Document:

Exhibit 10.48 

The Directors 

Powell (UK) Limited 

Ripley Road 

Bradford 

West Yorkshire 

BD4 7EH 

29 August 2014 

Dear Sirs 

HSBC Bank plc (the Bank) is pleased to offer Powell (UK) Limited (the Borrower) the facilities referred to below (each a Facility and together the Facilities) on and subject to the terms set out in this letter (the Facility Letter). 

The Bank recommends that the Borrower seek independent advice before accepting the offer in the Facility Letter. 

Facilities 

Drawings may be made under the following Facilities, provided that the aggregate amount of drawings (or Sterling Equivalent (as defined in the General Terms and Conditions attached) as appropriate) does not at any time go over the relevant Limit, unless we agree otherwise. 

 

	
 
	
  
	
Limit
	
 

	
Forward Exchange Contracts and Currency Options 
	
  
	
 
	
USD 4,500,000
	
 

	
 
	
 
	
 
	
 
	
 

	
Engagements including Bank Guarantees
	
  
	
 
	
£5,000,000
	
  

	
 
	
 
	
 
	
 
	
 

	
Foreign Bills/Cheques for Negotiation
	
  
	
 
	
£100,000
	
  

	
 
	
 
	
 
	
 
	
 

	
Import Line comprising:
	
  
	
 
	
£300,000
	
  

	
Documentary Credits
	
  
	
 
	
 
	
 

Please refer to the relevant Schedule to the Facility Letter for details of the sub-limit (the Sub-Limit) which apply to the Option within the Import Line Facility. 

Availability 

The Bank may at any time withdraw the Facilities and/or demand repayment of all sums owing to it. Subject to this, the Facilities are due for review by 30 July 2015. 

The Borrower may, at any time, repay the amount owing to the Bank, together with any interest and charges owing, and tell the Bank, in writing, that all or any of the Facilities are no longer required. 

Forward Exchange Contracts and Currency Option Facility 

Details of the Forward Exchange Contracts and Currency Option Facility are set out in the Forward Exchange Contracts and Currency Option Facility Schedule. 

Engagements and Foreign Bills/Cheques for Negotiation Facilities 

Details of the Engagements and Foreign Bills/Cheques for Negotiation Facilities are set out in the Engagements and Foreign Bills/Cheques for Negotiation Facilities Schedule. 

Import Line Facility 

Details of the Import Line Facility, including the rates of interest payable on this Facility are set out in the Import Line Facility Schedule. 

1

 

Fees 

An arrangement fee of £20,000 will be payable by the borrower upon acceptance of the Facility Letter. 

All other fees, costs and expenses mentioned in the General Terms and Conditions attached will be payable by the Borrower. 

Security 

The Borrower’s obligations to the Bank under the Facility Letter will be secured by: 

	
(a)
	
all existing security (if any) and any future security held by the Bank for those obligations; and 

	
(b)
	
security in the Bank’s preferred form as set out in the Security Schedule, 

(together the Security). 

The Security is required as a secondary source of repayment in the event that the Borrower fails to repay the Facilities as set out in the Facility Letter. 

The Bank is entitled at any time, at the Borrower’s expense, to obtain further valuations of any assets/properties charged to secure: 

	
(a)
	
the Borrower’s obligations to the Bank; and/or 

	
(b)
	
a guarantor’s obligations under any guarantee which is taken to secure the Borrower’s obligations to the Bank. 

Pre-Drawdown Conditions 

The Facilities will not become available until the conditions set out in the Pre-Drawdown Conditions Schedule (the Pre-Drawdown Conditions) have been complied with to the satisfaction of the Bank. 

Undertakings and Representations 

Without affecting the Bank’s right at any time to withdraw the Facilities and/or demand repayment of all sums owing to it, the Borrower will: 

	
(a)
	
give the undertakings (the Undertakings) set out in the Undertakings Schedule to the Bank which will remain in force until the Facilities have been repaid in full; and 

	
(b)
	
make the representations and warranties set out in the Representations Schedule to the Bank. 

Terms and Conditions 

Further details of the terms and conditions that apply to the Facilities are set out in the General Terms and Conditions and the Facilities Schedules attached to the Facility Letter. The General Terms and Conditions and the terms and conditions applying to the Facilities Schedules are incorporated into the Facility Letter. 

The Facilities are also subject to the Business Banking Terms and Conditions, as published from time to time, and a further copy of which is available on request. If there is any conflict between Business Banking Terms and Conditions and the terms of the Facility Letter (including the General Terms and Conditions and the Facility Schedules attached), the terms of the Facility Letter will prevail. 

The Bank may, at its discretion, change any of the provisions of the Facility Letter (including interest rates, fees and/or the General Terms and Conditions attached), including so as to reflect increased risk to the Bank as a result of a change in the Borrower’s circumstances and/or if the cost to the Bank of monitoring and/or administering the Facility increases by giving (except in the case of changes to the interest rate) at least 30 days’ written notice to the Borrower. Changes to third party published interest rate (such as the Bank of England Base Rate or LIBOR) take effect within one working day of the change being published. For changes to all other interest rates (including without limitation the margin by which interest payable exceeds a prevailing third party published interest rate), the Bank will give at least 2 months’ notice if the Borrower is a micro-enterprise or small charity (as defined in the Business Banking Terms and Conditions) or at least 30 days’ notice if the Borrower is neither a micro-enterprise nor a small charity. 

The Bank may introduce new fees in relation to the Facility if the risk to the Bank of making the Facility available to the Borrower increases as a result of a change in the Borrower’s circumstances and/or if the cost to the Bank of monitoring and/or administering the Facility increases. If the Bank intends to introduce new fees written notice will be sent to the Borrower at least 30 days before the introduction of those fees. 

2

 

Renewal 

The Facility Letter replaces any previous facility letter issued by the Bank in connection with the Facilities and from the date of acceptance of the Facility Letter any such previous facility letter will be withdrawn and all existing liabilities in respect of the Facilities will be governed by the terms and conditions in the Facility Letter. 

Acceptance 

To accept this offer please arrange for the enclosed copy of the Facility Letter to be signed and returned to the address above to arrive no later than 60 days from the date of the Facility Letter. If not accepted within this period, the offer will lapse. 

Yours faithfully 

N Rochester 

Senior Corporate Banking Manager 

For and on behalf of HSBC Bank plc 

 

	
Schedules:
	
  
	
 
	
Forward Exchange Contracts and Currency Option Facility Schedule
	
 

	
 
	
  
	
 
	
Engagements including Bank Guarantees and Foreign Bills/Cheques for Negotiation Facilities Schedule
	
 

	
 
	
  
	
 
	
Import Line Facility Schedule
	
 

	
 
	
  
	
 
	
Security Schedule
	
 

	
 
	
  
	
 
	
Pre-Drawdown Conditions Schedule
	
 

	
 
	
  
	
 
	
Undertakings Schedule
	
 

	
 
	
  
	
 
	
Representations Schedule
	
 

	
 
	
  
	
 
	
General Terms and Conditions
	
 

 

 

 

3

 

Forward Exchange Contracts and Currency Option Facility Schedule 

	
1
	
Drawings 

	
(a)
	
This Facility may be used for the purpose of spot and forward foreign exchange transactions and for currency options. 

	
(b)
	
The Bank may in its discretion decide whether or not this Facility may be utilised and may specify pre-conditions to such utilisation. 

	
2
	
International Foreign Exchange Market Master Agreement (IFEMA) Terms International Currency Options Market Master Agreement (ICOM) Terms 

	
(a)
	
Notwithstanding any non-execution of product documentation: 

	
(i)
	
each foreign exchange utilisation will be deemed to be subject to and will be subject to the terms of IFEMA; and 

	
(ii)
	
each currency option utilisation will be deemed to be subject to and will be subject to the terms of ICOM. 

	
(b)
	
If there is any conflict between the terms of the Facility Letter and those of IFEMA or ICOM, the terms of IFEMA or ICOM (as appropriate) will prevail, except in respect of any provisions in this Forward Exchange Contracts and Currency Option Facility Schedule which are expressed to be additional to or in replacement for any relevant IFEMA or ICOM provisions. 

	
(c)
	
Copies of IFEMA and ICOM terms are available from the Bank on request. 

	
(d)
	
Unless there is agreement in writing to the contrary, while this option is in force, the terms of the Facility Letter and particularly the terms of (a) and (b) above will continue to apply notwithstanding any pre-existing product documentation. 

	
3
	
Financial Services and Markets Act 2000 

No forward purchase or sale of any currency may be made for investment purposes (as mentioned in article 84 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001) without the Bank’s prior written consent. 

	
4
	
Contract Periods 

Without affecting any of the Bank’s rights under the Facility Letter, the duration of any foreign exchange transaction or currency option entered into under this Facility will not exceed twelve months. 

	
5
	
Settlement Limit 

Without affecting any of the Bank's rights under the Facility Letter, the maximum amount for delivery for value on any one day shall not at any time exceed USD 1,800,000 (or its Sterling Equivalent as appropriate).

 

 

 

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Engagements INCLUDING BANK GUARANTEES and 

Foreign BILLS/Cheques for Negotiation Facilities Schedule 

	
1
	
Drawings 

	
(a)
	
Each drawing under these Facilities will be made in accordance with and subject to the Bank’s current practice from time to time. Such practice will be explained on request as drawings are requested. 

	
(b)
	
The Bank may in its discretion decide whether or not a drawing may be made under any of these Facilities and may specify pre-conditions to such drawing. 

	
(c)
	
Without prejudice to the foregoing, the Borrower agrees, acknowledges and authorises that any request for a drawing under the Engagements Facility will require the: 

	
(i)
	
completion of an application form in paper or electronic format and submitted to the Bank by delivery method(s) agreed with the Bank, and, where required by the Bank, following execution of: (A) any agreement(s) for or relating to use of the Bank’s electronic banking services, and/or (B) a fax indemnity (as the case requires); and 

	
(ii)
	
provision of a counter-indemnity, either by execution (on a request by request basis) of the counter-indemnity appearing overleaf on paper format application form, or by execution of an omnibus counter-indemnity (at the Borrower’s election, except that the execution of an omnibus counter-indemnity will be mandatory before any application can be submitted using the Bank’s electronic banking services), 

in each case, in the Bank’s preferred form current from time to time. 

	
(d)
	
The Borrower agrees and authorises that any application form, and all such other documents the Bank may require completed in relation thereto, may be completed, and any issuance instructions may be given, from time to time: 

	
(i)
	
by any persons authorised to instruct the Bank to make payments on behalf of the Borrower, in the amount of the relevant instrument, under the terms of the account mandate provided to the Bank by the Borrower and then current; or 

	
(ii)
	
upon receipt of an executed omnibus counter-indemnity supporting applications made from time to time using any of the Bank’s electronic banking services, by any persons authorised or purporting to be authorised to instruct the Bank by electronic means as empowered in accordance with the agreement(s) between the Borrower and the Bank relating to the Borrower’s use of the electronic banking services and that any of such persons be authorised to agree with the Bank through any such electronic banking services the terms and conditions relating to such issued instrument from time to time. 

