EXHIBIT 4.1
THREE-YEAR CREDIT AGREEMENT
DATED AS OF DECEMBER 30, 2002
AMONG
TECUMSEH PRODUCTS COMPANY,
THE LENDERS AND LC ISSUER,
BANK ONE, NA
AS AGENT
AND
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS...........................................................................................1
ARTICLE II. THE CREDITS..........................................................................................15
2.1. Commitment.......................................................................................15
2.2. Required Payments; Termination...................................................................15
2.3. Ratable Loans....................................................................................15
2.4. Types of Advances................................................................................15
2.5 Swing Line Loans.................................................................................15
2.6 Facility Fee, Utilization Fee; Reductions in Aggregate Commitment................................17
2.7. Minimum Amount of Each Advance...................................................................17
2.8. Optional Principal Payments......................................................................17
2.9. Method of Selecting Types and Interest Periods for New Advances..................................17
2.10. Conversion and Continuation of Outstanding Advances..............................................18
2.11. Changes in Interest Rate, etc....................................................................18
2.12. Rates Applicable After Default...................................................................19
2.13. Method of Payment................................................................................19
2.14. Noteless Agreement; Evidence of Indebtedness.....................................................19
2.15. Telephonic Notices...............................................................................20
2.16. Interest Payment Dates; Interest and Fee Basis...................................................20
2.17. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions..................20
2.18. Lending Installations............................................................................21
2.19. Facility LCs.....................................................................................21
2.20. Non-Receipt of Funds by the Agent................................................................25
2.21. Replacement of Lender............................................................................25
ARTICLE III. YIELD PROTECTION; TAXES..............................................................................25
3.1. Yield Protection.................................................................................25
3.2. Changes in Capital Adequacy Regulations..........................................................26
3.3. Availability of Types of Advances................................................................27
3.4. Funding Indemnification..........................................................................27
3.5. Taxes............................................................................................27
3.6. Lender Statements; Survival of Indemnity.........................................................28
ARTICLE IV. CONDITIONS PRECEDENT.................................................................................29
4.1. Initial Credit Extension.........................................................................29
4.2 Each Credit Extension............................................................................31
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................32
5.1. Existence and Standing...........................................................................32
5.2. Authorization and Validity.......................................................................32
5.3. No Conflict; Government Consent..................................................................32
5.4. Financial Statements.............................................................................32
5.5. Material Adverse Change..........................................................................33
5.6. Taxes............................................................................................33
5.7. Litigation and Contingent Obligations............................................................33
5.8. Subsidiaries.....................................................................................33
5.9. ERISA............................................................................................33
5.10. Accuracy of Information..........................................................................34
5.11. Regulations T, U and X...........................................................................34
5.12. Material Agreements..............................................................................34
5.13. Compliance With Laws.............................................................................34
5.14. Ownership of Properties..........................................................................34
5.15. Plan Assets; Prohibited Transactions.............................................................34
5.16. Environmental Matters............................................................................34
5.17. Investment Company Act...........................................................................35
5.18. Public Utility Holding Company Act...............................................................35
5.19. Solvency.........................................................................................35
5.20. FASCO Acquisition................................................................................35
ARTICLE VI. COVENANTS............................................................................................36
6.1. Financial Reporting..............................................................................36
6.2. Use of Proceeds; FASCO Acquisition Documents.....................................................37
6.3. Notice of Default................................................................................38
6.4. Conduct of Business..............................................................................38
6.5. Taxes............................................................................................38
6.6. Insurance........................................................................................38
6.7. Compliance with Laws.............................................................................38
6.8. Maintenance of Properties........................................................................38
6.9. Inspection.......................................................................................38
6.10. Dividends........................................................................................38
6.11. Non-Guarantor Indebtedness.......................................................................39
6.12. Merger...........................................................................................39
6.13. Sale of Assets...................................................................................39
6.14. Investments and Acquisitions.....................................................................39
6.15. Liens............................................................................................40
6.16. Affiliates.......................................................................................41
6.17 Limitation on Restrictions on Subsidiary Distributions...........................................41
ii
6.18 Financial Contracts..............................................................................41
6.19. Financial Covenants..............................................................................41
6.20. Additional Covenants.............................................................................42
ARTICLE VII. DEFAULTS............................................................................................42
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.....................................................44
8.1. Acceleration; Facility LC Collateral Account.....................................................44
8.2. Amendments.......................................................................................45
8.3. Preservation of Rights...........................................................................46
ARTICLE IX. GENERAL PROVISIONS....................................................................................46
9.1. Survival of Representations......................................................................46
9.2. Governmental Regulation..........................................................................46
9.3. Headings.........................................................................................46
9.4. Entire Agreement.................................................................................47
9.5. Several Obligations; Benefits of this Agreement..................................................47
9.6. Expenses; Indemnification........................................................................47
9.7. Numbers of Documents.............................................................................47
9.8. Accounting.......................................................................................47
9.9. Severability of Provisions.......................................................................48
9.10. Nonliability of Lenders..........................................................................48
9.11. Confidentiality..................................................................................48
9.12. Nonreliance......................................................................................49
9.13. Disclosure.......................................................................................49
ARTICLE X. THE AGENT..............................................................................................49
10.1. Appointment; Nature of Relationship..............................................................49
10.2. Powers...........................................................................................49
10.3. General Immunity.................................................................................49
10.4. No Responsibility for Loans, Recitals, etc.......................................................49
10.5. Action on Instructions of Lenders................................................................50
10.6. Employment of Agents and Counsel.................................................................50
10.7. Reliance on Documents; Counsel...................................................................50
10.8. Agent's Reimbursement and Indemnification........................................................50
10.9. Notice of Default................................................................................51
10.10. Rights as a Lender...............................................................................51
10.11. Lender Credit Decision...........................................................................51
10.12. Successor Agent..................................................................................51
10.13. Agent and Arranger Fees..........................................................................52
10.14. Delegation to Affiliates.........................................................................52
iii
10.17. Co-Agents, Documentation Agent, Syndication Agent, etc...........................................52
ARTICLE XI. SETOFF; RATABLE PAYMENTS..............................................................................52
11.1. Setoff...........................................................................................52
11.2. Ratable Payments.................................................................................52
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...................................................53
12.1. Successors and Assigns...........................................................................53
12.2. Participations...................................................................................53
12.3. Assignments......................................................................................54
12.4. Dissemination of Information.....................................................................56
12.5. Tax Treatment....................................................................................56
ARTICLE XIII. NOTICES............................................................................................57
13.1. Notices..........................................................................................57
13.2. Change of Address................................................................................57
ARTICLE XIV. COUNTERPARTS.........................................................................................57
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.........................................57
15.1. CHOICE OF LAW....................................................................................57
15.2. CONSENT TO JURISDICTION..........................................................................57
15.3. WAIVER OF JURY TRIAL.............................................................................58
EXHIBIT A. FORM OF OPINION.......................................................................................61
EXHIBIT B. COMPLIANCE CERTIFICATE................................................................................63
EXHIBIT D. LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION........................................................71
EXHIBIT E. NOTE..................................................................................................72
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS...................................................................74
SCHEDULE 2. INDEBTEDNESS AND LIENS...............................................................................75
iv
SCHEDULE 3. FASCO ENTITIES.......................................................................................76
SCHEDULE 5.7. LITIGATION.........................................................................................76
v
THREE-YEAR CREDIT AGREEMENT
This Agreement, dated as of December 30, 2002, is among Tecumseh
Products Company, a Michigan corporation, the Lenders and Bank One, NA, a
national banking association having its principal office in Chicago, Illinois,
as Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Accumulated Funding Deficiency" means any accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302 of
ERISA.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities Voting Stock of any Person.
"Advance" means a borrowing hereunder, (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same Type and, in the
case of Eurodollar Loans, for the same Interest Period. The term "Advance" shall
include Swing Line Loans unless otherwise expressly provided.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 5% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof. As of
the date hereof, the Aggregate Commitment equals $125,000,000.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
1
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Applicable Facility Fee Rate" means, at any time, the percentage rate
per annum at which facility fees under Section 2.6(i) are accruing at such time
as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the president, chief executive
officer or chief financial officer of the Borrower or any other employee of the
Borrower designated in writing as an Authorized Officer by any of the foregoing,
in each case acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Board of Directors" means: (i) with respect to a corporation, the
board of directors of the corporation; (ii) with respect to a partnership, the
Board of Directors of the general partner of the partnership; and (iii) with
respect to any other Person, the board or committee of such Person serving a
similar function.
"Borrower" means Tecumseh Products Company, a Michigan corporation, and
its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Bridge Credit Agreement" means the Bridge Credit Agreement dated as of
the date hereof among the Borrower, the lenders party thereto and Bank One, NA,
as agent, as amended, modified, replaced or refinanced from time to time.
2
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Detroit and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Detroit for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capital Stock" means (i) in the case of any corporation, all capital
stock and any securities exchangeable for or convertible into capital stock and
any warrants, rights or other options to purchase or otherwise acquire capital
stock or such securities or any other form of equity securities, (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Xxxxx'x, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change in Control" means (i) the acquisition by any Person (other than
Permitted Holders), or two or more Persons (other than Permitted Holders) acting
in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
20% or more of the outstanding shares of voting stock of the Borrower; or (ii) a
majority of the members of the Board of Directors of the Borrower shall not be
Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to
make Revolving Loans to, and participate in Swing Line Loans and Facility LCs
issued upon the application of, the Borrower in an aggregate amount not
exceeding the amount set forth opposite its signature below or as set forth in
any Notice of Assignment relating to any assignment that has become effective
pursuant to Section 12.3.3, as such amount may be modified from time to time
pursuant to the terms hereof.
3
"Consolidated EBIT" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) restructuring
charges for plant closings (including charges for impairment of value of
equipment and severance costs) taken after September 30, 2002 but on or before
December 31, 2003 to the extent such restructuring charges do not exceed
$40,000,000 in aggregate amount, and (iv) extraordinary losses incurred other
than in the ordinary course of business, minus, to the extent included in
Consolidated Net Income, extraordinary gains realized other than in the ordinary
course of business, all calculated for the Borrower and its Subsidiaries on a
consolidated basis.
