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Exhibit 10.4
EXECUTION COPY
FOREIGN GUARANTY
Dated as of April 27, 2006
From
THE GUARANTORS NAMED HEREIN
And
THE ADDITIONAL GUARANTORS REFERRED TO HEREIN
as Guarantors
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
Foreign Guaranty
T A B
L E O F C O N
T E N T S
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Section
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Page
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Section 1. Guaranty; Limitation of
Liability
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1
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Section 2. Guaranty Absolute
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2
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Section 3. Waivers and
Acknowledgments
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4
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Section 4. Subrogation
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5
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Section 5. Payments Free and Clear of
Taxes, Etc.
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5
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Section 6. Representations and
Warranties
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6
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Section 7. Covenants
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6
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Section 8. Amendments, Guaranty
Supplements, Etc.
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6
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Section 9. Notices, Etc.
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7
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Section 10. No Waiver;
Remedies
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7
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Section 11. Right of Set-off
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7
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Section 12. Indemnification
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8
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Section 13. Continuing Guaranty;
Assignments under the Credit Agreement
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8
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Section 14. Judgments.
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9
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Section 15. Execution in
Counterparts
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9
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Section 16. Governing Law;
Jurisdiction; Waiver of Jury Trial, Etc.
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9
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Exhibit A - Guaranty Supplement
Foreign Guaranty
FOREIGN GUARANTY
FOREIGN GUARANTY dated as of April 27, 2006 made by the
Persons listed on the signature pages hereof under the caption
"Foreign Guarantors" and the Additional Guarantors (as defined in
Section 8(b) ) (such Persons so listed and the
Additional Guarantors being, collectively, the " Guarantors
" and, individually, each a " Guarantor ") in favor of the
Secured Parties (as defined in the Credit Agreement referred to
below).
PRELIMINARY STATEMENT.
SENSATA TECHNOLOGIES B.V., a private limited liability company (
besloten vennootschap met beperkte aansprakelijkheid )
incorporated under the laws of the Netherlands (the " BV
Borrower "), SENSATA TECHNOLOGIES FINANCE COMPANY, LLC, a
Delaware limited liability company (the " US Borrower ";
together with the BV Borrower, the " Borrowers "), SENSATA
TECHNOLOGIES INTERMEDIATE HOLDING B.V., a private limited liability
company ( besloten vennootschap met beperkte
aansprakelijkheid ) incorporated under the laws of the
Netherlands, are party to a Credit Agreement dated as of
April 27, 2006 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the " Credit
Agreement "; the capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined) with
certain Lenders party thereto, the Initial L/C Issuer, the Initial
Swing Line Lender and MORGAN STANLEY SENIOR FUNDING, INC., as
Collateral Agent and Administrative Agent. The Borrowers and the
Guarantors have entered into or may from time to time enter into
lines of credit (committed or uncommitted) and other similar
arrangements (the " Bilateral Obligations ") with Lenders or
their Affiliates and certain other financial institutions as
initially set forth on Schedule XII of the Domestic Security
Agreement and as such schedule may be amended from time to time
upon written notice by the Borrowers to the applicable Lenders or
Affiliates and certain other financial institutions (each, in such
capacity, a " Bilateral Provider ").
Each Guarantor may receive, directly or indirectly, a portion of
the proceeds of the Loans under the Credit Agreement and will
derive substantial direct and indirect benefits from the
transactions contemplated by the Credit Agreement and from each
Bilateral Provider’s Bilateral Obligations. It is a condition
precedent to the making of the Loans by the Lenders and the
issuance of Letters of Credit by the Initial L/C Issuer under the
Credit Agreement and the entry by the Hedge Banks into Secured
Hedge Agreements from time to time that each Guarantor shall have
executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Loans and to issue Letters of Credit
under the Credit Agreement, the Bilateral Providers to provide
Bilateral Obligations and the Hedge Banks to enter into Secured
Hedge Agreements from time to time, each Guarantor, jointly and
severally with each other Guarantor, hereby agrees as follows:
Section 1. Guaranty; Limitation of Liability .