	
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Bills and Termination 

Following demand for repayment, the Bank may require the Borrower to pay to the Bank monies equivalent in amount to the aggregate of the face value of all outstanding documentary letters of credit and bills accepted, purchased, negotiated or discounted by the Bank to meet such documentary letters of credit and bills on their maturities. 

	
3
	
Recourse 

Any drawings under these Facilities are made with recourse to the Borrower and will be subject to the Bank’s right at any time to demand immediate repayment of all sums owing to it. 

 

 

 

5

 

IMPORT LINE FACILITY SCHEDULE 

	
1
	
Options 

This Facility comprises a Documentary Credits Option (the Option). 

	
2
	
Drawings 

	
(a)
	
Each drawing under this Facility will be made in accordance with and subject to the Bank’s current practice from time to time. Such practice will be explained on request as drawings are requested. 

	
(b)
	
The Bank may in its discretion decide whether or not a drawing may be made under this Facility and may specify pre-conditions to such drawing. 

	
3
	
Documentary Credits Option 

	
(a)
	
Without prejudice to the foregoing, the Borrower agrees, acknowledges and authorises that a request for a drawing under this Facility will require completion of an application form in paper or electronic format and submitted to the Bank by delivery method(s) agreed with the Bank, and, where required by the Bank, following execution of: (A) any agreement(s) for or relating to use of the Bank’s electronic banking services, and/or (B) a fax indemnity (as the case requires). 

	
(b)
	
The opening by the Bank of a documentary letter of credit (“Credit”) will constitute a drawing under this Import Option for the full amount of such Credit. 

	
(c)
	
The Borrower agrees and acknowledges that any Credit issued by the Bank shall be subject to the Bank’s terms and conditions applicable from time to time to the issue of a Credit, as set out in the Bank’s preferred form of application form (whether in paper or electronic format). 

	
(d)
	
The Borrower agrees and authorises that any application form, and all such other documents the Bank may require completed in relation thereto, may be completed, and any issuance instructions may be given, from time to time: 

	
(i)
	
by any persons authorised to instruct the Bank to make payments on behalf of the Borrower, in the amount of the relevant instrument, under the terms of the account mandate provided to the Bank by the Borrower and then current; or 

	
(ii)
	
by any persons authorised or purporting to be authorised to instruct the Bank by electronic means as empowered in accordance with the agreement(s) between the Borrower and the Bank relating to the Borrower’s use of the electronic banking services and that any of such persons be authorised to agree with the Bank through any such electronic banking services the terms and conditions relating to such issued instrument from time to time. 

	
(e)
	
Within the limit relevant to this Documentary Credit Option drawings may be made up to a maximum of £300,000 (Three hundred thousand pounds) outstanding at any one time to open sight documentary credits where the Bank does not obtain control over the relevant goods via documents of title. 

	
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Interest 

	
(a)
	
Interest will be debited at the maturity of the relevant loan to the Borrower’s current account with the Bank as nominated for loan repayment in the loan application form. 

	
(b)
	
The General Terms and Conditions attached also apply. 

	
5
	
Insurance 

The Borrower will ensure that insurance cover will have been effected over all goods subject to finance in connection with the Facility Letter. The Borrower confirms that it holds such cover and that declarations under the policies are made for the respective shipments. The Borrower will, upon request, produce to the Bank the relevant policy of insurance. 

	
6
	
Recourse 

Any drawings under this Facility are made with recourse to the Borrower and will be subject to the Bank’s right at any time to demand immediate repayment of all sums owing to it. 

 

 

 

6

 

SECURITY SCHEDULE 

Company Guarantee to be given by Powell Industries PLC to secure all liabilities of Powell (UK) Limited, limited to £22,000,000. 

Agreement to Postpone Repayment of all indebtedness owing by Powell (UK) Limited to Powell Industries Inc. 

Counter-Indemnity from Powell (UK) Limited in respect of guarantees given by the Bank. 

 

 

 

7

 

PRE-DRAWDOWN Conditions SCHEDULE 

Acceptance of the Facility Letter 

Receipt by the Bank of the Facility Letter accepted on behalf of the Borrower by all appropriate signatories. 

Authorisations 

	
(a)
	
Receipt by the Bank of a copy of the certificate of incorporation of the Borrower and each company giving Security certified as up to date by the company secretary. 

	
(b)
	
Receipt by the Bank of a certified copy of board resolutions of the directors of the Borrower and each company giving Security: 

	
(i)
	
in relation to the Borrower, approving the Facility Letter and authorising a person or persons to accept the Facility Letter; and 

	
(ii)
	
approving the Omnibus Counter-Indemnity and authorising a person or persons to sign the Omnibus Counter-Indemnity 

	
(iii)
	
approving the Fax Indemnity and authorising a person or persons to sign the Fax Indemnity 

	
(iv)
	
approving any Security to be given by the Borrower and each company giving Security and authorising persons to execute that Security. 

The board resolutions are to be certified as true and correct by the chairman of the board meeting and the company secretary. 

	
(c)
	
 (i) Receipt of a copy of an Omnibus Counter-Indemnity duly executed, in support of applications for the issue of Engagements including Bank Guarantees and Standby Documentary Credits (as the case may be) from time to time 

(ii) Receipt of a copy of a duly executed Fax Indemnity 

Security 

	
(a)
	
Evidence that the Borrower and anyone else giving Security has good and marketable title to the assets (the Assets) over which they are providing Security. 

	
(b)
	
Security documents in form and content satisfactory to the Bank. 

	
(c)
	
Receipt by the Bank of the Security documents properly executed by the parties to them. 

	
(d)
	
Any documents required to enable registration of the Security at the Land Registry. 

	
(e)
	
Receipt of a copy of an Omnibus Counter-Indemnity duly executed, in support of applications for the issue of Engagements including Bank Guarantees and Standby Documentary Credits (as the case may be) from time to time 

	
(f)
	
A duly executed Fax Indemnity 

	
(g)
	
(i) the Omnibus Counter-Indemnity, 

(ii) the Fax Indemnity 

Valuation 

Receipt by the Bank of a satisfactory valuation of the Assets by an independent professional valuer, addressed to the Bank (and such other persons as the Bank may require). 

Insurance 

Evidence of insurance of the assets of the Borrower and each Company in accordance with the Insurance provisions in the Undertakings Schedule 

Miscellaneous 

	
(a)
	
Compliance with the Bank’s “know your customer” requirements. 

	
(b)
	
Receipt by the Bank of a bank mandate form completed by the Borrower. 

 

 

 

8

 

Undertakings SCHEDULE 

Additional Security 

Immediately on the Bank’s request, the Borrower will provide cash in the amount required by the Bank and subject to Security in favour of the Bank (at the Borrower’s expense and in form and content satisfactory to the Bank) in respect of any of the Borrower’s liabilities to the Bank (whether present or future, actual or contingent). 

Environmental Obligations 

The Borrower will comply, and will procure that each Company complies, with all applicable current laws, regulations and practices relating to the protection of the environment from pollution (the Environmental Obligations). 

Insurance 

	
(a)
	
If required by the Bank, the Borrower will keep, and will procure that each Company keeps, its assets fully insured against fire, theft, explosion, terrorist activities, floods, storm and other reasonable risks for their full reinstatement value with an insurer acceptable to the Bank. The insurance will also cover financial loss following business interruption as a result of damage or loss of the Borrower’s and each Company’s assets caused by the insured risks. 

	
(b)
	
The Borrower will provide the Bank with a copy of the relevant policies and insurance premium receipts upon request. 

Information 

	
(a)
	
The Borrower will promptly provide to the Bank any information that the Bank may, from time to time, reasonably request. 

	
(b)
	
The Borrower will also provide to the Bank: 

	
(i)
	
where the Borrower is required to prepare audited accounts by law, audited individual accounts, or 

	
(ii)
	
where the Borrower is not required to prepare audited accounts by law, unaudited individual accounts, 

not later than three months after the Borrower’s balance sheet date. 

	
(c)
	
Where the Borrower’s financial accounts have not been audited, the Bank may request an audit be carried out at the Borrower’s expense by an auditor acceptable to the Bank. 

	
(d)
	
All accounts and other financial information provided to the Bank will be prepared in accordance with generally accepted accounting standards. 

	
(e)
	
The information that the Bank asks for may be required, for example, to enable it to understand the Borrower’s financial position and to assess the Borrower’s ability to meet its obligations in the Facility Letter. 

Restriction on Lending 

The Borrower will not advance, whether subject to a formal or informal arrangement, any monies by way of a loan to a director of the Borrower, a director of the Borrower’s Group or a director of any Subsidiary without the prior written consent of the Bank. 

In this provision: 

	
(a)
	
the term Group means a parent undertaking and its subsidiary undertakings as defined in section 1162 and Schedule 7 of the Companies Act 2006 (as the same may be amended, varied or replaced). Unless the context requires otherwise, the application of the definition of Group to any company at any time shall apply to the company as it is at that time; and 

	
(b)
	
the term Subsidiary means a subsidiary undertaking as defined in section 1162 and Schedule 7 of the Companies Act 2006 (as the same may be amended, varied or replaced). Unless the context requires otherwise: 

	
(i)
	
the application of the definition of Subsidiary to any company at any time shall apply to the company as it is at that time; and 

	
(ii)
	
references to Subsidiary are references to a Subsidiary of any of the Borrower. 

Negative pledge 

The Borrower will not , and will procure that each Company does not, create or allow any mortgage, charge, pledge, lien (other than a lien arising by operation of law) or other encumbrance over all or any part of its assets or revenues or uncalled capital. 

9

 

Miscellaneous 

If required by the Bank, the Borrower will pay, and will procure that each Company pays, any rental and other income from its assets which are the subject of any Security into an account with the Bank or to such account as the Bank may require. 

Management Information 

The Borrower will submit to the Bank quarterly management accounts in a form acceptable to the Bank within 60 days of the end of the quarter to which they relate. Such management accounts are to contain a management information pack from Powell Industries Inc including covenant compliance with Bank Of America facilities with Powell (UK) Limited’s management information included. 

 

 

 

10

 

Representations SCHEDULE 

Status 

The Borrower is duly incorporated with limited liability under the laws of England and has the power to own its assets and carry on its business as it is being conducted. 

Power and authority 

The Borrower and each Company has: 

	
(a)
	
the power and authority to enter into the Facility Letter and the Security to which it is a party and to perform and observe the obligations under those documents; and 

	
(b)
	
has completed the Security to which it is a party in accordance with its constitutional documents. 

Obligations under the Facility Letter 

The Borrower is in full compliance with its obligations under the Facility Letter, including the Undertakings. 

Environmental Obligations 

The Borrower and each Company is in full compliance with the Environmental Obligations and the Borrower is not aware of any circumstance that may prevent full compliance in the future. 

No misleading information 

	
(a)
	
The Borrower has disclosed to the Bank all facts to enable the Bank to consider whether to make available the Facilities to it. 

	
(b)
	
All information provided by or on behalf of the Borrower and each Company was true, complete and accurate in all material respects as at the date it was provided and has not become materially adversely misleading or incorrect. 

Centre of main interests 

For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the Regulation), the centre of main interest (as that term is used in Article 3(1) of the Regulation) of the Borrower is situated in England and Wales. 

Time for making representations 

Each representation and warranty will be taken to be made by the Borrower daily until the Facilities have been repaid in full by reference to the facts and circumstances existing at the date the representation or warranty is made. 

