EXHIBIT 4.1
EXECUTION COPY
$275,000,000
FIRST LIEN CREDIT AGREEMENT
DATED AS OF FEBRUARY 6, 2006
AMONG
TECUMSEH PRODUCTS COMPANY
AS BORROWER
AND
THE LENDERS AND ISSUERS PARTY HERETO
AND
CITICORP USA, INC.
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
AMONG
* * *
CITIGROUP GLOBAL MARKETS INC.
AND
X.X. XXXXXX SECURITIES INC.
AS JOINT LEAD ARRANGERS AND JOINT BOOK MANAGERS
JPMORGAN CHASE BANK, N.A., AS SYNDICATION AGENT
BANK OF AMERICA, AS DOCUMENTATION AGENT
XXXXX FARGO FOOTHILL, LLC, AS DOCUMENTATION AGENT
COMERICA BANK, AS DOCUMENTATION AGENT
WEIL, GOTSHAL & XXXXXX LLP
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000-0000
CREDIT AGREEMENT, dated as of February 6, 2006, among TECUMSEH
PRODUCTS COMPANY, a Michigan corporation (the "Borrower"), the Lenders, the
Issuers, CITICORP USA, INC. ("Citicorp"), as administrative agent for the
Lenders and the Issuers (in such capacity, the "Administrative Agent"), and
Citicorp, as collateral agent for the Secured Parties and the Second Lien
Secured Parties (in such capacity, the "Collateral Agent").
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders and Issuers
make available for the purposes specified in this Agreement a revolving credit
and letter of credit facility; and
WHEREAS, the Lenders and Issuers are willing to make available to
the Borrower such revolving credit and letter of credit facility upon the terms
and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants
and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS
As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Account" has the meaning given to such term in the UCC.
"Account Debtor" has the meaning given to such term in the UCC.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Advance Rate" means (a) in the case of Eligible Receivables, up to
85%, (b) in the case of Eligible Inventory, the lesser of (i) 85% of the Orderly
Liquidation Value Percentage of such Eligible Inventory and (ii) up to 70%, (c)
in the case of Eligible Equipment, up to 75%, and (d) in the case of Eligible
Real Property, up to 50%.
"Affected Lender" has the meaning specified in Section 2.17
(Substitution of Lenders).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or that is controlled by or is under common
control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person that is the beneficial owner of
5% or more of any class of Voting Stock of such Person. For the purposes of this
definition, "control" means the possession of the power to direct or cause the
direction of
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"Agent Affiliate" has the meaning specified in Section 10.3(c)
(Posting of Approved Electronic Communications).
"Agreement" means this Credit Agreement.
"Aircraft" means all airships, airplanes, helicopters and other
aircraft owned on the date hereof or hereafter acquired by any Loan Party,
including those listed on Schedule 1.1 hereto.
"Aircraft Collateral" means Aircraft, Aircraft Parts and Aircraft
Log Books.
"Aircraft Collateral Documents" means the Senior Aircraft Security
Agreement between the Borrower, as grantor, and the Collateral Agent, and any
other document executed and delivered by a Loan Party granting a Lien on the
Aircraft to secure payment of the Secured Obligations.
"Aircraft Log Books" means any and all log books, maintenance
records, airworthiness certificates, registration documents and other records
and documents relating to the Aircraft or Aircraft Parts.
"Aircraft Parts" means all engines and propellers (whether or not
affixed to any Aircraft) owned by any Loan Party and used or intended for use in
connection with the Aircraft, and all avionics equipment, radio equipment,
navigation equipment, radar equipment and other equipment, appliances,
accessories and accessions used or intended for use in connection with the
Aircraft.
"Applicable Lending Office" means, with respect to each Revolving
Credit Lender, its Domestic Lending Office in the case of a Base Rate Loan, and
its Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means (a) during the period commencing on the
Closing Date and ending on the date falling six months after the Closing Date,
with respect to (i) Revolving Loans and Swing Loans maintained as Base Rate
Loans, a rate equal to 1.00% per annum and (ii) Revolving Loans maintained as
Eurodollar Rate Loans, a rate equal to 2.00% per annum and (b) thereafter, as of
any date of determination, a per annum rate equal to the rate set forth below
opposite the applicable type of Loan and the then applicable Quarterly Available
Credit (determined on the first day of the Fiscal Quarter succeeding the Fiscal
Quarter most recently ended) set forth below:
EURODOLLAR RATE
QUARTERLY AVAILABLE CREDIT BASE RATE LOANS LOANS
--------------------------------------------------- --------------- ---------------
Greater than or equal to $150,000,000 0.75% 1.75%
Less than $150,000,000 and greater than or equal to
$50,000,000 1.00% 2.00%
Less than $50,000,000 1.25% 2.25%
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TECUMSEH PRODUCTS COMPANY
Changes in the Applicable Margin resulting from a change in the Quarterly
Available Credit on the last day of any subsequent Fiscal Quarter will become
effective as to all Revolving Loans and Swing Loans upon the first Business Day
of any succeeding Fiscal Quarter.
"Applicable Unused Commitment Fee Rate" means 0.375% per annum.
"Appraisal" means each Initial Appraisal and each Updated Appraisal.
"Approved Deposit Account" means a Deposit Account that is the
subject of an effective Deposit Account Control Agreement and that is maintained
by any Loan Party with a Deposit Account Bank. "Approved Deposit Account"
includes all monies on deposit in a Deposit Account and all certificates and
instruments, if any, representing or evidencing such Deposit Account.
"Approved Electronic Communications" means each notice, demand,
communication, information, document and other material that any Loan Party is
obligated to, or otherwise chooses to, provide to the Administrative Agent
pursuant to any Loan Document or the transactions contemplated therein,
including (a) any supplement to the Guaranty, any joinder to the Pledge and
Security Agreement and any other written Contractual Obligation delivered or
required to be delivered in respect of any Loan Document or the transactions
contemplated therein and (b) any Financial Statement, financial and other
report, notice, request, certificate and other information material; provided,
however, that, "Approved Electronic Communication" shall exclude (i) any Notice
of Borrowing, Letter of Credit Request, Swing Loan Request, Notice of Conversion
or Continuation, and any other notice, demand, communication, information,
document and other material relating to a request for a new, or a conversion of
an existing, Borrowing, (ii) any notice pursuant to Section 2.8 (Optional
Prepayments) and Section 2.9 (Mandatory Prepayments) and any other notice
relating to the payment of any principal or other amount due under any Loan
Document prior to the scheduled date therefor, (iii) all notices of any Default
or Event of Default and (iv) any notice, demand, communication, information,
document and other material required to be delivered to satisfy any of the
conditions set forth in Article III (Conditions to Loans and Letters of Credit)
or Section 2.4(a) (Letters of Credit) or any other condition to any Borrowing or
other extension of credit hereunder or any condition precedent to the
effectiveness of this Agreement.
"Approved Electronic Platform" has the meaning specified in Section
10.3(a) (Posting of Approved Electronic Communications).
"Approved Fund" means any Fund that is advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or Affiliate of an entity
that administers or manages a Lender.
"Approved Securities Intermediary" means a "securities intermediary"
or "commodity intermediary" (as such terms are defined in the UCC) selected or
approved by the Administrative Agent.
"Arrangers" means Citigroup Global Markets Inc. and X.X. Xxxxxx
Securities Inc., in their capacities as joint lead arrangers and joint book
runners.
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"Asset Sale" has the meaning specified in Section 8.4 (Sale of
Assets).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Revolving Credit Lender and an Eligible Assignee, and accepted
by the Administrative Agent, in substantially the form of Exhibit A (Form of
Assignment and Acceptance).
"Availability Reserve" means, effective upon receipt of written
notice of any determination thereof to the Borrower by the Administrative Agent
such amounts as the Administrative Agent may from time to time establish against
the Facility, in the Administrative Agent's sole discretion and in accordance
with customary business practices for comparable asset based transactions, in
order either (a) to preserve the value of the Collateral or the Collateral
Agent's Lien thereon or (b) to provide for the payment of unanticipated
liabilities of any Loan Party arising after the Closing Date.
"Available Credit" means, at any time, (a) the Maximum Credit minus
(b) the aggregate Revolving Credit Outstandings at such time.
"Bailee's Letter" means a letter in form and substance acceptable to
the Administrative Agent and executed by any Person (other than the Borrower)
that is in possession of Inventory on behalf of a Loan Party pursuant to which
such Person acknowledges, among other things, the Collateral Agent's Lien with
respect thereto.
"Bankruptcy Code" means title 11, United States Code.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of the following:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the
rate per annum obtained by dividing (A) the latest three-week moving
average of secondary market morning offering rates in the United States
for three-month certificates of deposit of major United States money
market banks, such three-week moving average being determined weekly on
each Monday (or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the previous
Friday by Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve Bank of New York
or, if such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Federal Reserve
Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for
Citibank in respect of liabilities consisting of or including (among other
liabilities) three-month U.S. dollar nonpersonal time deposits in the
United States and (iii) the average during such three-week period of the
maximum annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by
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FIRST LIEN CREDIT AGREEMENT
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Citibank to the Federal Deposit Insurance Corporation (or any successor)
for insuring Dollar deposits in the United States; and
(c) 0.5% per annum plus the Federal Funds Rate.
"Base Rate Loan" means any Swing Loan or any other Loan during any
period in which it bears interest based on the Base Rate.
"Blockage Notice" has the meaning specified in each Deposit Account
Control Agreement.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Borrower's Accountants" means PriceWaterhouseCoopers LLP or other
independent nationally-recognized public accountants acceptable to the
Administrative Agent.
"Borrowing" means a borrowing consisting of Revolving Loans made on
the same day by the Revolving Credit Lenders ratably according to their
respective Revolving Credit Commitments.
"Borrowing Base" means, at any time, (a) the sum of (i) the product
of the Advance Rate then in effect for Eligible Receivables and the Dollar
Equivalent of the face amount of all Eligible Receivables of each Loan Party
(calculated net of all finance charges, late fees and other fees that are
unearned, sales, excise or similar taxes, and credits or allowances granted at
such time), (ii) the sum of the products of the Advance Rate then in effect for
each class of Eligible Inventory and the Dollar Equivalent of the value of each
such class of Eligible Inventory of each Loan Party (valued, in each case, at
the lower of cost and market on a first-in, first-out basis) constituting each
such class of Eligible Inventory at such time, (iii) the product of the Advance
Rate then in effect for Eligible Equipment and the Dollar Equivalent of the
orderly liquidation value (or, in the case of Aircraft Collateral, the fair
market value) of Eligible Equipment of each Loan Party at such time determined
by reference to the most recent Appraisal of such Eligible Equipment, and (iv)
the product of the Advance Rate then in effect for Eligible Real Property and
the Dollar Equivalent of the Mortgage Value of Eligible Real Property of each
Loan Party at such time, minus (b) any Eligibility Reserve then in effect;
provided, however, the sum of clauses (iii) and (iv) above shall not exceed 25%
of the aggregate amount of the Borrowing Base any time.
"Borrowing Base Certificate" means a certificate of the Borrower in
respect of the Borrowing Base of each Loan Party substantially in the form of
Exhibit J (Form of Borrowing Base Certificate).
"Brazil" means the Federative Republic of Brazil.
"Brazilian Subsidiaries" means any Subsidiary of the Borrower
organized under the laws of Brazil.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable Business
Day relates to notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar
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FIRST LIEN CREDIT AGREEMENT
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Rate Loans, a day on which dealings in Dollar deposits are also carried on in
the London interbank market.
"Canadian Collateral Documents" means any pledge agreement, security
agreement, mortgage or other document executed and delivered by a Canadian
Guarantor granting a Lien on any of its property to secure payment of the
Secured Obligations.
"Canadian Dollars" means the lawful currency of Canada.
"Canadian Guarantors" means Tecumseh Products of Canada Limited, a
company organized under the laws of Canada, Fasco Motors Company, an unlimited
liability company organized under the laws of Nova Scotia and any other Canadian
Subsidiary that becomes a Guarantor after the Closing Date.
"Canadian Subsidiary" means any Subsidiary of the Borrower organized
under the laws of Canada or any province or territory thereof.
"Capital Expenditures" means, for any Person for any period, the
aggregate of amounts that would be reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such Person and its Subsidiaries,
excluding interest capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease of, or
other arrangement conveying the right to use, property by such Person as lessee
that would be accounted for as a capital lease on a balance sheet of such Person
prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all Consolidated obligations of such Person or any of its
Subsidiaries under Capital Leases.
"Cash Collateral Account" means any Deposit Account or Securities
Account that is (a) established by the Administrative Agent from time to time in
its sole discretion to receive cash and Cash Equivalents (or purchase cash or
Cash Equivalents with funds received) from the Loan Parties or Persons acting on
their behalf pursuant to the Loan Documents, (b) with such depositaries and
securities intermediaries as the Administrative Agent may determine in its sole
discretion, (c) in the name of the Collateral Agent (although such account may
also have words referring to the Borrower and the account's purpose), (d) under
the control of the Collateral Agent and (e) in the case of a Securities Account,
with respect to which the Collateral Agent shall be the Entitlement Holder and
the only Person authorized to give Entitlement Orders with respect thereto.
"Cash Equivalents" means (a) securities issued or fully guaranteed
or insured by the United States federal government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any commercial bank organized under the laws of the
United States, any state thereof, the District of Columbia, any foreign bank, or
its branches or agencies (fully protected against currency fluctuations) that,
at the time of acquisition, are rated at least "A-1" by S&P or "P-1" by Xxxxx'x,
(c) commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by
Xxxxx'x and (d) shares of any money market fund that (i) has at least 95% of its
assets invested continuously in the types of
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
investments referred to in clauses (a), (b) and (c) above, (ii) has net assets
whose Dollar Equivalent exceeds $500,000,000 and (iii) is rated at least "A-1"
by S&P or "P-1" by Xxxxx'x; provided, however, that the maturities of all
obligations of the type specified in clauses (a), (b) and (c) above shall not
exceed 180 days.
"Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.
"Cash Management Document" means any certificate, agreement or other
document executed by any Loan Party in respect of the Cash Management
Obligations of any Loan Party.
"Cash Management Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person in respect
of cash management services (including treasury, depository, overdraft, credit
or debit card, electronic funds transfer and other cash management arrangements)
provided by the Administrative Agent, any Lender or any Affiliate of any of
them, including obligations for the payment of fees, interest, charges,
expenses, attorneys' fees and disbursements in connection therewith.
"Change of Control" means the occurrence of any of the following:
(a) any person or group of persons (within the meaning of the Securities
Exchange Act of 1934, as amended) (other than the Permitted Holders) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended) of 20% or more of the issued and outstanding Voting Stock of the
Borrower, or (b) during any period of twelve consecutive calendar months,
individuals who, at the beginning of such period, constituted the board of
directors of the Borrower (together with any new directors whose election by the
board of directors of the Borrower or whose nomination for election by the
stockholders of the Borrower was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
such period or whose elections or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office.
"Chase" means JPMorgan Chase Bank, N.A.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" has the meaning specified in the preamble to this
Agreement.
"Closing Date" means the first date on which any Loan is made or any
Letter of Credit is Issued or deemed issued pursuant to Section 2.4(k) (Letters
of Credit).
"Code" means the U.S. Internal Revenue Code of 1986, as currently
amended.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any Collateral Document.
"Collateral Agent" has the meaning specified in the preamble to this
Agreement or any successor thereto. The term "Collateral Agent" shall include
Citicorp acting in its
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FIRST LIEN CREDIT AGREEMENT
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capacity as collateral agent or trustee for and on behalf of the Secured Parties
and as collateral agent or trustee for and on behalf of the Second Lien Secured
Parties under, and in accordance with, the terms of the Collateral Documents.
"Collateral Documents" means the Pledge and Security Agreement, the
Foreign Pledge Agreements, the Canadian Collateral Documents, the Mortgages, the
Deposit Account Control Agreements, the Securities Account Control Agreements,
the Aircraft Collateral Documents and any other document executed and delivered
by a Loan Party granting a Lien on any of its property to secure payment of the
Secured Obligations.
"Commodity Account" has the meaning given to such term in the UCC.
"Compliance Certificate" has the meaning specified in Section 6.1(d)
(Financial Statements).
"Consolidated" means, with respect to any Person, the consolidation
of accounts of such Person and its Subsidiaries in accordance with GAAP.
"Consolidated Net Income" means, for any Person for any period, the
Consolidated net income (or loss) of such Person and its Subsidiaries for such
period ; provided, however, that (a) the net income of any other Person in which
such Person or one of its Subsidiaries has a joint interest with a third party
(which interest does not cause the net income of such other Person to be
Consolidated into the net income of such Person) shall be included only to the
extent of the amount of dividends or distributions paid to such Person or
Subsidiary, (b) the net income of any Subsidiary of such Person that is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions shall be excluded to the extent of such restriction or
limitation and (c) extraordinary gains and losses and any one-time increase or
decrease to net income that is required to be recorded because of the adoption
of new accounting policies, practices or standards required by GAAP shall be
excluded.
"Consolidated Total Assets" of any Person means, at any date,
Consolidated total assets of such Person and its Subsidiaries at such date minus
any minority interest in any third party that is not a Wholly-Owned Subsidiary
of such Person, if such minority interest would be reflected at such date on a
Consolidated balance sheet of such Person and its Subsidiaries.
"Constituent Documents" means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation, constitution or
certificate of formation (or the equivalent organizational documents) of such
Person, (b) the by-laws or operating agreement (or the equivalent governing
documents) of such Person and (c) any document setting forth the manner of
election or duties of the directors or managing members of such Person (if any)
and the designation, amount or relative rights, limitations and preferences of
any class or series of such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement,
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FIRST LIEN CREDIT AGREEMENT
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undertaking, contract, lease, indenture, mortgage, deed of trust or other
instrument (excluding a Loan Document) to which such Person is a party or by
which it or any of its property is bound or to which any of its property is
subject.
"Control Account" means a Securities Account or Commodity Account
that is the subject of an effective Securities Account Control Agreement and
that is maintained by any Loan Party with an Approved Securities Intermediary.
"Control Account" includes all Financial Assets held in a Securities Account or
a Commodity Account and all certificates and instruments, if any, representing
or evidencing the Financial Assets contained therein.
"Corporate Chart" means a corporate organizational chart, list or
other similar document in each case in form reasonably acceptable to the
Administrative Agent and setting forth, for each Person that is a Loan Party,
that is subject to Section 7.11 (Additional Collateral and Guaranties) or that
is a Subsidiary of any of them, (a) the full legal name of such Person (and any
trade name, fictitious name or other name such Person may have had or operated
under), (b) the jurisdiction of organization, the organizational number (if any)
and the tax identification number (if any) of such Person, (c) the location of
such Person's chief executive office (or sole place of business), (d) the number
of shares of each class of such Person's Stock authorized (if applicable), the
number outstanding as of the date of delivery and the number and percentage of
such outstanding shares for each such class owned (directly or indirectly) by
any Loan Party or any Subsidiary of any of them and (e) in the case of any such
Subsidiary that is (x) a Foreign Subsidiary, whether such Subsidiary is a
Material Foreign Subsidiary and (y) a Domestic Subsidiary, whether such
Subsidiary is a Material Domestic Subsidiary.
"Customary Permitted Liens" means, with respect to any Person, any
of the following Liens:
(a) Liens with respect to the payment of taxes, assessments or
governmental charges in each case that are not yet due or that are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being
maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens, in each case (i) imposed by law or arising in the ordinary
course of business, (ii) for amounts not yet due or that are being
contested in good faith by appropriate proceedings and (iii) with respect
to which adequate reserves or other appropriate provisions are being
maintained to the extent required by GAAP;
(c) deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other types of
social security benefits or to secure the performance of bids, tenders,
sales, contracts (other than for the repayment of borrowed money) and
surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar encumbrances on the use
of real property not materially detracting from the value of such real
property or not materially interfering with the ordinary conduct of the
business conducted and proposed to be conducted at such real property;
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(e) encumbrances arising under leases or subleases of real property
that do not, in the aggregate, materially detract from the value of such
real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property; and
(f) financing statements with respect to a lessor's rights in and to
personal property leased to such Person in the ordinary course of such
Person's business other than through a Capital Lease.
"Default" means any event that, with the passing of time or the
giving of notice or both, would become an Event of Default.
"Deposit Account" has the meaning given to such term in the UCC.
"Deposit Account Bank" means a financial institution selected or
approved by the Administrative Agent.
"Deposit Account Control Agreement" has the meaning specified in the
Pledge and Security Agreement and in the applicable Canadian Collateral
Document.
"Disclosure Documents" means one or more confidential information
memoranda relating to the Facility suitable for use in a customary syndication
of bank financing, with all financial statements (audited and unaudited as
available), information and projections relating to the Borrower and its
Subsidiaries as deemed necessary or desirable to be included therein by the
Arrangers in their reasonable judgment, as delivered and updated from time to
time.
"Documentary Letter of Credit" means any Letter of Credit that is
drawable upon presentation of documents evidencing the sale or shipment of goods
purchased by the Borrower or any of its Subsidiaries in the ordinary course of
its business.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Dollar Equivalent" of any amount means, at the time of
determination thereof, (a) if such amount is expressed in Dollars, such amount,
or (b) if such amount is expressed in a currency other than Dollars, the
equivalent of such amount in Dollars determined by using the rate of exchange
quoted by Citibank in New York, New York at 11:00 a.m. (New York time) on the
date of determination (or, if such date is not a Business Day, the last Business
Day prior thereto) to prime banks in New York for the spot purchase in the New
York foreign exchange market of such amount of Dollars with such currency or, if
such rate of exchange is not available, such other rate as the Administrative
Agent, in its reasonable discretion, deems appropriate.
"Domestic Lending Office" means, with respect to any Revolving
Credit Lender, the office of such Revolving Credit Lender specified as its
"Domestic Lending Office" opposite its name on Schedule II (- Applicable Lending
Offices and Addresses for Notices) or on the Assignment and Acceptance by which
it became a Revolving Credit Lender or such other office of such Revolving
Credit Lender as such Revolving Credit Lender may from time to time specify to
the Borrower and the Administrative Agent.
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"Domestic Person" means any "United States person" under and as
defined in Section 7701(a)(30) of the Code.
"Domestic Subsidiary" means any Subsidiary of the Borrower organized
under the laws of any state of the United States of America or the District of
Columbia.
"Douglas Property" means that certain real property located at 0000
Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000.
"EBITDA" means, with respect to any Person for any period, (a)
Consolidated Net Income of such Person for such period plus (b) the sum of, in
each case to the extent deducted in the calculation of such Consolidated Net
Income but without duplication, (i) any provision for income taxes, (ii)
Interest Expense, (iii) loss from extraordinary items, (iv) any aggregate loss
from the sale, exchange or other disposition of capital assets by such Person
outside the ordinary course of business, (v) depreciation, depletion and
amortization expenses, (vi) non-cash expenses in respect of Fourth Quarter 2005
Reserves; provided, however, all such non-cash expenses in Fourth Quarter 2005
Reserves shall not exceed an aggregate amount of $8,500,000, (vii) certain cash
and non-cash restructuring expenses in connection with the closing or
consolidation of certain facilities; provided, however, the cash portion of such
restructuring expenses shall not exceed an aggregate amount of $2,500,000 in any
consecutive four Fiscal Quarter period; and (viii) all other non-cash charges
and non-cash losses for such period that are not payable in cash in any
subsequent period minus (c) the sum of, in each case to the extent added in the
calculation of such Consolidated Net Income but without duplication, (i) any
credit for income tax, (ii) interest income, (iii) gains from extraordinary
items for such period, (iv) any aggregate gain from the sale, exchange or other
disposition of capital assets by such Person outside the ordinary course of
business and (v) any other non-cash gains or other items which have been added
in determining Consolidated Net Income, including any reversal of a charge
referred to in clause (b)(viii) above by reason of a decrease in the value of
any Stock or Stock Equivalent.
"Eligibility Reserves" means, effective upon receipt of written
notice of any determination thereof to the Borrower by the Administrative Agent,
such amounts as the Administrative Agent, in its sole discretion exercised
reasonably, may from time to time establish against the gross amounts of
Eligible Receivables, Eligible Inventory, Eligible Equipment and Eligible Real
Property to reflect risks or contingencies arising after the Closing Date that
may affect any one or more class of such items and that have not already been
taken into account in the calculation of the Borrowing Base.
"Eligible Assignee" means (a) a Lender or an Affiliate or Approved
Fund of any Lender, (b) a commercial bank having total assets whose Dollar
Equivalent exceeds $5,000,000,000, (c) a finance company, insurance company or
any other financial institution or Fund, in each case reasonably acceptable to
the Administrative Agent and regularly engaged in making, purchasing or
investing in loans and having a net worth, determined in accordance with GAAP,
whose Dollar Equivalent exceeds $250,000,000 (or, to the extent net worth is
less than such amount, a finance company, insurance company, other financial
institution or Fund, reasonably acceptable to the Administrative Agent and the
Borrower) or (d) a savings and loan association or savings bank organized under
the laws of the United States or any State thereof having a net worth,
determined in accordance with GAAP, whose Dollar Equivalent exceeds
$250,000,000.
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"Eligible Equipment" means the Equipment and Aircraft of each Loan
Party (a) that is owned solely by one or more Loan Parties, (b) with respect to
which the Collateral Agent has a valid, perfected and enforceable first-priority
Lien, (c) with respect to which no representation or warranty contained in any
Loan Document has been breached, (d) that is not, in the Administrative Agent's
sole discretion, exercised reasonably, obsolete or unmerchantable and (e) that
the Administrative Agent deems to be Eligible Equipment, based on such credit
and collateral considerations as the Administrative Agent may, in its sole
discretion, exercised reasonably, deem appropriate.
"Eligible Inventory" means the Inventory of each Loan Party (other
than any Inventory that has been consigned by such Loan Party) including raw
materials, work-in-process, finished goods, parts and supplies (a) that is owned
solely by one or more Loan Parties, (b) with respect to which the Collateral
Agent has a valid, perfected and enforceable first-priority Lien, (c) with
respect to which no representation or warranty contained in any Loan Document
has been breached, (d) that is not, in the Administrative Agent's sole
discretion, exercised reasonably, obsolete or unmerchantable, (e) with respect
to which (in respect of any Inventory labeled with a brand name or trademark and
sold by the Loan Party pursuant to a trademark owned by such Loan Party or a
license granted to such Loan Party) the Collateral Agent would have rights under
such trademark or license pursuant to the Pledge and Security Agreement, the
relevant Canadian Collateral Document or other agreement satisfactory to the
Administrative Agent to sell such Inventory in connection with a liquidation
thereof and (f) that the Administrative Agent deems to be Eligible Inventory
based on such credit and collateral considerations as the Administrative Agent
may, in its sole discretion, exercised reasonably, deem appropriate. No
Inventory of any Loan Party shall be Eligible Inventory if such Inventory
consists of (i) goods returned or rejected by customers other than goods that
are undamaged or are resalable in the normal course of business, (ii) goods to
be returned to suppliers, (iii) goods in transit (except for goods in transit
from and to manufacturing facilities located in the United States), (iv)
Inventory consisting of supply parts and packaging material or (v) goods
located, stored, used or held at the premises of a third party unless (A) the
Administrative Agent shall have received a Landlord Waiver or Bailee's Letter or
(B) in the case of Inventory located at a leased premises, an Eligibility
Reserve satisfactory to the Administrative Agent shall have been established
with respect thereto.
"Eligible Raw Materials" means the Eligible Inventory of each Loan
Party that is classified, consistent with past practice, on such Loan Party's
accounting system as "raw materials".
"Eligible Real Property" means any parcel of owned Real Property in
the United States and Canada owned by each Loan Party as to which each of the
following conditions has been satisfied at such time:
(a) (i) a valid and enforceable first-priority Lien on such parcel
of Real Property (subject to Customary Permitted Liens and other Liens
approved by the Administrative Agent) shall have been granted by such Loan
Party in favor of the Collateral Agent pursuant to a Mortgage in form and
substance satisfactory to the Administrative Agent and (ii) such Lien
shall be in full force and effect in favor of the Collateral Agent at such
time;
(b) except as otherwise permitted by the Administrative Agent, the
Administrative Agent and, where applicable, the relevant title insurance
company shall
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
have received in form and substance satisfactory to the Administrative
Agent, all. Mortgage Supporting Documents in respect of such parcel;
(c) the Administrative Agent shall have received an Appraisal with
respect to such parcel of Real Property;
(d) no casualty shall have occurred affecting the use, operation or
value of such parcel of Real Property if such casualty has not been
restored or repaired by the mortgagor under the Mortgage encumbering such
parcel of Real Property;
(e) no condemnation or taking by eminent domain shall have occurred
nor shall any notice of any pending or threatened condemnation or other
proceeding against such parcel of Real Property been delivered to the
owner or lessee of such parcel of Real Property that would materially
affect the use, operation or value of such; and
(f) the mortgagor under the relevant Mortgage encumbering such
parcel of Real Property shall comply in all material respects with the
terms of such Mortgage.
"Eligible Receivable" means the gross outstanding balance of each
Account of each Loan Party arising out of the sale of merchandise, goods or
services in the ordinary course of business of such Loan Party, that is made by
such Loan Party to a Person that is not an Affiliate of such Loan Party and that
constitutes Collateral in which the Collateral Agent has a fully perfected first
priority Lien; provided, however, that an Account shall not be an "Eligible
Receivable" if any of the following shall be true:
(a) (i) such Account is more than 60 days past due according to the
original terms of sale or (ii) 90 days past the original invoice date
thereof (or 120 days past the original invoice date in respect of Account
Debtors subject to seasonal invoicing system in the normal course of the
business of such Loan Party); or
(b) any warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct
with respect to such Account; or
(c) the Account Debtor on such Account has disputed liability or
made any claim with respect to any other Account due from such Account
Debtor to any Loan Party but only to the extent of such dispute or claim;
or
(d) the Account Debtor on such Account has (i) filed a petition for
bankruptcy or any other relief under the Bankruptcy Code or any other law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
(ii) made an assignment for the benefit of creditors, (iii) had filed
against it any petition or other application for relief under the
Bankruptcy Code or any such other law, (iv) has failed, suspended business
operations, become insolvent, called a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation or (v) had
or suffered a receiver or a trustee to be appointed for all or a
significant portion of its assets or affairs, or
(e) the Account Debtor on such Account or any of its Affiliates is
also a supplier to or creditor of any Loan Party unless such supplier or
creditor has executed a no-offset letter satisfactory to the
Administrative Agent, in its sole discretion; or
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
(f) the sale represented by such Account is to an Account Debtor
located outside the United States and Canada, unless the sale is on letter
of credit or acceptance terms acceptable to the Administrative Agent, in
its sole discretion and (i) such letter of credit names the Collateral
Agent as beneficiary for the benefit of the Secured Parties or (ii) the
issuer of such letter of credit has consented to the assignment of the
proceeds thereof to the Collateral Agent; or
(g) the sale to such Account Debtor on such Account is on a
xxxx-on-hold, guaranteed sale, sale-and-return, sale-on-approval or
consignment basis; or
(h) such Account is subject to a Lien in favor of any Person other
than the Collateral Agent for the benefit of the Secured Parties and the
Second Lien Secured Parties; or
(i) such Account is subject to any deduction, offset, counterclaim,
return privilege or other conditions other than volume sales discounts
given in the ordinary course of each Loan Party's business; provided,
however, that such Account shall be ineligible pursuant to this clause (i)
only to the extent of such deduction, offset, counterclaim, return
privilege or other condition; or
(j) the Account Debtor on such Account is located in any State of
the United States or in any province of Canada requiring the holder of
such Account, as a precondition to commencing or maintaining any action in
the courts of such State or such province either to (i) receive a
certificate of authorization to do business in such State or such province
or be in good standing in such State or such province or (ii) file a
Notice of Business Activities Report with the appropriate office or agency
of such State or the equivalent report or any other document required to
be filed in such province, in each case unless the holder of such Account
has received such a certificate of authority to do business, is in good
standing or, as the case may be, has duly filed such a notice in such
State or in the case of Canada, has made all the necessary filings and
complied with the relevant laws under each such province; or
(k) the Account Debtor on such Account is a Governmental Authority,
unless each Loan Party has assigned its rights to payment of such Account
to the Collateral Agent pursuant to the Assignment of Claims Act of 1940,
as amended, in the case of a federal Governmental Authority, and pursuant
to applicable law, if any, in the case of any other Governmental
Authority, and such assignment has been accepted and acknowledged by the
appropriate government officers; or
(l) 50% or more of the outstanding Accounts of the Account Debtor
have become, or have been determined by the Administrative Agent, in
accordance with the provisions hereof, to be, ineligible; or
(m) the sale represented by such Account is denominated in a
currency other than Dollars or Canadian Dollars; or
(n) such Account is not evidenced by an invoice or other writing in
form acceptable to the Administrative Agent, in its sole discretion; or
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
(o) each Loan Party, in order to be entitled to collect such
Account, is required to perform any additional service for, or perform or
incur any additional obligation to, the Person to whom or to which it was
made; or
(p) the total Accounts of such Account Debtor to the Loan Party
represent more than 10% of the Eligible Receivables of the Loan Parties at
such time (except for Accounts from (x) MTD Products Inc., to the extent
such Account Debtor does not represent more than 25% of the Eligible
Receivables of the Loan Parties at such time and (y) Carrier Corporation,
The Toro Company and Electrolux AB, to the extent each such Account Debtor
does not represent more than 20%, of the Eligible Receivables of the Loan
Parties at such time), but only to the extent of such excess; or
(q) the Administrative Agent, in accordance with its customary
criteria, determines, in its sole discretion exercised reasonably, that
such Account might not be paid or is otherwise ineligible.
"Entitlement Holder" has the meaning given to such term in the UCC.
"Entitlement Order" has the meaning given to such term in the UCC.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect and as amended or supplemented from time to time, relating
to pollution or the regulation and protection of human or animal health, safety,
the environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Section 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (7 U.S.C. Section 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.); the Toxic Substance
Control Act, as amended (15 U.S.C. Section 2601 et seq.); the Clean Air Act, as
amended (42 U.S.C. Section 7401 et seq.); the Federal Water Pollution Control
Act, as amended (33 U.S.C. Section 1251 et seq.); the Occupational Safety and
Health Act, as amended (29 U.S.C. Section 651 et seq.); the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f et seq.); and each of their state and
local counterparts or equivalents and any transfer of ownership notification or
approval statute, including the Industrial Site Recovery Act (N.J. Stat. Xxx.
Section 13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute and whether arising under any
Environmental Law, Permit, order or agreement with any Governmental Authority or
other Person, in each case relating to any environmental, health or safety
condition or to any Release or threatened Release and resulting from the past,
present or future operations of, or ownership of property by, such Person or any
of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" has the meaning given to such term in the UCC.
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FIRST LIEN CREDIT AGREEMENT
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"ERISA" means the United States Employee Retirement Income Security
Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
"ERISA Event" means (a) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from
any Multiemployer Plan, (d) notice of reorganization or insolvency of a
Multiemployer Plan, (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA, (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC, (g) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan, (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on the Borrower or
any of its Subsidiaries or any ERISA Affiliate or (i) any other event or
condition that might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board.
"Eurodollar Base Rate" means, with respect to any Interest Period
for any Eurodollar Rate Loan, the rate of interest determined by the
Administrative Agent to be the rate per annum at which deposits in Dollars are
offered by the principal office of Citibank in London to major banks in the
London interbank market at 11:00 a.m. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to the
Eurodollar Rate Loan of Citibank for a period equal to such Interest Period.
"Eurodollar Lending Office" means, with respect to any Revolving
Credit Lender, the office of such Revolving Credit Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule II (- Applicable
Lending Offices and Addresses for Notices) or on the Assignment and Acceptance
by which it became a Revolving Credit Lender (or, if no such office is
specified, its Domestic Lending Office) or such other office of such Revolving
Credit Lender as such Revolving Credit Lender may from time to time specify to
the Borrower and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b)(i) a percentage equal
to 100% minus (ii) the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
Eurodollar Rate is determined) having a term equal to such Interest Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1 (Events
of Default).
"Excluded Foreign Subsidiary" means any Subsidiary that is not a
Domestic Subsidiary or a Canadian Subsidiary in respect of which either (a) the
pledge of all of the Stock of such Subsidiary as Collateral to secure payment of
the Obligations of the Borrower, (b) the grant of a Lien on any of its property
as Collateral to secure payment of the Obligations of the Borrower or (c) the
guaranteeing by such Subsidiary of the Obligations of the Borrower, would, in
the good faith judgment of the Borrower based on an analysis reasonably
satisfactory to the Administrative Agent, result in materially adverse tax
consequences to the Loan Parties and their Subsidiaries, taken as a whole;
provided, however, that no such Subsidiary shall be an Excluded Foreign
Subsidiary if, with substantially similar tax consequences, such Subsidiary has
entered into Guaranty Obligations in respect of, such Subsidiary has granted a
security interest in any of its property to secure, or more than 66% of the
Stock of such Subsidiary has been pledged to secure, directly or indirectly, any
obligations under any Indebtedness (other than the Obligations) of any Loan
Party.
