EXECUTION COPY
EXHIBIT 4.2
$100,000,000
AMENDED AND RESTATED
SECOND LIEN CREDIT AGREEMENT
DATED AS OF NOVEMBER 13, 2006
AMONG
TECUMSEH PRODUCTS COMPANY
AS BORROWER
AND
THE LENDERS PARTY HERETO
AND
TRICAP PARTNERS LLC
AS ADMINISTRATIVE AGENT
AND
CITICORP USA, INC.
AS COLLATERAL AGENT
* * *
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS............... 1
Section 1.1 Defined Terms........................................... 1
Section 1.2 Computation of Time Periods............................. 28
Section 1.3 Accounting Terms and Principles......................... 28
Section 1.4 Conversion of Foreign Currencies........................ 29
Section 1.5 Certain Terms........................................... 29
ARTICLE II THE FACILITY.................................................. 30
Section 2.1 The Loan Commitment..................................... 30
Section 2.2 Termination of Loan Commitment.......................... 30
Section 2.3 Repayment of Loans...................................... 30
Section 2.4 Evidence of Debt........................................ 30
Section 2.5 Optional Prepayments.................................... 32
Section 2.6 Mandatory Prepayments................................... 32
Section 2.7 Interest................................................ 33
Section 2.8 Fees.................................................... 34
Section 2.9 Payments and Computations............................... 35
Section 2.10 Special Provisions Governing the Loan................... 37
Section 2.11 Capital Adequacy........................................ 39
Section 2.12 Taxes................................................... 39
Section 2.13 Substitution of Lenders................................. 42
ARTICLE III CONDITIONS TO THE LOAN....................................... 43
Section 3.1 Conditions Precedent to the Loan........................ 43
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................ 47
Section 4.1 Corporate Existence; Compliance with Law................ 47
Section 4.2 Corporate Power; Authorization; Enforceable
Obligations............................................. 48
Section 4.3 Ownership of Subsidiaries............................... 49
Section 4.4 Financial Statements.................................... 49
Section 4.5 Material Adverse Change................................. 50
Section 4.6 Solvency................................................ 50
TABLE OF CONTENTS
(continued)
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Section 4.7 Litigation.............................................. 50
Section 4.8 Taxes................................................... 51
Section 4.9 Full Disclosure......................................... 51
Section 4.10 Margin Regulations...................................... 51
Section 4.11 No Burdensome Restrictions; No Defaults................. 52
Section 4.12 Investment Company Act.................................. 52
Section 4.13 Use of Proceeds......................................... 52
Section 4.14 Insurance............................................... 52
Section 4.15 Labor Matters........................................... 53
Section 4.16 ERISA................................................... 53
Section 4.17 Environmental Matters................................... 54
Section 4.18 Intellectual Property................................... 55
Section 4.19 Title; Real Property.................................... 55
Section 4.20 Brazilian Subsidiaries.................................. 56
ARTICLE V FINANCIAL COVENANTS............................................ 57
Section 5.1 Minimum Fixed Charge Coverage Ratio..................... 57
Section 5.2 Minimum Cumulative EBITDA............................... 58
Section 5.3 Capital Expenditures.................................... 58
ARTICLE VI REPORTING COVENANTS........................................... 59
Section 6.1 Financial Statements.................................... 59
Section 6.2 Default Notices......................................... 61
Section 6.3 Litigation.............................................. 61
Section 6.4 Asset Sales............................................. 62
Section 6.5 Labor Relations......................................... 62
Section 6.6 Tax Returns............................................. 62
Section 6.7 Insurance............................................... 62
Section 6.8 ERISA Matters........................................... 62
Section 6.9 Environmental Matters................................... 63
Section 6.10 Customer Contracts...................................... 64
Section 6.11 Tax Reporting........................................... 64
TABLE OF CONTENTS
(continued)
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Section 6.12 Other Information....................................... 64
ARTICLE VII AFFIRMATIVE COVENANTS........................................ 65
Section 7.1 Preservation of Corporate Existence, Etc................ 65
Section 7.2 Compliance with Laws, Etc............................... 65
Section 7.3 Conduct of Business..................................... 65
Section 7.4 Payment of Taxes, Etc................................... 65
Section 7.5 Maintenance of Insurance................................ 65
Section 7.6 Access.................................................. 66
Section 7.7 Keeping of Books........................................ 66
Section 7.8 Maintenance of Properties, Etc.......................... 66
Section 7.9 Application of Proceeds................................. 67
Section 7.10 Environmental........................................... 67
Section 7.11 Additional Collateral and Guaranties.................... 67
Section 7.12 Control Accounts; Approved Deposit Accounts............. 68
Section 7.13 Real Property........................................... 69
Section 7.14 Advisory Board; Management.............................. 70
Section 7.15 Equity Issuance......................................... 71
Section 7.16 Intentionally Omitted................................... 71
Section 7.17 Post Closing Items...................................... 71
Section 7.18 Transfer or Termination of Title IV Plans............... 72
Section 7.19 Reporting on Brazilian Subsidiaries Restructuring....... 72
ARTICLE VIII NEGATIVE COVENANTS.......................................... 73
Section 8.1 Indebtedness............................................ 73
Section 8.2 Liens, Etc.............................................. 74
Section 8.3 Investments............................................. 75
Section 8.4 Sale of Assets.......................................... 76
Section 8.5 Restricted Payments..................................... 78
Section 8.6 Prepayment and Cancellation of Indebtedness............. 78
Section 8.7 Restriction on Fundamental Changes...................... 79
Section 8.8 Change in Nature of Business............................ 79
TABLE OF CONTENTS
(continued)
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Section 8.9 Transactions with Affiliates............................ 79
Section 8.10 Limitations on Restrictions on Subsidiary Distributions;
No New Negative Pledge.................................. 80
Section 8.11 Modification of Constituent Documents................... 80
Section 8.12 Modification of Debt Agreements......................... 81
Section 8.13 Accounting Changes; Fiscal Year......................... 81
Section 8.14 Margin Regulations...................................... 81
Section 8.15 Operating Leases; Sale/Leasebacks....................... 81
Section 8.16 No Speculative Transactions............................. 82
Section 8.17 Compliance with ERISA................................... 82
Section 8.18 Environmental........................................... 82
ARTICLE IX EVENTS OF DEFAULT............................................. 82
Section 9.1 Events of Default....................................... 82
Section 9.2 Remedies................................................ 85
Section 9.3 Rescission.............................................. 85
ARTICLE X THE ADMINISTRATIVE AGENT....................................... 86
Section 10.1 Authorization and Action................................ 86
Section 10.2 Administrative Agent's Reliance, Etc.................... 87
Section 10.3 Posting of Approved Electronic Communications........... 88
Section 10.4 The Administrative Agent Individually................... 89
Section 10.5 Lender Credit Decision.................................. 89
Section 10.6 Indemnification......................................... 89
Section 10.7 Successor Administrative Agent.......................... 90
Section 10.8 Concerning the Collateral and the Collateral Documents.. 91
ARTICLE XI MISCELLANEOUS................................................. 91
Section 11.1 Amendments, Waivers, Etc................................ 91
Section 11.2 Assignments and Participations.......................... 94
Section 11.3 Costs and Expenses...................................... 98
Section 11.4 Indemnities............................................. 99
Section 11.5 Limitation of Liability................................. 100
TABLE OF CONTENTS
(continued)
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Section 11.6 Right of Set-off........................................ 101
Section 11.7 Sharing of Payments, Etc................................ 101
Section 11.8 Notices, Etc............................................ 102
Section 11.9 No Waiver; Remedies..................................... 105
Section 11.10 Binding Effect.......................................... 105
Section 11.11 Governing Law........................................... 105
Section 11.12 Submission to Jurisdiction; Service of Process.......... 105
Section 11.13 Waiver of Jury Trial.................................... 106
Section 11.14 Marshaling; Payments Set Aside.......................... 106
Section 11.15 Section Titles.......................................... 107
Section 11.16 Execution in Counterparts............................... 107
Section 11.17 Entire Agreement........................................ 107
Section 11.18 Confidentiality......................................... 107
Section 11.19 Patriot Act Notice...................................... 108
SCHEDULES
Schedule I - Term Loan Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 1.1 - Aircraft
Schedule 3.1(a)(ii) - Guarantors
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 7.13 - Real Property Mortgages
Schedule 7.14(b) - Existing Canadian Liens
Schedule 7.14(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 Term Loan Note
Exhibit C - Reserved
Exhibit D - Form of Notice of Conversion or Continuation
Exhibit E - Form of Opinion of Counsel for the Loan Parties
Exhibit F - Form of Guaranty
Exhibit G - Form of Pledge and Security Agreement
AMENDED AND RESTATED SECOND LIEN CREDIT AGREEMENT, dated as of November 13,
2006 (the "Amended and Restated Credit Agreement"), among TECUMSEH PRODUCTS
COMPANY, a Michigan corporation (the "Borrower") TRICAP PARTNERS, LLC, a
Delaware limited liability company (the "Lender"), Tricap Partners, LLC, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent") and CITICORP USA, INC., as collateral agent for the Secured Parties and
the First Lien Secured Parties (the "Collateral Agent").