 

 

 

11

 

GENERAL TERMS AND CONDITIONS 

The following terms and conditions will apply to the Facilities. 

	
1
	
Sterling Equivalents 

	
(a)
	
The sterling equivalent (the Sterling Equivalent) of any amount denominated in another currency will be calculated by reference to the Bank’s then prevailing spot selling rate of exchange for the relevant currency of denomination against sterling. 

	
(b)
	
In order to determine compliance or otherwise with the Limits, the aggregate Sterling Equivalents for all drawings outstanding and/or proposed will be calculated at such time as the Bank determines before each drawing is made. 

	
2
	
Drawings 

The Bank may, at any time: 

	
(a)
	
refuse payment of any cheque or other order for payment which would result in the Borrower going over a Limit; and/or 

	
(b)
	
refuse to allow any drawing or other disposal against any credit balance on any of the Borrower’s current accounts with the Bank if, as a result, the Borrower would go over a Limit. 

	
3
	
Repayments and Drawings on the Same Day 

	
(a)
	
If a drawing is due for repayment on a day when the Borrower is entitled to make a drawing, the Bank may require: 

	
(i)
	
the amount of the drawing to be repaid to be deducted from the amount of the drawing to be made; and 

	
(ii)
	
only the difference in the amounts (if any) to be paid to the Borrower. 

	
(b)
	
If the relevant drawings are denominated in different currencies, any difference will be calculated at such time as the Bank determines before the drawing by the Borrower by application of the Bank’s then prevailing spot selling rate of exchange for the currency due to the Bank against the currency to be drawn by the Borrower. 

	
4
	
Interest on Facilities available in Sterling 

	
(a)
	
Interest will be calculated on a daily basis and on the basis that there are 365 days in each year. Interest calculated on this basis will be payable in respect of each of the 365 days in a calendar year (366 in a leap year). 

	
(b)
	
On the dates interest (or any other charge) is debited, interest will become payable on any borrowings created by such debit. 

	
(c)
	
The Bank may, from time to time and at its discretion, change its interest rates. The Bank makes its current interest rates available and gives notice of changes in its interest rates in accordance with the Facility Letter and/or the Business Banking Terms and Conditions. 

	
(d)
	
If the Bank demands repayment of the Facilities or any of them, interest after demand will be charged at the same rates and on the same basis as before demand., except that: 

	
(i)
	
in relation to the Import Line Facility, the Bank reserves the right to charge interest after demand on the Bank’s quarterly charging dates which at present are during March, June, September and December even though the relevant loan may not have matured at the date of such demand. 

	
5
	
Interest on Facilities available in Currencies other than Sterling 

	
(a)
	
Interest will be payable on the outstanding amount of the relevant Facility at the rate specified in the Facility Letter calculated on a daily basis and on the basis that there are 360 days in each year. Interest calculated on this basis will be payable in respect of each of the 365 days in a calendar year (366 in a leap year). 

	
(b)
	
Interest will be calculated up to and including the last Business Day of each May and November or upon earlier termination of any relevant Facility and debited in arrears on such day as the Bank determines to the relevant currency account together with any applicable commission charge in accordance with the Bank’s then current tariff. 

	
(c)
	
On the dates interest (or any other charge) is debited, interest will become payable on any borrowings created by such debit. 

	
(d)
	
If the Bank demands repayment of the Facilities or any of them, interest after demand will be charged at the same rates and on the same basis as before demand., except that in relation to the Import Line Facility, the Bank reserves the right to charge interest after demand on the Bank’s quarterly charging dates which at present are during March, June, September and December even though the relevant loan may not have matured at the date of such demand. 

12

 

	
6
	
Miscellaneous Provisions Relating to Facilities available in Currencies other than Sterling 

	
(a)
	
If, in the opinion of the Bank, deposits in a currency are not available to the Bank to finance any drawing on the relevant currency account: 

	
(i)
	
such drawing may, at the Bank’s discretion, be re-denominated in such currency as the Bank determines by reference to the Bank’s then prevailing spot selling rate of exchange for the outstanding currency against the currency of re-denomination; and 

	
(ii)
	
any re-denominated drawing may also be subject to re-denomination in accordance with (i) above. 

	
(b)
	
Upon any re-denomination, for any reason, the Bank may vary the terms of any relevant Facility relating to notice periods, interest rates, the basis of interest calculations and the value dating of credits received, if, in the opinion of the Bank, these terms are not appropriate for the re-denominated currency. 

	
(c)
	
If the Bank demands repayment, the Bank may at any time re-denominate in sterling any amount due to the Bank at the Bank’s then prevailing spot selling rate of exchange for the relevant outstanding currency against sterling. The provisions of (b) above will remain in force following any such re-denomination. 

	
(d)
	
Any reference to euro means the euro unit as defined in Regulation (EC) No. 1103/97 pronounced by the Council of the European Union and any reference to national currency unit has the meaning given to such expression by such Regulation, namely a unit of the currency of a participating Member State, as that unit is defined on the day before the start of the third stage of Economic and Monetary Union. 

If a change in any national currency unit occurs (including where there is more than one currency or currency unit recognised at the same time as the lawful currency), the Facility Letter will be amended to the extent the Bank determines is necessary to reflect this change. 

	
(e)
	
The Bank will not be under any obligation to accept any instructions, receive or make any payment or carry out any other transaction denominated in the euro or in any national currency unit on a day on which the Bank is not normally open for general business in the relevant jurisdiction where such transactions are to be received or carried out, whether or not such a day is a Business Day for transactions in the euro or the relevant national currency unit. 

	
7
	
Payments 

	
(a)
	
All payments by the Borrower will be made in cleared funds in the currency in which the payment is due on a Business Day on the due date for payment or, if that day is not a Business Day, on the next succeeding Business Day. 

	
(b)
	
All payments will be made without any deduction or withholding (whether in respect of set-off, counterclaim, duties, taxes, charges or otherwise). 

	
(c)
	
If the Borrower is required by law to make any deduction or withholding from a payment, it will promptly pay to the Bank such additional sums as will make the net sum received by the Bank equal to the full sum payable had there been no deduction or withholding. 

	
8
	
Costs and Expenses 

	
(a)
	
The Borrower will pay to the Bank the amount of all costs and expenses (including any legal, security and valuation fees), stamp duty, taxes and other charges and registration costs incurred or charged by the Bank in connection with: 

	
(i)
	
the negotiation, preparation, administration, amendment, variation or supervision of the Facilities, the Facility Letter and/or any Security; and 

	
(ii)
	
the enforcement of or the preservation of any rights under the Facility Letter and/or any Security and any proceedings instituted by or against the Bank as a consequence of taking or holding the Security or enforcing these rights. 

The Bank will debit these costs to the Borrower’s current account with the Bank. The Bank will advise the Borrower of the amount of such costs before they are debited. 

	
9
	
Indemnity 

The Borrower will indemnify the Bank on demand against any cost, loss or liability incurred by the Bank in connection with or arising out of: 

	
(a)
	
the application of any Facility or any part of it by the Borrower; and/or 

	
(b)
	
the provision of any Facility or any other banking facilities by the Bank to the Borrower; and/or 

13

 

	
(c)
	
the Bank having a security interest in any assets of the Borrower or any other person providing Security, including: 

	
(i)
	
those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning any Facility or its application; or 

	
(ii)
	
in respect of a breach of, or a failure to meet, any Environmental Obligations. 

	
10
	
Demand and Notice 

Any demand or notice given by the Bank under the Facility Letter may be: 

	
(a)
	
by letter addressed to the Borrower or any officer of the Borrower sent by first class post to or left at the Borrower’s address last known to the Bank or at the Borrower’s registered office; or 

	
(b)
	
by fax or other electronic means to the Borrower’s last known fax number or electronic mail address. 

If sent by post, the demand or notice will be taken to have been made or given at noon the second day following the day the letter was posted. If sent by fax or other electronic means, the demand or notice will be taken to have been made or given at the time of transmission. 

Unless otherwise advised by the Bank any notices given by the Borrower to the Bank under this letter will be delivered to this office. 

	
11
	
Joint Borrowers 

If the Borrower consists of two or more persons (whether corporates, partners or otherwise): 

	
(a)
	
they will be jointly and individually liable to the Bank for the Facilities and for any other moneys from time to time owing to the Bank in respect of the Facilities; 

	
(b)
	
any notice given to any one of them under the Facility Letter will be notice to all of them; 

	
(c)
	
if at any time any one or more of the provisions of the Facility Letter is or becomes invalid, illegal or unenforceable against any one or more of them, it will remain enforceable against the others as if it had been addressed to only to those others; 

	
(d)
	
the Bank’s rights against any one such person will not be impaired, discharged or otherwise affected by: 

	
—
	
the Bank granting any time or indulgence to any of the others; 

	
—
	
the Bank varying or releasing any of the others from any liability to the Bank or any Security relating to such liability; 

	
—
	
the Bank failing to take any such Security; and/or 

	
—
	
any act, event or omission which would, but for these provisions, impair, discharge or otherwise affect any of such rights of the Bank; and 

	
(e)
	
no such person will be entitled without the written consent of the Bank to exercise any right or make any claim against any of the others (including any right of subrogation or right to prove in a liquidation) arising by virtue of any payment made in accordance with the Facility Letter or otherwise in connection with the Facility Letter. 

	
12
	
Miscellaneous 

	
(a)
	
Business Day means a day (other than a Saturday or Sunday) and time on which the relevant banking offices and markets are open for business for the currency and transaction involved and, if the relevant currency is the euro, a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system is open for settlement of payments in euro. 

	
(b)
	
Facility Current Account means the current account of the Borrower with the Bank on which the Facility is run. 

	
(c)
	
No delay or failure by the Bank in exercising any right or remedy will be taken to mean or take effect as a waiver or release of that right or remedy. The Bank will always be entitled to exercise all its rights and remedies unless it has expressly waived them in writing. 

	
(d)
	
If at any time any one or more of the provisions of the Facility Letter is or becomes invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions of the Facility Letter will not be in any way affected. 

14

 

	
(e)
	
If it becomes unlawful for the Bank to perform all or any of its obligations under the Facility Letter, then the Bank will notify the Borrower and: 

	
(i)
	
the Borrower will repay any parts of the Facilities which have been drawn down together with all other amounts due and owing to the Bank; and 

	
(ii)
	
any parts of the Facilities that have not been drawn down will be cancelled. 

	
(f)
	
The Bank and the Borrower agree that the terms of the Facility Letter will not be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person who is not a party to the Facility Letter. 

	
(g)
	
If the Borrower does not accept the Facility Letter, the Bank may allow drawings under the Facilities and this will be taken to be acceptance of the terms and conditions of the Facility Letter (without amendment). 

	
(h)
	
The Borrower may sign any number of copies of the Facility Letter and these copies, together with the copy or copies signed on behalf of the Bank, will form a single document. 

	
13
	
Governing Law and Enforcement 

	
(a)
	
For facilities on accounts held in England, the Facility is governed by and construed in accordance with English law and all claims and disputes (including non-contractual claims and disputes) arising out of or in connection with the Facility or its subject matter, negotiation or formation will be determined in accordance with English law. 