"Existing Agent" means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent under the Existing Credit Agreement.
"Existing Credit Agreement" means that certain Credit Agreement,
dated as of December 21, 2004 among the Borrower, the institutions party thereto
as lenders and issuing banks and the Existing Agent.
"Facility" means the Revolving Credit Commitments and the provisions
herein related to the Revolving Loans, Swing Loans and Letters of Credit.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Board of
Directors of the Borrower or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in Securities of such type and selected by
the Administrative Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight
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FIRST LIEN CREDIT AGREEMENT
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Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Federal Reserve Board" means the Board of Governors of the United
States Federal Reserve System, or any successor thereto.
"Financial Asset" has the meaning given to such term in the UCC.
"Financial Covenant Debt" of any Person means Indebtedness of the
type specified in clauses (a), (b), (d), (e), (f) and (k) of the definition of
"Indebtedness" and non-contingent obligations of the type specified in clause
(c) of such definition.
"Financial Statements" means the financial statements of the
Borrower and its Subsidiaries delivered in accordance with Section 4.4
(Financial Statements) and Section 6.1 (Financial Statements).
"First Lien Fee Letter" shall mean the letter dated December 28,
2005, addressed to the Borrower from the Arrangers and accepted by the Borrower
on December 30, 2005, with respect to certain fees to be paid from time to time
to the Arrangers.
"Fiscal Quarter" means each of the three month periods ending on
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period, the ratio of (a) EBITDA of such Person for such period minus Capital
Expenditures of such Person for such period minus the total federal income tax
liability actually payable by such Person in respect of such period to (b) the
Fixed Charges of such Person for such period.
"Fixed Charges" means, with respect to any Person for any period,
the sum, determined on a Consolidated basis, of (a) the Cash Interest Expense of
such Person and its Subsidiaries for such period, (b) the principal amount of
Consolidated Financial Covenant Debt (other than any such Indebtedness
constituting a current liability) of such Person and its Subsidiaries having a
scheduled due date during such period and (c) all cash dividends payable by such
Person and its Subsidiaries on Stock in respect of such period to Persons other
than such Person and its Subsidiaries.
"Foreign Pledge Agreements" means any pledge or security agreement,
pursuant to which the Stock of any Foreign Subsidiary of any Loan Party is
pledged by such Loan Party to secure payment of the Secured Obligations.
"Foreign Subsidiary" means any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
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FIRST LIEN CREDIT AGREEMENT
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"Fourth Quarter 2005 Reserves" means reserves in respect of (i)
recall for engine fuel line, (ii) certain inventory reserves maintained by the
Borrower in connection with take-or-pay contracts in the Czech Republic and
(iii) certain reserves maintained by the Borrower in respect of the "Xxxxxx
preference claim".
"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.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, that are applicable to the circumstances as of the date of
determination.
"General Intangible" has the meaning given to such term in the UCC.
"Governmental Authority" means any nation, sovereign or government,
any state or other political subdivision thereof and any entity or authority
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any central bank or stock
exchange.
"Guarantor" means each Subsidiary of the Borrower party to or that
becomes party to the Guaranty or otherwise guarantees the Obligations.
"Guaranty" means the guaranty, in substantially the form of Exhibit
H (Form of Guaranty), executed by the Guarantors.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof, including (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor or to
provide funds for the payment or discharge of such Indebtedness (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss or (v) to supply funds to, or in any other manner
invest in, such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under clause (b)(i), (ii),
(iii), (iv) or (v) above the primary purpose or intent thereof is to provide
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
assurance that Indebtedness of another Person will be paid or discharged, that
any agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof. The amount of any Guaranty Obligation shall be equal to the amount of
the Indebtedness so guaranteed or otherwise supported; provided, however, such
Guaranty Obligation shall be limited to the amount of such guarantee or support.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or that bear
interest, (c) all reimbursement and all obligations with respect to letters of
credit, bankers' acceptances, surety bonds and performance bonds, whether or not
matured, (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business
that are not overdue, (e) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (f) all Capital Lease Obligations of
such Person, (g) all Guaranty Obligations of such Person, (h) all obligations of
such Person to purchase, redeem, retire, defease or otherwise acquire for value
any Stock or Stock Equivalents of such Person, valued, in the case of redeemable
preferred stock, at the greater of its voluntary liquidation preference and its
involuntary liquidation preference plus accrued and unpaid dividends, (i) all
payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person, (j) Off-Balance Sheet Liability,
and (k) all Indebtedness of the type referred to above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in property (including Accounts and General
Intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness.
"Indemnified Matter" has the meaning specified in Section 11.4
(Indemnities).
"Indemnitee" has the meaning specified in Section 11.4
(Indemnities).
"Initial Appraisals" has the meaning specified in Section 3.1(i)
(Conditions Precedent to Initial Loans and Letters of Credit).
"Intercreditor Agreement" means the Intercreditor Agreement, dated
the date hereof, among the Administrative Agent, the Second Lien Agent, the
Collateral Agent and the Borrower.
"Interest Expense" means, for any Person for any period,
Consolidated total interest expense of such Person and its Subsidiaries for such
period and including, in any event, interest capitalized during such period and
net costs under Interest Rate Contracts for such period.
20
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"Interest Period" means, in the case of any Eurodollar Rate Loan,
(a) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion or Continuation
given to the Administrative Agent pursuant to Section 2.2 (Borrowing Procedures)
or 2.11 (Conversion/Continuation Option), and (b) thereafter, if such Loan is
continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section
2.11 (Conversion/Continuation Option), a period commencing on the last day of
the immediately preceding Interest Period therefor and ending one, two, three or
six months thereafter, as selected by the Borrower in its Notice of Conversion
or Continuation given to the Administrative Agent pursuant to Section 2.11
(Conversion/Continuation Option); provided, however, that all of the foregoing
provisions relating to Interest Periods in respect of Eurodollar Rate Loans are
subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension
would be to extend such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iii) the Borrower may not select any Interest Period in
respect of Loans having an aggregate principal amount of less than
$5,000,000; and
(iv) there shall be outstanding at any one time no more than
five (5) Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
"Inventory" has the meaning given to such term in the UCC.
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by such Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by such Person of all
or a significant part of the assets of a business conducted by any other Person,
or all or substantially all of the assets constituting the business of a
division, branch or other unit operation of any other Person, (c) any loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable and similar items
made or incurred in the ordinary course of business as presently conducted) or
capital contribution by such Person to any other Person, including all
Indebtedness of any other Person to such Person arising from a sale of property
by such Person other than in the ordinary course of its business and (d) any
Guaranty Obligation incurred by such Person in respect of Indebtedness of any
other Person.
21
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"IRB Debt" means Indebtedness and other liabilities owing by any
Loan Party pursuant to any IRB Document at any time.
"IRB Documents" means all agreements, instruments and other
documents executed in connection with the following Industrial Development
Revenue Bonds issued by the Borrower: (i) 1997 Series A Corinth Bonds issued by
the Mississippi Business Finance Corporation due December 31, 2021, with a
current principle balance of $6,405,488.76 as of the Closing Date, (ii) 1997
Series B Corinth Bonds issued by Mississippi Business Finance Corporation due
May 1, 2007, with a current principal balance of $5,308,211.81 as of the Closing
Date, (iii) Xxxxxxx-Coffee Series 1995 Bonds issued by the Xxxxxxx-Coffee
Industrial Authority due December 1, 2010, with a current principal amount of
$36,627,976.73 as of Closing Date, (iv) Dunlap Series 1988 Bonds issued by the
Industrial Development Board of the City of Xxxxxx, Tennessee due December 31,
2007, with a current principal amount of $7,000,000, (v) 1996 Tupelo MS Series A
Supplemental Bonds issued by the Mississippi Business Finance Corporation due
August 1, 2006, with a current principal amount of $1,514,650.11, (vi) Shannon
XX Xxxxx issued by Xxx County Mississippi due April 1, 2006, with a current
principal amount of $48,026,106.21, (vii) Paris TN Evergy Project Bond issued by
Industrial Development Board of the City of Paris, Tennessee due December 31,
2014, with a current principal amount of $3,500,000 and (viii) 1994 Series A
Tupelo bonds originally issued by the Mississippi Business Finance Corporation
due November 17, 2019, with a current principal balance of $4,054,309.81 as of
the Closing Date.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Issue" means, with respect to any Letter of Credit, to issue
(including any deemed issuance pursuant to Section 2.4(k) (Letters of Credit)),
extend the expiry of, renew or increase the maximum face amount (including by
deleting or reducing any scheduled decrease in such maximum face amount) of,
such Letter of Credit. The terms "Issued" and "Issuance" shall have a
corresponding meaning.
"Issuer" means each Lender or Affiliate of a Lender that (a) is
listed on the signature pages hereof as an "Issuer" or (b) hereafter becomes an
Issuer with the approval of the Administrative Agent and the Borrower by
agreeing pursuant to an agreement with and in form and substance satisfactory to
the Administrative Agent and the Borrower to be bound by the terms hereof
applicable to Issuers.
"JPMorgan" means JPMorgan Chase Bank, N.A., a national banking
association.
"Judgment Currency" shall have the meaning assigned to such term in
Section 11.19.
"Judgment Currency Conversion Date" shall have the meaning assigned
to such term in Section 11.19.
"Land" of any Person means all of those plots, pieces or parcels of
land now owned, leased or hereafter acquired or leased or purported to be owned,
leased or hereafter acquired or leased (including, in respect of the Loan
Parties, as reflected in the most recent Financial Statements) by such Person.
22
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"Landlord Waiver" means a letter in form and substance reasonably
acceptable to the Administrative Agent and executed by a landlord in respect of
Inventory of a Loan Party located at any leased premises of such Loan Party
pursuant to which such landlord, among other things, waives or subordinates on
terms and conditions reasonably acceptable to the Administrative Agent any Lien
such landlord may have in respect of such Inventory.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Lender" means the Swing Loan Lender and each other financial
institution or other entity that (a) is listed on the signature pages hereof as
a "Lender" or (b) from time to time becomes a party hereto by execution of an
Assignment and Acceptance.
"Letter of Credit" means any letter of credit Issued pursuant to
Section 2.4 (Letters of Credit).
"Letter of Credit Obligations" means, at any time, the Dollar
Equivalent of the aggregate of all liabilities at such time of the Borrower to
all Issuers with respect to Letters of Credit, whether or not any such liability
is contingent, including, without duplication, the sum of (a) the Reimbursement
Obligations at such time and (b) the Letter of Credit Undrawn Amounts at such
time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Section 2.4(a)(vi) (Letters of Credit).
"Letter of Credit Request" has the meaning specified in Section
2.4(c) (Letters of Credit).
"Letter of Credit Sublimit" means $50,000,000.
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
hypotec, assignment, charge, deposit arrangement, encumbrance, lien (statutory
or other), security interest or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or the performance of any other obligation,
including any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease and any financing lease having substantially
the same economic effect as any of the foregoing, and the filing of any
financing statement under the UCC or comparable law of any jurisdiction naming
the owner of the asset to which such Lien relates as debtor.
"Liquidity Event Period" means any period (a) (i) beginning on the
first Business Day on which the Available Credit is less than $40,000,000 and
(ii) ending on the first Business Day on which the Available Credit is greater
than $40,000,000 for more than 30 consecutive days or (b) during which an Event
of Default has occurred and is continuing.
"Loan" means any loan made by any Lender pursuant to this Agreement.
23
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"Loan Documents" means, collectively, this Agreement, the Revolving
Credit Notes (if any), the Guaranty, the First Lien Fee Letter, each Letter of
Credit Reimbursement Agreement, each Hedging Contract between any Loan Party and
any Person that was a Lender or an Affiliate of a Lender at the time it entered
into such Hedging Contract, each Cash Management Document, the Collateral
Documents, the Intercreditor Agreement and each certificate, agreement or
document executed by a Loan Party and delivered to the Administrative Agent or
any Lender in connection with or pursuant to any of the foregoing.
"Loan Party" means each of the Borrower, each Guarantor and each
other Subsidiary of the Borrower that executes and delivers a Loan Document (it
being understood that no Material Foreign Subsidiary shall be deemed to be a
Loan Party unless and until it becomes a Guarantor).
"Material Adverse Change" means a material adverse change in any of
(a) the business, condition (financial or otherwise), operations, performance,
properties, contingent liabilities, material agreements or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole, (b) the
legality, validity or enforceability of this Agreement, any Revolving Credit
Note, any Collateral Document or any other material Loan Document, (c) the
perfection or priority of the Liens granted on any material portion of the
Collateral pursuant to the Collateral Documents, (d) the ability of the Borrower
to repay the Obligations or of the other Loan Parties to perform their
respective obligations under the Loan Documents or (e) the rights and remedies
of the Administrative Agent, the Collateral Agent, the Lenders or the Issuers
under the Loan Documents.
"Material Adverse Effect" means an effect that results in or causes,
or could reasonably be expected to result in or cause, a Material Adverse
Change.
"Material Domestic Subsidiary" means a Domestic Subsidiary or a
Canadian Subsidiary that is not a Non-Material Domestic Subsidiary.
"Material Foreign Subsidiary" means any Foreign Subsidiary that,
together with its Subsidiaries, satisfies one of the following conditions: (i)
the portion of Consolidated Total Assets attributable to such Foreign Subsidiary
is at least 5% of the Consolidated Total Assets of the Borrower at such time or
(ii) the portion of Consolidated EBITDA attributable to such Foreign Subsidiary
is at least 5% of Consolidated EBITDA of the Borrower for the applicable period,
in each case above, as would be shown in the Financial Statements for the most
recent four Fiscal Quarters ending prior to the Fiscal Quarter in which such
determination is made.
"Maximum Credit" means, at any time, (a) the lesser of (i) the
Revolving Credit Commitments in effect at such time and (ii) the Borrowing Base
at such time minus (b) the aggregate amount of any Availability Reserve in
effect at such time.
"Xxxxx'x" means Xxxxx'x Investors Services, Inc.
"Mortgage Value" means, with respect to any parcel of Eligible Real
Property, the lesser of (a) the Dollar Equivalent of the maximum stated amount
secured by the Lien on such parcel of Eligible Real Property granted in favor of
the Collateral Agent pursuant to the relevant Mortgage and (b) the Dollar
Equivalent of the value of such parcel of Eligible Real Property determined by
reference to the most recent Appraisal of such Eligible Real Property.
24
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"Mortgage Supporting Documents" means, with respect to any Mortgage
for a parcel of Real Property, each document (including title policies or
marked-up unconditional insurance binders (in each case, together with copies of
all documents referred to therein), maps, ALTA or TLTA, if applicable, as-built
surveys (in form and as to date that is sufficiently acceptable to the title
insurer issuing title insurance to the Collateral Agent for such title insurer
to deliver endorsements to such title insurance as reasonably requested by the
Administrative Agent), environmental assessments and reports and evidence
regarding recording and payment of fees, insurance premium and taxes) (and other
equivalent documents customarily required to be delivered with a Mortgage on
Canadian Real Property) that the Administrative Agent may reasonably request, to
create, register, perfect, maintain, evidence the existence, substance, form or
validity of or enforce a valid Lien on such parcel of Real Property in favor of
the Collateral Agent for the benefit of the Secured Parties, subject only to
such Liens as the Administrative Agent may approve.
"Mortgages" means the mortgages, deeds of trust or other real estate
security documents made or required herein to be made by the Borrower or any
other Loan Party, each in form and substance satisfactory to the Administrative
Agent.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by any Loan Party after
the Closing Date in cash or Cash Equivalents from any (a) Asset Sale, other than
an Asset Sale permitted under clauses (a), (b), (c)(i), (d), (e) or (h)(x) of
Section 8.4 (Sale of Assets), net of (i) the reasonable cash costs of sale,
assignment or other disposition, (ii) taxes paid or reasonably estimated to be
payable as a result thereof and (iii) any amount required to be paid or prepaid
on Indebtedness (other than the Obligations) secured by the assets subject to
such Asset Sale, provided, however, that evidence of each of clauses (i), (ii)
and (iii) above is provided to the Administrative Agent in form and substance
satisfactory to it, or (b) Property Loss Event.
"Non-Cash Interest Expense" means, with respect to any Person for
any period, the sum of the following amounts to the extent included in the
definition of Interest Expense (a) the amount of debt discount and debt issuance
costs amortized, (b) charges relating to write-ups or write-downs in the book or
carrying value of existing Financial Covenant Debt, (c) interest payable in
evidences of Indebtedness or by addition to the principal of the related
Indebtedness and (d) other non-cash interest.
"Non-Consenting Lender" has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).
"Non-Funding Lender" has the meaning specified in Section 2.2(d)
(Borrowing Procedures).
"Non-Guarantor Subsidiary" means any Subsidiary of the Borrower that
is not a Guarantor.
"Non-Material Domestic Subsidiary" means any Domestic Subsidiary or
Canadian Subsidiary that conducts no operations and owns no material assets;
provided, however,
25
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
the aggregate Fair Market Value of all assets held by all Non-Material Domestic
Subsidiaries shall not exceed $250,000.
"Non-U.S. Lender" means each Lender or Issuer (or the Administrative
Agent) that is a Non-U.S. Person.
"Non-U.S. Person" means any Person that is not a Domestic Person.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
(Borrowing Procedures).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.11 (Conversion/Continuation Option).
"Obligations" means the Loans, the Letter of Credit Obligations and
all other amounts, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, the Collateral Agent, any Lender, any Issuer, any
Affiliate of any of them or any Indemnitee, of every type and description
(whether by reason of an extension of credit, opening or amendment of a letter
of credit or payment of any draft drawn or other payment thereunder, loan,
guaranty, indemnification, foreign exchange or currency swap transaction,
interest rate hedging transaction or otherwise), present or future, arising
under this Agreement, any other Loan Document (including Cash Management
Documents and Hedging Contracts that are Loan Documents), whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired and
whether or not evidenced by any note, guaranty or other instrument or for the
payment of money, including all letter of credit, cash management and other
fees, interest, charges, expenses, attorneys' fees and disbursements, Cash
Management Obligations and other sums chargeable to the Borrower under this
Agreement, any other Loan Document (including Cash Management Documents and
Hedging Contracts that are Loan Documents) and all obligations of the Borrower
under any Loan Document to provide cash collateral for any Letter of Credit
Obligation.
"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 Capital 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.
"Orderly Liquidation Value Percentage" means the orderly liquidation
value on an as-is-where-is basis (net of costs and expenses incurred in
connection with liquidation) of inventory as a percentage of the cost of such
Inventory, which percentage shall be determined by reference to the most recent
Appraisal of such Inventory received by the Administrative Agent.
"Patriot Act" means the USA Patriot Act of 2001 (31 U.S.C. 5318 et
seq.).
"paid in full" and "payment in full" have the meaning specified in
the Intercreditor Agreement.
26
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Holders" means (i) any Person who is a lineal descendant
of Xxxxxxx Xxxxxxx, (ii) the spouse, children, or grandchildren of any such
persons, (iii) any trust of which any of such Persons is a trustee or a
beneficiary, (iv) the estate, executor, administrator, or any legal guardian of
any such Person, (v) any participation, corporation or limited liability company
owned and controlled solely by such Persons and (vi) the Xxxxxxx Foundation.
"Permitted Joint Venture" means a Person (a) that is a corporation,
limited liability company, joint venture or similar limited liability legal
entity hereafter formed or entered into by the Borrower or any of its
Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person, which legal entity does not constitute a
Subsidiary; (b) that does not own any Stock in a Loan Party nor at any time
itself have been a Loan Party; and (c) in respect of which all Indebtedness or
other obligations (in each case whether contingent or otherwise), including any
contractually binding commitment to make future capital contributions, assumed
by any Loan Party in respect thereof can be quantified.
"Permitted Refinancing" means renewals, extensions, refinancings and
refundings of Indebtedness permitted by Section 8.1(b) and Section 8.1(d)
(Indebtedness) that (a) are in an aggregate principal amount not greater than
the principal amount of, and is on terms no less favorable to the Borrower or
any Subsidiary of the Borrower obligated thereunder and (b) have a weighted
average maturity and final maturity (measured as of the date of such renewal,
refinancing, extension or refunding) no shorter than that of such Indebtedness.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity or a Governmental
Authority.
"Pledge and Security Agreement" means an agreement, in substantially
the form of Exhibit I (Form of Pledge and Security Agreement), executed by the
Borrower and each Guarantor.
"Pledged Debt Instruments" has the meaning specified in the Pledge
and Security Agreement.
"Pledged Stock" has the meaning specified in the Pledge and Security
Agreement.
"Pro Forma Basis" means, with respect to any determination for any
period, that such determination shall be made giving pro forma effect to each
acquisition consummated during such period, together with all transactions
relating thereto consummated during such period (including any incurrence,
assumption, refinancing or repayment of Indebtedness), as if such acquisition
and related transactions had been consummated on the first day of such period,
in each case based on historical results accounted for in accordance with GAAP
and, to the extent applicable, reasonable assumptions that are specified in
details in the relevant Compliance
27
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Certificate, Financial Statement or other document provided to the
Administrative Agent or any Lender in connection herewith in accordance with
Regulation S-X of the Securities Act of 1933.
"Proceeds" has the meaning given to such term in the UCC.
"Projections" means those financial projections dated January 2006
covering the fiscal years ending in 2006 through 2013 inclusive, to be delivered
to the Lenders by the Borrower.
"Property Loss Event" means (a) any loss of or damage to property of
any Loan Party that results in the receipt by such Person of proceeds of
insurance whose Dollar Equivalent exceeds $250,000 (individually or in the
aggregate) or (b) any taking of property of any Loan Party that results in the
receipt by such Person of a compensation payment in respect thereof whose Dollar
Equivalent exceeds $250,000 (individually or in the aggregate).
"Protective Advances" means all expenses, disbursements and advances
incurred by the Administrative Agent or the Collateral Agent pursuant to the
Loan Documents after the occurrence and during the continuance of an Event of
Default that the Administrative Agent, in its sole discretion, deems necessary
or desirable to preserve or protect the Collateral or any portion thereof or to
enhance the likelihood, or maximize the amount, of repayment of the Obligations.
"Purchasing Lender" has the meaning specified in Section 11.7
(Sharing of Payments, Etc.).
"Quarterly Available Credit" means, as of the date of determination,
the average daily Available Credit for the immediately preceding Fiscal Quarter.
"Ratable Portion" or (other than in the expression "equally and
ratably") "ratably" means, with respect to any Revolving Credit Lender, the
percentage obtained by dividing (a) the Revolving Credit Commitment of such
Revolving Credit Lender by (b) the aggregate Revolving Credit Commitments of all
Revolving Credit Lenders (or, at any time after the Revolving Credit Termination
Date, the percentage obtained by dividing the aggregate outstanding principal
balance of the Revolving Credit Outstandings owing to such Revolving Credit
Lender by the aggregate outstanding principal balance of the Revolving Credit
Outstandings owing to all Revolving Credit Lenders).
"Real Property" of any Person means the Land of such Person,
together with the right, title and interest of such Person, if any, in and to
the streets, the Land lying in the bed of any streets, roads or avenues, opened
or proposed, in front of, the air space and development rights pertaining to the
Land and the right to use such air space and development rights, all rights of
way, privileges, liberties, tenements, hereditaments and appurtenances belonging
or in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including all alley, vault, drainage, mineral, water, oil
and gas rights, together with all of the buildings and other improvements now or
hereafter erected on the Land and any fixtures appurtenant thereto.
"Refinanced IRB Debt" means Indebtedness and other liabilities owing
by any Loan Party pursuant to any Refinanced IRB Document.
28
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"Refinanced IRB Documents" means all agreements, instruments and
other documents executed in connection with (i) 1994 Series A Tupelo bonds
originally issued by the Mississippi Business Finance Corporation due November
17, 2019, with a current principal balance of $4,054,309.81 as of the Closing
Date and (ii) 1997 Series A Corinth Bonds issued by the Mississippi Business
Finance Corporation due December 31, 2021, with a current principle balance of
$6,405,488.76 as of the Closing Date.
"Register" has the meaning specified in Section 2.7(b) (Evidence of
Debt).
"Reimbursement Date" has the meaning specified in Section 2.4(h)
(Letters of Credit).
"Reimbursement Obligations" means, as and when matured, the
obligation of the Borrower to pay, on the date payment is made or scheduled to
be made to the beneficiary under each such Letter of Credit (or at such other
date as may be specified in the applicable Letter of Credit Reimbursement
Agreement) and in the currency drawn (or in such other currency as may be
specified in the applicable Letter of Credit Reimbursement Agreement), all
amounts of each drafts and other requests for payments drawn under Letters of
Credit, and all other matured reimbursement or repayment obligations of the
Borrower to any Issuer with respect to amounts drawn under Letters of Credit.
"Related Party Assignment" shall mean an assignment of all or a
portion of a Loan or a Revolving Credit Commitment of a Lender to an Affiliate
of such Lender or an Approved Fund of such Lender.
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned, leased or operated by
such Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
"Requirement of Law" means, with respect to any Person, the common
law and all federal, state, local and foreign laws, treaties, rules and
regulations, orders, judgments, decrees and other determinations of,
concessions, grants, franchises, licenses and other Contractual Obligations
with, any Governmental Authority or arbitrator, applicable to or binding upon
such Person or any of its property or to which such Person or any of its
property is subject.
"Requisite Lenders" means, collectively, Revolving Credit Lenders
having more than fifty percent (50%) of the aggregate outstanding amount of the
Revolving Credit Commitments or, after the Revolving Credit Termination Date,
more than fifty percent (50%) of the aggregate Revolving Credit Outstandings. A
Non-Funding Lender shall not be included in the calculation of "Requisite
Lenders."
29
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person but, in any event, with respect to financial matters, the chief financial
officer, treasurer or controller of such Person.
"Restricted Payment" means (a) any dividend, distribution or any
other payment whether direct or indirect, on account of any Stock or Stock
Equivalent of the Borrower or any of its Subsidiaries now or hereafter
outstanding and (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Stock or
Stock Equivalent of the Borrower or any of its Subsidiaries now or hereafter
outstanding.
"Revolving Credit Commitment" means, with respect to each Revolving
Credit Lender, the commitment of such Revolving Credit Lender to make Revolving
Loans and acquire interests in other Revolving Credit Outstandings in the
aggregate principal amount outstanding not to exceed the amount set forth
opposite such Revolving Credit Lender's name on Schedule I (Revolving Credit
Commitments) under the caption "Revolving Credit Commitment," as amended to
reflect each Assignment and Acceptance executed by such Revolving Credit Lender
and as such amount may be reduced pursuant to this Agreement. On the date
hereof, the aggregate Revolving Credit Commitments are $275,000,000.
"Revolving Credit Lender" means each Lender that (a) has a Revolving
Credit Commitment, (b) holds a Revolving Loan or (c) participates in any Letter
of Credit.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender in a principal amount equal
to the amount of such Revolving Credit Lender's Revolving Credit Commitment
evidencing the aggregate Indebtedness of the Borrower to such Revolving Credit
Lender resulting from the Revolving Loans owing to such Revolving Credit Lender.
"Revolving Credit Outstandings" means, at any particular time, the
sum of (a) the principal amount of the Revolving Loans outstanding at such time,
(b) the Letter of Credit Obligations outstanding at such time and (c) the
principal amount of the Swing Loans outstanding at such time.
"Revolving Credit Termination Date" shall mean the earliest of (a)
the Scheduled Termination Date, (b) the date of termination of all of the
Revolving Credit Commitments pursuant to Section 2.5 (Reduction and Termination
of the Revolving Credit Commitments) and (c) the date on which the Obligations
become due and payable pursuant to Section 9.2 (Remedies).
"Revolving Loan" has the meaning specified in Section 2.1 (The
Revolving Credit Commitments).
"Sale and Leaseback Transaction" means any sale or other transfer of
property by any Person with the intent to lease such property as lessee.
"S&P" means Standard & Poor's Rating Services.
"Xxxxxxxx-Xxxxx Act" means the United States Xxxxxxxx-Xxxxx Act of
2002.
"Scheduled Termination Date" means the fifth anniversary of the
Closing Date.
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"Second Lien Agent" means the "Administrative Agent" under and as
defined in the Second Lien Credit Agreement .
"Second Lien Credit Agreement" means that certain Second Lien Credit
Agreement, dated as of the date hereof, among the Borrower, the Second Lien
Agent, the Collateral Agent and the financial institutions party thereto as
lenders and issuing banks.
"Second Lien Facility" means the "Facility" under and as defined in
the Second Lien Credit Agreement.
"Second Lien Lenders" means the "Lenders" under and as defined in
the Second Lien Credit Agreement.
"Second Lien Loan Documents" means the Second Lien Credit Agreement
and the Loan Documents (as defined in the Second Lien Credit Agreement).
"Second Lien Secured Obligations" means the "Secured Obligations"
under and as defined in the Second Lien Credit Agreement.
"Second Lien Secured Parties" means the Second Lien Agent, the
Second Lien Lenders, the Collateral Agent and each other holder of the Second
Lien Secured Obligations.
"Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.
"Secured Parties" means the Lenders, the Issuers, the Administrative
Agent, the Collateral Agent and any other holder of any Secured Obligation.
"Securities Account" has the meaning given to such term in the UCC.
"Securities Account Control Agreement" has the meaning specified in
the Pledge and Security Agreement.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, any temporary or interim certificate for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, but shall not include any evidence of the Obligations.
"Selling Lender" has the meaning specified in Section 11.7 (Sharing
of Payments, Etc.).
"Senior Aircraft Security Agreement" means that certain Senior
Aircraft Security Agreement, dated as of the date hereof, by the Borrower, as
grantor, and the Collateral Agent.
"Senior Guaranteed Notes" means the $300,000,000 4.66% senior
guaranteed notes issued by the Borrower and due March 5, 2011.
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"Solvent" means, with respect to any Person as of any date of
determination, that, as of such date, (a) the value of the assets of such Person
(both at fair value and present fair saleable value) is greater than the total
amount of liabilities (including, without duplication, contingent and
unliquidated liabilities) of such Person, (b) such Person is able to pay all
liabilities of such Person as such liabilities mature and (c) such Person does
not have unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities shall be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Special Purpose Vehicle" means any special purpose funding vehicle
identified as such in writing by any Lender to the Administrative Agent.
"Specified Canadian Subsidiaries" means Tecumseh Products of Canada,
Limited and Fasco Motors Company.
"Standby Letter of Credit" means any Letter of Credit that is not a
Documentary Letter of Credit.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of 50% or more of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person or one or more
Subsidiaries of such Person.
"Substitute Institution" has the meaning specified in Section 2.17
(Substitution of Lenders).
"Substitution Notice" has the meaning specified in Section 2.17
(Substitution of Lenders).
"Swing Loan" has the meaning specified in Section 2.3 (Swing Loans).
"Swing Loan Lender" means Citicorp or any other Revolving Credit
Lender that becomes the Administrative Agent or agrees, with the approval of the
Administrative Agent and the Borrower, to act as the Swing Loan Lender
hereunder, in each case in its capacity as the Swing Loan Lender hereunder.
"Swing Loan Request" has the meaning specified in Section 2.3(a)
(Swing Loans).
"Swing Loan Sublimit" means $25,000,000.
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"Syndication Completion Date" has the meaning specified in the First
Lien Fee Letter.
"Tax Affiliate" means, with respect to any Person, (a) any
Subsidiary of such Person and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary tax
returns, provided however, that Tecumseh Italy shall not be considered a Tax
Affiliate of the Borrower or any Subsidiary of the Borrower as long as the
Borrower is diligently pursuing the dissolution or liquidation of Tecumseh
Italy.
"Tax Return" has the meaning specified in Section 4.8(a) (Taxes).
"Taxes" has the meaning specified in Section 2.16(a) (Taxes).
"Tecumseh Italy" means, collectively, Tecumseh Europa S.p.A and its
Subsidiaries.
"Thai Letter of Credit" means that certain letter of credit issued
by JPMorgan in favor of Standard Charter Bank in the amount of $18,000,000.
"Thai Subsidiary" means Fasco Motors (Thailand) Limited, a company
formed under the laws of Thailand and a Wholly-Owned Subsidiary of the Borrower.
"Title IV Plan" means a pension plan, other than a Multiemployer
Plan, covered by Title IV of ERISA and to which the Borrower any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability, contingent
or otherwise.
"UCC" has the meaning specified in the Pledge and Security
Agreement.
"Unused Commitment Fee" has the meaning specified in Section 2.12(a)
(Fees).
"Updated Appraisal" has the meaning specified in Section 6.10(b)
(Borrowing Base Determination).
"U.S. Lender" means each Lender or Issuer (or the Administrative
Agent) that is a Domestic Person.
"Voting Stock" means Stock of any Person having ordinary power to
vote in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
Person, all of the Stock of which (other than director's qualifying shares, as
may be required by law) is owned by such Person, either directly or indirectly
through one or more Wholly-Owned Subsidiaries of such Person.
"Withdrawal Liability" means, with respect to the Borrower or any of
its Subsidiaries at any time, the aggregate liability incurred (whether or not
assessed) with respect to all Multiemployer Plans pursuant to Section 4201 of
ERISA or for increases in contributions required to be made pursuant to Section
4243 of ERISA.
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SECTION 1.2 COMPUTATION OF TIME PERIODS
In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES
(a) Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto (including for purpose of
measuring compliance with Article V (Financial Covenants) shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
(Financial Statements) is hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successors thereto) and such change is adopted by the Borrower with the
agreement of the Borrower's Accountants and results in a change in any of the
calculations required by Article V (Financial Covenants) or VIII (Negative
Covenants) that would not have resulted had such accounting change not occurred,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such change such that the criteria for
evaluating compliance with such covenants by the Borrower shall be the same
after such change as if such change had not been made; provided, however, that
no change in GAAP that would affect a calculation that measures compliance with
any covenant contained in Article V (Financial Covenants) or VIII (Negative
Covenants) shall be given effect until such provisions are amended to reflect
such changes in GAAP.
(c) For purposes of making all financial calculations to determine
compliance with Article V (Financial Covenants), all components of such
calculations shall be adjusted to include or exclude, as the case may be,
without duplication, such components of such calculations attributable to any
business or assets that have been acquired by the Borrower or any of its
Subsidiaries after the first day of the applicable period of determination and
prior to the end of such period, as determined in good faith by the Borrower on
a Pro Forma Basis.
SECTION 1.4 CONVERSION OF FOREIGN CURRENCIES
(a) Financial Covenant Debt. Financial Covenant Debt denominated in
any currency other than Dollars shall be calculated using the Dollar Equivalent
thereof as of the date of the Financial Statements on which such Financial
Covenant Debt is reflected.
(b) Dollar Equivalents. The Administrative Agent shall determine the
Dollar Equivalent of any amount as required hereby, and a determination thereof
by the Administrative Agent shall be conclusive absent manifest error. The
Administrative Agent may, but shall not be obligated to, rely on any
determination made by any Loan Party in any document delivered to the
Administrative Agent. The Administrative Agent may determine or redetermine the
Dollar Equivalent of any amount on any date either in its own discretion or upon
the request of any Lender or Issuer.
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(c) Rounding-Off. The Administrative Agent may set up appropriate
rounding off mechanisms or otherwise round-off amounts hereunder to the nearest
higher or lower amount in whole Dollar or cent to ensure amounts owing by any
party hereunder or that otherwise need to be calculated or converted hereunder
are expressed in whole Dollars or in whole cents, as may be necessary or
appropriate.
SECTION 1.5 CERTAIN TERMS
(a) The terms "herein," "hereof," "hereto" and "hereunder" and
similar terms refer to this Agreement as a whole and not to any particular
Article, Section, subsection or clause in, this Agreement.
(b) Unless otherwise expressly indicated herein, (i) references in
this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause
refer to the appropriate Exhibit or Schedule to, or Article, Section, clause or
sub-clause in this Agreement and (ii) the words "above" and "below", when
following a reference to a clause or a sub-clause of any Loan Document, refer to
a clause or sub-clause within, respectively, the same Section or clause.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders or the Administrative Agent is required hereunder or under
the Intercreditor Agreement for an amendment, restatement, supplement or other
modification to any such agreement and such consent is not obtained, references
in this Agreement to such agreement shall be to such agreement as so amended,
restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified from time to time and to any successor
legislation thereto, in each case as in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
(f) The terms "Lender," "Issuer, "Administrative Agent" and
"Collateral Agent" include, without limitation, their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 10.7 (Successor Administrative Agent), references to
Citicorp in Section 10.4 (The Administrative Agent Individually) and to Citibank
in the definitions of Base Rate, Dollar Equivalent, and Eurodollar Rate shall be
deemed to refer to the financial institution then acting as the Administrative
Agent or one of its Affiliates if it so designates.