WITNESSETH:
WHEREAS, Borrower and Lender entered into that certain Second Lien Credit
Agreement, dated as of November 1, 2006 (the "Original Agreement");
WHEREAS, in connection with the execution of the Original Credit Agreement,
Borrower and Lender entered into that certain Escrow Letter, dated as of
November 1, 2006, whereby the Borrower and Lender agreed, subject to the terms
and conditions therein, that Borrower and Lender may agree to modify the terms
and conditions of the Original Agreement in connection with obtaining the
consent of the First Lien Lenders identified therein;
WHEREAS, Borrower and Lender have agreed to modify the terms and conditions
of the Original Agreement pursuant to this Amended and Restated Credit
Agreement, which amends and restates in its entirety the Original Agreement;
WHEREAS, Borrower has requested that the Lender make available for the
purposes specified in this Amended and Restated Credit Agreement a second lien
term loan facility; and
WHEREAS, the Lender is willing to make available to the Borrower such
second lien term loan 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 Amended and Restated Credit 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.
"Additional PIK Rate" means 2.50% per annum.
"Administrative Agent" has the meaning specified in the preamble to this
Agreement.
"Affected Lender" has the meaning specified in Section 2.13 (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 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 Amended and Restated 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 Junior 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 any Lender, the office
of such Lender identified opposite its name on Schedule II or on the Assignment
and Acceptance by which it became a Lender, or such other office of Lender as
such Lender may from time to time specify to the Borrower and the Administrative
Agent.
"Applicable Rate" means the LIBOR Rate and the PIK Rate.
"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
pursuant to Section 2.5 (Optional Prepayments) and Section 2.6 (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,
(ii) all notices of any Default or Event of Default and (iii) 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 the Loans) or any other condition to any Borrowing 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.
"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 Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of Exhibit A (Form of Assignment and Acceptance).
"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 Xxxxx 00, Xxxxxx Xxxxxx Code.
"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 Loan made on the Closing Date
by the Lender.
"Brazil" means the Federative Republic of Brazil.
"Brazilian Receivables Transaction" means a transaction whereby the
Brazilian Subsidiaries discount or sell, either with or without recourse under
Brazilian law, export receivables pursuant to and in accordance with one or more
programs administered by the Brazilian Central Bank.
"Brazilian Subsidiaries" means any Subsidiary of the Borrower organized
under the laws of Brazil.
"Brazilian Tax Benefit" means the anticipated increase in the Borrower's
net income (not to exceed an aggregate amount of $7,000,000) resulting from the
reversal of non-cash tax charges associated with the "PIS" and "COFINS" taxes
under Brazilian Law accrued prior to June 30, 2006.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City and 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 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 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.
"Closing Date" means November __, 2006.
"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 USA, Inc. acting in its 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 First 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, 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;
(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.
"Debt Issuance" means the incurrence of Indebtedness of the type specified
in clause (a) or (b) of the definition of "Indebtedness" by the Borrower or any
of its Subsidiaries.
"Default" means any event that, with the passing of time or the giving of
notice or both would become an Event of Default.
"Default Rate" has the meaning specified in Section 2.7(f) (Default
Interest).
"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 or any financial institution being utilized as a
Deposit Account Bank on the Closing Date in accordance with the First Lien Loan
Documents.
"Deposit Account Control Agreement" has the meaning specified in the Pledge
and Security Agreement and in the applicable Canadian Collateral Document.
"Determination Date" means initially, the Closing Date, and thereafter, two
Business Days prior to each Interest Period.
"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.
"Disposition Adjustment" means those adjustments, if any, to Minimum
Cumulative EBITDA provided in Annex A attached hereto.
"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 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, (viii) all other non-cash charges and non-cash
losses for such period that are not payable in cash in any subsequent period and
(ix) certain fees and costs payable to (x) Rothschild Inc., a financial advisor
to the Loan Parties, in connection with certain corporate services provided by
or to be provided by Rothschild Inc. to the Loan Parties, (y) BBK, Ltd., a
financial advisor to the Loan Parties, in connection with certain financial
services provided or to be provided by BBK, Inc. to the Loan Parties and (z) the
advisors in connection with certain financial due diligence and monitoring
services provided to or to be provided to the Lenders and the Secured Parties
following November 1, 2006, for so long as such professional fees and costs are
being borne by the Loan Parties, provided, however, all such fees and costs
payable under clauses (x), (y) and (z) do not exceed $2,400,000 per Fiscal
Quarter 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. For the avoidance of doubt, the anticipated
Brazilian Tax Benefit shall not constitute a non-cash gain or other item which
have been added in determining Consolidated Net Income for purposes of clause
(c)(v) above.
"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.
"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.
"Equity Issuance" means the issue or sale of any Stock of the Borrower or
any Subsidiary of the Borrower by the Borrower or any Subsidiary of the Borrower
to any Person other than the Borrower or any Subsidiary of the Borrower.
"ERISA" means the United States Employee Retirement Income Security Act of
1974 (as amended).
"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.
"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 Citicorp USA, Inc. in its capacity as administrative
agent under the Existing Credit Agreement.
"Existing Credit Agreement" means that certain Second Lien Credit
Agreement, dated as of February 6, 2006 among the Borrower, the lender parties
thereto and the Existing Agent.
"Existing Lenders" means the lenders under the Existing Credit Agreement.
"Extraordinary Receipts" means any proceeds (net of any income, excise, or
punitive taxes or other penalties) received by any Borrower or any other Loan
Party from Title IV Plan or any other pension plan.
"Facility" means the Loan Commitment and the provisions herein related to
the Loan.
"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 for the
rates on overnight 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, 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
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 Agent" means the "Administrative Agent" under and as defined in
the First Lien Credit Agreement.
"First Lien Available Credit" means, at any time, the maximum amount
available for borrowing (subject to any borrowing base or reserve requirements
in effect at such time and after giving effect to any loans, letters of credit
or other obligations outstanding from time to time) under the First Lien Credit
Agreement.
"First Lien Credit Agreement" means that certain First Lien Credit
Agreement, dated as February 6, 2006, among the Borrower, the First Lien Agent,
the Collateral Agent and the financial institutions party thereto as lenders and
issuers.
"First Lien Facility" means the "Facility" under and as defined in the
First Lien Credit Agreement.
"First Lien Lenders" means the "Lenders" and "Issuers" under and as defined
in the First Lien Credit Agreement.
"First Lien Letters of Credit" means any letter of credit issued pursuant
to the First Lien Credit Agreement.
"First Lien Loans" means any loan made by any First Lien Lender pursuant to
the First Lien Credit Agreement.
"First Lien Loan Documents" means the First Lien Credit Agreement and the
Loan Documents (as defined in the First Lien Credit Agreement).
"First Lien Secured Obligations" means the "Secured Obligations" under and
as defined in the First Lien Credit Agreement.
"First Lien Secured Parties" means the First Lien Agent, the First Lien
Lenders, the Collateral Agent and each other holder of the First Lien Secured
Obligations.
"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.
"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 F (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
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).
"Intercompany Loans" means any loans made by either the Borrower or any
Guarantor to any Material Foreign Subsidiary or the Thai Subsidiary.
"Intercreditor Agreement" means the Intercreditor Agreement, dated February
6, 2006, among the Administrative Agent, the First 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.
"Interest Period" means (a) initially, the period commencing on the Closing
Date and ending ninety (90) days thereafter, and (b) thereafter, the period
commencing on the last day of the immediately preceding Interest Period and
ending ninety (90) days thereafter; provided, however, that all of the foregoing
provisions relating to Interest Periods 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; and
(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.
"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.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Junior Aircraft Security Agreement" means that certain Junior Aircraft
Security Agreement, dated as of the date hereof, by and the Borrower, as
grantor, and the Collateral Agent.
"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.
"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 Tricap Partners LLC, and any financial institution or other
entity that from time to time becomes a party hereto by execution of an
Assignment and Acceptance.
"LIBOR Base" means, in respect of any particular Interest Period, the
interest rate per annum for deposits in the London interbank eurocurrency market
in Dollars for substantially the same number of days as such Interest Period
that appears on Page 3750 of the Telerate Screen, or such other page as is a
replacement therefor, as of approximately 11:00 a.m. (London time) on the
Determination Date. If such rate is not available at such time for any reason,
then "LIBOR Base" for such Interest Period will be the rate at which Dollar
deposits approximately equal to the amount of the Loan and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Lender or its parent in immediately available funds in the London interbank
market of approximately 11:00 a.m. (London time) on the Determination Date.
"LIBOR Rate" shall mean the per annum rate of interest equal to the LIBOR
Base plus the LIBOR Spread, which LIBOR Rate shall be reset on each
Determination Date.
"LIBOR Spread" shall mean, on any Determination Date, 675 basis points.
"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.
"Loan" has the meaning specified in Section 2.1 (The Loan).
"Loan Documents" means, collectively, this Agreement, the Note, the
Guaranty, the Collateral Documents, the Intercreditor Agreement and each
certificate, agreement or document executed by a Loan Party and delivered to the
Administrative Agent or 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 Term Loan 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 or the Lenders
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.
"Maturity Date" means the earlier to occur of (i) the third anniversary of
the Closing Date, or (ii) such earlier date upon which Administrative Agent
declares all Obligations due and owing under Section 9.2 (Remedies).
"Minimum Cumulative EBITDA" means, for each reporting period set forth in
Section 5.2 (Minimum Cumulative EBITDA), that amount set forth opposite such
period in Section 5.2 (Minimum Cumulative EBITDA).
"Xxxxx'x" means Xxxxx'x Investors Services, Inc.
"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 (g) 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, (b) Property Loss Event, (c) US Tax Receivable, or (d)
Extraordinary Receipts.