	
(b)
	
The Borrower and the Bank both submit to the non-exclusive jurisdiction of the courts of England and Wales in relation to all claims, disputes, differences or other matters (including non-contractual claims, disputes, differences or other matters) arising out of or in connection with the Facility 

	
(c)
	
The Borrower: 

	
(i)
	
waives any objection to the courts of England including an objection on grounds of inconvenience; and 

	
(ii)
	
agrees that a judgment or order of a court of England in connection with the Facility Letter is binding on it and may be enforced against it in the courts of any other jurisdiction. 

 

 

 

15

 

ACCEPTANCE BY THE BORROWER 

We, Powell (UK) Limited, accept the offer and agree to all the terms and conditions contained in the Facility Letter dated 28 August 2014. 

Date: 

Director: 

Director and 

Secretary: 

(Signed for and on behalf of Powell (UK) Limited, pursuant to a Resolution of the Board of Directors passed on .                     ). 

The Directors 

Powell (UK) Limited 

Ripley Road 

Bradford 

West Yorkshire 

BD4 7EH 

29 August 2014 

Dear Sirs 

HSBC Bank plc (the Bank) is pleased to offer Powell (UK) Limited (the Borrower) the facilities referred to below (each a Facility and together the Facilities) on and subject to the terms set out in this letter (the Facility Letter). 

The Bank recommends that the Borrower seek independent advice before accepting the offer in the Facility Letter. 

Facilities 

Drawings may be made under the following Facilities, provided that the aggregate amount of drawings (or Sterling Equivalent (as defined in the General Terms and Conditions attached) as appropriate) does not at any time go over the relevant Limit, unless we agree otherwise. 

 

	
 
	
  
	
Limit
	
 

	
Forward Exchange Contracts and Currency Options 
	
  
	
 
	
USD 4,500,000
	
 

	
 
	
 
	
 
	
 
	
 

	
Engagements including Bank Guarantees
	
  
	
 
	
£5,000,000
	
  

	
 
	
 
	
 
	
 
	
 

	
Foreign Bills/Cheques for Negotiation
	
  
	
 
	
£100,000
	
  

	
Import Line
	
 
	
 
	
 
	
 

	
comprising:
	
  
	
 
	
£300,000
	
  

	
Documentary Credits
	
  
	
 
	
 
	
 

Please refer to the relevant Schedule to the Facility Letter for details of the sub-limit (the Sub-Limit) which apply to the Option within the Import Line Facility. 

Availability 

The Bank may at any time withdraw the Facilities and/or demand repayment of all sums owing to it. Subject to this, the Facilities are due for review by 30 July 2015. 

The Borrower may, at any time, repay the amount owing to the Bank, together with any interest and charges owing, and tell the Bank, in writing, that all or any of the Facilities are no longer required. 

16

 

Forward Exchange Contracts and Currency Option Facility 

Details of the Forward Exchange Contracts and Currency Option Facility are set out in the Forward Exchange Contracts and Currency Option Facility Schedule. 

Engagements and Foreign Bills/Cheques for Negotiation Facilities 

Details of the Engagements and Foreign Bills/Cheques for Negotiation Facilities are set out in the Engagements and Foreign Bills/Cheques for Negotiation Facilities Schedule. 

Import Line Facility 

Details of the Import Line Facility, including the rates of interest payable on this Facility are set out in the Import Line Facility Schedule. 

Fees 

An arrangement fee of £20,000 will be payable by the borrower upon acceptance of the Facility Letter. 

All other fees, costs and expenses mentioned in the General Terms and Conditions attached will be payable by the Borrower. 

Security 

The Borrower’s obligations to the Bank under the Facility Letter will be secured by: 

	
(c)
	
all existing security (if any) and any future security held by the Bank for those obligations; and 

	
(d)
	
security in the Bank’s preferred form as set out in the Security Schedule, 

(together the Security). 

The Security is required as a secondary source of repayment in the event that the Borrower fails to repay the Facilities as set out in the Facility Letter. 

The Bank is entitled at any time, at the Borrower’s expense, to obtain further valuations of any assets/properties charged to secure: 

	
(c)
	
the Borrower’s obligations to the Bank; and/or 

	
(d)
	
a guarantor’s obligations under any guarantee which is taken to secure the Borrower’s obligations to the Bank. 

Pre-Drawdown Conditions 

The Facilities will not become available until the conditions set out in the Pre-Drawdown Conditions Schedule (the Pre-Drawdown Conditions) have been complied with to the satisfaction of the Bank. 

Undertakings and Representations 

Without affecting the Bank’s right at any time to withdraw the Facilities and/or demand repayment of all sums owing to it, the Borrower will: 

	
(c)
	
give the undertakings (the Undertakings) set out in the Undertakings Schedule to the Bank which will remain in force until the Facilities have been repaid in full; and 

	
(d)
	
make the representations and warranties set out in the Representations Schedule to the Bank. 

Terms and Conditions 

Further details of the terms and conditions that apply to the Facilities are set out in the General Terms and Conditions and the Facilities Schedules attached to the Facility Letter. The General Terms and Conditions and the terms and conditions applying to the Facilities Schedules are incorporated into the Facility Letter. 

17

 

The Facilities are also subject to the Business Banking Terms and Conditions, as published from time to time, and a further copy of which is available on request. If there is any conflict between Business Banking Terms and Conditions and the terms of the Facility Letter (including the General Terms and Conditions and the Facility Schedules attached), the terms of the Facility Letter will prevail. 

The Bank may, at its discretion, change any of the provisions of the Facility Letter (including interest rates, fees and/or the General Terms and Conditions attached), including so as to reflect increased risk to the Bank as a result of a change in the Borrower’s circumstances and/or if the cost to the Bank of monitoring and/or administering the Facility increases by giving (except in the case of changes to the interest rate) at least 30 days’ written notice to the Borrower. Changes to third party published interest rate (such as the Bank of England Base Rate or LIBOR) take effect within one working day of the change being published. For changes to all other interest rates (including without limitation the margin by which interest payable exceeds a prevailing third party published interest rate), the Bank will give at least 2 months’ notice if the Borrower is a micro-enterprise or small charity (as defined in the Business Banking Terms and Conditions) or at least 30 days’ notice if the Borrower is neither a micro-enterprise nor a small charity. 

The Bank may introduce new fees in relation to the Facility if the risk to the Bank of making the Facility available to the Borrower increases as a result of a change in the Borrower’s circumstances and/or if the cost to the Bank of monitoring and/or administering the Facility increases. If the Bank intends to introduce new fees written notice will be sent to the Borrower at least 30 days before the introduction of those fees. 

Renewal 

The Facility Letter replaces any previous facility letter issued by the Bank in connection with the Facilities and from the date of acceptance of the Facility Letter any such previous facility letter will be withdrawn and all existing liabilities in respect of the Facilities will be governed by the terms and conditions in the Facility Letter. 

Acceptance 

To accept this offer please arrange for the enclosed copy of the Facility Letter to be signed and returned to the address above to arrive no later than 60 days from the date of the Facility Letter. If not accepted within this period, the offer will lapse. 

Yours faithfully 

N Rochester 

Senior Corporate Banking Manager 

For and on behalf of HSBC Bank plc 

 

	
Schedules:
	
 
	
 
	
Forward Exchange Contracts and Currency Option Facility Schedule
	
 

	
 
	
 
	
 
	
Engagements including Bank Guarantees and Foreign Bills/Cheques for 

Negotiation Facilities Schedule
	
 

	
 
	
 
	
 
	
Import Line Facility Schedule
	
 

	
 
	
 
	
 
	
Security Schedule
	
 

	
 
	
 
	
 
	
Pre-Drawdown Conditions Schedule
	
 

	
 
	
 
	
 
	
Undertakings Schedule
	
 

	
 
	
 
	
 
	
Representations Schedule
	
 

	
 
	
 
	
 
	
General Terms and Conditions
	
 

 

 

 

18

 

Forward Exchange Contracts and Currency Option Facility Schedule 

	
1
	
Drawings 

	
(c)
	
This Facility may be used for the purpose of spot and forward foreign exchange transactions and for currency options. 

	
(d)
	
The Bank may in its discretion decide whether or not this Facility may be utilised and may specify pre-conditions to such utilisation. 

	
2
	
International Foreign Exchange Market Master Agreement (IFEMA) Terms 

International Currency Options Market Master Agreement (ICOM) Terms 

	
(e)
	
Notwithstanding any non-execution of product documentation: 

	
(iii)
	
each foreign exchange utilisation will be deemed to be subject to and will be subject to the terms of IFEMA; and 

	
(iv)
	
each currency option utilisation will be deemed to be subject to and will be subject to the terms of ICOM. 

	
(f)
	
If there is any conflict between the terms of the Facility Letter and those of IFEMA or ICOM, the terms of IFEMA or ICOM (as appropriate) will prevail, except in respect of any provisions in this Forward Exchange Contracts and Currency Option Facility Schedule which are expressed to be additional to or in replacement for any relevant IFEMA or ICOM provisions. 

	
(g)
	
Copies of IFEMA and ICOM terms are available from the Bank on request. 

	
(h)
	
Unless there is agreement in writing to the contrary, while this option is in force, the terms of the Facility Letter and particularly the terms of (a) and (b) above will continue to apply notwithstanding any pre-existing product documentation. 

	
3
	
Financial Services and Markets Act 2000 

No forward purchase or sale of any currency may be made for investment purposes (as mentioned in article 84 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001) without the Bank’s prior written consent. 

	
4
	
Contract Periods 

Without affecting any of the Bank’s rights under the Facility Letter, the duration of any foreign exchange transaction or currency option entered into under this Facility will not exceed twelve months. 

	
5
	
Settlement Limit 

Without affecting any of the Bank's rights under the Facility Letter, the maximum amount for delivery for value on any one day shall not at any time exceed USD 1,800,000 (or its Sterling Equivalent as appropriate).

 

 

 

19

 

Engagements INCLUDING BANK GUARANTEES and 

Foreign BILLS/Cheques for Negotiation Facilities Schedule 

	
1
	
Drawings 

	
(d)
	
Each drawing under these Facilities will be made in accordance with and subject to the Bank’s current practice from time to time. Such practice will be explained on request as drawings are requested. 

	
(e)
	
The Bank may in its discretion decide whether or not a drawing may be made under any of these Facilities and may specify pre-conditions to such drawing. 

	
(c)
	
Without prejudice to the foregoing, the Borrower agrees, acknowledges and authorises that any request for a drawing under the Engagements Facility will require the: 

	
(iii)
	
completion of an application form in paper or electronic format and submitted to the Bank by delivery method(s) agreed with the Bank, and, where required by the Bank, following execution of: (A) any agreement(s) for or relating to use of the Bank’s electronic banking services, and/or (B) a fax indemnity (as the case requires); and 

	
(iv)
	
provision of a counter-indemnity, either by execution (on a request by request basis) of the counter-indemnity appearing overleaf on paper format application form, or by execution of an omnibus counter-indemnity (at the Borrower’s election, except that the execution of an omnibus counter-indemnity will be mandatory before any application can be submitted using the Bank’s electronic banking services), 

in each case, in the Bank’s preferred form current from time to time. 