ARTICLE II
THE FACILITY
SECTION 2.1 THE REVOLVING CREDIT COMMITMENTS
On the terms and subject to the conditions contained in this
Agreement, each Revolving Credit Lender severally agrees to make loans in
Dollars (each a "Revolving Loan") to
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the Borrower from time to time on any Business Day during the period from the
date hereof until the Revolving Credit Termination Date in an aggregate
principal amount at any time outstanding for all such loans by such Revolving
Credit Lender not to exceed such Revolving Credit Lender's Revolving Credit
Commitment; provided, however, that at no time shall any Revolving Credit Lender
be obligated to make a Revolving Loan in excess of such Revolving Credit
Lender's Ratable Portion of the Available Credit. Within the limits of the
Revolving Credit Commitment of each Revolving Credit Lender, amounts of
Revolving Loans repaid may be reborrowed under this Section 2.1.
SECTION 2.2 BORROWING PROCEDURES
(a) Each Borrowing shall be made on notice given by the Borrower to
the Administrative Agent not later than 11:00 a.m. (New York time) (i) one
Business Day, in the case of a Borrowing of Base Rate Loans, and (ii) three
Business Days, in the case of a Borrowing of Eurodollar Rate Loans, prior to the
date of the proposed Borrowing. Each such notice shall be in substantially the
form of Exhibit C (Form of Notice of Borrowing) (a "Notice of Borrowing"),
specifying (A) the date of such proposed Borrowing, (B) the aggregate amount of
such proposed Borrowing, (C) whether any portion of the proposed Borrowing will
be of Base Rate Loans or Eurodollar Rate Loans, (D) for each Eurodollar Rate
Loan, the initial Interest Period or Periods thereof and (E) the Available
Credit (after giving effect to the proposed Borrowing). The Revolving Loans
shall be made as Base Rate Loans unless, subject to Section 2.14 (Special
Provisions Governing Eurodollar Rate Loans), the Notice of Borrowing specifies
that all or a portion thereof shall be Eurodollar Rate Loans. Notwithstanding
anything to the contrary contained in Section 2.3(a) (Swing Loans), if any
Notice of Borrowing requests a Borrowing of Base Rate Loans, the Administrative
Agent may make a Swing Loan available to the Borrower in an aggregate amount not
to exceed such proposed Borrowing, and the aggregate amount of the corresponding
proposed Borrowing shall be reduced accordingly by the principal amount of such
Swing Loan. Each Borrowing shall be in an aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) The Administrative Agent shall give to each Revolving Credit
Lender prompt notice of the Administrative Agent's receipt of a Notice of
Borrowing and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the applicable interest rate determined pursuant to Section 2.14(a)
(Determination of Interest Rate). Each Revolving Credit Lender shall, before
11:00 a.m. (New York time) on the date of the proposed Borrowing, make available
to the Administrative Agent at its address referred to in Section 11.8 (Notices,
Etc.), in immediately available funds, such Revolving Credit Lender's Ratable
Portion of such proposed Borrowing. Upon fulfillment (or due waiver in
accordance with Section 11.1 (Amendments, Waivers, Etc.)) (i) on the Closing
Date, of the applicable conditions set forth in Section 3.1 (Conditions
Precedent to Initial Loans and Letters of Credit) and (ii) at any time
(including the Closing Date), of the applicable conditions set forth in Section
3.2 (Conditions Precedent to Each Loan and Letter of Credit), and after the
Administrative Agent's receipt of such funds, the Administrative Agent shall
make such funds available to the Borrower.
(c) Unless the Administrative Agent shall have received notice from
a Revolving Credit Lender prior to the date of any proposed Borrowing that such
Revolving Credit Lender will not make available to the Administrative Agent such
Revolving Credit Lender's Ratable Portion of such Borrowing (or any portion
thereof), the Administrative Agent may assume that such Revolving Credit Lender
has made such Ratable Portion available to the Administrative Agent on the date
of such Borrowing in accordance with this Section 2.2 and the
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FIRST LIEN CREDIT AGREEMENT
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Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Revolving Credit Lender shall not have so made such Ratable Portion available to
the Administrative Agent, such Revolving Credit Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Revolving Credit Lender, the Federal Funds Rate for the
first Business Day and thereafter at the interest rate applicable at the time to
the Loans comprising such Borrowing. If such Revolving Credit Lender shall repay
to the Administrative Agent such corresponding amount, such corresponding amount
so repaid shall constitute such Revolving Credit Lender's Loan as part of such
Borrowing for purposes of this Agreement. If the Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Revolving Credit Lender of any obligation it may have hereunder to the
Borrower.
(d) The failure of any Revolving Credit Lender to make on the date
specified any Loan or any payment required by it (such Lender being a
"Non-Funding Lender"), including any payment in respect of its participation in
Swing Loans and Letter of Credit Obligations, shall not relieve any other
Revolving Credit Lender of its obligations to make such Loan or payment on such
date but no such other Revolving Credit Lender shall be responsible for the
failure of any Non-Funding Lender to make a Loan or payment required under this
Agreement.
SECTION 2.3 SWING LOANS
(a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may, in its sole discretion, make, in Dollars,
loans (each a "Swing Loan") otherwise available to the Borrower under the
Facility from time to time on any Business Day during the period from the date
hereof until the Revolving Credit Termination Date in an aggregate principal
amount at any time outstanding not to exceed the Swing Loan Sublimit; provided,
however, that at no time shall the Swing Loan Lender make any Swing Loan to the
extent that, after giving effect to such Swing Loan, the aggregate Revolving
Credit Outstandings would exceed the Maximum Credit. Each Swing Loan shall be a
Base Rate Loan and must be repaid in full within seven days after its making or,
if sooner, upon any Borrowing hereunder and shall in any event mature no later
than the Revolving Credit Termination Date. Within the limits set forth in the
first sentence of this clause (a), amounts of Swing Loans repaid may be
reborrowed under this clause (a).
(b) In order to request a Swing Loan, the Borrower shall telecopy
(or forward by electronic mail or similar means) to the Administrative Agent a
duly completed request in substantially the form of Exhibit D (Form of Swing
Loan Request), setting forth the requested amount and date of such Swing Loan (a
"Swing Loan Request"), to be received by the Administrative Agent and the Swing
Loan Lender not later than 1:00 p.m. (New York time) on the day of the proposed
borrowing. Subject to the terms of this Agreement, the Swing Loan Lender may
make a Swing Loan available to the Administrative Agent and, in turn, the
Administrative Agent shall make such amounts available to the Borrower on the
date of the relevant Swing Loan Request. The Swing Loan Lender shall not make
any Swing Loan during the period commencing on the first Business Day after it
receives written notice from the Administrative Agent or any Revolving Credit
Lender that one or more of the conditions precedent contained in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit)
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shall not on such date be satisfied, and ending when such conditions are
satisfied. The Swing Loan Lender shall not otherwise be required to determine
that, or take notice whether, the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) have been satisfied in
connection with the making of any Swing Loan.
(c) The Swing Loan Lender shall notify the Administrative Agent in
writing (which writing may be a telecopy or electronic mail) weekly, by no later
than 10:00 a.m. (New York time) on the first Business Day of each week, of the
aggregate principal amount of any Swing Loan then outstanding.
(d) The Swing Loan Lender may demand at any time that each Revolving
Credit Lender pay to the Administrative Agent, for the account of the Swing Loan
Lender, in the manner provided in clause (e) below, such Revolving Credit
Lender's Ratable Portion of all or a portion of the outstanding Swing Loans,
which demand shall be made through the Administrative Agent, shall be in writing
and shall specify the outstanding principal amount of Swing Loans demanded to be
paid and upon the occurrence of an Event of Default under Section 9.1(f) (Events
of Default), each Revolving Credit Lender shall immediately acquire, without
recourse or warranty, an undivided participation in the Swing Loan, by payment
to the Administrative Agent, in immediately available funds, of an amount equal
to such Revolving Credit Lender's Ratable Portion of such Swing Loan pursuant to
clause (e) below.
(e) The Administrative Agent shall forward each notice referred to
in clause (b) above and each demand referred to in clause (d) above to each
Revolving Credit Lender on the day such notice or such demand is received by the
Administrative Agent (except that any such notice or demand received by the
Administrative Agent after 2:00 p.m. (New York time) on any Business Day or any
such demand received on a day that is not a Business Day shall not be required
to be forwarded to the Revolving Credit Lenders by the Administrative Agent
until the next succeeding Business Day), together with a statement prepared by
the Administrative Agent specifying the amount of each Revolving Credit Lender's
Ratable Portion of the aggregate principal amount of the Swing Loans stated to
be outstanding in such notice or demanded to be paid pursuant to such demand,
and, notwithstanding whether or not the conditions precedent set forth in
Sections 3.2 (Conditions Precedent to Each Loan and Letter of Credit) and 2.1
(The Revolving Credit Commitments) shall have been satisfied (which conditions
precedent the Revolving Credit Lenders hereby irrevocably waive), each Revolving
Credit Lender shall, before 11:00 a.m. (New York time) on the Business Day next
succeeding the date of such Revolving Credit Lender's receipt of such notice
(other than any notice delivered under clause (b) above) or demand, make
available to the Administrative Agent, in immediately available funds, for the
account of the Swing Loan Lender, the amount specified in such statement. Upon
such payment by a Revolving Credit Lender, such Revolving Credit Lender shall,
except upon the occurrence of an Event of Default under Section 9.1(f) (Events
of Default), be deemed to have made a Revolving Loan to the Borrower. The
Administrative Agent shall use such funds to repay the Swing Loans to the Swing
Loan Lender. To the extent that any Revolving Credit Lender fails to make such
payment available to the Administrative Agent for the account of the Swing Loan
Lender, the Borrower shall repay such Swing Loan on demand and such Lender,
during the period of such failure, shall be deemed a Non Funding Loan. If all or
part of such amount is not in fact made available by such Revolving Credit
Lender to the Swing Loan Lender on such date, such Swing Loan Lender shall be
entitled to recover any such unpaid amount on demand from such Revolving Credit
Lender, together with interest accrued from such date at the Federal Funds Rate
for the first Business Day after such payment was due
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and thereafter at the rate of interest then applicable to the Revolving Loans
that are Base Rate Loans.
(f) From and after the date on which any Revolving Credit Lender (i)
is deemed to have made a Revolving Loan pursuant to clause (e) above with
respect to any Swing Loan or (ii) purchases an undivided participation interest
in a Swing Loan pursuant to clause (d), the Swing Loan Lender shall promptly
distribute to such Revolving Credit Lender such Revolving Credit Lender's
Ratable Portion of all payments of principal of and interest received by the
Swing Loan Lender on account of such Swing Loan other than those received from a
Revolving Credit Lender pursuant to clause (e) above.
SECTION 2.4 LETTERS OF CREDIT
(a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to Issue at the request of the Borrower and for
the account of the Borrower one or more Letters of Credit from time to time on
any Business Day during the period commencing on the Closing Date and ending on
the earlier of the Revolving Credit Termination Date and 30 days prior to the
Scheduled Termination Date; provided, however, that no Issuer shall be under any
obligation to Issue (and, upon the occurrence of any of the events described in
clauses (ii), (iii), (iv), (v) and (vi)(A) below, shall not Issue) any Letter of
Credit upon the occurrence of any of the following:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or restrain
such Issuer from Issuing such Letter of Credit or any Requirement of Law
applicable to such Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction
over such Issuer shall prohibit, or request that such Issuer refrain from,
the Issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon such Issuer with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which such
Issuer is not otherwise compensated) not in effect on the date of this
Agreement or result in any unreimbursed loss, cost or expense that was not
applicable, in effect or known to such Issuer as of the date of this
Agreement and that such Issuer in good xxxxx xxxxx material to it;
(ii) such Issuer shall have received any written notice of the
type described in clause (d) below;
(iii) after giving effect to the Issuance of such Letter of
Credit, the aggregate Revolving Credit Outstandings would exceed the
Maximum Credit at such time;
(iv) after giving effect to the Issuance of such Letter of
Credit, the sum of (i) the Dollar Equivalents of the Letter of Credit
Undrawn Amounts at such time and (ii) the Dollar Equivalents of the
Reimbursement Obligations at such time exceeds the Letter of Credit
Sublimit;
(v) (A) such Letter of Credit is requested to be denominated
in any currency other than Dollars; or
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(vi) (A) any fees due in connection with a requested
Issuance have not been paid, (B) such Letter of Credit is requested to
be Issued in a form that is not acceptable to such Issuer or (C) the
Issuer for such Letter of Credit shall not have received, in form and
substance reasonably acceptable to it and, if applicable, duly executed
by such Borrower, applications, agreements and other documentation
(collectively, a "Letter of Credit Reimbursement Agreement") such
Issuer generally employs in the ordinary course of its business for the
Issuance of letters of credit of the type of such Letter of Credit.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to Issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit
(i) be more than one year after the date of issuance thereof or (ii) be less
than thirty days prior to the Scheduled Termination Date; provided, however,
that any Letter of Credit with a term less than or equal to one year may provide
for the renewal thereof for additional periods less than or equal to one year,
as long as, (x) on or before the expiration of each such term and each such
period, the Borrower and the Issuer of such Letter or Credit shall have the
option to prevent such renewal and (y) neither the Issuer of such Letter of
Credit nor the Borrower shall permit any such renewal to extend the expiration
date of any Letter beyond the date set forth in clause (ii) above.
(c) In connection with the Issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Administrative Agent at least
two Business Days' prior written notice, in substantially the form of Exhibit E
(Form of Letter of Credit Request) (or in such other written or electronic form
as is acceptable to the Issuer), of the requested Issuance of such Letter of
Credit (a "Letter of Credit Request"). Such notice shall be irrevocable and
shall specify the Issuer of such Letter of Credit, the face amount of the Letter
of Credit requested (which shall not be less than $100,000), the date of
Issuance of such requested Letter of Credit, the date on which such Letter of
Credit is to expire (which date shall be a Business Day) and, in the case of an
issuance, the Person for whose benefit the requested Letter of Credit is to be
issued. Such notice, to be effective, must be received by the relevant Issuer
and the Administrative Agent not later than 11:00 a.m. (New York time) on the
second Business Day prior to the requested Issuance of such Letter of Credit.
(d) Subject to the satisfaction of the conditions set forth in this
Section 2.4, the relevant Issuer shall, on the requested date, Issue a Letter of
Credit on behalf of the Borrower in accordance with such Issuer's usual and
customary business practices. No Issuer shall Issue any Letter of Credit in the
period commencing on the first Business Day after it receives written notice
from any Revolving Credit Lender that one or more of the conditions precedent
contained in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit) or clause (a) above (other than those conditions set forth in clauses
(a)(i), (a)(vi)(B) and (C) above and, to the extent such clause relates to fees
owing to the Issuer of such Letter of Credit and its Affiliates, clause
(a)(vi)(A) above) are not on such date satisfied or duly waived and ending when
such conditions are satisfied or duly waived. No Issuer shall otherwise be
required to determine that, or take notice whether, the conditions precedent set
forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit)
have been satisfied in connection with the Issuance of any Letter of Credit.
(e) The Borrower agrees that, if requested by the Issuer of any
Letter of Credit, it shall execute a Letter of Credit Reimbursement Agreement in
respect to any Letter of
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Credit Issued hereunder. In the event of any conflict between the terms of any
Letter of Credit Reimbursement Agreement and this Agreement, the terms of this
Agreement shall govern.
(f) Each Issuer shall comply with the following:
(i) give the Administrative Agent written notice (or
telephonic notice confirmed promptly thereafter in writing), which writing
may be a telecopy or electronic mail, of the Issuance of any Letter of
Credit Issued by it, of all drawings under any Letter of Credit Issued by
it and of the payment (or the failure to pay when due) by the Borrower of
any Reimbursement Obligation when due (which notice the Administrative
Agent shall promptly transmit by telecopy, electronic mail or similar
transmission to each Lender);
(ii) upon the request of any Revolving Credit Lender, furnish
to such Revolving Credit Lender copies of any Letter of Credit
Reimbursement Agreement to which such Issuer is a party and such other
documentation as may reasonably be requested by such Revolving Credit
Lender; and
(iii) no later than 10 Business Days following the last day of
each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Lender requesting the
same) and the Borrower separate schedules for Documentary Letters of
Credit and Standby Letters of Credit issued by it, in form and substance
reasonably satisfactory to the Administrative Agent, setting forth the
aggregate Letter of Credit Obligations, in each case outstanding at the
end of each month, and any information requested by the Borrower or the
Administrative Agent relating thereto.
(g) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Revolving Credit Lender, and each
Revolving Credit Lender shall be deemed irrevocably and unconditionally to have
purchased and received from such Issuer, without recourse or warranty, an
undivided interest and participation, to the extent of such Revolving Credit
Lender's Ratable Portion, in such Letter of Credit and the obligations of the
Borrower with respect thereto (including all Letter of Credit Obligations with
respect thereto) and any security therefor and guaranty pertaining thereto.
(h) The Borrower agrees to pay to the Issuer of any Letter of Credit
the amount of all Reimbursement Obligations owing to such Issuer under any
Letter of Credit issued for its account no later than the date that is the next
succeeding Business Day after the Borrower receives written notice from such
Issuer that payment has been made under such Letter of Credit (the
"Reimbursement Date"), irrespective of any claim, set-off, defense or other
right that the Borrower may have at any time against such Issuer or any other
Person. In the event that any Issuer makes any payment under any Letter of
Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to this clause (h) or any such payment by the Borrower is rescinded or
set aside for any reason, such Reimbursement Obligation shall be payable on
demand with interest thereon computed (i) from the date on which such
Reimbursement Obligation arose to the Reimbursement Date, at the rate of
interest applicable during such period to Revolving Loans that are Base Rate
Loans and (ii) from the Reimbursement Date until the date of repayment in full,
at the rate of interest applicable during such period to past due Revolving
Loans that are Base Rate Loans, and such Issuer shall promptly notify the
Administrative Agent, which shall promptly notify each Revolving Credit Lender
of such failure, and each Revolving
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FIRST LIEN CREDIT AGREEMENT
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Credit Lender shall promptly and unconditionally pay to the Administrative Agent
for the account of such Issuer the amount of such Revolving Credit Lender's
Ratable Portion of such payment (or the Dollar Equivalent thereof if such
payment was made in any currency other than Dollars) in immediately available
Dollars. If the Administrative Agent so notifies such Revolving Credit Lender
prior to 11:00 a.m. (New York time) on any Business Day, such Revolving Credit
Lender shall make available to the Administrative Agent for the account of such
Issuer its Ratable Portion of the amount of such payment on such Business Day in
immediately available funds. Upon such payment by a Revolving Credit Lender,
such Revolving Credit Lender shall, except during the continuance of a Default
or Event of Default under Section 9.1(f) (Events of Default) and notwithstanding
whether or not the conditions precedent set forth in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit) shall have been satisfied (which
conditions precedent the Revolving Credit Lenders hereby irrevocably waive), be
deemed to have made a Revolving Loan to the Borrower in the principal amount of
such payment. Whenever any Issuer receives from the Borrower a payment of a
Reimbursement Obligation as to which the Administrative Agent has received for
the account of such Issuer any payment from a Revolving Credit Lender pursuant
to this clause (h), such Issuer shall pay over to the Administrative Agent any
amount received in excess of such Reimbursement Obligation and, upon receipt of
such amount, the Administrative Agent shall promptly pay over to each Revolving
Credit Lender, in immediately available funds, an amount equal to such Revolving
Credit Lender's Ratable Portion of the amount of such payment adjusted, if
necessary, to reflect the respective amounts the Revolving Credit Lenders have
paid in respect of such Reimbursement Obligation.
(i) If and to the extent such Revolving Credit Lender shall not have
so made its Ratable Portion of the amount of the payment required by clause (h)
above available to the Administrative Agent for the account of such Issuer, such
Revolving Credit Lender agrees to pay to the Administrative Agent for the
account of such Issuer forthwith on demand any such unpaid amount together with
interest thereon, for the first Business Day after payment was first due at the
Federal Funds Rate and, thereafter, until such amount is repaid to the
Administrative Agent for the account of such Issuer, at a rate per annum equal
to the rate applicable to Base Rate Loans under the Facility.
(j) The Borrower's obligation to pay each Reimbursement Obligation
and the obligations of the Revolving Credit Lenders to make payments to the
Administrative Agent for the account of the Issuers with respect to Letters of
Credit shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement, under any and all
circumstances whatsoever, including the occurrence of any Default or Event of
Default, and irrespective of any of the following:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, set off, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof or
any other Person may at any time have against the beneficiary under any
Letter of Credit, any Issuer, the Administrative Agent or any Lender or
any other Person, whether in connection with this Agreement, any other
Loan Document or any other related or unrelated agreement or transaction;
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FIRST LIEN CREDIT AGREEMENT
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(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuer under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
the Issuer, the Lenders, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not result in any liability of
such Issuer to the Borrower or any Lender. In determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.
Schedule II- Applicable Lending Offices and Addresses for
Notices
(k) Schedule 2.4 (Existing Letters of Credit) contains a schedule of
certain letters of credit issued prior to the Closing Date (including the Thai
Letter of Credit until such letter of credit is cancelled) by JPMorgan for the
account of the Borrower. On the Closing Date (i) such letters of credit, to the
extent outstanding, shall be automatically and without further action by the
parties thereto converted to Letters of Credit issued pursuant to this Section
2.4 for the account of the Borrower and subject to the provisions hereof, and
for this purpose the fees specified in Section 2.12(b) (Fees) shall be payable
(in substitution for any fees set forth in the applicable letter of credit
reimbursement agreements or applications relating to such letters of credit) as
if such letters of credit had been issued on the Closing Date, (ii) the issuers
of such Letters of Credit shall be deemed to be "Issuers" hereunder solely for
the purpose of maintaining such letters of credit, for purposes of Section
2.16(f) (Taxes) relating to the obligation to provide the appropriate forms,
certificates and statements to the Borrower and the Administrative Agent and any
updates required by Section 2.16(f) (Taxes) and for purposes of Section 2.7(c)
(Evidence of Debt) relating to the entries to be made in the Register, (iii) the
Dollar Equivalent of the face amount of such letters of credit shall be included
in the calculation of Letter of Credit Obligations and (iv) all liabilities of
the Borrower with respect to such letters of credit shall constitute
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Obligations. No letter of credit converted in accordance with this clause (k)
shall be amended, extended or renewed without the prior written consent of the
Administrative Agent.
SECTION 2.5 REDUCTION AND TERMINATION OF THE REVOLVING CREDIT
COMMITMENTS
The Borrower may, upon at least three Business Days' prior notice to
the Administrative Agent, terminate in whole or reduce in part ratably the
unused portions of the respective Revolving Credit Commitments of the Revolving
Credit Lenders; provided, however, that each partial reduction shall be in an
aggregate amount of not less than $3,000,000 or an integral multiple of
$1,000,000 in excess thereof.
SECTION 2.6 REPAYMENT OF LOANS
The Borrower promises to repay the entire unpaid principal amount of
the Revolving Loans and the Swing Loans on the Scheduled Termination Date or
earlier, if otherwise required by the terms hereof.
SECTION 2.7 EVIDENCE OF DEBT
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) (i) The Administrative Agent, acting as agent of the Borrower
solely for this purpose and for tax purposes, shall establish and maintain
at its address referred to in Section 11.8 (Notices, Etc.) a record of
ownership (the "Register") in which the Administrative Agent agrees to
register by book entry the Administrative Agent's, each Lender's and each
Issuer's interest in each Loan, each Letter of Credit and each
Reimbursement Obligation, and in the right to receive any payments
hereunder and any assignment of any such interest or rights. In addition,
the Administrative Agent, acting as agent of the Borrower solely for this
purpose and for tax purposes, shall establish and maintain accounts in the
Register in accordance with its usual practice in which it shall record
(i) the names and addresses of the Lenders and the Issuers, (ii) the
Revolving Credit Commitments of each Lender from time to time, (iii) the
amount of each Loan made and, if a Eurodollar Rate Loan, the Interest
Period applicable thereto, (iv) the amount of any drawn Letters of Credit,
(v) the amount of any principal or interest due and payable, and paid, by
the Borrower to, or for the account of, each Lender hereunder, (vi) the
amount that is due and payable, and paid, by the Borrower to, or for the
account of, each Issuer, including the amount of Letter Credit Obligations
(specifying the amount of any Reimbursement Obligations) due and payable
to an Issuer, and (vii) the amount of any sum received by the
Administrative Agent hereunder from the Borrower, whether such sum
constitutes principal or interest (and the type of Loan to which it
applies), fees, expenses or other amounts due under the Loan Documents and
each Lender's and Issuer's, as the case may be, share thereof, if
applicable.
(ii) Notwithstanding anything to the contrary contained in
this Agreement, the Loans (including the Revolving Credit Notes evidencing
such Loans) and the drawn Letters of Credit are registered obligations and
the right, title, and interest of
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
the Lenders and the Issuers and their assignees in and to such Loans or
drawn Letters of Credit, as the case may be, shall be transferable only
upon notation of such transfer in the Register. A Revolving Credit Note
shall only evidence the Lender's or a registered assignee's right, title
and interest in and to the related Loan, and in no event is any such
Revolving Credit Note to be considered a bearer instrument or obligation.
This Section 2.7(b) and Section 11.2 (Assignments and Participations)
shall be construed so that the Loans and drawn Letters of Credit are at
all times maintained in "registered form" within the meaning of Sections
163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations
(or any successor provisions of the Code or such regulations).
(c) The entries made in the Register and in the accounts therein
maintained pursuant to clauses (a) and (b) above shall, to the extent permitted
by applicable law and subject to the Borrower's right to object to any entry in
the Register within thirty days of the date of such entry, be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans in accordance with their terms.
In addition, the Loan Parties, the Administrative Agent, the Lenders and the
Issuers shall treat each Person whose name is recorded in the Register as a
Lender or as an Issuer, as applicable, for all purposes of this Agreement.
Information contained in the Register with respect to any Lender or Issuer shall
be available for inspection by the Borrower, the Administrative Agent, such
Lender or such Issuer at any reasonable time and from time to time upon
reasonable prior notice.
(d) Notwithstanding any other provision of the Agreement, in the
event that any Revolving Credit Lender requests that the Borrower execute and
deliver a promissory note or notes payable to such Revolving Credit Lender in
order to evidence the Indebtedness owing to such Revolving Credit Lender by the
Borrower hereunder, the Borrower shall promptly execute and deliver a Revolving
Credit Note or Revolving Credit Notes to such Revolving Credit Lender evidencing
the Revolving Loans of such Revolving Credit Lender, substantially in the form
of Exhibit B (Form of Revolving Credit Note).
SECTION 2.8 OPTIONAL PREPAYMENTS
The Borrower may prepay the outstanding principal amount of the
Revolving Loans and Swing Loans in whole or in part at any time; provided,
however, that if any prepayment of any Eurodollar Rate Loan is made by the
Borrower other than on the last day of an Interest Period for such Loan, the
Borrower shall also pay any amount owing pursuant to Section 2.14(e) (Breakage
Costs).
SECTION 2.9 MANDATORY PREPAYMENTS
(a) Upon receipt by the Borrower or any other Loan Party of Net Cash
Proceeds, the Borrower shall immediately prepay the Loans (or provide cash
collateral in respect of Letters of Credit) in an amount equal to 100% of such
Net Cash Proceeds. Any such mandatory prepayment shall be applied in accordance
with clause (c) below; provided, however, that, subject to the Intercreditor
Agreement and to any prepayment required to be made to the Second Lien Secured
Obligations under the Second Lien Credit Agreement, and so long as no Liquidity
Event Period is in effect, the Borrower or such Loan Party shall be entitled to
retain any Net Cash Proceeds in excess of the amount that would be required to
be used to repay the Loans or provide cash collateral in respect of Letters of
Credit pursuant to clause (b) below.
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Notwithstanding anything herein to the contrary, subject to the Intercreditor
Agreement, (x) no prepayment of the Second Lien Secured Obligations from Net
Cash Proceeds arising from any Asset Sale (other than any Asset Sale permitted
under Section 8.4(g)) shall be permitted if, after giving effect to the
application of such Net Cash Proceeds to the Obligations, the Available Credit
is less than $75,000,000 and (y) upon receipt by the Borrower or any other Loan
Party of Net Cash Proceeds arising from any Asset Sale permitted under Section
8.4(g), such Net Cash Proceeds shall be applied as follows: (i) first, the
Borrower shall immediately prepay that portion of the outstanding Loans (and
provide cash collateral in respect of Letters of Credit) in an amount equal to
that portion of the Available Credit created solely by the inclusion of the
assets subject to such Asset Sale in the Borrowing Base immediately prior to the
consummation of such Asset Sale (and to the extent that there are no Loans
outstanding at such time and no Default or Event of Default has occurred and is
continuing, the Borrower shall be entitled to retain such Net Cash Proceeds);
(ii) second, the Borrower shall apply 50% of the remaining balance of Net Cash
Proceeds after giving effect to the application of such proceeds made under
clause (i) above, as a mandatory prepayment of the loans under the Second Lien
Facility and (iii) then, as long as no Liquidity Event Period is in effect, the
Borrower or such Loan Party shall be entitled to retain any remaining Net Cash
Proceeds.
(b) If at any time, the aggregate principal amount of Revolving
Credit Outstandings exceeds the aggregate Maximum Credit at such time, the
Borrower shall forthwith prepay the Swing Loans first and then the Revolving
Loans then outstanding in an amount equal to such excess. If any such excess
remains after repayment in full of the aggregate outstanding Swing Loans and
Revolving Loans, the Borrower shall provide cash collateral for the Letter of
Credit Obligations in the manner set forth in Section 9.3 (Actions in Respect of
Letters of Credit) in an amount equal to 105% of such excess.
(c) Subject to the provisions of the Intercreditor Agreement and
Section 2.13(g) (Payments and Computations), any prepayments made by the
Borrower required to be applied in accordance with this clause (c) shall be
applied as follows: first, to repay the outstanding principal balance of the
Swing Loans until such Swing Loans shall have been repaid in full; second, to
repay the outstanding principal balance of the Revolving Loans until such
Revolving Loans shall have been paid in full; and then, to provide cash
collateral for any Letter of Credit Obligations in an amount equal to 105% of
such Letter of Credit Obligations in the manner set forth in Section 9.3
(Actions in Respect of Letters of Credit) until all such Letter of Credit
Obligations have been fully cash collateralized in the manner set forth therein.
(d) The Borrower hereby irrevocably waives the right to direct,
during a Liquidity Event Period, the application of all funds in the Cash
Collateral Account and agrees that the Administrative Agent may and, upon the
written direction of the Requisite Lenders given at any time during such
Liquidity Event Period, shall (i) deliver a Blockage Notice to each Deposit
Account Bank for each Approved Deposit Account and (ii) except, as provided in
Section 2.13(g) (Payments and Computations) and clause (c) above, following the
occurrence and during the continuance of an Event of Default, apply all payments
in respect of any Obligations and all available funds in the Cash Collateral
Account on a daily basis as follows: first, to repay the outstanding principal
amount of the Swing Loans until such Swing Loans have been repaid in full;
second, to repay the outstanding principal balance of the Revolving Loans until
such Revolving Loans shall have been repaid in full; and then to any other
Obligation then due and payable. The Administrative Agent agrees so to apply
such funds and the Borrower consents to such application; provided, however, the
Administrative Agent may, so long as no Default or
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Event of Default has occurred or is continuing, in its sole discretion return
amounts to the Company in respect of Eurodollar Rate Loans with Interest Periods
ending after the receipt of such funds. If (i) following such application all
Letters of Credit shall have expired or be fully drawn (or cash collateral has
been provided in an amount equal to 105% of the Letter of Credit Obligations in
the manner required in Section 9.3 (Actions in Respect of Letters of Credit)),
or (ii) if such Liquidity Event Period has ended, then, subject to the
Intercreditor Agreement, the Administrative Agent shall cause (or direct the
Collateral Agent to cause) any remaining funds in the Cash Collateral Account to
be paid at the written direction of the Borrower (or, in the absence of such
direction, to the Borrower or another Person lawfully entitled thereto).
SECTION 2.10 INTEREST
(a) Rate of Interest. All Loans and the outstanding amount of all
other Obligations (other than pursuant to Hedging Contracts that are Loan
Documents, to the extent such Hedging Contracts provide for the accrual of
interest on unpaid obligations) shall bear interest, in the case of Loans, on
the unpaid principal amount thereof from the date such Loans are made and, in
the case of such other Obligations, from the date such other Obligations are due
and payable until, in all cases, paid in full, except as otherwise provided in
clause (c) below, as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate
per annum equal to the sum of (A) the Base Rate as in effect from time to
time and (B) the Applicable Margin for Revolving Loans that are Base Rate
Loans; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable Interest
Period and (B) the Applicable Margin in effect from time to time during
such Eurodollar Interest Period.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
(other than Swing Loans) shall be payable in arrears (A) on the first Business
Day of each calendar month, commencing on the first such day following the
making of such Base Rate Loan and (B) if not previously paid in full, at
maturity (whether by acceleration or otherwise) of such Base Rate Loan, (ii)
interest accrued on the Swing Loans shall be payable in arrears on the first
Business Day of the immediately succeeding calendar month, (iii) interest
accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on the last
day of each Interest Period applicable to such Loan and, if such Interest Period
has a duration of more than three months, on each date during such Interest
Period occurring every three months from the first day of such Interest Period,
(B) upon the payment or prepayment thereof in full or in part and (C) if not
previously paid in full, at maturity (whether by acceleration or otherwise) of
such Eurodollar Rate Loan and (iv) interest accrued on the amount of all other
Obligations shall be payable on demand from and after the time such Obligation
becomes due and payable (whether by acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest
specified in clause (a) above or elsewhere herein, effective immediately upon
the occurrence of an Event of Default and for as long thereafter as such Event
of Default shall be continuing, the principal balance of all Loans and the
amount of all other Obligations then due and payable shall bear interest at a
rate that is two percent per annum in excess of the rate of interest applicable
to such Loans or other Obligations from time to time. Such interest shall be
payable on the date that
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
would otherwise be applicable to such interest pursuant to clause (b) above or
otherwise on demand.
SECTION 2.11 CONVERSION/CONTINUATION OPTION
(a) The Borrower may elect (i) at any time on any Business Day, to
convert Base Rate Loans (other than Swing Loans) or any portion thereof to
Eurodollar Rate Loans and (ii) at the end of any applicable Interest Period, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate amount of the Eurodollar
Loans for each Interest Period must be in the amount of at least $5,000,000 or
an integral multiple of $1,000,000 in excess thereof. Each conversion or
continuation shall be allocated among the Loans of each Revolving Credit Lender
in accordance with such Revolving Credit Lender's Ratable Portion. Each such
election shall be in substantially the form of Exhibit F (Form of Notice of
Conversion or Continuation) (a "Notice of Conversion or Continuation") and shall
be made by giving the Administrative Agent at least three Business Days' prior
written notice specifying (A) the amount and type of Loan being converted or
continued, (B) in the case of a conversion to or a continuation of Eurodollar
Rate Loans, the applicable Interest Period and (C) in the case of a conversion,
the date of such conversion.
(b) The Administrative Agent shall promptly notify each Lender of
its receipt of a Notice of Conversion or Continuation and of the options
selected therein. Notwithstanding the foregoing, (i) no conversion in whole or
in part of Base Rate Loans to Eurodollar Rate Loans shall be permitted at any
time prior to the Syndication Completion Date and (ii) no conversion in whole or
in part of Base Rate Loans to Eurodollar Rate Loans and no continuation in whole
or in part of Eurodollar Rate Loans upon the expiration of any applicable
Interest Period shall be permitted at any time at which (A) a Default or an
Event of Default shall have occurred and be continuing or (B) the continuation
of, or conversion into, a Eurodollar Rate Loan would violate any provision of
Section 2.14 (Special Provisions Governing Eurodollar Rate Loans). If, within
the time period required under the terms of this Section 2.11, the
Administrative Agent does not receive a Notice of Conversion or Continuation
from the Borrower containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period or to convert any such Loans, then,
upon the expiration of the applicable Interest Period, such Loans shall be
automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.
SECTION 2.12 FEES
(a) Unused Commitment Fee. The Borrower agrees to pay in immediately
available Dollars to each Revolving Credit Lender a commitment fee on the actual
daily amount by which the Revolving Credit Commitment of such Revolving Credit
Lender exceeds such Revolving Credit Lender's Ratable Portion of the sum of (i)
the aggregate outstanding principal amount of Revolving Loans and (ii) the
outstanding amount of the aggregate Letter of Credit Obligations (the "Unused
Commitment Fee") from the date hereof through the Revolving Credit Termination
Date at the Applicable Unused Commitment Fee Rate, payable in arrears (x) on the
first Business Day of each calendar month, commencing on the first such Business
Day following the Closing Date and (y) on the Revolving Credit Termination Date.
