the Collateral to secure the payment and performance of the Obligations, (b) agrees to be bound by and comply with all of the terms and provisions of the Security Agreement applicable to it as a Grantor and (c) represents and warrants that the representations and warranties made by it as a Grantor under the Security Agreement are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of the date hereof, unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date.  In furtherance of the foregoing, each reference to a “Grantor” and/or “Grantors” in the Security Agreement shall be deemed to include each of the New Subsidiary.

(ii) Representations.  The New Subsidiary hereby represents and warrants that this Agreement has been duly authorized, executed and delivered by it and that this Agreement and the Security Agreement constitute the legal, valid and binding obligation of the New Subsidiary, enforceable against it in accordance with its terms.

(iii) Incorporation.  The provisions of Sections 7.7 thru 7.12, inclusive, of the Security Agreement are incorporated into this Agreement as if fully set forth herein, mutatis mutandis; provided that (A) references to any Grantor shall be deemed to be references to the New Subsidiary and (B) references to the Security Agreement shall be deemed to be references to this Agreement.

SECTION 4.1.3. Disclosure.

(i) The New Subsidiary has no Subsidiaries or Material Subsidiaries other than those specifically disclosed as a Subsidiary or Material Subsidiary in Part (a) of Schedule 1 attached hereto, and all of the outstanding Equity Interests (including, as reflected on Part (a) of Schedule 1, as to percentage of issued and outstanding Equity Interests of each Subsidiary owned by the New Subsidiary) in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by the New Subsidiary in the amounts specified on Part (a) of Schedule 1 attached hereto free and clear of all Liens except those created under the Collateral Documents.  The New Subsidiary has no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 1 attached hereto.  Set forth on Part (c) of Schedule 1 attached hereto is the New Subsidiary’s jurisdiction of organization (and, if different, the jurisdiction of the New Subsidiary for purposes of Sections 9-301 and 9-307 of the UCC), address of its principal place of business and U.S. taxpayer identification number.

(ii) Each location as to which a secured party would have filed a UCC financing statement in the five years prior to the date hereof to perfect a security interest in equipment, inventory and general intangibles owned by the New Subsidiary is set forth on Schedule 2 attached hereto.

(iii) The New Subsidiary does not have any trade names other than those set forth in on Schedule 3 attached hereto.

(iv) During the twelve months preceding the date hereof, the New Subsidiary has not been known by any legal name different from the one set forth on the signature page hereto, nor has the New Subsidiary been the subject of any merger or other corporate reorganization or otherwise acquired assets outside of the ordinary course of business, except as set forth on Schedule 4 attached hereto.

(v) The New Subsidiary is not a party to any federal, state or local government contract that is material to its business except as set forth on Schedule 5 attached hereto.

(vi) The New Subsidiary does not maintain any deposit accounts, securities accounts or commodity accounts with any Person, in each case, except as set forth on Schedule 6 attached hereto.

(vii) The New Subsidiary is not the beneficiary of any Letters of Credit, except as set forth on Schedule 7 attached hereto.

(viii) The New Subsidiary does not have any commercial tort claims in which a suit has been filed by the New Subsidiary in excess of $500,000, except as set forth on Schedule 8 attached hereto.

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(ix) The address of the New Subsidiary for purposes of all notices and other communications is the address designated for the Borrowers in Section 11.02 of the Credit Agreement or such other address as the New Subsidiary may from time to time notify the Administrative Agent in writing.

ARTICLE V.

MISCELLANEOUS

SECTION 5.1. Cross-References. References in this Agreement to any Article or Section are, unless otherwise specified, to such Article or Section of this Agreement.

SECTION 5.2. Loan Document Pursuant to Credit Agreement.  This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with all of the terms and provisions of the Credit Agreement, including Article XI thereof.

