Exhibit 10.1(ay)
FIH|LOAN AGREEMENT
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FIH-LOAN AGREEMENT
#1204901
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Debtors
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The Term Loan can be allocated
between the following Debtors at the Debtors’ discretion
(subject only as set forth below):
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Sauer-Danfoss Inc.
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250 Parkway Drive,
Suite 270
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Lincolnshire
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IL 60069
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USA
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and
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Sauer-Danfoss Holding ApS
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Nordborgvej 81
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6430 Nordborg
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Denmark
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CVR-no. 20161612
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The Principal must be fully drawn in
one draw down notice. If the Principal is split between the two
Debtors, each term loan will have a separate FIH-loan number. Both
term loans will be governed by this Loan Agreement.
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The borrowing amount allocated to
Sauer-Danfoss Holding ApS must be approved by both Sauer-Danfoss
Holding ApS and Sauer-Danfoss Inc. Enclosed in the draw down and
approval letter to the Creditor (as defined below) must be a
confirmation of the guarantee from Sauer-Danfoss Inc. covering the
payments under the allocation to Sauer-Danfoss Holding ApS to the
Creditor according the paragraph “Guarantor” and
“Draw down” in this Loan Agreement.
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A Debtor will only be liable for the
repayments (including interests, amortization, fees, etc.) related
to amounts allocated to that Debtor (i.e., the Debtors will not be
jointly liable for all payments under this Loan Agreement).
However, Sauer-Danfoss Inc. will be responsible for all payments
under this Loan Agreement as either Debtor or Guarantor for the
allocated amount to Sauer-Danfoss Holding ApS.
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Creditor
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FIH Erhvervsbank A/S
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Langelinie Alle 43
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2100 Copenhagen O
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Denmark
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Principal
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USD 75,000,000
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Currencies
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USD or EUR
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Loan structure
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Term Loan.
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The Principal must be fully drawn in
one draw down notice. If the Principal is partly or fully repaid,
this part can not be redrawn.
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Maturity
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10 years
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Amortization
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20 consecutive quarterly payments
consisting of interest only followed by 20 consecutive quarterly
payments each equal to 1/20 th of
the Principal outstanding after 20 quarterly payments (the loan
will be fully repaid after 10 years). Any prepayments shall be
applied pro rata to the remaining Principal payments.
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Interest rate
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Fixed interest rate
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`
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Credit commitment and margin
commitment 10 years
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The interest rate will be based on
FIH cost-of-funds + 0,40%
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Interest payment quarterly in
arrear
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Based on the market interest level
of 28 October 2005, the interest rate can be indicated to
5,71% (USD) and 4,03% (EUR)
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Payment dates
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1 January, 1 April, 1 July and
1 October
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Up Front Fee
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0,20% of the Principal
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The Up Front Fee will be deducted
when drawing the Principal.
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Conversion
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By notice from Sauer-Danfoss Inc.
either portion of the Term Loan can at any time be converted to
other currencies and/or interest rate-base:
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Term Loans with floating rates can
be converted at Payment dates without fees, breakage costs or
compensation to the Creditor
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Term Loans with floating rates
covered with a swap can be converted at Payment dates without fees
or compensation to the Creditor. However ordinary breakage costs,
excluding margins will apply for the cancellation of the
swap
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Term Loans with fixed interest rates
will be converted using the NPV at the conversion date as the new
Principal
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The Conversion amount must be not
less than USD 10 mill.
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Repayment
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The Term Loan can at any time be
fully or partly repaid:
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Term Loans with floating rates can
be repaid at Payment dates without fees, breakage costs or
compensation to the Creditor
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Term Loans with floating rates
covered with a swap can be repaid at Payment dates without fees or
compensation to the Creditor. However ordinary breakage costs,
excluding margins will apply for the cancellation of the
swap
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Term Loans with fixed interest rates
can be terminated by repaying the NPV at the conversion
date
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Prepayments must be not less than
USD 5 mill.
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Collateral
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Unsecured
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Financial
covenants
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Debt covenant
: NIBD / EBITDA < 3,50
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Interest
coverage : EBITDA / Net interest > 3,00
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The financial covenants will be
tested quarterly in connection with the Payment dates on a running
12 month rolling basis.
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Sauer-Danfoss Inc. must prepare a
compliance certificate for delivery with each financial statement
referred to below. The compliance certificate covering the end of
the financial year must include a positive statement, that the
Debtors are not in breach with the “disposal of
asset”-covenant.
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If a financial covenant is not met,
the Loan Agreement can be considered in default by the
Creditor.
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Financial
information
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The Debtors are obliged to send the
Creditor:
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A copy of the annual (both Debtors)
and quarterly financial statements (only Sauer-Danfoss Inc.) plus
information provided to the lenders under the US $250,000,000
Multicurrency Revolving Facility Agreement, dated 12
September 2003, or any refinancing or replacement thereof, as
and when so provided
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Other relevant information sent to
the lenders under the US $250,000,000 Multicurrency Revolving
Facility Agreement, dated 12 September 2003, or any
refinancing or replacement thereof
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A compliance certificate with each
of the foregoing financial statements prepared by Sauer-Danfoss
Inc. on a consolidated
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basis.
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Other terms and
conditions
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Material Adverse Clause. Not
included (see however the Pari Passu paragraph below).
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Pari Passu. The payments under the
Term Loan are to be treated at least pari passu with other senior
loans taken up by the Debtors, also, if, to the extent and for so
long as any other senior loan made to the Debtor provides the
lender thereunder with an option to terminate the senior loan based
on a material adverse change, such clause shall apply to this
loan
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Cross default. Any financial
indebtedness of any member of the Sauer-Danfoss group is not paid
when due nor within any original applicable grace period over the
amount of USD 10,000,000, provided the non-payment is not disputed
or remedied within 10 business days after the due date or the end
of any original grace period, the Term Loan can be terminated by
the Creditor
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Change-of-control. If any person or
two or more persons acting in concert (other than (a) Klaus H.
Murmann, his family or any trust or other entity owned or
controlled by Klaus H. Murmann or his family, and/or
(b) Danfoss A/S, directly or indirectly), acquires a
beneficial ownership (within the meaning of Rule 13d-3 of the
SEC under the Securities Act of 1934) of thirty (30) per cent, or
more of the outstanding shares of voting stock of Sauer-Danfoss
Inc., the Term Loan can be terminated by the Creditor
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Negative Pledge. The Debtors are not
allowed to pledge securities, except securities representing 65% of
Sauer-Danfoss Inc.’s interests in Sauer-Danfoss Holding ApS,
Sauer-Danfoss GmbH, Sauer-Danfoss GmbH & Co. OHG and such
other additional equity interests as may be required from time to
time to be pledged as collateral security for the refinancing of
t
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