(b) Letter of Credit Fees. The Borrower agrees to pay the following
amounts with respect to Letters of Credit issued by any Issuer:
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FIRST LIEN CREDIT AGREEMENT
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(i) to the Administrative Agent for the account of each Issuer
of a Letter of Credit, with respect to each Letter of Credit issued by
such Issuer, an issuance fee equal to 0.25% per annum of the Dollar
Equivalent of the maximum undrawn face amount of such Letter of Credit,
payable in arrears (A) on the first Business Day of each calendar month,
commencing on the first such Business Day following the issuance of such
Letter of Credit and (B) on the Revolving Credit Termination Date;
(ii) to the Administrative Agent for the ratable benefit of
the Revolving Credit Lenders, with respect to each Letter of Credit, a fee
accruing in Dollars at a rate per annum equal to the Applicable Margin for
Revolving Loans that are Eurodollar Rate Loans on the Dollar Equivalent of
the maximum undrawn face amount of such Letter of Credit, payable in
arrears (A) on the first Business Day of each calendar month, commencing
on the first such Business Day following the issuance of such Letter of
Credit and (B) on the Revolving Credit Termination Date; provided,
however, that during the continuance of an Event of Default, such fee
shall be increased by two percent per annum (instead of, and not in
addition to, any increase pursuant to Section 2.10(c) (Interest)) and
shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to
the issuance, amendment or transfer of each Letter of Credit and each
drawing made thereunder, documentary and processing charges in accordance
with such Issuer's standard schedule for such charges in effect at the
time of issuance, amendment, transfer or drawing, as the case may be.
(c) Additional Fees. The Borrower has agreed to pay to the
Administrative Agent and the Arrangers additional fees, the amount and dates of
payment of which are embodied in the First Lien Fee Letter.
SECTION 2.13 PAYMENTS AND COMPUTATIONS
(a) The Borrower shall make each payment hereunder (including fees
and expenses) not later than 11:00 a.m. (New York time) on the day when due, in
the currency specified herein (or, if no such currency is specified, in Dollars)
to the Administrative Agent at its address referred to in Section 11.8 (Notices,
Etc.) in immediately available funds without set-off or counterclaim. The
Administrative Agent shall promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal, interest or
fees to the Lenders, in accordance with the application of payments set forth in
clause (f) or (g) below, as applicable, for the account of their respective
Applicable Lending Offices; provided, however, that amounts payable pursuant to
Section 2.15 (Capital Adequacy), Section 2.16 (Taxes) or Section 2.14(c) or (d)
(Special Provisions Governing Eurodollar Rate Loans) shall be paid only to the
affected Lender or Lenders and amounts payable with respect to Swing Loans shall
be paid only to the Swing Loan Lender. Payments received by the Administrative
Agent after 11:00 a.m. (New York time) shall be deemed to be received on the
next Business Day.
(b) All computations of interest and of fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of a rate of interest hereunder shall
be conclusive and binding for all purposes, absent manifest error.
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(c) Each payment by the Borrower of any Loan, Reimbursement
Obligation (including interest or fees in respect thereof) and each
reimbursement of various costs, expenses or other Obligation shall be made in
the currency in which such Loan was made, such Letter of Credit issued or such
cost, expense or other Obligation was incurred; provided, however, that (i) the
Letter of Credit Reimbursement Agreement for a Letter of Credit may specify
another currency for the Reimbursement Obligation in respect of such Letter of
Credit and (ii) other than for payments in respect of a Loan or Reimbursement
Obligation, Loan Documents duly executed by the Administrative Agent or any
Hedging Contract may specify other currencies of payment for Obligations created
by or directly related to such Loan Document or Hedging Contract.
(d) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, the due date for such payment shall be extended
to the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the immediately preceding Business
Day. All repayments of any Revolving Loans shall be applied as follows: first,
to repay such Loans outstanding as Base Rate Loans and then, to repay such Loans
outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having
earlier expiring Eurodollar Interest Periods being repaid prior to those having
later expiring Eurodollar Interest Periods.
(e) Unless the Administrative Agent shall have received notice from
the Borrower to the Lenders prior to the date on which any payment is due
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon (at the Federal Funds Rate for the first Business Day and
thereafter at the rate applicable to Base Rate Loans) for each day from the date
such amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent.
(f) Except for payments and other amounts received by the
Administrative Agent and applied in accordance with the provisions of clause (g)
below (or required to be applied in accordance with Section 2.9(a) or (c)
(Mandatory Prepayments)), all payments and any other amounts received by the
Administrative Agent from or for the benefit of the Borrower shall be applied as
follows: first, to pay principal of, and interest on, any portion of the Loans
the Administrative Agent may have advanced pursuant to the express provisions of
this Agreement on behalf of any Lender, for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrower, second, to pay all
other Obligations then due and payable and third, as the Borrower so designates.
Payments in respect of Swing Loans received by the Administrative Agent shall be
distributed to the Swing Loan Lender; payments in respect of Revolving Loans
received by the Administrative Agent shall be distributed to each Revolving
Credit Lender in accordance with such Revolving Credit Lender's Ratable Portion;
and all payments of fees and all other payments in respect of any other
Obligation shall be allocated among such of the Lenders and Issuers as are
entitled thereto and, for such payments allocated to the Revolving Credit
Lenders, in proportion to their respective Ratable Portions.
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FIRST LIEN CREDIT AGREEMENT
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(g) The Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Obligations and any
proceeds of Collateral after the occurrence and during the continuance of an
Event of Default and agrees that, notwithstanding the provisions of Section
2.9(c) (Mandatory Prepayments) and clause (f) above, the Collateral Agent may,
and, upon either (A) the written direction of the Administrative Agent or the
Requisite Lenders after the occurrence and during the continuance of an Event of
Default or (B) the acceleration of the Obligations pursuant to Section 9.2
(Remedies), shall, deliver a Blockage Notice to each Deposit Account Bank for
each Approved Deposit Account and, subject to the provisions of the
Intercreditor Agreement, apply all payments in respect of any Secured
Obligations and all funds on deposit in any Cash Collateral Account and all
other proceeds of Collateral in the following order:
(i) first, to pay interest on and then principal of any
portion of the Revolving Loans that the Administrative Agent may have
advanced on behalf of any Lender for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrower;
(ii) second, to pay interest on and then principal of any
Protective Advance and then any Swing Loan;
(iii) third, to pay Secured Obligations in respect of any
expense, reimbursements or indemnities then due to the Administrative
Agent or the Collateral Agent;
(iv) fourth, to pay Secured Obligations in respect of any
expense, reimbursements or indemnities then due to the Lenders and the
Issuers;
(v) fifth, to pay Secured Obligations in respect of any fees
then due to the Administrative Agent, the Collateral Agent, the Lenders
and the Issuers;
(vi) sixth, to pay interest then due and payable in respect of
the Loans and Reimbursement Obligations;
(vii) seventh, to pay or prepay principal amounts on the Loans
and Reimbursement Obligations, to provide cash collateral for outstanding
Letter of Credit Undrawn Amounts in the manner described in Section 9.3
(Actions in Respect of Letters of Credit), ratably to the aggregate
principal amount of such Loans, Reimbursement Obligations and Letter of
Credit Undrawn Amounts,
(viii) eighth, to pay Cash Management Obligations and amounts
owing with respect to Hedging Contracts, ratably to the aggregate
principal amount of such Cash Management Obligations and Obligations owing
with respect to Hedging Contracts;
(ix) ninth, to the ratable payment of all other Secured
Obligations; and
(x) the balance to the Borrower or the Loan Party lawfully
entitled to receive such proceeds;
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FIRST LIEN CREDIT AGREEMENT
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provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Secured Obligation described in any of
clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii) and (ix) above the
available funds being applied with respect to any such Secured Obligation
(unless otherwise specified in such clause) shall be allocated to the payment of
such Secured Obligation ratably, based on the proportion of the Administrative
Agent's and each Lender's or Issuer's interest in the aggregate outstanding
Secured Obligations described in such clauses. The order of priority set forth
in clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii) and (ix) above may
at any time and from time to time be changed by the agreement of the Requisite
Lenders without necessity of notice to or consent of or approval by the
Borrower, any Secured Party that is not a Lender or Issuer or by any other
Person that is not a Lender or Issuer. The order of priority set forth in
clauses (i), (ii), (iii), (iv) and (v) above may be changed only with the prior
written consent of the Administrative Agent or the Collateral Agent, as
applicable, in addition to that of the Requisite Lenders.
(h) At the option of the Administrative Agent, principal on the
Swing Loans, Reimbursement Obligations, interest, fees, expenses and other sums
due and payable in respect of the Revolving Loans and Protective Advances may be
paid from the proceeds of Swing Loans or Revolving Loans. The Borrower hereby
authorizes the Swing Loan Lender to make such Swing Loans pursuant to Section
2.3(a) (Swing Loans) and the Revolving Credit Lenders to make such Revolving
Loans pursuant to Section 2.2(a) (Borrowing Procedures) from time to time in the
amounts of any and all principal payable with respect to the Swing Loans,
Reimbursement Obligations, interest, fees, expenses and other sums payable in
respect of the Revolving Loans and Protective Advances, and further authorizes
the Administrative Agent to give the Lenders notice of any Borrowing with
respect to such Swing Loans and Revolving Loans and to distribute the proceeds
of such Swing Loans and Revolving Loans to pay such amounts. The Borrower agrees
that all such Swing Loans and Revolving Loans so made shall be deemed to have
been requested by it (irrespective of the satisfaction of the conditions in
Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit), which
conditions the Lenders irrevocably waive) and directs that all proceeds thereof
shall be used to pay such amounts.
SECTION 2.14 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS
(a) Determination of Interest Rate
The Eurodollar Rate for each Interest Period for Eurodollar Rate
Loans shall be determined by the Administrative Agent pursuant to the procedures
set forth in the definition of "Eurodollar Rate." The Administrative Agent's
determination shall be presumed to be correct absent manifest error and shall be
binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair
In the event that (i) the Administrative Agent determines that
adequate and fair means do not exist for ascertaining the applicable interest
rates by reference to which the Eurodollar Rate then being determined is to be
fixed or (ii) the Requisite Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period will not adequately reflect the cost to
the Revolving Credit Lenders of making or maintaining such Loans for such
Interest Period, the Administrative Agent shall forthwith so notify the Borrower
and the Revolving Credit Lenders, whereupon each Eurodollar Loan shall
automatically, on the last day of the current Interest Period for such Loan,
convert into a Base Rate Loan and the obligations of the Revolving Credit
Lenders to make Eurodollar Rate Loans or to convert Base Rate Loans into
Eurodollar
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FIRST LIEN CREDIT AGREEMENT
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Rate Loans shall be suspended until the Administrative Agent shall notify the
Borrower that the Requisite Lenders have determined that the circumstances
causing such suspension no longer exist.
(c) Increased Costs
If at any time any Revolving Credit Lender determines that the
introduction of, or any change in or in the interpretation of, any law, treaty
or governmental rule, regulation or order (other than any change by way of
imposition or increase of reserve requirements included in determining the
Eurodollar Rate) or the compliance by such Revolving Credit Lender with any
guideline, request or directive from any central bank or other Governmental
Authority (whether or not having the force of law), shall have the effect of
increasing the cost to such Revolving Credit Lender of agreeing to make or
making, funding or maintaining any Eurodollar Rate Loans, then the Borrower
shall from time to time, upon demand by such Revolving Credit Lender (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Revolving Credit Lender additional amounts
sufficient to compensate such Revolving Credit Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower
and the Administrative Agent by such Revolving Credit Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(d) Illegality
Notwithstanding any other provision of this Agreement, if any
Revolving Credit Lender determines that the introduction of, or any change in or
in the interpretation of, any law, treaty or governmental rule, regulation or
order after the date of this Agreement shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Revolving Credit Lender or its Eurodollar Lending Office to make Eurodollar Rate
Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on notice
thereof and demand therefor by such Revolving Credit Lender to the Borrower
through the Administrative Agent, (i) the obligation of such Revolving Credit
Lender to make or to continue Eurodollar Rate Loans and to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended, and each such Revolving
Credit Lender shall make a Base Rate Loan as part of any requested Borrowing of
Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
outstanding, the Borrower shall immediately convert each such Loan into a Base
Rate Loan. If, at any time after a Revolving Credit Lender gives notice under
this clause (d), such Revolving Credit Lender determines that it may lawfully
make Eurodollar Rate Loans, such Revolving Credit Lender shall promptly give
notice of that determination to the Borrower and the Administrative Agent, and
the Administrative Agent shall promptly transmit the notice to each other
Lender. The Borrower's right to request, and such Revolving Credit Lender's
obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.
(e) Breakage Costs
In addition to all amounts required to be paid by the Borrower
pursuant to Section 2.10 (Interest), the Borrower shall compensate each
Revolving Credit Lender, upon demand, for all losses, expenses and liabilities
(including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Revolving Credit Lender
to fund or maintain such Revolving Credit Lender's Eurodollar Rate Loans to the
Borrower but excluding any loss of the Applicable Margin on the relevant Loans)
that such Revolving Credit Lender may sustain (i) if for any reason (other than
solely by reason of such
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Lender being a Non-Funding Lender) a proposed Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion or Continuation
given by the Borrower or in a telephonic request by it for borrowing or
conversion or continuation or a successive Interest Period does not commence
after notice therefor is given pursuant to Section 2.11 (Conversion/Continuation
Option), (ii) if for any reason any Eurodollar Rate Loan is prepaid (including
mandatorily pursuant to Section 2.9 (Mandatory Prepayments)) on a date that is
not the last day of the applicable Interest Period, (iii) as a consequence of a
required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of
any of the events indicated in clause (d) above or (iv) as a consequence of any
failure by the Borrower to repay Eurodollar Rate Loans when required by the
terms hereof. The Revolving Credit Lender making demand for such compensation
shall deliver to the Borrower concurrently with such demand a written statement
as to such losses, expenses and liabilities, and this statement shall be
conclusive as to the amount of compensation due to such Revolving Credit Lender,
absent manifest error.
SECTION 2.15 CAPITAL ADEQUACY
If at any time any Lender determines that (a) the adoption of, or
any change in or in the interpretation of, any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital adequacy,
(b) compliance with any such law, treaty, rule, regulation or order or (c)
compliance with any guideline or request or directive from any central bank or
other Governmental Authority (whether or not having the force of law) shall have
the effect of reducing the rate of return on such Lender's (or any corporation
controlling such Lender's) capital as a consequence of its obligations hereunder
or under or in respect of any Letter of Credit to a level below that which such
Lender or such corporation could have achieved but for such adoption, change,
compliance or interpretation, then, upon demand from time to time by such Lender
(with a copy of such demand to the Administrative Agent), the Borrower shall pay
to the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender for such reduction. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes absent manifest error.
SECTION 2.16 TAXES
(a) Except as otherwise provided in this Section 2.16, any and all
payments by any Loan Party under each Loan Document shall be made free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) in the case of each Lender, each Issuer and the
Administrative Agent (A) taxes measured by its net income (including the
Michigan single business tax), and franchise taxes imposed on it, and similar
taxes imposed by the jurisdiction (or any political subdivision thereof) under
the laws of which such Lender, such Issuer or the Administrative Agent (as the
case may be) is organized and (B) any U.S. withholding taxes payable with
respect to payments under the Loan Documents under laws (including any statute,
treaty or regulation) in effect on the Closing Date (or, in the case of (x) an
Eligible Assignee, the date of the Assignment and Acceptance, (y) a successor
Administrative Agent, the date of the appointment of such Administrative Agent,
and (z) a successor Issuer, the date such Issuer becomes an Issuer) applicable
to such Lender, such Issuer or the Administrative Agent, as the case may be, but
not excluding any U.S. withholding taxes payable as a result of any change in
such laws occurring after the Closing Date (or the date of such Assignment and
Acceptance or the date of such appointment of such Administrative Agent or the
date such Issuer
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
becomes an Issuer) and (ii) in the case of each Lender or each Issuer, taxes
measured by its net income and franchise taxes imposed on it as a result of a
present or former connection between such Lender or such Issuer (as the case may
be) and the jurisdiction of the Governmental Authority imposing such tax or any
taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If any Taxes shall be required by law to be deducted
from or in respect of any sum payable under any Loan Document to any Lender, any
Issuer or the Administrative Agent (w) the sum payable shall be increased as may
be necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.16), such Lender,
such Issuer or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (x)
the relevant Loan Party shall make such deductions, (y) the relevant Loan Party
shall pay the full amount deducted to the relevant taxing authority or other
authority in accordance with applicable law and (z) the relevant Loan Party
shall deliver to the Administrative Agent evidence of such payment.
(b) In addition, each Loan Party agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, in
each case arising from any payment made under any Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, any Loan
Document (collectively, "Other Taxes"). Each Loan Party authorizes the
Administrative Agent to pay such Other Taxes in the name of such Loan Party and,
for such purpose, to submit a Notice of Borrowing for Revolving Loans in the
currency such Other Taxes are owed (or, if not available, in Dollars) (i) after
the occurrence of any Event of Default and in respect of any event occurring on
the Closing Date and (ii) otherwise, with the consent of such Loan Party, in the
name of the Loan Party owing such Other Taxes and in an aggregate principal
amount not to exceed all amounts owing in respect of such Other Taxes. If such a
Notice of Borrowing is prepared by the Administrative Agent, the Borrowing
corresponding thereto shall be made without regard to the conditions precedent
set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit) and the proceeds thereof shall be disbursed to the Administrative Agent
in the name of the Borrower and shall be used by the Administrative Agent solely
to pay such Other Taxes (any excess thereof to be used to repay such Borrowing).
The Administrative Agent may also make Swing Loans and Protective Advances to
pay such Other Taxes in the name of such Loan Party and may pay such Other Taxes
and seek separate reimbursement of such Other Taxes hereunder as a Secured
Obligation.
(c) Each Loan Party shall, jointly and severally, indemnify each
Lender, each Issuer and the Administrative Agent for the full amount of Taxes
and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.16) paid by such Lender, such Issuer or
the Administrative Agent (as the case may be) and any liability (including for
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date such Lender,
such Issuer or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes by any Loan Party, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 11.8 (Notices, Etc.), the original or a
certified copy of a receipt evidencing payment thereof.
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under the Guaranty, the agreements and obligations of
such Loan Party contained in this Section 2.16 shall survive the payment in full
of the Obligations.
(f) Each Non-U.S. Lender that is entitled to an exemption from U.S.
withholding tax, or that is subject to such tax at a reduced rate under an
applicable tax treaty, shall (v) on or prior to the Closing Date in the case of
each Non-U.S. Lender that is a signatory hereto, (w) on or prior to the date of
the Assignment and Acceptance pursuant to which such Non-U.S. Lender becomes a
Lender, on or prior to the date a successor Issuer becomes an Issuer or on or
prior to the date a successor Administrative Agent or Collateral Agent becomes
the Administrative Agent or Collateral Agent, as applicable, (x) on or prior to
the date on which any such form or certification expires or becomes obsolete,
(y) after the occurrence of any event requiring a change in the most recent form
or certification previously delivered by it to the Borrower and the
Administrative Agent, and (z) from time to time thereafter if requested by the
Borrower or the Administrative Agent, provide the Administrative Agent and the
Borrower (or, in the case of an assignee pursuant to a Related Party Assignment
that is not delivered to the Administrative Agent in accordance with Section
11.2(c), to the assigning Lender only) with two completed originals of each of
the following, as applicable:
(i) (A) Form W-8ECI (claiming exemption from U.S. withholding
tax because the income is effectively connected with a U.S. trade or
business) (or Form W-8IMY (with appropriate attachments)) or any successor
form, (B) Form W-8BEN (claiming exemption from, or a reduction of, U.S.
withholding tax under an income tax treaty) (or Form W-8IMY (with
appropriate attachments)) or any successor form, (C) in the case of a
Non-U.S. Lender claiming exemption under Sections 871(h) or 881(c) of the
Code, a Form W-8BEN (claiming exemption from U.S. withholding tax under
the portfolio interest exemption) (or Form W-8IMY (with appropriate
attachments)) or any successor form or (D) any other applicable form,
certificate or document prescribed by the IRS certifying as to such
Non-U.S. Lender's entitlement to such exemption from U.S. withholding tax
or reduced rate with respect to all payments to be made to such Non-U.S.
Lender under the Loan Documents. Unless the Borrower and the
Administrative Agent have received forms or other documents satisfactory
to them indicating that payments under any Loan Document to or for a
Non-U.S. Lender are not subject to U.S. withholding tax or are subject to
such tax at a rate reduced by an applicable tax treaty, the Loan Parties
and the Administrative Agent shall withhold amounts required to be
withheld by applicable Requirements of Law from such payments at the
applicable statutory rate.
(ii) Each U.S. Lender shall (v) on or prior to the Closing
Date in the case of each U.S. Lender that is a signatory hereto, (w) on
the date of the Assignment and Acceptance pursuant to which such U.S.
Lender becomes a Lender (other than a Related Party Assignment that is not
delivered to the Administrative Agent in accordance with Section 11.2(c)),
on or prior to the date a successor Issuer becomes an Issuer or on or
prior to the date a successor Administrative Agent or Collateral Agent
becomes the Administrative Agent or Collateral Agent, as applicable,
hereunder, (x) on or prior to the date on which any such form or
certification expires or becomes obsolete, (y) after the occurrence of any
event requiring a change in the most recent form or certification
previously delivered by it to the Borrower and the Administrative Agent
and (z) from time to time if requested by the Borrower or the
Administrative Agent, provide the
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Administrative Agent and the Borrower (or, in the case of an assignee
pursuant to a Related Party Assignment that is not delivered to the
Administrative Agent in accordance with Section 11.2(c), to the assigning
Lender only) with two completed originals of Form W-9 (certifying that
such U.S. Lender is entitled to an exemption from U.S. backup withholding
tax) or any successor form. Solely for purposes of this Section 2.16(f), a
U.S. Lender shall not include a Lender, an Issuer or an Administrative
Agent that may be treated as an exempt recipient based on the indicators
described in Treasury Regulation section 1.6049-4(c)(1)(ii).
(g) Any Revolving Credit Lender claiming any additional amounts
payable pursuant to this Section 2.16 shall use its reasonable efforts
(consistent with its internal policies and Requirements of Law) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that would be payable or may thereafter accrue and would not, in the sole
determination of such Revolving Credit Lender, be otherwise disadvantageous to
such Revolving Credit Lender.
(h) Each Lender who makes a Related Party Assignment hereby
indemnifies and agrees to hold the Borrower and the Administrative Agent
harmless from and against any U.S. Federal withholding tax that would not have
been imposed but for (i) the failure of the Affiliate or the Related Fund that
received such Related Party Assignment to comply with clause (f) above or (ii)
the failure of such Lender to withhold such tax at the proper rate in the event
such Affiliate or Related Fund does not comply with clause (f) above (or
complies with clause (f) above but delivers forms indicating it is entitled to a
reduced rate of such tax).
SECTION 2.17 SUBSTITUTION OF LENDERS
(a) In the event that (i)(A) any Revolving Credit Lender makes a
claim under Section 2.14(c) (Increased Costs) or 2.15 (Capital Adequacy), (B) it
becomes illegal for any Revolving Credit Lender to continue to fund or make any
Eurodollar Rate Loan and such Revolving Credit Lender notifies the Borrower
pursuant to Section 2.14(d) (Illegality), (C) any Loan Party is required to make
any payment pursuant to Section 2.16 (Taxes) that is attributable to a
particular Revolving Credit Lender or (D) any Revolving Credit Lender becomes a
Non-Funding Lender, (ii) in the case of clause (i)(A) above, as a consequence of
increased costs in respect of which such claim is made, the effective rate of
interest payable to such Revolving Credit Lender under this Agreement with
respect to its Loans materially exceeds the effective average annual rate of
interest payable to the Requisite Lenders under this Agreement and (iii) in the
case of clause (i)(A), (B) and (C) above, Lenders holding at least 75% of the
sum of the Revolving Credit Commitments then outstanding are not subject to such
increased costs or illegality, payment or proceedings (any such Lender, an
"Affected Lender"), the Borrower may substitute any Lender and, if reasonably
acceptable to the Administrative Agent, any other Eligible Assignee (a
"Substitute Institution") for such Affected Lender hereunder, after delivery of
a written notice (a "Substitution Notice") by the Borrower to the Administrative
Agent and the Affected Lender within a reasonable time (in any case not to
exceed 90 days) following the occurrence of any of the events described in
clause (i) above that the Borrower intends to make such substitution; provided,
however, that, if more than one Lender claims increased costs, illegality or
right to payment arising from the same act or condition and such claims are
received by the Borrower within 30 days of each other, then the Borrower may
substitute all, but not (except to the extent the Borrower has already
substituted one of such Affected Lenders before the Borrower's receipt of the
other Affected Lenders' claim) less than all, Lenders making such claims.
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(b) If the Substitution Notice was properly issued under this
Section 2.17, the Affected Lender shall sell, and the Substitute Institution
shall purchase, all rights and claims of such Affected Lender under the Loan
Documents, and the Substitute Institution shall assume, and the Affected Lender
shall be relieved of, the Affected Lender's Revolving Credit Commitments and all
other prior unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (which, pursuant to Section 11.5
(Limitation of Liability), do not include exemplary or punitive damages, to the
extent permitted by applicable law) in respect of any such unperformed
obligations). Such purchase and sale (and the corresponding assignment of all
rights and claims hereunder) shall be recorded in the Register maintained by the
Administrative Agent and shall be effective on (and not earlier than) the later
of (i) the receipt by the Affected Lender of its Ratable Portion of the
Revolving Credit Outstandings, together with any other Obligations owing to it,
(ii) the receipt by the Administrative Agent of an agreement in form and
substance satisfactory to it and the Borrower whereby the Substitute Institution
shall agree to be bound by the terms hereof and (iii) the payment in full to the
Affected Lender in cash of all fees, unreimbursed costs and expenses and
indemnities accrued and unpaid through such effective date. Upon the
effectiveness of such sale, purchase and assumption, the Substitute Institution
shall become a "Lender" hereunder for all purposes of this Agreement having a
Revolving Credit Commitment in the amount of such Affected Lender's Revolving
Credit Commitment assumed by it and such Revolving Credit Commitment of the
Affected Lender shall be terminated; provided, however, that all indemnities
under the Loan Documents shall continue in favor of such Affected Lender.
(c) Each Revolving Credit Lender agrees that, if it becomes an
Affected Lender and its rights and claims are assigned hereunder to a Substitute
Institution pursuant to this Section 2.17, it shall execute and deliver to the
Administrative Agent an Assignment and Acceptance to evidence such assignment,
together with any Revolving Credit Note (if such Loans are evidenced by a
Revolving Credit Note) evidencing the Loans subject to such Assignment and
Acceptance; provided, however, that the failure of any Affected Lender to
execute an Assignment and Acceptance shall not render such assignment invalid.
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS OF
CREDIT
The obligation of each Revolving Credit Lender to make the Loans
requested to be made by it on the Closing Date and the obligation of each Issuer
to Issue Letters of Credit on the Closing Date is subject to the satisfaction or
due waiver in accordance with Section 11.1 (Amendments, Waivers, Etc.) of each
of the following conditions precedent on or before February 28, 2006:
(a) Certain Documents. The Administrative Agent shall have received
on or prior to the Closing Date (and, to the extent any Borrowing of any
Eurodollar Rate Loans is requested to be made on the Closing Date, in respect of
the Notice of Borrowing for such Eurodollar Rate Loans, at least three Business
Days prior to the Closing Date) each of the following, each dated the Closing
Date unless otherwise indicated or agreed to by the Administrative Agent, in
form and substance satisfactory to the Administrative Agent and in sufficient
copies for each Lender:
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(i) this Agreement, duly executed and delivered by the
Borrower and, for the account of each Lender requesting the same, a
Revolving Credit Note of the Borrower conforming to the requirements set
forth herein;
(ii) the Guaranty, duly executed by each Guarantor set forth
on Schedule 3.1(a)(ii) (Guarantors);
(iii) the Pledge and Security Agreement, the Canadian
Collateral Documents, the Foreign Pledge Agreements and the Aircraft
Collateral Documents, each duly executed by the Borrower and each
Guarantor, together with each of the following:
(A) evidence satisfactory to the Administrative Agent
that, upon the filing and recording of instruments delivered at the
closing, the Collateral Agent (for the benefit of the Secured
Parties) shall have a valid and perfected first priority security
interest in the Collateral, including (x) such documents duly
executed by each Loan Party as the Administrative Agent may request
with respect to the perfection of its security interests in the
Collateral (including financing statements under the UCC, patent,
trademark and copyright security agreements suitable for filing with
the Patent and Trademark Office or the Copyright Office, as the case
may be, and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens created by the
Pledge and Security Agreement) and (y) copies of UCC search reports
as of a recent date listing all effective financing statements that
name any Loan Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral,
except for those that shall be terminated on the Closing Date or are
otherwise permitted hereunder;
(B) all certificates, instruments and other documents
representing all Pledged Stock being pledged pursuant to such Pledge
and Security Agreement and stock powers for such certificates,
instruments and other documents executed in blank;
(C) all instruments representing Pledged Debt
Instruments (including all instruments evidencing the IRB Debt owing
to the Borrower or any other Loan Party) being pledged pursuant to
such Pledge and Security Agreement duly endorsed in favor of the
Collateral Agent or in blank;
(D) all Deposit Account Control Agreements, duly
executed by the corresponding Deposit Account Bank and Loan Party,
that, in the reasonable judgment of the Administrative Agent, shall
be required for the Loan Parties to comply with Section 7.12
(Control Accounts; Approved Deposit Accounts); and
(E) Securities Account Control Agreements duly executed
by the appropriate Loan Party and (1) all "securities
intermediaries" (as defined in the UCC) with respect to all
Securities Accounts and securities entitlements of the Borrower and
each Guarantor and (2) all "commodities intermediaries" (as defined
in the UCC) with respect to all commodities contracts and
commodities accounts held by the Borrower and each Guarantor;
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(iv) the Intercreditor Agreement, duly executed and delivered
by the Administrative Agent (as defined in the Second Lien Credit
Agreement), the Collateral Agent and the Borrower;
(v) a favorable opinion of (A) Xxxxxx Xxxxxxxx, Xxxxxxx and
Stone, P.L.C., counsel to the Loan Parties, in substantially the form of
Exhibit G (Form of Opinion of Counsel for the Loan Parties), (B) counsel
to the Loan Parties in Delaware, Wisconsin, Oklahoma, Michigan,
Mississippi, Tennessee, Xxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx, Xxxxxx, in each
case addressed to the Administrative Agent, the Collateral Agent and the
Lenders and addressing such other matters as any Lender through the
Administrative Agent may reasonably request and (C) (i) New York counsel
to the Administrative Agent as to the enforceability of this Agreement and
the other Loan Documents to be executed on the Closing Date and (ii)
counsel to the Administrative Agent in Brazil, Canada, France, India and
the United States (in respect of opinions addressing the Aircraft
Collateral Documents, in each case addressed to the Administrative Agent,
the Collateral Agent and the Lenders and addressing such other matters as
any Lender through the Administrative Agent may reasonably request;
(vi) a copy of the articles or certificate of incorporation
(or equivalent Constituent Document) of each Loan Party, certified as of a
recent date by the Secretary of State of the state of organization of such
Loan Party, together with certificates of such official attesting to the
good standing of each such Loan Party;
(vii) a certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying (A) the names and true signatures of each
officer of such Loan Party that has been authorized to execute and deliver
any Loan Document or other document required hereunder to be executed and
delivered by or on behalf of such Loan Party, (B) the by-laws (or
equivalent Constituent Document) of such Loan Party as in effect on the
date of such certification, (C) the resolutions of such Loan Party's Board
of Directors (or equivalent governing body) approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and (D) that there have been no changes
in the certificate of incorporation (or equivalent Constituent Document)
of such Loan Party from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to clause (vi) above;
(viii) a certificate of a Responsible Officer of the Borrower
and each Guarantor, stating that the Borrower and each Guarantor is
Solvent after giving effect to the initial Loans and Letters of Credit,
the application of the proceeds thereof in accordance with Section 7.9
(Application of Proceeds) and the payment of all estimated legal,
accounting and other fees related hereto and thereto;
(ix) a certificate of a Responsible Officer to the effect that
(A) the condition set forth in Section 3.2(b) (Conditions Precedent to
Each Loan and Letter of Credit) has been satisfied and (B) to knowledge of
such officer no litigation not listed on Schedule 4.7 (Litigation) has
been commenced against any Loan Party or any of its Subsidiaries that
would have a Material Adverse Effect;
(x) evidence satisfactory to the Administrative Agent that the
insurance policies required by Section 7.5 (Maintenance of Insurance) and
any Collateral
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Document are in full force and effect, together with, unless otherwise
agreed by the Administrative Agent, endorsements naming the Collateral
Agent, on behalf of the Secured Parties, as an additional insured or loss
payee under all insurance policies to be maintained with respect to the
properties of the Borrower and each other Loan Party; and
(xi) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
(b) Cash Management. The Administrative Agent shall have received
evidence that, as of the Closing Date, the procedures with respect to cash
management required by the Collateral Documents have been established and are
currently being maintained by each Loan Party, together with copies of all
executed lockbox agreements and Deposit Account Control Agreements executed by
such Loan Party in connection therewith.
(c) Landlord Waivers and Bailee's Letters. The Administrative Agent
shall have received such Landlord Waivers and Bailee's Letters, in each case in
respect of third-party premises with Inventory and Equipment with an aggregate
Fair Market Value in excess of $250,000, as the Administrative Agent shall
request in its reasonable discretion.
(d) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent, the
Collateral Agent and the Lenders, as applicable, all fees and expenses
(including reasonable fees and expenses of counsel) due and payable on or before
the Closing Date (including all such fees described in the First Lien Fee
Letter).
(e) Refinancing of Existing Credit Agreement. (i) All obligations
under the Existing Credit Agreement shall have been repaid in full, (ii) the
Existing Credit Agreement and all Loan Documents (as defined therein) shall have
been terminated (and all Liens securing such Existing Credit Agreement shall be
released) on terms satisfactory to the Administrative Agent and (iii) the
Administrative Agent shall have received a payoff letter duly executed and
delivered by the Borrower and the Existing Agent or other evidence of such
termination in each case in form and substance satisfactory to the
Administrative Agent.
(f) Redemption of Senior Guaranteed Notes. (i) All obligations under
the Senior Guaranteed Notes shall have been repaid in full, (ii) the Senior
Guaranteed Notes have been cancelled and returned to the Borrower and all Liens
granted by the Borrower in connection with such Senior Guaranteed Notes have
been released and (iii) the Administrative Agent shall have received a payoff
letter duly executed and delivered by the Borrower and the applicable indenture
trustee or other evidence of such termination in each case in form and substance
satisfactory to the Administrative Agent.
(g) Refinanced IRB Documents. (i) All obligations under the
Refinanced IRB Documents shall have been repaid in full, (ii) all Refinanced IRB
Documents have been terminated and all Liens outstanding in connection with such
Refinanced IRB Documents have been released and (iii) the Administrative Agent
shall have received a payoff letter duly executed and delivered by the
applicable Loan Party and the trustee or other evidence of such termination in
each case in form and substance satisfactory to the Administrative Agent.
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(h) Consents, Etc. Each of the Borrower and its Subsidiaries shall
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all Permits
of, and effected all notices to and filings with, any Governmental Authority, in
each case, as may be necessary to allow each of the Borrower and its
Subsidiaries lawfully (i) to execute, deliver and perform, in all material
respects, their respective obligations hereunder and under the Loan Documents to
which each of them, respectively, is, or shall be, a party and each other
agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith, and (ii) to create
and perfect the Liens on the Collateral to be owned by each of them in the
manner and for the purpose contemplated by the Loan Documents.
(i) Field Examination; Initial Appraisals. The Administrative Agent
shall be satisfied with the results of a field examination of the Borrower and
its Subsidiaries conducted by Citicorp's internal auditors no more than seven
(7) days prior to the Closing Date and shall have received appraisals (the
"Initial Appraisals") of all Inventory, Equipment and Real Property of each Loan
Party, each in form and substance reasonably satisfactory to the Administrative
Agent.
(j) Minimum Available Credit. The Administrative Agent shall be
satisfied (based on a Borrowing Base Certificate to be delivered to the
Administered Agent on the Closing Date) that, after giving effect to Loans
funded on the Closing Date and the application of the proceeds thereof, the
Available Credit shall be at least $65,000,000 on the Closing Date (it being
understood and agreed that (x) all Real Property set forth on Schedule 7.14
shall constitute Eligible Real Property and (y) the Thai Letter of Credit shall
not be deemed a Revolving Credit Outstanding, on the Closing Date, in each case
solely for the purpose of calculating the above stated minimum Available
Credit).
