EXHIBIT 4.2
EXECUTION VERSION
$100,000,000
SECOND LIEN CREDIT AGREEMENT
DATED AS OF FEBRUARY 6, 2006
AMONG
TECUMSEH PRODUCTS COMPANY
AS BORROWER
AND
THE LENDERS PARTY HERETO
AND
CITICORP USA, INC.
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
* * *
CITIGROUP GLOBAL MARKETS INC.
AS ARRANGER AND BOOK MANAGER
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
SECOND LIEN CREDIT AGREEMENT, dated as of February 6, 2006, among
TECUMSEH PRODUCTS COMPANY, a Michigan corporation (the "Borrower"), the Lenders,
CITICORP USA, INC. ("Citicorp"), as administrative agent for the Lenders (in
such capacity, the "Administrative Agent"), and Citicorp, as collateral agent
for the Secured Parties and the First Lien Secured Parties (in such capacity,
the "Collateral Agent").
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders make available
for the purposes specified in this Agreement a second lien term loan facility;
and
WHEREAS, the Lenders are willing to make available to the Borrower
such second lien term loan facility upon the terms and subject to the conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants
and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS
As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Account" has the meaning given to such term in the UCC.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Affected Lender" has the meaning specified in Section 2.15
(Substitution of Lenders).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or that is controlled by or is under common
control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person that is the beneficial owner of
5% or more of any class of Voting Stock of such Person. For the purposes of this
definition, "control" means the possession of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent Affiliate" has the meaning specified in Section 10.3(c)
(Posting of Approved Electronic Communications).
"Agreement" means this Credit Agreement.
SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
"Aircraft" means all airships, airplanes, helicopters and other
aircraft owned on the date hereof or hereafter acquired by any Loan Party,
including those listed on Schedule 1.1 hereto.
"Aircraft Collateral" means Aircraft, Aircraft Parts and Aircraft
Log Books.
"Aircraft Collateral Documents" means the Junior Aircraft Security
Agreement between the Borrower, as grantor, and the Collateral Agent, and any
other document executed and delivered by a Loan Party granting a Lien on the
Aircraft to secure payment of the Secured Obligations.
"Aircraft Log Books" means any and all log books, maintenance
records, airworthiness certificates, registration documents and other records
and documents relating to the Aircraft or Aircraft Parts.
"Aircraft Parts" means all engines and propellers (whether or not
affixed to any Aircraft) owned by any Loan Party and used or intended for use in
connection with the Aircraft, and all avionics equipment, radio equipment,
navigation equipment, radar equipment and other equipment, appliances,
accessories and accessions used or intended for use in connection with the
Aircraft.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means, with respect to (i) Loans maintained as
Base Rate Loans, a rate equal to 6.50% per annum and (ii) Loans maintained as
Eurodollar Rate Loans, a rate equal to 7.50% per annum.
"Approved Deposit Account" means a Deposit Account that is the
subject of an effective Deposit Account Control Agreement and that is maintained
by any Loan Party with a Deposit Account Bank. "Approved Deposit Account"
includes all monies on deposit in a Deposit Account and all certificates and
instruments, if any, representing or evidencing such Deposit Account.
"Approved Electronic Communications" means each notice, demand,
communication, information, document and other material that any Loan Party is
obligated to, or otherwise chooses to, provide to the Administrative Agent
pursuant to any Loan Document or the transactions contemplated therein,
including (a) any supplement to the Guaranty, any joinder to the Pledge and
Security Agreement and any other written Contractual Obligation delivered or
required to be delivered in respect of any Loan Document or the transactions
contemplated therein and (b) any Financial Statement, financial and other
report, notice, request, certificate and other information material; provided,
however, that, "Approved Electronic Communication" shall exclude (i) any Notice
of Borrowing, Notice of Conversion or Continuation, and any other notice,
demand, communication, information, document and other material relating to a
request for a new, or a conversion of an existing, Borrowing, (ii) any notice
pursuant to Section 2.6 (Optional Prepayments) and Section 2.7 (Mandatory
Prepayments) and any other notice relating to the payment of any principal or
other amount due under any Loan Document prior to the scheduled date therefor,
(iii) all notices of any Default or Event of Default and (iv) any notice,
demand, communication, information, document and other material required to be
delivered to satisfy any
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SECOND LIEN CREDIT AGREEMENT
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of the conditions set forth in Article III (Conditions to the Loans) or any
other condition to any Borrowing or any condition precedent to the effectiveness
of this Agreement.
"Approved Electronic Platform" has the meaning specified in Section
10.3(a) (Posting of Approved Electronic Communications).
"Approved Fund" means any Fund that is advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or Affiliate of an entity
that administers or manages a Lender.
"Approved Securities Intermediary" means a "securities intermediary"
or "commodity intermediary" (as such terms are defined in the UCC) selected or
approved by the Administrative Agent.
"Arranger" means Citigroup Global Markets Inc., in its capacity as
sole lead arranger and book manager.
"Asset Sale" has the meaning specified in Section 8.4 (Sale of
Assets).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit A (Form of Assignment
and Acceptance).
"Bailee's Letter" means a letter in form and substance acceptable to
the Administrative Agent and executed by any Person (other than the Borrower)
that is in possession of Inventory on behalf of a Loan Party pursuant to which
such Person acknowledges, among other things, the Collateral Agent's Lien with
respect thereto.
"Bankruptcy Code" means title 11, United States Code.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of the following:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the
rate per annum obtained by dividing (A) the latest three-week moving
average of secondary market morning offering rates in the United States
for three-month certificates of deposit of major United States money
market banks, such three-week moving average being determined weekly on
each Monday (or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the previous
Friday by Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve Bank of New York
or, if such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Federal Reserve
Board for determining the maximum reserve requirement
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SECOND LIEN CREDIT AGREEMENT
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(including any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar nonpersonal
time deposits in the United States and (iii) the average during such
three-week period of the maximum annual assessment rates estimated by
Citibank for determining the then current annual assessment payable by
Citibank to the Federal Deposit Insurance Corporation (or any successor)
for insuring Dollar deposits in the United States; and
(c) 0.5% per annum plus the Federal Funds Rate.
"Base Rate Loan" means any Loan during any period in which it bears
interest based on the Base Rate.
"Blockage Notice" has the meaning specified in each Deposit Account
Control Agreement.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Borrower's Accountants" means PriceWaterhouseCoopers LLP or other
independent nationally-recognized public accountants acceptable to the
Administrative Agent.
"Borrowing" means a borrowing consisting of Loans made on the same
day by the Lenders.
"Brazil" means the Federative Republic of Brazil.
"Brazilian Subsidiaries" means any Subsidiary of the Borrower
organized under the laws of Brazil.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable Business
Day relates to notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in
Dollar deposits are also carried on in the London interbank market.
"Canadian Collateral Documents" means any pledge agreement, security
agreement, mortgage or other document executed and delivered by a Canadian
Guarantor granting a Lien on any of its property to secure payment of the
Secured Obligations.
"Canadian Dollars" means the lawful currency of Canada.
"Canadian Guarantors" means Tecumseh Products of Canada Limited, a
company organized under the laws of Canada, Fasco Motors Company, an unlimited
liability company organized under the laws of Nova Scotia and any other Canadian
Subsidiary that becomes a Guarantor after the Closing Date.
"Canadian Subsidiary" means any Subsidiary of the Borrower organized
under the laws of Canada or any province or territory thereof.
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SECOND LIEN CREDIT AGREEMENT
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"Capital Expenditures" means, for any Person for any period, the
aggregate of amounts that would be reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such Person and its Subsidiaries,
excluding interest capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease of, or
other arrangement conveying the right to use, property by such Person as lessee
that would be accounted for as a capital lease on a balance sheet of such Person
prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all Consolidated obligations of such Person or any of its
Subsidiaries under Capital Leases.
"Cash Equivalents" means (a) securities issued or fully guaranteed
or insured by the United States federal government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any commercial bank organized under the laws of the
United States, any state thereof, the District of Columbia, any foreign bank, or
its branches or agencies (fully protected against currency fluctuations) that,
at the time of acquisition, are rated at least "A-1" by S&P or "P-1" by ▇▇▇▇▇'▇,
(c) commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by
▇▇▇▇▇'▇ and (d) shares of any money market fund that (i) has at least 95% of its
assets invested continuously in the types of investments referred to in clauses
(a), (b) and (c) above, (ii) has net assets whose Dollar Equivalent exceeds
$500,000,000 and (iii) is rated at least "A-1" by S&P or "P-1" by ▇▇▇▇▇'▇;
provided, however, that the maturities of all obligations of the type specified
in clauses (a), (b) and (c) above shall not exceed 180 days.
"Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.
"Cash Management Document" means any certificate, agreement or other
document executed by any Loan Party in respect of the Cash Management
Obligations of any Loan Party.
"Cash Management Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person in respect
of cash management services (including treasury, depository, overdraft, credit
or debit card, electronic funds transfer and other cash management arrangements)
provided by the Administrative Agent, any Lender or any Affiliate of any of
them, including obligations for the payment of fees, interest, charges,
expenses, attorneys' fees and disbursements in connection therewith.
"Change of Control" means the occurrence of any of the following:
(a) any person or group of persons (within the meaning of the Securities
Exchange Act of 1934, as amended) (other than the Permitted Holders) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended) of 20% or more of the issued and outstanding Voting Stock of the
Borrower, or (b) during any period of twelve consecutive calendar months,
individuals who, at the beginning of such period, constituted the board of
directors of the Borrower (together with any new directors whose election by the
board of directors of the Borrower or whose
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SECOND LIEN CREDIT AGREEMENT
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nomination for election by the stockholders of the Borrower was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose elections or nomination
for election was previously so approved) cease for any reason other than death
or disability to constitute a majority of the directors then in office.
"Citicorp" has the meaning specified in the preamble to this
Agreement.
"Closing Date" means the date on which the Loans are made.
"Code" means the U.S. Internal Revenue Code of 1986, as currently
amended.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any Collateral Document.