"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-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, 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 the Administrative Agent) that is a
Non-U.S. Person.
"Non-U.S. Person" means any Person that is not a Domestic Person.
"Note" means a promissory note of the Borrower payable to the order of any
Lender in a principal amount equal to the amount of the Loan owing to such
Lender.
"Obligations" means the Loan and all other amounts, obligations, covenants
and duties owing by the Borrower to the Administrative Agent, the Collateral
Agent, any
Lender, any Affiliate of any of them or any Indemnitee, of every type and
description (whether by reason of an extension of credit, loan, guaranty or
indemnification or otherwise), present or future, arising under this Agreement,
any other Loan Document, 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 other
fees, interest, charges, expenses, attorneys' fees and disbursements and other
sums chargeable to the Borrower under this Agreement, any other Loan Document.
"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.
"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.
"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.
"PIK" means payments in kind.
"PIK Rate" means 1.50% per annum.
"Pledge and Security Agreement" means an agreement, in substantially the
form of Exhibit G (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.
"Prepayment Premium" means, (i) with respect to any prepayment prior to the
first anniversary of the Closing Date, an amount equal to 2.00% of the principal
amount prepaid and (ii) with respect to any prepayment on or after the first
anniversary of the Closing Date, but prior to the second anniversary of the
Closing Date, an amount equal to 1.00% of the principal amount prepaid.
"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 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 October 2006 covering
the fiscal years ending in 2006 through 2013 inclusive, to be delivered to the
Lender 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).
"Purchasing Lender" has the meaning specified in Section 11.7 (Sharing of
Payments, Etc.).
"Ratable Portion" or (other than in the expression "equally and ratably")
"ratably" means, with respect to any Lender, the percentage obtained by dividing
the outstanding principal amount of such Lender's Loan by the aggregate
outstanding principal amount of the Loans of all 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.
"Register" has the meaning specified in Section 2.5(b) (Evidence of Debt).
"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, Lenders having more than fifty
percent (50%) of the aggregate outstanding amount of the Term Loan Commitments
or, after the Closing Date, more than fifty percent (50%) of the principal
amount of all Loans then outstanding.
"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.
"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.
"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 Administrative Agent, the Lenders, 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.).
"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.
"Specified Canadian Subsidiaries" means Tecumseh Products of Canada,
Limited and Fasco Motors Company.
"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.
"Subject Units" means the Stock or any assets of all or any part of any
entity or combination or parts of entities comprising a part of any of (i) M.P.
Pumps, Inc., (ii) the Electrical Components Products Segment (as reported in the
Financial Statements), and/or (iii) the Engine and Powertrain Products Segment
(as reported in the Financial Statements).
"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.
"Supplemental PIK Rate" means 5.0% per annum.
"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 2.12(a) (Taxes).
"Tecumseh Italy" means, collectively, Tecumseh Europa S.p.A and its
Subsidiaries.
"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.
"TMT" means TMT-Motoco do Brasil Ltda.
"TMT Enforcement Remedy" means the filing of an enforcement action or any
ordinary collection law suit or of a bankruptcy request or other formal
proceedings, in each case filed or instituted in Brazil and arising from, or in
connection with, any indebtedness having a principal amount in excess of
$100,000; provided, however, that such action is not effectively stayed within
ten (10) days of the commencement thereof.
"TMT Indebtedness" means the Indebtedness of TMT outstanding as of the
Closing Date.
"UCC" has the meaning specified in the Pledge and Security Agreement.
"U.S. Lender" means each Lender (or the Administrative Agent) that is a
Domestic Person.
"US Tax Receivable" means a United States income tax refund with respect to
the 2003 tax year of any Loan Party in the amount of up to $14,000,000.
"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.
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.
(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," "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 Tricap Partners LLC
in Section 10.4 (The Administrative Agent Individually) 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 LOAN COMMITMENT
On the terms and subject to the conditions contained in this Agreement,
Lender agrees to advance, on the Closing Date, a term loan to Borrower in
Dollars (the "Loan"), in a principal amount not to exceed $100,000,000 (the
"Commitment") as follows:
(a) Funds sufficient to repay all Secured Obligations (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement, shall be
advanced by wire transfer, for the account of Borrower, to the Existing Agent
for and on behalf of the Existing Lenders.
(b) The balance of the Commitment after the advance made pursuant to clause
(a) above, which shall be used to prepay a portion of the outstanding principal
amount of the First Lien Facility, shall be advanced by wire transfer, for the
account of Borrower, to the Administrative Agent (as defined in the First Lien
Credit Agreement) for and on behalf of the First Lien Lender.
The Loan is being made on a non-revolving basis and any amounts repaid or
prepaid may not be reborrowed.
SECTION 2.2 TERMINATION OF LOAN COMMITMENT
Lender's obligation to advance any amount of the Loan not advanced on the
Closing Date under Section 2.1 (Loan Commitment) shall terminate on the Closing
Date.
SECTION 2.3 REPAYMENT OF LOANS
The Borrower shall repay the entire unpaid principal amount of the Loan on
the Maturity Date.
SECTION 2.4 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 the Loan, 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 and each Lender's interest in the
Loan 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, (ii) the amount of the Loan made and the
Interest Period applicable thereto, (iii) the amount of any principal or
interest due and payable, and paid, by the Borrower to, or for the account
of, each Lender hereunder and (iv) the amount of any sum received by the
Administrative Agent hereunder from the Borrower, whether such sum
constitutes principal or interest, fees, expenses or other amounts due
under the Loan Documents and each Lender's share thereof, if applicable.
(ii) Notwithstanding anything to the contrary contained in this
Agreement, the Loan (including the Note evidencing the Loan) is a
registered obligation and the right, title, and interest of the Lenders and
their assignees in and to the Loan shall be transferable only upon notation
of such transfer in the Register. A Term Loan 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 Term Loan Note to be considered a
bearer instrument or obligation. This Section 2.5(b) and Section 11.2
(Assignments and Participations) shall be construed so that the Loans 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 and the Lenders shall
treat each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. Information contained in the Register with respect
to any Lender shall be
available for inspection by the Borrower, the Administrative Agent or such
Lender 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 Lender requests that the Borrower execute and deliver a promissory note or
notes payable to such Lender in order to evidence the Indebtedness owing to such
Lender by the Borrower hereunder, the Borrower shall promptly execute and
deliver a Note to such Lender evidencing the Loan of such Lender, substantially
in the form of Exhibit B (Form of Note).
SECTION 2.5 OPTIONAL PREPAYMENTS
(a) Borrower shall have no right to prepay the Loan prior to the second
anniversary of the Closing Date. From and after the second anniversary of the
Closing Date, and subject to the terms of the First Lien Credit Agreement and
the Intercreditor Agreement, the Borrower may, upon at least three Business
Days' prior notice to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Loan, in whole or in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(i) if any such prepayment is made by or on behalf of the Borrower other than on
the last day of an Interest Period, the Borrower shall also pay any amounts
owing pursuant to Section 2.10(e) (Breakage Costs), and (ii) each such
prepayment that is a partial prepayment shall be in an aggregate amount of
$3,000,000 or an amount that is an integral multiple of $1,000,000 in excess
thereof. Upon the giving of such notice of prepayment, the principal amount of
the Loan specified to be prepaid shall become due and payable on the date
specified for such prepayment.
(b) The Borrower shall have no right to prepay the principal amount of the
Loan other than as provided in this Section 2.5.
SECTION 2.6 MANDATORY PREPAYMENTS
(a) Subject to the Intercreditor Agreement and clause (c) below, upon
receipt by the Borrower or any Loan Party of Net Cash Proceeds the Borrower
shall immediately prepay the Loan in an amount equal to 100% of such Net Cash
Proceeds; provided, however, that (i) no prepayment from Net Cash Proceeds shall
be permitted if the First Lien Available Credit would be less than $40,000,000
after giving effect to such prepayment, (ii) upon receipt by the Borrower or any
other Loan Party of Net Cash Proceeds arising from any Loan Party's receipt of
US Tax Receivable, such Net Proceeds shall be applied as follows: (A) first, the
Borrower shall immediately prepay the outstanding First Lien Loans to the extent
that the First Lien Available Credit is less than $40,000,000, and (B) second,
to the extent that the First Lien Available Credit is greater than $40,000,000,
the Borrower shall prepay the Loan and (iii) upon receipt by the Borrower or any
other Loan Party of Net Cash Proceeds arising from any Asset Sale permitted
under Section 8.4(i), such Net Cash Proceeds shall be applied as follows: (A)
first, the Borrower shall immediately prepay that portion of the outstanding
First Lien
Loans (and provide cash collateral in respect of First Lien Letters of Credit)
in an amount equal to that portion of the First Lien Available Credit created
solely by the inclusion of the assets subject to such Asset Sale in the
borrowing base under the First Lien Credit Agreement immediately prior to the
consummation of such Asset Sale; (B) second, the Borrower shall apply the
remaining balance of Net Cash Proceeds after giving effect to the application of
such proceeds made under clause (A) above, to prepay the Loan; provided,
however, that no prepayment from Net Cash Proceeds under this clause (B) shall
be permitted if the First Lien Available Credit would be less than $40,000,000
after giving effect to such prepayment, and (C) third, if permitted under the
First Lien Credit Agreement, the Borrower or such Loan Party shall be entitled
to retain any remaining Net Cash Proceeds.