(k) Second Lien Credit Facility. The Administrative Agent shall have
received a duly executed copy of the Second Lien Credit Agreement and all
ancillary documents relating thereto. The "Closing Date" under, and as defined
in the Second Lien Credit Agreement, shall have occurred and the Borrower shall
have received proceeds of loans under the Second Lien Facility of at least
$100,000,000.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF CREDIT
The obligation of each Revolving Credit Lender on any date
(including the Closing Date) to make any Loan and of each Issuer on any date
(including the Closing Date) to Issue any Letter of Credit is subject to the
satisfaction of each of the following conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing (or, in the case of Swing Loans, a duly executed
Swing Loan Request), and, with respect to any Letter of Credit, the
Administrative Agent and the Issuer shall have received a duly executed Letter
of Credit Request.
(b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Loan or Issuance, both before and
after giving effect thereto and, in the case of any Loan, to the application of
the proceeds thereof:
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(i) the representations and warranties set forth in Article IV
(Representations and Warranties) and in the other Loan Documents shall be
true and correct on and as of the Closing Date and shall be true and
correct in all material respects on and as of any such date after the
Closing Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects as of such
earlier date; and
(ii) no Default or Event of Default shall have occurred and be
continuing.
(c) Borrowing Base. The Borrower shall have delivered the Borrowing
Base Certificate required to be delivered by Section 6.10(a) (Borrowing Base
Determination). After giving effect to the Loans or Letters of Credit requested
to be made or Issued on any such date and the use of proceeds thereof, the
Revolving Credit Outstandings shall not exceed the Maximum Credit at such time.
(d) No Legal Impediments. The making of the Loans or the Issuance of
such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or Issuance of such Letter of
Credit and is not enjoined, temporarily, preliminarily or permanently.
(e) Additional Matters. The Administrative Agent shall have received
such additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Loan requested therein, and each submission by the Borrower to
an Issuer of a Letter of Credit Request, and the Issuance of each Letter of
Credit requested therein, shall be deemed to constitute a representation and
warranty by the Borrower as to the matters specified in clause (b) above on the
date of the making of such Loan or the Issuance of such Letter of Credit.
SECTION 3.3 DETERMINATIONS OF INITIAL BORROWING CONDITIONS
For purposes of determining compliance with the conditions specified
in Section 3.1 (Conditions Precedent to Initial Loans and Letters of Credit),
each Revolving Credit Lender shall be deemed to have consented to, approved,
accepted or be satisfied with, each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to the Revolving
Credit Lenders unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
such Revolving Credit Lender prior to the initial Borrowing, borrowing of Swing
Loans or Issuance or deemed Issuance hereunder specifying its objection thereto
and such Revolving Credit Lender shall not have made available to the
Administrative Agent such Revolving Credit Lender's Ratable Portion of such
Borrowing or Swing Loans.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, the Borrower represents and warrants each of the
following to the Lenders, the Issuers and the Administrative Agent, on and as of
the Closing Date and after giving effect to the making of the Loans and the
other financial accommodations on the Closing Date and on and as of each date as
required by Section 3.2(b)(i) (Conditions Precedent to Each Loan and Letter of
Credit):
SECTION 4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW
Each of the Borrower and the Borrower's Subsidiaries (a) is duly
organized, validly existing and, to the extent applicable to Foreign
Subsidiaries, in good standing under the laws of the jurisdiction of its
organization, (b) is duly qualified to do business as a foreign entity and, to
the extent applicable to Foreign Subsidiaries, in good standing under the laws
of each jurisdiction where such qualification is necessary, except where the
failure to be so qualified or in good standing would not, in the aggregate, have
a Material Adverse Effect, (c) has all requisite power and authority and the
legal right to own, pledge, mortgage and operate its properties, to lease the
property it operates under lease and to conduct its business as now or currently
proposed to be conducted, (d) is in compliance with its Constituent Documents,
(e) is in compliance with all applicable Requirements of Law except where the
failure to be in compliance would not, in the aggregate, have a Material Adverse
Effect and (f) has all necessary Permits from or by, has made all necessary
filings with, and has given all necessary notices to, each Governmental
Authority having jurisdiction, to the extent required for such ownership,
operation and conduct, except for Permits or filings that can be obtained or
made by the taking of ministerial action to secure the grant or transfer thereof
or the failure to obtain or make would not, in the aggregate, have a Material
Adverse Effect.
SECTION 4.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS
(a) The execution, delivery and performance by each Loan Party of
the Loan Documents to which it is a party and the consummation of the
transactions contemplated thereby:
(i) are within such Loan Party's corporate, limited liability
company, partnership or other powers;
(ii) have been or, at the time of delivery thereof pursuant to
Article III (Conditions to Loans and Letters of Credit) will have been
duly authorized by all necessary action, including the consent of
shareholders, partners and members where required;
(iii) do not and will not (A) contravene or violate such Loan
Party's or any of its Subsidiaries' respective Constituent Documents, (B)
violate any other Requirement of Law applicable to such Loan Party
(including Regulations T, U and X of the Federal Reserve Board), or any
order or decree of any Governmental Authority or arbitrator applicable to
such Loan Party, (C) conflict with or result in the breach of, or
constitute a default under, or result in or permit the termination or
acceleration of, any material Contractual Obligation of such Loan Party or
any of its Subsidiaries or (D) result
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in the creation or imposition of any Lien upon any property of such Loan
Party or any of its Subsidiaries, other than those in favor of the Secured
Parties pursuant to the Collateral Documents; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority
or any other Person, other than those listed on Schedule 4.2 (Consents)
and that have been or will be, prior to the Closing Date, obtained or
made, copies of which have been or will be delivered to the Administrative
Agent pursuant to Section 3.1 (Conditions Precedent to Initial Loans and
Letters of Credit), and each of which on the Closing Date will be in full
force and effect and, with respect to the Collateral, filings required to
perfect the Liens created by the Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents
will have been upon delivery thereof pursuant to the terms of this Agreement,
duly executed and delivered by each Loan Party party thereto. This Agreement is,
and the other Loan Documents will be, when delivered hereunder, the legal, valid
and binding obligation of each Loan Party party thereto, enforceable against
such Loan Party in accordance with its terms.
SECTION 4.3 OWNERSHIP OF SUBSIDIARIES
(a) Set forth on Schedule 4.3 (Ownership of Subsidiaries) is a
complete and accurate list showing, as of the Closing Date, all Subsidiaries of
the Borrower and, as to each such Subsidiary, the jurisdiction of its
organization, the number of shares of each class of Stock authorized (if
applicable), the number outstanding on the Closing Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower. No Stock of any Subsidiary of the Borrower is
subject to any outstanding option, warrant, right of conversion or purchase of
any similar right. All of the outstanding Stock of each Subsidiary of the
Borrower owned (directly or indirectly) by the Borrower has been validly issued,
is fully paid and non-assessable (to the extent applicable) and is owned by the
Borrower or a Subsidiary of the Borrower, free and clear of all Liens (other
than the Liens in favor of the Secured Parties and the Second Lien Secured
Parties created pursuant to the Pledge and Security Agreement), options,
warrants, rights of conversion or purchase or any similar rights. Neither the
Borrower nor any such Subsidiary is a party to, or has knowledge of, any
agreement restricting the transfer or hypothecation of any Stock of any such
Subsidiary, other than the Loan Documents. The Borrower does not own or hold,
directly or indirectly, any Stock of any Person other than such Subsidiaries and
Investments permitted by Section 8.3 (Investments).
(b) Schedule 4.3 (Ownership of Subsidiaries) identifies each
Subsidiary of the Borrower that is a Material Foreign Subsidiary on the Closing
Date.
SECTION 4.4 FINANCIAL STATEMENTS
(a) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2004, and the related Consolidated statements of
income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by PriceWaterhouseCoopers LLP, and the
Consolidated balance sheets of the Borrower and its Subsidiaries as at September
30, 2005, and the related Consolidated statements of income, retained earnings
and cash flows of the Borrower and its Subsidiaries for the nine months then
ended, copies of which have been furnished to each Lender, fairly present,
subject, in the case of
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said balance sheets as at September 30, 2005, and said statements of income,
retained earnings and cash flows for the nine months then ended, to the absence
of footnote disclosure and normal recurring year-end audit adjustments, the
Consolidated financial condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Borrower and its
Subsidiaries for the period ended on such dates, all in conformity with GAAP.
(b) None of the Borrower or any of the Borrower's Subsidiaries has
any material obligation, contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitment that is not reflected in the
Financial Statements referred to in clause (a) above or in the notes thereto and
not otherwise permitted by this Agreement.
(c) The Projections have been prepared by the Borrower in light of
the past operations of its business, and reflect projections for the seven year
period beginning on January 1, 2006 on a quarterly basis for the first year and
on a year by year basis thereafter. The Projections are based upon estimates and
assumptions stated therein, all of which the Borrower believes to be reasonable
and fair in light of current conditions and current facts known to the Borrower
and, as of the Closing Date, reflect the Borrower's good faith and reasonable
estimates of the future financial performance of the Borrower and its
Subsidiaries and of the other information projected therein for the periods set
forth therein.
SECTION 4.5 MATERIAL ADVERSE CHANGE
Except as disclosed in the (x) Form 10-Q filed by the Borrower with
the Securities and Exchange Commission for the Fiscal Quarters ended March 31,
2005, June 30, 2005 and September 30, 2005 and (y) Form 8-K filed by the
Borrower with the Securities and Exchange Commission on November 8, 2005,
November 9, 2005, January 9, 2006 and January 10, 2006, since December 31, 2004,
there has been no Material Adverse Change and there have been no events or
developments that, in the aggregate, have had a Material Adverse Effect.
SECTION 4.6 SOLVENCY
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or extended on the Closing Date or such other date
as Loans and Letter of Credit Obligations requested hereunder are made or
extended, (b) the Term Loans (as such term is defined in the Second Lien Credit
Agreement) to be made on the Closing Date, (c) the disbursement of the proceeds
of such Loans and Term Loans pursuant to the instructions of the Borrower
(including the payment in full of all of the Borrower's obligations under the
Existing Credit Agreement, the Senior Guaranteed Notes and the IRB Documents)
and (d) the payment and accrual of all transaction costs in connection with the
foregoing, each Loan Party is Solvent.
SECTION 4.7 LITIGATION
Except as set forth on Schedule 4.7 (Litigation), there are no
pending or, to the knowledge of the Borrower, threatened actions, investigations
or proceedings affecting the Borrower or any of its Subsidiaries before any
court, Governmental Authority or arbitrator other than those that, in the
aggregate, would not have a Material Adverse Effect. The performance of any
action by any Loan Party required or contemplated by any Loan Document is not
restrained or enjoined (either temporarily, preliminarily or permanently).
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SECTION 4.8 TAXES
(a) All federal, state, local and foreign income and franchise and
other material tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by the Borrower or any of its Tax Affiliates have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein or otherwise due and payable have been paid prior
to the date on which any fine, penalty, interest, late charge or loss may be
added thereto for non-payment thereof except where contested in good faith and
by appropriate proceedings if adequate reserves therefor have been established
on the books of the Borrower or such Tax Affiliate in conformity with GAAP. No
Tax Return is under audit or examination by any Governmental Authority and no
notice of such an audit or examination or any assertion of any claim for Taxes
has been given or made by any Governmental Authority. Proper and accurate
amounts have been withheld by the Borrower and each of its Tax Affiliates from
their respective employees for all periods in full and complete compliance with
the tax, social security and unemployment withholding provisions of applicable
Requirements of Law and such withholdings have been timely paid to the
respective Governmental Authorities.
(b) None of the Borrower or any of its Tax Affiliates has (i)
executed or filed with the IRS or any other Governmental Authority any agreement
or other document extending, or having the effect of extending, the period for
the filing of any Tax Return or the assessment or collection of any charges,
(ii) incurred any obligation under any tax sharing agreement or arrangement
other than those of which the Administrative Agent has received a copy prior to
the date hereof or (iii) been a member of an affiliated, combined or unitary
group other than the group of which the Borrower (or its Tax Affiliate) is the
common parent.
SECTION 4.9 FULL DISCLOSURE
The information prepared or furnished by or on behalf of the
Borrower and the Guarantors in connection with this Agreement or the
consummation of the transactions contemplated hereunder, including the
information contained in the Disclosure Documents, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading.
SECTION 4.10 MARGIN REGULATIONS
The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no proceeds of any Loan will be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock in contravention
of Regulation T, U or X of the Federal Reserve Board.
SECTION 4.11 NO BURDENSOME RESTRICTIONS; NO DEFAULTS
(a) None of the Borrower or any Subsidiary of the Borrower (i) is a
party to any Contractual Obligation the compliance with one or more of which
would have, in the aggregate, a Material Adverse Effect or the performance of
which by any thereof, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Lien permitted under
Section 8.2 (Liens, Etc.)) on the assets of any thereof or (ii) is subject
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to one or more charter or corporate restrictions that would, in the aggregate,
have a Material Adverse Effect.
(b) None of the Borrower or any Subsidiary of the Borrower is in
default under or with respect to any Contractual Obligation owed by it and, to
the knowledge of the Borrower, no other party is in default under or with
respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary of any Loan Party, other than, in either case, those defaults that,
in the aggregate, would not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of the Borrower, there are no Requirements
of Law applicable to any Loan Party or any Subsidiary of any Loan Party the
compliance with which by such Loan Party or such Subsidiary, as the case may be,
would, in the aggregate, have a Material Adverse Effect.
SECTION 4.12 INVESTMENT COMPANY ACT
None of the Borrower or any Subsidiary of the Borrower is (a) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended or (b) a "holding company" or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", as each such term is defined and used in the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.13 USE OF PROCEEDS
The proceeds of the Loans and the Letters of Credit are being used
by the Borrower (and, to the extent distributed to them by the Borrower, each
other Loan Party) solely (a) to refinance all Indebtedness and other obligations
outstanding under (i) the Existing Credit Agreement, (ii) the Senior Guaranteed
Notes and (iii) the IRB Documents, (b) for the payment of transaction costs,
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby and (c) for working capital and general
corporate purposes.
SECTION 4.14 INSURANCE
All policies of insurance of any kind or nature of the Borrower or
any of its Subsidiaries, including policies of life, fire, theft, product
liability, public liability, property damage, other casualty, employee fidelity,
workers' compensation and employee health and welfare insurance, are in full
force and effect and are of a nature and provide such coverage as is sufficient
and as is customarily carried by businesses of the size and character of such
Person. None of the Borrower or any of its Subsidiaries has been refused
insurance for any material coverage for which it had applied or had any policy
of insurance terminated (other than at its request).
SECTION 4.15 LABOR MATTERS
(a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving the Borrower or any of its
Subsidiaries, other than those that, in the aggregate, would not have a Material
Adverse Effect.
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(b) There are no unfair labor practices, grievances, complaints or
arbitrations pending, or, to the Borrower's knowledge, threatened, against or
involving the Borrower or any of its Subsidiaries, nor are there any
arbitrations or grievances threatened involving the Borrower or any of its
Subsidiaries, other than those that, in the aggregate, would not have a Material
Adverse Effect.
(c) Except as set forth on Schedule 4.15 (Labor Matters), as of the
Closing Date, there is no collective bargaining agreement covering any employee
of the Borrower or its Subsidiaries.
(d) Schedule 4.15 (Labor Matters) sets forth, as of the date hereof,
all material consulting agreements, executive employment agreements, executive
compensation plans, deferred compensation agreements, employee stock purchase
and stock option plans and severance plans of the Borrower and any of its
Subsidiaries.
SECTION 4.16 ERISA
(a) Schedule 4.16 (List of Plans) separately identifies as of the
date hereof all Title IV Plans, all Multiemployer Plans and all of the employee
benefit plans within the meaning of Section 3(3) of ERISA to which the Borrower
or any of the Borrower's Subsidiaries has any obligation or liability,
contingent or otherwise.
(b) Each employee benefit plan of the Borrower or any of the
Borrower's Subsidiaries intended to qualify under Section 401 of the Code does
so qualify, and any trust created thereunder is exempt from tax under the
provisions of Section 501 of the Code, except where such failures, in the
aggregate, would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects
with applicable provisions of ERISA, the Code and other Requirements of Law
except for non-compliances that, in the aggregate, would not have a Material
Adverse Effect.
(d) There has been no, nor is there reasonably expected to occur,
any ERISA Event other than those that, in the aggregate, would not have a
Material Adverse Effect.
(e) Except to the extent set forth on Schedule 4.16 (List of Plans),
none of the Borrower, any of the Borrower's Subsidiaries or any ERISA Affiliate
would have any Withdrawal Liability as a result of a complete withdrawal as of
the date hereof from any Multiemployer Plan.
SECTION 4.17 ENVIRONMENTAL MATTERS
(a) The operations of the Borrower and each of its Subsidiaries have
been and are in compliance with all Environmental Laws, including obtaining and
complying with all required environmental, health and safety Permits, other than
non-compliances that, in the aggregate, would not have a reasonable likelihood
of the Borrower and its Subsidiaries incurring Environmental Liabilities and
Costs after the date hereof whose Dollar Equivalent would exceed $1,000,000.
(b) Except as disclosed on Schedule 4.17 (Environmental Matters),
none of the Borrower or any of its Subsidiaries or any Real Property currently
or, to the knowledge of the
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Borrower, previously owned, operated or leased by or for the Borrower or any of
its Subsidiaries is subject to any pending or, to the knowledge of the Borrower,
threatened, claim, order, agreement, notice of violation, notice of potential
liability or is the subject of any pending or threatened proceeding or
governmental investigation under or pursuant to Environmental Laws other than
those that, in the aggregate, are not reasonably likely to result in the
Borrower and its Subsidiaries incurring Environmental Liabilities and Costs
whose Dollar Equivalent would exceed $1,000,000.
(c) Except as disclosed on Schedule 4.17 (Environmental Matters),
none of the Borrower or any of its Subsidiaries is a treatment, storage or
disposal facility requiring a Permit under the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the regulations thereunder or any
state analog.
(d) Except as disclosed on Schedule 4.17 (Environmental Matters),
there are no facts, circumstances or conditions arising out of or relating to
the operations or ownership of the Borrower or of Real Property owned, operated
or leased by the Borrower or any of its Subsidiaries that are not specifically
included in the financial information furnished to the Lenders other than those
that, in the aggregate, would not have a reasonable likelihood of the Borrower
and its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$1,000,000.
(e) As of the date hereof, no Environmental Lien has attached to any
property of the Borrower or any of its Subsidiaries and, to the knowledge of the
Borrower, no facts, circumstances or conditions exist that could reasonably be
expected to result in any such Lien attaching to any such property.
(f) The Borrower and each of its Subsidiaries has provided the
Lenders with copies of all environmental, health or safety audits, studies,
assessments, inspections, investigations or other environmental health and
safety reports relating to the operations of the Borrower or any of its
Subsidiaries or any Real Property of any of them that are in the possession,
custody or control of the Borrower or any of its Subsidiaries.
(g) None of the information disclosed on Schedule 4.17
(Environmental Matters) would reasonably likely result in, individually or in
the aggregate, or cause a Material Adverse Effect.
SECTION 4.18 INTELLECTUAL PROPERTY
The Borrower and its Subsidiaries own or license or otherwise have
the right to use all licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
copyright applications, Internet domain names, franchises, authorizations and
other intellectual property rights (including all Intellectual Property as
defined in the Pledge and Security Agreement) that are necessary for the
operations of their respective businesses, without, to the Borrower's knowledge,
infringement upon or conflict with the rights of any other Person with respect
thereto, including all trade names associated with any private label brands of
the Borrower or any of its Subsidiaries. To the Borrower's knowledge, no
license, permit, patent, patent application, trademark, trademark application,
service xxxx, trade name, copyright, copyright application, Internet domain
name, franchise, authorization, other intellectual property right (including all
"Intellectual Property" as defined in the Pledge and Security Agreement), slogan
or other advertising device, product, process, method, substance,
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part or component, or other material now employed, or now contemplated to be
employed, by the Borrower or any of its Subsidiaries infringes upon or conflicts
with any rights owned by any other Person, and no claim or litigation regarding
any of the foregoing is pending or to the Borrower's knowledge, threatened.
SECTION 4.19 TITLE; REAL PROPERTY
(a) Each of the Borrower and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all Real Property and good
title to all personal property, in each case that is purported to be owned or
leased by it, including those reflected on the most recent Financial Statements
delivered by the Borrower, and none of such properties and assets is subject to
any Lien, except Liens permitted under Section 8.2 (Liens, Etc.). The Borrower
and its Subsidiaries have received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar agreements, bills of sale and other
documents in respect of, and have duly effected all recordings, filings and
other actions necessary to establish, protect and perfect, the Borrower's and
its Subsidiaries' right, title and interest in and to all such property.
(b) Set forth on Schedule 4.19 (Real Property) is a complete and
accurate list of all Real Property of each Loan Party and its Subsidiaries and
showing, as of the Closing Date, the current street address (including, where
applicable, county, state and other relevant jurisdictions), record owner and,
where applicable, lessee thereof.
(c) No Loan Party nor any of its Subsidiaries owns or holds, or is
obligated under or a party to, any lease, option, right of first refusal or
other contractual right to purchase, acquire, sell, assign, dispose of or lease
any Real Property of such Loan Party or any of its Subsidiaries.
(d) No portion of any Real Property of any Loan Party or any of its
Subsidiaries has suffered any material damage by fire or other casualty loss
that has not heretofore been completely repaired and restored to its original
condition. No portion of any Real Property of any Loan Party or any of its
Subsidiaries is located in a special flood hazard area as designated by any
federal Governmental Authority.
(e) All Permits required to have been issued or appropriate to
enable all Real Property of the Borrower or any of its Subsidiaries to be
lawfully occupied and used for all of the purposes for which they are currently
occupied and used have been lawfully issued and are in full force and effect,
other than those that, in the aggregate, would not have a Material Adverse
Effect.
(f) None of the Borrower or any of its Subsidiaries has received any
notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Real Property of the Borrower or any of
its Subsidiaries or any part thereof, except those that, in the aggregate, would
not have a Material Adverse Effect.
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ARTICLE V
FINANCIAL COVENANTS
The Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following as long as any Obligation or any
Revolving Credit Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing:
SECTION 5.1 MINIMUM FIXED CHARGE COVERAGE RATIO
The Borrower shall maintain a Fixed Charge Coverage Ratio,
determined on the last day of each Fiscal Quarter set forth below for the four
Fiscal Quarters ending on such date, of at least the minimum ratio set forth
below opposite such Fiscal Quarter:
MINIMUM FIXED CHARGE
FISCAL QUARTER COVERAGE RATIO
------------------ --------------------
December 31, 2007 1.10 to 1
March 31, 2008 1.15 to 1
June 30, 2008 1.15 to 1
September 30, 2008 1.20 to 1
December 31, 2008 1.20 to 1
March 31, 2009 1.20 to 1
June 30, 2009 1.20 to 1
September 30, 2009 1.25 to 1
December 31, 2009 1.25 to 1
March 31, 2010 1.25 to 1
June 30, 2010 1.25 to 1
September 30, 2010 1.25 to 1
SECTION 5.2 MINIMUM EBITDA
The Borrower shall have, for the four Fiscal Quarters ending on the
last day of each Fiscal Quarter set forth below, EBITDA of not less than the
following:
FISCAL QUARTER MINIMUM EBITDA
------------------ --------------
March 31, 2006 $32,000,000
June 30, 2006 $27,000,000
September 30, 2006 $21,000,000
December 31, 2006 $45,000,000
March 31, 2007 $60,000,000
June 30, 2007 $75,000,000
September 30, 2007 $85,000,000
SECTION 5.3 CAPITAL EXPENDITURES
The Borrower shall not make or incur, or permit to be made or
incurred, Capital Expenditures (it being understood that any Capital
Expenditures financed solely through the proceeds obtained from property loss
insurance shall not be covered under this Section 5.3), during the four Fiscal
Quarters ending on the last day of each Fiscal Quarter set forth below to be, in
the aggregate, in excess of the maximum amount set forth opposite such Fiscal
Quarter:
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MAXIMUM CAPITAL
FISCAL QUARTER EXPENDITURES
------------------ ---------------
March 31, 2006 $125,000,000
June 30, 2006 $115,000,000
September 30, 2006 $105,000,000
December 31, 2006 $ 90,000,000
March 31, 2007 $ 90,000,000
June 30, 2007 $ 90,000,000
September 30, 2007 $ 90,000,000
December 31, 2007 $ 90,000,000
March 31, 2008 $100,000,000
June 30, 2008 $100,000,000
September 30, 2008 $100,000,000
December 31, 2008 $100,000,000
March 31, 2009 $105,000,000
June 30, 2009 $105,000,000
September 30, 2009 $105,000,000
December 31, 2009 $105,000,000
March 31, 2010 $110,000,000
June 30, 2010 $110,000,000
September 30, 2010 $110,000,000
ARTICLE VI
REPORTING COVENANTS
The Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following, as long as any Obligation or any
Revolving Credit Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing:
SECTION 6.1 FINANCIAL STATEMENTS
The Borrower shall furnish to the Administrative Agent each of the
following:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month in each Fiscal Year, financial information regarding the Borrower and its
Subsidiaries consisting of Consolidated and consolidating unaudited balance
sheets as of the close of such month and the related statements of income and
cash flow for such month and that portion of the current Fiscal Year ending as
of the close of such month, setting forth in comparative form the figures for
the corresponding period in the prior year.
(b) Quarterly Reports. Within 45 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year, financial information regarding
the Borrower and its Subsidiaries consisting of Consolidated and consolidating
unaudited balance sheets as of the close of such quarter and the related
statements of income and cash flow for such quarter and that portion of the
Fiscal Year ending as of the close of such quarter, setting forth in comparative
form the figures for the corresponding period in the prior year and the figures
contained in the Projections or, if applicable, the latest business plan
provided pursuant to clause (f) below for the
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current Fiscal Year, in each case certified by a Responsible Officer of the
Borrower as fairly presenting the Consolidated and consolidating financial
position of the Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated in
accordance with GAAP (subject to the absence of footnote disclosure and normal
year-end audit adjustments).
(c) Annual Reports. Within 90 days after the end of each Fiscal
Year, financial information regarding the Borrower and its Subsidiaries
consisting of Consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as of the end of such year and related statements of income and
cash flows of the Borrower and its Subsidiaries for such Fiscal Year, all
prepared in conformity with GAAP and certified, in the case of such Consolidated
Financial Statements, without qualification as to the scope of the audit or as
to the Borrower being a going concern by the Borrower's Accountants, together
with the report of such accounting firm stating that (i) such Financial
Statements fairly present the Consolidated financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
the Borrower's Accountants shall concur and that shall have been disclosed in
the notes to the Financial Statements) and (ii) the examination by the
Borrower's Accountants in connection with such Consolidated Financial Statements
has been made in accordance with generally accepted auditing standards, and
accompanied by a certificate stating that in the course of the regular audit of
the business of the Borrower and its Subsidiaries such accounting firm has
obtained no knowledge that a Default or Event of Default in respect of the
financial covenants contained in Article V (Financial Covenants) has occurred
and is continuing, or, if in the opinion of such accounting firm, a Default or
Event of Default has occurred and is continuing in respect of such financial
covenants, a statement as to the nature thereof.
(d) Compliance Certificate. Together with each delivery of any
Financial Statement pursuant to clause (b) or (c) above and, with respect to the
fourth Fiscal Quarter of each Fiscal Year, within 45 days after the end of such
Fiscal Quarter (in respect of the unaudited results for such Fiscal Quarter), a
certificate of a Responsible Officer of the Borrower (each, a "Compliance
Certificate") (i) showing in reasonable detail the calculations used in
determining the Quarterly Availability Credit (for purposes of determining the
Applicable Margin) and demonstrating compliance with each of the financial
covenants contained in Article V (Financial Covenants) and (ii) stating that no
Default or Event of Default has occurred and is continuing or, if a Default or
an Event of Default has occurred and is continuing, stating the nature thereof
and the action that the Borrower proposes to take with respect thereto.
(e) Corporate Chart and Other Collateral Updates. Together with each
delivery of any Financial Statement pursuant to clause (b) or (c) above, (i) a
certificate of a Responsible Officer of the Borrower certifying that the
Corporate Chart attached thereto (or the last Corporate Chart delivered pursuant
to this clause (e)) is true, correct, complete and current as of the date of
such Financial Statement and (ii) a certificate of a Responsible Officer of the
Borrower in form and substance satisfactory to the Administrative Agent that all
certificates, statements, updates and other documents (including updated
schedules) required to be delivered pursuant to the Pledge and Security
Agreement by any Loan Party in the preceding Fiscal Quarter have been delivered
thereunder (or such delivery requirement was otherwise duly waived or extended).
The reporting requirements set forth in this clause (e) are in addition to, and
are not intended to and shall not replace or otherwise modify, any obligation of
any Loan Party under any
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Loan Document (including other notice or reporting requirements). Compliance
with the reporting obligations in this clause (e) shall only provide notice to
the Administrative Agent and shall not, by itself, modify any obligation of any
Loan Party under any Loan Document, update any Schedule to this Agreement or any
schedule to any other Loan Document or cure, or otherwise modify in any way, any
failure to comply with any covenant, or any breach of any representation or
warranty, contained in any Loan Document or any other Default or Event of
Default.
(f) Business Plan. Not later than January 31st of each Fiscal Year,
and containing substantially the types of financial information contained in the
Projections, (i) the annual business plan of the Borrower and its Subsidiaries
for such Fiscal Year, (ii) forecasts prepared by management of the Borrower for
each Fiscal Quarter for such Fiscal Year and (iii) forecasts prepared by
management of the Borrower for such and each of the succeeding Fiscal Years
through the Fiscal Year in which the later of (i) the Revolving Credit
Termination Date and (ii) the Term Loan Maturity Date (as defined in the Second
Lien Credit Agreement) is scheduled to occur, including, in each instance
described in clauses (ii) and (iii) above, (x) a projected year-end Consolidated
balance sheet and income statement and statement of cash flows and (y) a
statement of all of the material assumptions on which such forecasts are based.
The Borrower shall notify the Administrative Agent of any material modifications
to such business plan and related forecasts upon the approval thereof by the
Board of Directors of the Borrower.
(g) Management Letters, Etc. Within five Business Days after receipt
thereof by any Loan Party, copies of each management letter, exception report or
similar letter or report received by such Loan Party from its independent
certified public accountants (including the Borrower's Accountants).
(h) Intercompany Loan Balances. Together with each delivery of any
Financial Statement pursuant to clause (a) above, a summary of the outstanding
balance of all intercompany Indebtedness as of the last day of the fiscal month
covered by such Financial Statement, certified by a Responsible Officer of the
Borrower.
SECTION 6.2 DEFAULT NOTICES
As soon as practicable, and in any event within five Business Days
after a Responsible Officer of any Loan Party has actual knowledge of the
existence of any Default, Event of Default or other event having had a Material
Adverse Effect or having any reasonable likelihood of causing or resulting in a
Material Adverse Change, the Borrower shall give the Administrative Agent notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone,
shall be promptly confirmed in writing on the next Business Day.
SECTION 6.3 LITIGATION
Promptly after the commencement thereof, the Borrower shall give the
Administrative Agent written notice of the commencement of all actions, suits
and proceedings before any domestic or foreign Governmental Authority or
arbitrator affecting the Borrower or any of Subsidiary of the Borrower that (i)
seeks injunctive or similar relief or (ii) in the reasonable judgment of the
Borrower or such Subsidiary, expose the Borrower or such Subsidiary to liability
in an amount aggregating $250,000 or more or that, if adversely determined,
would have a Material Adverse Effect.
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SECTION 6.4 ASSET SALES
Except for Asset Sales permitted under Section 8.4(g) and Section
8.4(h), prior to any Asset Sale whose Net Cash Proceeds (or the Dollar
Equivalent thereof) are anticipated to exceed $2,000,000, the Borrower shall
send the Administrative Agent a notice (a) describing such Asset Sale or the
nature and material terms and conditions of such transaction and (b) stating the
estimated Net Cash Proceeds anticipated to be received by the Borrower or any of
its Subsidiaries.
SECTION 6.5 LABOR RELATIONS
Promptly after becoming aware of the same, the Borrower shall give
the Administrative Agent written notice of (a) any material labor dispute to
which the Borrower or any of its Subsidiaries is or may become a party,
including any strikes, lockouts or other disputes relating to any of such
Person's plants and other facilities, and (b) any Worker Adjustment and
Retraining Notification Act or related liability incurred with respect to the
closing of any plant or other facility of any such Person.
SECTION 6.6 TAX RETURNS
Upon the request of the Administrative Agent, the Borrower shall
provide copies of all federal, state, local and foreign tax returns and reports
filed by the Borrower or any Subsidiary of the Borrower in respect of taxes
measured by income (excluding sales, use and like taxes).
SECTION 6.7 INSURANCE
As soon as is practicable and in any event within 90 days after the
end of each Fiscal Year, the Borrower shall furnish the Administrative Agent (in
sufficient copies for each of the Lenders) with (a) a report in form and
substance satisfactory to the Administrative Agent and the Lenders outlining all
material insurance coverage maintained as of the date of such report by the
Borrower or any Subsidiary of the Borrower and the duration of such coverage and
(b) an insurance broker's statement that all premiums then due and payable with
respect to such coverage have been paid and confirming, with respect to any
insurance maintained by the Borrower or any other Loan Party, that the
Collateral Agent has been named as loss payee or additional insured, as
applicable.
SECTION 6.8 ERISA MATTERS
The Borrower shall furnish the Administrative Agent (with sufficient
copies for each of the Lenders) each of the following:
(a) promptly and in any event within 30 days after the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate knows or has reason to know
that any ERISA Event has occurred, written notice describing such event;
(b) promptly and in any event within 10 days after the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate knows or has reason to know
that a request for a minimum funding waiver under Section 412 of the Code has
been filed with respect to any Title IV Plan or Multiemployer Plan, a written
statement of a Responsible Officer of the
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Borrower describing such ERISA Event or waiver request and the action, if any,
the Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with the PBGC or the IRS pertaining
thereto; and
(c) simultaneously with the date that the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.
SECTION 6.9 ENVIRONMENTAL MATTERS
The Borrower shall provide the Administrative Agent promptly and in
any event within 10 days after the Borrower or any Subsidiary of the Borrower
learning of any of the following, written notice of each of the following:
(a) that any Loan Party is or may be liable to any Person as a
result of a Release or threatened Release that could reasonably be expected to
subject such Loan Party to Environmental Liabilities and Costs whose Dollar
Equivalent shall exceed $1,000,000;
(b) the receipt by any Loan Party of notification that any real or
personal property of such Loan Party is or is reasonably likely to be subject to
any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition that could reasonably be expected to result in a violation of or
liability under, any Environmental Law, except for violations and liabilities
the consequence of which, in the aggregate, would not be reasonably likely to
subject the Loan Parties collectively to Environmental Liabilities and Costs
whose Dollar Equivalent shall exceed $1,000,000;
(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of or liability under any Environmental Law,
that, in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs whose Dollar Equivalent shall exceed $1,000,000;
(e) any proposed acquisition of stock, assets or real estate, any
proposed leasing of property or any other action by any Loan Party or any of its
Subsidiaries other than those the consequences of which, in the aggregate, have
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs whose Dollar Equivalent shall exceed
$1,000,000;
(f) any proposed action by any Loan Party or any of its Subsidiaries
or any proposed change in Environmental Laws that, in the aggregate, have a
reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that, in the aggregate, would have
cost $1,000,000 or more or that shall subject the Loan Parties to additional
Environmental Liabilities and Costs whose Dollar Equivalent shall exceed
$1,000,000; and
(g) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard
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or liability issue identified in any notice or report delivered pursuant to this
Agreement; provided, however, that the Borrower shall be required to provide
such report no more than once in any six month period.
SECTION 6.10 BORROWING BASE DETERMINATION
(a) The Borrower shall deliver, as soon as available and in any
event not later than ten Business Days after the end of each fiscal month, a
Borrowing Base Certificate as of the end of such fiscal month executed by a
Responsible Officer of the Borrower (and on the Thursday of each week, weekly
updates thereof showing sales and collections for such week).
(b) The Borrower shall conduct, or shall cause to be conducted, at
its expense and upon request of the Administrative Agent, and present to the
Administrative Agent for approval, (i) updates to the Initial Appraisals that
shall be in form and substance and from third-party appraisers reasonably
acceptable to the Administrative Agent (the "Updated Appraisals") for the
purpose of determining the Borrowing Base and (ii) other investigations and
reviews (including field audits conducted by the Administrative Agent);
provided, however, that as long as no Liquidity Event Period is continuing, the
Borrower shall be required to provide Updated Appraisals no more than (A) twice
in any Fiscal Year for Inventory and (B) once in any Fiscal Year for Equipment
(including Aircraft Collateral) and Real Property (it being understood that the
Borrower shall provide the Updated Appraisals required under (A) and (B) above
once each Fiscal Year in the absence of any request from the Administrative
Agent) and provided, further, so long as no Liquidity Event Period is
continuing, the Administrative Agent may carry out other investigations and
reviews (including field audits conducted by the Administrative Agent) no more
than four in any Fiscal Year (but no more than once in any three-month period).