"Collateral Agent" has the meaning specified in the preamble to this
Agreement or any successor thereto. The term "Collateral Agent" shall include
Citicorp acting in its capacity as collateral agent or trustee for and on behalf
of the Secured Parties and as collateral agent or trustee for and on behalf of
the First Lien Secured Parties under, and in accordance with, the terms of the
Collateral Documents.
"Collateral Documents" means the Pledge and Security Agreement, the
Foreign Pledge Agreements, the Canadian Collateral Documents, the Mortgages, the
Deposit Account Control Agreements, the Securities Account Control Agreements,
the Aircraft Collateral Documents and any other document executed and delivered
by a Loan Party granting a Lien on any of its property to secure payment of the
Secured Obligations.
"Commodity Account" has the meaning given to such term in the UCC.
"Compliance Certificate" has the meaning specified in Section 6.1(d)
(Financial Statements).
"Consolidated" means, with respect to any Person, the consolidation
of accounts of such Person and its Subsidiaries in accordance with GAAP.
"Consolidated Net Income" means, for any Person for any period, the
Consolidated net income (or loss) of such Person and its Subsidiaries for such
period ; provided, however, that (a) the net income of any other Person in which
such Person or one of its Subsidiaries has a joint interest with a third party
(which interest does not cause the net income of such other Person to be
Consolidated into the net income of such Person) shall be included only to the
extent of the amount of dividends or distributions paid to such Person or
Subsidiary, (b) the net income of any Subsidiary of such Person that is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions shall be excluded to the extent of such restriction or
limitation and (c) extraordinary gains and losses and any one-time increase or
decrease to net income that is required to be recorded because of the adoption
of new accounting policies, practices or standards required by GAAP shall be
excluded.
"Consolidated Total Assets" of any Person means, at any date,
Consolidated total assets of such Person and its Subsidiaries at such date minus
any minority interest in any
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SECOND LIEN CREDIT AGREEMENT
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third party that is not a Wholly-Owned Subsidiary of such Person, if such
minority interest would be reflected at such date on a Consolidated balance
sheet of such Person and its Subsidiaries.
"Constituent Documents" means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation, constitution or
certificate of formation (or the equivalent organizational documents) of such
Person, (b) the by-laws or operating agreement (or the equivalent governing
documents) of such Person and (c) any document setting forth the manner of
election or duties of the directors or managing members of such Person (if any)
and the designation, amount or relative rights, limitations and preferences of
any class or series of such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its property is subject.
"Control Account" means a Securities Account or Commodity Account
that is the subject of an effective Securities Account Control Agreement and
that is maintained by any Loan Party with an Approved Securities Intermediary.
"Control Account" includes all Financial Assets held in a Securities Account or
a Commodity Account and all certificates and instruments, if any, representing
or evidencing the Financial Assets contained therein.
"Corporate Chart" means a corporate organizational chart, list or
other similar document in each case in form reasonably acceptable to the
Administrative Agent and setting forth, for each Person that is a Loan Party,
that is subject to Section 7.11 (Additional Collateral and Guaranties) or that
is a Subsidiary of any of them, (a) the full legal name of such Person (and any
trade name, fictitious name or other name such Person may have had or operated
under), (b) the jurisdiction of organization, the organizational number (if any)
and the tax identification number (if any) of such Person, (c) the location of
such Person's chief executive office (or sole place of business), (d) the number
of shares of each class of such Person's Stock authorized (if applicable), the
number outstanding as of the date of delivery and the number and percentage of
such outstanding shares for each such class owned (directly or indirectly) by
any Loan Party or any Subsidiary of any of them and (e) in the case of any such
Subsidiary that is (x) a Foreign Subsidiary, whether such Subsidiary is a
Material Foreign Subsidiary and (y) a Domestic Subsidiary, whether such
Subsidiary is a Material Domestic Subsidiary.
"Customary Permitted Liens" means, with respect to any Person, any
of the following Liens:
(a) Liens with respect to the payment of taxes, assessments or
governmental charges in each case that are not yet due or that are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being
maintained to the extent required by GAAP;
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SECOND LIEN CREDIT AGREEMENT
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(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens, in each case (i) imposed by law or arising in the ordinary
course of business, (ii) for amounts not yet due or that are being
contested in good faith by appropriate proceedings and (iii) with respect
to which adequate reserves or other appropriate provisions are being
maintained to the extent required by GAAP;
(c) deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other types of
social security benefits or to secure the performance of bids, tenders,
sales, contracts (other than for the repayment of borrowed money) and
surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar encumbrances on the use
of real property not materially detracting from the value of such real
property or not materially interfering with the ordinary conduct of the
business conducted and proposed to be conducted at such real property;
(e) encumbrances arising under leases or subleases of real property
that do not, in the aggregate, materially detract from the value of such
real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property; and
(f) financing statements with respect to a lessor's rights in and to
personal property leased to such Person in the ordinary course of such
Person's business other than through a Capital Lease.
"Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a) or (b) of the definition of "Indebtedness" by the
Borrower or any of its Subsidiaries.
"Default" means any event that, with the passing of time or the
giving of notice or both, would become an Event of Default.
"Deposit Account" has the meaning given to such term in the UCC.
"Deposit Account Bank" means a financial institution selected or
approved by the Administrative Agent.
"Deposit Account Control Agreement" has the meaning specified in the
Pledge and Security Agreement and in the applicable Canadian Collateral
Document.
"Disclosure Documents" means one or more confidential information
memoranda relating to the Facility suitable for use in a customary syndication
of bank financing, with all financial statements (audited and unaudited as
available), information and projections relating to the Borrower and its
Subsidiaries as deemed necessary or desirable to be included therein by the
Arrangers in their reasonable judgment, as delivered and updated from time to
time.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
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SECOND LIEN CREDIT AGREEMENT
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"Dollar Equivalent" of any amount means, at the time of
determination thereof, (a) if such amount is expressed in Dollars, such amount,
or (b) if such amount is expressed in a currency other than Dollars, the
equivalent of such amount in Dollars determined by using the rate of exchange
quoted by Citibank in New York, New York at 11:00 a.m. (New York time) on the
date of determination (or, if such date is not a Business Day, the last Business
Day prior thereto) to prime banks in New York for the spot purchase in the New
York foreign exchange market of such amount of Dollars with such currency or, if
such rate of exchange is not available, such other rate as the Administrative
Agent, in its reasonable discretion, deems appropriate.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II (- Applicable Lending Offices and Addresses for Notices) or
on the Assignment and Acceptance by which it became a Lender or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Domestic Person" means any "United States person" under and as
defined in Section 7701(a)(30) of the Code.
"Domestic Subsidiary" means any Subsidiary of the Borrower organized
under the laws of any state of the United States of America or the District of
Columbia.
"Douglas Property" means that certain real property located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"EBITDA" means, with respect to any Person for any period, (a)
Consolidated Net Income of such Person for such period plus (b) the sum of, in
each case to the extent deducted in the calculation of such Consolidated Net
Income but without duplication, (i) any provision for income taxes, (ii)
Interest Expense, (iii) loss from extraordinary items, (iv) any aggregate loss
from the sale, exchange or other disposition of capital assets by such Person
outside the ordinary course of business, (v) depreciation, depletion and
amortization expenses, (vi) non-cash expenses in respect of Fourth Quarter 2005
Reserves; provided, however, all such non-cash expenses in Fourth Quarter 2005
Reserves shall not exceed an aggregate amount of $8,500,000, (vii) certain cash
and non-cash restructuring expenses in connection with the closing or
consolidation of certain facilities; provided, however, the cash portion of such
restructuring expenses shall not exceed an aggregate amount of $2,500,000 in any
consecutive four Fiscal Quarter period; and (viii) all other non-cash charges
and non-cash losses for such period that are not payable in cash in any
subsequent period minus (c) the sum of, in each case to the extent added in the
calculation of such Consolidated Net Income but without duplication, (i) any
credit for income tax, (ii) interest income, (iii) gains from extraordinary
items for such period, (iv) any aggregate gain from the sale, exchange or other
disposition of capital assets by such Person outside the ordinary course of
business and (v) any other non-cash gains or other items which have been added
in determining Consolidated Net Income, including any reversal of a charge
referred to in clause (b)(viii) above by reason of a decrease in the value of
any Stock or Stock Equivalent.
"Eligible Assignee" means (a) a Lender or an Affiliate or Approved
Fund of any Lender, (b) a commercial bank having total assets whose Dollar
Equivalent exceeds $5,000,000,000, (c) a finance company, insurance company or
any other financial institution or Fund, in each case reasonably acceptable to
the Administrative Agent and regularly engaged in making, purchasing or
investing in loans and having a net worth, determined in accordance with
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GAAP, whose Dollar Equivalent exceeds $250,000,000 (or, to the extent net worth
is less than such amount, a finance company, insurance company, other financial
institution or Fund, reasonably acceptable to the Administrative Agent and the
Borrower) or (d) a savings and loan association or savings bank organized under
the laws of the United States or any State thereof having a net worth,
determined in accordance with GAAP, whose Dollar Equivalent exceeds
$250,000,000.
"Entitlement Holder" has the meaning given to such term in the UCC.
"Entitlement Order" has the meaning given to such term in the UCC.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect and as amended or supplemented from time to time, relating
to pollution or the regulation and protection of human or animal health, safety,
the environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Section 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (7 U.S.C. Section 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.); the Toxic Substance
Control Act, as amended (15 U.S.C. Section 2601 et seq.); the Clean Air Act, as
amended (42 U.S.C. Section 7401 et seq.); the Federal Water Pollution Control
Act, as amended (33 U.S.C. Section 1251 et seq.); the Occupational Safety and
Health Act, as amended (29 U.S.C. Section 651 et seq.); the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f et seq.); and each of their state and
local counterparts or equivalents and any transfer of ownership notification or
approval statute, including the Industrial Site Recovery Act (N.J. Stat. ▇▇▇.
Section 13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute and whether arising under any
Environmental Law, Permit, order or agreement with any Governmental Authority or
other Person, in each case relating to any environmental, health or safety
condition or to any Release or threatened Release and resulting from the past,
present or future operations of, or ownership of property by, such Person or any
of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" has the meaning given to such term in the UCC.