(a) Each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees the punctual payment when due, whether at
scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all Obligations of the BV
Borrower, each Loan Party guaranteeing the Obligations of the BV
Borrower and each other Foreign Subsidiary that is an obligor with
respect to the Cash Management Obligations now or hereafter
existing (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all
of the foregoing Obligations), whether direct or indirect, absolute
or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or
otherwise and the Bilateral Obligations of each Bilateral Provider
(such Obligations being the " Guaranteed Obligations "), and
agrees to pay any and all reasonable expenses (including, without
limitation, reasonable fees and reasonable out-of-pocket expenses
of counsel) incurred by the
Foreign Guaranty
Administrative Agent or any other Secured Party
in enforcing any rights under this Guaranty or any other Loan
Document in accordance with Section 10.04 of the Credit
Agreement (including Attorney Costs of any law firm or other
external counsel to the Administrative Agent); provided ,
however , that in no event shall the Guaranteed Obligations
of any Guarantor include any of its obligations as a Borrower under
the Credit Agreement. Without limiting the generality of the
foregoing, each Guarantor’s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and
would be owed by any other Guarantor to any Secured Party under or
in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such
other Guarantor. Notwithstanding anything herein or in the Credit
Agreement to the contrary, (i) the aggregate principal amount
of all Bilateral Obligations guaranteed hereby shall not exceed
$40,000,000 and (ii) to the extent that Bilateral Obligations
are cash collateralized or otherwise guaranteed (other than
pursuant hereunder), such Bilateral Obligations shall not be
guaranteed hereby.
(b) Each Guarantor (other than the BV Borrower), and by its
acceptance of this Guaranty, the Administrative Agent and each
other Secured Party, hereby confirm that it is the intention of all
such Persons that this Guaranty and the Obligations of each
Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law (as hereinafter defined),
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar foreign, federal or state Law to the
extent applicable to this Guaranty and the Obligations of each
Guarantor hereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the Guarantors
hereby irrevocably agree that the Obligations of each Guarantor
(other than the BV Borrower in its capacity as a Borrower under the
Credit Agreement) under this Guaranty at any time shall be limited
to the maximum amount as will result in the Obligations of such
Guarantor under this Guaranty not constituting a fraudulent
transfer or conveyance. For purposes hereof, " Bankruptcy
Law " means any proceeding of the type referred to in
Section 8.01(f) of the Credit Agreement or Title 11,
U.S. Code, or any similar foreign, federal or state Law for the
relief of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to any
Secured Party under this Guaranty or any other guaranty, such
Guarantor will contribute, to the maximum extent permitted by Law,
such amounts to each other Guarantor and each other guarantor so as
to maximize the aggregate amount paid to the Secured Parties under
or in respect of the Loan Documents.
(d) To the extent that any Guarantor shall be required hereunder
to pay a portion of the Guaranteed Obligations exceeding the
greater of (a) the amount of the economic benefit actually
received by such Guarantor from the Loans and (b) the amount
such Guarantor would otherwise have paid if such Guarantor had paid
the aggregate amount of the Guaranteed Obligations (excluding the
amount thereof repaid by the Borrowers) in the same proportion as
such Guarantor’s net worth at the date enforcement is sought
hereunder bears to the aggregate net worth of all the Guarantors
(taken together with the aggregate net worth of all other "
Guarantors " (as such term is defined in the Credit
Agreement) obligated with respect to the Guaranteed Obligations
(the " Other Guarantors ")) at the date of enforcement is
sought hereunder, then each Other Guarantor shall reimburse such
other Guarantors for the amount of such excess, pro rata, based on
the respective net worths of such Other Guarantors at the date
enforcement hereunder is sought.
(e) Notwithstanding anything to the contrary in any Loan
Document, no Guarantor shall have any liability or obligation under
this Guaranty to the extent that such liability or obligation would
constitute unlawful financial assistance under the applicable Laws
of the jurisdiction of any Guarantor.
Section 2. Guaranty Absolute . Each Guarantor guarantees
that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any
Foreign Guaranty
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Law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
rights of any Secured Party with respect thereto. The Obligations
of each Guarantor under or in respect of this Guaranty are
independent of the Guaranteed Obligations or any other Obligations
of any other Loan Party under or in respect of the Loan Documents,
and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the BV Borrower (in its
capacity as Borrower under the Credit Agreement) or any other Loan
Party or whether the BV Borrower or any other Loan Party is joined
in any such action or actions. The liability of each Guarantor
under this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and each Guarantor hereby
irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to, any or all of the
following:
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(a) any lack of validity or enforceability of any Loan Document
or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of
the Loan Documents, or any other amendment or waiver of or any
consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting
from the extension of additional credit to any Loan Party or any of
its Subsidiaries or otherwise; provided that where such a
waiver is unenforceable or where such a change would discharge the
Guarantor of its liability under this Guaranty if made without its
consent, the Guarantor hereby gives its consent to such change;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or
amendment or waiver of, or consent to departure from, any other
guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any
Collateral or any other collateral for all or any of the Guaranteed
Obligations or any other Obligations of any Loan Party under the
Loan Documents or any other assets of any Loan Party or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its
Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan
Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or
prospects of any other Loan Party now or hereafter known to such
Secured Party (each Guarantor waiving any duty on the part of the
Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver this
Guaranty, any Guaranty Supplement (as hereinafter defined) or any
other guaranty or agreement or the release or reduction of
liability of any Guarantor or other guarantor or surety with
respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute
a defense available to, or a discharge of, any Loan Party or any
other guarantor or surety to the extent permitted; provided
that, where a Loan Party contracts with the Secured Parties to be
discharged from the Guaranteed Obligations, the Guarantor hereby
assents to such contract and remains bound under this Guaranty.