The Borrower shall furnish to the Administrative Agent any information that the
Administrative Agent may reasonably request regarding the determination and
calculation of the Borrowing Base including correct and complete copies of any
invoices, underlying agreements, instruments or other documents and the identity
of all Account Debtors in respect of Accounts referred to therein.
(c) The Borrower shall promptly notify the Administrative Agent in
writing in the event that at any time the Borrower receives or otherwise gains
knowledge that (i) the Borrowing Base is less than 90% of the Borrowing Base
reflected in the most recent Borrowing Base Certificate delivered pursuant to
clause (a) above, (ii) the outstanding Revolving Credit Outstandings exceed the
Borrowing Base as a result of a decrease therein, in which case such notice
shall also include the amount of such excess or (iii) a Liquidity Event Period
has begun.
(d) The Administrative Agent may, at the Borrower's sole cost and
expense, make test verifications of the Accounts and physical verifications of
the Inventory in any manner and through any medium that the Administrative Agent
considers advisable, and the Borrower shall furnish all such assistance and
information as the Administrative Agent may require in connection therewith. At
any time and from time to time, upon the Administrative Agent's request and at
the expense of the Borrower, the Borrower shall cause independent public
accountants or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts; provided, however, that
unless a Liquidity Event Period shall be continuing, the Administrative Agent
shall request no more than four such reports during any calendar year.
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SECTION 6.11 CUSTOMER CONTRACTS
Promptly after any Loan Party becoming aware of the same, the
Borrower shall give the Administrative Agent written notice of any cancellation,
termination or loss of any material Contractual Obligation or other customer
arrangement.
SECTION 6.12 TAX REPORTING
Promptly after the Borrower determines that it intends to treat the
Loans and the Letters of Credit and the related transactions contemplated hereby
as a "reportable transaction" within the meaning of Treasury Regulation Section
1.6011-4 of the Code, the Borrower shall give the Administrative Agent written
notice thereof and shall deliver to the Administrative Agent all IRS forms
required in connection therewith.
SECTION 6.13 OTHER INFORMATION
The Borrower shall provide the Administrative Agent or any Lender
with such other information respecting the business, properties, condition,
financial or otherwise, or operations of the Borrower or any Subsidiary of the
Borrower as the Administrative Agent or such Lender through the Administrative
Agent may from time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following (except that the following shall
have no application to Tecumseh Italy as long as the Borrower is diligently
pursuing the dissolution or liquidation of Tecumseh Italy), as long as any
Obligation or any Revolving Credit Commitment remains outstanding and, in each
case, unless the Requisite Lenders otherwise consent in writing:
SECTION 7.1 PRESERVATION OF CORPORATE EXISTENCE, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, preserve and maintain its legal existence, rights (charter and statutory)
and franchises, except as permitted by Sections 8.4 (Sale of Assets) and 8.7
(Restriction on Fundamental Changes).
SECTION 7.2 COMPLIANCE WITH LAWS, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, comply with all applicable Requirements of Law, Contractual Obligations and
Permits, except where the failure so to comply would not, in the aggregate, have
a Material Adverse Effect.
SECTION 7.3 CONDUCT OF BUSINESS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, (a) conduct its business in the ordinary course and consistent with past
practice and (b) use its reasonable efforts, in the ordinary course and
consistent with past practice, to preserve its business and the goodwill and
business of the customers, advertisers, suppliers and others having
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business relations with the Borrower or any of its Subsidiaries, except in each
case where the failure to comply with the covenants in each of clauses (a) and
(b) above would not, in the aggregate, have a Material Adverse Effect.
SECTION 7.4 PAYMENT OF TAXES, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, pay and discharge before the same shall become delinquent, all lawful
governmental claims, taxes, assessments, charges and levies, except where
contested in good faith, by proper proceedings and adequate reserves therefor
have been established on the books of the Borrower or the appropriate Subsidiary
in conformity with GAAP.
SECTION 7.5 MAINTENANCE OF INSURANCE
The Borrower shall (a) maintain for itself, and shall cause to be
maintained for each Subsidiary of the Borrower, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates, and such other insurance as may be reasonably
requested by the Requisite Lenders, and, in any event, all insurance required by
any Collateral Documents and (b) cause all such insurance relating to any Loan
Party to name the Collateral Agent on behalf of the Secured Parties as
additional insured or loss payee, as appropriate, and to provide that no
cancellation, material addition in amount or material change in coverage shall
be effective until after 30 days' written notice thereof to the Administrative
Agent.
SECTION 7.6 ACCESS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, from time to time permit the Administrative Agent and the Lenders, or any
agents or representatives thereof, within two Business Days after written
notification of the same and during normal business hours (except that during
the continuance of an Event of Default, no such notice shall be required) to (a)
examine and make copies of and abstracts from the records and books of account
of the Borrower and each Subsidiary of the Borrower, (b) visit the properties of
the Borrower and each Subsidiary of the Borrower, (c) discuss the affairs,
finances and accounts of the Borrower and each Subsidiary of the Borrower with
any of their respective officers or directors and (d) communicate directly with
any of its certified public accountants (including the Borrower's Accountants).
The Borrower shall authorize its certified public accountants (including the
Borrower's Accountants), and shall cause the certified public accountants of any
Subsidiary of the Borrower, if any, to disclose to the Administrative Agent or
any Lender any and all financial statements and other information of any kind,
as the Administrative Agent or any Lender reasonably requests and that such
accountants may have with respect to the business, financial condition, results
of operations or other affairs of the Borrower or any Subsidiary of the
Borrower.
SECTION 7.7 KEEPING OF BOOKS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to keep, proper books of record and account, in which full and correct entries
shall be made in conformity with GAAP of all financial transactions and the
assets and business of the Borrower and each such Subsidiary.
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SECTION 7.8 MAINTENANCE OF PROPERTIES, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, maintain and preserve (a) in good working order and condition all of its
properties necessary in the conduct of its business, (b) all rights, permits,
licenses, approvals and privileges (including all Permits) used or useful or
necessary in the conduct of its business and (c) all registered patents,
trademarks, trade names, copyrights and service marks with respect to its
business, except where failure to so maintain and preserve the items set forth
in clauses (a), (b) and (c) above would not, in the aggregate, have a Material
Adverse Effect.
SECTION 7.9 APPLICATION OF PROCEEDS
The Borrower (and, to the extent distributed to them by the
Borrower, each Loan Party) shall use the entire amount of the proceeds of the
Loans as provided in Section 4.13 (Use of Proceeds).
SECTION 7.10 ENVIRONMENTAL
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, comply in all material respects with Environmental Laws and, without
limiting the foregoing, the Borrower shall, at its sole cost and expense, upon
receipt of any notification or otherwise obtaining knowledge of any Release or
other event that has any reasonable likelihood of any of the Borrower or any
Subsidiary of the Borrower incurring Environmental Liabilities and Costs whose
Dollar Equivalent shall exceed $1,000,000 in the aggregate, (a) conduct, or pay
for consultants to conduct, tests or assessments of environmental conditions at
such operations or properties, including the investigation and testing of
subsurface conditions and (b) take such Remedial Action and undertake such
investigation or other action as required by Environmental Laws or as any
Governmental Authority requires or as is appropriate and consistent with good
business practice to address the Release or event and otherwise ensure
compliance with Environmental Laws.
SECTION 7.11 ADDITIONAL COLLATERAL AND GUARANTIES
To the extent not delivered to the Administrative Agent on or before
the Closing Date (including in respect of after-acquired property and Persons
that become a Material Domestic Subsidiary or Material Foreign Subsidiary of any
Loan Party after the Closing Date), the Borrower agrees promptly to do, or cause
each Subsidiary of the Borrower to do, each of the following, unless otherwise
agreed by the Administrative Agent:
(a) deliver to the Administrative Agent such duly-executed
supplements and amendments to the Guaranty, in each case in form and substance
reasonably satisfactory to the Administrative Agent and as the Administrative
Agent deems necessary or advisable in order to ensure that each Material
Domestic Subsidiary and Material Foreign Subsidiary that has entered into
Guaranty Obligations in respect of the Indebtedness of any Loan Party
guaranties, as primary obligor and not as surety, the full and punctual payment
when due of the Obligations or any part thereof; provided, however, in no event
shall any Excluded Foreign Subsidiary be required to guaranty the payment of the
Obligations unless the Borrower and the Administrative Agent otherwise agree;
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(b) deliver to the Administrative Agent such duly-executed joinder
and amendments to the Pledge and Security Agreement and the relevant Canadian
Collateral Document and, if applicable, other Collateral Documents (including,
in the case of any Loan Party that owns Stock of a Material Foreign Subsidiary,
Foreign Pledge Agreements), in each case in form and substance reasonably
satisfactory to the Administrative Agent and as the Administrative Agent deems
necessary or advisable in order to (i) effectively grant to the Collateral
Agent, for the benefit of the Secured Parties, a valid, perfected and
enforceable first-priority security interest in the Stock and Stock Equivalents
and other debt Securities owned by any Loan Party and (ii) effectively grant to
the Collateral Agent, for the benefit of the Secured Parties, a valid, perfected
and enforceable first-priority security interest in all property interests and
other assets of any Loan Party; provided, however, in no event shall (x) any
Loan Party, individually or collectively, be required to pledge in excess of 66%
of the outstanding Voting Stock of any Excluded Foreign Subsidiary or (y) any
assets of any Excluded Foreign Subsidiary be required to be pledged, unless the
Borrower and the Administrative Agent otherwise agree;
(c) deliver to the Administrative Agent all certificates,
instruments and other documents representing all Pledged Stock, Pledged Debt
Instruments and all other Stock, Stock Equivalents and other debt Securities
being pledged pursuant to the joinders, amendments and Foreign Pledge Agreements
executed pursuant to clause (b) above, together with (i) in the case of
certificated Pledged Stock and other certificated Stock and Stock Equivalents,
undated stock powers endorsed in blank and (ii) in the case of Pledged Debt
Instruments and other certificated debt Securities, endorsed in blank, in each
case executed and delivered by a Responsible Officer of such Loan Party;
(d) to take such other actions necessary or advisable to ensure the
validity or continuing validity of the guaranties required to be given pursuant
to clause (a) above or to create, maintain or perfect the security interest
required to be granted pursuant to clause (b) above, including the filing of UCC
financing statements in such jurisdictions as may be required by the Collateral
Documents or by law or as may be reasonably requested by the Administrative
Agent;
(e) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
SECTION 7.12 CONTROL ACCOUNTS; APPROVED DEPOSIT ACCOUNTS
(a) The Borrower shall, and shall cause each of its Subsidiaries
that are Loan Parties, to (i) deposit in an Approved Deposit Account all cash
they receive, (ii) not establish or maintain any Securities Account that is not
a Control Account and (iii) not establish or maintain any Deposit Account other
than with a Deposit Account Bank; provided, however, that the Borrower and such
Subsidiaries may (x) maintain payroll, withholding tax and other fiduciary
accounts, (y) maintain accounts with the Collateral Agent and (z) maintain other
accounts as long as the aggregate balance in all such accounts does not exceed
$500,000.
(b) The Borrower shall, and shall cause each of its Subsidiaries, to
(i) instruct each Account Debtor or other Person obligated to make a payment to
any of them under any Account or General Intangible to make payment, or to
continue to make payment, to an Approved Deposit Account and (ii) deposit in an
Approved Deposit Account immediately upon
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receipt all Proceeds of such Accounts and General Intangibles received by the
Borrower or any of their Subsidiaries from any other Person.
(c) In the event (i) the Borrower, any Subsidiary of the Borrower or
any Deposit Account Bank shall, after the date hereof, terminate an agreement
with respect to the maintenance of an Approved Deposit Account for any reason,
(ii) the Administrative Agent shall demand such termination as a result of the
failure of a Deposit Account Bank to comply with the terms of the applicable
Deposit Account Control Agreement or (iii) the Administrative Agent determines
in its sole discretion that the financial condition of a Deposit Account Bank
has materially deteriorated, the Borrower shall, and shall cause each Subsidiary
of the Borrower to, notify all of their respective obligors that were making
payments to such terminated Approved Deposit Account to make all future payments
to another Approved Deposit Account.
(d) In the event (i) the Borrower, any Subsidiary of the Borrower or
any Approved Securities Intermediary shall, after the date hereof, terminate an
agreement with respect to the maintenance of a Control Account for any reason,
(ii) the Administrative Agent shall demand such termination as a result of the
failure of an Approved Securities Intermediary to comply with the terms of the
applicable Securities Account Control Agreement or (iii) the Administrative
Agent determines in its sole discretion that the financial condition of an
Approved Securities Intermediary has materially deteriorated, the Borrower
shall, and shall cause each Subsidiary of the Borrower to, notify all of its
obligors that were making payments to such terminated Control Account to make
all future payments to another Control Account.
(e) The Administrative Agent may (or direct the Collateral Agent to)
establish one or more Cash Collateral Accounts with such depositaries and
Securities Intermediaries as it in its sole discretion shall determine. The
Borrower agrees that each such Cash Collateral Account shall meet the
requirements of the definition of "Cash Collateral Account". Without limiting
the foregoing, funds on deposit in any Cash Collateral Account may be invested
(but the Collateral Agent shall be under no obligation to make any such
investment) in Cash Equivalents at the direction of the Administrative Agent
and, except during the continuance of an Event of Default, the Administrative
Agent agrees with the Borrower to issue Entitlement Orders (or to cause the
Collateral Agent to issue Entitlement Orders) for such investments in Cash
Equivalents as requested by the Borrower; provided, however, that neither the
Administrative Agent nor the Collateral Agent shall have any responsibility for,
or bear any risk of loss of, any such investment or income thereon. None of the
Borrower, any Subsidiary of the Borrower or any other Loan Party or Person
claiming on behalf of or through the Borrower, any Subsidiary of the Borrower or
any other Loan Party shall have any right to demand payment of any funds held in
any Cash Collateral Account at any time prior to the termination of all
outstanding Letters of Credit and the payment in full of all then outstanding
and payable monetary Obligations. The Administrative Agent shall apply (or cause
the Collateral Agent to apply) all funds on deposit in a Cash Collateral Account
as provided in Section 2.9(c) (Mandatory Prepayments).
(f) The requirements of this Section 7.12 shall not apply to any
Excluded Foreign Subsidiary.
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SECTION 7.13 LANDLORD WAIVERS AND BAILEE'S LETTERS
The Borrower shall, and shall cause each of its Subsidiaries (other
than Excluded Foreign Subsidiaries) to, use commercially reasonable efforts to
deliver such Landlord Waivers and Bailee's Letters as the Administrative Agent
shall reasonably request.
SECTION 7.14 REAL PROPERTY
(a) The Borrower shall, and shall cause each of its Subsidiaries
(other than Excluded Foreign Subsidiaries) to, (i) comply in all material
respects with all of their respective obligations under all of their respective
Leases now or hereafter held respectively by them, including the Leases set
forth on Schedule 4.19 (Real Property), (ii) not modify, amend, cancel, extend
or otherwise change in any materially adverse manner any term, covenant or
condition of any such Lease, (iii) not assign or sublet any other Lease if such
assignment or sublet would have a Material Adverse Effect, (iv) provide the
Administrative Agent with a copy of each notice of default under any Lease
received by the Borrower or any Subsidiary of the Borrower (other than Excluded
Foreign Subsidiaries) immediately upon receipt thereof and deliver to the
Administrative Agent a copy of each notice of default sent by the Borrower or
any Subsidiary of the Borrower (other than Excluded Foreign Subsidiaries) under
any Lease simultaneously with its delivery of such notice under such Lease and
(v) notify the Administrative Agent at least 14 days prior to the date the
Borrower or any Subsidiary (other than Excluded Foreign Subsidiaries) takes
possession of, or becomes liable under, any new leased premises or Lease,
whichever is earlier.
(b) At least 15 Business Days prior to (i) entering into any Lease
(other than a renewal of an existing Lease) for the principal place of business
and chief executive office of the Borrower or any Guarantor or any other Lease
(including any renewal) in which the Dollar Equivalent of the annual rental
payments are anticipated to equal or exceed $1,000,000 or (ii) acquiring any
material owned Real Property, the Borrower shall, and shall cause such Guarantor
to, provide the Administrative Agent written notice thereof and, upon written
request of the Administrative Agent, the Borrower shall, and shall cause such
Guarantor to provide Phase I environmental reports on such Real Property or, as
the case may be, the Real Property subject to such Lease showing no condition
that could give rise to material Environmental Liabilities and Costs.
(c) To the extent not previously delivered to the Administrative
Agent, upon written request of the Administrative Agent, the Borrower shall, and
shall cause each Guarantor to, execute and deliver to the Administrative Agent,
for the benefit of the Secured Parties, promptly and in any event not later than
45 days after receipt of such notice (or, if such notice is given by the
Administrative Agent prior to the acquisition of such Real Property or Lease,
immediately upon such acquisition), a Mortgage on any Real Property or Lease of
the Borrower or such Guarantor, together with (i) if requested by the
Administrative Agent and such Real Property is located in the United States or
Canada or is a Lease of Real Property located in the United States or Canada,
all Mortgage Supporting Documents relating thereto or (ii) otherwise, documents
similar to Mortgage Supporting Documents deemed by the Administrative Agent to
be appropriate in the applicable jurisdiction to obtain the equivalent in such
jurisdiction of a first-priority mortgage on such Real Property or Lease.
(d) Within 60 days after the Closing Date or such later date as may
be agreed to by the Administrative Agent, the Borrower shall cause Real Property
set forth on Schedule 7.14 (Real Property Mortgages) to be subject to a
Mortgage, in form and substance satisfactory to
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the Administrative Agent in its sole discretion, together with all Mortgage
Supporting Documents relating thereto.
SECTION 7.15 POST CLOSING ITEMS
(a) The Borrower shall, and shall cause its Thai Subsidiary, (A)(x)
within five (5) Business Days after Closing Date to repay all existing
Indebtedness of the Thai Subsidiary owing to Standard Charter Bank and (y)
within ten (10) Business Days after Closing Date to cancel the Thai Letter of
Credit and (B) within 5 Business Days of Closing Date to deliver to the
Collateral Agent the Thai Intercompany Note (as defined in Section 8.03(e)(iii),
endorsed in blank, and delivered by a Responsible Officer of the Borrower.
(b) The Borrower shall, and shall cause the Specified Canadian
Subsidiaries, (A) within 20 days of the Closing Date to terminate and discharge
all existing Liens set forth on Schedule 7.15(b) (Existing Canadian Liens) to
the extent such Liens are not permitted under the Canadian Collateral Documents
and shall use commercially reasonable efforts to obtain and deliver to the
Collateral Agent within 20 days releases, waivers, acknowledgements, discharges
or other similar instruments (in form and substance satisfactory to the
Administrative Agent) from the parties set forth on Schedule 7.15(b) in
connection with the Liens set forth on Schedule 7.15(b)(Existing Canadian
Liens), to the extent such Liens are permitted under the Canadian Collateral
Documents and (B) to use commercially reasonable efforts to deliver to the
Collateral Agent, as soon as reasonably practicable and in any event within 20
days, control account agreements required by Section 7.11 which were not
delivered on the Closing Date.
(c) The Borrower shall, and shall cause its Subsidiaries, to use
commercially reasonable efforts to deliver all Landlord Waivers and Bailee's
Letters set forth on Schedule 7.15(c) (Landlord Waivers and Bailee's Letters) to
the Collateral Agent; provided; however, in the event that the Borrower and its
Subsidiaries fail to obtain the agreements set forth on Schedule 7.15(c)
(Landlord Waivers and Bailee's Letters) within 30 days after Closing Date, the
Administrative Agent may, in its sole discretion, establish Availability
Reserves which shall not exceed, so long as no Default or Event of Default has
occurred and is continuing, an amount equal to three months rent in respect of
each property.
(d) Within 45 days after the Closing Date, the Borrower shall
deliver to the Collateral Agent the Xxxxxxx-Coffee Series 1995 Bonds issued by
the Xxxxxxx-Coffee Industrial Authority due on December 1, 2010 in accordance
with Section 7.11 hereof, unless the Xxxxxxx Property has been sold prior to
such date pursuant to Section 8.4 (i), and at which time the Borrower shall be
relieved of any obligations to deliver such bonds.
(e) Within 15 days after the Closing Date or such later date as may
be agreed by the Administrative Agent, the Collateral Agent shall have received
an environmental site assessment report for each piece of Real Property subject
to a Mortgage and any Real Property that is part of the Borrowing Base, prepared
by a consultant acceptable to the Administrative Agent and in a form and scope
satisfactory to the Administrative Agent.
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ARTICLE VIII
NEGATIVE COVENANTS
The Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following, as long as any Obligation or any
Revolving Credit Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing:
SECTION 8.1 INDEBTEDNESS
Neither the Borrower nor any of its Subsidiaries shall, directly or
indirectly, create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any Indebtedness except for the following:
(a) the Secured Obligations (other than in respect of Hedging
Contracts) and the Second Lien Secured Obligations;
(b) Indebtedness existing on the date of this Agreement and
disclosed on Schedule 8.1 (Existing Indebtedness), together with any Permitted
Refinancing of any Indebtedness permitted by this clause (b);
(c) Guaranty Obligations incurred by the Borrower or any Guarantor
in respect of Indebtedness of the Borrower or any Guarantor that is otherwise
permitted by this Section 8.1;
(d) Capital Lease Obligations and purchase money Indebtedness
incurred by the Borrower or a Subsidiary of the Borrower to finance the
acquisition of fixed assets, together with any Permitted Refinancing of any
Indebtedness permitted by this clause (d); provided, however, that the Capital
Expenditure related thereto is otherwise permitted by Section 5.3 (Capital
Expenditures) and that the Dollar Equivalent of the aggregate outstanding
principal amount of all such Capital Lease Obligations and purchase money
Indebtedness shall not exceed $5,000,000 at any time;
(e) a Sale and Leaseback Transaction permitted pursuant to Section
8.15(b) (Operating Leases; Sale/Leasebacks), to the extent such transaction
would constitute Indebtedness;
(f) Indebtedness arising from intercompany loans (i) from the
Borrower to any Guarantor, (ii) from any Guarantor to the Borrower or any other
Guarantor, (iii) from any Non-Guarantor Subsidiary to the Borrower or any
Guarantor or (iv) from the Borrower or any Guarantor to any Non-Guarantor
Subsidiary; provided, however, that, in the case of this clause (iv), the
Investment in such intercompany loan to such Non-Guarantor Subsidiary is
permitted under Section 8.3 (Investments);
(g) Indebtedness arising under any performance or surety bond
entered into in the ordinary course of business;
(h) Obligations under Hedging Contracts permitted under Section 8.16
(No Speculative Transactions);
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(i) Indebtedness (not otherwise permitted under this Section 8.1)
incurred by any Excluded Foreign Subsidiary (that is not a Material Foreign
Subsidiary) and Guaranty Obligations incurred by any Excluded Foreign Subsidiary
in respect of such Indebtedness; provided, however, that the Dollar Equivalent
of the aggregate outstanding principal amount of all such Indebtedness shall not
exceed $10,000,000 at any time;
(j) Indebtedness (not otherwise permitted under this Section 8.1)
incurred by any Brazilian Subsidiary in respect of any Indebtedness owed to any
Governmental Authority in Brazil; provided, however, (i) that the Dollar
Equivalent of the aggregate outstanding principal amount of all such
Indebtedness shall not exceed $25,000,000 at any time and (ii) the proceeds of
such Indebtedness shall be held in cash deposit or money market accounts in the
name of such Brazilian Subsidiary;
(k) Indebtedness (not otherwise permitted under this Section 8.1)
incurred by any Material Foreign Subsidiary; provided, however, that the Dollar
Equivalent of the aggregate outstanding principal amount of all such
Indebtedness shall not exceed $25,000,000 at any time; and
(l) unsecured Indebtedness not otherwise permitted under this
Section 8.1; provided, however, that the Dollar Equivalent of the aggregate
outstanding principal amount of all such unsecured Indebtedness shall not exceed
$5,000,000 at any time.
SECTION 8.2 LIENS, ETC.
Neither the Borrower nor any of its Subsidiaries shall create or
suffer to exist, any Lien upon or with respect to any of their respective
properties or assets, whether now owned or hereafter acquired, or assign, or
permit any of its Subsidiaries to assign, any right to receive income, except
for the following:
(a) Liens created pursuant to the Loan Documents and the Second Lien
Loan Documents;
(b) Liens existing on the date of this Agreement and disclosed on
Schedule 8.2 (Existing Liens);
(c) Customary Permitted Liens on the assets of the Borrower and the
Borrower's Subsidiaries;
(d) purchase money Liens granted by the Borrower or any of its
Subsidiaries (including the interest of a lessor under a Capital Lease and
purchase money Liens to which any property is subject at the time, on or after
the date hereof, of the Borrower's or such Subsidiary's acquisition thereof)
securing Indebtedness permitted under Section 8.1(d) (Indebtedness) and limited
in each case to the property purchased with the proceeds of such purchase money
Indebtedness or subject to such Capital Lease;
(e) any Lien securing any Permitted Refinancing of any Indebtedness
secured by any Lien permitted by clause (b) or (d) above or this clause (e)
without any change in the assets subject to such Lien and to the extent such
Permitted Refinancing is permitted by Section 8.1(e) (Indebtedness);
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(f) Liens in favor of lessors securing operating leases or, to the
extent such transactions create a Lien hereunder, sale and leaseback
transactions, in each case to the extent such operating leases or sale and
leaseback transactions are permitted hereunder;
(g) Liens securing any Indebtedness of Excluded Foreign Subsidiaries
permitted under Section 8.1(b), (i), (j) or (k); and
(h) Liens not otherwise permitted by the foregoing clauses of this
Section 8.2 securing obligations or other liabilities of any Loan Party;
provided, however, that the Dollar Equivalent of the aggregate outstanding
amount of all such obligations and liabilities shall not exceed $1,000,000 at
any time.
SECTION 8.3 INVESTMENTS
Neither the Borrower nor any of its Subsidiaries shall make or
maintain, directly or indirectly, any Investment except for the following:
(a) Investments existing on the date of this Agreement and disclosed
on Schedule 8.3 (Existing Investments);
(b) Investments in cash and Cash Equivalents; provided, however,
that such Investments shall be made in compliance with Section 7.12(a) (Control
Accounts; Approved Deposit Accounts);
(c) Investments in payment intangibles, chattel paper (each as
defined in the UCC) and Accounts, notes receivable and similar items arising or
acquired in the ordinary course of business consistent with the past practice of
the Borrower and its Subsidiaries;
(d) Investments received in settlement of amounts due to the
Borrower or any Subsidiary of the Borrower effected in the ordinary course of
business;
(e) Investments by (i) the Borrower in any Guarantor or any
Guarantor in the Borrower or any other Guarantor, (ii) any Non-Guarantor
Subsidiary of the Borrower in the Borrower or any other Subsidiary of the
Borrower, (iii) the Borrower in loans made to the Thai Subsidiary in the
aggregate principal amount of $10,000,000; provided, however, that such loans
are evidenced by an intercompany note on terms acceptable to the Administrative
Agent to be pledged in favor of the Collateral Agent pursuant to the Pledge and
Security Agreement (the "Thai Intercompany Note"), (iv) the Borrower or any
Guarantor in a Non-Guarantor Subsidiary or a Permitted Joint Venture; provided,
however, that the Dollar Equivalent of the aggregate outstanding amount of all
Investments permitted pursuant to this clause (iv) shall not exceed $3,000,000
in any Fiscal Year and $10,000,000 in the aggregate at any time;
(f) loans or advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business as presently
conducted other than any loans or advances that would be in violation of Section
402 of the Xxxxxxxx-Xxxxx Act; provided, however, that the Dollar Equivalent of
the aggregate principal amount of all loans and advances permitted pursuant to
this clause (f) shall not exceed $500,000 at any time;
(g) Guaranty Obligations permitted by Section 8.1 (Indebtedness);
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(h) Investments by Excluded Foreign Subsidiaries not otherwise
permitted hereby; provided, however, that the Dollar Equivalent of the aggregate
outstanding amount of all such Investments shall not exceed $3,000,000 in any
Fiscal Year and $10,000,000 in the aggregate at any time; and
(i) Investments not otherwise permitted hereby; provided, however,
that the Dollar Equivalent of the aggregate outstanding amount of all such
Investments shall not exceed $1,000,000 at any time.
SECTION 8.4 SALE OF ASSETS
Neither the Borrower nor any of its Subsidiaries (other than
Excluded Foreign Subsidiaries) shall sell, convey, transfer, lease or otherwise
dispose of, any of their respective assets or any interest therein (including
the sale or factoring at maturity or collection of any accounts) to any Person,
or permit or suffer any other Person to acquire any interest in any of their
respective assets or, except in the case of the Borrower, issue or sell any
shares of their Stock or any Stock Equivalents (any such disposition being an
"Asset Sale"), except for the following:
(a) the sale or disposition of Cash Equivalents or Inventory, in
each case in the ordinary course of business;
(b) the sale or disposition of Equipment that has become obsolete or
is replaced in the ordinary course of business;
(c) (i) a true lease or sublease of Real Property not constituting
Indebtedness and not constituting a Sale and Leaseback Transaction and (ii) a
sale of assets pursuant to a Sale and Leaseback Transaction, in each case as
permitted under Section 8.15 (Operating Leases; Sale/Leasebacks);
(d) assignments and licenses of intellectual property of the
Borrower and its Subsidiaries in the ordinary course of business;
(e) any Asset Sale to the Borrower or any Guarantor;
(f) as long as no Default or Event of Default is continuing or would
result therefrom, any other Asset Sale for Fair Market Value, payable in cash
upon such sale; provided, however, that with respect to any such Asset Sale
pursuant to this clause (f), (i) the Dollar Equivalent of the aggregate
consideration received during any Fiscal Year for all such Asset Sales shall not
exceed $5,000,000 and (ii) an amount equal to all Net Cash Proceeds of such
Asset Sale are applied to the payment of the Obligations as set forth in, and to
the extent required by, Section 2.9 (Mandatory Prepayments);
(g) as long as no Default or Event of Default is continuing or would
result therefrom, an Asset Sale for Fair Market Value payable in cash in respect
of the Stock or assets of the Little Giant Pump Company; provided, however, that
such (i) Asset Sale is consummated on or prior to July 31, 2006 and (ii) the Net
Cash Proceeds from such sale are applied to the Obligations as set forth in, and
to the extent required by, Section 2.9(a);
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(h) the sale of (x) certain Investment Property set forth on
Schedule 8.4(a) in an aggregate Net Cash Proceeds of which shall not exceed
$500,000 and (y) the Borrower's Investments in Kulthorn Xxxxx, so long as each
sale in clauses (x) and (y) are consummated on or prior to July 31, 2006; and
(i) so long as no Default or Event of Default is continuing or would
result from any sale hereunder, and so long as an Asset Sale is made for Fair
Market Value, payable in cash, the sale of certain Real Property set forth on
Schedule 8.4(b);
SECTION 8.5 RESTRICTED PAYMENTS
Neither the Borrower nor any of its Subsidiaries shall declare,
order, pay, make or set apart any sum for any Restricted Payment except for the
following:
(a) Restricted Payments by any Subsidiary of the Borrower made
directly or indirectly to the Borrower or any Guarantor;
(b) dividends and distributions declared and paid on the common
Stock of the Borrower and payable only in common Stock of the Borrower; and
(c) as long as no Default or Event of Default is continuing or would
result therefrom, dividends and distributions declared and paid in cash on the
common Stock of the Borrower at any time after December 31, 2006; provided,
however, that, after giving effect to such Restricted Payment and any payment
made pursuant to Section 8.6(b)(vi) (Prepayment and Cancellation of
Indebtedness), (x) the Available Credit is greater than $100,000,000, (y) the
Borrower shall be in compliance with Section 5.1 (Minimum Fixed Charge Coverage
Ratio) on a Pro Forma Basis for the most recent Fiscal Quarter with respect to
which a Compliance Certificate has been delivered pursuant to Section 6.1(d)
(Compliance Certificate) and (z) the ratio of (A) the sum of the Secured
Obligations and the Second Lien Secured Obligations to (B) EBITDA for the four
Fiscal Quarters most recently ended prior to such payment shall not be greater
than 3:1.
SECTION 8.6 PREPAYMENT AND CANCELLATION OF INDEBTEDNESS
(a) Neither the Borrower nor any of its Subsidiaries (other than
Excluded Foreign Subsidiaries) shall cancel any claim or Indebtedness owed to
any of them except (i) in the ordinary course of business consistent with past
practice and (ii) in respect of intercompany Indebtedness among the Borrower and
the Guarantors.
(b) Neither the Borrower nor any of its Subsidiaries shall prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any subordination
terms of, any Indebtedness; provided, however, the Borrower and each Subsidiary
of the Borrower may (i) prepay the Obligations in accordance with the terms of
this Agreement and repay the Second Lien Secured Obligations in accordance with
the terms of the Second Lien Credit Agreement, (ii) make regularly scheduled or
otherwise required repayments or redemptions of Indebtedness, (iii) prepay
Indebtedness under the Existing Credit Agreement, the Senior Guaranteed Notes
and the IRB Documents with the proceeds of the initial Borrowings hereunder,
(iv) prepay any Indebtedness payable to the Borrower by any of its Subsidiaries,
(v) renew, extend, refinance and refund Indebtedness, as long as such renewal,
extension, refinancing or refunding is permitted under Section 8.1(e)
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(Indebtedness), (vi) prepay Indebtedness of Excluded Foreign Subsidiaries
provided that such prepayment is made by an Excluded Foreign Subsidiary and
(vii) as long as no Default or Event of Default is continuing or would result
therefrom, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof any Indebtedness; provided, however, that, after
giving effect to such payment and any Restricted Payment made pursuant to
Section 8.5(c) (Restricted Payments), the Available Credit is greater than
$75,000,000 (or, if such prepayment is made with Net Cash Proceeds of the Asset
Sale permitted under Section 8.4(g) after giving effect to any mandatory
prepayment of such proceeds required under Section 2.9(a), $75,000,000).
SECTION 8.7 RESTRICTION ON FUNDAMENTAL CHANGES
Neither the Borrower nor any of its Subsidiaries shall, (a) (i)
merge with any Person, (ii) consolidate with any Person, (iii) acquire all or
substantially all of the Stock or Stock Equivalents of any Person or (iv)
acquire all or substantially all of the assets of any Person or all or
substantially all of the assets constituting the business of a division, branch
or other unit operation of any Person, (b) enter into any joint venture or
partnership with any Person unless the Investment is in a Permitted Joint
Venture permitted under Section 8.3(e) and Section 8.3(h) (Investments) or (c)
acquire or create any Subsidiary unless, after giving effect to such creation or
acquisition, such Subsidiary is a Wholly-Owned Subsidiary of the Borrower or
such Subsidiary, the Borrower or such Subsidiary is in compliance with Section
7.11 (Additional Collateral and Guaranties) and the Investment in such
Subsidiary is permitted under Section 8.3(e) and Section 8.3(h) (Investments);
provided, however, clauses (b) and (c) above shall not apply to Excluded Foreign
Subsidiaries. Notwithstanding the foregoing, nothing contained herein shall
restrict, prohibit or otherwise affect the ability of the Borrower to effect and
pursue the Borrower's ongoing efforts in connection with the institution and
pendancy of the liquidation of Tecumseh Italy as long as the Borrower is
diligently pursuing the dissolution or liquidation of Tecumseh Italy..
SECTION 8.8 CHANGE IN NATURE OF BUSINESS
Neither the Borrower nor any of its Subsidiaries shall make any
material change in the nature or conduct of its business as carried on at the
date hereof.
SECTION 8.9 TRANSACTIONS WITH AFFILIATES
Neither the Borrower nor any of its Subsidiaries shall, except as
otherwise expressly permitted herein, do any of the following: (a) make any
Investment in an Affiliate of the Borrower that is not a Subsidiary of the
Borrower, (b) transfer, sell, lease, assign or otherwise dispose of any asset to
any Affiliate of the Borrower that is not a Subsidiary of the Borrower, (c)
merge into or consolidate with or purchase or acquire assets from any Affiliate
of the Borrower that is not a Subsidiary of the Borrower, (d) repay any
Indebtedness to any Affiliate of the Borrower that is not a Subsidiary of the
Borrower or (e) enter into any other transaction directly or indirectly with or
for the benefit of any Affiliate of the Borrower that is not a Guarantor
(including guaranties and assumptions of obligations of any such Affiliate),
except for, in the case of this clause (e), (i) transactions in the ordinary
course of business on a basis no less favorable to the Borrower or, as the case
may be, such Subsidiary thereof as would be obtained in a comparable arm's
length transaction with a Person not an Affiliate thereof and (ii) salaries and
other director or employee compensation to officers or directors of the Borrower
or any of its Subsidiaries.
