EXHIBIT 4.2
BRIDGE CREDIT AGREEMENT
DATED AS OF DECEMBER 30, 2002
AMONG
TECUMSEH PRODUCTS COMPANY,
THE LENDERS,
BANK ONE, NA
AS AGENT
AND
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS..........................................................................................1
ARTICLE II. THE CREDITS........................................................................................13
2.1. Commitment.......................................................................................13
2.2. Required Payments; Termination...................................................................14
2.3. Ratable Loans....................................................................................14
2.4. Types of Advances................................................................................14
2.5. Facility Fee; Reductions in Aggregate Commitment.................................................14
2.6. Minimum Amount of Each Advance...................................................................14
2.7. Optional Principal Payments......................................................................14
2.8. Method of Selecting Types and Interest Periods for New Advances..................................15
2.9. Conversion and Continuation of Outstanding Advances..............................................15
2.10. Changes in Interest Rate, etc....................................................................15
2.11. Rates Applicable After Default...................................................................16
2.12. Method of Payment................................................................................16
2.13. Noteless Agreement; Evidence of Indebtedness.....................................................16
2.14. Telephonic Notices...............................................................................17
2.15. Interest Payment Dates; Interest and Fee Basis...................................................17
2.16. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions..................17
2.17. Lending Installations............................................................................17
2.18. Non-Receipt of Funds by the Agent................................................................17
2.19. Replacement of Lender............................................................................18
ARTICLE III. YIELD PROTECTION; TAXES...........................................................................18
3.1. Yield Protection.................................................................................18
3.2. Changes in Capital Adequacy Regulations..........................................................19
3.3. Availability of Types of Advances................................................................19
3.4. Funding Indemnification..........................................................................20
3.5. Taxes............................................................................................20
3.6. Lender Statements; Survival of Indemnity.........................................................21
ARTICLE IV. CONDITIONS PRECEDENT...............................................................................22
4.1. Initial Advance..................................................................................22
4.2. Each Advance.....................................................................................24
ARTICLE V. REPRESENTATIONS AND WARRANTIES......................................................................24
5.1. Existence and Standing...........................................................................24
5.2. Authorization and Validity.......................................................................24
5.3. No Conflict; Government Consent..................................................................25
5.4. Financial Statements.............................................................................25
5.5. Material Adverse Change..........................................................................25
5.6. Taxes............................................................................................26
5.7. Litigation and Contingent Obligations............................................................26
5.8. Subsidiaries.....................................................................................26
5.9. ERISA............................................................................................26
5.10. Accuracy of Information..........................................................................26
5.11. Regulations T, U and X...........................................................................26
5.12. Material Agreements..............................................................................27
5.13. Compliance With Laws.............................................................................27
5.14. Ownership of Properties..........................................................................27
5.15. Plan Assets; Prohibited Transactions.............................................................27
5.16. Environmental Matters............................................................................27
5.17. Investment Company Act...........................................................................27
5.18. Public Utility Holding Company Act...............................................................27
5.19. Solvency.........................................................................................27
5.20. FASCO Acquisition................................................................................28
ARTICLE VI. COVENANTS..........................................................................................29
6.1. Financial Reporting..............................................................................29
6.2. Use of Proceeds; FASCO Acquisition Documents.....................................................30
6.3. Notice of Default................................................................................30
6.4. Conduct of Business..............................................................................30
6.5. Taxes............................................................................................31
6.6. Insurance........................................................................................31
6.7. Compliance with Laws.............................................................................31
6.8. Maintenance of Properties........................................................................31
6.9. Inspection.......................................................................................31
6.10. Dividends........................................................................................31
6.11. Indebtedness.....................................................................................31
6.12. Merger...........................................................................................31
6.13. Sale of Assets...................................................................................32
6.14. Investments and Acquisitions.....................................................................32
6.15. Liens............................................................................................33
6.16. Affiliates.......................................................................................34
6.17 Limitation on Restrictions on Subsidiary Distributions...........................................34
6.18 Financial Contracts..............................................................................34
6.19. Financial Covenants..............................................................................34
6.20. Additional Covenants.............................................................................34
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ARTICLE VII. DEFAULTS..........................................................................................35
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...................................................37
8.1. Acceleration.....................................................................................37
8.2. Amendments.......................................................................................37
8.3. Preservation of Rights...........................................................................38
ARTICLE IX. GENERAL PROVISIONS..................................................................................38
9.1. Survival of Representations......................................................................38
9.2. Governmental Regulation..........................................................................38
9.3. Headings.........................................................................................38
9.4. Entire Agreement.................................................................................38
9.5. Several Obligations; Benefits of this Agreement..................................................39
9.6. Expenses; Indemnification........................................................................39
9.7. Numbers of Documents.............................................................................39
9.8. Accounting.......................................................................................39
9.9. Severability of Provisions.......................................................................40
9.10. Nonliability of Lenders..........................................................................40
9.11. Confidentiality..................................................................................40
9.12. Nonreliance......................................................................................40
9.13. Disclosure.......................................................................................40
ARTICLE X. THE AGENT............................................................................................41
10.1. Appointment; Nature of Relationship..............................................................41
10.2. Powers...........................................................................................41
10.3. General Immunity.................................................................................41
10.4. No Responsibility for Loans, Recitals, etc.......................................................41
10.5. Action on Instructions of Lenders................................................................42
10.6. Employment of Agents and Counsel.................................................................42
10.7. Reliance on Documents; Counsel...................................................................42
10.8. Agent's Reimbursement and Indemnification........................................................42
10.9. Notice of Default................................................................................43
10.10. Rights as a Lender...............................................................................43
10.11. Lender Credit Decision...........................................................................43
10.12. Successor Agent..................................................................................43
10.13. Agent and Arranger Fees..........................................................................44
10.14. Delegation to Affiliates.........................................................................44
10.15. Co-Agents, Documentation Agent, Syndication Agent, etc...........................................44
ARTICLE XI. SETOFF; RATABLE PAYMENTS............................................................................44
11.1. Setoff...........................................................................................44
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11.2. Ratable Payments.................................................................................44
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................................45
12.1. Successors and Assigns...........................................................................45
12.2. Participations...................................................................................45
12.3. Assignments......................................................................................46
12.4. Dissemination of Information.....................................................................48
12.5. Tax Treatment....................................................................................48
ARTICLE XIII. NOTICES..........................................................................................48
13.1. Notices..........................................................................................48
13.2. Change of Address................................................................................49
ARTICLE XIV. COUNTERPARTS.......................................................................................49
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.......................................49
15.1. CHOICE OF LAW....................................................................................49
15.2. CONSENT TO JURISDICTION..........................................................................49
15.3. WAIVER OF JURY TRIAL.............................................................................50
PRICING SCHEDULE.................................................................................................52
EXHIBIT A. FORM OF OPINION.....................................................................................53
EXHIBIT B. COMPLIANCE CERTIFICATE..............................................................................54
EXHIBIT D. LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION......................................................62
EXHIBIT E. NOTE................................................................................................63
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS.................................................................65
SCHEDULE 2. INDEBTEDNESS AND LIENS.............................................................................66
iv
SCHEDULE 3. FASCO ENTITIES.....................................................................................67
SCHEDULE 5.7. LITIGATION.......................................................................................67
v
BRIDGE CREDIT AGREEMENT
This Agreement, dated as of December 30, 2002, is among Tecumseh
Products Company, a Michigan corporation, the Lenders and Bank One, NA, a
national banking association having its principal office in Chicago, Illinois,
as Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Accumulated Funding Deficiency" means any accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302 of
ERISA.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities Voting Stock of any Person.