SECTION 5.3. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

SECTION 5.4. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 5.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 5.6. Full Force and Effect. Except as expressly amended hereby, all of the representations, warranties, terms, covenants, conditions and other provisions of the Credit Agreement and the other Loan Documents shall remain unchanged and shall continue to be, and shall remain, in full force and effect in accordance with their respective terms.  The amendments set forth herein shall be limited precisely as provided for herein to the provisions expressly amended herein and shall not be deemed to be an amendment to or modification of any other term or provision of the Credit Agreement or any other Loan Document or of any transaction or further or future action on the part of any Loan Party which would require the consent of the Lenders under the Credit Agreement or any of the Loan Documents.

SECTION 5.7. Representations and Warranties. In order to induce the Lenders to execute and deliver this Agreement, the Borrowers hereby represent and warrant to the Lenders that both before and after giving effect to this Agreement, (a) no event has occurred and is continuing which constitutes a Default or an Event of Default and (b) the representations and warranties of (i) the Borrowers contained in Article V of the Credit Agreement and (ii) each Loan Party contained in each other Loan Document or in any document furnished at any time under or in connection herewith or therewith, are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date, and except that for purposes of this Agreement, the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to, respectively, of Sections 6.01(a) and (b) of the Credit Agreement.

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8

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.

 

	
BORROWERS:
	
 
	
 
	
 
	
GENTHERM INCORPORATED,

	
 
	
  
	
 
	
  
	
a Michigan corporation

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Barry G. Steele

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Barry G. Steele

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Chief Financial Officer, Vice-President Finance

and Treasurer

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
  
	
GENTHERM (TEXAS), INC.,

	
 
	
 
	
 
	
 
	
a Texas corporation

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Barry G. Steele

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Barry G. Steele

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Chief Financial Officer and Treasurer

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
GENTHERM GMBH,

	
 
	
 
	
 
	
  
	
a German limited liability company

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Barry G. Steele

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Barry G. Steele

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Managing Director

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
GLOBAL THERMOELECTRIC INC.,

	
 
	
 
	
 
	
  
	
an Alberta corporation

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Barry G. Steele

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Barry G. Steele

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Treasurer

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
GENTHERM CANADA LTD.,

	
 
	
 
	
 
	
  
	
an Ontario corporation

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Barry G. Steele

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Barry G. Steele

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Vice-President of Finance

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
NEW SUBSIDIARY:
	
 
	
 
	
 
	
GENTHERM PROPERTIES II, LLC,

a Michigan limited liability company

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Barry G. Steele

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Barry G. Steele

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Chief Financial Officer

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
ADMINISTRATIVE AGENT:
	
 
	
 
	
 
	
BANK OF AMERICA, N.A.,

as Administrative Agent

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Denise Jones

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Denise Jones

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Assistant Vice President

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
LENDERS:
	
 
	
 
	
 
	
BANK OF AMERICA, N.A.,

as a Lender and L/C Issuer

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
  
	
/s/ Gregory J. Bosio

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Gregory J. Bosio

	
 
	
 
	
 
	
 
	
Title:
	
 
	
Vice President

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
 
	
 
	
JPMORGAN CHASE BANK, N.A.,

as a Lender

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
  
	
/s/ Wieslaw R. Sliwinski

	
 
	
 
	
Name:
	
 
	
Wieslaw R. Sliwinski

	
 
	
 
	
Title:
	
 
	
Authorized Signer

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
 
	
 
	
HSBC BANK USA, NATIONAL ASSOCIATION,

as a Lender

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
  
	
/s/ Gregory R. Duval

	
 
	
 
	
Name:
	
 
	
Gregory R. Duval

	
 
	
 
	
Title:
	
 
	
Senior Vice President

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
 
	
 
	
COMERICA BANK,

as a Lender

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
  
	
/s/ Nicole Swigert

	
 
	
 
	
Name:
	
 
	
Nicole Swigert

	
 
	
 
	
Title:
	
 
	
Vice President

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
 
	
 
	
THE HUNTINGTON NATIONAL BANK,

as a Lender

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
  
	
/s/ Dan Swanson

	
 
	
 
	
Name:
	
 
	
Dan Swanson

	
 
	
 
	
Title:
	
 
	
Staff Officer

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

	
 
	
 
	
KEYBANK NATIONAL ASSOCIATION,

as a Lender

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
  
	
/s/ Brandon Welling

	
 
	
 
	
Name:
	
 
	
Brandon Welling

	
 
	
 
	
Title:
	
 
	
Vice President

 

 

 

GENTHERM INCORPORATED

FIRST AMENDMENT TO CREDIT AGREEMENT

 

Schedule 1

Subsidiaries

Part (a):

None.