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SECTION 8.10 LIMITATIONS ON RESTRICTIONS ON SUBSIDIARY
DISTRIBUTIONS; NO NEW NEGATIVE PLEDGE
Except pursuant to the Loan Documents, the Second Lien Loan
Documents and any agreements governing Indebtedness permitted by Section
8.1(b),(d),(e), and (in respect of Liens securing Indebtedness permitted under
Section 8.1(i),and Section 8.1(k)) (Indebtedness) (in the case of agreements
permitted by such clauses, any prohibition or limitation shall only be effective
against the assets financed thereby), neither the Borrower nor any of its
Subsidiaries shall (a) agree to enter into or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of such Subsidiary to pay dividends or make any other distribution or transfer
of funds or assets or make loans or advances to or other Investments in, or pay
any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower
or (b) enter into or suffer to exist or become effective any agreement
prohibiting or limiting the ability of the Borrower or any Subsidiary of the
Borrower to create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, to secure
the Obligations, including any agreement requiring any other Indebtedness or
Contractual Obligation to be equally and ratably secured with the Obligations.
SECTION 8.11 MODIFICATION OF CONSTITUENT DOCUMENTS
Neither the Borrower nor any of its Subsidiaries shall change its
capital structure (including in the terms of its outstanding Stock) or otherwise
amend its Constituent Documents, except for changes and amendments that do not
materially affect the rights and privileges of the Borrower or any Subsidiary of
the Borrower and do not materially affect the interests of the Secured Parties
under the Loan Documents or in the Collateral.
SECTION 8.12 MODIFICATION OF DEBT AGREEMENTS
Except as to any Excluded Foreign Subsidiary, neither the Borrower
nor any of its Subsidiaries shall change or amend the terms of any agreement or
instrument governing or evidencing any Indebtedness (other than the Second Lien
Secured Obligations), the outstanding principal amount of which exceeds
$1,000,000 (or any indenture or agreement or other material document entered
into in connection therewith), if the effect of such amendment is to (a)
increase the interest rate on such Indebtedness, (b) change the dates upon which
payments of principal or interest are due on such Indebtedness other than to
extend such dates, (c) change any default or event of default other than to
delete or make less restrictive any default provision therein, or add any
covenant with respect to such Indebtedness, (d) change the subordination
provisions of such Indebtedness, (e) change the redemption or prepayment
provisions of such Indebtedness other than to extend the dates therefor or to
reduce the premiums payable in connection therewith or (f) change or amend any
other term if such change or amendment would materially increase the obligations
of the obligor or confer additional material rights to the holder of such
Indebtedness in a manner adverse to the Secured Parties.
SECTION 8.13 ACCOUNTING CHANGES; FISCAL YEAR
Neither the Borrower nor any of its Subsidiaries shall change its
(a) accounting treatment and reporting practices or tax reporting treatment,
except as required by GAAP or any Requirement of Law and disclosed to the
Lenders and the Administrative Agent or (b) fiscal year.
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SECTION 8.14 MARGIN REGULATIONS
Neither the Borrower nor any of its Subsidiaries shall use all or
any portion of the proceeds of any credit extended hereunder to purchase or
carry margin stock (within the meaning of Regulation U of the Federal Reserve
Board) in contravention of Regulation U of the Federal Reserve Board.
SECTION 8.15 OPERATING LEASES; SALE/LEASEBACKS
(a) Except as disclosed on Schedule 8.1, neither the Borrower nor
any of its Subsidiaries (other than Excluded Foreign Subsidiaries) shall become
or remain liable as lessee or guarantor or other surety with respect to any
operating lease, unless the Dollar Equivalent of the aggregate amount of all
rents paid or accrued under all such operating leases shall not exceed
$5,000,000 in any Fiscal Year.
(b) Except as disclosed on Schedule 8.1, neither the Borrower nor
any of its Subsidiaries (other than Excluded Foreign Subsidiaries) shall enter
into any Sale and Leaseback Transaction if, after giving effect to such sale and
leaseback transaction, the Dollar Equivalent of the aggregate Fair Market Value
of all properties covered by sale and leaseback transactions would exceed
$5,000,000.
SECTION 8.16 NO SPECULATIVE TRANSACTIONS
Neither the Borrower nor any of its Subsidiaries shall engage in any
speculative transaction or in any transaction involving Hedging Contracts except
for the sole purpose of hedging in the normal course of business and consistent
with industry practices.
SECTION 8.17 COMPLIANCE WITH ERISA
Neither the Borrower nor any of its Subsidiaries shall cause or
permit to occur, (a) an event that could result in the imposition of a Lien
under Section 412 of the Code or Section 302 or 4068 of ERISA or (b) ERISA
Events that would have a Material Adverse Effect in the aggregate.
SECTION 8.18 ENVIRONMENTAL
Neither the Borrower nor any of its Subsidiaries shall allow a
Release of any Contaminant in violation of any Environmental Law; provided,
however, that the Borrower or such Subsidiary shall not be deemed in violation
of this Section 8.18 if all Environmental Liabilities and Costs incurred or
reasonably expected to be incurred by the Loan Parties as the consequence of all
such Releases shall not exceed $1,000,000 in the aggregate.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 EVENTS OF DEFAULT
Each of the following events shall be an Event of Default:
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(a) the Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when the same becomes due and payable; or
(b) the Borrower shall fail to pay any interest on any Loan, any fee
under any of the Loan Documents or any other Obligation (other than one referred
to in clause (a) above) and such non-payment continues for a period of three
Business Days after the due date therefor; or
(c) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V (Financial Covenants), Section 6.1
(Financial Statements), 6.2 (Default Notices), 7.1 (Preservation of Corporate
Existence, Etc.), 7.6 (Access), 7.9 (Application of Proceeds), 7.11 (Additional
Collateral and Guaranties)or 7.14 (Real Property) or Article VIII (Negative
Covenants) or (ii) any other term, covenant or agreement contained in this
Agreement or in any other Loan Document if such failure under this clause (ii)
shall remain unremedied for 30 days after the earlier of (A) the date on which a
Responsible Officer of the Borrower becomes aware of such failure and (B) the
date on which written notice thereof shall have been given to the Borrower by
the Administrative Agent or any Lender; or
(e) (i) the Borrower, any other Loan Party or any Material Foreign
Subsidiary shall fail to make any payment on any Indebtedness of the Borrower or
any such Subsidiary (other than the Obligations) or any Guaranty Obligation in
respect of Indebtedness of any other Person, and, in each case, such failure
relates to Indebtedness having a principal amount of $1,000,000 or more, when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), (ii) any other event shall occur
or condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness or (iii) any such
Indebtedness shall become or be declared to be due and payable, or be required
to be prepaid or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(f) (i) the Borrower, any other Loan Party or any Material Foreign
Subsidiary shall generally not pay its debts as such debts become due, shall
admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors, (ii) any proceeding shall be
instituted by or against the Borrower, any other Loan Party or any Material
Foreign Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts, under any Requirement of Law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a custodian, receiver,
trustee or other similar official for it or for any substantial part of its
property; provided, however, that, in the case of any such proceedings
instituted against the Borrower, any other Loan Party or any Material Foreign
Subsidiary (but not instituted by the Borrower, any other Loan Party or any
Material Foreign Subsidiary), either such proceedings shall remain undismissed
or unstayed for a period of 60 days or more or any action sought in such
proceedings shall occur or (iii) the Borrower, any other Loan Party or any
Material Foreign
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Subsidiary shall take any corporate action to authorize any action set forth in
clauses (i) and (ii) above; or
(g) one or more judgments or orders (or other similar process)
involving, in the case of money judgments, an aggregate amount whose Dollar
Equivalent exceeds $1,000,000, to the extent not covered by insurance, shall be
rendered against one or more of the Borrower, any other Loan Parties or any
Material Foreign Subsidiary and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 20 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(h) an ERISA Event shall occur and the Dollar Equivalent of the
amount of all liabilities and deficiencies resulting therefrom, whether or not
assessed, exceeds $1,000,000 in the aggregate; or
(i) any provision of this Agreement, any Revolving Credit Note, any
Collateral Document or any other material Loan Document, after delivery thereof
shall for any reason fail or cease to be valid and binding on, or enforceable
against, any Loan Party party thereto, or any Loan Party shall so state in
writing; or
(j) any Collateral Document shall for any reason fail or cease to
create a valid and enforceable Lien on any Collateral purported to be covered
thereby or, except as permitted by the Loan Documents, such Lien shall fail or
cease to be a perfected and first priority Lien, or any Loan Party shall so
state in writing, in each case to the extent that such failure or cessation
relates to any Collateral with an aggregate value in excess of $250,000; or
(k) there shall occur any Change of Control; or
(l) one or more of the Borrower, any other Loan Party or any
Material Foreign Subsidiary shall have entered into one or more consent or
settlement decrees or agreements or similar arrangements with a Governmental
Authority or one or more judgments, orders, decrees or similar actions shall
have been entered against one or more of the Borrower, any other Loan Party or
any Material Foreign Subsidiary based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower, any other Loan Party or any Material Foreign
Subsidiary of the Borrower is likely to incur Environmental Liabilities and
Costs whose Dollar Equivalent exceeds $1,000,000 in the aggregate that were not
reflected in the Projections or the Financial Statements delivered pursuant to
Section 4.4 (Financial Statements) prior to the date hereof.
SECTION 9.2 REMEDIES
During the continuance of any Event of Default, the Administrative
Agent (a) may, and, at the request of the Requisite Lenders, shall, by notice to
the Borrower declare that all or any portion of the Revolving Credit Commitments
be terminated, whereupon the obligation of each Revolving Credit Lender to make
any Loan and each Issuer to Issue any Letter of Credit shall immediately
terminate and (b) may, and, at the request of the Requisite Lenders, shall, by
notice to the Borrower, declare the Loans, all interest thereon and all other
amounts and Obligations payable under this Agreement to be forthwith due and
payable, whereupon the Loans, all such interest and all such amounts and
Obligations shall become and be forthwith due and
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payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of the Events of Default specified in Section 9.1(f) (Events
of Default), (x) the Revolving Credit Commitments of each Revolving Credit
Lender to make Loans and the commitments of each Revolving Credit Lender and
Issuer to Issue or participate in Letters of Credit shall each automatically be
terminated and (y) the Loans, all such interest and all such amounts and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
with or without the request of the Requisite Lenders, each of the Administrative
Agent and the Collateral Agent may exercise any remedies provided for by the
Collateral Documents and the Intercreditor Agreement in accordance with the
terms thereof or any other remedies provided by applicable law.
SECTION 9.3 ACTIONS IN RESPECT OF LETTERS OF CREDIT
At any time (i) upon the Revolving Credit Termination Date, (ii)
after the Revolving Credit Termination Date when the aggregate funds on deposit
in Cash Collateral Accounts shall be less than 105% of the Letter of Credit
Obligations, or (iii) as may be required by Section 2.9(a) (Mandatory
Prepayments), the Borrower shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office referred to in Section 11.8
(Notices, Etc.), for deposit in a Cash Collateral Account, (x) in the case of
clauses (i) and (ii) above, the amount required to that, after such payment, the
aggregate funds on deposit in the Cash Collateral Accounts equals or exceeds
105% of the sum of all outstanding Letter of Credit Obligations and (y) in the
case of clause (iii) above, the amount required by Section 2.9(a) (Mandatory
Prepayments). Subject to the Intercreditor Agreement, the Administrative Agent
may, from time to time after funds are deposited in any Cash Collateral Account,
apply (or cause the Collateral Agent to apply) funds then held in such Cash
Collateral Account to the payment of any amounts, in accordance with Section
2.9(d) (Mandatory Prepayments) and Section 2.13(g) (Payments and Computations),
as shall have become or shall become due and payable by the Borrower to the
Issuers or Lenders in respect of the Letter of Credit Obligations. The
Administrative Agent shall promptly give written notice of any such application;
provided, however, that the failure to give such written notice shall not
invalidate any such application.
SECTION 9.4 RESCISSION
If at any time after termination of the Revolving Credit Commitments
or acceleration of the maturity of the Loans, the Borrower shall pay all arrears
of interest and all payments on account of principal of the Loans and
Reimbursement Obligations that shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified herein) and all Events of Default and
Defaults (other than non-payment of principal of and accrued interest on the
Loans due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to Section 11.1 (Amendments, Waivers, Etc.), then upon the
written consent of the Requisite Lenders and written notice to the Borrower, the
termination of the Revolving Credit Commitments or the acceleration and their
consequences may be rescinded and annulled; provided, however, that such action
shall not affect any subsequent Event of Default or Default or impair any right
or remedy consequent thereon. The provisions of the preceding sentence are
intended merely to bind the Lenders and the Issuers to a decision that may be
made at the election of the Requisite Lenders, and such provisions are not
intended to benefit the Borrower and do not give the Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
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ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION
(a) Each Lender and each Issuer hereby appoints Citicorp as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party, to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents and,
in the case of the Collateral Documents, to act as agent for the Lenders,
Issuers and the other Secured Parties under such Collateral Documents.
(b) Each Lender and each Issuer hereby acknowledges the appointment
of Citicorp as the Collateral Agent pursuant to the Intercreditor Agreement and
hereby authorizes the Administrative Agent to execute the Intercreditor
Agreement and the Collateral Agent to take such action as agent on its behalf
and to exercise such powers as set forth in the Intercreditor Agreement and in
the Collateral Documents.
(c) As to any matters not expressly provided for by this Agreement
and the other Loan Documents (including enforcement or collection), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding upon all Lenders
and each Issuer; provided, however, that the Administrative Agent shall not be
required to take any action that (i) the Administrative Agent in good faith
believes exposes it to personal liability unless the Administrative Agent
receives an indemnification satisfactory to it from the Lenders and the Issuers
with respect to such action or (ii) is contrary to this Agreement, the
Intercreditor Agreement or applicable law. The Administrative Agent agrees to
give to each Lender and each Issuer prompt notice of each notice given to it by
any Loan Party pursuant to the terms of this Agreement or the other Loan
Documents.
(d) In performing its functions and duties hereunder and under the
other Loan Documents, the Administrative Agent is acting solely on behalf of the
Lenders and the Issuers except to the limited extent provided in Section 2.7(c)
(Evidence of Debt), and its duties are entirely administrative in nature. The
Administrative Agent does not assume and shall not be deemed to have assumed any
obligation other than as expressly set forth herein and in the other Loan
Documents or any other relationship as the agent, fiduciary or trustee of or for
any Lender, Issuer or holder of any other Obligation. The Administrative Agent
may perform any of its duties under any Loan Document by or through its agents
or employees.
(e) The Arrangers, Documentation Agent and the Syndication Agent
shall have no obligations or duties whatsoever in such capacity under this
Agreement or any other Loan Document and shall incur no liability hereunder or
thereunder in such capacity.
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(f) The Administrative Agent agrees to promptly furnish to the
Lenders financial statements, field examination reports and Updated Appraisals
obtained by the Administrative Agent pursuant to Section 6 of this Agreement.
SECTION 10.2 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
None of the Administrative Agent, any of its Affiliates or any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Revolving
Credit Note as its holder until such Revolving Credit Note has been assigned in
accordance with Section 11.2 (Assignments and Participations), (b) may rely on
the Register to the extent set forth in Section 2.7 (Evidence of Debt), (c) may
consult with legal counsel (including counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (d)
makes no warranty or representation to any Lender or Issuer and shall not be
responsible to any Lender or Issuer for any statements, warranties or
representations made by or on behalf of the Borrower or any of its Subsidiaries
in or in connection with this Agreement or any other Loan Document, (e) shall
not have any duty to ascertain or to inquire either as to the performance or
observance of any term, covenant or condition of this Agreement or any other
Loan Document, as to the financial condition of any Loan Party or as to the
existence or possible existence of any Default or Event of Default, (f) shall
not be responsible to any Lender or Issuer for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto and (g)
shall incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which writing may be a telecopy or electronic mail) or any telephone
message believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 10.3 POSTING OF APPROVED ELECTRONIC COMMUNICATIONS
(a) Each of the Lenders, the Issuers and the Borrower agree, and the
Borrower shall cause each Guarantor to agree, that the Administrative Agent may,
but shall not be obligated to, make the Approved Electronic Communications
available to the Lenders and Issuers by posting such Approved Electronic
Communications on IntraLinks(TM) or a substantially similar electronic platform
chosen by the Administrative Agent to be its electronic transmission system (the
"Approved Electronic Platform").
(b) Although the Approved Electronic Platform and its primary web
portal are secured with generally-applicable security procedures and policies
implemented or modified by the Administrative Agent from time to time
(including, as of the Closing Date, a dual firewall and a User ID/Password
Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the
Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders,
the Issuers and the Borrower acknowledges and agrees, and the Borrower shall
cause each Guarantor to acknowledge and agree, that the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such
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distribution. In consideration for the convenience and other benefits afforded
by such distribution and for the other consideration provided hereunder, the
receipt and sufficiency of which is hereby acknowledged, each of the Lenders,
the Issuers and the Borrower hereby approves, and the Borrower shall cause each
Guarantor to approve, distribution of the Approved Electronic Communications
through the Approved Electronic Platform and understands and assumes, and the
Borrower shall cause each Guarantor to understand and assume, the risks of such
distribution.
(c) THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC
COMMUNICATIONS ARE PROVIDED "AS IS" AND "AS AVAILABLE". NONE OF THE
ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (THE "AGENT
AFFILIATES") WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED
ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY
DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM
AND THE APPROVED ELECTRONIC COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
AFFILIATES IN CONNECTION WITH THE APPROVED ELECTRONIC PLATFORM OR THE APPROVED
ELECTRONIC COMMUNICATIONS.
(d) Each of the Lenders, the Issuers, and the Borrower agree, and
the Borrower shall cause each Guarantor to agree, that the Administrative Agent
may, but (except as may be required by applicable law) shall not be obligated
to, store the Approved Electronic Communications on the Approved Electronic
Platform in accordance with the Administrative Agent's generally-applicable
document retention procedures and policies.
SECTION 10.4 THE ADMINISTRATIVE AGENT INDIVIDUALLY
With respect to its Ratable Portion, Citicorp shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Revolving Credit Lenders", "Requisite Lenders" and
any similar terms shall, unless the context clearly otherwise indicates,
include, without limitation, the Administrative Agent in its individual capacity
as a Lender, a Revolving Credit Lender or as one of the Requisite Lenders.
Citicorp and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with, any Loan
Party as if Citicorp were not acting as the Administrative Agent.
SECTION 10.5 LENDER CREDIT DECISION
Each Lender and each Issuer acknowledges that it shall,
independently and without reliance upon the Administrative Agent or any other
Lender, conduct its own independent investigation of the financial condition and
affairs of the Borrower and each other Loan Party in connection with the making
and continuance of the Loans and with the issuance of the Letters of Credit.
Each Lender and each Issuer also acknowledges that it shall, independently and
without reliance upon the Administrative Agent 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 other Loan Documents. Except for
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documents expressly required by any Loan Document to be transmitted by the
Administrative Agent to the Lenders or the Issuers, the Administrative Agent
shall not have any duty or responsibility to provide any Lender or any Issuer
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
Loan Party or any Affiliate of any Loan Party that may come into the possession
of the Administrative Agent or any Affiliate thereof or any employee or agent of
any of the foregoing.
SECTION 10.6 INDEMNIFICATION
Each Revolving Credit Lender agrees to indemnify the Administrative
Agent and each of its Affiliates, and each of their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Borrower), from and against such Revolving Credit Lender's aggregate Ratable
Portion of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including fees,
expenses and disbursements of financial and legal advisors) of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against, the
Administrative Agent or any of its Affiliates, directors, officers, employees,
agents and advisors in any way relating to or arising out of this Agreement or
the other Loan Documents or any action taken or omitted by the Administrative
Agent under this Agreement or the other Loan Documents; provided, however, that
no Revolving Credit Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's or such
Affiliate's gross negligence or willful misconduct. Without limiting the
foregoing, each Revolving Credit Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including fees, expenses and disbursements of financial and legal advisors)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement or the
other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower or another Loan Party.
SECTION 10.7 SUCCESSOR ADMINISTRATIVE AGENT
(a) The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and shall, immediately
upon giving such notice, be discharged from its duties and obligations under
this Agreement and the other Loan Documents; provided, however, that if the
Person acting as Administrative Agent is not also acting as Second Lien Agent,
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents solely upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent as provided below. Upon any such resignation by the
Administrative Agent, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent selected from among the Lenders. Such appointment shall be
subject to the prior written approval of the Borrower (which approval may not be
unreasonably withheld and shall not be required upon the occurrence and during
the continuance of an Event of Default). Upon the acceptance of any appointment
as Administrative Agent by a successor Administrative Agent, such successor
Administrative Agent shall succeed to, and become vested with, all the rights,
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powers, privileges and duties of the retiring Administrative Agent. The retiring
Administrative Agent shall take such action as may be reasonably necessary to
assign to the successor Administrative Agent its rights as Administrative Agent
under the Loan Documents. At any time after the discharge of a retiring
Administrative Agent from its duties and obligations under this Agreement and
prior to any Person accepting its appointment as a successor Administrative
Agent, the Requisite Lenders shall assume and perform all of the duties of such
retiring Administrative Agent hereunder until such time, if any, as a successor
Administrative Agent shall become the Administrative Agent hereunder. After its
resignation as Administrative Agent hereunder, the retiring Administrative Agent
shall continue to have the benefit of this Article X as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Agreement
and the other Loan Documents.
(b) The Collateral Agent may resign, and a successor Collateral
Agent may be appointed, under the terms and conditions and as set forth in the
Intercreditor Agreement.
SECTION 10.8 CONCERNING THE COLLATERAL AND THE COLLATERAL DOCUMENTS
(a) Each Lender and each Issuer agrees that any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or of the other Loan Documents, and the
exercise by the Administrative Agent or the Requisite Lenders (or, where so
required, such greater proportion) of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders, Issuers and other Secured
Parties. Without limiting the generality of the foregoing, the Administrative
Agent shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders and the Issuers with respect to
all payments and collections arising in connection herewith and with the
Collateral Documents, (ii) execute and deliver each Collateral Document and
accept delivery of each such agreement delivered by the Borrower or any of its
Subsidiaries, (iii) act as collateral agent for the Lenders, the Issuers and the
other Secured Parties for purposes of the perfection of all security interests
and Liens created by such agreements and all other purposes stated therein,
provided, however, that the Administrative Agent hereby appoints, authorizes and
directs each Lender and Issuer to act as collateral sub-agent for the
Administrative Agent, the Lenders and the Issuers for purposes of the perfection
of all security interests and Liens with respect to the Collateral, including
any Deposit Accounts maintained by a Loan Party with, and cash and Cash
Equivalents held by, such Lender or such Issuer, (iv) manage, supervise and
otherwise deal with the Collateral, including the making of Protective Advances
in an aggregate amount not to exceed the lesser of (A) $15,000,000, (B) the
aggregate amount of the unused Revolving Credit Commitments and (c) 10% of the
then applicable Borrowing Base; provided, however, (x) the Loan Parties shall
repay all outstanding Protective Advances no later than 30 days after such
Protective Loans have been made and (y) no Protective Advances shall be made
after the date the Requisite Lenders have informed the Administrative Agent in
writing that no Protective Advances should be made, (v) take such action as is
necessary or desirable to maintain the perfection and priority of the security
interests and Liens created or purported to be created by the Collateral
Documents and (vi) except as may be otherwise specifically restricted by the
terms hereof or of any other Loan Document, exercise all remedies given to the
Administrative Agent, the Lenders, the Issuers and the other Secured Parties
with respect to the Collateral under the Loan Documents relating thereto,
applicable law or otherwise.
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(b) Each of the Administrative Agent, the Lenders and the Issuers
hereby authorizes and directs (i) the Collateral Agent (without any further
notice or consent) to promptly release or subordinate any Lien as set forth in
Section 8 of the Intercreditor Agreement and (ii) the Administrative Agent
(without any further notice or consent) to release any Guarantor if such
Guarantor is dissolved, merged, consolidated, sold or otherwise transferred
(except with or into another Loan Party) in accordance with the terms hereof.
SECTION 10.9 COLLATERAL MATTERS RELATING TO RELATED OBLIGATIONS
The benefit of the Loan Documents and of the provisions of this
Agreement relating to the Collateral shall extend to and be available in respect
of any Secured Obligation arising under any Hedging Contract or Cash Management
Obligation or that is otherwise owed to Persons other than the Administrative
Agent, the Lenders and the Issuers (collectively, "Related Obligations") solely
on the condition and understanding, as among the Administrative Agent and all
Secured Parties, that (a) the Related Obligations shall be entitled to the
benefit of the Loan Documents and the Collateral to the extent expressly set
forth in this Agreement and the other Loan Documents and to such extent the
Administrative Agent shall hold, and have the right and power to act with
respect to, the Guaranty and the Collateral on behalf of and as agent for the
holders of the Related Obligations, but the Administrative Agent is otherwise
acting solely as agent for the Lenders and the Issuers and shall have no
fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other
obligation whatsoever to any holder of Related Obligations, (b) all matters,
acts and omissions relating in any manner to the Guaranty, the Collateral, or
the omission, creation, perfection, priority, abandonment or release of any
Lien, shall be governed solely by the provisions of this Agreement and the other
Loan Documents and no separate Lien, right, power or remedy shall arise or exist
in favor of any Secured Party under any separate instrument or agreement or in
respect of any Related Obligation, (c) each Secured Party shall be bound by all
actions taken or omitted, in accordance with the provisions of this Agreement
and the other Loan Documents, by the Administrative Agent and the Requisite
Lenders, each of whom shall be entitled to act at its sole discretion and
exclusively in its own interest given its own Revolving Credit Commitments and
its own interest in the Loans, Letter of Credit Obligations and other
Obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Secured Party or as to any Related
Obligation and without regard to whether any Related Obligation remains
outstanding or is deprived of the benefit of the Collateral or becomes unsecured
or is otherwise affected or put in jeopardy thereby, (d) no holder of Related
Obligations and no other Secured Party (except the Administrative Agent, the
Lenders and the Issuers, to the extent set forth in this Agreement) shall have
any right to be notified of, or to direct, require or be heard with respect to,
any action taken or omitted in respect of the Collateral or under this Agreement
or the Loan Documents and (e) no holder of any Related Obligation shall exercise
any right of setoff, banker's lien or similar right except to the extent
provided in Section 11.6 (Right of Set-off) and then only to the extent such
right is exercised in compliance with Section 11.7 (Sharing of Payments, Etc.).
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 AMENDMENTS, WAIVERS, ETC.
(a) Except as provided in the Intercreditor Agreement, no amendment
or waiver of any provision of this Agreement or any other Loan Document nor
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be in writing and (x) in the case of any such
waiver or consent signed by the Requisite Lenders (or by the Administrative
Agent with the consent of the Requisite Lenders) and (y) in the case of any
other amendment, by the Requisite Lenders (or by the Administrative Agent with
the consent of the Requisite Lenders ) and the Borrower, and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by each Lender directly affected
thereby, in addition to the Requisite Lenders (or the Administrative Agent with
the consent thereof), do any of the following:
(i) waive any condition specified in Section 3.1 (Conditions
Precedent to Initial Loans and Letters of Credit) or 3.2(b) (Conditions
Precedent to Each Loan and Letter of Credit), except with respect to a
condition based upon another provision hereof, the waiver of which
requires only the concurrence of the Requisite Lenders and, in the case of
the conditions specified in Section 3.1 (Conditions Precedent to Initial
Loans and Letters of Credit), subject to the provisions of Section 3.3
(Determinations of Initial Borrowing Conditions);
(ii) increase the Revolving Credit Commitment of such Lender
or subject such Lender to any additional obligation;
(iii) extend the scheduled final maturity of any Loan owing to
such Lender, or waive, reduce or postpone any scheduled date fixed for the
payment or reduction of principal or interest of any such Loan or fees
owing to such Lender (it being understood that Section 2.9 (Mandatory
Prepayments) does not provide for scheduled dates fixed for payment) or
for the reduction of such Lender's Revolving Credit Commitment;
(iv) reduce, or release the Borrower from its obligations to
repay, the principal amount of any Loan or Reimbursement Obligation owing
to such Lender (other than by the payment or prepayment thereof);
(v) reduce the rate of interest on any Loan or Reimbursement
Obligation outstanding and owing to such Lender or any fee payable
hereunder to such Lender;
(vi) postpone any scheduled date fixed for payment of interest
or fees owing to such Lender or waive any such payment;
(vii) change the aggregate Ratable Portions of Lenders
required for any or all Lenders to take any action hereunder;
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(viii) release all or substantially all of the Collateral
except as provided in Section 10.8(b) (Concerning the Collateral and the
Collateral Documents) or release the Borrower from its payment obligation
to such Lender under this Agreement or the Revolving Credit Notes owing to
such Lender (if any) or release any Guarantor from its obligations under
the Guaranty except in connection with the sale or other disposition of a
Guarantor (or all or substantially all of the assets thereof) permitted by
this Agreement (or permitted pursuant to a waiver or consent of a
transaction otherwise prohibited by this Agreement);
(ix) increase any of the percentages set forth in the
definition of "Advance Rate" above the maximum percentages stated in such
definitions on the date hereof; or
(x) amend Section 2.13(g), Section 10.8(b) (Concerning the
Collateral and the Collateral Documents), Section 11.7 (Sharing of
Payments, Etc.), this Section 11.1, either definition of the terms
"Requisite Lenders" or "Ratable Portion" or Section 8 of the Intercreditor
Agreement or modify any other provision of any Loan Document that would
alter the pro rata sharing or the order of application of payments
required thereby; or
(xi) subordinate any lien or security interest with respect to
any of the Collateral (except as permitted under Section 8 of the
Intercreditor Agreement);
and provided, further, that (x) no amendment, waiver or consent shall, unless in
writing and signed by any Special Purpose Vehicle that has been granted an
option pursuant to Section 11.2(f) (Assignments and Participations), affect the
grant or nature of such option or the right or duties of such Special Purpose
Vehicle hereunder, (y) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent or the Collateral Agent, as applicable,
in addition to the Lenders required above to take such action, affect the rights
or duties of the Administrative Agent or Collateral Agent, as the case may be,
under this Agreement or the other Loan Documents and (z) no amendment, waiver or
consent shall, affect the rights or duties of any Swing Loan Lender under this
Agreement or the other Loan Documents unless in writing and signed by such Swing
Loan Lender in addition to the Lenders required above to take such action; and
provided, further, that the Administrative Agent may, with the consent of the
Borrower, amend, modify or supplement this Agreement to cure any ambiguity,
omission, defect or inconsistency, so long as such amendment, modification or
supplement does not adversely affect the rights of any Lender or any Issuer.
(b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(c) If, in connection with any proposed amendment, modification,
waiver or termination requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained but the consent of other Revolving Credit
Lenders whose consent is required is not obtained (any such Revolving Credit
Lender whose consent is not obtained (other than any Arranger or any of its
Affiliates) as described in this Section 11.1 being referred to as a
"Non-
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Consenting Lender"), then, as long as the Revolving Credit Lender acting as the
Administrative Agent is not a Non-Consenting Lender, at the Borrower's request,
any Eligible Assignee acceptable to the Administrative Agent shall have the
right with the Administrative Agent's consent and in the Administrative Agent's
sole discretion (but shall have no obligation) to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon
the Administrative Agent's request, sell and assign to the Revolving Credit
Lender acting as the Administrative Agent or such Eligible Assignee, all of the
Revolving Credit Commitments, and Revolving Credit Outstandings of such
Non-Consenting Lender for an amount equal to the principal balance of all Loans
held by the Non-Consenting Lender and all accrued and unpaid interest and fees
with respect thereto through the date of sale; provided, however, that such
purchase and sale shall be recorded in the Register maintained by the
Administrative Agent and shall not be effective until (x) the Administrative
Agent shall have received from such Eligible Assignee an agreement in form and
substance satisfactory to the Administrative Agent and the Borrower whereby such
Eligible Assignee shall agree to be bound by the terms hereof and (y) such
Non-Consenting Lender shall have received payments of all Loans held by it and
all accrued and unpaid interest and fees with respect thereto through the date
of the sale. Each Revolving Credit Lender agrees that, if it becomes a
Non-Consenting Lender, it shall execute and deliver to the Administrative Agent
an Assignment an Acceptance to evidence such sale and purchase and shall deliver
to the Administrative Agent any Revolving Credit Note (if the assigning
Revolving Credit Lender's Loans are evidenced by a Revolving Credit Note)
subject to such Assignment and Acceptance; provided, however, that the failure
of any Non-Consenting Lender to execute an Assignment and Acceptance shall not
render such sale and purchase (and the corresponding assignment) invalid and
such assignment shall be recorded in the Register.
SECTION 11.2 ASSIGNMENTS AND PARTICIPATIONS
(a) Each Revolving Credit Lender may sell, transfer, negotiate or
assign to one or more Eligible Assignees all or a portion of its rights and
obligations hereunder (including all of its rights and obligations with respect
to the Revolving Loans, the Swing Loans and the Letters of Credit); provided,
however, that (i) if any such assignment shall be of the assigning Revolving
Credit Lender's Revolving Credit Outstandings and Revolving Credit Commitments,
such assignment shall cover the same percentage of such Revolving Credit
Lender's Revolving Credit Outstandings and Revolving Credit Commitments, (ii)
the aggregate amount being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event (if less than the assignor's entire interest) be less than
$2,000,000 or an integral multiple of $1,000,000 in excess thereof, except, in
either case, (A) with the consent of the Borrower (which consent shall not be
unreasonably withheld or delayed) and the Administrative Agent or (B) if such
assignment is being made to a Lender or an Affiliate or Approved Fund of such
Lender and (iii) if such Eligible Assignee is not, prior to the date of such
assignment, a Lender or an Affiliate or Approved Fund of a Lender, such
assignment shall be subject to the prior consent of the Administrative Agent
(which consents shall not be unreasonably withheld or delayed); and provided,
further, that, notwithstanding any other provision of this Section 11.2, the
consent of the Borrower shall not be required for any assignment occurring when
any Event of Default shall have occurred and be continuing.
(b) Except as otherwise permitted in Section 11.2 (c), the parties
to each such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Revolving Credit Note (if the assigning Revolving Credit
Lender's Loans are evidenced by a Revolving Credit
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Note) subject to such assignment. Upon the execution, delivery, acceptance and
recording in the Register of any Assignment and Acceptance and, other than in
respect of assignments made pursuant to Section 2.17 (Substitution of Lenders)
and Section 11.1(c) (Amendments, Waivers, Etc.), the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount of
$3,500 from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall become a party hereto and, to the
extent that rights and obligations under the Loan Documents have been assigned
to such assignee pursuant to such Assignment and Acceptance, have the rights and
obligations of a Revolving Credit Lender and, if such Revolving Credit Lender
were an Issuer, of such Issuer hereunder and thereunder, (ii) the Revolving
Credit Notes (if any) corresponding to the Loans assigned thereby shall be
transferred to such assignee by notation in the Register and (iii) the assignor
thereunder shall, to the extent that rights and obligations under this Agreement
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except for those surviving the payment in full of the Obligations)
and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Revolving Credit Lender's rights and obligations under the Loan
Documents, such Revolving Credit Lender shall cease to be a party hereto).
(c) Notwithstanding anything contained in Section 11.2 to the
contrary, a Lender may effect a Related Party Assignment without delivering an
Assignment and Acceptance to the Administrative Agent for recordation in the
Register and without payment of the assignment fee referred to in Section
11.2(b) and without delivering any tax forms (provided that should an assignee
party to a Related Party Assignment that is not a Lender deliver an Assignment
and Acceptance for recording, such assignee shall also deliver the applicable
tax forms); provided that (i) the Borrower, the Agents and the other Lenders
shall continue to deal solely and directly with such assigning Lender until such
Assignment and Acceptance has been delivered to the Administrative Agent and
promptly recorded in the Register in accordance with Section 11.2(d), (ii) the
failure of such assigning Lender to deliver an Assignment and Acceptance to the
Administrative Agent shall not affect the legality, validity, or binding effect
of such assignment, and (iii) an Assignment and Acceptance with respect to a
Related Party Assignment shall be effective as of the date specified in such
Assignment and Acceptance and recorded on the Related Party Register. The
Borrower agrees that each assignee party to a Related Party Assignment shall be
entitled to the benefits of Sections 2.14(d), 2.15 and 2.16 and to the same
extent as any other Lender that delivers an Assignment and Acceptance to the
Administrative Agent pursuant to this Section 11.2(c).
(d) The Administrative Agent shall maintain at its address referred
to in Section 11.8 (Notices, Etc.) a copy of each Assignment and Acceptance
delivered to and accepted by it and shall record in the Register the names and
addresses of the Lenders and Issuers and the principal amount of the Loans and
Reimbursement Obligations owing to each Lender from time to time and the
Revolving Credit Commitments of each Lender. Except for a Related Party
Assignment, any assignment pursuant to this Section 11.2 shall not be effective
until such assignment is recorded in the Register. In the case of a Related
Party Assignment as to which an Assignment and Acceptance is not delivered to
the Administrative Agent, the assigning Lender shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register (the
"Related Party Register") comparable to the Register on behalf of the Borrower.