"Consolidated EBITDA" means Consolidated EBIT plus, to the extent
deducted from revenues in determining Consolidated EBIT and without duplication,
(i) depreciation, (ii) amortization and (iii) non-cash charges related
specifically to any goodwill impairment charge required under FASB 142 not to
exceed $25,000,000 in the aggregate for any four consecutive fiscal quarters or
$50,000,000 in the aggregate for any twelve consecutive fiscal quarters, all
calculated for the Borrower and its Subsidiaries on a consolidated basis.
"Consolidated Indebtedness" means at any time the Indebtedness of the
Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.
"Consolidated Interest Expense" means, with reference to any period,
the interest expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period, including without limitation all financing
costs in connection with a Qualified Receivables Transaction.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis as of such time; provided that all accumulated other
comprehensive income (as determined in accordance with Agreement Accounting
Principles, which includes such non-cash adjustments for foreign currency
translation and transaction adjustments, net unrealized gains/losses on all
investments, minimum pension liability and other FASB 87 adjustments, and all
FASB 133 related adjustments) shall be excluded in determining Consolidated Net
Worth.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Continuing Directors" means, as of any date, individuals who at the
beginning of any period of two consecutive calendar years ended before such date
constituted the Board of Directors of the Borrower, together with any new
directors whose election by such Board of Directors or whose nomination for
election was approved by a vote of at least two-thirds of the members of such
Board of Directors then still in office who either were members of such Board of
Directors at the beginning of such period or whose election or nomination for
election was previously so approved.
4
"Conversion/Continuation Notice" is defined in Section 2.10.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Default" means an event described in Article VII.
"Defaulting Lender" means any Lender that on any Borrowing Date fails
to make available to the Agent such Lender's Loans required to be made to the
Borrower on such Borrowing Date or fails to make any payment due to the Agent as
and when due hereunder. Once a Lender becomes a Defaulting Lender, such Lender
shall continue as a Defaulting Lender until such time as such Defaulting Lender
makes available to the Agent the amount of such Defaulting Lender's Loans
together with all other amounts required to be paid to the Agent and/or the
Lenders pursuant to this Agreement.
"Domestic Subsidiary" means each present and future Subsidiary of the
Borrower which is not a Foreign Subsidiary.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
5
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income
(including the Michigan single business tax), and franchise taxes imposed on it,
by (i) the jurisdiction under the laws of which such Lender or the Agent is
incorporated or organized or (ii) the jurisdiction in which the Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Facility LC" is defined in Section 2.19.1.
"Facility LC Application" is defined in Section 2.19.3.
"Facility LC Collateral Account" is defined in Section 2.19.11.
"Facility Termination Date" means the earlier of (i) the date three
years after the date of this Agreement or (ii) the date on which the Aggregate
Commitment is reduced to zero or otherwise terminated pursuant to the terms
hereof
"FASCO" shall mean the entities comprising the FASCO Motors Group to be
acquired by the Borrower as further described in the FASCO Acquisition Documents
and set forth on attached Schedule 3.
"FASCO Acquisition" means the Acquisition by the Borrower and/or a
Guarantor of FASCO pursuant to the FASCO Acquisition Documents, which is
currently scheduled to be completed on or before February 28, 2003.
"FASCO Acquisition Documents" means the FASCO Purchase Agreement and
all other material agreements, documents and instruments executed in connection
therewith, in each case as amended or modified from time to time to the extent
permitted by Section 6.2 hereof.
"FASCO Stock Purchase Agreement" means the stock purchase agreement
dated November 27, 2002 among the Borrower and the Sellers for the Acquisition
by the Borrower and/or a Guarantor of FASCO, as amended or modified from time to
time to the extent permitted by Section 6.2 hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Detroit
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
6
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (ii) any Rate Management
Transaction.
"Floating Rate" means, for any day, a rate of interest per annum equal
to the higher of (i) the Prime Rate for such day and (ii) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.12, bears interest at the Floating Rate.
"Foreign Subsidiary" means each Subsidiary organized under the laws of
a jurisdiction outside of the United States.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court or any foreign governmental
authority, agency or court.
"Guarantor" means all present and future Domestic Subsidiaries of the
Borrower and their successors and assigns, and any other Person executing a
Guaranty at any time.
"Guaranty" means all guaranties of the Obligations executed by the
Guarantors in favor of the Agent, for the ratable benefit of the Lenders, as it
may be amended or modified and in effect from time to time, and each such
guaranty shall be in form and substance acceptable to the Agent.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) obligations of such Person
with respect to Letters of Credit, whether drawn or undrawn, contingent or
otherwise, (vii) Net Xxxx-to-Market Exposure, (viii) Off-Balance Sheet
Liabilities, (ix) Capitalized Lease Obligations, (x) Receivables Transaction
Attributed Indebtedness, (xi) any other obligation for borrowed money or other
financial accommodation which in accordance with Agreement Accounting Principles
would be shown as a liability on the consolidated balance sheet of such Person,
and (xii) all Contingent Obligations of such Person with respect to any of the
foregoing.
7
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LC Fee" is defined in Section 2.19.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.19.5.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns. Unless otherwise
specified, the term "Lenders" includes Bank One in its capacity as Swing Line
Lender.
"Lending Installation" means, with respect to a Lender, the Agent or LC
Issuer, the office, branch, subsidiary or affiliate of such Lender, the Agent or
LC Issuer listed on the signature pages hereof or on a Schedule or otherwise
selected by such Lender, the Agent or LC Issuer pursuant to Section 2.18
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (i)
Consolidated Indebtedness outstanding on such date to (ii) Consolidated EBITDA
for the Borrower's then most-recently ended four fiscal quarters.
8
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan Documents" means this Agreement, the Guaranties, the Facility LC
Applications, any Notes issued pursuant to Section 2.14 and any other agreements
or instruments executed in connection herewith at any time.
"Loan" means a Revolving Loan or a Swing Line Loan.
"Margin Stock" means "margin stock" as defined in Regulations U or X or
"marginable OTC stock" or "foreign margin stock" within the meaning of
Regulation T.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, or of FASCO
taken as a whole, (ii) the ability of the Borrower and the Guarantors taken as a
whole to perform their respective obligations under the Loan Documents, or (iii)
the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Material Indebtedness" means Indebtedness in an outstanding principal
amount of $25,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Modify" and "Modification" are defined in Section 2.19.1.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Cash Proceeds" means, in connection with any issuance or sale of
any equity securities or debt securities or instruments or the incurrence of
loans, the cash proceeds received from such issuance or incurrence, net of
investment banking fees, reasonable and documented attorneys' fees, accountants'
fees, underwriting discounts and commissions and other reasonable and customary
fees and expenses actually incurred in connection therewith.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).
9
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.14.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent, the LC Issuer or any
indemnified party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding from this clause (iv) Operating Leases.
"Opening Pro Forma Statements" is defined in Section 4.1(xii).
"Opening Projections" is defined in Section 4.1(xii).
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Revolving Loans outstanding at
such time, plus (ii) an amount equal to its Pro Rata Share of the LC Obligations
and the aggregate principal amount of Swing Line Loans outstanding at such time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the date three months after the date hereof and
each date occurring each three months thereafter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Holders" means and includes (A) any Person who is a lineal
descendant of Xxxxxxx Xxxxxxx, (B) the spouse, children, or grandchildren of any
such Person, (C) any trust of which any of such Persons is a trustee or a
beneficiary, (D) the estate, executor, administrator, or any legal guardian of
any such Person, (E) any partnership, corporation or limited liability company
owned and controlled solely by such Persons and (F) the Xxxxxxx Foundation.
10
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Borrower or any Subsidiary pursuant
to which the Borrower or any Subsidiary may sell, convey or otherwise transfer
to a newly-formed Subsidiary or other special-purpose entity, or any other
Person, any accounts or notes receivable and rights related thereto, provided
that (i) all of the terms and conditions of such transaction or series of
transactions, including without limitation the amount and type of any recourse
to the Borrower or any Subsidiary with respect to the assets transferred, are
acceptable to the Agent and the Required Lenders and (ii) the Receivables
Transaction Attributed Indebtedness incurred in such transaction or series of
transactions does not exceed $100,000,000.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Receivables Transaction Attributed Indebtedness" means the amount of
obligations outstanding under the legal documents entered into as part of any
Qualified Receivables Transaction on any date of determination that would be
characterized as principal if such Qualified Receivables Transaction were
structured as a secured lending transaction rather than as a purchase.
11
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having more than 50%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding more than 50% of the Aggregate Outstanding
Credit Exposure.
"Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority (foreign or domestic), in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Loan" means, with respect to a Lender, such Lender's loan
made pursuant to its commitment to lend set forth in Section 2.1 (or any
conversion or continuation thereof).
12
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SEC Reports" means the following reports and financial statements of
the Borrower:
(i) the Borrower's annual report on Form 10-K for the year
ended December 31, 2001, as filed with or sent to the Securities and Exchange
Commission as of the date hereof; and
(ii) the Borrower's quarterly reports on Form 10-Q for the
quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, the
definitive proxy statement for the 2002 annual shareholders meeting of the
Borrower and all Form 8-K's filed after December 31, 2001, in each case as filed
with the Securities and Exchange Commission as of the date hereof.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Sellers" means BTR Industries Limited, a corporation organized and
existing under the laws of England and Wales, BTR (European Holdings) BV, a
corporation organized and existing under the laws of the Netherlands, CPN
Holdings Pty Limited, a corporation organized and existing under the laws of
Australia, Invensys Controls Mexican Holding, L.L.C., a limited liability
company organized and existing under the laws of Mexico and BTR (USA) Finance
Company, a Massachusetts business trust, and Invensys plc, a corporation
organized and existing under the laws of England and Wales.
"Significant Subsidiary" means any one or more Subsidiaries which, if
considered in the aggregate as a single Subsidiary, would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Securities
Exchange Act of 1934.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower. For purposes of the representations and
warranties made herein, each reference to a "Subsidiary" of the Borrower shall
include the Target and its Subsidiaries.
13
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which represents more than 10% (or, for
purposes of Section 6.13, 15%) of the consolidated assets of the Borrower and
its Subsidiaries or property which is responsible for more than 10% (or, for
purposes of Section 6.13, 15%) of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).
"Swing Line Borrowing Notice" is defined in Section 2.5.2.
"Swing Line Commitment" means the obligation of the Swing Line Lender
to make Swing Line Loans up to a maximum principal amount of $15,000,000 at any
one time outstanding.