(b) Together with any prepayment of the Loan pursuant to clause (a) above,
the Borrower shall also pay the Prepayment Premium, if any, calculated at the
time of such prepayment.
(c) Notwithstanding the foregoing, no mandatory prepayment under this
Section 2.6 shall be required if such prepayment is otherwise prohibited under
the First Lien Credit Agreement.
SECTION 2.7 INTEREST
(a) Rate of Interest. The Loan and the outstanding amount of all other
Obligations shall bear interest at the Applicable Rate, in the case of the Loan,
on the unpaid principal amount thereof from the date the Loan is 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
clauses (d), (e) and (f) below:
(b) LIBOR Rate Interest Payments. Interest accrued at the LIBOR Rate on the
Loan shall be payable in arrears (A) on the last day of each Interest Period
and, if such Interest Period has a duration of more than one month, on each date
during such Interest Period occurring every month 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). Interest accrued at the LIBOR Rate 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) PIK Rate Interest Payments. Interest accrued at the PIK Rate on the
Loan and all other Obligations will be added to the principal amount outstanding
under the Loan on the last day of each calendar month.
(d) Supplemental PIK Interest; Payments. From and after June 30, 2007
supplemental PIK interest will accrue at the Supplemental PIK Rate calculated on
the difference between:
(i) from June 30, 2007 through September 29, 2007, $20,000,000 and the
net proceeds realized from the sale of the Subject Units;
(ii) from September 30, 2007 through December 30, 2007, $40,000,000
and the net proceeds realized from the sale of the Subject Units; and
(iii) from December 31, 2007 through the Maturity Date, $60,000,000
and the net proceeds realized from the sale of the Subject Units.
Interest accrued at the Supplemental PIK Rate under this clause (d) will be
added to the principal amount outstanding under the Loan on the last day of each
calendar month
(e) Additional PIK Interest; Payments. If Borrower shall not have disposed
of its Engine and Powertrain Products Segment (as reported on the Financial
Statements) on or before December 31, 2007, additional PIK interest shall accrue
on the Loan at the Additional PIK Rate from and after January 1, 2008. Interest
accrued at the Additional PIK Rate under this clause (e) will be added to the
principal amount outstanding under the Loan on the last day of each calendar
month.
(f) Default Interest. Notwithstanding the rates of interest specified in
clause (b) above, 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 the Loan and the amount of all other Obligations then
due and payable and bearing interest at the LIBOR Rate shall bear interest, in
lieu of the then-existing LIBOR Rate, at a rate that is two percent per annum in
excess of the LIBOR Rate at the time of such Event of Default (the "Default
Rate"). Such interest shall be payable on the date that would otherwise be
applicable to such interest pursuant to clause (b) above or otherwise on demand.
Notwithstanding anything in this Section 2.7 to the contrary, no PIK
interest will accrue from and after payment in full of all Obligations.
SECTION 2.8 FEES
(a) The Borrower has paid to the Lender (i) a closing fee in the amount of
$1,500,000, which fee was earned on the November 6, 2006, and (ii) all fees and
expenses of Lender, the Administrative Agent or Collateral Agent (including,
without limitation, fees and expenses of legal counsel) in excess of the $50,000
expense fee delivered by Borrower to Lender and incurred in connection with the
transactions contemplated in this Agreement or the other Loan Documents,
including projected fees and expenses to be incurred in connection with all
Post-Closing Items under Section 7.17.
(b) From and after the earlier to occur of (i) the date upon which the
Lender executes and delivers the first Assignment and Acceptance under Section
11.2 (Assignments and Participations), or (ii) the date upon which a successor
Administrative
Agent is appointed, Borrower agrees to pay the reasonable and customary fees of
the Administrative Agent and the Collateral Agent and any successor
Administrative Agent or Collateral Agent.
SECTION 2.9 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 2.11 (Capital Adequacy), Section 2.10 (Special Provisions Governing the
Loan), or Section 2.12 (Taxes) shall be paid only to the affected Lender or
Lenders. 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.
(c) Each payment by the Borrower of the Loan and each reimbursement of
various costs, expenses or other Obligation shall be made in Dollars; provided,
however, that other than for payments in respect of the Loan, Loan Documents
duly executed by the Administrative Agent may specify other currencies of
payment for Obligations created by or directly related to such Loan Document.
(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 such payment to be made in
the next calendar month, such payment shall be made on the immediately preceding
Business Day.
(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 Applicable Rate) 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 clause (b) of Section 2.6 (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, the Loan, second, to pay all other
Obligations then due and payable and third, as the Borrower so designates.
Payments in respect of any Obligation (including payment of the Loan) received
by the Administrative Agent shall be distributed to Lender in accordance with
Lender's Ratable Portion.
(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 2.6
(Mandatory Prepayments) and clause (f) above, subject to the terms of the
Intercreditor Agreement, 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 proceeds of Collateral in
the following order:
(i) first, to pay Secured Obligations in respect of any expense,
reimbursements or indemnities then due to the Administrative Agent or the
Collateral Agent;
(ii) second, to pay Secured Obligations in respect of any fees due to
the Collateral Agent;
(iii) third, to pay Secured Obligations in respect of any fees then
due to the Administrative Agent or the Lenders;
fourth, to pay interest then due and payable in respect of the Loans;
(iv) fifth, to pay or prepay principal amounts on the Loan;
(v) sixth, to the ratable payment of all other Secured Obligations;
and
(vi) seventh, the balance to the Borrower or the Loan Party lawfully
entitled to receive such proceeds;
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) and (v) 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 interest
in the aggregate outstanding Secured Obligations described in such clauses. The
order of priority set forth in clauses (i), (ii), (iii), (iv) and (v) 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 by any other Person that is
not a Lender. The order of priority set forth in clauses (i), (ii) and (iii)
above may be changed only with the prior written consent of the Administrative
Agent and the Collateral Agent, as applicable, in addition to that of the
Requisite Lenders.
SECTION 2.10 SPECIAL PROVISIONS GOVERNING THE LOAN
(a) Determination of Interest Rate
The LIBOR Rate for each Interest Period shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
"LIBOR 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 LIBOR Base by reference to which
the LIBOR Rate then being determined is to be fixed or (ii) the Requisite
Lenders notify the Administrative Agent that the LIBOR Rate for any Interest
Period will not adequately reflect the cost to the Lenders of making or
maintaining the Loan for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower, whereupon the LIBOR Rate shall for any
succeeding Interest Period shall be determined by such alternate method as
reasonably selected by the Administrative Agent.
(c) Increased Costs
If at any time Lender determines that the introduction of, or any change in
or in the interpretation of, any law, treaty or governmental rule, regulation or
order, or the compliance by such 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 Lender of
agreeing to maintain the Loan, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such 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 Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(d) Illegality
Notwithstanding any other provision of this Agreement, if any 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 Lender to maintain the Loan,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, the Loan shall automatically convert to such
other rate at Administrative Agent may reasonably select.
(e) Breakage Costs
In addition to all amounts required to be paid by the Borrower pursuant to
Section 2.7 (Interest), the Borrower shall compensate each 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 Lender to fund or maintain the Loan but excluding any loss of the LIBOR
Spread on the Loan) that Lender may sustain (i) if for any reason the Loan is
prepaid (including mandatorily pursuant to Section 2.6 (Mandatory Prepayments))
on a date that is not the last day of the applicable Interest Period, (ii) as a
result of any of the events indicated in clause (d) above or (iii) as a
consequence of any failure by the Borrower to repay the Loan when required by
the terms hereof. The 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 Lender, absent manifest error.
SECTION 2.11 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
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 2.12 TAXES
(a) Except as otherwise provided in this Section 2.12, 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 Lender 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 Lender 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 and (y) a successor Administrative Agent, the date of
the appointment of such Administrative Agent) applicable to such Lender 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 appointment of such
Administrative Agent, as the case may be) and (ii) in the case of each Lender,
taxes measured by its net income and franchise taxes imposed on it as a result
of a present or former connection between such Lender 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 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 2.12), such Lender 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").
(c) Each Loan Party shall, jointly and severally, indemnify each Lender 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 2.12) paid by such Lender 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 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.
(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 2.12 shall survive the payment in full of
the Obligations.
(f) If a Person 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,
enters into an Assignment and Acceptance thereby becoming a Lender under this
Agreement, such Person shall on or prior to the date of such Assignment and
Acceptance 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 and 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(e), 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 Person that is 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 such Person 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) Lender and any Person that is a U.S. Lender entering into an
Assignment and Acceptance thereby becoming a Lender under this Agreement,
shall (v) on or prior to the Closing Date in the case of the Lender, (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
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 2.12(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 Lender claiming any additional amounts payable pursuant to this
Section 2.12 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 Lender, be
otherwise disadvantageous to such 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 2.13 SUBSTITUTION OF LENDERS
(a) In the event that (i)(A) any Lender makes a claim under Section 2.10(c)
(Increased Costs) or 2.11 (Capital Adequacy), (B) it becomes illegal for any
Lender to continue to fund or make any Eurodollar Rate Loan and such Lender
notifies the Borrower pursuant to Section 2.10(d) (Illegality), (C) any Loan
Party is required to make any payment pursuant to Section 2.12 (Taxes) that is
attributable to a particular Lender or (D) any 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 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 principal amount of the Term Loans
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.