Part (b):

None.

Part (c):

Michigan

21680 Haggerty Road, Northville, Michigan 48167

The New Subsidiary does not have a U.S. taxpayer identification number, it utilizes the U.S. taxpayer identification number of its sole member, the Company, which is 95-4318554.

 

 

 

 

 

Schedule 2

Filing Locations (Last 5 Years)

Michigan.

 

 

 

 

 

Schedule 3

Trade Names

None.

 

 

 

 

 

Schedule 4

Changes in Name; Merger or Other Reorganization

None.

 

 

 

 

 

Schedule 5

Government Contracts

None.

 

 

 

 

 

Schedule 6

Deposit Accounts; Securities Accounts; Commodity Accounts

Comerica Bank Checking Account #1853116901.

 

 

 

 

 

Schedule 7

Letter of Credit Rights

None.

 

 

 

 

 

Schedule 8

Commercial Tort Claims

None.CNSI - 1.31.2015 - Exhibit 10.20

Exhibit 10.20
        
November 7, 2014    

Narasimha (Gani) Nayak
By Electronic Delivery

Dear Gani:

This letter agreement and general release (this “Letter”) summarizes the terms of separation that Comverse, Inc., on behalf of itself and its subsidiaries (collectively, the “Company” or the “Group Companies”) is willing to offer you. You are referred in some instances in this Letter as the “Executive.” Please read this Letter, which includes a general release, carefully.  If you agree to its terms, please sign in the space provided below where it indicates “Executive Acceptance” and return it to Kathleen Harris, Comverse, Inc., 200 Quannapowitt Parkway, Wakefield, MA 01880 within the time period set forth herein so that your separation benefits can begin.  

Your employment terms under which you have been employed to date are set forth in an employment letter dated October 3, 2012, between you and the Company (the “Employment Agreement”).  Capitalized terms used but not otherwise defined herein, shall have the meaning ascribed thereto in the Employment Agreement.

1.Regardless of whether you sign this Letter, your employment with the Company is terminated effective December 8, 2014 (the “Separation Date”). You will be paid for time worked through the Separation Date and for any unused and accrued PTO (if any) as of the Separation Date, less lawful deductions.  

2.After the Separation Date, except as provided below, you will not be entitled to receive any benefits paid by, or participate in any benefit programs offered by, the Company to its employees. You will receive, under separate cover, information concerning your right to continue your health insurance benefits after that date in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  

3.In consideration for and in compliance with the representations and  promises made herein, and in the event you sign this Letter and Exhibit A “Waiver and Release Agreement” and return it to the Company within the time period set forth in this Letter and do not revoke your acceptance of this Letter pursuant to section 10 below, the Company will pay you, subject to section 8, the following:

		
	a.
	an aggregate gross amount of $450,000, less lawful deductions, payable as follows: (i) $50,000, less lawful deductions, on the later of (a) the first payroll date after the expiration of the seven (7) day revocation period described in Section 10 and (b) January 16, 2015, (ii) $175,000, less lawful deductions, payable on February 13, 2015, (iii) $75,000 on May 8, 2015, (vi) $50,000 on August 14, 2015 and (v) $100,000 on December 4, 2015.     

		
	b.
	a pro-rata portion of your Cash  Bonus for  the fiscal year ending January 31, 2015 (determined by multiplying the amount of the Cash Bonus you would have been entitled to receive for the full fiscal year ending January 31, 2015 based on actual company and individual performance, by a fraction, the numerator of which is the number of days during the fiscal year ending January 31, 2015 that you were employed with the Company and the denominator of which is 365), less lawful deduction, payable only if any annual bonus is paid to other Company executives.  If payment of annual cash bonuses for the fiscal year ending January 31, 2015 is 

made to Company executives, any payment of a Cash Bonus to you will be made at the same time as such payment is made to executives of the Company, but in no event later than April 15, 2015.    
		