"Advance" means a borrowing hereunder, (i) made by the Lenders on the
same Borrowing Date, or (ii) converted or continued by the Lenders on the same
date of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 5% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof. As of
the date hereof, the Aggregate Commitment equals $250,000,000.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
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"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the president, chief executive
officer or chief financial officer of the Borrower or any other employee of the
Borrower designated in writing as an Authorized Officer by any of the foregoing,
in each case acting singly.
"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Board of Directors" means: (i) with respect to a corporation, the
board of directors of the corporation; (ii) with respect to a partnership, the
Board of Directors of the general partner of the partnership; and (iii) with
respect to any other Person, the board or committee of such Person serving a
similar function.
"Borrower" means Tecumseh Products Company, a Michigan corporation, and
its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Detroit and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Detroit for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capital Stock" means (i) in the case of any corporation, all capital
stock and any securities exchangeable for or convertible into capital stock and
any warrants, rights or other options to purchase or otherwise acquire capital
stock or such securities or any other form of equity securities, (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation
2
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Xxxxx'x, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change in Control" means (i) the acquisition by any Person (other than
Permitted Holders), or two or more Persons (other than Permitted Holders) acting
in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
20% or more of the outstanding shares of voting stock of the Borrower; or (ii) a
majority of the members of the Board of Directors of the Borrower shall not be
Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below, as
it may be modified as a result of any assignment that has become effective
pursuant to Section 12.3.3 or as otherwise modified from time to time pursuant
to the terms hereof.
"Consolidated EBIT" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) restructuring
charges for plant closings (including charges for impairment of value of
equipment and severance costs) taken after September 30, 2002 but on or before
December 31, 2003 to the extent such restructuring charges do not exceed
$40,000,000 in aggregate amount, and (iv) extraordinary losses incurred other
than in the ordinary course of business, minus, to the extent included in
Consolidated Net Income, extraordinary gains realized other than in the ordinary
course of business, all calculated for the Borrower and its Subsidiaries on a
consolidated basis.
"Consolidated EBITDA" means Consolidated EBIT plus, to the extent
deducted from revenues in determining Consolidated EBIT and without duplication,
(i) depreciation, (ii) amortization and (iii) non-cash charges related
specifically to any goodwill impairment charge required under FASB 142 not to
exceed $25,000,000 in the aggregate for any four consecutive fiscal quarters or
$50,000,000 in the aggregate for any twelve consecutive fiscal quarters, all
calculated for the Borrower and its Subsidiaries on a consolidated basis.
3
"Consolidated Indebtedness" means at any time the Indebtedness of the
Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.
"Consolidated Interest Expense" means, with reference to any period,
the interest expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period, including without limitation all financing
costs in connection with a Qualified Receivables Transaction.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis as of such time; provided that all accumulated other
comprehensive income (as determined in accordance with Agreement Accounting
Principles, which includes such non-cash adjustments for foreign currency
translation and transaction adjustments, net unrealized gains/losses on all
investments, minimum pension liability and other FASB 87 adjustments, and all
FASB 133 related adjustments) shall be excluded in determining Consolidated Net
Worth.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Continuing Directors" means, as of any date, individuals who at the
beginning of any period of two consecutive calendar years ended before such date
constituted the Board of Directors of the Borrower, together with any new
directors whose election by such Board of Directors or whose nomination for
election was approved by a vote of at least two-thirds of the members of such
Board of Directors then still in office who either were members of such Board of
Directors at the beginning of such period or whose election or nomination for
election was previously so approved.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Default" means an event described in Article VII.
"Defaulting Lender" means any Lender that on any Borrowing Date fails
to make available to the Agent such Lender's Loans required to be made to the
Borrower on such Borrowing Date or fails to make any payment due to the Agent as
and when due hereunder. Once a Lender becomes a Defaulting Lender, such Lender
shall continue as a Defaulting Lender until such time as such Defaulting Lender
makes available to the Agent the amount of such Defaulting Lender's Loans
together with all other amounts required to be paid to the Agent and/or the
Lenders pursuant to this Agreement.
4
"Domestic Subsidiary" means each present and future Subsidiary of the
Borrower which is not a Foreign Subsidiary.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income
(including the Michigan single business tax), and franchise taxes imposed on it,
by (i) the jurisdiction under the laws of which such Lender or the Agent is
incorporated or organized or (ii) the jurisdiction in which the Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Facility Termination Date" means the earliest to occur of (i) the date
six months after the date of this Agreement, (ii) the date the obligations are
due (whether at stated maturity, by acceleration or otherwise) or the
commitments are terminated under the Three-Year Credit Agreement (other than as
a
5
result of a voluntary reduction of the commitments thereunder by the Borrower),
or (iii) the date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof
"FASCO" shall mean the entities comprising the FASCO Motors Group to be
acquired by the Borrower as further described in the FASCO Acquisition Documents
and set forth on attached Schedule 3.
"FASCO Acquisition" means the Acquisition by the Borrower and/or a
Guarantor of FASCO pursuant to the FASCO Acquisition Documents, which is
currently scheduled to be completed on or before January 15, 2003.
"FASCO Acquisition Documents" means the FASCO Purchase Agreement and
all other material agreements, documents and instruments executed in connection
therewith, in each case as amended or modified from time to time to the extent
permitted by Section 6.2 hereof.
"FASCO Stock Purchase Agreement" means the stock purchase agreement
dated November 27, 2002 among the Borrower and the Sellers for the Acquisition
by the Borrower and/or a Guarantor of FASCO, as amended or modified from time to
time to the extent permitted by Section 6.2 hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Detroit
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (ii) any Rate Management
Transaction.
"Floating Rate" means, for any day, a rate of interest per annum equal
to the higher of (i) the Prime Rate for such day and (ii) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.
"Foreign Subsidiary" means each Subsidiary organized under the laws of
a jurisdiction outside of the United States.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
6
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court or any foreign governmental
authority, agency or court.
"Guarantor" means all present and future Domestic Subsidiaries of the
Borrower and their successors and assigns, and any other Person executing a
Guaranty at any time.
"Guaranty" means all guaranties of the Obligations executed by the
Guarantors in favor of the Agent, for the ratable benefit of the Lenders, as it
may be amended or modified and in effect from time to time, and each such
guaranty shall be in form and substance acceptable to the Agent.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) obligations of such Person
with respect to Letters of Credit, whether drawn or undrawn, contingent or
otherwise, (vii) Net Xxxx-to-Market Exposure, (viii) Off-Balance Sheet
Liabilities, (ix) Capitalized Lease Obligations, (x) Receivables Transaction
Attributed Indebtedness, (xi) any other obligation for borrowed money or other
financial accommodation which in accordance with Agreement Accounting Principles
would be shown as a liability on the consolidated balance sheet of such Person,
and (xii) all Contingent Obligations of such Person with respect to any of the
foregoing.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
7
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.17
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (i)
Consolidated Indebtedness outstanding on such date to (ii) Consolidated EBITDA
for the Borrower's then most-recently ended four fiscal quarters.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Guaranties, any Notes issued
pursuant to Section 2.13 and any other agreements or instruments executed in
connection herewith at any time.