(b) If the Substitution Notice was properly issued under this Section 2.13,
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 all 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 Loans,
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 Term Loan Commitment in the amount of such
Affected Lender's Term Loan Commitment assumed by it and such Term Loan
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 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 2.13, it shall execute and deliver to the Administrative Agent an
Assignment and Acceptance to evidence such assignment, together with any Term
Loan Note (if such Loans are evidenced by a Term Loan 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 THE LOAN
SECTION 3.1 CONDITIONS PRECEDENT TO THE LOAN
The obligation of Lender to make the Loan 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 November __, 2006:
(a) Certain Documents. Subject to Section 7.17 (Post Closing), the
Administrative Agent shall have received on or prior to the Closing Date each of
the following, each dated the Closing Date unless otherwise indicated or agreed
to by the Lender:
(i) this Agreement and the Note, each duly executed and delivered by
the Borrower and 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) 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 second 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;
(iv) 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 delivered to the Collateral Agent for the benefit of the Lender,
each executed in blank;
(v) all instruments representing Pledged Debt Instruments being
pledged pursuant to such Pledge and Security Agreement duly endorsed in
favor of the Collateral Agent or in blank and delivered to the Collateral
Agent for the benefit of the Lender;
(vi) the consent and waiver of the First Lien Lenders, as set forth in
the Escrow Letter, whereby the First Lien Lenders (a) waive such Defaults
and Events of Default, and amend such covenants, under the First Lien
Facility, including, without limitation, such waivers or amendments as may
be necessary or appropriate to permit Lender to make the Loan under and
subject to the terms and conditions of this Agreement, (b) consents to the
Lender making the Loan under and subject to the terms of this Agreement,
and (c) waive any cross-default that would be triggered under the First
Lien Facility as a result of any defaults occurring with respect to the TMT
Indebtedness.
(vii) a favorable opinion of (A) Xxxxxx Xxxxxxxx, Xxxxxxx and Xxxxx,
P.L.C., counsel to the Loan Parties, in substantially the form of Exhibit E
(Form of Opinion of Counsel for the Loan Parties), (B) counsel to the Loan
Parties in, Wisconsin, Michigan, Mississippi, Tennessee, Missouri, and
Rhode Island, in each case addressed to the Administrative Agent, the
Collateral Agent and the Lender and addressing such other matters as Lender
may reasonably request;
(viii) 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;
(ix) 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;
(x) 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 Loan, 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;
(xi) evidence satisfactory to the Administrative Agent that the
insurance policies required by Section 7.5 (Maintenance of Insurance) and
any Collateral 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
(xii) such other certificates, documents, agreements and information
respecting any Loan Party as any Lender through the Administrative Agent
may reasonably request.
(b) 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 Lender, as applicable, all fees and expenses (including
reasonable fees and expenses of counsel) due and payable on or before the
Closing Date (including all fees and expenses incurred in connection with the
transactions contemplated by this Agreement and the other Loan Documents).
(c) 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 reasonably 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 reasonably satisfactory to the
Administrative Agent.
(d) 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.
(e) Minimum First Lien Available Credit. After giving effect to (i) the
Loan, and (ii) the loans made or to be made and letters of credit issued or to
be issued under the First Lien Credit Agreement on the Closing Date, the First
Lien Available Credit shall be at least $62,000,000 on the Closing Date (it
being understood and agreed that (x) all Real Property set forth on Schedule
7.13 (Real Property Mortgages) to the First Lien Credit Agreement shall
constitute "Eligible Real Property" as defined in the First Lien Credit
Agreement and (y) the Thai Letter of Credit (as defined in the First Lien Credit
Agreement) shall not be deemed a Revolving Credit Outstanding (as defined in the
First Lien Credit Agreement), on the Closing Date, in each case solely for the
purpose of calculating the above stated First Lien Available Credit).
(f) Representations and Warranties; No Defaults. The following statements
shall be true on the Closing Date, both before and after giving effect to the
Loan and to the application of the proceeds thereof (and the Administrative
Agent shall have received a certificate of a Responsible Officer of the Borrower
to that effect):
(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, 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;
(ii) no Default or Event of Default shall have occurred and be
continuing; and
(iii) no litigation not listed on Schedule 4.7 (Litigation) shall have
been commenced against any Loan Party or any of its Subsidiaries that would
have a Material Adverse Effect.
(g) No Legal Impediments. The making of the Loan on the Closing Date does
not violate any Requirement of Law on the date of or immediately following such
Loan and is not enjoined, temporarily, preliminarily or permanently.
(h) Additional Matters. The Administrative Agent shall have received such
additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter into this
Agreement, the Borrower represents and warrants each of the following to the
Lenders and the Administrative Agent on and as of the Closing Date and after
giving effect to the making of the Loan and the other financial accommodations
on the Closing Date:
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 the Loan) 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 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 the Loan), 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 First 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, 2005, 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 June 30,
2006, 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 Lender, fairly present, subject, in the
case of said balance sheets as at June 30, 2006, 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, 2006
and June 30, 2006 and (y) Form 8-K filed by the Borrower with the Securities and
Exchange Commission on January 9, 2006, January 10, 2006, February 9, 2006,
February 23, 2006, February 28, 2006, March 21, 2006, April 28, 2006, May 4,
2006, August 8, 2006, August 16, 2006 and November 8, 2006, since December 31,
2005, 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 Loan to be made on the
Closing Date and (b) the disbursement of the proceeds of the Loan in accordance
with the terms of this Agreement (including the payment in full of all of the
Borrower's obligations under the Existing Credit Agreement) and (c) 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).
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 to one or more
charter or corporate restrictions that would, in the aggregate, have a Material
Adverse Effect.
(b) Except for defaults that may arise in connection with the Contractual
Obligations for the TMT Indebtedness, 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 Loan 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 the Existing
Credit Agreement, and (b) to prepay a portion of the outstanding principal
amount of the First Lien Facility.
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.
(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 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, 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) Except with respect to the Real Property located at 0000 Xxxxxxxx Xxx.,
Xxxxxx, Xxxx, 00000 (and set forth on Schedule 4.19), 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.
SECTION 4.20 BRAZILIAN SUBSIDIARIES
(a) The only Brazilian Subsidiaries that currently exist are Tecumseh do
Brasil Ltda. ("TdB") and TMT.
(b) Each Brazilian Subsidiary is a separate legal entity that is operated
separately from the other Brazilian Subsidiary. Neither Brazilian Subsidiary
holds any equity interest in the other Brazilian Subsidiary nor has the right to
obtain any equity interest in the other Brazilian Subsidiary. Neither Brazilian
Subsidiary has any capital contribution in the other Brazilian Subsidiary on
behalf of itself, the Borrower or any other Affiliate or Subsidiary of Borrower.
There is no commingling of assets of the Brazilian Subsidiaries. Neither
Brazilian Subsidiary is a joint debtor with the other Brazilian Subsidiary on
any debt, and neither Brazilian Subsidiary otherwise has agreed to undertake any
obligation or responsibility for any claims by third parties against the other
Brazilian Subsidiary, including, but not limited to, claims related to labor or
tax matters. Neither Brazilian Subsidiary has in place (i) a guarantee of the
debt of the other Brazilian Subsidiary, pledged any of its assets as security
for the debts of the other Brazilian Subsidiary or (ii) any commitments or
undertakings that could reasonably be expected to give rise to an obligation for
any claim against the other Brazilian Subsidiary. The standard forms of debt
documents provided by the lenders to each of the Brazilian Subsidiaries and
generally used as the basis for the definitive debt documents related to the
Indebtedness of each of the Brazilian Subsidiaries do not specifically identify
a
default by the other Brazilian Subsidiary under any of its Indebetedness as a
cross-default, and Borrower is not aware that any such specific cross-default
provision is included in any of the actual definitive debt documents related to
Indebtedness of either of the Brazilian Subsidiaries. Since January 1, 2003, no
member of management of either of the Brazilian Subsidiaries is, or has been, a
member of the management of the other Brazilian Subsidiary, with the exception
of Xxxxxx Xxxxxxxxx and Xxxxxxxx Xxxxxxx, who both served as the Managers for
both Brazilian Subsidiaries for, with respect to Xxxxxx Xxxxxxxxx, approximately
120 days during 2005-2006 and, with respect to Xxxxxxxx Xxxxxxx, approximately
90 days during 2005-2006. There are currently no agreements between the
Brazilian Subsidiaries other than the inter-company loans made by TdB to TMT,
and payables and receivables arising from transactions in the ordinary course of
the respective businesses of TdB and TMT. All material transactions and
agreements between the Brazilian Subsidiaries have been entered into on "arm's
length" fair market terms.
ARTICLE V
FINANCIAL COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent to each
of the following as long as any Obligation or the Loan 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 1.00 to 1
March 31, 2008 1.05 to 1
June 30, 2008 1.05 to 1
September 30, 2008 1.10 to 1
December 31, 2008 1.10 to 1
March 31, 2009 1.10 to 1
June 30, 2009 1.10 to 1
September 30, 2009 1.15 to 1
SECTION 5.2 MINIMUM CUMULATIVE EBITDA
Subject to any applicable Disposition Adjustment, the Borrower shall have,
from October 1, 2006 to the end of each fiscal quarter set forth below, EBITDA
of not less than the following:
MINIMUM
CUMULATIVE
FISCAL QUARTER EBITDA
-------------- ------------
December 31, 2006 $(16,900,000)
March 31, 2007 $(10,000,000)
June 30, 2007 $ 15,000,000
September 30, 2006 $ 50,000,000
December 31, 2007 $ 80,000,000
In the event Borrower provides written notice to Administrative Agent that
all or a substantial portion of one or more of the Subject Units have been sold
or otherwise disposed of, which notice shall identify the Subject Units or
portion thereof sold, the Minimum Cumulative EBITDA requirements set forth in
this section shall be subject to a Disposition Adjustment in accordance with
Annex A attached hereto and incorporated herein by reference.