	
(d)
	
The Borrower agrees and authorises that any application form, and all such other documents the Bank may require completed in relation thereto, may be completed, and any issuance instructions may be given, from time to time: 

	
(i)
	
by any persons authorised to instruct the Bank to make payments on behalf of the Borrower, in the amount of the relevant instrument, under the terms of the account mandate provided to the Bank by the Borrower and then current; or 

	
(ii)
	
upon receipt of an executed omnibus counter-indemnity supporting applications made from time to time using any of the Bank’s electronic banking services, by any persons authorised or purporting to be authorised to instruct the Bank by electronic means as empowered in accordance with the agreement(s) between the Borrower and the Bank relating to the Borrower’s use of the electronic banking services and that any of such persons be authorised to agree with the Bank through any such electronic banking services the terms and conditions relating to such issued instrument from time to time. 

	
2
	
Bills and Termination 

Following demand for repayment, the Bank may require the Borrower to pay to the Bank monies equivalent in amount to the aggregate of the face value of all outstanding documentary letters of credit and bills accepted, purchased, negotiated or discounted by the Bank to meet such documentary letters of credit and bills on their maturities. 

	
3
	
Recourse 

Any drawings under these Facilities are made with recourse to the Borrower and will be subject to the Bank’s right at any time to demand immediate repayment of all sums owing to it. 

 

 

 

20

 

IMPORT LINE FACILITY SCHEDULE 

	
1
	
Options 

This Facility comprises a Documentary Credits Option (the Option). 

	
2
	
Drawings 

	
(c)
	
Each drawing under this Facility will be made in accordance with and subject to the Bank’s current practice from time to time. Such practice will be explained on request as drawings are requested. 

	
(d)
	
The Bank may in its discretion decide whether or not a drawing may be made under this Facility and may specify pre-conditions to such drawing. 

	
3
	
Documentary Credits Option 

	
(a)
	
Without prejudice to the foregoing, the Borrower agrees, acknowledges and authorises that a request for a drawing under this Facility will require completion of an application form in paper or electronic format and submitted to the Bank by delivery method(s) agreed with the Bank, and, where required by the Bank, following execution of: (A) any agreement(s) for or relating to use of the Bank’s electronic banking services, and/or (B) a fax indemnity (as the case requires). 

	
(b)
	
The opening by the Bank of a documentary letter of credit (“Credit”) will constitute a drawing under this Import Option for the full amount of such Credit. 

	
(f)
	
The Borrower agrees and acknowledges that any Credit issued by the Bank shall be subject to the Bank’s terms and conditions applicable from time to time to the issue of a Credit, as set out in the Bank’s preferred form of application form (whether in paper or electronic format). 

	
(d)
	
The Borrower agrees and authorises that any application form, and all such other documents the Bank may require completed in relation thereto, may be completed, and any issuance instructions may be given, from time to time: 

	
(j)
	
by any persons authorised to instruct the Bank to make payments on behalf of the Borrower, in the amount of the relevant instrument, under the terms of the account mandate provided to the Bank by the Borrower and then current; or 

	
(ii)
	
by any persons authorised or purporting to be authorised to instruct the Bank by electronic means as empowered in accordance with the agreement(s) between the Borrower and the Bank relating to the Borrower’s use of the electronic banking services and that any of such persons be authorised to agree with the Bank through any such electronic banking services the terms and conditions relating to such issued instrument from time to time. 

	
(e)
	
Within the limit relevant to this Documentary Credit Option drawings may be made up to a maximum of £300,000 (Three hundred thousand pounds) outstanding at any one time to open sight documentary credits where the Bank does not obtain control over the relevant goods via documents of title. 

	
4
	
Interest 

	
(c)
	
Interest will be debited at the maturity of the relevant loan to the Borrower’s current account with the Bank as nominated for loan repayment in the loan application form. 

	
(d)
	
The General Terms and Conditions attached also apply. 

	
5
	
Insurance 

The Borrower will ensure that insurance cover will have been effected over all goods subject to finance in connection with the Facility Letter. The Borrower confirms that it holds such cover and that declarations under the policies are made for the respective shipments. The Borrower will, upon request, produce to the Bank the relevant policy of insurance. 

	
6
	
Recourse 

Any drawings under this Facility are made with recourse to the Borrower and will be subject to the Bank’s right at any time to demand immediate repayment of all sums owing to it. 

 

 

 

21

 

SECURITY SCHEDULE 

Company Guarantee to be given by Powell Industries PLC to secure all liabilities of Powell (UK) Limited, limited to £22,000,000. 

Agreement to Postpone Repayment of all indebtedness owing by Powell (UK) Limited to Powell Industries Inc. 

Counter-Indemnity from Powell (UK) Limited in respect of guarantees given by the Bank. 

 

 

 

22

 

PRE-DRAWDOWN Conditions SCHEDULE 

Acceptance of the Facility Letter 

Receipt by the Bank of the Facility Letter accepted on behalf of the Borrower by all appropriate signatories. 

Authorisations 

	
(b)
	
Receipt by the Bank of a copy of the certificate of incorporation of the Borrower and each company giving Security certified as up to date by the company secretary. 

	
(c)
	
Receipt by the Bank of a certified copy of board resolutions of the directors of the Borrower and each company giving Security: 

	
(ii)
	
in relation to the Borrower, approving the Facility Letter and authorising a person or persons to accept the Facility Letter; and 

	
(ii)
	
approving the Omnibus Counter-Indemnity and authorising a person or persons to sign the Omnibus Counter-Indemnity 

	
(iii)
	
approving the Fax Indemnity and authorising a person or persons to sign the Fax Indemnity 

	
(iv)
	
approving any Security to be given by the Borrower and each company giving Security and authorising persons to execute that Security. 

The board resolutions are to be certified as true and correct by the chairman of the board meeting and the company secretary. 

	
(c)
	
(i) Receipt of a copy of an Omnibus Counter-Indemnity duly executed, in support of applications for the issue of Engagements including Bank Guarantees and Standby Documentary Credits (as the case may be) from time to time 

(ii) Receipt of a copy of a duly executed Fax Indemnity 

Security 

	
(e)
	
Evidence that the Borrower and anyone else giving Security has good and marketable title to the assets (the Assets) over which they are providing Security. 

	
(f)
	
Security documents in form and content satisfactory to the Bank. 

	
(g)
	
Receipt by the Bank of the Security documents properly executed by the parties to them. 

	
(h)
	
Any documents required to enable registration of the Security at the Land Registry. 

	
(e)
	
Receipt of a copy of an Omnibus Counter-Indemnity duly executed, in support of applications for the issue of Engagements including Bank Guarantees and Standby Documentary Credits (as the case may be) from time to time 

	
(f)
	
A duly executed Fax Indemnity 

	
(g)
	
(i) the Omnibus Counter-Indemnity, 

(ii) the Fax Indemnity 

Valuation 

Receipt by the Bank of a satisfactory valuation of the Assets by an independent professional valuer, addressed to the Bank (and such other persons as the Bank may require). 

Insurance 

Evidence of insurance of the assets of the Borrower and each Company in accordance with the Insurance provisions in the Undertakings Schedule 

Miscellaneous 

	
(c)
	
Compliance with the Bank’s “know your customer” requirements. 

	
(d)
	
Receipt by the Bank of a bank mandate form completed by the Borrower. 

 

 

 

23

 

Undertakings SCHEDULE 

Additional Security 

Immediately on the Bank’s request, the Borrower will provide cash in the amount required by the Bank and subject to Security in favour of the Bank (at the Borrower’s expense and in form and content satisfactory to the Bank) in respect of any of the Borrower’s liabilities to the Bank (whether present or future, actual or contingent). 

Environmental Obligations 

The Borrower will comply, and will procure that each Company complies, with all applicable current laws, regulations and practices relating to the protection of the environment from pollution (the Environmental Obligations). 

Insurance 

	
(c)
	
If required by the Bank, the Borrower will keep, and will procure that each Company keeps, its assets fully insured against fire, theft, explosion, terrorist activities, floods, storm and other reasonable risks for their full reinstatement value with an insurer acceptable to the Bank. The insurance will also cover financial loss following business interruption as a result of damage or loss of the Borrower’s and each Company’s assets caused by the insured risks. 

	
(d)
	
The Borrower will provide the Bank with a copy of the relevant policies and insurance premium receipts upon request. 

Information 

	
(f)
	
The Borrower will promptly provide to the Bank any information that the Bank may, from time to time, reasonably request. 

	
(g)
	
The Borrower will also provide to the Bank: 

	
(iii)
	
where the Borrower is required to prepare audited accounts by law, audited individual accounts, or 

	
(iv)
	
where the Borrower is not required to prepare audited accounts by law, unaudited individual accounts, 

not later than three months after the Borrower’s balance sheet date. 

	
(h)
	
Where the Borrower’s financial accounts have not been audited, the Bank may request an audit be carried out at the Borrower’s expense by an auditor acceptable to the Bank. 

	
(i)
	
All accounts and other financial information provided to the Bank will be prepared in accordance with generally accepted accounting standards. 

	
(j)
	
The information that the Bank asks for may be required, for example, to enable it to understand the Borrower’s financial position and to assess the Borrower’s ability to meet its obligations in the Facility Letter. 

Restriction on Lending 

The Borrower will not advance, whether subject to a formal or informal arrangement, any monies by way of a loan to a director of the Borrower, a director of the Borrower’s Group or a director of any Subsidiary without the prior written consent of the Bank. 

In this provision: 

	
(a)
	
the term Group means a parent undertaking and its subsidiary undertakings as defined in section 1162 and Schedule 7 of the Companies Act 2006 (as the same may be amended, varied or replaced). Unless the context requires otherwise, the application of the definition of Group to any company at any time shall apply to the company as it is at that time; and 

	
(b)
	
the term Subsidiary means a subsidiary undertaking as defined in section 1162 and Schedule 7 of the Companies Act 2006 (as the same may be amended, varied or replaced). Unless the context requires otherwise: 

	
(i)
	
the application of the definition of Subsidiary to any company at any time shall apply to the company as it is at that time; and 

	
(ii)
	
references to Subsidiary are references to a Subsidiary of any of the Borrower. 

Negative pledge 

The Borrower will not , and will procure that each Company does not, create or allow any mortgage, charge, pledge, lien (other than a lien arising by operation of law) or other encumbrance over all or any part of its assets or revenues or uncalled capital. 

24

 

Miscellaneous 

If required by the Bank, the Borrower will pay, and will procure that each Company pays, any rental and other income from its assets which are the subject of any Security into an account with the Bank or to such account as the Bank may require. 

Management Information 

The Borrower will submit to the Bank quarterly management accounts in a form acceptable to the Bank within 60 days of the end of the quarter to which they relate. Such management accounts are to contain a management information pack from Powell Industries Inc including covenant compliance with Bank Of America facilities with Powell (UK) Limited’s management information included. 

 

 

 

25

 

Representations SCHEDULE 

Status 

The Borrower is duly incorporated with limited liability under the laws of England and has the power to own its assets and carry on its business as it is being conducted. 

Power and authority 

The Borrower and each Company has: 

	
(c)
	
the power and authority to enter into the Facility Letter and the Security to which it is a party and to perform and observe the obligations under those documents; and 

	
(d)
	
has completed the Security to which it is a party in accordance with its constitutional documents. 