"Swing Line Lender" means Bank One or such other Lender which may
succeed to its rights and obligations as Swing Line Lender pursuant to the terms
of this Agreement.
"Swing Line Loan" means a Loan made available to the Borrower by the
Swing Line Lender pursuant to Section 2.5.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, trustees or
similar persons thereof.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
14
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to (i) make Revolving Loans to
the Borrower and (ii) participate in Swing Line Loans and Facility LCs issued
upon the request of the Borrower, provided that, after giving effect to the
making of each such Loan and the issuance of each such Facility LC, such
Lender's Outstanding Credit Exposure shall not exceed its Commitment, provided,
further, that at no time shall the aggregate principal amount of the Loans and
Facility LC's outstanding hereunder exceed the Aggregate Commitment.. Subject to
the terms of this Agreement, the Borrower may borrow, repay and reborrow at any
time prior to the Facility Termination Date. The Commitments to extend credit
hereunder shall expire on the Facility Termination Date. The LC Issuer will
issue Facility LCs hereunder on the terms and conditions set forth in Section
2.19.
2.2. Required Payments; Termination. Unless earlier payment is
required hereunder, the Loans and all other unpaid Obligations shall be paid in
full by the Borrower on the Facility Termination Date.
2.3. Ratable Loans. Each Advance hereunder (other than any
Swing Line Loan) shall consist of Revolving Loans made from the several
Lenders ratably in proportion to the ratio that their respective
Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.9 and 2.10, or Swing Line Loans selected by the
Borrower in accordance with Section 2.5.
2.5. Swing Line Loans.
2.5.1. Amount of Swing Line Loans. Upon the satisfaction of
the conditions precedent set forth in Section 4.2 and, if such Swing
Line Loan is to be made on the date of the initial Advance hereunder,
the satisfaction of the conditions precedent set forth in Section 4.1
as well, from and including the date of this Agreement and prior to the
Facility Termination Date, the Swing Line Lender agrees, on the terms
and conditions set forth in this Agreement, to make Swing Line Loans to
the Borrower from time to time in an aggregate principal amount not to
exceed the Swing Line Commitment, provided that the Aggregate
Outstanding Credit Exposure shall not at any time exceed the Aggregate
Commitment, and provided further that at no time shall the sum of (i)
the Swing Line Lender's Pro Rata Share of the Swing Line Loans, plus
(ii) the outstanding Revolving Loans made by the Swing Line Lender
pursuant to Section 2.1, exceed the Swing Line Lender's Commitment at
such time. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Swing Line Loans at any time prior to the
Facility Termination Date.
15
2.5.2. Borrowing Notice. The Borrower shall deliver to the
Agent and the Swing Line Lender irrevocable notice (a "Swing Line
Borrowing Notice") not later than noon (Detroit time) on the Borrowing
Date of each Swing Line Loan, specifying (i) the applicable Borrowing
Date (which date shall be a Business Day), and (ii) the aggregate
amount of the requested Swing Line Loan which shall be an amount not
less than $100,000. The Swing Line Loans shall bear interest at the
Floating Rate.
2.5.3. Making of Swing Line Loans. Promptly after receipt of a
Swing Line Borrowing Notice, the Agent shall notify each Lender by fax,
or other similar form of transmission, of the requested Swing Line
Loan. Not later than 2:00 p.m. (Detroit time) on the applicable
Borrowing Date, the Swing Line Lender shall make available the Swing
Line Loan, in funds immediately available in Detroit, to the Agent at
its address specified pursuant to Article XIII. The Agent will promptly
make the funds so received from the Swing Line Lender available to the
Borrower on the Borrowing Date at the Agent's aforesaid address.
2.5.4. Repayment of Swing Line Loans. Each Swing Line Loan
shall be paid in full by the Borrower on or before the seventh (7th)
Business Day after the Borrowing Date for such Swing Line Loan. In
addition, the Swing Line Lender (i) may at any time in its sole
discretion with respect to any outstanding Swing Line Loan, or (ii)
shall on the seventh (7th) Business Day after the Borrowing Date of any
Swing Line Loan, require each Lender (including the Swing Line Lender)
to make a Revolving Loan in the amount of such Lender's Pro Rata Share
of such Swing Line Loan (including, without limitation, any interest
accrued and unpaid thereon), for the purpose of repaying such Swing
Line Loan. Not later than noon (Detroit time) on the date of any notice
received pursuant to this Section 2.5.4, each Lender shall make
available its required Revolving Loan, in funds immediately available
in Detroit to the Agent at its address specified pursuant to Article
XIII. Revolving Loans made pursuant to this Section 2.5.4 shall
initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Loans in the manner
provided in Section 2.10 and subject to the other conditions and
limitations set forth in this Article II. Unless a Lender shall have
notified the Swing Line Lender, prior to its making any Swing Line
Loan, that any applicable condition precedent set forth in Sections 4.1
or 4.2 had not then been satisfied, such Lender's obligation to make
Revolving Loans pursuant to this Section 2.5.4 to repay Swing Line
Loans shall be unconditional, continuing, irrevocable and absolute and
shall not be affected by any circumstances, including, without
limitation, (a) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Agent, the Swing Line
Lender or any other Person, (b) the occurrence or continuance of a
Default or Unmatured Default, (c) any adverse change in the condition
(financial or otherwise) of the Borrower, or (d) any other
circumstances, happening or event whatsoever. In the event that any
Lender fails to make payment to the Agent of any amount due under this
Section 2.5.4, the Agent shall be entitled to receive, retain and apply
against such obligation the principal and interest otherwise payable to
such Lender hereunder until the Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied. In addition to
the foregoing, if for any reason any Lender fails to make payment to
the Agent of any amount due under this Section 2.5.4, such Lender shall
be deemed, at the option of the Agent, to have unconditionally and
irrevocably purchased from the Swing Line Lender, without recourse or
warranty, an undivided interest and participation in the applicable
Swing Line Loan in the amount of such Revolving Loan, and such interest
and participation may be recovered from such Lender together with
interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand and ending on the
date such amount is received. On the Facility Termination Date, the
Borrower shall repay in full the outstanding principal balance of the
Swing Line Loans.
16
2.6. Facility Fee; Utilization Fee; Reductions in Aggregate
Commitment. The Borrower agrees to pay to the Agent for the account of each
Lender a
(i) facility fee at a per annum rate equal to the Applicable Facility
Fee Rate on such Lender's Commitment (whether used or unused) from the date
hereof to and including the Facility Termination Date, payable on each Payment
Date hereafter and on the Facility Termination Date, provided that, if any
Lender continues to have Loans outstanding hereunder after the termination of
its Commitment (including, without limitation, during any period when Loans may
be outstanding but new Loans may not be borrowed hereunder), then such facility
fee shall continue to accrue on the aggregate principal amount of the Loans owed
to such Lender until such Loans are repaid in full, and
(ii) utilization fee on all outstanding Loans of each Lenders at a per
annum rate equal to 0.125% for each day when the aggregate principal amount of
the Loans exceeds 33% of the Aggregate Commitment, payable on each Payment Date
hereafter, on the Facility Termination Date and on demand thereafter.
The Borrower may permanently reduce the Aggregate Commitment in whole, or in
part ratably among the Lenders in integral multiples of $10,000,000, upon at
least five Business Days' written notice to the Agent, which notice shall
specify the amount of any such reduction, provided, however, that the amount of
the Aggregate Commitment may not be reduced below the aggregate principal amount
of the outstanding Advances. All accrued facility fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder and on the final date upon which all Loans are repaid hereunder.
2.7. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance (other than an Advance to repay Swing
Line Loans) shall be in the minimum amount of $10,000, provided, however, that
any Floating Rate Advance may be in the amount of the unused Aggregate
Commitment.
2.8. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances (other
than Swing Line Loans), or, in a minimum aggregate amount of $10,000, any
portion of the outstanding Floating Rate Advances (other than Swing Line Loans)
upon two Business Days' prior notice to the Agent. The Borrower may at any time
pay, without penalty or premium, all outstanding Swing Line Loans, or, in a
minimum amount of $100,000 and increments of $50,000 in excess thereof, any
portion of the outstanding Swing Line Loans, with notice to the Agent and the
Swing Line Lender by 11:00 a.m. (Detroit time) on the date of repayment. The
Borrower may from time to time pay, subject to the payment of any funding
indemnification amounts required by Section 3.4 but without penalty or premium,
all outstanding Eurodollar Advances, or, in a minimum aggregate amount of
$5,000,000 or any integral multiple of $100,000 in excess thereof, any portion
of the outstanding Eurodollar Advances upon three Business Days' prior notice to
the Agent.
2.9. Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Detroit time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance (other than a Swing Line Loan) and
three Business Days before the Borrowing Date for each Eurodollar Advance,
specifying:
17
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Detroit time) on each Borrowing Date, each Lender shall
make available its Revolving Loan or Revolving Loans in funds immediately
available in Detroit to the Agent at its address specified pursuant to Article
XIII. The Agent will make the funds so received from the Lenders available to
the Borrower at the Agent's aforesaid address.
2.10. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances (other than Swing Line
Loans) unless and until such Floating Rate Advances are converted into
Eurodollar Advances pursuant to this Section 2.10 or are repaid in accordance
with Section 2.8. Each Eurodollar Advance shall continue as a Eurodollar Advance
until the end of the then applicable Interest Period therefor, at which time
such Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless (x) such Eurodollar Advance is or was repaid in accordance with
Section 2.8 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period. Subject to the terms of Section 2.7,
the Borrower may elect from time to time to convert all or any part of a
Floating Rate Advance into a Eurodollar Advance. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of a Floating Rate Advance(other than Swing Line Loans) into a Eurodollar
Advance or continuation of a Eurodollar Advance not later than 10:00 a.m.
(Detroit time) at least three Business Days prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.11. Changes in Interest Rate, etc. Each Floating Rate Advance (other
than a Swing Line Loan) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.10, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.10 hereof, at a rate per annum
equal to the Floating Rate for such day. Each Swing Line Loan shall bear
interest on the outstanding principal amount thereof, for each day from and
including the day such Swing Line Loan is made to but excluding the date it is
paid, at a rate per annum equal to the Floating Rate for such day. Changes in
the rate of interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in the Floating
Rate. Each Eurodollar Advance shall bear interest on the outstanding principal
amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Agent as applicable to such Eurodollar
Advance based upon the Borrower's selections under Sections 2.9 and 2.10 and
otherwise in accordance with the terms hereof. No Interest Period may end after
the Facility Termination Date.