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:
MAXIMUM CAPITAL
FISCAL QUARTER EXPENDITURES
-------------- ---------------
December 31, 2006 $76,900,000
March 31, 2007 $68,900,000
June 30, 2007 $66,700,000
September 30, 2007 $59,700,000
December 31, 2007 $52,700,000
March 31, 2008 $57,700,000
June 30, 2008 $62,700,000
September 30, 2008 $67,700,000
December 31, 2008 $72,700,000
March 31, 2009 $77,700,000
MAXIMUM CAPITAL
FISCAL QUARTER EXPENDITURES
-------------- ---------------
June 30, 2009 $82,700,000
September 30, 2009 $87,700,000
ARTICLE VI
REPORTING COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent to each
of the following, as long as any Obligation or the Loan 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 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
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 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 (as defined in the First Lien Credit Agreement) and (ii) the
Term Loan Maturity Date 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.
(i) Cash Flow Forecast. The Borrower shall deliver to the Administrative
Agent on or prior to the Closing Date, and thereafter as soon as available and
in any event not later than Tuesday at 5:00 pm (New York time) of each week
until payment in full of all Obligations, a 13-week rolling cash flow forecast
detailing cash receipts and cash disbursements on a weekly basis for the next 13
weeks, the information and calculations contained in which shall be reasonably
satisfactory to the Administrative Agent and certified by a Responsible Officer
of the Borrower that such forecast has been prepared in good faith.
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.
SECTION 6.4 ASSET SALES
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 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 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 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 6.11 TAX REPORTING
Promptly after the Borrower determines that it intends to treat the Loan
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 6.12 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 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 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 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.
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 Loan 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;
(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 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 requirements of this Section 7.12 shall not apply to any Excluded
Foreign Subsidiary.
SECTION 7.13 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.
SECTION 7.14 ADVISORY BOARD; MANAGEMENT
(a) No later than thirty days following the Closing Date, Borrower shall
create an advisory board (which shall not be a committee of the Board of
Directors of the Borrower) (the "Advisory Board") reasonably satisfactory to
Lender, which shall include at least one member appointed by the Administrative
Agent and two members appointed by the Board of Directors of the Company, which
members shall be reasonably acceptable to the Administrative Agent. The Advisory
Board shall assist the Board of Directors of the Borrower in identifying,
engaging, and working with, a nationally recognized executive recruiting firm
and shall recommend to the Board of Directions qualified candidates for various
senior management positions, including, without limitation, senior managers in
sales and marketing and a chief executive officer for the Borrower.
(b) Concurrently with the Advisory Board's recommendation and the
Borrower's Board of Directors' engagement of a new Chief Executive Officer for
the Borrower, Xxxx X. Xxxxxxx shall assume the role of Chairman of the Board for
the Borrower's Board of Directors.
SECTION 7.15 EQUITY ISSUANCE
The Borrower and each of its Subsidiaries shall provide written notice to
the Administrative Agent no later than thirty days prior to the sale or issuance
of any Stock of the Borrower or any Subsidiary of the Borrower by the Borrower
or any Subsidiary of the Borrower to any Person, which notice shall include the
terms of such proposed sale or issuance including, in connection with any such
sale of Stock of Borrower or any Subsidiary of Borrower, the proposed purchaser
of such Stock, the price for which such Stock shall be sold, and the class of
Stock being sold.
SECTION 7.16 INTENTIONALLY OMITTED
SECTION 7.17 POST CLOSING ITEMS
(a) If, using commercially reasonable efforts, it is not practicable for
Borrower to satisfy the requirements of Section 3.1(a)(iii) or (xii) on or prior
to the Closing Date, such failure to satisfy such conditions precedent shall not
prevent the closing on the Loan on the Closing Date; provided, however, that
Borrower or any applicable Loan Party shall, on or prior to the Closing Date,
commence satisfaction of all such conditions precedent and shall thereafter
diligently pursue the same completion and; provided, further, that Borrower or
any applicable Loan Party shall satisfy all conditions precedent within 30 days
of the Closing Date.
(b) 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 7.14(c) (Landlord Waivers and Bailee's Letters) to
the Collateral Agent.
(c) Within 30 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.
(d) Within 30 days of the Closing Date, Borrower shall (i) document, or
cause to be documented, to the reasonable satisfaction of Administrative Agent,
each Intercompany Loan, which documentation shall include, without limitation, a
promissory note in a principal amount not less than the outstanding principal
amount of such Intercompany Loan, (ii) deliver to the Collateral Agent copies of
all such documentation, and (iii) shall pledge and grant to Collateral Agent for
the benefit of the Lenders a security interest in such promissory notes.
(e) Within 30 days of the Closing Date, Borrower shall deliver to Lender a
favorable opinion of (A) counsel to the Loan Parties in, Ontario, Canada,
addressed to the Administrative Agent, the Collateral Agent and the Lender and
addressing such other matters as Lender may reasonably request and (B) (i) New
York counsel to the Borrower as to the enforceability of this Agreement and the
other Loan Documents and (ii) counsel
to the Borrower 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 Lender and
addressing such other matters as Lender may reasonably request.
SECTION 7.18 TRANSFER OR TERMINATION OF TITLE IV PLANS
(a) Borrower shall provide Collateral Agent and Administrative Agent with
not less than 30 days' notice prior to the transfer to any Person or the
termination of any Title IV Plan sponsored or maintained by Borrower or its
Subsidiaries.
(b) If Borrower receives any cash recoupment (net of any resulting income,
excise, or punitive taxes or other penalties) from the termination or transfer
(other than as part of an Asset Sale) of a Title IV Plan sponsored or maintained
by Borrower or its Subsidiaries, then subject to observance of any requirements
of the plan document or ERISA, the full amount of such cash recoupment (net of
taxes, penalties and other direct costs and expenses) shall be paid by Borrower
to the Collateral Agent for the benefit of the First Lien Lenders and the
Lender, and shall be distributed by the Collateral Agent to the First Lien
Lenders and the Lender in accordance with the terms of the Intercreditor
Agreement, the First Lien Credit Agreement and this Agreement and applied to the
payment of the First Lien Secured Obligations and the Loan in accordance with
the terms of the First Lien Credit Agreement.
(c) If a Title IV Plan sponsored or maintained by Borrower or a Subsidiary
is transferred to a Subsidiary the Stock of which has not been previously
pledged to the Collateral Agent for the benefit of the First Lien Lenders and
the Lender, other than in connection with the consummation of an Asset Sale,
then the Borrower or the transferring Subsidiary, as applicable, shall,
concurrent with such transfer, pledge and deliver the Stock of the transferee
Subsidiary to the Collateral Agent for the benefit of the First Lien Lenders and
the Lender.
SECTION 7.19 REPORTING ON BRAZILIAN SUBSIDIARIES RESTRUCTURING
(a) The Borrower shall promptly, but in any event within 5 days, inform the
Lenders (which may be affected by a conference call) of any and all material
developments with respect to the progress of the restructuring of the documents
evidencing the TMT Indebtedness and otherwise on the business and financial
conditions of the Brazilian Subsidiaries.
(b) Until the Secured Obligations are paid in full, each of the Borrower's
Brazilian Subsidiaries shall maintain their respective: (a) product distribution
capabilities; (b) quality of product; and (c) ability to meet the purchase
requirements of the Borrower or its affiliates, as the case may be, at not less
than the same levels as in existence as of the date hereof as each may be
adjusted to take into account the re-sourcing of such products by the Borrower
or its affiliates. The Borrower shall promptly notify the Administrative Agent
of the failure of any Brazilian Subsidiary to satisfy one or more of
these requirements and shall have 14 calendar days from the date of such notice
to cure any such non-compliance. Failure to cure within the 14 day period shall
result in an Event of Default.
ARTICLE VIII
NEGATIVE COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent to each
of the following, as long as any Obligation 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 and the First Lien Secured Obligations (other
than in respect of Hedging Contracts);
(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 $7,500,000 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, (iv)
from a Brazilian Subsidiary to any other Brazilian Subsidiary; provided,
however, the aggregate outstanding principal amount of all such Indebtedness
permitted under this clause (iv)
and under Section 8.1(k)(iii)(y)(B) shall not exceed $10,000,000 or (v) from the
Borrower or any Guarantor to any Non-Guarantor Subsidiary; provided, however,
that, in the case of this clause (v), the Investment in such intercompany loan
to such Non-Guarantor Subsidiary is permitted under Section 8.3(e)(iv)
(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);
(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
$15,000,000 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
(i) in connection with the Brazilian Receivables Transactions; provided,
however, that the Dollar Equivalent of the aggregate outstanding principal
amount (or equivalent repurchase obligation) of all such Indebtedness incurred
pursuant to this clause (i) shall not exceed $150,000,000 at any time and (ii)
by any Material Foreign Subsidiary (other than in connection with the Brazilian
Receivables Transactions mentioned in clause (i) above); provided, however, that
the Dollar Equivalent of the aggregate outstanding principal amount of all
Indebtedness permitted under this clause (ii) shall not exceed $25,000,000 at
any time and (iii) incurred by Tecumseh do Brasil Ltda solely for the purpose of
(x) paying a dividend to the Borrower or (y) making a loan to TMT; provided,
that, the Dollar Equivalent of the aggregate outstanding principal amount of all
Indebtedness permitted under this clause (iii) shall not exceed (A) $15,000,000,
in the case of clause (x) above and (B) $10,000,000, in the case of clause (y)
above; provided, further, the outstanding principal amount of all Indebtedness
permitted under this clause (iii) shall not exceed $25,000,000 at any time; or
(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 $7,500,000
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 First 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);
(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 $5,000,000 in any Fiscal
Year and $15,000,000 in the aggregate at any time (other than Investments
permitted under Section 8.1(f) and 8.1(k));
(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);
(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 $5,000,000 in any
Fiscal Year and $15,000,000 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 $2,000,000 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 2.6 (Mandatory Prepayments);
(g) the sale of certain Investment Property set forth on Schedule 8.4(a) in
an aggregate Net Cash Proceeds of which shall not exceed $500,000, so long as
such sale is consummated on or prior to January 1, 2007.