	c.
	in respect of equity, (i) shares to be issued to you upon vesting and settlement of certain of your restricted stock unit awards (“RSUs”) as of the Separation Date as set forth in Exhibit B hereto, and (ii) vesting as of the Separation Date of certain of your stock option awards as set forth in Exhibit B hereto.     Any vested stock option may be exercised by you following the Separation Date subject to and in accordance with the terms of the Employment Agreement and the applicable stock option award agreement.     For the avoidance of doubt, the number of vested RSUs and stock options set forth in Exhibit B shall be in addition to your RSUs  and options (or other equity grants) that have vested, or shall be vested, prior to the Separation Date.     

		
	d.
	Provided that you properly elect to continue your health coverage under COBRA, the Company will contribute toward the cost of your COBRA premiums in the same amount as if you were actively employed (provided that you timely pay your portion of such COBRA premium), with such contribution ending on the earlier of (i) 12 months from the Separation Date; or (ii) the date on which you become eligible for coverage under the group health plan of another employer.  Thereafter, you will be personally responsible for the full cost of any COBRA premiums.   You agree to notify the Company immediately upon becoming eligible for coverage under the group health plan of another employer during the period in which the Company is contributing toward the cost of your COBRA coverage.  Such payments by the Company will be treated as taxable income to you and amounts will be withheld from the severance payments under Section 3(a) to cover the Company’s tax withholding obligation with respect to these payments.   

4.You understand and agree that you would not receive the funds and other consideration specified in section 3 above except in consideration for your execution of this Letter and Waiver and Release Agreement and the fulfillment of the promises contained herein. 

5.By signing this Letter, you expressly affirm and acknowledge the following:    
         
a.      Nothing in this Letter (or Exhibit A) limits your right, where applicable, to file or participate in an investigative proceeding of any federal, state or local governmental agency, provided, however, that by signing this Letter, you waive the right to seek or receive any money damages based upon any claim that might be asserted arising out of your employment at the Company or separation therefrom; and    

     b.    You have been paid and have received all leave (paid or unpaid), compensation, wages, bonuses, commissions, relocation costs, and/or benefits to which you may be entitled and that no other leave (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits are due to you, except as provided in this Letter (including but not limited to continued payment and entitlement to all amounts, vesting and benefits to which you are entitled as an employee through the Separation Date); and      

c.    You have no known workplace injuries or occupational diseases; and

d.    You have not been retaliated against for reporting any allegations of wrongdoing by the Company or its officers, including any allegations of corporate fraud; and 

e.    All decisions regarding your pay and benefits through the date of your execution of this Letter were not discriminatory based on age, disability, race, color, sex, religion, national origin or any other classification protected by law.    
    
f.           As of the date hereof, you are in full compliance with the obligations set forth in Section 8 of the Employment Agreement.    

g.      You are not entitled to receive any additional Severance Payments under Section 6 of the Employment Agreement.     
    
6.    You acknowledge that the Company will be required to publicly disclose this Letter and its terms in accordance with its reporting obligations under applicable securities laws.

            7.      You hereby acknowledge and reaffirm the validity of the post-employment obligations contained in any agreement you executed with the Company relating to non-competition, non-solicitation, confidentiality, assignment of inventions, and non-disparagement, including the provisions set forth in Section 8 of the Employment Agreement, which for the avoidance of any doubt, are incorporated herein by reference and continue to apply and be in full force and effect following the termination of Executive’s employment in accordance with their terms. You further agree that you shall abide by any and all common-law and statutory obligations relating to protection and non-disclosure of trade secrets and confidential and proprietary documents and information.  You agree not to erase or destroy, and to return to the Company on or before the Separation Date, all documents (and any hard or computer copies thereof and including, without limitation, all confidential information of the Group Companies) and property of any kind or nature (including, without limitation, any and all personnel documents, employee or consumer lists, and personnel manuals) that belong to the Group Companies.  You also agree to return all Company access cards, credit cards and/or equipment to the Company on or before the Separation Date.  You understand that the Company would not provide you with the monies and benefits under this Letter but for your reaffirmation of your post-employment obligations and your other representations contained in this Letter.  Your expenses related to your participation in future investigations or cases on behalf of the Company will be reimbursed by the Company.
       