18
2.12. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.9, 2.10 or 2.11, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum,
and (iii) the LC Fee shall be increased by 2% per annum, provided that, during
the continuance of a Default under Section 7.6 or 7.7, the interest rates set
forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in
clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Agent or any Lender.
2.13. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall (except in the case of Reimbursement Obligations for which the LC
Issuer has not been fully indemnified by the Lenders, or as otherwise
specifically required hereunder and except with respect to repayments of Swing
Line Loans) be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with Bank One
for each payment of principal, interest, Reimbursement Obligations and fees as
it becomes due hereunder. Each reference to the Agent in this Section 2.13 shall
also be deemed to refer, and shall apply equally, to the LC Issuer, in the case
of payments required to be made by the Borrower to the LC Issuer pursuant to
Section 2.19.6.
2.14. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
(c) the original stated amount of each Facility LC and the amount of LC
Obligations outstanding at any time, and (d) the amount of any sum received by
the Agent hereunder from the Borrower and each Lender's share thereof.
19
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note or, in the case of the Swing Line Lender, promissory notes representing its
Revolving Loans and Swing Line Loans, respectively, substantially in the form of
Exhibit E, with appropriate changes for notes evidencing Swing Line Loans (each
a "Note"). In such event, the Borrower shall prepare, execute and deliver to
such Lender such Note or Notes payable to the order of such Lender. Thereafter,
the Loans evidenced by each such Note and interest thereon shall at all times
(prior to any assignment pursuant to Section 12.3) be represented by one or more
Notes payable to the order of the payee named therein, except to the extent that
any such Lender subsequently returns any such Note for cancellation and requests
that such Loans once again be evidenced as described in paragraphs (i) and (ii)
above.
2.15. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.16. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Eurodollar Advance shall be payable on the last day of
its applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest, facility fees and LC Fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.17. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Swing Line Borrowing Notice, Conversion/Continuation Notice,
and repayment notice received by it hereunder. The Agent will notify each Lender
of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Floating Rate.
20
2.18. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.19. Facility LCs.
2.19.1. Issuance. The LC Issuer hereby agrees, on the terms
and conditions set forth in this Agreement, to issue standby and
commercial letters of credit (each, a "Facility LC") and to renew,
extend, increase, decrease or otherwise modify each Facility LC
("Modify," and each such action a "Modification"), from time to time
from and including the date of this Agreement and prior to the Facility
Termination Date upon the request of the Borrower; provided that
immediately after each such Facility LC is issued or Modified, (i) the
aggregate amount of the outstanding LC Obligations shall not exceed
$25,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall
not exceed the Aggregate Commitment. No Facility LC shall have an
expiry date later than the earlier of (x) the fifth Business Day prior
to the Facility Termination Date and (y) one year after its issuance.
2.19.2. Participations. Upon the issuance or Modification by
the LC Issuer of a Facility LC in accordance with this Section 2.19,
the LC Issuer shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Lender,
and each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the LC
Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata
Share.
2.19.3. Notice. Subject to Section 2.19.1, the Borrower shall
give the LC Issuer notice prior to 10:00 a.m. (Detroit time) at least
five Business Days prior to the proposed date of issuance or
Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of such
Facility LC, and describing the proposed terms of such Facility LC and
the nature of the transactions proposed to be supported thereby. Upon
receipt of such notice, the LC Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Lender, of the contents
thereof and of the amount of such Lender's participation in such
proposed Facility LC. The issuance or Modification by the LC Issuer of
any Facility LC shall, in addition to the conditions precedent set
forth in Article IV (the satisfaction of which the LC Issuer shall have
no duty to ascertain), be subject to the conditions precedent that such
Facility LC shall be satisfactory to the LC Issuer and that the
Borrower shall have executed and delivered such application agreement
and/or such other instruments and agreements relating to such Facility
LC as the LC Issuer shall have reasonably requested (each, a "Facility
LC Application"). In the event of any conflict between the terms of
this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control.
2.19.4. LC Fees. The Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, (i) with respect to each standby Facility LC, a letter of
credit fee at a per annum rate equal to the Applicable Margin for
Eurodollar Loans in effect from time to time on the average daily
undrawn stated amount under such standby Facility LC, such fee to be
payable in arrears on each Payment Date, and (ii) with respect to each
commercial Facility LC, a one-time letter of credit fee in an amount
equal to a percentage agreed upon between the Borrower and the LC
Issuer of the initial stated amount (or, with respect to a Modification
of any such commercial Facility LC which increases the stated amount
thereof, such increase in the stated amount) thereof, such fee to be
payable on the date of such issuance or increase (each such fee
described in this sentence an "LC Fee"). The Borrower shall also pay to
the LC Issuer for its own account (x) at the time of issuance of each
Facility LC, a fronting fee in an amount equal to 0.125% per annum and
(y) documentary and processing charges in connection with the issuance
or Modification of and draws under Facility LCs in accordance with the
LC Issuer's standard schedule for such charges as in effect from time
to time.
21
2.19.5. Administration; Reimbursement by Lenders. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Agent and the Agent
shall promptly notify the Borrower and each other Lender as to the
amount to be paid by the LC Issuer as a result of such demand and the
proposed payment date (the "LC Payment Date"). The responsibility of
the LC Issuer to the Borrower and each Lender shall be only to
determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment
shall be in conformity in all material respects with such Facility LC.
The LC Issuer shall endeavor to exercise the same care in the issuance
and administration of the Facility LCs as it does with respect to
letters of credit in which no participations are granted, it being
understood that in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Lender shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or
any condition precedent whatsoever, to reimburse the LC Issuer on
demand for (i) such Lender's Pro Rata Share of the amount of each
payment made by the LC Issuer under each Facility LC to the extent such
amount is not reimbursed by the Borrower pursuant to Section 2.19.6
below, plus (ii) interest on the foregoing amount to be reimbursed by
such Lender, for each day from the date of the LC Issuer's demand for
such reimbursement (or, if such demand is made after 11:00 a.m.
(Detroit time) on such date, from the next succeeding Business Day) to
the date on which such Lender pays the amount to be reimbursed by it,
at a rate of interest per annum equal to the Federal Funds Effective
Rate for the first three days and, thereafter, at a rate of interest
equal to the rate applicable to Floating Rate Advances.
2.19.6. Reimbursement by Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date for any amounts to be paid by
the LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided
that neither the Borrower nor any Lender shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by the Borrower or such Lender to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 2%
plus the rate applicable to Floating Rate Advances for such day if such
day falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts
received by it from the Borrower for application in payment, in whole
or in part, of the Reimbursement Obligation in respect of any Facility
LC issued by the LC Issuer, but only to the extent such Lender has made
payment to the LC Issuer in respect of such Facility LC pursuant to
Section 2.19.5. Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Borrowing Notice in
compliance with Section 2.8 or a Swing Line Borrowing Notice in
compliance with Section 2.5.2 and the satisfaction of the applicable
conditions precedent set forth in Article IV), the Borrower may request
an Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.
22
2.19.7. Obligations Absolute. The Borrower's obligations under
this Section 2.19 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by the LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not
put the LC Issuer or any Lender under any liability to the Borrower.
Nothing in this Section 2.19.7 is intended to limit the right of the
Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.19.6.
2.19.8. Actions of LC Issuer. The LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.19, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.19.9. Indemnification. The Borrower hereby agrees to
indemnify and hold harmless each Lender, the LC Issuer and the Agent,
and their respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities, costs or
expenses which such Lender, the LC Issuer or the Agent may incur (or
which may be claimed against such Lender, the LC Issuer or the Agent by
any Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against
any defaulting Lender) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that the Borrower
shall not be required to indemnify any Lender, the LC Issuer or the
Agent for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful
misconduct or gross negligence of the LC Issuer in determining whether
a request presented under any Facility LC complied with the terms of
such Facility LC or (y) the LC Issuer's failure to pay under any
Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.19.9 is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
23
2.19.10. Lenders' Indemnification. Each Lender shall, ratably
in accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and conditions of the
Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.19 or any action taken or omitted by such
indemnitees hereunder.
2.19.11. Facility LC Collateral Account. The Borrower agrees
that it will, upon the request of the Agent or the Required Lenders and
until the final expiration date of any Facility LC and thereafter as
long as any amount is payable to the LC Issuer or the Lenders in
respect of any Facility LC, maintain a special collateral account
pursuant to arrangements satisfactory to the Agent (the "Facility LC
Collateral Account") at the Agent's office at the address specified
pursuant to Article XIII, in the name of such Borrower but under the
sole dominion and control of the Agent, for the benefit of the Lenders
and in which such Borrower shall have no interest other than as set
forth in Section 8.1. The Borrower hereby pledges, assigns and grants
to the Agent, on behalf of and for the ratable benefit of the Lenders
and the LC Issuer, a security interest in all of the Borrower's right,
title and interest in and to all funds which may from time to time be
on deposit in the Facility LC Collateral Account to secure the prompt
and complete payment and performance of the Obligations. The Agent will
invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a
maturity not exceeding 30 days. Nothing in this Section 2.19.11 shall
either require the Borrower, or obligate the Agent to require the
Borrower, to deposit any funds in the Facility LC Collateral Account or
limit the right of the Agent to release any funds held in the Facility
LC Collateral Account in each case other than as required by Section
8.1.
24
2.19.12. Rights as a Lender. In its capacity as a Lender, the
LC Issuer shall have the same rights and obligations as any other
Lender.