(h) 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);
(i) so long as no Default or Event of Default is continuing or would result
from any sale hereunder, an Asset Sale for Fair Market Value (i) payable in cash
or (ii) payable in a combination of cash and other consideration; provided,
however, (A) at least 85% of all the consideration received from such Asset Sale
shall be in cash (except for Asset Sales of certain Subject Units set forth
under clause III on Annex A hereto for which the greater of (x) 25% of the total
purchase price and (y) an amount equal to that
portion of the Available Credit created solely by the inclusion of the assets
comprising the Subject Units set forth under clause III on Annex A hereof
included calculating the borrowing base under the First Lien Credit Agreement
immediately prior to the consummation of such Asset Sale, shall be in cash and
the balance of the purchase price shall be permitted to be in the form of the
assumption of TMT Indebtedness by the purchaser of such assets) and (B) the Net
Cash Proceeds received from such Asset Sale is in an amount sufficient to
satisfy the Secured Obligations, in respect of the Stock or assets of all or any
part of any entity or combination of parts or entities comprising the Subject
Units; provided, further, that such Net Cash Proceeds from such sale are applied
to the Obligations as set forth in, and to the extent required by, Section
2.6(a).
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 First Lien 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 First Lien Secured Obligations in accordance with the terms of First
Lien Credit Agreement, (ii) make regularly scheduled or otherwise required
repayments or redemptions of Indebtedness, (iii) prepay Indebtedness under the
Existing Credit Agreement and the First Lien Facility with the proceeds of the
Loan in accordance with the terms and conditions of this Agreement, (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) (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, subject to Section 2.5 (Prepayments); provided,
however, that, after giving effect to such payment and any Restricted Payment
made pursuant to Section 8.5(c) (Restricted Payments), the First Lien Available
Credit is greater than $75,000,000; provided, further, no prepayment of the
Obligations with proceeds of any Equity Issuance or Debt Issuance shall be
permitted if the First Lien Available Credit is less than $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 (other than with any other Loan Party), (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, (ii) salaries and other director or employee
compensation to officers or directors of the Borrower or any of its
Subsidiaries, and (iii) that certain Master Global Manufacture and Supply
Agreement between Tecumseh Power Company and TMT, in connection with the
restructuring of the TMT Indebtedness, with terms and conditions that are as
favorable to Borrower as those that could be obtained in a comparable arm's
length transaction with a Person not an Affiliate of Borrower.
SECTION 8.10 LIMITATIONS ON RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS; NO
NEW NEGATIVE PLEDGE
Except pursuant to the Loan Documents, the First 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 First 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.
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:
(a) the Borrower shall fail to pay any principal of any Loan 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), 7.13 (Real Property), 7.14 (Advisory Board), 7.15
(Equity Issuance), 7.16 (TMT Indebtedness), 7.17(a) or (d), 7.18 (Transfer or
Termination of Title IV Plans) 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) Other than in respect of the First Lien Secured Obligations, (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 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, the 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 second priority Lien (subordinated only to the Lien in favor of
the First Lien Secured Parties under the First Lien Credit Agreement), 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;
(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; or
(m) there shall have occurred an "Event of Default" under, and as defined
in, the First Lien Credit Agreement and such Event of Default shall not have
been cured or waived for a period of 45 consecutive days in accordance with the
terms of the First Lien Credit Agreement.
Notwithstanding anything in this Section 9.1 (Events of Defaults) to the
contrary, until the earlier of (i) the date that any TMT Enforcement Remedy has
occurred; and (ii)
180 days from the earlier of (x) December 15, 2006 and (y) the date that TMT has
failed to make a payment that is due and payable under any document evidencing
the TMT Indebtedness (as in effect on the date hereof), (A) TMT's failure to
make any payment on any TMT Indebtedness when the same becomes due and payable
shall not be an Event of Default under Section 9.1(e) and (B) solely with
respect to TMT, any restructuring of the TMT Indebtedness or any arbitration
instituted in connection with the TMT Indebtedness shall not be an Event of
Default under Section 9.1(f); provided, however, that 90 days following the
earlier of (x) December 15, 2006 and (y) the date that TMT has failed to make a
payment that is due and payable under any TMT Indebtedness (as in effect on the
date hereof), and thereafter, and upon at least 10 calendar days written notice
to the Borrower, either (x) Requisite Lenders under this Agreement or (y)
Revolving Credit Lenders (as defined in the First Lien Credit Agreement) having
more than fifty percent (50%) of the aggregate outstanding amount of the
Revolving Credit Commitments (as defined in the First Lien Credit Agreement) or,
after the Revolving Credit Termination Date (as defined in the First Lien Credit
Agreement), more than fifty percent (50%) of the aggregate Revolving Credit
Outstandings (as defined in the First Lien Credit Agreement), may, in their sole
discretion, elect to declare either or both of the events identified in clause
(A) and (B) above an Event of Default.
SECTION 9.2 REMEDIES
(a) During the continuance of any Event of Default, the Administrative
Agent may, and, at the request of the Requisite Lenders, shall, by notice to the
Borrower, declare the Loan, all interest thereon and all other amounts and
Obligations payable under this Agreement to be forthwith due and payable,
whereupon the Loan, all such interest and all such amounts and Obligations shall
become and be forthwith due and 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) (other than with respect to TMT)
the Loan, 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 RESCISSION
If at any time after acceleration of the maturity of the Loan, the Borrower
shall pay all arrears of interest and all payments on account of principal of
the Loan 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 Loan 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 acceleration and
consequences thereof 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 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.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION
(a) Each Lender hereby appoints Tricap Partners LLC ("Tricap") as the
Administrative Agent hereunder and each Lender 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
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 and the other
Secured Parties under such Collateral Documents.
(b) Each Lender 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; 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 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 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 except to the limited extent provided in Section 2.4(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 or
holder of an Obligation. The Administrative Agent may perform any of its duties
under any Loan Document by or through its agents or employees.
(e) The Arrangers 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
(f) The Administrative Agent agrees to promptly furnish to the Lenders
financial statements and field examination reports 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 Term Loan
Note as its holder until such Term Loan 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 2.4 (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 and shall not be responsible to any
Lender 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 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 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 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
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 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 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 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, Tricap 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", "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 Lender or as one
of the Requisite Lenders. Administrative Agent 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 Administrative Agent were not
acting as the Administrative Agent.
SECTION 10.5 LENDER CREDIT DECISION
Each Lender 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 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
documents expressly required by any Loan Document to be transmitted by the
Administrative Agent to the Lenders, the Administrative Agent shall not have any
duty or responsibility to provide any Lender 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 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 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 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 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 First 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,
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 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 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 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 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 to act as collateral sub-agent for
the Administrative Agent, the Lenders 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, (iv) manage, supervise and otherwise deal with the
Collateral, (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 and the
other Secured Parties with respect to the Collateral under the Loan Documents
relating thereto, applicable law or otherwise.
Each of the Administrative Agent, the Lenders 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.
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) subject such Lender to any additional obligation;
(ii) extend the scheduled final maturity of the Loan, or waive,
reduce or postpone any scheduled date fixed for the payment or
reduction of principal or interest of the Loan or fees owing to such
Lender (it being understood that Section 2.6 (Mandatory Prepayments)
does not provide for scheduled dates fixed for payment);
(iii) reduce, or release the Borrower from its obligations to
repay, the principal amount of any Loan owing to such Lender (other
than by the payment or prepayment thereof);
(iv) reduce the rate of interest on the Loan outstanding and
owing to such Lender or any fee payable hereunder to such Lender or
reduce, or limit the application of, the Prepayment Premium;
(v) postpone any scheduled date fixed for payment of interest or
fees owing to such Lender or waive any such payment;
(vi) change the aggregate Ratable Portions of Lenders required
for any or all Lenders to take any action hereunder;
(vii) 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 Note 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);
(viii) amend Section 2.9(g) (Payments and Computations), 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
(ix) 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 no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent and the Collateral Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent, the Collateral Agent, as the case may be,
under this Agreement or the other Loan Documents; 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.