Obligations under the Facility Letter 

The Borrower is in full compliance with its obligations under the Facility Letter, including the Undertakings. 

Environmental Obligations 

The Borrower and each Company is in full compliance with the Environmental Obligations and the Borrower is not aware of any circumstance that may prevent full compliance in the future. 

No misleading information 

	
(c)
	
The Borrower has disclosed to the Bank all facts to enable the Bank to consider whether to make available the Facilities to it. 

	
(d)
	
All information provided by or on behalf of the Borrower and each Company was true, complete and accurate in all material respects as at the date it was provided and has not become materially adversely misleading or incorrect. 

Centre of main interests 

For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the Regulation), the centre of main interest (as that term is used in Article 3(1) of the Regulation) of the Borrower is situated in England and Wales. 

Time for making representations 

Each representation and warranty will be taken to be made by the Borrower daily until the Facilities have been repaid in full by reference to the facts and circumstances existing at the date the representation or warranty is made. 

 

 

 

26

 

GENERAL TERMS AND CONDITIONS 

The following terms and conditions will apply to the Facilities. 

	
1
	
Sterling Equivalents 

	
(c)
	
The sterling equivalent (the Sterling Equivalent) of any amount denominated in another currency will be calculated by reference to the Bank’s then prevailing spot selling rate of exchange for the relevant currency of denomination against sterling. 

	
(d)
	
In order to determine compliance or otherwise with the Limits, the aggregate Sterling Equivalents for all drawings outstanding and/or proposed will be calculated at such time as the Bank determines before each drawing is made. 

	
3
	
Drawings 

The Bank may, at any time: 

	
(c)
	
refuse payment of any cheque or other order for payment which would result in the Borrower going over a Limit; and/or 

	
(d)
	
refuse to allow any drawing or other disposal against any credit balance on any of the Borrower’s current accounts with the Bank if, as a result, the Borrower would go over a Limit. 

	
3
	
Repayments and Drawings on the Same Day 

	
(c)
	
If a drawing is due for repayment on a day when the Borrower is entitled to make a drawing, the Bank may require: 

	
(iii)
	
the amount of the drawing to be repaid to be deducted from the amount of the drawing to be made; and 

	
(iv)
	
only the difference in the amounts (if any) to be paid to the Borrower. 

	
(d)
	
If the relevant drawings are denominated in different currencies, any difference will be calculated at such time as the Bank determines before the drawing by the Borrower by application of the Bank’s then prevailing spot selling rate of exchange for the currency due to the Bank against the currency to be drawn by the Borrower. 

	
4
	
Interest on Facilities available in Sterling 

	
(e)
	
Interest will be calculated on a daily basis and o n the basis that there are 365 days in each year. Interest calculated on this basis will be payable in respect of each of the 365 days in a calendar year (366 in a leap year). 

	
(f)
	
On the dates interest (or any other charge) is debited, interest will become payable on any borrowings created by such debit. 

	
(g)
	
The Bank may, from time to time and at its discretion, change its interest rates. The Bank makes its current interest rates available and gives notice of changes in its interest rates in accordance with the Facility Letter and/or the Business Banking Terms and Conditions. 

	
(h)
	
If the Bank demands repayment of the Facilities or any of them, interest after demand will be charged at the same rates and on the same basis as before demand., except that: 

	
(ii)
	
in relation to the Import Line Facility, the Bank reserves the right to charge interest after demand on the Bank’s quarterly charging dates which at present are during March, June, September and December even though the relevant loan may not have matured at the date of such demand. 

	
5
	
Interest on Facilities available in Currencies other than Sterling 

	
(e)
	
Interest will be payable on the outstanding amount of the relevant Facility at the rate specified in the Facility Letter calculated on a daily basis and on the basis that there are 360 days in each year. Interest calculated on this basis will be payable in respect of each of the 365 days in a calendar year (366 in a leap year). 

	
(f)
	
Interest will be calculated up to and including the last Business Day of each May and November or upon earlier termination of any relevant Facility and debited in arrears on such day as the Bank determines to the relevant currency account together with any applicable commission charge in accordance with the Bank’s then current tariff. 

	
(g)
	
On the dates interest (or any other charge) is debited, interest will become payable on any borrowings created by such debit. 

	
(h)
	
If the Bank demands repayment of the Facilities or any of them, interest after demand will be charged at the same rates and on the same basis as before demand., except that in relation to the Import Line Facility, the Bank reserves the right to charge interest after demand on the Bank’s quarterly charging dates which at present are during March, June, September and December even though the relevant loan may not have matured at the date of such demand. 

27

 

	
6
	
Miscellaneous Provisions Relating to Facilities available in Currencies other than Sterling 

	
(f)
	
If, in the opinion of the Bank, deposits in a currency are not available to the Bank to finance any drawing on the relevant currency account: 

	
(j)
	
such drawing may, at the Bank’s discretion, be re-denominated in such currency as the Bank determines by reference to the Bank’s then prevailing spot selling rate of exchange for the outstanding currency against the currency of re-denomination; and 

	
(iii)
	
any re-denominated drawing may also be subject to re-denomination in accordance with (i) above. 

	
(g)
	
Upon any re-denomination, for any reason, the Bank may vary the terms of any relevant Facility relating to notice periods, interest rates, the basis of interest calculations and the value dating of credits received, if, in the opinion of the Bank, these terms are not appropriate for the re-denominated currency. 

	
(h)
	
If the Bank demands repayment, the Bank may at any time re-denominate in sterling any amount due to the Bank at the Bank’s then prevailing spot selling rate of exchange for the relevant outstanding currency against sterling. The provisions of (b) above will remain in force following any such re-denomination. 

	
(i)
	
Any reference to euro means the euro unit as defined in Regulation (EC) No. 1103/97 pronounced by the Council of the European Union and any reference to national currency unit has the meaning given to such expression by such Regulation, namely a unit of the currency of a participating Member State, as that unit is defined on the day before the start of the third stage of Economic and Monetary Union. 

If a change in any national currency unit occurs (including where there is more than one currency or currency unit recognised at the same time as the lawful currency), the Facility Letter will be amended to the extent the Bank determines is necessary to reflect this change. 

	
(j)
	
The Bank will not be under any obligation to accept any instructions, receive or make any payment or carry out any other transaction denominated in the euro or in any national currency unit on a day on which the Bank is not normally open for general business in the relevant jurisdiction where such transactions are to be received or carried out, whether or not such a day is a Business Day for transactions in the euro or the relevant national currency unit. 

	
7
	
Payments 

	
(d)
	
All payments by the Borrower will be made in cleared funds in the currency in which the payment is due on a Business Day on the due date for payment or, if that day is not a Business Day, on the next succeeding Business Day. 

	
(e)
	
All payments will be made without any deduction or withholding (whether in respect of set-off, counterclaim, duties, taxes, charges or otherwise). 

	
(f)
	
If the Borrower is required by law to make any deduction or withholding from a payment, it will promptly pay to the Bank such additional sums as will make the net sum received by the Bank equal to the full sum payable had there been no deduction or withholding. 

	
8
	
Costs and Expenses 

	
(b)
	
The Borrower will pay to the Bank the amount of all costs and expenses (including any legal, security and valuation fees), stamp duty, taxes and other charges and registration costs incurred or charged by the Bank in connection with: 

	
(iii)
	
the negotiation, preparation, administration, amendment, variation or supervision of the Facilities, the Facility Letter and/or any Security; and 

	
(iv)
	
the enforcement of or the preservation of any rights under the Facility Letter and/or any Security and any proceedings instituted by or against the Bank as a consequence of taking or holding the Security or enforcing these rights. 

The Bank will debit these costs to the Borrower’s current account with the Bank. The Bank will advise the Borrower of the amount of such costs before they are debited. 

	
9
	
Indemnity 

The Borrower will indemnify the Bank on demand against any cost, loss or liability incurred by the Bank in connection with or arising out of: 

	
(d)
	
the application of any Facility or any part of it by the Borrower; and/or 

	
(e)
	
the provision of any Facility or any other banking facilities by the Bank to the Borrower; and/or 

28

 

	
(f)
	
the Bank having a security interest in any assets of the Borrower or any other person providing Security, including: 

	
(iii)
	
those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning any Facility or its application; or 

	
(iv)
	
in respect of a breach of, or a failure to meet, any Environmental Obligations. 

	
10
	
Demand and Notice 

Any demand or notice given by the Bank under the Facility Letter may be: 

	
(c)
	
by letter addressed to the Borrower or any officer of the Borrower sent by first class post to or left at the Borrower’s address last known to the Bank or at the Borrower’s registered office; or 

	
(d)
	
by fax or other electronic means to the Borrower’s last known fax number or electronic mail address. 

If sent by post, the demand or notice will be taken to have been made or given at noon the second day following the day the letter was posted. If sent by fax or other electronic means, the demand or notice will be taken to have been made or given at the time of transmission. 

Unless otherwise advised by the Bank any notices given by the Borrower to the Bank under this letter will be delivered to this office. 

	
11
	
Joint Borrowers 

If the Borrower consists of two or more persons (whether corporates, partners or otherwise): 

	
(f)
	
they will be jointly and individually liable to the Bank for the Facilities and for any other moneys from time to time owing to the Bank in respect of the Facilities; 

	
(g)
	
any notice given to any one of them under the Facility Letter will be notice to all of them; 

	
(h)
	
if at any time any one or more of the provisions of the Facility Letter is or becomes invalid, illegal or unenforceable against any one or more of them, it will remain enforceable against the others as if it had been addressed to only to those others; 

	
(i)
	
the Bank’s rights against any one such person will not be impaired, discharged or otherwise affected by: 

	
—
	
the Bank granting any time or indulgence to any of the others; 

	
—
	
the Bank varying or releasing any of the others from any liability to the Bank or any Security relating to such liability; 

	
—
	
the Bank failing to take any such Security; and/or 

	
—
	
any act, event or omission which would, but for these provisions, impair, discharge or otherwise affect any of such rights of the Bank; and 

	
(j)
	
no such person will be entitled without the written consent of the Bank to exercise any right or make any claim against any of the others (including any right of subrogation or right to prove in a liquidation) arising by virtue of any payment made in accordance with the Facility Letter or otherwise in connection with the Facility Letter. 

	
12
	
Miscellaneous 

	
(i)
	
Business Day means a day (other than a Saturday or Sunday) and time on which the relevant banking offices and markets are open for business for the currency and transaction involved and, if the relevant currency is the euro, a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system is open for settlement of payments in euro. 

	
(j)
	
Facility Current Account means the current account of the Borrower with the Bank on which the Facility is run. 

	
(k)
	
No delay or failure by the Bank in exercising any right or remedy will be taken to mean or take effect as a waiver or release of that right or remedy. The Bank will always be entitled to exercise all its rights and remedies unless it has expressly waived them in writing. 

	
(l)
	
If at any time any one or more of the provisions of the Facility Letter is or becomes invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions of the Facility Letter will not be in any way affected. 

29

 

	
(m)
	
If it becomes unlawful for the Bank to perform all or any of its obligations under the Facility Letter, then the Bank will notify the Borrower and: 

	
(iii)
	
the Borrower will repay any parts of the Facilities which have been drawn down together with all other amounts due and owing to the Bank; and 

	
(iv)
	
any parts of the Facilities that have not been drawn down will be cancelled. 