 8.    In further consideration for the monies and other benefits provided to you in this Letter, you agree to the following:

		
	a.
	You shall not, use or disclose to any third party any Confidential Information for any reason or purpose whatsoever without the express written consent of the Company; and

		
	b.
	You agree that you shall observe in strict compliance the provisions of Section 8 of the Employment Agreement.  For the sake of clarity and for removal of doubt, without derogating from Section 8 of the Employment Agreement, you agree that (i) Executive working for, or (ii) any  involvement of the Executive with, or the provision of services or other engagement by the Executive with, a business unit or division of Ericsson, NetCracker Technology Corp,  Mavenir Systems, Inc. or Metaswitch Networks, their respective affiliates, parents and subsidiaries, or any entity in such competitors’ group, which engages in a “Competitive Business” (as defined by the Employment Agreement) before the lapse of one (1) year from the Separation Date, shall be regarded as a breach of the Employment Agreement, this Letter and any agreement you executed with the Company relating to inventions, confidentiality, non-disclosure, non-solicitation and/or non-competition.

You agree that the limitations set forth in this section 8 (including Section 8 of the Employment Agreement) are reasonable given the highly competitive nature of the Company's business and are required for the Company's protection based upon numerous factors, including the knowledge and information to which you have had access during your employment with the Company.  In the event that any court of competent jurisdiction determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, you agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable.  You acknowledge that a breach of this section 8 (including Section 8 of the Employment Agreement) will cause irreparable harm to the Company that would be difficult to quantify and for which money damages would be inadequate.  As a result, you agree that in the event of such a breach or threat of such a breach the Company shall, in addition to any other remedies available to it, have the right to injunctive relief, without the necessity of posting a bond.

You further understand and agree that your foregoing obligations under this section 8 (including all subparts and Section 8 of the Employment Agreement) and the representation set forth in section 5.f. are material terms of this Letter, and that in the event you breach any of your obligations under section 8 of this Letter (including any of your obligations under Section 8 of the Employment Agreement which is incorporated herein by reference) or the representation set forth in section 5.f., (i) the Company shall have the right, in addition to any other damages, to cease making any payments due hereunder, and (ii) you shall be obligated to return to the Company the consideration paid hereunder (without impacting the validity or enforceability of the general release contained herein); provided, however, that prior to asserting any such rights under clauses (i) and (ii) of this paragraph, the Company shall provide you with written notice identifying with reasonable specificity the facts and circumstances alleged to constitute a violation of Section 8 of the Employment Agreement or this paragraph, and providing you not less than 10 days to cure or cease and desist from such alleged violation. Notwithstanding the forgoing, nothing herein shall serve or be deemed or construed to impede, hinder or delay the Company’s right to initiate legal proceedings in law or in equity (including injunctive relief). You acknowledge and agree that the Company’s subsidiaries and other affiliates are intended third party beneficiaries of this section 8.