2.20. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.21. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 or any
Lender is a Defaulting Lender (any Lender so affected an "Affected Lender"), the
Borrower may elect, if such amounts continue to be charged or such suspension is
still effective, to replace such Affected Lender as a Lender party to this
Agreement, provided that no Default or Unmatured Default shall have occurred and
be continuing at the time of such replacement, and provided further that,
concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Advances and other Obligations due to the
Affected Lender pursuant to an assignment substantially in the form of Exhibit C
and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in same day funds on the day of
such replacement (A) all interest, fees and other amounts then accrued but
unpaid to such Affected Lender by the Borrower hereunder to and including the
date of termination, including without limitation payments due to such Affected
Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Affected Lender been prepaid on such
date rather than sold to the replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation
25
or the LC Issuer with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) subjects any Lender or any applicable Lending Installation or
the LC Issuer to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to any
Lender or the LC Issuer in respect of its Eurodollar Loans,
Facility LCs or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its
Eurodollar Loans, or of issuing or participating in Facility
LCs, or reduces any amount receivable by any Lender or any
applicable Lending Installation or the LC Issuer in connection
with its Eurodollar Loans, Facility LCs_or participations
therein, or requires any Lender or any applicable Lending
Installation or the LC Issuer to make any payment calculated
by reference to the amount of Eurodollar Loans, Facility LCs
or participations therein held or interest or LC Fees received
by it, by an amount deemed material by such Lender or the LC
Issuer as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within 15 days of demand by such Lender or the LC Issuer, as the case may be,
the Borrower shall pay such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer, as
the case may be, for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within 15 days of demand by such Lender or the LC
Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or the LC Issuer or any Lending
Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities
26
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5. Taxes. (i) All payments by the Borrower to or for the account of
any Lender, the LC Issuer or the Agent hereunder or under any Note or Facility
LC Application shall be made free and clear of and without deduction for any and
all Taxes. If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or Facility LC Application or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note or Facility LC Application
("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, the LC Issuer
and each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Lender and any liability
(including interest and expenses, unless resulting solely from such Lender's
failure to timely pay such Taxes or Other Taxes) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within 30
days of the date the Agent, the LC Issuer or such Lender makes demand therefor
pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to the Agent two duly completed copies of United States Internal
27
Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to the
Agent a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Borrower and the Agent (x) renewals or additional copies of such form (or
any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the Agent. All forms
or amendments described in the preceding sentence shall certify that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender and the LC Issuer shall designate an alternate Lending
Installation with respect to its Eurodollar Loans or the Facility LCs to reduce
any liability of the Borrower to such Lender or the LC Issuer under Sections
3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under
Section 3.3, so long
28
as such designation is not, in the judgment of such Lender, disadvantageous to
such Lender. Each Lender or the LC Issuer shall deliver a written statement of
such Lender or the LC Issuer to the Borrower (with a copy to the Agent) as to
the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written
statement shall set forth in reasonable detail the calculations upon which such
Lender determined such amount and shall be final, conclusive and binding on the
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Loan shall be calculated as
though each Lender funded its Eurodollar Loan through the purchase of a deposit
of the type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that is
the case or not. Unless otherwise provided herein, the amount specified in the
written statement of any Lender shall be payable on demand after receipt by the
Borrower of such written statement. The obligations of the Borrower under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Credit Extension. The Lenders shall not be required to
make the initial Credit Extension hereunder unless the Borrower has furnished to
the Agent:
(i) Copies of the articles or certificate of incorporation of the
Borrower and each Guarantor, together with all amendments, and
a certificate of good standing, each certified by the
appropriate governmental officer in its jurisdiction of
incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrower and each Guarantor, of its by-laws and of its
Board of Directors' resolutions and of resolutions or actions
of any other body authorizing the execution of the Loan
Documents to which the Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower and each Guarantor, which
shall identify by name and title and bear the signatures of
the Authorized Officers and any other officers of the Borrower
and each Guarantor authorized to sign the Loan Documents to
which it is a party, upon which certificate the Agent and the
Lenders shall be entitled to rely until informed of any change
in writing by the Borrower or such Guarantor.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's and each Guarantor's
counsel, addressed to the Lenders in substantially the form of
Exhibit A.
(vi) Any Notes requested by a Lender pursuant to Section 2.14
payable to the order of each such requesting Lender.
29
(vii) Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested and the payment of all fees required in connection
herewith.
(viii) All Guaranties signed by the Guarantors.
(ix) Copies of such financial statements of the Borrower and its
Subsidiaries required by the Agent, together with prospective
financial information for the Borrower and its Subsidiaries,
in each case in form and substance satisfactory to the Agent.
(x) The Borrower and its Subsidiaries shall have obtained all
Governmental Authorizations and all consents of other Persons,
in each case that are necessary in connection with the FASCO
Acquisition and the other transactions contemplated by the
Loan Documents and the FASCO Acquisition Documents, and each
of the foregoing shall be in full force and effect. All
applicable waiting periods shall have expired without any
action being taken by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on
the completion of the FASCO Acquisition or the financing
thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of
the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on
its own motion shall have expired.
(xi) (a) All conditions precedent to the FASCO Acquisition shall
have been satisfied pursuant to the FASCO Acquisition
Documents or waived by the party entitled to do so to the
extent permitted by Section 6.2 hereof; (b) The aggregate
consideration paid or payable, including without limitation
all direct payments, all deferred payments, all Indebtedness
assumed and all other consideration, for the FASCO Acquisition
shall not exceed $450,000,000; and (c) the Agent shall have
received a certificate of the Borrower to the effect set forth
in clauses (a) and (b) above and stating that the Borrower
and/or another Guarantor will proceed to consummate the FASCO
Acquisition substantially in accordance with the FASCO
Acquisition Documents on or within one Business Day of the
initial Advance hereunder and containing such other
certifications as may be reasonably required by the Agent.
(xii) The Agent shall have received pro forma balance sheet and
income statement as of September 30, 2002 (the "Opening Pro
Forma Statements") giving effect to the FASCO Acquisition and
consolidated and consolidating (breaking out the Borrower and
its Subsidiaries and FASCO) projections (the "Opening
Projections") covering a period of not less than three years
and updating the summary projections previously provided to
the Agent on or about August 14, 2002, all in form and
substance reasonably acceptable to the Agent, together with a
compliance certificate, signed by the chief financial officer
of the Borrower, dated the date hereof and giving effect to
the FASCO Acquisition, and such other information as the Agent
may request indicating compliance with all financial and other
covenants and showing no material change from the existing
summary projections delivered on or about August 14, 2002.
(xiii) Satisfactory results of all due diligence required by the
Agent, including without limitation a review of all contingent
liabilities, a review of contracts and insurance, a review of
all litigation, environmental matters, all retiree medical
benefits, ERISA
30
matters and other due diligence with respect to FASCO and the
FASCO Acquisition required by the Agent.
(xiv) The Agent shall have received all FASCO Acquisition Documents
and shall be satisfied with the form, structure and terms of
the FASCO Acquisition and all related transactions, the legal
and the regulatory aspects of the FASCO Acquisition and all
related transactions and all other legal (including tax
implications), financial and regulatory matters relating to
the FASCO Acquisition and related transactions.
(xv) The Bridge Credit Agreement shall close simultaneously
herewith and all conditions precedent thereto shall be
satisfied.
(xvi) All liabilities and obligations under the existing
$100,000,000 credit agreement of the Borrower dated July 15,
1994, as amended, shall be paid in full and the credit
facility thereunder shall be terminated (and the Borrower
hereby agrees that any commitment to lend or other credit
facility under such credit agreement is terminated).
(xvii) The Agent shall have received a certificate from the chief
financial officer of the Borrower concerning the solvency and
other appropriate factual information in form and substance
satisfactory to the Agent with respect to solvency.
(xviii) Since March 31, 2002 there shall have been no change in the
business, Property, prospects, condition (financial or
otherwise) or results of operations of FASCO which could
reasonably be expected to have a Material Adverse Effect.
(xix) The Agent shall have received such other documents as the
Agent or its counsel may have reasonably requested.
4.2. Each Credit Extension. The Lenders shall not (except as otherwise
set forth in Section 2.5.4 with respect to Revolving Loans for the purpose of
repaying Swing Line Loans) be required to make any Credit Extension unless on
the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Credit Extension Date except to
the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct on
and as of such earlier date.
(iii) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their
counsel.
Each Borrowing Notice, Swing Line Borrowing Notice or request for
issuance of a Facility LC with respect to each such Credit Extension shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making a Credit Extension.
31
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
5.2. Authorization and Validity. The Borrower and each Guarantor has
the power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations thereunder. The
execution and delivery by the Borrower and each Guarantor of the Loan Documents
to which it is a party and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents to
which the Borrower is a party constitute legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower or any Guarantor of the Loan Documents to which it is a
party, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of its Subsidiaries or (ii) the Borrower's or any Subsidiary's
articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of any such indenture, instrument
or agreement. No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
5.4. Financial Statements. The December 31, 2001 and the September 30,
2002 consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Lenders were prepared in accordance with Agreement
Accounting Principles in effect on the date such statements were prepared and
fairly present the consolidated financial condition and operations of the
Borrower and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended. The March 31, 2002 consolidated pro forma
financial statements of FASCO heretofore delivered to the Lenders were prepared
as special purpose audits in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and, subject to
the assumptions stated therein, fairly present the consolidated financial
condition and operations of FASCO at such date and the
32
consolidated results of their operations for the period then ended. The Opening
Pro Forma Statements are complete and accurate in all material respects and
fairly represent pro forma financial condition and operations of the Borrower
and its Subsidiaries on a consolidated basis in accordance with generally
accepted accounting principles in effect on the date such statements were
prepared and after giving effect on a pro forma basis to (i) the consummation of
the FASCO Acquisition, (ii) the Advances to be made hereunder and the use of
proceeds thereof, (iii) the payment of fees and expenses in connection with the
foregoing and (iv) the other transactions contemplated by the FASCO Acquisition
and the FASCO Acquisition Documents. The Opening Projections are based on good
faith estimates and assumptions made by the management of the Borrower, and
there are no statements or conclusions in the Opening Projections which are
based upon or include information known to the Borrower to be misleading or
which fail to take into account material information regarding the matters
reported therein. On the date of the initial Advance hereunder and on the date
of the consummation of the FASCO Acquisition, the Borrower believes that the
Opening Projections are reasonable and attainable, it being understood that
uncertainty is inherent in any forecasts or projections.