"Equity Issuance" means the issue or sale of any Stock of the
Borrower or any Subsidiary of the Borrower by the Borrower or any Subsidiary of
the Borrower to any Person other than the Borrower or any Subsidiary of the
Borrower.
"ERISA" means the United States Employee Retirement Income Security
Act of 1974.
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"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
"ERISA Event" means (a) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from
any Multiemployer Plan, (d) notice of reorganization or insolvency of a
Multiemployer Plan, (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA, (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC, (g) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan, (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on the Borrower or
any of its Subsidiaries or any ERISA Affiliate or (i) any other event or
condition that might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board.
"Eurodollar Base Rate" means, with respect to any Interest Period
for any Eurodollar Rate Loan, the rate of interest determined by the
Administrative Agent to be the rate per annum at which deposits in Dollars are
offered by the principal office of Citibank in London to major banks in the
London interbank market at 11:00 a.m. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to the
Eurodollar Rate Loan of Citibank for a period equal to such Interest Period.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II (- Applicable Lending Offices and Addresses for Notices) or
on the Assignment and Acceptance by which it became a Lender (or, if no such
office is specified, its Domestic Lending Office) or such other office of such
Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b)(i) a percentage equal
to 100% minus (ii) the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the Eurodollar Rate is determined) having a term equal to
such Interest Period.
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"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1 (Events
of Default).
"Excluded Foreign Subsidiary" means any Subsidiary that is not a
Domestic Subsidiary or a Canadian Subsidiary in respect of which either (a) the
pledge of all of the Stock of such Subsidiary as Collateral to secure payment of
the Obligations of the Borrower, (b) the grant of a Lien on any of its property
as Collateral to secure payment of the Obligations of the Borrower or (c) the
guaranteeing by such Subsidiary of the Obligations of the Borrower, would, in
the good faith judgment of the Borrower based on an analysis reasonably
satisfactory to the Administrative Agent, result in materially adverse tax
consequences to the Loan Parties and their Subsidiaries, taken as a whole;
provided, however, that no such Subsidiary shall be an Excluded Foreign
Subsidiary if, with substantially similar tax consequences, such Subsidiary has
entered into Guaranty Obligations in respect of, such Subsidiary has granted a
security interest in any of its property to secure, or more than 66% of the
Stock of such Subsidiary has been pledged to secure, directly or indirectly, any
obligations under any Indebtedness (other than the Obligations) of any Loan
Party.
"Existing Agent" means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent under the Existing Credit Agreement.
"Existing Credit Agreement" means that certain Credit Agreement,
dated as of December 21, 2004 among the Borrower, the institutions party thereto
as lenders and issuing banks and the Existing Agent.
"Facility" means the Term Loan Commitments and the provisions herein
related to the Loans.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Board of
Directors of the Borrower or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in Securities of such type and selected by
the Administrative Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
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transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the United
States Federal Reserve System, or any successor thereto.
"Financial Asset" has the meaning given to such term in the UCC.
"Financial Covenant Debt" of any Person means Indebtedness of the
type specified in clauses (a), (b), (d), (e), (f) and (k) of the definition of
"Indebtedness" and non-contingent obligations of the type specified in clause
(c) of such definition.
"Financial Statements" means the financial statements of the
Borrower and its Subsidiaries delivered in accordance with Section 4.4
(Financial Statements) and Section 6.1 (Financial Statements).
"First Lien Agent" means the "Administrative Agent" under and as
defined in the First Lien Credit Agreement.
"First Lien Available Credit" means, at any time, the maximum amount
available for borrowing (subject to any borrowing base or reserve requirements
in effect at such time and after giving effect to any loans, letters of credit
or other obligations outstanding from time to time) under the First Lien Credit
Agreement.
"First Lien Credit Agreement" means that certain First Lien Credit
Agreement, dated as of the date hereof, among the Borrower, the First Lien
Agent, the Collateral Agent and the financial institutions party thereto as
lenders and issuers.
"First Lien Facility" means the "Facility" under and as defined in
the First Lien Credit Agreement.
"First Lien Lenders" means the "Lenders" and "Issuers" under and as
defined in the First Lien Credit Agreement.
"First Lien Loan Documents" means the First Lien Credit Agreement
and the Loan Documents (as defined in the First Lien Credit Agreement).
"First Lien Secured Obligations" means the "Secured Obligations"
under and as defined in the First Lien Credit Agreement.
"First Lien Secured Parties" means the First Lien Agent, the First
Lien Lenders, the Collateral Agent and each other holder of the First Lien
Secured Obligations.
"Fiscal Quarter" means each of the three month periods ending on
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period, the ratio of (a) EBITDA of such Person for such period minus Capital
Expenditures of
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such Person for such period minus the total federal income tax liability
actually payable by such Person in respect of such period to (b) the Fixed
Charges of such Person for such period.
"Fixed Charges" means, with respect to any Person for any period,
the sum, determined on a Consolidated basis, of (a) the Cash Interest Expense of
such Person and its Subsidiaries for such period, (b) the principal amount of
Consolidated Financial Covenant Debt (other than any such Indebtedness
constituting a current liability) of such Person and its Subsidiaries having a
scheduled due date during such period and (c) all cash dividends payable by such
Person and its Subsidiaries on Stock in respect of such period to Persons other
than such Person and its Subsidiaries.
"Foreign Pledge Agreements" means any pledge or security agreement,
pursuant to which the Stock of any Foreign Subsidiary of any Loan Party is
pledged by such Loan Party to secure payment of the Secured Obligations.
"Foreign Subsidiary" means any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Fourth Quarter 2005 Reserves" means reserves in respect of (i)
recall for engine fuel line, (ii) certain inventory reserves maintained by the
Borrower in connection with take-or-pay contracts in the Czech Republic and
(iii) certain reserves maintained by the Borrower in respect of the "▇▇▇▇▇▇
preference claim".
"Fund" means any Person (other than a natural Person) that is or
will be engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, that are applicable to the circumstances as of the date of
determination.
"General Intangible" has the meaning given to such term in the UCC.
"Governmental Authority" means any nation, sovereign or government,
any state or other political subdivision thereof and any entity or authority
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any central bank or stock
exchange.
"Guarantor" means each Subsidiary of the Borrower party to or that
becomes party to the Guaranty or otherwise guarantees the Obligations.
"Guaranty" means the guaranty, in substantially the form of Exhibit
F (Form of Guaranty), executed by the Guarantors.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide
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SECOND LIEN CREDIT AGREEMENT
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assurance to the obligee of such Indebtedness that such Indebtedness will be
paid or discharged, that any agreement relating thereto will be complied with,
or that any holder of such Indebtedness will be protected (in whole or in part)
against loss in respect thereof, including (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of Indebtedness of another Person and (b) any liability of such Person
for Indebtedness of another Person through any agreement (contingent or
otherwise) (i) to purchase, repurchase or otherwise acquire such Indebtedness or
any security therefor or to provide funds for the payment or discharge of such
Indebtedness (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss or (v) to supply funds to, or in
any other manner invest in, such other Person (including to pay for property or
services irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under clause (b)(i), (ii),
(iii), (iv) or (v) above the primary purpose or intent thereof is to provide
assurance that Indebtedness of another Person will be paid or discharged, that
any agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof. The amount of any Guaranty Obligation shall be equal to the amount of
the Indebtedness so guaranteed or otherwise supported; provided, however, such
Guaranty Obligation shall be limited to the amount of such guarantee or support.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or that bear
interest, (c) all reimbursement and all obligations with respect to letters of
credit, bankers' acceptances, surety bonds and performance bonds, whether or not
matured, (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business
that are not overdue, (e) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (f) all Capital Lease Obligations of
such Person, (g) all Guaranty Obligations of such Person, (h) all obligations of
such Person to purchase, redeem, retire, defease or otherwise acquire for value
any Stock or Stock Equivalents of such Person, valued, in the case of redeemable
preferred stock, at the greater of its voluntary liquidation preference and its
involuntary liquidation preference plus accrued and unpaid dividends, (i) all
payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person, (j) Off-Balance Sheet Liability,
and (k) all Indebtedness of the type referred to above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in property (including Accounts and General
Intangibles) owned by
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SECOND LIEN CREDIT AGREEMENT
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such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"Indemnified Matter" has the meaning specified in Section 11.4
(Indemnities).
"Indemnitee" has the meaning specified in Section 11.4
(Indemnities).
"Intercreditor Agreement" means the Intercreditor Agreement, dated
the date hereof, among the Administrative Agent, the First Lien Agent, the
Collateral Agent and the Borrower.
"Interest Expense" means, for any Person for any period,
Consolidated total interest expense of such Person and its Subsidiaries for such
period and including, in any event, interest capitalized during such period and
net costs under Interest Rate Contracts for such period.
"Interest Period" means, in the case of any Eurodollar Rate Loan,
(a) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion or Continuation
given to the Administrative Agent pursuant to Section 2.2 (Borrowing Procedures)
or 2.9 (Conversion/Continuation Option) and (b) thereafter, if such Loan is
continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section
2.9 (Conversion/Continuation Option), a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.9
(Conversion/Continuation Option); provided, however, that all of the foregoing
provisions relating to Interest Periods in respect of Eurodollar Rate Loans are
subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension
would be to extend such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iii) the Borrower may not select any Interest Period in
respect of Loans having an aggregate principal amount of less than
$5,000,000; and
(iv) there shall be outstanding at any one time no more than
five (5) Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
"Inventory" has the meaning given to such term in the UCC.
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SECOND LIEN CREDIT AGREEMENT
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"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by such Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by such Person of all
or a significant part of the assets of a business conducted by any other Person,
or all or substantially all of the assets constituting the business of a
division, branch or other unit operation of any other Person, (c) any loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable and similar items
made or incurred in the ordinary course of business as presently conducted) or
capital contribution by such Person to any other Person, including all
Indebtedness of any other Person to such Person arising from a sale of property
by such Person other than in the ordinary course of its business and (d) any
Guaranty Obligation incurred by such Person in respect of Indebtedness of any
other Person.
"IRB Debt" means Indebtedness and other liabilities owing by any
Loan Party pursuant to any IRB Document at any time.