"Margin Stock" means "margin stock" as defined in Regulations U or X or
"marginable OTC stock" or "foreign margin stock" within the meaning of
Regulation T.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, or of FASCO
taken as a whole, (ii) the ability of the Borrower and the Guarantors taken as a
whole to perform their respective obligations under the Loan Documents, or (iii)
the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent or the Lenders thereunder.
"Material Indebtedness" means Indebtedness in an outstanding principal
amount of $25,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Cash Proceeds" means, in connection with any issuance or sale of
any equity securities or debt securities or instruments or the incurrence of
loans, the cash proceeds received from such issuance or
8
incurrence, net of investment banking fees, reasonable and documented attorneys'
fees, accountants' fees, underwriting discounts and commissions and other
reasonable and customary fees and expenses actually incurred in connection
therewith.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.13.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party arising under the Loan
Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding from this clause (iv) Operating Leases.
"Opening Pro Forma Statements" is defined in Section 4.1(xii).
"Opening Projections" is defined in Section 4.1(xii).
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the date three months after the date hereof and
each date occurring each three months thereafter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Holders" means and includes (A) any Person who is a lineal
descendant of Xxxxxxx Xxxxxxx, (B) the spouse, children, or grandchildren of any
such Person, (C) any trust of which any of such Persons is a trustee or a
beneficiary, (D) the estate, executor, administrator, or any legal guardian of
any
9
such Person, (E) any partnership, corporation or limited liability company owned
and controlled solely by such Persons and (F) the Xxxxxxx Foundation.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Borrower or any Subsidiary pursuant
to which the Borrower or any Subsidiary may sell, convey or otherwise transfer
to a newly-formed Subsidiary or other special-purpose entity, or any other
Person, any accounts or notes receivable and rights related thereto, provided
that (i) all of the terms and conditions of such transaction or series of
transactions, including without limitation the amount and type of any recourse
to the Borrower or any Subsidiary with respect to the assets transferred, are
acceptable to the Agent and the Required Lenders and (ii) the Receivables
Transaction Attributed Indebtedness incurred in such transaction or series of
transactions does not exceed $100,000,000.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Receivables Transaction Attributed Indebtedness" means the amount of
obligations outstanding under the legal documents entered into as part of any
Qualified Receivables Transaction on any date of determination that would be
characterized as principal if such Qualified Receivables Transaction were
10
structured as a secured lending transaction rather than as a purchase.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having more than 50%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding more than 50% of the aggregate outstanding
Loans.
"Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority (foreign or domestic), in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
11
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SEC Reports" means the following reports and financial statements of
the Borrower:
(i) the Borrower's annual report on Form 10-K for the year
ended December 31, 2001, as filed with or sent to the Securities and Exchange
Commission as of the date hereof; and
(ii) the Borrower's quarterly reports on Form 10-Q for the
quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, the
definitive proxy statement for the 2002 annual shareholders meeting of the
Borrower and all Form 8-K's filed after December 31, 2001, in each case as filed
with the Securities and Exchange Commission as of the date hereof.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Sellers" means BTR Industries Limited, a corporation organized and
existing under the laws of England and Wales, BTR (European Holdings) BV, a
corporation organized and existing under the laws of the Netherlands, CPN
Holdings Pty Limited, a corporation organized and existing under the laws of
Australia, Invensys Controls Mexican Holding, L.L.C., a limited liability
company organized and existing under the laws of Mexico and BTR (USA) Finance
Company, a Massachusetts business trust, and Invensys plc, a corporation
organized and existing under the laws of England and Wales.
"Significant Subsidiary" means any one or more Subsidiaries which, if
considered in the aggregate as a single Subsidiary, would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Securities
Exchange Act of 1934.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower. For purposes of the representations and
warranties made herein, each reference to a "Subsidiary" of the Borrower shall
include the Target and its Subsidiaries.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which represents more than 10% (or, for
purposes of Section 6.13, 15%) of the consolidated assets of the Borrower and
its Subsidiaries or property which is responsible for more than 10% (or, for
purposes of Section 6.13, 15%) of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).
12
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Three-Year Credit Agreement" means the Three-Year Credit Agreement
dated as of the date hereof among the Borrower, the lenders party thereto and
Bank One, NA, as agent, as amended, modified, replaced or refinanced from time
to time.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, trustees or
similar persons thereof.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
from time to time in amounts not to exceed in the aggregate at any one time
outstanding the amount of its Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow at any time prior to the
Facility Termination Date. The Commitments to lend hereunder shall expire on the
Facility Termination Date.
13
2.2. Required Payments; Termination. Unless earlier payment is required
hereunder, the Loans and all other unpaid Obligations shall be paid in full by
the Borrower on the Facility Termination Date. In addition to any other required
payment, the Borrower shall cause the Loans and all other unpaid Obligations to
be paid with 100% of the Net Cash Proceeds from (i) the issuance of any senior
unsecured notes, public bonds or notes or similar debt securities after the date
hereof, or the incurrence of any indebtedness for borrowed money (other than
loans under the Three-Year Credit Agreement) by the Borrower or any of its
Subsidiaries in excess of $75,000,000 in aggregate amount after the date hereof
(provided that it is acknowledged that 100% of the Net Cash Proceeds of such
issuance or incurrence shall be used as a prepayment and not only the amount in
excess of $75,000,0000), and (ii) the issuance or other sale or transfer of any
Capital Stock of the Borrower or any of its Subsidiaries after the date hereof.
Such mandatory payments shall also permanently decrease the Aggregate
Commitment, on a pro rata basis among the Lenders, by the amount of such
payments.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. Facility Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender a facility fee at a
per annum rate equal to 0.15% on such Lender's Commitment (whether used or
unused) from the date hereof to and including the Facility Termination Date,
payable on each Payment Date hereafter and on the Facility Termination Date,
provided that, if any Lender continues to have Loans outstanding hereunder after
the termination of its Commitment (including, without limitation, during any
period when Loans may be outstanding but new Loans may not be borrowed
hereunder), then such facility fee shall continue to accrue on the aggregate
principal amount of the Loans owed to such Lender until such Loans are repaid in
full. The Borrower may permanently reduce the Aggregate Commitment in whole, or
in part ratably among the Lenders in integral multiples of $10,000,000, upon at
least five Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction, provided, however, that the amount of
the Aggregate Commitment may not be reduced below the aggregate principal amount
of the outstanding Advances. All accrued facility fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder and on the final date upon which all Loans are repaid hereunder.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$10,000, provided, however, that any Floating Rate Advance may be in the amount
of the unused Aggregate Commitment.
2.7. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $10,000, any portion of the outstanding Floating
Rate Advances upon two Business Days' prior notice to the Agent. The Borrower
may from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $5,000,000 or any
integral multiple of $100,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior notice to the Agent.
14
2.8. Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Detroit time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Detroit time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Detroit to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.9 or are repaid in accordance with Section 2.7. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with Section 2.7 or (y) the Borrower shall have given
the Agent a Conversion/Continuation Notice (as defined below) requesting that,
at the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another Interest Period. Subject to the terms
of Section 2.6, the Borrower may elect from time to time to convert all or any
part of a Floating Rate Advance into a Eurodollar Advance. The Borrower shall
give the Agent irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of a Floating Rate Advance into a Eurodollar Advance or continuation
of a Eurodollar Advance not later than 10:00 a.m. (Detroit time) at least three
Business Days prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each
15
change in the Floating Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period
may end after the Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum,
provided that, during the continuance of a Default under Section 7.6 or 7.7, the
interest rates set forth in clauses (i) and (ii) above shall be applicable to
all Advances without any election or action on the part of the Agent or any
Lender.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with Bank One
for each payment of principal, interest and fees as it becomes due hereunder.