9.    You will have up to twenty-one (21) days from your receipt of this Letter signed by the Company to consider the meaning and effect of this Letter.  You are advised to consult with an attorney and you acknowledge that you have had the opportunity to do so.  You agree that any modifications to this Letter, material or otherwise, do not restart or affect in any manner the 21-day consideration period.  If you do not sign and return this Letter within the 21-day consideration period, the Company’s offer to provide you with the monies and/or other benefits set forth in this Letter will expire and be deemed null and void.  
     10.       You may revoke your acceptance of this Letter (including the general release contained in Exhibit A) for a period of seven (7) days following the day you execute and deliver this Letter to the Company.  Any revocation within this period must be submitted, in writing, to Kathleen Harris, Senior Vice President, Human Resources and state, “I hereby revoke my acceptance of the Letter dated November 7, 2014” The revocation must be personally delivered to Kathleen Harris, Comverse, Inc., 200 Quannapowitt Parkway, Wakefield, MA 01880, and/or postmarked within seven (7) days of execution of this Letter.  This Letter shall not become effective or enforceable until the applicable revocation period has expired.  If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Massachusetts or the state in which you are based, then the revocation period shall not expire until the next following day which is not a Saturday, Sunday, or legal holiday.

11.    On the Separation Date, the unvested portion of any stock options, RSUs or any other equity securities previously awarded to you shall be immediately forfeited and canceled unless otherwise stated herein or in the applicable award agreement. The treatment of the vested portion of your stock options, RSUs 

or other equity securities, if any, upon termination of your employment shall be subject to the terms of the applicable equity incentive plan and award agreements.  Without derogating from the generality of the preceding sentence, tax withholding in the amount necessary to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to the delivery of shares in settlement of RSUs shall be made by the Company withholding shares otherwise deliverable in settlement of the RSU having a fair market value on the vesting date equal to the minimum statutory total tax that could be imposed on the transaction.
12.    This Letter (including Exhibit A) may not be modified, altered, or changed except upon express written consent of both parties wherein specific reference is made to this Letter.  This Letter (including Exhibit A) shall in all respects be interpreted, governed and enforced by the laws of the Commonwealth of Massachusetts without reference to the principles of conflicts of law thereof.   Any claims or causes of action which arise out of this Letter (including Exhibit A) shall be instituted and litigated only in, and you voluntarily submit to the jurisdiction over your person by a court of competent jurisdiction located within the Commonwealth of Massachusetts.   Both you and the Company expressly waive the right, if any, to a trial by jury with respect to any dispute arising out of or relating to this Letter (including Exhibit A).  
13.    You agree that this Agreement will inure to the benefit of the Company, its successors and assigns.  This Agreement may be assigned in whole or in part by the Company to a successor to all or substantially all of the business or assets of the Company; or to any parent, division or part of the Company; or to any subsidiary, affiliate or division or to any entity that is majority owned by the Company or its parent, subsidiaries, divisions or affiliates.  It is agreed that a waiver by either party of a breach of any provisions of this Agreement must be in writing and signed by the waiving party and shall not operate or be construed as a waiver of any subsequent breach by the same party.
14.    In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid, illegal, or other unenforceable provision had never been contained herein.  If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope or subject, it shall be construed by limiting it and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.
15.    This Letter represents the complete agreement between you and the Company, and fully supersedes any prior agreements or understandings between the parties including the Employment Agreement except (i) that your obligations under Section 8 (Restrictions on Activities of Executive) and Section 9 of the Employment Agreement as modified herein shall continue to apply, except that any references to Comverse Technology, Inc. or Parent in such section shall be eliminated or (ii) as specifically stated otherwise herein.  You acknowledge that you have not relied on any representations, promises, or agreements of any kind made to you in connection with your decision to sign this Letter and general release, except those set forth herein.
16.    No later than ten (10) days after the expiration of the seven (7) day revocation period described in Section 10 and receipt of an invoice, the Company shall pay your attorney’s fees associated with the negotiation and execution of this Letter (and Exhibit A), by issuing a check in the amount of Ten Thousand Dollars ($10,000) payable to Shilepsky Hartley Robb LLP.

Comverse would like to extend its appreciation to you for your past service, and its sincere hope for success in your future endeavors.

                        
Very truly yours,

Comverse, Inc.

/s/ Kathleen Harris
Kathleen Harris
                         Senior Vice President, Human Resources

EXECUTIVE ACCEPTANCE:

Having elected to execute this Letter, which includes Exhibit A “Waiver and Release Agreement” to fulfill the promises set forth herein, and to receive thereby the sums and benefits set forth in section 3 above, you freely and knowingly, and after due consideration, enter into this Letter intending to waive, settle, and release all claims you have or might have against the Group Companies through the date hereof. 