"IRB Documents" means all agreements, instruments and other
documents executed in connection with the following Industrial Development
Revenue Bonds issued by the Borrower: (i) 1997 Series A Corinth Bonds issued by
the Mississippi Business Finance Corporation due December 31, 2021, with a
current principle balance of $6,405,488.76 as of the Closing Date, (ii) 1997
Series B Corinth Bonds issued by Mississippi Business Finance Corporation due
May 1, 2007, with a current principal balance of $5,308,211.81 as of the Closing
Date, (iii) ▇▇▇▇▇▇▇-Coffee Series 1995 Bonds issued by the ▇▇▇▇▇▇▇-Coffee
Industrial Authority due December 1, 2010, with a current principal amount of
$36,627,976.73 as of Closing Date, (iv) Dunlap Series 1988 Bonds issued by the
Industrial Development Board of the City of ▇▇▇▇▇▇, Tennessee due December 31,
2007, with a current principal amount of $7,000,000, (v) 1996 Tupelo MS Series A
Supplemental Bonds issued by the Mississippi Business Finance Corporation due
August 1, 2006, with a current principal amount of $1,514,650.11, (vi) Shannon
▇▇ ▇▇▇▇▇ issued by ▇▇▇ County Mississippi due April 1, 2006, with a current
principal amount of $48,026,106.21, (vii) Paris TN Evergy Project Bond issued by
Industrial Development Board of the City of Paris, Tennessee due December 31,
2014, with a current principal amount of $3,500,000 and (viii) 1994 Series A
Tupelo bonds originally issued by the Mississippi Business Finance Corporation
due November 17, 2019, with a current principal balance of $4,054,309.81 as of
the Closing Date.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Junior Aircraft Security Agreement" means that certain Junior
Aircraft Security Agreement, dated as of the date hereof, by and the Borrower,
as grantor, and the Collateral Agent.
"Land" of any Person means all of those plots, pieces or parcels of
land now owned, leased or hereafter acquired or leased or purported to be owned,
leased or hereafter acquired or leased (including, in respect of the Loan
Parties, as reflected in the most recent Financial Statements) by such Person.
"Landlord Waiver" means a letter in form and substance reasonably
acceptable to the Administrative Agent and executed by a landlord in respect of
Inventory of a Loan Party located at any leased premises of such Loan Party
pursuant to which such landlord, among other
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
things, waives or subordinates on terms and conditions reasonably acceptable to
the Administrative Agent any Lien such landlord may have in respect of such
Inventory.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Lender" means each financial institution or other entity that (a)
is listed on the signature pages hereof as a "Lender" or (b) from time to time
becomes a party hereto by execution of an Assignment and Acceptance.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
hypotec, assignment, charge, deposit arrangement, encumbrance, lien (statutory
or other), security interest or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or the performance of any other obligation,
including any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease and any financing lease having substantially
the same economic effect as any of the foregoing, and the filing of any
financing statement under the UCC or comparable law of any jurisdiction naming
the owner of the asset to which such Lien relates as debtor.
"Loan" means any loan made by any Lender pursuant to this Agreement.
"Loan Documents" means, collectively, this Agreement, the Term Loan
Notes (if any), the Guaranty, the Second Lien Fee Letter, the Collateral
Documents, the Intercreditor Agreement and each certificate, agreement or
document executed by a Loan Party and delivered to the Administrative Agent or
any Lender in connection with or pursuant to any of the foregoing.
"Loan Party" means each of the Borrower, each Guarantor and each
other Subsidiary of the Borrower that executes and delivers a Loan Document (it
being understood that no Material Foreign Subsidiary shall be deemed to be a
Loan Party unless and until it becomes a Guarantor).
"Material Adverse Change" means a material adverse change in any of
(a) the business, condition (financial or otherwise), operations, performance,
properties, contingent liabilities, material agreements or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole, (b) the
legality, validity or enforceability of this Agreement, any Term Loan Note, any
Collateral Document or any other material Loan Document, (c) the perfection or
priority of the Liens granted on any material portion of the Collateral pursuant
to the Collateral Documents, (d) the ability of the Borrower to repay the
Obligations or of the other Loan Parties to perform their respective obligations
under the Loan Documents or (e) the rights and remedies of the Administrative
Agent, the Collateral Agent or the Lenders under the Loan Documents.
"Material Adverse Effect" means an effect that results in or causes,
or could reasonably be expected to result in or cause, a Material Adverse
Change.
"Material Domestic Subsidiary" means a Domestic Subsidiary or a
Canadian Subsidiary that is not a Non-Material Domestic Subsidiary.
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SECOND LIEN CREDIT AGREEMENT
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"Material Foreign Subsidiary" means any Foreign Subsidiary that,
together with its Subsidiaries, satisfies one of the following conditions: (i)
the portion of Consolidated Total Assets attributable to such Foreign Subsidiary
is at least 5% of the Consolidated Total Assets of the Borrower at such time or
(ii) the portion of Consolidated EBITDA attributable to such Foreign Subsidiary
is at least 5% of Consolidated EBITDA of the Borrower for the applicable period,
in each case above, as would be shown in the Financial Statements for the most
recent four Fiscal Quarters ending prior to the Fiscal Quarter in which such
determination is made.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc.
"Mortgage Supporting Documents" means, with respect to any Mortgage
for a parcel of Real Property, each document (including title policies or
marked-up unconditional insurance binders (in each case, together with copies of
all documents referred to therein), maps, ALTA or TLTA, if applicable, as-built
surveys (in form and as to date that is sufficiently acceptable to the title
insurer issuing title insurance to the Collateral Agent for such title insurer
to deliver endorsements to such title insurance as reasonably requested by the
Administrative Agent), environmental assessments and reports and evidence
regarding recording and payment of fees, insurance premium and taxes) (and other
equivalent documents customarily required to be delivered with a Mortgage on
Canadian Real Property) that the Administrative Agent may reasonably request, to
create, register, perfect, maintain, evidence the existence, substance, form or
validity of or enforce a valid Lien on such parcel of Real Property in favor of
the Collateral Agent for the benefit of the Secured Parties, subject only to
such Liens as the Administrative Agent may approve.
"Mortgages" means the mortgages, deeds of trust or other real estate
security documents made or required herein to be made by the Borrower or any
other Loan Party, each in form and substance satisfactory to the Administrative
Agent.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by any Loan Party after
the Closing Date in cash or Cash Equivalents from any (a) Asset Sale, other than
an Asset Sale permitted under clauses (a), (b), (c)(i), (d), (e) or (h)(x) of
Section 8.4 (Sale of Assets), net of (i) the reasonable cash costs of sale,
assignment or other disposition, (ii) taxes paid or reasonably estimated to be
payable as a result thereof and (iii) any amount required to be paid or prepaid
on Indebtedness (other than the Obligations) secured by the assets subject to
such Asset Sale, provided, however, that evidence of each of clauses (i), (ii)
and (iii) above is provided to the Administrative Agent in form and substance
satisfactory to it, (b) Property Loss Event or (c)(i) Equity Issuance (other
than any such issuance of common Stock of Borrower occurring in the ordinary
course of business to any director, member of the management or employee of the
Borrower or its Subsidiaries) or (ii) any Debt Issuance (other than any Debt
Issuance permitted under clauses (a) through (k) of Section 8.1 (Indebtedness)),
in each case net of brokers' and advisors' fees and other costs incurred in
connection with such transaction; provided, however, that in the case of this
clause (c), evidence of such costs is provided to the Administrative Agent in
form and substance satisfactory to it.
"Non-Cash Interest Expense" means, with respect to any Person for
any period, the sum of the following amounts to the extent included in the
definition of Interest Expense
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SECOND LIEN CREDIT AGREEMENT
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(a) the amount of debt discount and debt issuance costs amortized, (b) charges
relating to write-ups or write-downs in the book or carrying value of existing
Financial Covenant Debt, (c) interest payable in evidences of Indebtedness or by
addition to the principal of the related Indebtedness and (d) other non-cash
interest.
"Non-Consenting Lender" has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).
"Non-Funding Lender" has the meaning specified in Section 2.2(d)
(Borrowing Procedures).
"Non-Guarantor Subsidiary" means any Subsidiary of the Borrower that
is not a Guarantor.
"Non-Material Domestic Subsidiary" means any Domestic Subsidiary or
Canadian Subsidiary that conducts no operations and owns no material assets;
provided, however, the aggregate Fair Market Value of all assets held by all
Non-Material Domestic Subsidiaries shall not exceed $250,000.
"Non-U.S. Lender" means each Lender (or the Administrative Agent)
that is a Non-U.S. Person.
"Non-U.S. Person" means any Person that is not a Domestic Person.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
(Borrowing Procedures).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.9 (Conversion/Continuation Option).
"Obligations" means the Loans and all other amounts, obligations,
covenants and duties owing by the Borrower to the Administrative Agent, the
Collateral Agent, any Lender, any Affiliate of any of them or any Indemnitee, of
every type and description (whether by reason of an extension of credit, loan,
guaranty or indemnification or otherwise), present or future, arising under this
Agreement, any other Loan Document, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired and whether or not evidenced
by any note, guaranty or other instrument or for the payment of money, including
all other fees, interest, charges, expenses, attorneys' fees and disbursements
and other sums chargeable to the Borrower under this Agreement, any other Loan
Document.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capital Lease, (iii) any liability under any
so-called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding from this clause (iv) operating leases.
"Patriot Act" means the USA Patriot Act of 2001 (31 U.S.C. 5318 et
seq.).
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SECOND LIEN CREDIT AGREEMENT
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"paid in full" and "payment in full" have the meaning specified in
the Intercreditor Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Holders" means (i) any Person who is a lineal descendant
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, (ii) the spouse, children, or grandchildren of any such
persons, (iii) any trust of which any of such Persons is a trustee or a
beneficiary, (iv) the estate, executor, administrator, or any legal guardian of
any such Person, (v) any participation, corporation or limited liability company
owned and controlled solely by such Persons and (vi) the ▇▇▇▇▇▇▇ Foundation.