5.5. Material Adverse Change. Since December 31, 2001 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, except as disclosed in
the SEC Reports. To the Borrower's knowledge, since March 31, 2002 there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the FASCO which could reasonably be
expected to have a Material Adverse Effect
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. No tax liens have been filed and no claims are
being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.7, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Credit Extensions. Other than any
liability incident to any litigation, arbitration or proceeding which could not
reasonably be expected to have a Material Adverse Effect, the Borrower has no
material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule 1 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective Capital Stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of Capital Stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9. ERISA. No Accumulated Funding Deficiency exists with respect to
any Single Employer Plan. Neither the Borrower nor any other member of the
Controlled Group has incurred, or is
33
reasonably expected to incur, any withdrawal liability to Multiemployer Plans in
excess of $15,000,000 in the aggregate. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither the Borrower nor any other
member of the Controlled Group has withdrawn from any Plan or initiated steps to
do so, and no steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents, taken in the light of all other information supplied to the Agent and
the Lenders, contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.11 Regulations T, U and X. Neither the Borrower nor any of its
Subsidiaries extends or maintains, in the ordinary course of business, credit
for the purpose, whether immediate, incidental, or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of any Advance will be used
for the purpose, whether immediate, incidental, or ultimate, of buying or
carrying any such Margin Stock or maintaining or extending credit to others for
such purpose in any way that would violate Regulation T, U or X. After applying
the proceeds of each Advance, Margin Stock will not constitute more than 25% of
the value of the assets (either of the Borrower alone or of the Borrower and its
Subsidiaries on a consolidated basis) that are subject to any provisions of any
Loan Document that may cause the Advances to be deemed secured, directly or
indirectly, by Margin Stock. The Borrower and its Subsidiaries are in compliance
with Section 6.2.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable Requirements of Law except for any failure to
comply with any of the foregoing which could not reasonably be expected to have
a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule 2, on
the date of this Agreement, the Borrower and its Subsidiaries will have good
title, free of all Liens other than those permitted by Section 6.15, to all of
the Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to
34
the Borrower due to Environmental Laws. Except as disclosed in the SEC Reports,
on the basis of this consideration, the Borrower has concluded that
Environmental Laws cannot reasonably be expected to have a Material Adverse
Effect. Except as disclosed in the SEC Reports, neither the Borrower nor any
Subsidiary has received any notice to the effect that its operations are not in
material compliance with any of the requirements of applicable Environmental
Laws or are the subject of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or remedial action
could reasonably be expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Solvency. (i) Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the making of
each Credit Extension, if any, made on the date hereof and after giving effect
to the application of the proceeds of such Credit Extensions, (a) the fair value
of the assets of the Borrower and its Subsidiaries on a consolidated basis, at a
fair valuation, will exceed the debts and liabilities, subordinated, contingent
or otherwise, of the Borrower and its Subsidiaries on a consolidated basis; (b)
the present fair saleable value of the Property of the Borrower and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Borrower and its Subsidiaries
on a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the Borrower and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) the Borrower
and its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.20 FASCO Acquisition. (i) The Borrower has heretofore furnished to
the Agent true and complete copies of the FASCO Stock Purchase Agreement and all
other FASCO Acquisition Documents, in each case together with all schedules and
exhibits referred to therein or delivered pursuant thereto and all amendments,
modifications and waivers relating thereto. On the date hereof and immediately
prior to giving effect to the consummation of the FASCO Acquisition, (a) other
than amendments delivered to the Agent prior to the date hereof, none of the
FASCO Acquisition Documents shall have been amended, modified or supplemented,
nor any condition or provision thereof waived, in any manner which would breach
Section 6.2 hereof, and each of the FASCO Acquisition Documents is in full force
and effect and neither the Borrower, any Guarantor any other party thereto is in
default thereunder or in breach thereof, (b) all conditions to the obligations
of the Borrower and the Guarantors under each of such FASCO
35
Acquisition Documents to consummate the transactions contemplated thereby on the
date hereof shall have been satisfied or shall be satisfied with the
consummation of the transactions contemplated hereunder to occur on the date
hereof or shall be waived by the party entitled to waive such condition to the
extent permitted by Section 6.2 hereof, and (c) the FASCO Acquisition will be
consummated substantially in accordance with the terms of the FASCO Acquisition
Documents, this Agreement and the certificate delivered pursuant to Section
4.1(xi)(c) hereof and in compliance with all applicable Requirements of Law.
(ii) Each of the representations and warranties given by the Sellers to
the Borrower and/or any Guarantor and by the Borrower and/or any Guarantor to
the Sellers in the FASCO Acquisition Documents is true and correct as of the
date hereof (or as of any earlier date to which such representation and warranty
specifically relates).
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted accounting principles and required or
approved by the Borrower's independent certified public
accountants) audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a
consolidated basis for itself and its Subsidiaries, including
balance sheets as of the end of such period, related profit
and loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by (a) any management
letter prepared by said accountants, and (b) a certificate of
said accountants that, in the course of their examination
necessary for their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured Default, or
if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status
thereof.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period and consolidated profit and loss and
reconciliation of surplus statements and a statement of cash
flows for the period from the beginning of such fiscal year to
the end of such quarter, all certified by its chief financial
officer.
(iii) As soon as available, but in any event within 30 days after
the beginning of each fiscal year of the Borrower, a copy of
the plan and forecast (including a projected consolidated
36
and consolidating balance sheet, income statement and funds
flow statement) of the Borrower for such fiscal year.
(iv) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by its chief financial officer
showing the calculations necessary to determine compliance
with this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(v) Within 365 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
(vi) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief
financial officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with
respect thereto.
(vii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries, which,
in either case, could reasonably be expected to have a
Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
(x) Such other information (including non-financial information)
as the Agent or any Lender may from time to time reasonably
request.
6.2. Use of Proceeds; FASCO Acquisition Documents. The Borrower will
use the proceeds of the Credit Extensions for working capital and other general
corporate purposes, including in part to consummate the FASCO Acquisition. The
Borrower will not, nor will it permit the Borrower or any Subsidiary to, use any
of the proceeds of the Advances to purchase or carry any Margin Stock. The
Borrower will not permit the FASCO Acquisition Documents to be amended or
modified, or waive any condition or right thereunder, which in any of the
foregoing cases would individually or in the aggregate (i) cause the
consideration paid or payable (including without limitation all direct payments,
all deferred payments, all Indebtedness assumed and all other consideration) for
the FASCO Acquisition to increase, (ii) decrease the percentage of the issued
and outstanding Capital Stock of FASCO being acquired pursuant to the FASCO
Acquisition Documents below 100% or otherwise decrease the Property being
acquired in the FASCO Acquisition or (iii) otherwise reasonably be expected to
be materially adverse to the Lenders, without in each case obtaining the prior
written consent of the Agent.
37
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all Requirements of Law, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may designate.
6.10. Dividends. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
Capital Stock (other than dividends payable in its own Capital Stock) or redeem,
repurchase or otherwise acquire or retire any of its Capital Stock at any time
outstanding, except that (i) any Subsidiary may declare and pay dividends or
make distributions to the Borrower or to a Wholly-Owned Subsidiary, and (ii) the
Borrower may declare and pay dividends on its Capital Stock and make
redemptions, repurchases or other acquisitions or retirements of any of its
38
Capital Stock provided that in each case no Default or Unmatured Default shall
exist before or after giving effect thereto or be caused as a result thereof.
6.11. Non-Guarantor Indebtedness. The Borrower will not permit any
Subsidiary which is not a Guarantor to, create, incur or suffer to exist any
Indebtedness, except:
(i) Indebtedness existing on the date hereof and described in
Schedule 2, but no increase in the amount thereof as reduced
from time to time.
(ii) Other Indebtedness in an aggregate outstanding amount for all
such Subsidiaries not to exceed $25,000,000.
6.12. Merger. The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that, (i) a
Subsidiary of the Borrower may merge with the Borrower, provided that the
Borrower shall be the surviving corporation, (ii) a Subsidiary of the Borrower
may merge or consolidate with a Guarantor, provided that the Guarantor shall be
the surviving corporation, (iii) a Subsidiary of the Borrower that is not a
Guarantor may merge, consolidate or amalgamate with any other Subsidiary of the
Borrower that is not a Guarantor, and (iv) the Borrower or any Subsidiary may
merge, consolidate or amalgamate with any other Person in connection with an
Acquisition, provided that, if any such merger involves the Borrower or a
Guarantor, the Borrower or such Guarantor shall be the surviving corporation and
such Acquisition is permitted pursuant to the terms of Section 6.14.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as
permitted by this Section during the twelve-month period
ending with the month in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries.
(iii) Any transfer of an interest in accounts or notes receivable
and related assets as part of a Qualified Receivables
Transaction.
(iv) Transfers of assets between Guarantors or between the Borrower
and Guarantors.
(v) Transfers of assets between the Borrower's Subsidiaries that
are not Guarantors.
6.14. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefore, or to create any Subsidiary or to
become or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
39
(ii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule 1.
(iii) Investments comprised of capital contributions (whether in the
form of cash, a note, or other assets) to a Subsidiary or
other special-purpose entity created solely to engage in a
Qualified Receivables Transaction or otherwise resulting from
transfers of assets permitted by Section 6.13(iii) to such a
special-purpose entity.
(iv) Investments in Guarantors.
(v) Other Investments (other than Acquisitions) provided that the
aggregate amount of such Investments made in any fiscal year
does not exceed 10% of Consolidated Net Worth as of the
beginning of such fiscal year.
(vi) The FASCO Acquisition, subject to the terms of this Agreement.
(vii) Any other Acquisition, provided that (a) immediately before
and after giving effect to such Acquisition, on a pro forma
basis acceptable to the Agent, no Default or Unmatured Default
shall exist or shall have occurred and be continuing and the
representations and warranties contained in Article V and in
the other Loan Documents shall be true and correct on and as
of the date thereof (both before and after such Acquisition is
consummated) as if made on the date such Acquisition is
consummated, (b) the target of such Acquisition is in
substantially the same line of business as the Borrower, (c)
such Acquisition is non-hostile and the Board of Directors of
the target of such Acquisition has approved such Acquisition,
and (d) the aggregate consideration paid or payable in
connection with all Acquisitions permitted by this Section
6.14(vii) in any consecutive twelve month period, including
without limitation all direct payments, all deferred payments,
all Indebtedness assumed and all other consideration, shall
not exceed $150,000,000.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
40
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule 2.
(vii) Liens incurred in connection with any transfer of an interest
in accounts or notes receivable or related assets as part of a
Qualified Receivables Transaction.
(viii) Liens securing Indebtedness and not otherwise permitted by the
foregoing provisions of this Section 6.15, provided that the
aggregate outstanding principal amount of the Indebtedness
secured by all such Liens shall not at any time exceed 10% of
Consolidated Net Worth.