Date: November 7, 2014        /s/ Narasimha (Gani) Nayak 
Narasimha (Gani) Nayak 

EXHIBIT A

WAIVER AND RELEASE AGREEMENT

This Waiver and Release Agreement (hereinafter “Release”) is entered into among Narasimha (Gani) Nayak (hereinafter “Executive”), and Comverse, Inc. (the “Company”). 

WHEREAS, the Company and the Executive previously entered into an employment letter dated October 3, 2012, between you and the Company (the “Employment Agreement”); and

WHEREAS, Executive’s employment with the Company will be terminated effective December 8, 2014. 

NOW THEREFORE, in consideration of certain payments and benefits under his Employment Agreement and the letter agreement and general release between the parties dated November 7, 2014 to which this Release is attached (the “Letter”), Executive and the Company agree as follows:     

		
	1.
	Executive expressly waives and releases the Company and its affiliates, their respective affiliates and related entities, parent corporations and subsidiaries, and all current and former directors, administrators, supervisors, managers, agents, officers, partners, stockholders, attorneys, insurers and employees of the Company and their affiliates, related entities, parent corporations and subsidiaries, and their successors and assigns, from any and all claims, actions, and causes of action, at law or in equity, known or unknown, including those directly or indirectly relating to or connected with Executive’s employment with the Company or termination of such employment including but not limited to any claim related to additional compensation, any claim or right to receive equity securities of the Company (if any) and any and all claims under the National Labor Relations Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; Sections 1981 through 1988 of Title 42 of the United States Code, as amended; the Age Discrimination in Employment Act of 1967, as amended; the Older Workers Benefit Protection Act; the Immigration Reform Control Act, as amended; the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq.; the Occupational Safety and Health Act, as amended; the Civil Rights Act of 1866, 29 U.S.C. § 1981, et seq; the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq.; the Americans With Disabilities Act of 1990, as amended; the Civil Rights Act of 1991; the Family and Medical Leave Act; the Equal Pay Act;  the Genetic Information Nondiscrimination Act (“GINA”); the Massachusetts Law Against Discrimination, G.L. c. 151B;  the Massachusetts Wage Payment Statute, G.L. c. 149, §§ 148, 148A, 148B, 149, 150,150A-150C, 151, 152, 152A, et seq.; the Massachusetts Wage and Hour laws, G.L. c. 151§1A et seq.; the Massachusetts Privacy Statute, G.L. c. 214, § 1B; the Massachusetts Sexual Harassment Statute, G.L. c. 214 § 1C; the Massachusetts Civil Rights Act, G.L. c. 12, § 11H; the Massachusetts Equal Rights Act, G.L. c. 93, § 102; the Illinois Human Rights Act, 775 I.L.C.S. §§ 5/1-101 et seq.;  the Illinois statutory provision regarding retaliation/discrimination for filing a workers’ compensation claim, 820 I.L.C.S. § 305/4(h);  the Illinois Equal Pay Act, 820 I.L.C.S. §§ 110/1 et seq.;  the Illinois Equal Wage Act, 820 I.L.C.S. §§ 112/1 et seq.;  the Illinois Wage Payment and Collection Law, 820 I.L.C.S. §§ 110/1 et seq.;  the Illinois Minimum Wage Law, 820 I.L.C.S. §§ 105/1 et seq.;  the Illinois One Day Rest in Seven Act, 820 I.L.C.S. §§ 140/1 et seq.; the Illinois Eight Hour Day Act, 820 I.L.C.S. §§ 145/1 et seq.;  the Illinois Family Military Leave Act, 820 I.L.C.S. §§ 151/1 et seq.; the Illinois Worker Adjustment and Retraining Notification Act, 820 I.L.C.S. §§ 65/1 et seq.; the Illinois Health and Safety Act, 820 I.L.C.S. §§ 225/1 et seq.; the Illinois Whistleblower Protection Act, 5 I.L.C.S. §§ 395/1 et seq. (public employers only);  the Illinois Whistleblower Act - 740 ILCS §§ 