	
(n)
	
The Bank and the Borrower agree that the terms of the Facility Letter will not be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person who is not a party to the Facility Letter. 

	
(o)
	
If the Borrower does not accept the Facility Letter, the Bank may allow drawings under the Facilities and this will be taken to be acceptance of the terms and conditions of the Facility Letter (without amendment). 

	
(p)
	
The Borrower may sign any number of copies of the Facility Letter and these copies, together with the copy or copies signed on behalf of the Bank, will form a single document. 

	
13
	
Governing Law and Enforcement 

	
(a)
	
For facilities on accounts held in England, the Facility is governed by and construed in accordance with English law and all claims and disputes (including non-contractual claims and disputes) arising out of or in connection with the Facility or its subject matter, negotiation or formation will be determined in accordance with English law. 

	
(b)
	
The Borrower and the Bank both submit to the non-exclusive jurisdiction of the courts of England and Wales in relation to all claims, disputes, differences or other matters (including non-contractual claims, disputes, differences or other matters) arising out of or in connection with the Facility 

	
(c)
	
The Borrower: 

	
(ii)
	
waives any objection to the courts of England including an objection on grounds of inconvenience; and 

	
(iii)
	
agrees that a judgment or order of a court of England in connection with the Facility Letter is binding on it and may be enforced against it in the courts of any other jurisdiction. 

 

 

 

30

 

ACCEPTANCE BY THE BORROWER 

We, Powell (UK) Limited, accept the offer and agree to all the terms and conditions contained in the Facility Letter dated 28 August 2014. 

Date: 

Director: 

Director and 

Secretary: 

(Signed for and on behalf of Powell (UK) Limited, pursuant to a Resolution of the Board of Directors passed on .                 ). 

 

31Exhibit 10.1

 

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
made and entered into as of this 3rd day of December, 2014 by and between MSC INDUSTRIAL DIRECT CO., INC., a New York corporation
(the “Corporation”), and Erik Gershwind, having an address at c/o MSC Industrial Direct Co., Inc., 75 Maxess Road,
Melville, New York 11747 (the “Associate”).

 

WITNESSETH:

 

WHEREAS, the Corporation
and the Associate are parties to a Change in Control Agreement, dated as of December 27, 2005, as amended by the Amendment to Change
in Control Agreement, dated December 17, 2007, as further amended by Amendment No. 2 to Change in Control Agreement, dated as of
December 22, 2011 (as amended, the “Agreement”) and wish to further amend and restate the Agreement as provided herein.

 

NOW, THEREFORE, the parties
hereto hereby agree as follows:

 

First:
Severance Benefits.

 

A.           If,
within two (2) years after a Change in Control, the Associate’s “Circumstances of Employment” (as hereinafter
defined) shall have changed, the Associate may terminate his employment by written notice to the Corporation given no later than
ninety (90) days following such change in the Associate’s Circumstances of Employment. In the event of such termination by
the Associate of his employment or if, within two (2) years after a Change in Control, the Corporation shall terminate the Associate’s
employment other than for “Cause” (as hereinafter defined), then subject to the provisions of paragraph F of this Article
FIRST: (a) the Corporation shall pay to the Associate, in cash, the “Special Severance Payment” (as hereinafter defined)
as provided in Section E below, and (b) any stock options or stock appreciation rights held by the Associate shall become fully
vested and exercisable, any restrictions applicable to any stock awards held by the Associate shall lapse and the stock relating
to such awards shall become free of all restrictions and fully vested and transferable, any performance conditions imposed with
respect to any stock awards shall be deemed to be achieved at target performance levels (except as otherwise specifically provided
in an award agreement which provides that that the award shall be deemed to be earned or vest on a pro rata or other basis), and
all outstanding repurchase rights of the Corporation with respect to any awards held by the Associate shall terminate, provided
that awards which are not assumed or substituted for shall accelerate in accordance with the provisions of the Corporation’s
2005 or 2015 Omnibus Incentive Plan, as applicable.

 

    	 

    	 

    

 

B.           A
Change in Control shall be deemed to occur if:

 

(a)          any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”), other than Mitchell Jacobson or Marjorie Gershwind or a member of the
Jacobson or Gershwind families or any trust established principally for members of the Jacobson or Gershwind families or an executor,
administrator or personal representative of an estate of a member of the Jacobson or Gershwind families and/or their respective
affiliates, becomes the beneficial owner, directly or indirectly, of fifty percent (50%) or more of the combined voting power of
the Corporation’s outstanding voting securities ordinarily having the right to vote for the election of directors of the
Corporation; provided, however, that for purposes of this subparagraph (a), the following acquisitions shall not constitute a Change
in Control: any acquisition by any corporation pursuant to a transaction which complies with clauses (1), (2) and (3) of subparagraph
(c) of this paragraph B;

 

    	2

    	 

    

  

(b)          during
any twenty-four month period, individuals who, at the beginning of such period, constitute the Board of Directors of the Corporation,
together with any new director(s) (other than (1) a director designated by a Person who shall have entered into an agreement with
the Corporation to effect a transaction described in subparagraphs (a) or (c) of this paragraph B and (2) a director whose initial
assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the
Corporation) whose election by the Board or nomination for election by the Corporation’s shareholders was approved by a vote
of at least two-thirds of the directors then still in office who either were directors at the beginning of the twenty-four (24)
month period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority
thereof;

 

    	3

    	 

    

  

(c)          there
is a consummation of a reorganization, merger or consolidation involving the Corporation (a “Business Combination”),
in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were
beneficial owners of the Corporation’s outstanding voting securities ordinarily having the right to vote for the election
of directors of the Corporation immediately prior to such Business Combination beneficially own, directly or indirectly, more than
fifty percent (50%) of the combined voting power of the then outstanding voting securities ordinarily having the right to vote
for the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same proportion as their ownership, immediately prior to such
Business Combination, of the Corporation’s outstanding voting securities, (2) no Person (excluding any corporation resulting
from such Business Combination) other than Mitchell Jacobson or Marjorie Gershwind or a member of the Jacobson or Gershwind families
or any trust established principally for members of the Jacobson or Gershwind families or an executor, administrator or personal
representative of an estate of a member of the Jacobson or Gershwind families and/or their respective affiliates, beneficially
owns, directly or indirectly, 50% or more of the combined voting power of the then outstanding voting securities of the corporation
resulting from such Business Combination, and (3) at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the incumbent Board of Directors of the Corporation at the time of the
execution of the initial agreement, or of the action of the Board, providing for such Business Combination;

 

(d)          there
is a liquidation or dissolution of the Corporation approved by the shareholders; or

 

(e)          there
is a consummation of a sale of all or substantially all of the assets of the Corporation.

 

    	4

    	 

    

  

C.           The
Associate’s “Circumstances of Employment” shall have changed if there shall have occurred any of the following
events: (a) a material reduction or change in the Associate’s employment duties or reporting responsibilities; (b) a reduction
in the annual base salary made available by the Corporation to the Associate from the annual base salary in effect immediately
prior to a Change in Control; (c) a material diminution in the Associate’s status, working conditions or other economic benefits
from those in effect immediately prior to a Change in Control; or (d) the Corporation requiring the Associate to be based at any
place outside a 30-mile radius from the Corporation’s offices where the Associate was based prior to a Change in Control,
except for reasonably required travel on the Corporation’s business which is not materially greater than such travel requirements
prior to a Change in Control.

 

D.           “Cause”
shall mean (i) the willful and continued failure by the Associate to substantially perform his duties with the Corporation and
its subsidiaries (other than any such failure resulting from his incapacity due to physical or mental illness, or any such actual
or anticipated failure after issuance of a notice of termination by the Associate due to a change in the Associate’s Circumstances
of Employment) after a written demand for substantial performance is delivered to the Associate by the Corporation which demand
specifically identifies the manner in which the Corporation believes that the Associate has not substantially performed his duties,
(ii) the willful engaging by the Associate in conduct which is demonstrably and materially injurious to the Corporation or its
subsidiaries, monetarily or otherwise, or (iii) the Associate’s conviction of, or entering a plea of nolo contendere
to, a felony. For purposes of clauses (i) and (ii), no act or failure to act on the Associate’s part shall be deemed “willful”
unless done, or omitted to be done, by the Associate not in good faith or without reasonable belief that his action or omission
was in the best interest of the Corporation and its subsidiaries.

 

    	5

    	 

    

  

E.           The
“Special Severance Payment” shall mean: (X) payment equal to the sum of (i) the product of two (2) and the annual base
salary in effect immediately prior to a change in the Associate’s Circumstances of Employment or the termination other than
for Cause of the Associate’s employment by the Corporation, as the case may be, and (ii) the product of two (2) and the targeted
bonus for the Associate in effect immediately prior to a change in Associate Circumstances of Employment or termination other than
for Cause, as the case may be, such payment to be made in equal installments in accordance with the Corporation’s regular
payroll policies (but not less frequently than biweekly) for a period of eighteen months, with the first such installment being
made on the fifth (5th) business day following the six-month anniversary of Associate’s termination of employment;
(Y) payment of a pro rata portion of the Associate’s targeted bonus in effect immediately prior to the date such change in
Associate’s Circumstances of Employment or termination of employment other than for Cause occurs (the “In Year Bonus”),
calculated as the product of (a) the In Year Bonus multiplied by (b) a fraction the numerator of which is the number
of whole months elapsed in the fiscal year up to the date such change in Associate’s Circumstances of Employment or termination
occurs, and the denominator of which is twelve (12), such payment to be made on the fifth (5th) business day following
the six (6) months’ anniversary of termination of employment; and (Z) for the two (2) year period or the remaining term of
the automobile lease at issue, whichever is less following Associate’s date of termination of employment (other than termination
for Cause), the Corporation shall, as applicable, either (a) pay Associate a monthly automobile allowance in amounts equal to those
in effect immediately prior to such termination, or (b) continue to make the monthly lease payments under the automobile lease
in effect for the benefit of Associate immediately prior to such termination, provided that if any payment (or portion thereof)
otherwise due under this clause (Z) during the first six (6) months following the Associate’s termination of employment is
not exempt from the application of Section 409A of the Code, including the regulations, rulings, notices and other guidance issued
by the Internal Revenue Service interpreting the same (collectively, “Section 409A”), the amount subject to Section
409A that would otherwise be paid during such first six months shall be held (without adjustment for earnings and losses) and paid
on the fifth (5th) business day following the six-month anniversary of such termination date. For the avoidance of doubt,
it is understood that "targeted bonus" for purposes of this Agreement shall mean the target annual incentive cash bonus
then in effect and approved under the Corporation's annual incentive bonus plan without regard to awards or targets approved in
order to comply with Section 162(m) of the Code, provided further that if a "targeted bonus" is not in effect immediately
prior to the date of such change in Associate's Circumstances of Employment or termination of employment other than for Cause,
the "targeted bonus" shall be the target annual incentive cash bonus most recently in effect.