Any such Related Party Register shall be available for inspection by the
Borrower, the Agents and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
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(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Revolving Credit Lender and an assignee, the Administrative Agent
shall, if such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record or cause to be recorded the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall, if requested by such assignee, and provided
any Revolving Credit Notes to the order of the assigning Revolving Credit Lender
have been surrendered or an affidavit of loss certificate has been provided by
such Lender, execute and deliver to the Administrative Agent, new Revolving
Credit Notes to the order of such assignee in an amount equal to the Revolving
Credit Commitments assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Revolving Credit Lender has surrendered any Revolving Credit
Note for exchange in connection with the assignment and has retained Revolving
Credit Commitments hereunder, new Revolving Credit Notes to the order of the
assigning Revolving Credit Lender in an amount equal to the Revolving Credit
Commitments retained by it hereunder. Such new Revolving Credit Notes shall be
dated the same date as the surrendered Revolving Credit Notes and be in
substantially the form of Exhibit B (Form of Revolving Credit Note).
(f) In addition to the other assignment rights provided in this
Section 11.2, each Revolving Credit Lender may do each of the following:
(i) grant to a Special Purpose Vehicle the option to make all
or any part of any Loan that such Revolving Credit Lender would otherwise
be required to make hereunder and the exercise of such option by any such
Special Purpose Vehicle and the making of Loans pursuant thereto shall
satisfy (once and to the extent that such Loans are made) the obligation
of such Revolving Credit Lender to make such Loans thereunder, provided,
however, that (x) nothing herein shall constitute a commitment or an offer
to commit by such a Special Purpose Vehicle to make Loans hereunder and no
such Special Purpose Vehicle shall be liable for any indemnity or other
Obligation (other than the making of Loans for which such Special Purpose
Vehicle shall have exercised an option, and then only in accordance with
the relevant option agreement) and (y) such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain
responsible to the other parties for the performance of its obligations
under the terms of this Agreement and shall remain the holder of the
Obligations for all purposes hereunder; and
(ii) assign, as collateral or otherwise, any of its rights
under this Agreement, whether now owned or hereafter acquired (including
rights to payments of principal or interest on the Loans), to (A) without
notice to or consent of the Administrative Agent or the Borrower, any
Federal Reserve Bank (pursuant to Regulation A of the Federal Reserve
Board) and (B) without notice to or consent of the Administrative Agent or
the Borrower, (1) any holder of, or trustee for the benefit of, the
holders of such Revolving Credit Lender's Securities and (2) any Special
Purpose Vehicle to which such Revolving Credit Lender has granted an
option pursuant to clause (i) above;
provided, however, that no such assignment or grant shall release such Revolving
Credit Lender from any of its obligations hereunder except as expressly provided
in clause (i) above and except, in the case of a subsequent foreclosure pursuant
to an assignment as collateral, if such foreclosure is made in compliance with
the other provisions of this Section 11.2 other than this clause (f) or
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clause (g) below. Each party hereto acknowledges and agrees 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 debt of any such Special Purpose Vehicle, such
party shall not institute against, or join any other Person in instituting
against, any Special Purpose Vehicle that has been granted an option pursuant to
this clause (f) any bankruptcy, reorganization, insolvency or liquidation
proceeding (such agreement shall survive the payment in full of the
Obligations). The terms of the designation of, or assignment to, such Special
Purpose Vehicle shall not restrict such Lender's ability to, or grant such
Special Purpose Vehicle the right to, consent to any amendment or waiver to this
Agreement or any other Loan Document or to the departure by the Borrower from
any provision of this Agreement or any other Loan Document without the consent
of such Special Purpose Vehicle except, as long as the Administrative Agent and
the Lenders, Issuers and other Secured Parties shall continue to, and shall be
entitled to continue to, deal solely and directly with such Lender in connection
with such Lender's obligations under this Agreement, to the extent any such
consent would reduce the principal amount of, or the rate of interest on, any
Obligations, amend this clause (f) or postpone any scheduled date of payment of
such principal or interest. Each Special Purpose Vehicle shall be entitled to
the benefits of Sections 2.15 (Capital Adequacy) and 2.16 (Taxes) and of Section
2.14(d) (Illegality) as if it were such Lender; provided, however, that anything
herein to the contrary notwithstanding, no Borrower shall, at any time, be
obligated to make under Section 2.15 (Capital Adequacy), 2.16 (Taxes) or 2.14(d)
(Illegality) to any such Special Purpose Vehicle and any such Lender any payment
in excess of the amount the Borrower would have been obligated to pay to such
Lender in respect of such interest if such Special Purpose Vehicle had not been
assigned the rights of such Lender hereunder; and provided, further, that such
Special Purpose Vehicle shall have no direct right to enforce any of the terms
of this Agreement against the Borrower, the Administrative Agent or the other
Lenders.
(g) Each Lender may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to the Revolving Loans
and Letters of Credit). The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights such Lender may have under or in respect of the
Loan Documents (including the right to enforce the obligations of the Loan
Parties), except if any such amendment, waiver or other modification or consent
would (i) reduce the amount, or postpone any date fixed for, any amount (whether
of principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with Section 10.8(b) (Concerning the
Collateral and the Collateral Documents). In the event of the sale of any
participation by any Lender, (w) such Lender's obligations under the Loan
Documents shall remain unchanged, (x) such Lender shall remain solely
responsible to the other parties for the performance of such obligations, (y)
such Lender shall remain the holder of such Obligations for all purposes of this
Agreement and (z) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Each participant
shall be entitled to the benefits of Sections 2.15 (Capital Adequacy) and 2.16
(Taxes) and of Section 2.14(d) (Illegality) as if it were a Lender; provided,
however, that anything herein to the contrary notwithstanding, the Borrower
shall not, at any time, be obligated to make under Section 2.15 (Capital
Adequacy), 2.16 (Taxes) or 2.14(d) (Illegality) to the participants in the
rights and obligations of any Lender (together with
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such Lender) any payment in excess of the amount the Borrower would have been
obligated to pay to such Lender in respect of such interest had such
participation not been sold and provided, further, that such participant in the
rights and obligations of such Lender shall have no direct right to enforce any
of the terms of this Agreement against the Borrower, the Administrative Agent or
the other Lenders.
(h) In the event that any Lender sells participations in a Loan,
such Lender shall maintain a register on which it enters the name of all
participants in the Loans held by it (the "Participant Register"). A Loan (and
the registered note, if any, evidencing the same) may be participated in whole
or in part only by registration of such participation on the Participant
Register (and each registered note shall expressly so provide). Any
participation of such Loan (and the registered note, if any, evidencing the
same) may be effected only by the registration of such participation on the
Participant Register. Any such Participant Register shall be available for
inspection by the Borrower, Administrative Agent and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(i) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrower, the Administrative Agent, such Issuer and such
Lender, subject to the provisions of Section 2.7(c) (Evidence of Debt) relating
to notations of transfer in the Register. If any Issuer ceases to be a Lender
hereunder by virtue of any assignment made pursuant to this Section 11.2, then,
as of the effective date of such cessation, such Issuer's obligations to Issue
Letters of Credit pursuant to Section 2.4 (Letters of Credit) shall terminate
and such Issuer shall be an Issuer hereunder only with respect to outstanding
Letters of Credit issued prior to such date.
SECTION 11.3 COSTS AND EXPENSES
(a) The Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including the
reasonable fees, expenses and disbursements of the Administrative Agent's
counsel, Weil, Gotshal & Xxxxxx LLP, local legal counsel, auditors, accountants,
appraisers, printers, insurance and environmental advisors, and other
consultants and agents) incurred by the Administrative Agent in connection with
any of the following: (i) the Administrative Agent's audit and investigation of
the Borrower and its Subsidiaries in connection with the preparation,
negotiation or execution of any Loan Document or the Administrative Agent's
periodic audits of the Borrower or any of its Subsidiaries, as the case may be,
(ii) the preparation, negotiation, execution or interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any condition set forth in Article III (Conditions to Loans and Letters of
Credit), any Loan Document or any proposal letter or commitment letter issued in
connection therewith, or the making of the Loans hereunder, (iii) the creation,
perfection or protection of the Liens under any Loan Document (including any
reasonable fees, disbursements and expenses for local counsel in various
jurisdictions), (iv) the ongoing administration of this Agreement and the Loans,
including consultation with attorneys in connection therewith and with respect
to the Administrative Agent's rights and responsibilities hereunder and under
the other Loan Documents, (v) the protection, collection or enforcement of any
Obligation or the enforcement of any Loan Document, (vi) the commencement,
defense or intervention in any court proceeding relating in any way to the
Obligations, any Loan Party, any of the Borrower's Subsidiaries, this Agreement
or any other Loan Document, (vii) the response to, and preparation for, any
subpoena
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or request for document production with which the Administrative Agent is served
or deposition or other proceeding in which the Administrative Agent is called to
testify, in each case, relating in any way to the Obligations, any Loan Party,
any of the Borrower's Subsidiaries, this Agreement or any other Loan Document or
(viii) any amendment, consent, waiver, assignment, restatement, or supplement to
any Loan Document or the preparation, negotiation and execution of the same.
(b) The Borrower further agrees to pay or reimburse the
Administrative Agent, the Collateral Agent and each of the Lenders and Issuers
upon demand for all out-of-pocket costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel and costs of
settlement), incurred by the Administrative Agent, the Collateral Agent and such
Lenders or such Issuers in connection with any of the following: (i) in
enforcing any Loan Document or Obligation or any security therefor or exercising
or enforcing any other right or remedy available by reason of an Event of
Default, (ii) in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding, (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to the Obligations, any Loan
Party, any of the Borrower's Subsidiaries and related to or arising out of the
transactions contemplated hereby or by any other Loan Document or (iv) in taking
any other action in or with respect to any suit or proceeding (bankruptcy or
otherwise) described in clause (i), (ii) or (iii) above.
SECTION 11.4 INDEMNITIES
(a) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Collateral Agent, the Arrangers, each Lender and each
Issuer and each of their respective Affiliates, and each of the directors,
officers, employees, agents, trustees, representatives, attorneys, consultants
and advisors of or to any of the foregoing (including those retained in
connection with the satisfaction or attempted satisfaction of any condition set
forth in Article III (Conditions to Loans and Letters of Credit) (each such
Person being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses, joint or several, of any kind or nature (including
fees, disbursements and expenses of financial and legal advisors to any such
Indemnitee) that may be imposed on, incurred by or asserted against any such
Indemnitee in connection with or arising out of any investigation, litigation or
proceeding, whether or not such investigation, litigation or proceeding is
brought by any such Indemnitee or any of its directors, security holders or
creditors or any such Indemnitee, director, security holder or creditor is a
party thereto, whether direct, indirect, or consequential and whether based on
any federal, state or local law or other statutory regulation, securities or
commercial law or regulation, or under common law or in equity, or on contract,
tort or otherwise, in any manner relating to or arising out of this Agreement,
any other Loan Document, any Obligation, any Letter of Credit, any Disclosure
Document, or any act, event or transaction related or attendant to any thereof,
or the use or intended use of the proceeds of the Loans or Letters of Credit or
in connection with any investigation of any potential matter covered hereby
(collectively, the "Indemnified Matters"); provided, however, that the Borrower
shall not have any liability under this Section 11.4 to an Indemnitee with
respect to any Indemnified Matter that has resulted primarily from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order. Without
limiting the foregoing, "Indemnified Matters" include (i) all Environmental
Liabilities and Costs arising from or connected with the past, present or future
operations of the Borrower or any of its Subsidiaries
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involving any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such property or any
contiguous real estate, (ii) any costs or liabilities incurred in connection
with any Remedial Action concerning the Borrower or any of its Subsidiaries,
(iii) any costs or liabilities incurred in connection with any Environmental
Lien and (iv) any costs or liabilities incurred in connection with any other
matter under any Environmental Law, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (49 U.S.C. Section 9601 et
seq.) and applicable state property transfer laws, whether, with respect to any
such matter, such Indemnitee is a mortgagee pursuant to any leasehold mortgage,
a mortgagee in possession, the successor in interest to the Borrower or any of
its Subsidiaries, or the owner, lessee or operator of any property of the
Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above,
to the extent (x) incurred following foreclosure by the Administrative Agent,
the Collateral Agent, any Lender or any Issuer, or the Administrative Agent, the
Collateral Agent, any Lender or any Issuer having become the successor in
interest to the Borrower or any of its Subsidiaries and (y) attributable solely
to acts of the Administrative Agent, such Lender or such Issuer or any agent on
behalf of the Administrative Agent, such Lender or such Issuer.
(b) The Borrower shall indemnify the Administrative Agent, the
Collateral Agent, the Lenders and each Issuer for, and hold the Administrative
Agent, the Lenders and each Issuer harmless from and against, any and all claims
for brokerage commissions, fees and other compensation made against the
Administrative Agent, the Collateral Agent, the Lenders and the Issuers for any
broker, finder or consultant with respect to any agreement, arrangement or
understanding made by or on behalf of any Loan Party or any of its Subsidiaries
in connection with the transactions contemplated by this Agreement.
(c) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against any investigation, litigation or proceeding or
requested Remedial Action, in each case contemplated in clause (a) above, and
the Borrower, in any event, may participate in the defense thereof with legal
counsel of the Borrower's choice. In the event that such Indemnitee requests the
Borrower to defend against such investigation, litigation or proceeding or
requested Remedial Action, the Borrower shall promptly do so and such Indemnitee
shall have the right to have legal counsel of its choice participate in such
defense. No action taken by legal counsel chosen by such Indemnitee in defending
against any such investigation, litigation or proceeding or requested Remedial
Action, shall vitiate or in any way impair the Borrower's obligation and duty
hereunder to indemnify and hold harmless such Indemnitee.
(d) The Borrower agrees that any indemnification or other protection
provided to any Indemnitee pursuant to this Agreement (including pursuant to
this Section 11.4) or any other Loan Document shall (i) survive payment in full
of the Obligations and (ii) inure to the benefit of any Person that was at any
time an Indemnitee under this Agreement or any other Loan Document.
SECTION 11.5 LIMITATION OF LIABILITY
(a) The Borrower agrees that no Indemnitee shall have any liability
(whether in contract, tort or otherwise) to any Loan Party or any of their
respective Subsidiaries or any of their respective equity holders or creditors
for or in connection with the transactions contemplated hereby and in the other
Loan Documents, except to the extent such liability is determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
primarily
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from such Indemnitee's gross negligence or willful misconduct. In no
event, however, shall any Indemnitee be liable on any theory of liability for
any special, indirect, consequential or punitive damages (including, without
limitation, any loss of profits, business or anticipated savings). The Borrower
hereby waives, releases and agrees (each for itself and on behalf of its
Subsidiaries) not to xxx upon any such claim for any special, indirect,
consequential or punitive damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
(b) In no event shall any Agent Affiliate have any liability to any
Loan Party, Lender, Issuer or any other Person for damages of any kind,
including direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort or contract or otherwise) arising out of any
Loan Party or any Agent Affiliate's transmission of Approved Electronic
Communications through the Internet or any use of the Approved Electronic
Platform, except to the extent such liability of any Agent Affiliate is found in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted primarily form such Agent Affiliate's gross negligence or willful
misconduct.
SECTION 11.6 RIGHT OF SET-OFF
Upon the occurrence and during the continuance of any Event of
Default each Lender and each Affiliate of a Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other Indebtedness at any time owing by such
Lender or its Affiliates to or for the credit or the account of the Borrower
against any and all of the Obligations now or hereafter existing whether or not
such Lender shall have made any demand under this Agreement or any other Loan
Document and even though such Obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application made by
such Lender or its Affiliates; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. Each
Lender agrees that it shall not, without the express consent of the Requisite
Lenders (and that, it shall, to the extent lawfully entitled to do so, upon the
request of the Requisite Lenders) exercise its set-off rights under this Section
11.6 against any deposit accounts of the Loan Parties and their Subsidiaries
maintained with such Lender or any Affiliate thereof. The rights of each Lender
under this Section 11.6 are in addition to the other rights and remedies
(including other rights of set-off) that such Lender may have.
SECTION 11.7 SHARING OF PAYMENTS, ETC.
(a) If any Revolving Credit Lender (directly or through an Affiliate
thereof) obtains any payment (whether voluntary, involuntary, through the
exercise of any right of set-off (including pursuant to Section 11.6 (Right of
Set-off)) or otherwise) of the Loans owing to it, any interest thereon, fees in
respect thereof or amounts due pursuant to Section 11.3 (Costs and Expenses) or
11.4 (Indemnities) (other than payments pursuant to Section 2.14 (Special
Provisions Governing Eurodollar Rate Loans), 2.15 (Capital Adequacy) or 2.16
(Taxes)) or otherwise receives any Collateral or any "Proceeds" (as defined in
the Pledge and Security Agreement) of Collateral (other than payments pursuant
to Section 2.14 (Special Provisions Governing Eurodollar Rate Loans), 2.15
(Capital Adequacy) or 2.16 (Taxes)) (in each case, whether voluntary,
involuntary, through the exercise of any right of set-off (including pursuant to
Section 11.6 (Right of Set-off)) or otherwise) in excess of its Ratable Portion
of all payments of such Obligations obtained by all the Revolving Credit
Lenders, such Revolving Credit Lender (a "Purchasing Lender") shall forthwith
purchase from the other Lenders (each, a "Selling Lender")
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
such participations in their Loans or other Obligations as shall be necessary to
cause such Purchasing Lender to share the excess payment ratably with each of
them.
(b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each Selling Lender shall be rescinded and such Selling Lender shall repay to
the Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment in
relation to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the Purchasing Lender in respect
of the total amount so recovered.
(c) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 11.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 11.8 NOTICES, ETC.
(a) Addresses for Notices. All notices, demands, requests, consents
and other communications provided for in this Agreement shall be given in
writing, or by any telecommunication device capable of creating a written record
(including electronic mail), and addressed to the party to be notified as
follows:
(i) if to the Borrower:
TECUMSEH PRODUCTS COMPANY
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx
Telecopy no: (000) 000-0000
E-Mail Address: xxxxxxxxx@xxxxxxxx.xxx
with a copy to:
Miller, Canfield, Paddock and Stone, P.L.C
000 Xxxx Xxxx Xxxx Xxxx, Xxxxx 000
Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx
Telecopy no: (000) 000-0000
E-Mail Address: xxxxxxx@xxxxxxxxxxxxxx.xxx
(ii) if to any Revolving Credit Lender, at its Domestic
Lending Office specified opposite its name on Schedule II (- Applicable
Lending Offices and Addresses for Notices) or on the signature page of any
applicable Assignment and Acceptance;
(iii) if to any Issuer, at the address set forth under its
name on Schedule II (- Applicable Lending Offices and Addresses for
Notices); and
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FIRST LIEN CREDIT AGREEMENT
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(iv) if to the Administrative Agent or the Swing Loan Lender:
CITICORP USA, INC.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Sebastien Delasnerie
Telecopy no: (000) 000-0000
E-Mail Address: xxxxxxxxx.xxxxxxxxxx@xxxxxxxxx.xxx
with a copy to:
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Telecopy no: (000) 000-0000
E-Mail Address: xxxxxx.xxxxx@xxxx.xxx
or at such other address as shall be notified in writing (x) in the case of the
Borrower, the Administrative Agent and the Swing Loan Lender, to the other
parties and (y) in the case of all other parties, to the Borrower and the
Administrative Agent.
(b) Effectiveness of Notices. All notices, demands, requests,
consents and other communications described in clause (a) above shall be
effective (i) if delivered by hand, including any overnight courier service,
upon personal delivery, (ii) if delivered by mail, when deposited in the mails,
(iii) if delivered by posting to an Approved Electronic Platform, an Internet
website or a similar telecommunication device requiring that a user have prior
access to such Approved Electronic Platform, website or other device (to the
extent permitted by Section 10.3 (Posting of Approved Electronic Communications)
to be delivered thereunder), when such notice, demand, request, consent and
other communication shall have been made generally available on such Approved
Electronic Platform, Internet website or similar device to the class of Person
being notified (regardless of whether any such Person must accomplish, and
whether or not any such Person shall have accomplished, any action prior to
obtaining access to such items, including registration, disclosure of contact
information, compliance with a standard user agreement or undertaking a duty of
confidentiality) and such Person has been notified that such communication has
been posted to the Approved Electronic Platform and (iv) if delivered by
electronic mail or any other telecommunications device, when transmitted to an
electronic mail address (or by another means of electronic delivery) as provided
in clause (a) above; provided, however, that notices and communications to the
Administrative Agent and the Collateral Agent pursuant to Article II (The
Facility) or Article X (The Administrative Agent) shall not be effective until
received by the Administrative Agent and the Collateral Agent.
(c) Use of Electronic Platform. Notwithstanding clauses (a) and (b)
above (unless the Administrative Agent and the Collateral Agent request that the
provisions of clause (a) and (b) above be followed) and any other provision in
this Agreement or any other Loan Document providing for the delivery of any
Approved Electronic Communication by any other means the Loan Parties shall
deliver all Approved Electronic Communications to the Administrative Agent and
the Collateral Agent by properly transmitting such Approved Electronic
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to xxxxxxxxxxxxxxx@xxxxxxxxx.xxx or such other electronic
mail address
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
(or similar means of electronic delivery) as the Administrative Agent and the
Collateral Agent may notify the Borrower. Nothing in this clause (c) shall
prejudice the right of the Administrative Agent or any Lender or Issuer to
deliver any Approved Electronic Communication to any Loan Party in any manner
authorized in this Agreement or to request that the Borrower effect delivery in
such manner.
SECTION 11.9 NO WAIVER; REMEDIES
No failure on the part of any Lender, Issuer or the Administrative
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 11.10 BINDING EFFECT
This Agreement shall become effective when it shall have been
executed by the Borrower and the Administrative Agent and when the
Administrative Agent shall have been notified by each Lender and Issuer that
such Lender or Issuer has executed it and thereafter shall be binding upon and
inure solely to the benefit of the Borrower, the Administrative Agent and each
Lender and Issuer and, in each case, their respective successors and assigns;
provided, however, that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of the
Lenders.
SECTION 11.11 GOVERNING LAW
This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
SECTION 11.12 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
(a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York
located in the City of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
the Borrower hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereto hereby irrevocably waive any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, that any of
them may now or hereafter have to the bringing of any such action or proceeding
in such respective jurisdictions.
(b) The Borrower hereby irrevocably consents to the service of any
and all legal process, summons, notices and documents in any suit, action or
proceeding brought in the United States of America arising out of or in
connection with this Agreement or any other Loan Document by the mailing (by
registered or certified mail, postage prepaid) or delivering of a copy of such
process to the Borrower at its address specified in Section 11.8 (Notices,
Etc.). The Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
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FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
(c) Nothing contained in this Section 11.12 shall affect the right
of the Administrative Agent, the Collateral Agent or any Lender to serve process
in any other manner permitted by law or commence legal proceedings or otherwise
proceed against the Borrower or any other Loan Party in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
SECTION 11.13 WAIVER OF JURY TRIAL
EACH OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE LENDERS,
THE ISSUERS AND THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.14 MARSHALING; PAYMENTS SET ASIDE
None of the Administrative Agent, the Collateral Agent, any Lender
or any Issuer shall be under any obligation to marshal any assets in favor of
the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment or payments to the
Administrative Agent, the Collateral Agent, the Lenders or the Issuers or any
such Person receives payment from the proceeds of the Collateral or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
right and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.
SECTION 11.15 SECTION TITLES
The section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto, except when used to reference a
section. Any reference to the number of a clause, sub-clause or subsection
hereof immediately followed by a reference in parenthesis to the title of the
Section containing such clause, sub-clause or subsection is a reference to such
clause, sub-clause or subsection and not to the entire Section; provided,
however, that, in case of direct conflict between the reference to the title and
the reference to the number of such Section, the reference to the title shall
govern absent manifest error. If any reference to the number of a Section (but
not to any clause, sub-clause or subsection thereof) is followed immediately by
a reference in parenthesis to the title of a Section, the title reference shall
govern in case of direct conflict absent manifest error.
116
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
SECTION 11.16 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document. Delivery of an executed signature page of
this Agreement by facsimile transmission, electronic mail or by posting on the
Approved Electronic Platform shall be as effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
parties shall be lodged with the Borrower and the Administrative Agent.
SECTION 11.17 ENTIRE AGREEMENT
This Agreement, together with all of the other Loan Documents and
all certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof. In the event of any
conflict between the terms of this Agreement and any other Loan Document, the
terms of this Agreement shall govern.
SECTION 11.18 CONFIDENTIALITY
Each Lender, the Administrative Agent and the Collateral Agent agree
to use all reasonable efforts to keep information obtained by it pursuant hereto
and the other Loan Documents confidential in accordance with such Lender's, the
Administrative Agent's or the Collateral Agent's, as the case may be, customary
practices and agrees that it shall not disclose any such information other than
(a) to such Lender's, the Administrative Agent's or the Collateral Agent's, as
the case may be, employees, representatives and agents that are or are expected
to be involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and are advised of the confidential
nature of such information, (b) to the extent such information presently is or
hereafter becomes available to such Lender, the Administrative Agent or the
Collateral Agent, as the case may be, on a non-confidential basis from a source
other than the Borrower or any other Loan Party, (c) to the extent disclosure is
required by law, regulation or judicial order or requested or required by bank
regulators or auditors or (d) to current or prospective assignees, participants
and Special Purpose Vehicle grantees of any option described in Section 11.2(f)
(Assignments and Participations), contractual counterparties in any Hedging
Contract permitted hereunder and to their respective legal or financial
advisors, in each case and to the extent such assignees, participants, grantees
or counterparties agree to be bound by, and to cause their advisors to comply
with, the provisions of this Section 11.18. Notwithstanding any other provision
in this Agreement, the Administrative Agent hereby agrees that the Borrower (and
each of its officers, directors, employees, accountants, attorneys and other
advisors) may disclose to any and all persons, without limitation of any kind,
the U.S. tax treatment and U.S. tax structure of the Facility and the
transactions contemplated hereby and all materials of any kind (including
opinions and other tax analyses) that are provided to it relating to such U.S.
tax treatment and U.S. tax structure.
SECTION 11.19 JUDGMENT CURRENCY
The Loan Parties' Obligations hereunder and under the other Loan
Documents to make payments in Dollars shall not be discharged or satisfied by
any tender or recovery pursuant
117
FIRST LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
to any judgment expressed in or converted into any currency other than Dollars.
If, for the purpose of obtaining or enforcing judgment against any Loan Party in
any court or in any jurisdiction, it becomes necessary to convert into or from
any currency other than Dollars (such other currency being hereinafter referred
to as the "Judgment Currency") an amount due in Dollars, the conversion shall be
made at the Dollar Equivalent determined as of the Business Day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Loan Parties covenant and agree to pay, or cause to be paid,
such additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial award at the rate of
exchange prevailing on the Judgment Currency Conversion Date.
SECTION 11.20 PATRIOT ACT NOTICE
Each Lender subject to the Patriot Act hereby notifies the Borrower
that, pursuant to Section 326 of the Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower, including the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Patriot Act.
[SIGNATURE PAGES FOLLOW]
118
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
TECUMSEH PRODUCTS COMPANY,
as Borrower
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President, Treasurer & CFO
CITICORP USA, INC.,
as Administrative Agent, Collateral Agent,
Swing Loan Lender and Lender
By: /s/ Sebastien Delasnerie
---------------------------------------
Name: Sebastien Delasnerie
Title: Vice President
CITIBANK, N.A.,
as Issuer
By: /s/ Sebastien Delasnerie
---------------------------------------
Name: Sebastien Delasnerie
Title: Vice President
JPMORGAN CHASE BANK, N.A.
as Lender
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
[SIGNATURE PAGE TO TECUMSEH PRODUCTS COMPANY CREDIT AGREEMENT]
TABLE OF CONTENTS
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS............................................ 1
Section 1.1 Defined Terms.............................................................. 1
Section 1.2 Computation of Time Periods................................................ 34
Section 1.3 Accounting Terms and Principles............................................ 34
Section 1.4 Conversion of Foreign Currencies........................................... 35
Section 1.5 Certain Terms.............................................................. 35
ARTICLE II THE FACILITY............................................................................... 36
Section 2.1 The Revolving Credit Commitments........................................... 36
Section 2.2 Borrowing Procedures....................................................... 36
Section 2.3 Swing Loans................................................................ 38
Section 2.4 Letters of Credit.......................................................... 40
Section 2.5 Reduction and Termination of the Revolving Credit Commitments.............. 45
Section 2.6 Repayment of Loans......................................................... 45
Section 2.7 Evidence of Debt........................................................... 45
Section 2.8 Optional Prepayments....................................................... 47
Section 2.9 Mandatory Prepayments...................................................... 47
Section 2.10 Interest................................................................... 48
Section 2.11 Conversion/Continuation Option............................................. 49
Section 2.12 Fees....................................................................... 50
Section 2.13 Payments and Computations.................................................. 51
Section 2.14 Special Provisions Governing Eurodollar Rate Loans......................... 54
Section 2.15 Capital Adequacy........................................................... 55
Section 2.16 Taxes...................................................................... 56
Section 2.17 Substitution of Lenders.................................................... 58
ARTICLE III CONDITIONS TO LOANS AND LETTERS OF CREDIT................................................. 60
Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit................ 60
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit..................... 64
Section 3.3 Determinations of Initial Borrowing Conditions............................. 65
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................................. 65
Section 4.1 Corporate Existence; Compliance with Law................................... 65
Section 4.2 Corporate Power; Authorization; Enforceable Obligations.................... 66
i
TABLE OF CONTENTS
(CONTINUED)
Section 4.3 Ownership of Subsidiaries.................................................. 67
Section 4.4 Financial Statements....................................................... 67
Section 4.5 Material Adverse Change.................................................... 68
Section 4.6 Solvency................................................................... 68
Section 4.7 Litigation................................................................. 68
Section 4.8 Taxes...................................................................... 68
Section 4.9 Full Disclosure............................................................ 69
Section 4.10 Margin Regulations......................................................... 69
Section 4.11 No Burdensome Restrictions; No Defaults.................................... 69
Section 4.12 Investment Company Act..................................................... 69
Section 4.13 Use of Proceeds............................................................ 70
Section 4.14 Insurance.................................................................. 70
Section 4.15 Labor Matters.............................................................. 70
Section 4.16 ERISA...................................................................... 70
Section 4.17 Environmental Matters...................................................... 71
Section 4.18 Intellectual Property...................................................... 72
Section 4.19 Title; Real Property....................................................... 72
ARTICLE V FINANCIAL COVENANTS......................................................................... 73
Section 5.1 Minimum Fixed Charge Coverage Ratio........................................ 73
Section 5.2 Minimum EBITDA............................................................. 74
Section 5.3 Capital Expenditures....................................................... 74
ARTICLE VI REPORTING COVENANTS........................................................................ 75
Section 6.1 Financial Statements....................................................... 75
Section 6.2 Default Notices............................................................ 77
Section 6.3 Litigation................................................................. 77
Section 6.4 Asset Sales................................................................ 77
Section 6.5 Labor Relations............................................................ 77
Section 6.6 Tax Returns................................................................ 77
Section 6.7 Insurance.................................................................. 78
Section 6.8 ERISA Matters.............................................................. 78
Section 6.9 Environmental Matters...................................................... 78
ii
TABLE OF CONTENTS
(CONTINUED)
Section 6.10 Borrowing Base Determination............................................... 79
Section 6.11 Customer Contracts......................................................... 80
Section 6.12 Tax Reporting.............................................................. 80
Section 6.13 Other Information.......................................................... 80
ARTICLE VII AFFIRMATIVE COVENANTS..................................................................... 80
Section 7.1 Preservation of Corporate Existence, Etc................................... 81
Section 7.2 Compliance with Laws, Etc.................................................. 81
Section 7.3 Conduct of Business........................................................ 81
Section 7.4 Payment of Taxes, Etc...................................................... 81
Section 7.5 Maintenance of Insurance................................................... 81
Section 7.6 Access..................................................................... 82
Section 7.7 Keeping of Books........................................................... 82
Section 7.8 Maintenance of Properties, Etc............................................. 82
Section 7.9 Application of Proceeds.................................................... 82
Section 7.10 Environmental.............................................................. 82
Section 7.11 Additional Collateral and Guaranties....................................... 83
Section 7.12 Control Accounts; Approved Deposit Accounts................................ 84
Section 7.13 Landlord Waivers and Bailee's Letters...................................... 85
Section 7.14 Real Property.............................................................. 85
ARTICLE VIII NEGATIVE COVENANTS....................................................................... 86
Section 8.1 Indebtedness............................................................... 86
Section 8.2 Liens, Etc................................................................. 87
Section 8.3 Investments................................................................ 88
Section 8.4 Sale of Assets............................................................. 89
Section 8.5 Restricted Payments........................................................ 90
Section 8.6 Prepayment and Cancellation of Indebtedness................................ 91
Section 8.7 Restriction on Fundamental Changes......................................... 91
Section 8.8 Change in Nature of Business............................................... 92
Section 8.9 Transactions with Affiliates............................................... 92
Section 8.10 Limitations on Restrictions on Subsidiary Distributions; No New Negative
Pledge..................................................................... 92
Section 8.11 Modification of Constituent Documents...................................... 92
iii
TABLE OF CONTENTS
(CONTINUED)
Section 8.12 Modification of Debt Agreements............................................ 93
Section 8.13 Accounting Changes; Fiscal Year............................................ 93
Section 8.14 Margin Regulations......................................................... 93
Section 8.15 Operating Leases; Sale/Leasebacks.......................................... 93
Section 8.16 No Speculative Transactions................................................ 94
Section 8.17 Compliance with ERISA...................................................... 94
Section 8.18 Environmental.............................................................. 94
ARTICLE IX EVENTS OF DEFAULT.......................................................................... 94
Section 9.1 Events of Default.......................................................... 94
Section 9.2 Remedies................................................................... 96
Section 9.3 Actions in Respect of Letters of Credit.................................... 96
Section 9.4 Rescission................................................................. 97
ARTICLE X THE ADMINISTRATIVE AGENT.................................................................... 97
Section 10.1 Authorization and Action................................................... 97
Section 10.2 Administrative Agent's Reliance, Etc....................................... 98
Section 10.3 Posting of Approved Electronic Communications.............................. 99
Section 10.4 The Administrative Agent Individually...................................... 100
Section 10.5 Lender Credit Decision..................................................... 100
Section 10.6 Indemnification............................................................ 100
Section 10.7 Successor Administrative Agent............................................. 101
Section 10.8 Concerning the Collateral and the Collateral Documents..................... 101
Section 10.9 Collateral Matters Relating to Related Obligations......................... 102
ARTICLE XI MISCELLANEOUS.............................................................................. 103
Section 11.1 Amendments, Waivers, Etc................................................... 103
Section 11.2 Assignments and Participations............................................. 105
Section 11.3 Costs and Expenses......................................................... 109
Section 11.4 Indemnities................................................................ 110
Section 11.5 Limitation of Liability.................................................... 111
Section 11.6 Right of Set-off........................................................... 112
Section 11.7 Sharing of Payments, Etc................................................... 112
Section 11.8 Notices, Etc............................................................... 113
iv
TABLE OF CONTENTS
(CONTINUED)
Section 11.9 No Waiver; Remedies........................................................ 114
Section 11.10 Binding Effect............................................................. 114
Section 11.11 Governing Law.............................................................. 115
Section 11.12 Submission to Jurisdiction; Service of Process............................. 115
Section 11.13 Waiver of Jury Trial....................................................... 115
Section 11.14 Marshaling; Payments Set Aside............................................. 116
Section 11.15 Section Titles............................................................. 116
Section 11.16 Execution in Counterparts.................................................. 116
Section 11.17 Entire Agreement........................................................... 116
Section 11.18 Confidentiality............................................................ 117
Section 11.19 Judgment Currency.......................................................... 117
Section 11.20 Patriot Act Notice......................................................... 118
v
TABLE OF CONTENTS
(CONTINUED)
SCHEDULES
Schedule I - Revolving Credit Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 2.4 - Existing Letters of Credit
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Subsidiaries
Schedule 4.7 - Litigation
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.19 - Real Property
Schedule 7.14 - Real Property Mortgages
Schedule 7.15(b) - Existing Canadian Liens
Schedule 7.15(c) - Landlord Waivers and Bailee's Letters
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
Schedule 8.4(a) - Investment Property
Schedule 8.4(b) - Real Property to be Sold
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Swing Loan Request
Exhibit E - Form of Letter of Credit Request
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Opinion of Counsel for the Loan Parties
Exhibit H - Form of Guaranty
Exhibit I - Form of Pledge and Security Agreement
Exhibit J - Form of Borrowing Base Certificate
vi