6.16. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction and (ii) transactions between the Borrower or
any Subsidiary, on the one hand, and any Subsidiary or other special-purpose
entity created to engage solely in a Qualified Receivables Transaction.
6.17 Limitation on Restrictions on Subsidiary Distributions. The
Borrower will not, and will not permit any Subsidiary to, enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (i) pay dividends or make any other
distributions in respect of any Capital Stock of such Subsidiary held by, or pay
any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower,
(ii) make loans or advances to the Borrower or any other Subsidiary of the
Borrower or (iii) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (a) any restrictions existing under the Loan
Documents, (b) any restrictions with respect to a Subsidiary imposed pursuant to
an agreement which has been entered into in connection with the disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary, or
(c) any restrictions with respect to assets encumbered by a Lien permitted by
Section 6.15 so long as such restriction applies only to the assets encumbered
by such permitted Lien.
6.18 Financial Contracts. The Borrower will not, and will not permit
any Subsidiary to, enter into or remain a party to any Financial Contract for
purposes of financial speculation, provided that hedging by the Borrower or any
of its Subsidiaries of their own interest rate or foreign currency exposure
shall not be deemed financial speculation.
6.19. Financial Covenants.
6.19.1. Interest Coverage Ratio. The Borrower will not permit
the ratio, determined as of the end of each of its fiscal quarters for
the then most-recently ended four fiscal quarters, of (i) Consolidated
EBIT to (ii) Consolidated Interest Expense to be less than (a) 2.75 to
1.0 as of the end of any fiscal quarter ending after the date hereof
and prior to December 31, 2003 or (b) 3.00 to 1.0 as of the end of any
fiscal quarter thereafter.
41
6.19.2. Leverage Ratio. The Borrower will not permit the
ratio, determined as of the end of each of its fiscal quarters, of (i)
Consolidated Indebtedness to (ii) Consolidated EBITDA for the then
most-recently ended four fiscal quarters to be greater than 2.50 to
1.0.
6.19.3. Minimum Net Worth. The Borrower will at all times
maintain Consolidated Net Worth of not less than the sum of (i)
$900,000,000 plus (ii) 50% of Consolidated Net Income earned in the
fiscal quarter ending December 31, 2002 (without deduction for losses)
plus (iii) 50% of Consolidated Net Income earned in each fiscal year
beginning with the fiscal year ending December 31, 2003 (without
deduction for losses).
6.20 Additional Covenants. This covenant governs any instrument or
agreement, or any group of related instruments or agreements, relating to or
amending any terms or conditions applicable to any Indebtedness equal to or
greater than $100,000,000 of the Borrower or a Subsidiary (each a "Debt
Instrument"), whether such Debt Instrument is now existing or subsequently
entered into by the Borrower or a Subsidiary. The Borrower shall promptly
deliver to the Agent a copy of each Debt Instrument. If any Debt Instrument
contains any covenant, term or condition or default not substantially provided
for in this Agreement or that is more favorable to the lender or lenders
thereunder than those provided for in this Agreement (each a "More Favorable
Provision"), such More Favorable Provision shall be incorporated by reference in
this Agreement as if set forth fully herein (a) as of the date of this Agreement
if such Debt Instrument is now existing, or (b) as of the effective date of the
Debt Instrument if the Borrower or a Subsidiary subsequently enters into such
Debt Instrument. No amendment, other modification, termination or expiration of
any More Favorable Provision shall alter or otherwise affect such provision as
incorporated herein, except that any modification which makes such provision
become more favorable to the applicable lender shall be incorporated herein in
addition to (and not in lieu of) the provisions which it replaces.
Notwithstanding the foregoing, More Favorable Provisions shall not include any
term of a Debt Instrument relating to amount, rate of interest, fees,
amortization, or maturity of the Indebtedness or the conditions to be satisfied
for consummation of the related borrowing.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any facility fee, LC Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.
42
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.1, 6.2, 6.3, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15 or 6.19.
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after
written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when due
any Material Indebtedness; or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of the Borrower and its Subsidiaries which, when taken together
with all other Property of the Borrower and its Subsidiaries so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such action occurs, constitutes a
Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $15,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
43
7.10. Any Change in Control shall occur.
7.11. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.12. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with any
of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
7.13. Any member of the Controlled Group shall fail to pay when due an
amount or amounts aggregating in excess of $15,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Single Employer Plan with Unfunded Liabilities in excess of $15,000,000 (a
"Material Plan") shall be filed under Section 4041(c) of ERISA by any member of
the Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist that could reasonably be expected to
result in PBGC obtaining a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one
or more Multiemployer Plans which causes one or more members of the Controlled
Group to incur a current payment obligation for withdrawal liability in excess
of $15,000,000 in aggregate amount for the Controlled Group.
7.14. (i) The FASCO Acquisition shall be unwound, reversed or otherwise
rescinded in whole or in any material part for any reason, or (ii) the FASCO
Acquisition shall not be consummated on or before February 28, 2003 in
accordance with the terms of the Loan Documents and the FASCO Acquisition
Documents.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration; Facility LC Collateral Account. (i) If any Default
described in Section 7.6 or 7.7 occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and the Borrower
will be and become thereby unconditionally obligated, without any further
notice, act or demand, to pay to the Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral Account, equal to
the difference of (x) the amount of LC Obligations at such time, less (y) the
amount on deposit in the Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and has not been
applied against the Obligations (such difference, the "Collateral Shortfall
Amount"). If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation and
44
power of the LC Issuer to issue Facility LCs, or declare the Obligations to be
due and payable, or both, whereupon the Obligations shall become immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives, and (b) upon notice to the Borrower
and in addition to the continuing right to demand payment of all amounts payable
under this Agreement, make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(ii) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account if a Default has occurred and is
continuing, apply such funds to the payment of the Obligations and any other
amounts as shall from time to time have become due and payable by the Borrower
to the Lenders or the LC Issuer under the Loan Documents.
(iv) At any time while any Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Facility LC Collateral Account.
After all of the Obligations have been indefeasibly paid in full and the
Aggregate Commitment has been terminated, any funds remaining in the Facility LC
Collateral Account shall be returned by the Agent to the Borrower or paid to
whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in Section 7.6 or 7.7
with respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the expiry
date of any Facility LC to a date after the Facility
Termination Date, or forgive all or any portion of the
principal amount thereof or any Reimbursement Obligation
related thereto, or reduce the rate or extend the time of
payment of interest or fees thereon or Reimbursement
Obligations related thereto.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
45
(iii) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payment required
under Section 2.2, or increase the amount of the Aggregate
Commitment or of the Commitment of any Lender hereunder or
permit the Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any Guarantor or Guarantors that would constitute a
Significant Subsidiary.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. No amendment of any
provision of this Agreement relating to the Swing Line Lender or any Swing Line
Loans shall be effective without the written consent of the Swing Line Lender.
No amendment of any provision relating to the LC Issuer or any Facility LCs
shall be effective without the written consent of the LC Issuer. The Agent may
waive payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
Notwithstanding anything herein to the contrary, no Defaulting Lender shall be
entitled to vote (whether to consent or to withhold its consent) with respect to
any amendment, modification, termination or waiver requiring the consent of the
Required Lenders and, for purposes of determining the Required Lenders, the
Commitments and Loans of each Defaulting Lender shall be disregarded.
8.3. Preservation of Rights. No delay or omission of the Lenders, the
LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
46
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent, the LC Issuer and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Agent, the LC Issuer and the Lenders relating to the subject matter thereof
other than those contained in the fee letter described in Section 10.13 which
shall survive and remain in full force and effect during the term of this
Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
Agent and the Arranger for any reasonable costs and out-of-pocket expenses
(including attorneys' fees of attorneys for the Agent) paid or incurred by the
Agent or the Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, distribution (including, without limitation,
via the internet), review, amendment, modification, and administration of the
Loan Documents. The Borrower also agrees to reimburse the Agent, the Arranger,
the LC Issuer and the Lenders for any reasonable costs and out-of-pocket
expenses (including attorneys' fees of attorneys for the Agent, the Arranger,
the LC Issuer and the Lenders) paid or incurred by the Agent, the Arranger, the
LC Issuer or any Lender in connection with the collection and enforcement of the
Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer, each Lender, their respective affiliates, and each of
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer, any Lender or any affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, any Acquisition, the transactions contemplated hereby or
the direct or indirect application or proposed application of the proceeds of
any Credit Extension hereunder except to the extent that they are determined in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles; provided that, if the Borrower notifies the Agent that the Borrower
wishes to amend any covenant contained in Article VI to eliminate the effect of
any change in generally accepted accounting principles on the calculation of
such covenant (or if the Agent notifies the Borrower
47
that the Required Lenders wish to amend Article VI for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders. Notwithstanding anything
herein, in any financial statements of the Borrower or in Agreement Accounting
Principles to the contrary, for purposes of calculating and determining
compliance with the financial covenants in Article VI and determining the
Applicable Margin and the Applicable Facility Fee Rate, including defined terms
used therein, any Acquisition (including without limitation the FASCO
Acquisition) made by the Borrower or any of its Subsidiaries, including through
mergers or consolidations and including any related financing transactions,
during the period for which such financial covenants or the Applicable Margin
and the Applicable Facility Fee Rate were calculated shall be deemed to have
occurred on the first day of the relevant period for which such financial
covenants or the Applicable Margin and the Applicable Facility Fee Rate were
calculated on a pro forma basis acceptable to the Agent.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, the LC Issuer nor any
Lender shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to xxx for, any special, indirect, consequential or
punitive damages suffered by the Borrower in connection with, arising out of, or
in any way related to the Loan Documents or the transactions contemplated
thereby.
9.11. Confidentiality. The Agent, the LC Issuer and each Lender agree
to hold any confidential information which it may receive from the Borrower
pursuant to this Agreement in confidence, except for disclosure (i) to its
Affiliates and to other Lenders, the Agent and the LC Issuer and their
respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as required by law, regulation, or legal process,
(v) to any Person in connection with any legal proceeding to which such Lender
is a party, (vi) to such Lender's direct or indirect contractual counterparties
in swap agreements or to legal counsel, accountants and other professional
advisors to such counterparties, and (vii) permitted by Section 12.4. The Agent,
the LC Issuer and Lenders agree to give reasonable prior notice to the Borrower
of any disclosure pursuant to the foregoing clauses (iv) and (v) to the extent
feasible and so long as giving such notice is not otherwise prohibited by
applicable law.