 

    	6

    	 

    

  

F.           As
a condition to receiving the Special Severance Payment and other Severance Benefits provided in Article FIRST A., no later than
sixty (60) days following the Associate’s termination of employment (x) Associate shall have executed a Confidentiality,
Non-Solicitation and Non-Competition Agreement in a form reasonably satisfactory to the Corporation and in substantially the same
form as previously executed and (y) shall execute and return the General Release in substantially the form attached as Exhibit
A hereto, and Associate shall at all times be in compliance with such Agreement and Release.

 

G.           For
purposes of this Agreement, “affiliate” shall have the meaning ascribed thereto under the Securities Act of 1933.

 

    	7

    	 

    

  

H.           For
purposes of this Agreement, “termination of employment” means cessation of full or part time employment with the Corporation
and any of its subsidiaries.

 

Second:
Payment Adjustment. Payments under Article FIRST A. shall be made without regard to whether the deductibility of
such payments (or any other payments or benefits to or for the benefit of Associate) would be limited or precluded by Section 280G
of the Code and without regard to whether such payments (or any other payments or benefits) would subject Associate to the federal
excise tax levied on certain “excess parachute payments” under Section 4999 of the Code; provided, that if the total
of all payments to or for the benefit of Associate, after reduction for all federal, state and local taxes (including the excise
tax under Section 4999 of the Code) with respect to such payments (“Associate’s total after-tax payments”), would
be increased by the limitation or elimination of any payment under Article FIRST A., or by an adjustment to the vesting of any
equity-based awards that would otherwise vest on an accelerated basis in connection with the Change in Control (and the termination
of employment), amounts payable under Article FIRST A. shall be reduced and the vesting of equity-based awards shall be adjusted
to the extent, and only to the extent, necessary to maximize Associate’s total after-tax payments. Any reduction in payments
or adjustment of vesting required by the preceding sentence shall be applied, first, against any benefits payable under Article
FIRST A., and then against the vesting of any equity-based awards, if any, that would otherwise have vested in connection with
the Change in Control (and the termination of employment). The determination as to whether Associate’s payments and benefits
include “excess parachute payments” and, if so, the amount and ordering of any reductions in payment required by the
provisions of this Article SECOND shall be made at the Corporation’s expense by Ernst & Young LLP or by such other certified
public accounting firm as the Compensation Committee of the Board of Directors of the Corporation may designate prior to a Change
in Control (the “accounting firm”). In the event of any underpayment or overpayment hereunder, as determined by the
accounting firm, the amount of such underpayment or overpayment shall forthwith and in all events within thirty (30) days of such
determination be paid to Associate or refunded to the Corporation, as the case may be, with interest at the applicable Federal
rate provided for in Section 7872(f)(2) of the Code.

 

    	8

    	 

    

  

Third:
Continued Medical Coverage. If Associate’s employment is terminated in either of the circumstances described
in Article FIRST, Part A hereof, in the event Associate timely elects under the provisions of COBRA to continue his group health
plan coverage that was in effect prior to the date of the termination of Associate’s employment with the Corporation, Associate
will be entitled to continuation of such coverage, at the Corporation’s expense, for a period of eighteen (18) months from
the date of termination, provided that Associate continues to be eligible for COBRA coverage.

 

Fourth:
Outplacement. If Associate’s employment is terminated in either of the circumstances described in Article FIRST,
Part A hereof, Associate shall be eligible for outplacement services, at the Corporation’s expense and with a service selected
by the Corporation in its reasonable discretion, for up to six (6) months from the date of the termination of Associate’s
employment with the Corporation.

 

Fifth:
At Will Employment. Nothing in this Agreement shall confer upon the Associate the right to remain in the employ of
the Corporation, it being understood and agreed that (a) the Associate is an employee at will and serves at the pleasure of the
Corporation at such compensation as the Corporation shall determine from time to time and (b) the Corporation shall have the right
to terminate the Associate’s employment at any time, with or without Cause. In the event of any such termination prior to
the occurrence of a Change in Control, no amount shall be payable by the Corporation to the Associate pursuant to Article FIRST
hereof.

 

    	9

    	 

    

  

Sixth:
Costs of Enforcement. In the event that the Associate incurs any costs or expenses, including attorneys’ fees,
in the enforcement of his rights under this Agreement then, unless the Corporation is wholly successful in defending against the
enforcement of such rights, the Corporation shall pay to the Associate all such costs and expenses sixty (60) days following a
final decision.

 

Seventh:
Term. The initial term of this Agreement shall be for three (3) years from the date hereof, and this Agreement shall
automatically renew for successive three (3) year terms unless terminated by the Corporation, in its sole discretion, by delivering
to Associate written notice thereof provided to Associate at least 18 months prior to the end of the initial term or such successive
terms, as applicable.

 

Eighth:
Notices. All notices hereunder shall be in writing and shall be sent by registered or certified mail, return receipt
requested, and if intended for the Corporation shall be addressed to it, attention of its President, 75 Maxess Road, Melville,
New York 11747 or at such other address of which the Corporation shall have given notice to the Associate in the manner herein
provided; and if intended for the Associate, shall be mailed to him at the address of the Associate first set forth above or at
such other address of which the Associate shall have given notice to the Corporation in the manner herein provided.

 

Ninth:
Entire Agreement. This Agreement constitutes the entire understanding between the parties with respect to the matters
referred to herein, and no waiver of or modification to the terms hereof shall be valid unless in writing signed by the party to
be charged and only to the extent therein set forth. All prior and contemporaneous agreements and understandings with respect to
the subject matter of this Agreement are hereby terminated and superseded by this Agreement.

 

    	10

    	 

    

  

Tenth:
Withholding. The Corporation shall be entitled to withhold from amounts payable to the Associate hereunder such amounts
as may be required by applicable law.

 

Eleventh:
Binding Nature. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective
heirs, administrators, executors, personal representatives, successors and assigns.

 

Twelfth:
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the
State of New York.

 

Thirteenth:
Section 409A.

 

A.           To
the fullest extent applicable, amounts and other benefits payable under this Agreement are intended to be exempt from the definition
of “nonqualified deferred compensation” under Section 409A in accordance with one or more of the exemptions available
under Section 409A. In this regard, each such payment hereunder that may be treated as payable in the form of “a series of
installment payments,” as defined in Treas. Reg. §1.409A-2(b)(2)(iii) shall be deemed a separate payment for purposes
of Section 409A.

 

B.           To
the extent that any amounts or benefits payable under this Agreement are or become subject to Section 409A due to a failure to
qualify for an exemption from the definition of nonqualified deferred compensation under Section 409A, this Agreement is intended
to comply in form and operation with the applicable requirements of Section 409A with respect to such amounts or benefits. This
Agreement shall be interpreted and administered to the extent possible in a manner consistent with the foregoing statement of intent.

 

    	11

    	 

    

  

C.           Notwithstanding
any provision of this Agreement to the contrary, the time of payment of any stock awards that are subject to Section 409A as “nonqualified
deferred compensation” and that vest on an accelerated basis pursuant to this Agreement shall not be accelerated unless such
accelerated payment is permissible under Section 409A.

 

D.           The
following rules shall apply to any obligation to reimburse an expense or provide an in-kind benefit that is nonqualified deferred
compensation within the meaning of Section 409A: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year; (ii) the reimbursement of an eligible expense must be made on or before the last day of the calendar year following
the calendar year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit.

 

[signature page to follow]

 

    	12

    	 

    

 

IN WITNESS WHEREOF, the
parties have executed this Amended and Restated Change in Control Agreement as of the day and year first above written.

 

	 	MSC INDUSTRIAL DIRECT CO., INC.
	 	 	 
	 	By:	/s/ Steve Armstrong
	 	 	Name: Steve Armstrong
	 	 	Title: Senior Vice President and General

Counsel
	 	 	 
	 	 	/s/ Erik Gershwind
	 	 	     Erik Gershwind

 

    	13

    	 

    

 

Exhibit A

 

RELEASE

 

WHEREAS, _____________ (the “Associate”)
was a party to an Amended and Restated Change in Control Agreement dated as of November __, 2014 (the “Agreement”)
by and between the Associate and MSC INDUSTRIAL DIRECT CO., INC., a New York corporation (the “Corporation”), and the
employment of the Associate with the Corporation has been terminated; and

 

WHEREAS, it is a condition to the Corporation’s
obligations to make the severance payments and benefits available to the Associate pursuant to the Agreement that the Associate
execute and deliver this Release to the Corporation.

 

NOW, THEREFORE, in consideration of the
receipt by the Associate of the benefits under the Agreement, which constitute a material inducement to enter into this Release,
the Associate intending to be legally bound hereby agrees as follows:

 

Subject to the next succeeding paragraph,
effective upon the expiration of the 7-day revocation period following execution hereof as provided below, the Associate irrevocably
and unconditionally releases the Corporation and its owners, stockholders, predecessors, successors, assigns, affiliates, control
persons, agents, directors, officers, employees, representatives, divisions and subdivisions (collectively, the “Related
Persons”) from any and all causes of action, charges, complaints, liabilities, obligations, promises, agreements, controversies
and claims (a) arising out of the Associate’s employment with the Corporation and the conclusion thereof, including, without
limitation, any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the employment
relationship and/or specifically that prohibit discrimination based upon age, race, religion, sex, national origin, disability,
sexual orientation or any other unlawful bases, including, without limitation, as amended, Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Civil Rights Acts of 1866 and 1871, the
Americans With Disabilities Act of 1990, the New York City and State Human Rights Laws, and any applicable rules and regulations
promulgated pursuant to or concerning any of the foregoing statutes; (b) for tort, tortious or harassing conduct, infliction of
emotional distress, interference with contract, fraud, libel or slander; and (c) for breach of contract or for damages, including,
without limitation, punitive or compensatory damages or for attorneys’ fees, expenses, costs, salary, severance pay, vacation,
injunctive or equitable relief, whether, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured,
which, from the beginning of the world up to and including the date hereof, exists, have existed, or may arise, which the Associate,
or any of his heirs, executors, administrators, successors and assigns ever had, now has or at any time hereafter may have, own
or hold against the Corporation and/or any Related Person.

 

    	 

    	 

    

 

Notwithstanding anything contained herein
to the contrary, the Associate is not releasing the Corporation from any of the Corporation’s obligations (a) under the Agreement,
(b) to provide the Associate with insurance coverage defense and/or indemnification as an officer or director of the Corporation
to the extent generally made available at the date of termination to the Corporation’s officers and directors in respect
of facts and circumstances existing or arising on or prior to the date hereof, or (c) in respect of the Associate’s rights
under the Corporation’s Associate Stock Purchase Plan, the 2005 Omnibus Incentive Plan, or the 2015 Omnibus Incentive Plan,
as applicable.

 

The Corporation has advised the Associate
in writing to consult with an attorney of his choosing prior to the signing of this Release and the Associate hereby represents
to the Corporation that he has in fact consulted with such an attorney prior to the execution of this Release. The Associate acknowledges
that he has had at least twenty-one days to consider the waiver of his rights under the ADEA. Upon execution of this Release, the
Associate shall have seven additional days from such date of execution to revoke his consent to the waiver of his rights under
the ADEA. If no such revocation occurs, the Associate’s waiver of rights under the ADEA shall become effective seven days
from the date the Associate executes this Release.

 

IN WITNESS WHEREOF, the undersigned has
executed this Release on the ____ day of __________, 20__.

 

	 	 

 

    	2

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