"Permitted Joint Venture" means a Person (a) that is a corporation,
limited liability company, joint venture or similar limited liability legal
entity hereafter formed or entered into by the Borrower or any of its
Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person, which legal entity does not constitute a
Subsidiary; (b) that does not own any Stock in a Loan Party nor at any time
itself have been a Loan Party; and (c) in respect of which all Indebtedness or
other obligations (in each case whether contingent or otherwise), including any
contractually binding commitment to make future capital contributions, assumed
by any Loan Party in respect thereof can be quantified.
"Permitted Refinancing" means renewals, extensions, refinancings and
refundings of Indebtedness permitted by Section 8.1(b) and Section 8.1(d)
(Indebtedness) that (a) are in an aggregate principal amount not greater than
the principal amount of, and is on terms no less favorable to the Borrower or
any Subsidiary of the Borrower obligated thereunder and (b) have a weighted
average maturity and final maturity (measured as of the date of such renewal,
refinancing, extension or refunding) no shorter than that of such Indebtedness.
"Permitted Reinvestment" means, with respect to any Reinvestment
Event, to acquire assets useful in the business of the Loan Parties or, if such
Reinvestment Event is a Property Loss Event that is a loss or damage, to repair,
rebuild or replace such loss or damage.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity or a Governmental
Authority.
"Pledge and Security Agreement" means an agreement, in substantially
the form of Exhibit G (Form of Pledge and Security Agreement), executed by the
Borrower and each Guarantor.
"Pledged Debt Instruments" has the meaning specified in the Pledge
and Security Agreement.
"Pledged Stock" has the meaning specified in the Pledge and Security
Agreement.
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SECOND LIEN CREDIT AGREEMENT
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"Prepayment Premium" means, (i) with respect to any prepayment prior
to the first anniversary of the Closing Date, an amount equal to 2.00% of the
principal amount prepaid and (ii) with respect to any prepayment on or after the
first anniversary of the Closing Date, but prior to the second anniversary of
the Closing Date, an amount equal to 1.00% of the principal amount prepaid.
"Pro Forma Basis" means, with respect to any determination for any
period, that such determination shall be made giving pro forma effect to each
acquisition consummated during such period, together with all transactions
relating thereto consummated during such period (including any incurrence,
assumption, refinancing or repayment of Indebtedness), as if such acquisition
and related transactions had been consummated on the first day of such period,
in each case based on historical results accounted for in accordance with GAAP
and, to the extent applicable, reasonable assumptions that are specified in
details in the relevant Compliance Certificate, Financial Statement or other
document provided to the Administrative Agent or any Lender in connection
herewith in accordance with Regulation S-X of the Securities Act of 1933.
"Proceeds" has the meaning given to such term in the UCC.
"Projections" means those financial projections dated January 2006
covering the fiscal years ending in 2006 through 2013 inclusive, to be delivered
to the Lenders by the Borrower.
"Property Loss Event" means (a) any loss of or damage to property of
any Loan Party that results in the receipt by such Person of proceeds of
insurance whose Dollar Equivalent exceeds $250,000 (individually or in the
aggregate) or (b) any taking of property of any Loan Party that results in the
receipt by such Person of a compensation payment in respect thereof whose Dollar
Equivalent exceeds $250,000 (individually or in the aggregate).
"Purchasing Lender" has the meaning specified in Section 11.7
(Sharing of Payments, Etc.).
"Ratable Portion" or (other than in the expression "equally and
ratably") "ratably" means, with respect to any Lender, the percentage obtained
by dividing (a) the Term Loan Commitment of such Lender by (b) the aggregate
Term Loan Commitments of all Lenders (or, at any time after the Closing Date,
the percentage obtained by dividing the outstanding principal amount of such
Lender's Loans by the aggregate outstanding principal amount of the Loans of all
Lenders).
"Real Property" of any Person means the Land of such Person,
together with the right, title and interest of such Person, if any, in and to
the streets, the Land lying in the bed of any streets, roads or avenues, opened
or proposed, in front of, the air space and development rights pertaining to the
Land and the right to use such air space and development rights, all rights of
way, privileges, liberties, tenements, hereditaments and appurtenances belonging
or in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including all alley, vault, drainage, mineral, water, oil
and gas rights, together with all of the buildings and other improvements now or
hereafter erected on the Land and any fixtures appurtenant thereto.
"Refinanced IRB Documents" means all agreements, instruments and
other documents executed in connection with (i) 1994 Series A Tupelo bonds
originally issued by the
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Mississippi Business Finance Corporation due November 17, 2019, with a current
principal balance of $4,054,309.81 as of the Closing Date and (ii) 1997 Series A
Corinth Bonds issued by the Mississippi Business Finance Corporation due
December 31, 2021, with a current principle balance of $6,405,488.76 as of the
Closing Date.
"Register" has the meaning specified in Section 2.5(b) (Evidence of
Debt).
"Reinvestment Deferred Amount" means, with respect to any Net Cash
Proceeds of any Reinvestment Event, the portion of such Net Cash Proceeds
subject to a Reinvestment Notice.
"Reinvestment Event" means any Asset Sale or Property Loss Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a
Responsible Officer of the Borrower stating that no Default or Event of Default
has occurred and is continuing and that the Borrower (directly or indirectly
through one of its Subsidiaries) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Property Loss Event to make
a Permitted Reinvestment.
"Reinvestment Prepayment Amount" means, with respect to any Net Cash
Proceeds of any Reinvestment Event, the Reinvestment Deferred Amount for such
Net Cash Proceeds less any amount expended or required to be expended pursuant
to a Contractual Obligation entered into prior to the relevant Reinvestment
Prepayment Date for such Net Cash Proceeds to make Permitted Reinvestments using
such Net Cash Proceeds.
"Reinvestment Prepayment Date" means, with respect to any Net Cash
Proceeds of any Reinvestment Event, the earlier of (a) the date occurring 180
days after such Reinvestment Event and (b) the date that is five Business Days
after the date on which the Borrower shall have notified the Administrative
Agent of the Borrower's determination not to make a Permitted Reinvestment with
all or any portion of such Reinvestment Deferred Amount for such Net Cash
Proceeds.
"Related Party Assignment" shall mean an assignment of all or a
portion of a Loan or a Revolving Credit Commitment of a Lender to an Affiliate
of such Lender or an Approved Fund of such Lender.
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned, leased or operated by
such Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
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SECOND LIEN CREDIT AGREEMENT
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"Requirement of Law" means, with respect to any Person, the common
law and all federal, state, local and foreign laws, treaties, rules and
regulations, orders, judgments, decrees and other determinations of,
concessions, grants, franchises, licenses and other Contractual Obligations
with, any Governmental Authority or arbitrator, applicable to or binding upon
such Person or any of its property or to which such Person or any of its
property is subject.
"Requisite Lenders" means, collectively, Lenders having more than
fifty percent (50%) of the aggregate outstanding amount of the Term Loan
Commitments or, after the Closing Date, more than fifty percent (50%) of the
principal amount of all Loans then outstanding. A Non-Funding Lender shall not
be included in the calculation of "Requisite Lenders."
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person but, in any event, with respect to financial matters, the chief financial
officer, treasurer or controller of such Person.
"Restricted Payment" means (a) any dividend, distribution or any
other payment whether direct or indirect, on account of any Stock or Stock
Equivalent of the Borrower or any of its Subsidiaries now or hereafter
outstanding and (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Stock or
Stock Equivalent of the Borrower or any of its Subsidiaries now or hereafter
outstanding.
"Sale and Leaseback Transaction" means any sale or other transfer of
property by any Person with the intent to lease such property as lessee.
"S&P" means Standard & Poor's Rating Services.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act" means the United States ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002.
"Second Lien Fee Letter" shall mean the letter dated December 28,
2005, addressed to the Borrower from the Arranger and accepted by the Borrower
on December 30, 2005, with respect to certain fees to be paid from time to time
to the Arranger.
"Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.
"Secured Parties" means the Lenders, the Administrative Agent, the
Collateral Agent and any other holder of any Secured Obligation.
"Securities Account" has the meaning given to such term in the UCC.
"Securities Account Control Agreement" has the meaning specified in
the Pledge and Security Agreement.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, any temporary or interim certificate for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, but shall not include any evidence of the Obligations.
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SECOND LIEN CREDIT AGREEMENT
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"Selling Lender" has the meaning specified in Section 11.7 (Sharing
of Payments, Etc.).
"Senior Guaranteed Notes" means the $300,000,000 4.66% senior
guaranteed notes issued by the Borrower and due March 5, 2011.
"Solvent" means, with respect to any Person as of any date of
determination, that, as of such date, (a) the value of the assets of such Person
(both at fair value and present fair saleable value) is greater than the total
amount of liabilities (including, without duplication, contingent and
unliquidated liabilities) of such Person, (b) such Person is able to pay all
liabilities of such Person as such liabilities mature and (c) such Person does
not have unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities shall be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Special Purpose Vehicle" means any special purpose funding vehicle
identified as such in writing by any Lender to the Administrative Agent.
"Specified Canadian Subsidiaries" means Tecumseh Products of Canada,
Limited and Fasco Motors Company.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of 50% or more of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person or one or more
Subsidiaries of such Person.
"Substitute Institution" has the meaning specified in Section 2.15
(Substitution of Lenders).
"Substitution Notice" has the meaning specified in Section 2.15
(Substitution of Lenders).
"Syndication Completion Date" has the meaning specified in the
Second Lien Fee Letter.
"Tax Affiliate" means, with respect to any Person, (a) any
Subsidiary of such Person and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary tax
returns, provided however, that Tecumseh Italy shall not be considered a Tax
Affiliate of the Borrower or any Subsidiary of the Borrower as long as the
Borrower is diligently pursuing the dissolution or liquidation of Tecumseh
Italy.
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SECOND LIEN CREDIT AGREEMENT
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"Tax Return" has the meaning specified in Section 4.8(a) (Taxes).
"Taxes" has the meaning specified in Section 2.14(a) (Taxes).
"Tecumseh Italy" means, collectively, Tecumseh Europa S.p.A and its
Subsidiaries.
"Term Loan" has the meaning specified in Section 2.1 (The Term Loan
Commitments).