2.13. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (c) the amount of any sum received by the Agent hereunder from the Borrower
and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
16
(iv) Any Lender may request that its Loans be evidenced by a promissory
note in substantially the form of Exhibit E (a "Note"). In such event, the
Borrower shall prepare, execute and deliver to such Lender such Note payable to
the order of such Lender. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (prior to any assignment pursuant to Section
12.3) be represented by one or more Notes payable to the order of the payee
named therein, except to the extent that any such Lender subsequently returns
any such Note for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Eurodollar Advance shall be payable on the last day of
its applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest and facility fees shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any payment
of principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Floating Rate.
2.17. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.18. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the
17
case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal, interest or fees to the Agent for the account of the
Lenders, that it does not intend to make such payment, the Agent may assume that
such payment has been made. The Agent may, but shall not be obligated to, make
the amount of such payment available to the intended recipient in reliance upon
such assumption. If such Lender or the Borrower, as the case may be, has not in
fact made such payment to the Agent, the recipient of such payment shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to (x) in the case of payment by
a Lender, the Federal Funds Effective Rate for such day for the first three days
and, thereafter, the interest rate applicable to the relevant Loan or (y) in the
case of payment by the Borrower, the interest rate applicable to the relevant
Loan.
2.19. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 or any
Lender is a Defaulting Lender (any Lender so affected an "Affected Lender"), the
Borrower may elect, if such amounts continue to be charged or such suspension is
still effective, to replace such Affected Lender as a Lender party to this
Agreement, provided that no Default or Unmatured Default shall have occurred and
be continuing at the time of such replacement, and provided further that,
concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Advances and other Obligations due to the
Affected Lender pursuant to an assignment substantially in the form of Exhibit C
and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in same day funds on the day of
such replacement (A) all interest, fees and other amounts then accrued but
unpaid to such Affected Lender by the Borrower hereunder to and including the
date of termination, including without limitation payments due to such Affected
Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Affected Lender been prepaid on such
date rather than sold to the replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation to
any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect
of its Eurodollar Loans, or
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(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining its Eurodollar Loans or
reduces any amount receivable by any Lender or any applicable
Lending Installation in connection with its Eurodollar Loans,
or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of
Eurodollar Loans held or interest received by it, by an amount
deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
Commitment to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
19
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5. Taxes. (i) All payments by the Borrower to or for the account of
any Lender or the Agent hereunder or under any Note shall be made free and clear
of and without deduction for any and all Taxes. If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.5) such Lender or the
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower shall make such
deductions, (c) the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall furnish
to the Agent the original copy of a receipt evidencing payment thereof within 30
days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent and each Lender
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by
the Agent or such Lender as a result of its Commitment, any Loans made by it
hereunder, or otherwise in connection with its participation in this Agreement
and any liability (including interest and expenses, unless resulting solely from
such Lender's failure to timely pay such Taxes or Other Taxes) arising therefrom
or with respect thereto. Payments due under this indemnification shall be made
within 30 days of the date the Agent or such Lender makes demand therefor
pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to the Agent two duly completed copies of United States Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to the
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Borrower and the Agent (x) renewals or additional copies of such form (or
any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the Agent. All forms
or amendments described in the preceding sentence shall certify that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly
20
completing and delivering any such form or amendment with respect to it and such
Lender advises the Borrower and the Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
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ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower has furnished to the Agent with
sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of the
Borrower and each Guarantor, together with all amendments, and
a certificate of good standing, each certified by the
appropriate governmental officer in its jurisdiction of
incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrower and each Guarantor, of its by-laws and of its
Board of Directors' resolutions and of resolutions or actions
of any other body authorizing the execution of the Loan
Documents to which the Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower and each Guarantor, which
shall identify by name and title and bear the signatures of
the Authorized Officers and any other officers of the Borrower
and each Guarantor authorized to sign the Loan Documents to
which it is a party, upon which certificate the Agent and the
Lenders shall be entitled to rely until informed of any change
in writing by the Borrower or such Guarantor.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's and each Guarantor's
counsel, addressed to the Lenders in substantially the form of
Exhibit A.
(vi) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(vii) Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested and the payment of all fees required in connection
herewith.
(viii) All Guaranties signed by the Guarantors.
(ix) Copies of such financial statements of the Borrower and its
Subsidiaries required by the Agent, together with prospective
financial information for the Borrower and its Subsidiaries,
in each case in form and substance satisfactory to the Agent.
(x) The Borrower and its Subsidiaries shall have obtained all
Governmental Authorizations and all consents of other Persons,
in each case that are necessary in connection with the FASCO
Acquisition and the other transactions contemplated by the
Loan Documents and the FASCO Acquisition Documents, and each
of the foregoing shall be in full force and effect. All
applicable waiting periods shall have expired without any
action being taken
22
by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the completion of the
FASCO Acquisition or the financing thereof. No action, request
for stay, petition for review or rehearing, reconsideration,
or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action
to set aside its consent on its own motion shall have expired.
(xi) (a) All conditions precedent to the FASCO Acquisition shall
have been satisfied pursuant to the FASCO Acquisition
Documents or waived by the party entitled to do so to the
extent permitted by Section 6.2 hereof; (b) The aggregate
consideration paid or payable, including without limitation
all direct payments, all deferred payments, all Indebtedness
assumed and all other consideration, for the FASCO Acquisition
shall not exceed $450,000,000; and (c) the Agent shall have
received a certificate of the Borrower to the effect set forth
in clauses (a) and (b) above and stating that the Borrower
and/or another Guarantor will proceed to consummate the FASCO
Acquisition substantially in accordance with the FASCO
Acquisition Documents on or within one Business Day of the
initial Advance hereunder and containing such other
certifications as may be reasonably required by the Agent.
(xii) The Agent shall have received pro forma balance sheet and
income statement as of September 30, 2002 (the "Opening Pro
Forma Statements") giving effect to the FASCO Acquisition and
consolidated and consolidating (breaking out the Borrower and
its Subsidiaries and FASCO) projections (the "Opening
Projections") covering a period of not less than three years
and updating the summary projections previously provided to
the Agent on or about August 14, 2002, all in form and
substance reasonably acceptable to the Agent, together with a
compliance certificate, signed by the chief financial officer
of the Borrower, dated the date hereof and giving effect to
the FASCO Acquisition, and such other information as the Agent
may request indicating compliance with all financial and other
covenants and showing no material change from the existing
summary projections delivered on or about August 14, 2002.
(xiii) The initial Loan hereunder shall be made on or before January
15, 2003.
(xiv) Satisfactory results of all due diligence required by the
Agent, including without limitation a review of all contingent
liabilities, a review of contracts and insurance, a review of
all litigation, environmental matters, all retiree medical
benefits, ERISA matters and other due diligence with respect
to FASCO and the FASCO Acquisition required by the Agent.
(xv) The Agent shall have received all FASCO Acquisition Documents
and shall be satisfied with the form, structure and terms of
the FASCO Acquisition and all related transactions, the legal
and the regulatory aspects of the FASCO Acquisition and all
related transactions and all other legal (including tax
implications), financial and regulatory matters relating to
the FASCO Acquisition and related transactions.