(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 Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained (other
than any Arranger or any of its Affilates) as described in this Section 11.1
being referred to as a "Non-Consenting Lender"), then, as long as the 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
Lender acting as the Administrative Agent or such Eligible Assignee, all of the
Loans of such Non-Consenting Lender for an amount equal to the principal balance
of such 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 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 Term Loan Note (if the assigning Lender's Loans
are evidenced by a Term Loan 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 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 Loan);
provided, however, that (i) if any such assignment shall be of the assigning
Lender's Loan and Commitments, such assignment shall cover the same percentage
of such Lender's Loan and 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 $1,000,000 or an integral multiple
of $1,000,000 in excess thereof, except with the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed) and the Administrative
Agent. If any assignment under this Section 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 Term Loan Note (if the assigning Lender's Loans are evidenced by a Term
Loan 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 2.13 (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 Lender, (ii) the Term Loan 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 Lender's rights
and obligations under the Loan Documents, such 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 2.12(d) and 2.13 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 the principal amount of the Loans owing to each Lender from
time to time and the Term Loan 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.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning 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 Term Loan Notes
to the order of the assigning Lender have been surrendered or an affidavit of
loss certificate has been provided by such Lender, execute and deliver to the
Administrative Agent, new Term Loan Notes to the order of such assignee in an
amount equal to the Term Loan Commitments assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has surrendered any Term
Loan Note for exchange in connection with the assignment and has retained Term
Loan Commitments hereunder, new Term Loan Notes to the order of the assigning
Lender in an amount equal to the Term Loan Commitments retained by it hereunder.
Such new Term Loan Notes shall be dated the same date as the surrendered Term
Loan Notes and be in substantially the form of Exhibit B (Form of Term Loan
Note).
(f) 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 Loan). 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 2.11 (Capital
Adequacy) and 2.12 (Taxes) and of Section 2.10 (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 Sections 2.11
(Capital Adequacy), 2.12 (Taxes) or 2.10 (Illegality) to the participants in the
rights and obligations of any Lender (together with 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.
(g) 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.
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 the Loans), 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 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 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 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.
(c) The Administrative Agent at the request of the Requisite Lenders shall
have the right to retain such advisors and professionals as Administrative Agent
reasonably determines is necessary to advise Administrative Agent or the Lenders
in connection with the maintenance of the Loan and the transactions contemplated
in this Agreement and the other Loan Documents. Borrower hereby agrees that
Borrower shall promptly (but in no event later than 30 days after Administrative
Agent delivers to Borrower an invoice therefor) pay any and all fees, costs and
other expenses incurred by Administrative Agent in connection with the retention
of such advisors and professionals
SECTION 11.4 INDEMNITIES
(a) The Borrower agrees to indemnify and hold harmless the Administrative
Agent, the Collateral Agent, and each Lender 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
the Loan) (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 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 Loan
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 10.4 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 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 or any Lender, or the Administrative Agent, the Collateral
Agent or any Lender having become the successor in interest to the Borrower or
any of its Subsidiaries and (y) attributable solely to acts of the
Administrative Agent or such Lender or any agent on behalf of the Administrative
Agent or Lender.
(b) The Borrower shall indemnify the Administrative Agent, the Collateral
Agent and the Lenders for, and hold the Administrative Agent and the Lenders
harmless from and against, any and all claims for brokerage commissions, fees
and other compensation made against the Administrative Agent, the Collateral
Agent or the Lenders 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 10.4) 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 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 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 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 2.10 (Special Provisions Governing Eurodollar Rate Loans), 2.11 (Capital
Adequacy) or 2.12 (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 2.10 (Special Provisions Governing
Eurodollar Rate Loans), 2.11 (Capital Adequacy) or 2.12 (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
Lenders, such Lender (a "Purchasing Lender") shall forthwith purchase from the
other Lenders (each, a "Selling Lender") 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 Lender:
TRICAP PARTNERS LLC
BCE Place, Suite 300
000 Xxx Xxxxxx, X.X. Xxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xx. Xxxxx Xxxxx
Telecopy no: (000) 000-0000
E-Mail Address: XXxxxx@xxxxxxxxxx.xxx
With additional notice to:
TRICAP PARTNERS LLC
3 World Financial Center
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxxx X. Xxxxxx
E-Mail Address: XXxxxxx@xxxxxxxxxx.xxx
with a copy to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Telecopy No. (000) 000-0000
E-Mail Address: xxxxxxxx@xxx.xxx
(iii) if to Administrative Agent:
TRICAP PARTNERS LLC
BCE Place, Suite 300
000 Xxx Xxxxxx, X.X. Xxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xx. Xxxxx Xxxxx
Telecopy no: (000) 000-0000
E-Mail Address: XXxxxx@xxxxxxxxxx.xxx
With additional notice to:
TRICAP PARTNERS LLC
3 World Financial Center
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxxx X. Xxxxxx
E-Mail Address: XXxxxxx@xxxxxxxxxx.xxx
or at such other address as shall be notified in writing (x) in the case of the
Borrower or the Administrative Agent, 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 (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 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 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 that such Lender 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, 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.
(c) Nothing contained in this Section 10.10 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 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 or any Lender 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 or the Lenders 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.
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 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]
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
---------------------------------
and Chief Financial Officer
---------------------------------
CITICORP USA, INC.,
as Collateral Agent
By: /s/ Sebastien Delasnerie
------------------------------------
Name: Sebastien Delasnerie
----------------------------------
Title: Vice President
---------------------------------
TRICAP PARTNERS LLC
as Administrative Agent
By: /s/ Xxxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
----------------------------------
Title: President
---------------------------------
TRICAP PARTNERS LLC
as Lender
By: /s/ Xxxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
----------------------------------
Title: President
---------------------------------
* indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
ANNEX A
SUBJECT UNITS
SUBJECT UNITS:
I. *
II. *; and
III. *.
Certain definitions relating to Disposition Adjusted set forth in Section 5.2
"Reporting Period" has the meaning specified on Annex A.
"Electrical Segment" has the meaning specified on Annex A.
"Engines Segment" has the meaning specified on Annex A.
"Segment" means, individually, each of *, * and * as shown on Annex A.
"Cumulative EBITDA Covenant Adjustment" means, with respect to each Reporting
Period, that number set forth opposite such Reporting Period under the heading
"Cumulative EBITDA Covenant Adjustment" in the chart on Annex A.
"Cumulative Sales Projection" means, with respect to each Reporting Period, that
number set forth opposite such Reporting Period under the heading "Cumulative
Sales Projection" in the chart on Annex A.
"Quarterly Projected EBITDA Covenant" means, with respect to each quarter
specified in the applicable chart on Annex A, that number set forth opposite
such quarter under the heading "Quarterly Projected EBITDA Covenant" in the
chart on Annex A.
"Sales Projection" means, with respect to each quarter specified in the
applicable chart on Annex A, that number set forth opposite such quarter under
the heading "Sales Projection" in the chart on Annex A.
In the event of an Asset Sale of a Subject Unit permitted under Section 8.4(i),
Minimum EBITDA shall be adjusted downward, for each reporting period specified
in Section 5.2 (each a "Reporting Period") (other than Reporting Periods ended
prior to the date of the Asset Sale being examined), by the Cumulative EBITDA
Covenant Adjustment amount set forth opposite each of (x) the Reporting Period
in which the Asset Sale takes place for the applicable Segment below and (y)
each Reporting Period subsequent to the Reporting Period in which the Asset Sale
takes place for the applicable Segment below; provided, however, that
(A) in the event the subject Asset Sale is of less than the entire Segment,
then the Cumulative EBITDA Covenant Adjustment specified below for each
Reporting Period shall be an amount equal to the product obtained by multiplying
(x) the Cumulative EBITDA Covenant
* indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
Adjustment specified for such Reporting Period by (y) a fraction (i) the
numerator of which is that portion of the Segment's Sales Projection
attributable to the assets being sold and (ii) the denominator of which is Sales
Projection for the subject Segment set forth opposite such Reporting Period and
(B) shall be further adjusted in accordance with GAAP accounting standards
to reflect the timing of the Asset Sale to reflect the EBITDA contribution to
such Segment's Cumulative EBITDA Covenant Adjustment that was projected for the
Segment (or portion thereof) that was the subject of the Asset Sale as set forth
in the Quarterly Projected EBITDA Covenant table below
*
CUMULATIVE CUMULATIVE SALES
EBITDA ADJUSTMENT PROJECTION
CUMULATIVE REPORTING PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
--------------------------- ----------------- ----------------
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
10/01/2006-12/31/07 * *
QUARTERLY PROJECTED EBITDA COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
------- ----------------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
* indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
*
CUMULATIVE CUMULATIVE SALES
EBITDA ADJUSTMENT PROJECTION
REPORTING PERIOD ($ IN MILLIONS) ($ IN MILLIONS)
---------------- ----------------- ----------------
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
10/01/2006-12/31/07 * *
QUARTERLY PROJECTED EBITDA COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
------- ----------------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
* indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
*
CUMULATIVE SALES
CUMULATIVE PROJECTION
REPORTING PERIOD EBITDA ADJUSTMENT ($ IN MILLIONS)
---------------- ----------------- ----------------
10/01/2006-12/31/06 * *
10/01/2006-3/31/07 * *
10/01/2006-6/30/07 * *
10/01/2006-9/30/07 * *
10/01/2006-12/31/07 * *
QUARTERLY PROJECTED EBITDA COVENANT SALES PROJECTION
QUARTER ($ IN MILLIONS) ($ IN MILLIONS)
------- ----------------------------------- ----------------
Q4-2006 * *
Q1-2007 * *
Q2-2007 * *
Q3-2007 * *
Q4-2007 * *