"Term Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make a Loan to the Borrower on the Closing Date in
a principal amount not to exceed the amount set forth opposite such Lender's
name on Schedule I (Term Loan Commitments) under the caption "Term Loan
Commitment" (as amended to reflect each Assignment and Acceptance executed by
such Lender), as such amount may be reduced pursuant to this Agreement. On the
date hereof, the aggregate amount of the Term Loan Commitments is $100,000,000.
"Term Loan Maturity Date" means the seventh anniversary of the
Closing Date.
"Term Loan Note" means a promissory note of the Borrower payable to
the order of any Lender in a principal amount equal to the amount of the Loan
owing to such Lender.
"Thai Subsidiary" means Fasco Motors (Thailand) Limited, a company
formed under the laws of Thailand and a Wholly-Owned Subsidiary of the Borrower.
"Title IV Plan" means a pension plan, other than a Multiemployer
Plan, covered by Title IV of ERISA and to which the Borrower any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability, contingent
or otherwise.
"UCC" has the meaning specified in the Pledge and Security
Agreement.
"U.S. Lender" means each Lender (or the Administrative Agent) that
is a Domestic Person.
"Voting Stock" means Stock of any Person having ordinary power to
vote in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
Person, all of the Stock of which (other than director's qualifying shares, as
may be required by law) is owned by such Person, either directly or indirectly
through one or more Wholly-Owned Subsidiaries of such Person.
"Withdrawal Liability" means, with respect to the Borrower or any of
its Subsidiaries at any time, the aggregate liability incurred (whether or not
assessed) with respect to all Multiemployer Plans pursuant to Section 4201 of
ERISA or for increases in contributions required to be made pursuant to Section
4243 of ERISA.
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
SECTION 1.2 COMPUTATION OF TIME PERIODS
In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES
(a) Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto (including for purpose of
measuring compliance with Article V (Financial Covenants) shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
(Financial Statements) is hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successors thereto) and such change is adopted by the Borrower with the
agreement of the Borrower's Accountants and results in a change in any of the
calculations required by Article V (Financial Covenants) or VIII (Negative
Covenants) that would not have resulted had such accounting change not occurred,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such change such that the criteria for
evaluating compliance with such covenants by the Borrower shall be the same
after such change as if such change had not been made; provided, however, that
no change in GAAP that would affect a calculation that measures compliance with
any covenant contained in Article V (Financial Covenants) or VIII (Negative
Covenants) shall be given effect until such provisions are amended to reflect
such changes in GAAP.
(c) For purposes of making all financial calculations to determine
compliance with Article V (Financial Covenants), all components of such
calculations shall be adjusted to include or exclude, as the case may be,
without duplication, such components of such calculations attributable to any
business or assets that have been acquired by the Borrower or any of its
Subsidiaries after the first day of the applicable period of determination and
prior to the end of such period, as determined in good faith by the Borrower on
a Pro Forma Basis.
SECTION 1.4 CONVERSION OF FOREIGN CURRENCIES
(a) Financial Covenant Debt. Financial Covenant Debt denominated in
any currency other than Dollars shall be calculated using the Dollar Equivalent
thereof as of the date of the Financial Statements on which such Financial
Covenant Debt is reflected.
(b) Dollar Equivalents. The Administrative Agent shall determine the
Dollar Equivalent of any amount as required hereby, and a determination thereof
by the Administrative Agent shall be conclusive absent manifest error. The
Administrative Agent may, but shall not be obligated to, rely on any
determination made by any Loan Party in any document delivered to the
Administrative Agent. The Administrative Agent may determine or redetermine the
Dollar Equivalent of any amount on any date either in its own discretion or upon
the request of any Lender.
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SECOND LIEN CREDIT AGREEMENT
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(c) Rounding-Off. The Administrative Agent may set up appropriate
rounding off mechanisms or otherwise round-off amounts hereunder to the nearest
higher or lower amount in whole Dollar or cent to ensure amounts owing by any
party hereunder or that otherwise need to be calculated or converted hereunder
are expressed in whole Dollars or in whole cents, as may be necessary or
appropriate.
SECTION 1.5 CERTAIN TERMS
(a) The terms "herein," "hereof," "hereto" and "hereunder" and
similar terms refer to this Agreement as a whole and not to any particular
Article, Section, subsection or clause in, this Agreement.
(b) Unless otherwise expressly indicated herein, (i) references in
this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause
refer to the appropriate Exhibit or Schedule to, or Article, Section, clause or
sub-clause in this Agreement and (ii) the words "above" and "below", when
following a reference to a clause or a sub-clause of any Loan Document, refer to
a clause or sub-clause within, respectively, the same Section or clause.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders or the Administrative Agent is required hereunder or under
the Intercreditor Agreement for an amendment, restatement, supplement or other
modification to any such agreement and such consent is not obtained, references
in this Agreement to such agreement shall be to such agreement as so amended,
restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified from time to time and to any successor
legislation thereto, in each case as in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
(f) The terms "Lender," "Administrative Agent" and "Collateral
Agent" include, without limitation, their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 10.7 (Successor Administrative Agent), references to
Citicorp in Section 10.4 (The Administrative Agent Individually) and to Citibank
in the definitions of Base Rate, Dollar Equivalent, and Eurodollar Rate shall be
deemed to refer to the financial institution then acting as the Administrative
Agent or one of its Affiliates if it so designates.
ARTICLE II
THE FACILITY
SECTION 2.1 THE TERM LOAN COMMITMENTS
On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make a loan in Dollars (each a "Term
Loan") to the Borrower on the
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Closing Date, in an amount not to exceed such Lender's Term Loan Commitment.
Amounts of Term Loans prepaid may not be reborrowed.
SECTION 2.2 BORROWING PROCEDURES
(a) The Borrowing shall be made on notice given by the Borrower to
the Administrative Agent not later than 11:00 a.m. (New York time) (i) one
Business Day, in the case of a Borrowing of Base Rate Loans, and (ii) three
Business Days, in the case of a Borrowing of Eurodollar Rate Loans, prior to the
Closing Date. Such notice shall be in substantially the form of Exhibit C (Form
of Notice of Borrowing) (a "Notice of Borrowing"), specifying (A) the Closing
Date, (B) the aggregate amount of the proposed Borrowing, (C) whether any
portion of the proposed Borrowing will be of Base Rate Loans or Eurodollar Rate
Loans and (D) for each Eurodollar Rate Loan, the initial Interest Period or
Periods thereof. The Term Loans shall be made as Base Rate Loans unless, subject
to Section 2.12 (Special Provisions Governing Eurodollar Rate Loans), the Notice
of Borrowing specifies that all or a portion thereof shall be Eurodollar Rate
Loans.
(b) The Administrative Agent shall give to each Lender prompt notice
of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate determined pursuant to Section 2.12(a) (Determination
of Interest Rate). Each Lender shall, before 11:00 a.m. (New York time) on the
date of the proposed Borrowing, make available to the Administrative Agent at
its address referred to in Section 11.8 (Notices, Etc.), in immediately
available funds, such Lender's Ratable Portion of such proposed Borrowing. Upon
fulfillment (or due waiver in accordance with Section 11.1 (Amendments, Waivers,
Etc.)) of the applicable conditions set forth in Section 3.1 (Conditions
Precedent to the Loans) and after the Administrative Agent's receipt of such
funds, the Administrative Agent shall make such funds available to the Borrower.
(c) Unless the Administrative Agent shall have received notice from
a Lender prior to the date of the proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's Ratable Portion of the
Borrowing (or any portion thereof), the Administrative Agent may assume that
such Lender has made such Ratable Portion available to the Administrative Agent
on the date of such Borrowing in accordance with this Section 2.2 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such Ratable Portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate for the first Business Day and thereafter at the interest
rate applicable at the time to the Loans comprising such Borrowing. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
corresponding amount so repaid shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. If the Borrower shall repay to
the Administrative Agent such corresponding amount, such payment shall not
relieve such Lender of any obligation it may have hereunder to the Borrower.
(d) The failure of any Lender to make on the date specified any Loan
or any payment required by it (such Lender being a "Non-Funding Lender") shall
not relieve any other
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SECOND LIEN CREDIT AGREEMENT
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Lender of its obligations to make such Loan or payment on such date but no such
other Lender shall be responsible for the failure of any Non-Funding Lender to
make a Loan or payment required under this Agreement.
SECTION 2.3 TERMINATION OF THE TERM LOAN COMMITMENTS
On the Closing Date, any unused Term Loan Commitment shall
terminate.
SECTION 2.4 REPAYMENT OF LOANS
The Borrower promises to repay the Term Loans at the dates and in
the amounts set forth below:
DATE AMOUNT DATE AMOUNT
March 31, 2006 $250,000 September 30, 2009 $250,000
June 30, 2006 $250,000 December 31, 2009 $250,000
September 30, 2006 $250,000 March 31, 2010 $250,000
December 31, 2006 $250,000 June 30, 2010 $250,000
March 31, 2007 $250,000 September 30, 2010 $250,000
June 30, 2007 $250,000 December 31, 2010 $250,000
September 30, 2007 $250,000 March 31, 2011 $250,000
December 31, 2007 $250,000 June 30, 2011 $250,000
March 31, 2008 $250,000 September 30, 2011 $250,000
June 30, 2008 $250,000 December 31, 2011 $250,000
September 30, 2008 $250,000 March 31, 2012 $250,000
December 31, 2008 $250,000 June 30, 2012 $250,000
March 31, 2009 $250,000 September 30, 2012 $250,000
June 30, 2009 $250,000 December 31, 2012 $250,000
provided, however, that the Borrower shall repay the entire unpaid principal
amount of the Term Loans on the Term Loan Maturity Date.
SECTION 2.5 EVIDENCE OF DEBT
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) (i) The Administrative Agent, acting as agent of the Borrower
solely for this purpose and for tax purposes, shall establish and maintain
at its address referred to in Section 11.8 (Notices, Etc.) a record of
ownership (the "Register") in which the Administrative Agent agrees to
register by book entry the Administrative Agent's and each Lender's
interest in each Loan and in the right to receive any payments hereunder
and any assignment of any such interest or rights. In addition, the
Administrative Agent, acting as agent of the Borrower solely for this
purpose and for tax purposes, shall establish and maintain accounts in the
Register in accordance with its usual practice in which it shall record
(i) the names and addresses of the Lenders, (ii) the amount of each Loan
made and, if a Eurodollar Rate Loan, the Interest Period applicable
thereto, (iii) the
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
amount of any principal or interest due and payable, and paid, by the
Borrower to, or for the account of, each Lender hereunder and (iv) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower, whether such sum constitutes principal or interest (and the type
of Loan to which it applies), fees, expenses or other amounts due under
the Loan Documents and each Lender's share thereof, if applicable.