(xvi) The Three-Year Credit Agreement shall close simultaneously
herewith and all conditions precedent thereto shall be
satisfied, including without limitation termination of the
existing $100,000,000 Credit Agreement of the Borrower dated
July 15, 1994, as amended.
23
(xvii) The Agent shall have received a certificate from the chief
financial officer of the Borrower concerning the solvency and
other appropriate factual information in form and substance
satisfactory to the Agent with respect to solvency.
(xviii) Since March 31, 2002 there shall have been no change in the
business, Property, prospects, condition (financial or
otherwise) or results of operations of FASCO which could
reasonably be expected to have a Material Adverse Effect.
(xix) The Agent shall have received such other documents as the
Agent or its counsel may have reasonably requested.
4.2. Each Advance. The Lenders shall not be required to make any
Advance unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing Date except to the
extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation
or warranty shall have been true and correct on and as of such
earlier date.
(iii) All legal matters incident to the making of such Advance shall
be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
5.2. Authorization and Validity. The Borrower and each Guarantor has
the power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations thereunder. The
execution and delivery by the Borrower and each Guarantor of the Loan Documents
to which it is a party and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents to
which the Borrower is a party
24
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower or any Guarantor of the Loan Documents to which it is a
party, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of its Subsidiaries or (ii) the Borrower's or any Subsidiary's
articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of any such indenture, instrument
or agreement. No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
5.4. Financial Statements. The December 31, 2001 and the September 30,
2002 consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with Agreement
Accounting Principles in effect on the date such statements were prepared and
fairly present the consolidated financial condition and operations of the
Borrower and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended. The March 31, 2002 consolidated pro forma
financial statements of FASCO heretofore delivered to the Lenders were prepared
as special purpose audits in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and, subject to
the assumptions stated therein, fairly present the consolidated financial
condition and operations of FASCO at such date and the consolidated results of
their operations for the period then ended. The Opening Pro Forma Statements are
complete and accurate in all material respects and fairly represent pro forma
financial condition and operations of the Borrower and its Subsidiaries on a
consolidated basis in accordance with generally accepted accounting principles
in effect on the date such statements were prepared and after giving effect on a
pro forma basis to (i) the consummation of the FASCO Acquisition, (ii) the
Advances to be made hereunder and the use of proceeds thereof, (iii) the payment
of fees and expenses in connection with the foregoing and (iv) the other
transactions contemplated by the FASCO Acquisition and the FASCO Acquisition
Documents. The Opening Projections are based on good faith estimates and
assumptions made by the management of the Borrower, and there are no statements
or conclusions in the Opening Projections which are based upon or include
information known to the Borrower to be misleading or which fail to take into
account material information regarding the matters reported therein. On the date
of the initial Advance hereunder and on the date of the consummation of the
FASCO Acquisition, the Borrower believes that the Opening Projections are
reasonable and attainable, it being understood that uncertainty is inherent in
any forecasts or projections.
5.5. Material Adverse Change. Since December 31, 2001 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, except as
25
disclosed in the SEC Reports. To the Borrower's knowledge, since March 31, 2002
there has been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of the FASCO which could
reasonably be expected to have a Material Adverse Effect
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. No tax liens have been filed and no claims are
being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.7, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Loans. Other than any liability
incident to any litigation, arbitration or proceeding which could not reasonably
be expected to have a Material Adverse Effect, the Borrower has no material
contingent obligations not provided for or disclosed in the financial statements
referred to in Section 5.4.
5.8. Subsidiaries. Schedule 1 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective Capital Stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of Capital Stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9. ERISA. No Accumulated Funding Deficiency exists with respect to
any Single Employer Plan. Neither the Borrower nor any other member of the
Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $15,000,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents, taken in the light of all other information supplied to the Agent and
the Lenders, contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.11 Regulations T, U and X Neither the Borrower nor any of its
Subsidiaries extends or maintains, in the ordinary course of business, credit
for the purpose, whether immediate, incidental, or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of any Advance will be used
for the purpose, whether immediate, incidental, or ultimate, of buying or
carrying any such Margin Stock or maintaining or extending credit to others for
such purpose in any way that would violate Regulation T, U or X. After applying
the proceeds of each Advance, Margin Stock will not constitute more than 25% of
the value of the assets (either of the Borrower alone or of the Borrower and its
Subsidiaries on a
26
consolidated basis) that are subject to any provisions of any Loan Document that
may cause the Advances to be deemed secured, directly or indirectly, by Margin
Stock. The Borrower and its Subsidiaries are in compliance with Section 6.2.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable Requirements of Law except for any failure to
comply with any of the foregoing which could not reasonably be expected to have
a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule 2, on
the date of this Agreement, the Borrower and its Subsidiaries will have good
title, free of all Liens other than those permitted by Section 6.15, to all of
the Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Loans hereunder gives rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. Except as disclosed in the SEC Reports, on the basis
of this consideration, the Borrower has concluded that Environmental Laws cannot
reasonably be expected to have a Material Adverse Effect. Except as disclosed in
the SEC Reports, neither the Borrower nor any Subsidiary has received any notice
to the effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Solvency. (i) Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the making of
each Loan, if any, made on the date hereof and
27
after giving effect to the application of the proceeds of such Loans, (a) the
fair value of the assets of the Borrower and its Subsidiaries on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Borrower and its Subsidiaries on a consolidated
basis; (b) the present fair saleable value of the Property of the Borrower and
its Subsidiaries on a consolidated basis will be greater than the amount that
will be required to pay the probable liability of the Borrower and its
Subsidiaries on a consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) the Borrower and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.20 FASCO Acquisition. (i) The Borrower has heretofore furnished to
the Agent true and complete copies of the FASCO Stock Purchase Agreement and all
other FASCO Acquisition Documents, in each case together with all schedules and
exhibits referred to therein or delivered pursuant thereto and all amendments,
modifications and waivers relating thereto. On the date hereof and immediately
prior to giving effect to the consummation of the FASCO Acquisition, (a) other
than amendments delivered to the Agent prior to the date hereof, none of the
FASCO Acquisition Documents shall have been amended, modified or supplemented,
nor any condition or provision thereof waived, in any manner which would breach
Section 6.2 hereof, and each of the FASCO Acquisition Documents is in full force
and effect and neither the Borrower, any Guarantor any other party thereto is in
default thereunder or in breach thereof, (b) all conditions to the obligations
of the Borrower and the Guarantors under each of such FASCO Acquisition
Documents to consummate the transactions contemplated thereby on the date hereof
shall have been satisfied or shall be satisfied with the consummation of the
transactions contemplated hereunder to occur on the date hereof or shall be
waived by the party entitled to waive such condition to the extent permitted by
Section 6.2 hereof, and (c) the FASCO Acquisition will be consummated
substantially in accordance with the terms of the FASCO Acquisition Documents,
this Agreement and the certificate delivered pursuant to Section 4.1(xi)(c)
hereof and in compliance with all applicable Requirements of Law.
(ii) Each of the representations and warranties given by the Sellers to
the Borrower and/or any Guarantor and by the Borrower and/or any Guarantor to
the Sellers in the FASCO Acquisition Documents is true and correct as of the
date hereof (or as of any earlier date to which such representation and warranty
specifically relates).