48
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any Margin Stock for the repayment of the Credit Extensions
provided for herein.
9.13. Disclosure. The Borrower and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Michigan Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any
49
obligor under any Loan Document, including, without limitation, any agreement by
an obligor to furnish information directly to each Lender; (c) the satisfaction
of any condition specified in Article IV, except receipt of items required to be
delivered solely to the Agent; (d) the existence or possible existence of any
Default or Unmatured Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower or any guarantor of any of the Obligations
or of any of the Borrower's or any such guarantor's respective Subsidiaries. The
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation,
50
for any such amounts incurred by or asserted against the Agent in connection
with any dispute between the Agent and any Lender or between two or more of the
Lenders), or the enforcement of any of the terms of the Loan Documents or of any
such other documents, provided that (i) no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Agent and (ii) any indemnification
required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of
this Section 10.8, be paid by the relevant Lender in accordance with the
provisions thereof. The obligations of the Lenders under this Section 10.8 shall
survive payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Credit Extensions as any Lender
and may exercise the same as though it were not the Agent, and the term "Lender"
or "Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger, the LC Issuer
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent, the Arranger, the LC Issuer or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint one
of the Lenders, on behalf of the Borrower and the Lenders, a successor Agent. If
no successor Agent shall have been so appointed by the Required Lenders within
thirty days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the Borrower and the
Lenders, one of the Lenders as a successor Agent. Notwithstanding the previous
sentence, the Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Agent hereunder. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of the Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable
51
Lender and for all other purposes shall deal directly with the Lenders. No
successor Agent shall be deemed to be appointed hereunder until such successor
Agent has accepted the appointment. Any such successor Agent shall be a
commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the Agent
and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Co-Agents, Documentation Agent, Syndication Agent, etc. Neither
any of the Lenders identified in this Agreement or elsewhere as a "co-agent", a
"documentation agent" or a "syndication agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders
52
so that after such purchase each Lender will hold its Pro Rata Share of the
Aggregate Outstanding Credit Exposure. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their respective Pro Rata Shares of the Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with
Section 12.3, and (iii) any transfer by Participation must be made in compliance
with Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3.2. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Credit Extension or which holds any Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 12.3; provided,
however, that the Agent may in its discretion (but shall not be required to)
follow instructions from the Person which made any Credit Extension or which
holds any Note to direct payments relating to such Credit Extension or Note to
another Person. Any assignee of the rights to any Credit Extension or any Note
agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Credit Extension (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Credit Extension.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Credit Extension owing to such Lender,
any Note held by such Lender, any Commitment of such Lender or any
other interest of such Lender under the Loan Documents. In the event of
any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender
shall remain the owner of its Credit Extensions
53
and the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest which
would require consent of all of the Lenders pursuant to the terms of
Section 8.2 or of any other Loan Document.
12.2.3. Benefit of Certain Provisions. The Borrower agrees
that each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a
Lender under the Loan Documents, provided that each Lender shall retain
the right of setoff provided in Section 11.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree
to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and
(ii) any Participant not incorporated under the laws of the United
States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto. Each such
assignment with respect to a Purchaser which is not a Lender or an
Affiliate of a Lender or an Approved Fund shall either be in an amount
equal to the entire applicable Commitment and Credit Extensions of the
assigning Lender or (unless each of the Borrower and the Agent
otherwise consents) be in an aggregate amount not less than $10,000,000
or such lesser amount agreed to by the Agent. The amount of the
assignment shall be based on the Commitment or outstanding Credit
Extensions (if the Commitment has been terminated) subject to the
assignment, determined as of the date of such assignment or as of the
"Trade Date," if the "Trade Date" is specified in the assignment.
12.3.2. Consents. The consent of the Borrower shall be
required prior to an assignment becoming effective unless the Purchaser
is a Lender, an Affiliate of a Lender or an Approved Fund, provided
that the consent of the Borrower shall not be required if a Default has
occurred and is continuing. The consent of the Agent and the LC Issuer
shall be required prior to an
54
assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund. Any consent required under
this Section 12.3.2 shall not be unreasonably withheld or delayed.
12.3.3. Effect; Effective Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Sections
12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the Agent for
processing such assignment (unless such fee is waived by the Agent),
such assignment shall become effective on the effective date specified
in such assignment. The assignment shall contain a representation by
the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Credit Extensions under the
applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan
Document executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party thereto, and the transferor
Lender shall be released with respect to the Commitment and Credit
Extensions assigned to such Purchaser without any further consent or
action by the Borrower, the Lenders or the Agent. In the case of an
assignment covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a
Lender hereunder but shall continue to be entitled to the benefits of,
and subject to, those provisions of this Agreement and the other Loan
Documents which survive payment of the Obligations and termination of
the applicable agreement. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with
this Section 12.3 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations
in accordance with Section 12.2. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.3, the
transferor Lender, the Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments,
as adjusted pursuant to such assignment.
12.3.4. Register. The Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable
prior notice.
12.3.5 Special Purpose Funding Vehicles. (i) Notwithstanding
anything to the contrary contained herein, any Lender (a "Designating
Lender") may grant to one or more special purpose funding vehicles
(each, an "SPV"), identified as such in writing from time to time by
the Designating Lender to the Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such
Designating Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement, provided that (A) nothing herein shall
constitute a
55
commitment by any SPV to make any Loan, (B) if any SPV elects not to
exercise such option or otherwise fails to provide all or any part of
such Loan, the Designating Lender shall be obligated to make such Loan
pursuant to the terms hereof, (C) the Designating Lender shall remain
liable for any indemnity or other payment obligation with respect to
its Commitments hereunder and (D) the Borrower shall not incur any
additional costs or expenses as a result of any such grant by a
Designated Lender to an SPV. The making of a Loan by an SPV hereunder
shall utilize the relevant Commitment of the Designating Lender to the
same extent, and as if, such Loan were made by such Designating Lender.
(ii) As to any Loans or portion thereof made by it, each SPV
shall have all the rights that a Lender making such Loans or portion
thereof would have had under this Agreement; provided, however, that
each SPV shall have granted to its Designating Lender an irrevocable
power of attorney, to deliver and receive all communications and
notices under this Agreement (and any related documents) and to
exercise on such SPV's behalf, all of such SPV's voting rights under
this Agreement. No additional Note shall be required to evidence the
Loans or portion thereof made by an SPV; and the related Designating
Lender shall be deemed to hold its Note, if any, as agent for such SPV
to the extent of the Loans or portion thereof funded by such SPV. In
addition, any payments for the account of any SPV shall be paid to its
Designating Lender as agent for such SPV.
(iii) Each party hereto hereby agrees that no SPV shall be
liable for any indemnity or payment under this Agreement for which a
Lender would otherwise be liable. In furtherance of the foregoing, each
party hereto hereby agrees (which agreements shall survive the
termination of this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPV, it will not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement insolvency or liquidation
proceedings under the laws of the United States or any State thereof.
(iv) In addition, subject to Section 12.4, any SPV may (A) at
any time and without paying any processing fee therefor, assign or
participate all or a portion of its interest in any Loans to the
Designating Lender or to any financial institutions providing liquidity
and/or credit support to or for the account of such SPV to support the
funding or maintenance of Loans and (B) disclose on a confidential
basis any non-public information relating to its Loans to any rating
agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancements to such SPV. This Section 12.3.3 may
not be amended without the written consent of any Designating Lender
affected thereby.
12.4. Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.6. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
56
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.15 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth in its administrative questionnaire or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, or (ii) if given by any
other means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section; provided that notices to the
Agent under Article II shall not be effective until received.
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF MICHIGAN, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR MICHIGAN STATE
COURT SITTING IN DETROIT, MICHIGAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE
57
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT, THE LC
ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT,
MICHIGAN.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
58
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Agent have executed this Agreement as of the date first above written.
TECUMSEH PRODUCTS COMPANY
By: /s/ Xxxxx X. Xxx
-----------------------------------------
Title: Vice President, Treasurer & CFO
000 Xxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Commitments
$125,000,000 BANK ONE, NA,
Individually and as Agent and LC Issuer
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Title: First Vice President
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Banking - Michigan Group
Telephone: (000) 000-0000
FAX: (000) 000-0000
59
PRICING SCHEDULE
LEVEL I STATUS LEVEL II STATUS LEVEL III STATUS LEVEL IV STATUS
-------------- --------------- ---------------- ---------------
Applicable Facility Fee Rate 12.5 bps 15.0 bps 17.5 bps 22.5 bps
Applicable Margin -
Eurodollar Rate Loans 37.5 bps 47.5 bps 70.0 bps 100.0 bps
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Company delivered pursuant to the Credit Agreement.
"Level I Status" exists at any date if, on such date, the Leverage
Ratio is less than or equal to 1.00:1.
"Level II Status" exists at any date if, on such date, (i) the Company
has not qualified for Level I Status and (ii) the Leverage Ratio is greater than
1.00:1.
"Level III Status" exists at any date if, on such date, (i) the Company
has not qualified for Level I Status or Level II Status and (ii) the Leverage
Ratio is greater than 1.50:1.
"Level IV Status" exists at any date if, on such date, (i) the Company
has not qualified for Level I Status, Level II Status or Level III Status and
(ii) the Leverage Ratio is greater than 2.00:1
"Status" means Level I Status, Level II Status, Level III Status, or
Level IV Status.
The Applicable Margin and Applicable Facility Fee Rate shall be
determined in accordance with the foregoing table based on the Company's Status
as determined in the then most recent Financials. Adjustments, if any, to the
Applicable Margin and Applicable Facility Fee Rate shall be effective five
Business Days after the date the Company is required to deliver the applicable
Financials. If the Borrower fails to deliver the Financials to the Agent at the
time required pursuant to the Credit Agreement, then the Applicable Margin and
the Applicable Facility Fee Rate shall be the highest Applicable Margin and
Applicable Facility Fee Rate set forth in the foregoing table until five days
after such Financials are so delivered. Notwithstanding anything herein to the
contrary, the Applicable Margin and Applicable Facility Fee Rate shall be set at
Level III as of the date hereof and shall be adjusted for the first time based
on the Financials for the fiscal quarter ending March 31, 2003.
60