(ii) Notwithstanding anything to the contrary contained in this
Agreement, the Loans (including the Term Loan Notes evidencing such Loans)
are registered obligations and the right, title, and interest of the
Lenders and their assignees in and to such Loans shall be transferable
only upon notation of such transfer in the Register. A Term Loan Note
shall only evidence the Lender's or a registered assignee's right, title
and interest in and to the related Loan, and in no event is any such Term
Loan Note to be considered a bearer instrument or obligation. This Section
2.5(b) and Section 11.2 (Assignments and Participations) shall be
construed so that the Loans are at all times maintained in "registered
form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of
the Code and any related regulations (or any successor provisions of the
Code or such regulations).
(c) The entries made in the Register and in the accounts therein
maintained pursuant to clauses (a) and (b) above shall, to the extent permitted
by applicable law and subject to the Borrower's right to object to any entry in
the Register within thirty days of the date of such entry, be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans in accordance with their terms.
In addition, the Loan Parties, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. Information contained in the Register with respect
to any Lender shall be available for inspection by the Borrower, the
Administrative Agent or such Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Notwithstanding any other provision of the Agreement, in the
event that any Lender requests that the Borrower execute and deliver a
promissory note or notes payable to such Lender in order to evidence the
Indebtedness owing to such Lender by the Borrower hereunder, the Borrower shall
promptly execute and deliver a Term Loan Note or Term Loan Notes to such Lender
evidencing the Term Loans of such Lender, substantially in the form of Exhibit B
(Form of Term Loan Note).
SECTION 2.6 OPTIONAL PREPAYMENTS
(a) Loans. Subject to the terms of the First Lien Credit Agreement
and the Intercreditor Agreement, the Borrower may, upon at least three Business
Days' prior notice to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Loans, in whole or in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(i) if any such prepayment is a prepayment of any Eurodollar Rate Loan made by
or on behalf of the Borrower other than on the last day of an Interest Period
for such Loan, the Borrower shall also pay any amounts owing pursuant to Section
2.12(e) (Breakage Costs), (ii) each such prepayment that is a partial prepayment
shall be in an aggregate amount of $3,000,000 or an amount that is an integral
multiple of $1,000,000 in excess thereof and (iii) together with such prepayment
of the Loans, the Borrower shall also pay the Prepayment
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SECOND LIEN CREDIT AGREEMENT
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Premium, if any, for such Loans calculated at the time of such prepayment.
Notwithstanding the foregoing, the Prepayment Premium shall not apply to any
optional prepayment made with proceeds of the sale of Little Giant Pump Company
as long as such sale is consummated on or prior to July 31, 2006. Upon the
giving of such notice of prepayment, the principal amount of the Loans specified
to be prepaid shall become due and payable on the date specified for such
prepayment.
(b) The Borrower shall have no right to prepay the principal amount
of any Loan other than as provided in this Section 2.6.
SECTION 2.7 MANDATORY PREPAYMENTS
(a) Subject to clause (c) below, upon receipt by the Borrower or any
Loan Party of Net Cash Proceeds arising from an Asset Sale (other than any Asset
Sale permitted by Section 8.4(g)), Property Loss Event, Equity Issuance or Debt
Issuance, the Borrower shall immediately prepay the Loans in an amount equal to
100% of such Net Cash Proceeds; provided, however, that no such prepayment shall
be required under this Agreement to the extent the First Lien Available Credit
would be less than $75,000,000 after giving effect to such prepayment.
(b) Upon receipt by the Borrower or any Loan Party of Net Cash
Proceeds arising from an Asset Sale permitted under Section 8.4(g), the Borrower
shall prepay the Loans in an amount equal to the amount of Net Cash Proceeds
specified in clause (ii) below. Notwithstanding anything herein to the contrary,
such Net Cash Proceeds shall be applied as follows: (i) first, the Borrower
shall immediately prepay that portion of the outstanding revolving loans (and
provide cash collateral in respect of letters of credit) under the First Lien
Credit Agreement in an amount equal to that portion of the First Lien Available
Credit created solely by the inclusion of the assets subject to such Asset Sale
in the Borrowing Base (as defined in the First Lien Credit Agreement)
immediately prior to the consummation of such Asset Sale (and to the extent that
there are no revolving loans outstanding under the First Lien Credit Agreement
at such time and no Default or Event of Default under the First Lien Credit
Agreement has occurred and is continuing, the Borrower shall be entitled to
retain such Net Cash Proceeds); and (ii) second, the Borrower shall apply 50% of
the remaining balance of Net Cash Proceeds after giving effect to the
application of such proceeds made under clause (i) above as a mandatory
prepayment of the Loans.
(c) Notwithstanding clause (a) above, upon the occurrence of any
Asset Sale or Property Loss Event in respect of which a Responsible Officer of
the Borrower has delivered a Reinvestment Notice (a "Reinvestment Event"), all
of the following shall occur:
(i) Upon receipt of the Net Cash Proceeds subject to such
Reinvestment Notice (as long as no Event of Default shall have occurred
and be continuing), the Borrower shall be permitted to make Permitted
Reinvestments using such Net Cash Proceeds, as set forth in the
Reinvestment Notice for such Net Cash Proceeds, and shall not be required
to prepay the Loans to the extent provided in clause (a) above.
(ii) On each Reinvestment Prepayment Date for such
Reinvestment Event, to the extent the First Lien Available Credit would
not be less than $75,000,000 after giving effect to such prepayment, the
Borrower shall prepay the Loans in an amount
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SECOND LIEN CREDIT AGREEMENT
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equal to the Reinvestment Prepayment Amount applicable to such
Reinvestment Prepayment Date.
(d) Together with any prepayment of the Loans pursuant to clauses
(a) or (c) above, the Borrower shall also pay the Prepayment Premium, if any,
for such Loans calculated at the time of such prepayment.
(e) Notwithstanding the foregoing, no mandatory prepayment under
this Section 2.7 shall be required if such prepayment is otherwise prohibited
under the First Lien Credit Agreement.
SECTION 2.8 INTEREST
(a) Rate of Interest. All Loans and the outstanding amount of all
other Obligations shall bear interest, in the case of Loans, on the unpaid
principal amount thereof from the date such Loans are made and, in the case of
such other Obligations, from the date such other Obligations are due and payable
until, in all cases, paid in full, except as otherwise provided in clause (c)
below, as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate
per annum equal to the sum of (A) the Base Rate as in effect from time to
time and (B) the Applicable Margin for Term Loans that are Base Rate
Loans; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable Interest
Period and (B) the Applicable Margin in effect from time to time during
such Eurodollar Interest Period.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
shall be payable in arrears (A) on the first Business Day of each calendar
month, commencing on the first such day following the making of such Base Rate
Loan, (B) upon the payment or prepayment thereof in full or in part and (C) if
not previously paid in full, at maturity (whether by acceleration or otherwise)
of such Base Rate Loan, (ii) interest accrued on each Eurodollar Rate Loan shall
be payable in arrears (A) on the last day of each Interest Period applicable to
such Loan and, if such Interest Period has a duration of more than three months,
on each date during such Interest Period occurring every three months from the
first day of such Interest Period, (B) upon the payment or prepayment thereof in
full or in part and (C) if not previously paid in full, at maturity (whether by
acceleration or otherwise) of such Eurodollar Rate Loan and (iii) interest
accrued on the amount of all other Obligations shall be payable on demand from
and after the time such Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest
specified in clause (a) above or elsewhere herein, effective immediately upon
the occurrence of an Event of Default and for as long thereafter as such Event
of Default shall be continuing, the principal balance of all Loans and the
amount of all other Obligations then due and payable shall bear interest at a
rate that is two percent per annum in excess of the rate of interest applicable
to such Loans or other Obligations from time to time. Such interest shall be
payable on the date that would otherwise be applicable to such interest pursuant
to clause (b) above or otherwise on demand.
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SECOND LIEN CREDIT AGREEMENT
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SECTION 2.9 CONVERSION/CONTINUATION OPTION
(a) The Borrower may elect (i) at any time on any Business Day, to
convert Base Rate Loans or any portion thereof to Eurodollar Rate Loans and (ii)
at the end of any applicable Interest Period, to convert Eurodollar Rate Loans
or any portion thereof into Base Rate Loans or to continue such Eurodollar Rate
Loans or any portion thereof for an additional Interest Period; provided,
however, that the aggregate amount of the Eurodollar Loans for each Interest
Period must be in the amount of at least $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. Each conversion or continuation shall be allocated
among the Loans of each Lender in accordance with such Lender's Ratable Portion.
Each such election shall be in substantially the form of Exhibit D (Form of
Notice of Conversion or Continuation) (a "Notice of Conversion or Continuation")
and shall be made by giving the Administrative Agent at least three Business
Days' prior written notice specifying (A) the amount and type of Loan being
converted or continued, (B) in the case of a conversion to or a continuation of
Eurodollar Rate Loans, the applicable Interest Period and (C) in the case of a
conversion, the date of such conversion.
(b) The Administrative Agent shall promptly notify each Lender of
its receipt of a Notice of Conversion or Continuation and of the options
selected therein. Notwithstanding the foregoing, (i) no conversion in whole or
in part of Base Rate Loans to Eurodollar Rate Loans shall be permitted at any
time prior to the Syndication Completion Date and (ii) no conversion in whole or
in part of Base Rate Loans to Eurodollar Rate Loans and no continuation in whole
or in part of Eurodollar Rate Loans upon the expiration of any applicable
Interest Period shall be permitted at any time at which (A) a Default or an
Event of Default shall have occurred and be continuing or (B) the continuation
of, or conversion into, a Eurodollar Rate Loan would violate any provision of
Section 2.12 (Special Provisions Governing Eurodollar Rate Loans). If, within
the time period required under the terms of this Section 2.9, the Administrative
Agent does not receive a Notice of Conversion or Continuation from the Borrower
containing a permitted election to continue any Eurodollar Rate Loans for an
additional Interest Period or to convert any such Loans, then, upon the
expiration of the applicable Interest Period, such Loans shall be automatically
converted to Base Rate Loans. Each Notice of Conversion or Continuation shall be
irrevocable.