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ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted accounting principles and required or
approved by the Borrower's independent certified public
accountants) audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a
consolidated basis for itself and its Subsidiaries, including
balance sheets as of the end of such period, related profit
and loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by (a) any management
letter prepared by said accountants, and (b) a certificate of
said accountants that, in the course of their examination
necessary for their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured Default, or
if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status
thereof.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period and consolidated profit and loss and
reconciliation of surplus statements and a statement of cash
flows for the period from the beginning of such fiscal year to
the end of such quarter, all certified by its chief financial
officer.
(iii) As soon as available, but in any event within 30 days after
the beginning of each fiscal year of the Borrower, a copy of
the plan and forecast (including a projected consolidated and
consolidating balance sheet, income statement and funds flow
statement) of the Borrower for such fiscal year.
(iv) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by its chief financial officer
showing the calculations necessary to determine compliance
with this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(v) Within 365 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
(vi) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief
29
financial officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with
respect thereto.
(vii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries, which,
in either case, could reasonably be expected to have a
Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
(x) Such other information (including non-financial information)
as the Agent or any Lender may from time to time reasonably
request.
6.2. Use of Proceeds; FASCO Acquisition Documents. The Borrower will
use the proceeds of the Advances solely to consummate the FASCO Acquisition. The
Borrower will not, nor will it permit the Borrower or any Subsidiary to, use any
of the proceeds of the Advances to purchase or carry any Margin Stock. The
Borrower will not permit the FASCO Acquisition Documents to be amended or
modified, or waive any condition or right thereunder, which in any of the
foregoing cases would individually or in the aggregate (i) cause the
consideration paid or payable (including without limitation all direct payments,
all deferred payments, all Indebtedness assumed and all other consideration) for
the FASCO Acquisition to increase, (ii) decrease the percentage of the issued
and outstanding Capital Stock of FASCO being acquired pursuant to the FASCO
Acquisition Documents below 100% or otherwise decrease the Property being
acquired in the FASCO Acquisition or (iii) otherwise reasonably be expected to
be materially adverse to the Lenders, without in each case obtaining the prior
written consent of the Agent.
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
30
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all Requirements of Law, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may designate.
6.10. Dividends. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
Capital Stock (other than dividends payable in its own Capital Stock) or redeem,
repurchase or otherwise acquire or retire any of its Capital Stock at any time
outstanding, except that (i) any Subsidiary may declare and pay dividends or
make distributions to the Borrower or to a Wholly-Owned Subsidiary, and (ii) the
Borrower may declare and pay dividends on its Capital Stock and make
redemptions, repurchases or other acquisitions or retirements of any of its
Capital Stock provided that in each case no Default or Unmatured Default shall
exist before or after giving effect thereto or be caused as a result thereof.
6.11. Non-Guarantor Indebtedness. The Borrower will not permit any
Subsidiary which is not a Guarantor to, create, incur or suffer to exist any
Indebtedness, except:
(i) Indebtedness existing on the date hereof and described in
Schedule 2, but no increase in the amount thereof as reduced
from time to time.
(ii) Other Indebtedness in an aggregate outstanding amount for
all such Subsidiaries not to exceed $25,000,000.
6.12. Merger. The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that, (i) a
Subsidiary of the Borrower may merge with the Borrower, provided that the
Borrower shall be the surviving corporation, (ii) a Subsidiary of the
31
Borrower may merge or consolidate with a Guarantor, provided that the Guarantor
shall be the surviving corporation, (iii) a Subsidiary of the Borrower that is
not a Guarantor may merge, consolidate or amalgamate with any other Subsidiary
of the Borrower that is not a Guarantor, and (iv) the Borrower or any Subsidiary
may merge, consolidate or amalgamate with any other Person in connection with an
Acquisition, provided that, if any such merger involves the Borrower or a
Guarantor, the Borrower or such Guarantor shall be the surviving corporation and
such Acquisition is permitted pursuant to the terms of Section 6.14.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as
permitted by this Section during the twelve-month period
ending with the month in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries.
(iii) Any transfer of an interest in accounts or notes receivable
and related assets as part of a Qualified Receivables
Transaction.
(iv) Transfer of assets between Guarantors or between the Borrower
and Guarantors.
(v) Transfer of assets between the Borrower's Subsidiaries that
are not Guarantors.
6.14. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule 1.
(iii) Investments comprised of capital contributions (whether in the
form of cash, a note, or other assets) to a Subsidiary or
other special-purpose entity created solely to engage in a
Qualified Receivables Transaction or otherwise resulting from
transfers of assets permitted by Section 6.13(iii) to such a
special-purpose entity.
(iv) Investments in Guarantors.
(v) Other Investments (other than Acquisitions) provided that the
aggregate amount of such Investments made in any fiscal year
does not exceed 10% of Consolidated Net Worth as of the
beginning of such fiscal year.
(vi) The FASCO Acquisition, subject to the terms of this Agreement.
32
(vii) Any other Acquisition, provided that (a) immediately before
and after giving effect to such Acquisition, on a pro forma
basis acceptable to the Agent, no Default or Unmatured Default
shall exist or shall have occurred and be continuing and the
representations and warranties contained in Article V and in
the other Loan Documents shall be true and correct on and as
of the date thereof (both before and after such Acquisition is
consummated) as if made on the date such Acquisition is
consummated, (b) the target of such Acquisition is in
substantially the same line of business as the Borrower, (c)
such Acquisition is non-hostile and the Board of Directors of
the target of such Acquisition has approved such Acquisition,
and (d) the aggregate consideration paid or payable in
connection with all Acquisitions permitted by this Section
6.14(vii) in any consecutive twelve month period, including
without limitation all direct payments, all deferred payments,
all Indebtedness assumed and all other consideration, shall
not exceed $150,000,000.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule 2.
(vii) Liens incurred in connection with any transfer of an interest
in accounts or notes receivable or related assets as part of a
Qualified Receivables Transaction.
(viii) Liens securing Indebtedness and not otherwise permitted by the
foregoing provisions of this Section 6.15, provided that the
aggregate outstanding principal amount of the Indebtedness
secured by all such Liens shall not at any time exceed 10% of
Consolidated Net Worth.
33
6.16. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction and (ii) transactions between the Borrower or
any Subsidiary, on the one hand, and any Subsidiary or other special-purpose
entity created to engage solely in a Qualified Receivables Transaction.
6.17 Limitation on Restrictions on Subsidiary Distributions. The
Borrower will not, and will not permit any Subsidiary to, enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (i) pay dividends or make any other
distributions in respect of any Capital Stock of such Subsidiary held by, or pay
any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower,
(ii) make loans or advances to the Borrower or any other Subsidiary of the
Borrower or (iii) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (a) any restrictions existing under the Loan
Documents, (b) any restrictions with respect to a Subsidiary imposed pursuant to
an agreement which has been entered into in connection with the disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary, or
(c) any restrictions with respect to assets encumbered by a Lien permitted by
Section 6.15 so long as such restriction applies only to the assets encumbered
by such permitted Lien.
6.18 Financial Contracts. The Borrower will not, and will not permit
any Subsidiary to, enter into or remain a party to any Financial Contract for
purposes of financial speculation, provided that hedging by the Borrower or any
of its Subsidiaries of their own interest rate or foreign currency exposure
shall not be deemed financial speculation.