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This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of
any of the Guaranteed Obligations is rescinded or must otherwise be
returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the BV Borrower (in its
capacity as a Borrower under the Credit Agreement) or any other
Loan Party or otherwise, all as though such payment had not been
made.
Section 3. Waivers and Acknowledgments . (a) Each
Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration,
protest or dishonor and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that
any Secured Party protect, secure, perfect or insure any Lien or
any property subject thereto or exhaust any right or take any
action against any Loan Party or any other Person or any
Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives
any right to revoke this Guaranty and, where it may not waive this
right, the Guarantor agrees that this Guaranty will not be revoked,
and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense
based upon an election of remedies by any Secured Party that in any
manner impairs, reduces, releases or otherwise adversely affects
the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any
other guarantor or any other Person or any Collateral and
(ii) any defense based on any right of set-off or counterclaim
against or in respect of the Obligations of such Guarantor
hereunder.
(d) Each Guarantor acknowledges that the Collateral Agent may,
without notice to or demand upon such Guarantor and without
affecting the liability of such Guarantor under this Guaranty,
foreclose under any mortgage by nonjudicial sale, and each
Guarantor hereby waives any defense to the recovery by the
Collateral Agent and the other Secured Parties against such
Guarantor of any deficiency after such nonjudicial sale and any
defense or benefits that may be afforded by applicable Law.
(e) Each Guarantor hereby unconditionally and irrevocably waives
any duty on the part of any Secured Party to disclose to such
Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party or any of its
Subsidiaries now or hereafter known by such Secured Party.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth
in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.
(g) To the fullest extent permitted by law, each Guarantor
organized under the laws of Mexico unconditionally and irrevocably
waives, any right to which it may be entitled, to the extent
applicable, under Articles 2813, 2814,2815,2816, 2817, 2818, 2819,
2820, 2821, 2822, 2823, 2824, 2826, 2827, 2830, 2835, 2836, 2837,
2838, 2839, 2840, 2842, 2844, 2846, 2847, 2848 and 2849 of the
Federal Civil Code ( Código Civil Federal ) and the
corresponding provisions of the Civil Codes of the States of Mexico
and the Federal District.
Foreign Guaranty
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(h) Each Guarantor organized under the laws of
Brazil hereby unconditionally and irrevocably waives the rights and
benefits under Articles 364, 365, 827, 829, 834, 835, 837, 838 and
839 of the Brazilian Civil Code.
Section 4. Subrogation . Each Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights
that it may now have or hereafter acquire against the BV Borrower,
any other Loan Party or any other insider guarantor that arise from
the existence, payment, performance or enforcement of such
Guarantor’s Obligations under or in respect of this Guaranty
or any other Loan Document, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy
of any Secured Party against the BV Borrower, any other Loan Party
or any other insider guarantor or any Collateral, whether or not
such claim, remedy or right arises in equity or under contract,
statute or common Law, including, without limitation, the right to
take or receive from the BV Borrower, any other Loan Party or any
other insider guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security
on account of such claim, remedy or right, unless and until all of
the Guaranteed Obligations (other than (x) obligations with
respect to Secured Hedge Agreements, (y) Cash Management
Obligations not yet due and payable and (z) contingent
indemnification obligations not yet accrued and payable under the
Loan Documents) and all other amounts payable under this Guaranty
shall have been paid in full in cash, all Letters of Credit shall
have been cash collateralized or otherwise back-stopped, in each
case, on terms required by the Credit Agreement or shall have
expired or been terminated and the Commitments shall have expired
or been terminated. If any amount shall be paid to any Guarantor in
violation of the immediately preceding sentence at any time prior
to the latest of (a) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this
Guaranty, (b) the Maturity Date of the Term Loan Facility and
(c) the latest date of cash collateralization or other
back-stop, in each case, on the terms required by the Credit
Agreement or the expiration or termination of all Letters of
Credit, such amounts shall be received and held in trust for the
benefit of the Secured Parties, shall be segregated from other
property and funds of such Guarantor and shall forthwith be paid or
delivered to the Administrative Agent in the same form as so
received (with any necessary endorsement or assignment) to be
credited and applied to the Guaranteed Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured,
in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts
payable under this Guaranty thereafter arising. If (i) any
Guarantor shall make payment to any Secured Party of all or any
part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts, if any, payable under this
Guaranty shall have been paid in full in cash, (iii) the
Maturity Date of the Term Loan Facility shall have occurred and
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