174 et seq.;  the Illinois School Visitation Rights Act, 820 I.L.C.S. §§ 147/1 et seq.; the Illinois AIDS Confidentiality Act, 410 I.L.C.S. § 305;  the Illinois Right to Privacy in the Workplace Act, 820 I.L.C.S. §§ 55/1 et seq.;  the Illinois Genetic Information Privacy Act, 410 I.L.C.S. §§ 513/5 et seq.; the Illinois Personnel Record Review Act, 820 I.L.C.S. §§ 40/0.01 et seq.; the Illinois Victims’ Economic Safety and Security Act, 820 ILCS §§ 180/1 et seq., as such Acts have been amended, and all other forms of employment claims whether under federal, state or local statute or ordinance, wrongful termination, retaliatory discharge, breach of express implied, or oral contact, interference with contractual relations, defamation, intentional infliction of emotional distress and any other tort or contact claim under common law of any state or for attorneys’ fees, based on any act, transaction, circumstance or event arising up to and including the date of Executive’s execution of this Release; provided, however, nothing herein shall limit or impede Executive’s right to file or pursue an administrative charge with, or participate in, any investigation before the Equal Employment Opportunity Commission (“EEOC”), or any similar local, state or federal agency.  Executive agrees, however, that if Executive or anyone acting on Executive’s behalf, brings any action concerning or related to any cause of action or liability released in this Release or the Letter, Executive waives any right to, and will not accept, any payments, monies, damages, or other relief, awarded in connection therewith.  Notwithstanding the foregoing, nothing in this paragraph is intended to act as a release of any claim you may have for workers’ compensation benefits, unemployment insurance benefits, any right to indemnification or directors’ and officers’ liability insurance coverage to which you are otherwise entitled, any right you may have under the Letter, as well as any other claims that cannot lawfully be released. 

		
	2.
	Executive acknowledges: (a) that Executive is advised in writing hereby to consult with any attorney before signing this Release, and (b) that Executive has had at least twenty-one (21) days after receipt to consider whether to accept or reject this Release.  Executive understands that Executive may sign this Release prior to the end of such twenty-one (21) day period, but is not required to do so.  In addition, Executive has seven (7) days after Executive signs this Release to revoke it as provided for in the Letter.  If Executive revokes this Release as provided herein, it shall be null and void and Executive shall not be entitled to the monies and/or benefits provided for in the Letter.  

		
	3.
	Executive and the Company agree that neither this Release nor the performance hereunder constitutes an admission by the Company of any violation of any federal, state or local law, regulation, or common law, or any breach of any contract or any other wrongdoing of any type. 

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS FULL READ AND FULLY UNDERSTANDS THIS RELEASE; AND THAT EXECUTIVE ENTERED INTO IT FREELY AND VOLUNTARILY AND WITHOUT COERCION OR PROMISES NOT CONTAINED IN THIS RELEASE.

EXECUTIVE

/s/ Narasimha (Gani) Nayak
Narasimha (Gani) Nayak

Comverse, Inc.

		
	By: 
	/s/ Kathleen Harris

Name: Kathleen Harris
Title:  Senior Vice President, Human Resources

EXHIBIT B

	
			
	Security
	Date of Grant
	No. of Securities to Vest on Separation Date

	Stock Option
	December, 5, 2012
	4,616

	Stock Option
	June 21, 2013
	3,093

	Stock Option
	June 25, 2014
	3,534

	 
	 
	 

	Performance Restricted Stock Unit
	June 21, 2013
	0

	 
	 
	 

	Restricted Stock Unit
	December, 5, 2012
	1,596

	Restricted Stock Unit
	June 21, 2013
	1,068

	Restricted Stock Unit
	June 25, 2014
	1,223

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00243-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00243-of-00352.parquet"}]]