6.19. Financial Covenants.
6.19.1. Interest Coverage Ratio. The Borrower will not permit
the ratio, determined as of the end of each of its fiscal quarters for
the then most-recently ended four fiscal quarters, of (i) Consolidated
EBIT to (ii) Consolidated Interest Expense to be less than (a) 2.75 to
1.0 as of the end of any fiscal quarter ending after the date hereof
and prior to December 31, 2003 or (b) 3.00 to 1.0 as of the end of any
fiscal quarter thereafter.
6.19.2. Leverage Ratio. The Borrower will not permit the
ratio, determined as of the end of each of its fiscal quarters, of (i)
Consolidated Indebtedness to (ii) Consolidated EBITDA for the then
most-recently ended four fiscal quarters to be greater than 2.50 to
1.0.
6.19.3. Minimum Net Worth. The Borrower will at all times
maintain Consolidated Net Worth of not less than the sum of (i)
$900,000,000 plus (ii) 50% of Consolidated Net Income earned in the
fiscal quarter ending December 31, 2002 (without deduction for losses)
plus (iii) 50% of Consolidated Net Income earned in each fiscal year
beginning with the fiscal year ending December 31, 2003 (without
deduction for losses).
6.20 Additional Covenants. This covenant governs any instrument or
agreement, or any group of related instruments or agreements, relating to or
amending any terms or conditions applicable to any Indebtedness equal to or
greater than $100,000,000 of the Borrower or a Subsidiary (each a "Debt
Instrument"), whether such Debt Instrument is now existing or subsequently
entered into by the Borrower
34
or a Subsidiary. The Borrower shall promptly deliver to the Agent a copy of each
Debt Instrument. If any Debt Instrument contains any covenant, term or condition
or default not substantially provided for in this Agreement or that is more
favorable to the lender or lenders thereunder than those provided for in this
Agreement (each a "More Favorable Provision"), such More Favorable Provision
shall be incorporated by reference in this Agreement as if set forth fully
herein (a) as of the date of this Agreement if such Debt Instrument is now
existing, or (b) as of the effective date of the Debt Instrument if the Borrower
or a Subsidiary subsequently enters into such Debt Instrument. No amendment,
other modification, termination or expiration of any More Favorable Provision
shall alter or otherwise affect such provision as incorporated herein, except
that any modification which makes such provision become more favorable to the
applicable lender shall be incorporated herein in addition to (and not in lieu
of) the provisions which it replaces. Notwithstanding the foregoing, More
Favorable Provisions shall not include any term of a Debt Instrument relating to
amount, rate of interest, fees, amortization, or maturity of the Indebtedness or
the conditions to be satisfied for consummation of the related borrowing.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any facility fee or other obligations under any of
the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.1, 6.2, 6.3, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15 or 6.19.
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after
written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when due
any Material Indebtedness; or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
35
7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of the Borrower and its Subsidiaries which, when taken together
with all other Property of the Borrower and its Subsidiaries so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such action occurs, constitutes a
Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $15,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. Any Change in Control shall occur.
7.11. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.12. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with any
of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
7.13 Any member of the Controlled Group shall fail to pay when due an
amount or amounts aggregating in excess of $15,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Single Employer Plan with Unfunded Liabilities in excess of $15,000,000 (a
"Material Plan") shall be filed under Section 4041(c) of ERISA by any member of
the Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall
36
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist that could reasonably be expected to result in PBGC obtaining a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
causes one or more members of the Controlled Group to incur a current payment
obligation for withdrawal liability in excess of $15,000,000 in aggregate amount
for the Controlled Group.
7.14 (i) The FASCO Acquisition shall be unwound, reversed or otherwise
rescinded in whole or in any material part for any reason, or (ii) the FASCO
Acquisition shall not be consummated on or before January 15, 2003 in accordance
with the terms of the Loan Documents and the FASCO Acquisition Documents.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Required Lenders (or
the Agent with the consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrower hereby expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
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(iii) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required
under Section 2.2, or increase the amount of the Aggregate
Commitment or of the Commitment of any Lender hereunder, or
permit the Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any Guarantor or Guarantors that would constitute a
Significant Subsidiary.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement.
Notwithstanding anything herein to the contrary, no Defaulting Lender shall be
entitled to vote (whether to consent or to withhold its consent) with respect to
any amendment, modification, termination or waiver requiring the consent of the
Required Lenders and, for purposes of determining the Required Lenders, the
Commitments and Loans of each Defaulting Lender shall be disregarded.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Loans
herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof
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other than those contained in the fee letter described in Section 10.13 which
shall survive and remain in full force and effect during the term of this
Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
Agent and the Arranger for any reasonable costs and out-of-pocket expenses
(including attorneys' fees of attorneys for the Agent) paid or incurred by the
Agent or the Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, distribution (including, without limitation,
via the internet), review, amendment, modification, and administration of the
Loan Documents. The Borrower also agrees to reimburse the Agent, the Arranger
and the Lenders for any reasonable costs and out-of-pocket expenses (including
attorneys' fees of attorneys for the Agent, the Arranger and the Lenders) paid
or incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, each Lender, their respective affiliates, and each of their directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Agent, the Arranger,
any Lender or any affiliate is a party thereto) which any of them may pay or
incur arising out of or relating to this Agreement, the other Loan Documents,
any Acquisition, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder except
to the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section 9.6 shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles; provided that, if the Borrower notifies the Agent that the Borrower
wishes to amend any covenant contained in Article VI to eliminate the effect of
any change in generally accepted accounting principles on the calculation of
such covenant (or if the Agent notifies the Borrower that the Required Lenders
wish to amend Article VI for such purpose), then the Borrower's compliance with
such covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders. Notwithstanding anything herein, in any financial
statements of the
39
Borrower or in Agreement Accounting Principles to the contrary, for purposes of
calculating and determining compliance with the financial covenants in Article
VI and determining the Applicable Margin, including defined terms used therein,
any Acquisition (including without limitation the FASCO Acquisition) made by the
Borrower or any of its Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the period for which
such financial covenants or the Applicable Margin were calculated shall be
deemed to have occurred on the first day of the relevant period for which such
financial covenants or the Applicable Margin were calculated on a pro forma
basis acceptable to the Agent.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender. Neither the Agent, the Arranger nor any Lender
shall have any fiduciary responsibilities to the Borrower. Neither the Agent,
the Arranger nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower agrees that neither the Agent,
the Arranger nor any Lender shall have liability to the Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger nor any Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to xxx for, any special, indirect, consequential or
punitive damages suffered by the Borrower in connection with, arising out of, or
in any way related to the Loan Documents or the transactions contemplated
thereby.
9.11. Confidentiality. The Agent and each Lender agree to hold any
confidential information which it may receive from the Borrower pursuant to this
Agreement in confidence, except for disclosure (i) to its Affiliates and to the
Agent and other Lenders and their respective Affiliates, (ii) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(iii) to regulatory officials, (iv) to any Person as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4. The Agent and Lenders agree to give reasonable prior
notice to the Borrower of any disclosure pursuant to the foregoing clauses (iv)
and (v) to the extent feasible and so long as giving such notice is not
otherwise prohibited by applicable law.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any Margin Stock for the repayment of the Loans provided for
herein.
9.13. Disclosure. The Borrower and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.
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ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Michigan Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
41
the Lenders information that is not required to be furnished by the Borrower to
the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof.
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The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint one
of the Lenders, on behalf of the Borrower and the Lenders, a successor Agent. If
no successor Agent shall have been so appointed by the Required Lenders within
thirty days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the Borrower and the
Lenders, one of the Lenders as a successor Agent. Notwithstanding the previous
sentence, the Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Agent hereunder. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of the Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor Agent shall be
a commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
43
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the Agent
and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Co-Agents, Documentation Agent, Syndication Agent, etc. Neither
any of the Lenders identified in this Agreement or elsewhere as a "co-agent", a
"documentation agent" or a "syndication agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
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ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with
Section 12.3, and (iii) any transfer by Participation must be made in compliance
with Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3.2. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Agent may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Loan.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Loan Documents. In the event of any such sale by
a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall remain the owner
of its Loans and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable
by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and
the Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents.
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12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which would
require consent of all of the Lenders pursuant to the terms of Section
8.2 or of any other Loan Document.
12.2.3. Benefit of Certain Provisions. The Borrower agrees
that each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a
Lender under the Loan Documents, provided that each Lender shall retain
the right of setoff provided in Section 11.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree
to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and
(ii) any Participant not incorporated under the laws of the United
States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto. Each such
assignment with respect to a Purchaser which is not a Lender or an
Affiliate of a Lender or an Approved Fund shall either be in an amount
equal to the entire applicable Commitment and Loans of the assigning
Lender or (unless each of the Borrower and the Agent otherwise
consents) be in an aggregate amount not less than $10,000,000 or such
lesser amount agreed to by the Agent. The amount of the assignment
shall be based on the Commitment or outstanding Loans (if the
Commitment has been terminated) subject to the assignment, determined
as of the date of such assignment or as of the "Trade Date," if the
"Trade Date" is specified in the assignment.
12.3.2. Consents. The consent of the Borrower shall be
required prior to an assignment becoming effective unless the Purchaser
is a Lender, an Affiliate of a Lender or an Approved Fund, provided
that the consent of the Borrower shall not be required if a Default has
occurred and is continuing. The consent of the Agent shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender, an Affiliate of a Lender or an Approved Fund. Any consent
required under this Section 12.3.2 shall not be unreasonably withheld
or delayed.
12.3.3. Effect; Effective Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Sections
12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the Agent for
processing such assignment (unless such fee is waived by the Agent),
such assignment
46
shall become effective on the effective date specified in such
assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Loans under the applicable assignment
agreement constitutes "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the effective date
of such assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by or on
behalf of the Lenders and shall have all the rights and obligations of
a Lender under the Loan Documents, to the same extent as if it were an
original party thereto, and the transferor Lender shall be released
with respect to the Commitment and Loans assigned to such Purchaser
without any further consent or action by the Borrower, the Lenders or
the Agent. In the case of an assignment covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall
cease to be a Lender hereunder but shall continue to be entitled to the
benefits of, and subject to, those provisions of this Agreement and the
other Loan Documents which survive payment of the Obligations and
termination of the applicable agreement. Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not
comply with this Section 12.3 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with Section 12.2. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 12.3.3, the
transferor Lender, the Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments,
as adjusted pursuant to such assignment.
12.3.4. Register. The Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable
prior notice.
12.3.5 Special Purpose Funding Vehicles. (i) Notwithstanding
anything to the contrary contained herein, any Lender (a "Designating
Lender") may grant to one or more special purpose funding vehicles
(each, an "SPV"), identified as such in writing from time to time by
the Designating Lender to the Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such
Designating Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement, provided that (A) nothing herein shall
constitute a commitment by any SPV to make any Loan, (B) if any SPV
elects not to exercise such option or otherwise fails to provide all or
any part of such Loan, the Designating Lender shall be obligated to
make such Loan pursuant to the terms hereof, (C) the Designating Lender
shall remain liable for any indemnity or other payment obligation with
respect to its Commitments hereunder and (D) the Borrower shall not
incur any additional costs or expenses as a result of any such grant by
a Designated Lender to an SPV. The making of a Loan by an SPV hereunder
shall utilize the relevant Commitment of the Designating Lender to the
same extent, and as if, such Loan were
47
made by such Designating Lender.
(ii) As to any Loans or portion thereof made by it, each SPV
shall have all the rights that a Lender making such Loans or portion
thereof would have had under this Agreement; provided, however, that
each SPV shall have granted to its Designating Lender an irrevocable
power of attorney, to deliver and receive all communications and
notices under this Agreement (and any related documents) and to
exercise on such SPV's behalf, all of such SPV's voting rights under
this Agreement. No additional Note shall be required to evidence the
Loans or portion thereof made by an SPV; and the related Designating
Lender shall be deemed to hold its Note, if any, as agent for such SPV
to the extent of the Loans or portion thereof funded by such SPV. In
addition, any payments for the account of any SPV shall be paid to its
Designating Lender as agent for such SPV.
(iii) Each party hereto hereby agrees that no SPV shall be
liable for any indemnity or payment under this Agreement for which a
Lender would otherwise be liable. In furtherance of the foregoing, each
party hereto hereby agrees (which agreements shall survive the
termination of this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPV, it will not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement insolvency or liquidation
proceedings under the laws of the United States or any State thereof.
(iv) In addition, subject to Section 12.4, any SPV may (A) at
any time and without paying any processing fee therefor, assign or
participate all or a portion of its interest in any Loans to the
Designating Lender or to any financial institutions providing liquidity
and/or credit support to or for the account of such SPV to support the
funding or maintenance of Loans and (B) disclose on a confidential
basis any non-public information relating to its Loans to any rating
agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancements to such SPV. This Section 12.3.3 may
not be amended without the written consent of any Designating Lender
affected thereby.
12.4. Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing
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(including electronic transmission, facsimile transmission or similar writing)
and shall be given to such party: (x) in the case of the Borrower or the Agent,
at its address or facsimile number set forth on the signature pages hereof, (y)
in the case of any Lender, at its address or facsimile number set forth in its
administrative questionnaire or (z) in the case of any party, at such other
address or facsimile number as such party may hereafter specify for the purpose
by notice to the Agent and the Borrower in accordance with the provisions of
this Section 13.1. Each such notice, request or other communication shall be
effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received, or (ii) if given by any other means, when delivered (or, in the case
of electronic transmission, received) at the address specified in this Section;
provided that notices to the Agent under Article II shall not be effective until
received.
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF MICHIGAN, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR MICHIGAN STATE
COURT SITTING IN DETROIT, MICHIGAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER
IN THE COURTS OF ANY OTHER
49
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT, MICHIGAN.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
TECUMSEH PRODUCTS COMPANY
By: /s/ Xxxxx X. Xxx
-----------------------------------------
Title: Vice President, Treasurer & CFO
000 Xxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Commitments
$250,000,000 BANK ONE, NA,
Individually and as Agent
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Title: First Vice President
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Banking - Michigan Group
Telephone: (000) 000-0000
FAX: (000) 000-0000
51
PRICING SCHEDULE
============================== ====================================== ====================================
APPLICABLE MARGIN ANY TIME DURING THE FIRST THREE ANY TIME THEREAFTER
MONTHS AFTER CLOSING
------------------------------ -------------------------------------- ------------------------------------
Eurodollar Rate 0.60% 0.85%
============================== ====================================== ====================================
Notwithstanding the foregoing, the Applicable Margin shall
automatically be increased in excess of the percentages described above as may
be necessary such that the Applicable Margin hereunder is at all times at least
0.125% higher than the Applicable Margin as defined in the Three-Year Credit
Agreement.
52