SECTION 2.10 FEES
The Borrower has agreed to pay to the Administrative Agent and the
Arranger certain fees, the amount and dates of payment of which are embodied in
the Second Lien Fee Letter.
SECTION 2.11 PAYMENTS AND COMPUTATIONS
(a) The Borrower shall make each payment hereunder (including fees
and expenses) not later than 11:00 a.m. (New York time) on the day when due, in
the currency specified herein (or, if no such currency is specified, in Dollars)
to the Administrative Agent at its address referred to in Section 11.8 (Notices,
Etc.) in immediately available funds without set-off or counterclaim. The
Administrative Agent shall promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal, interest or
fees to the Lenders, in accordance with the application of payments set forth in
clause (f) or (g) below, as applicable, for the account of their respective
Applicable Lending Offices; provided, however, that amounts payable pursuant to
Section 2.13 (Capital Adequacy), Section 2.14 (Taxes) or Section 2.12(c) or (d)
(Special Provisions Governing Eurodollar Rate Loans) shall be paid only to the
affected
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
Lender or Lenders. Payments received by the Administrative Agent after 11:00
a.m. (New York time) shall be deemed to be received on the next Business Day.
(b) All computations of interest and of fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of a rate of interest hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(c) Each payment by the Borrower of any Loan and each reimbursement
of various costs, expenses or other Obligation shall be made in Dollars;
provided, however, that other than for payments in respect of a Loan, Loan
Documents duly executed by the Administrative Agent may specify other currencies
of payment for Obligations created by or directly related to such Loan Document.
(d) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, the due date for such payment shall be extended
to the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the immediately preceding Business
Day. All repayments of any Term Loans shall be applied as follows: first, to
repay such Loans outstanding as Base Rate Loans and then, to repay such Loans
outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having
earlier expiring Eurodollar Interest Periods being repaid prior to those having
later expiring Eurodollar Interest Periods.
(e) Unless the Administrative Agent shall have received notice from
the Borrower to the Lenders prior to the date on which any payment is due
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon (at the Federal Funds Rate for the first Business Day and
thereafter at the rate applicable to Base Rate Loans) for each day from the date
such amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent.
(f) Except for payments and other amounts received by the
Administrative Agent and applied in accordance with the provisions of clause (g)
below (or required to be applied in accordance with clause (b) of Section 2.7
(Mandatory Prepayments)), all payments and any other amounts received by the
Administrative Agent from or for the benefit of the Borrower shall be applied as
follows: first, to pay principal of, and interest on, any portion of the Loans
the Administrative Agent may have advanced pursuant to the express provisions of
this Agreement on behalf of any Lender, for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrower, second, to pay all
other Obligations then due and payable and third, as the Borrower so designates.
Payments in respect of any Loans received by the Administrative Agent shall be
distributed to each Lender in accordance with such Lender's Ratable Portion; and
all payments of fees and all other payments in respect of any other Obligation
shall be allocated
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
among such of the Lenders as are entitled thereto and, for such payments
allocated to the Lenders, in proportion to their respective Ratable Portions.
(g) The Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Obligations and any
proceeds of Collateral after the occurrence and during the continuance of an
Event of Default and agrees that, notwithstanding the provisions of Section 2.7
(Mandatory Prepayments) and clause (f) above, subject to the terms of the
Intercreditor Agreement, the Collateral Agent may, and, upon either (A) the
written direction of the Administrative Agent or the Requisite Lenders after the
occurrence and during the continuance of an Event of Default or (B) the
acceleration of the Obligations pursuant to Section 9.2 (Remedies), shall,
deliver a Blockage Notice to each Deposit Account Bank for each Approved Deposit
Account and, subject to the provisions of the Intercreditor Agreement, apply all
payments in respect of any Secured Obligations and all proceeds of Collateral in
the following order:
(i) first, to pay Secured Obligations in respect of any
expense, reimbursements or indemnities then due to the Administrative
Agent or the Collateral Agent;
(ii) second, to pay Secured Obligations in respect of any
expense, reimbursements or indemnities then due to the Lenders;
(iii) third, to pay Secured Obligations in respect of any fees
then due to the Administrative Agent, the Collateral Agent, the Lenders;
(iv) fourth, to pay interest then due and payable in respect
of the Loans;
(v) fifth, to pay or prepay principal amounts on the Loans,
ratably to the aggregate principal amount of such Loans;
(vi) sixth, to the ratable payment of all other Secured
Obligations; and
(vii) seventh, the balance to the Borrower or the Loan Party
lawfully entitled to receive such proceeds;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Secured Obligation described in any of
clauses (i), (ii), (iii), (iv) and (v) above the available funds being applied
with respect to any such Secured Obligation (unless otherwise specified in such
clause) shall be allocated to the payment of such Secured Obligation ratably,
based on the proportion of the Administrative Agent's and each Lender's interest
in the aggregate outstanding Secured Obligations described in such clauses. The
order of priority set forth in clauses (i), (ii), (iii), (iv) and (v) above may
at any time and from time to time be changed by the agreement of the Requisite
Lenders without necessity of notice to or consent of or approval by the
Borrower, any Secured Party that is not a Lender or by any other Person that is
not a Lender . The order of priority set forth in clauses (i), (ii) and (iii)
above may be changed only with the prior written consent of the Administrative
Agent or the Collateral Agent, as applicable, in addition to that of the
Requisite Lenders.
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
SECTION 2.12 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS
(a) Determination of Interest Rate
The Eurodollar Rate for each Interest Period for Eurodollar Rate
Loans shall be determined by the Administrative Agent pursuant to the procedures
set forth in the definition of "Eurodollar Rate." The Administrative Agent's
determination shall be presumed to be correct absent manifest error and shall be
binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair
In the event that (i) the Administrative Agent determines that
adequate and fair means do not exist for ascertaining the applicable interest
rates by reference to which the Eurodollar Rate then being determined is to be
fixed or (ii) the Requisite Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period will not adequately reflect the cost to
the Lenders of making or maintaining such Loans for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon each Eurodollar Loan shall automatically, on the last day of the
current Interest Period for such Loan, convert into a Base Rate Loan and the
obligations of the Lenders to make Eurodollar Rate Loans or to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended until the Administrative
Agent shall notify the Borrower that the Requisite Lenders have determined that
the circumstances causing such suspension no longer exist.
(c) Increased Costs
If at any time any Lender determines that the introduction of, or
any change in or in the interpretation of, any law, treaty or governmental rule,
regulation or order (other than any change by way of imposition or increase of
reserve requirements included in determining the Eurodollar Rate) or the
compliance by such Lender with any guideline, request or directive from any
central bank or other Governmental Authority (whether or not having the force of
law), shall have the effect of increasing the cost to such Lender of agreeing to
make or making, funding or maintaining any Eurodollar Rate Loans, then the
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower and the Administrative Agent by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.
(d) Illegality
Notwithstanding any other provision of this Agreement, if any Lender
determines that the introduction of, or any change in or in the interpretation
of, any law, treaty or governmental rule, regulation or order after the date of
this Agreement shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to make Eurodollar Rate Loans or to continue to fund or maintain
Eurodollar Rate Loans, then, on notice thereof and demand therefor by such
Lender to the Borrower through the Administrative Agent, (i) the obligation of
such Lender to make or to continue Eurodollar Rate Loans and to convert Base
Rate Loans into Eurodollar Rate Loans shall be suspended, and each such Lender
shall make a Base Rate Loan as part of any requested Borrowing of Eurodollar
Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
outstanding, the Borrower shall immediately convert each such Loan into a Base
Rate Loan. If, at any time after a Lender gives notice under this clause (d),
such Lender determines that it may lawfully make Eurodollar Rate Loans, such
Lender shall promptly give notice of that determination to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit the
notice to each other Lender. The Borrower's right to request, and such Lender's
obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.
(e) Breakage Costs
In addition to all amounts required to be paid by the Borrower
pursuant to Section 2.8 (Interest), the Borrower shall compensate each Lender,
upon demand, for all losses, expenses and liabilities (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Lender's Eurodollar
Rate Loans to the Borrower but excluding any loss of the Applicable Margin on
the relevant Loans) that such Lender may sustain (i) if for any reason (other
than solely by reason of such Lender being a Non-Funding Lender) a proposed
Borrowing, conversion into or continuation of Eurodollar Rate Loans does not
occur on a date specified therefor in a Notice of Borrowing or a Notice of
Conversion or Continuation given by the Borrower or in a telephonic request by
it for borrowing or conversion or continuation or a successive Interest Period
does not commence after notice therefor is given pursuant to Section 2.9
(Conversion/Continuation Option), (ii) if for any reason any Eurodollar Rate
Loan is prepaid (including mandatorily pursuant to Section 2.7 (Mandatory
Prepayments)) on a date that is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in clause
(d) above or (iv) as a consequence of any failure by the Borrower to repay
Eurodollar Rate Loans when required by the terms hereof. The Lender making
demand for such compensation shall deliver to the Borrower concurrently with
such demand a written statement as to such losses, expenses and liabilities, and
this statement shall be conclusive as to the amount of compensation due to such
Lender, absent manifest error.
SECTION 2.13 CAPITAL ADEQUACY
If at any time any Lender determines that (a) the adoption of, or
any change in or in the interpretation of, any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital adequacy,
(b) compliance with any such law, treaty, rule, regulation or order or (c)
compliance with any guideline or request or directive from any central bank or
other Governmental Authority (whether or not having the force of law) shall have
the effect of reducing the rate of return on such Lender's (or any corporation
controlling such Lender's) capital as a consequence of its obligations hereunder
to a level below that which such Lender or such corporation could have achieved
but for such adoption, change, compliance or interpretation, then, upon demand
from time to time by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such reduction. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes absent
manifest error.
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SECOND LIEN CREDIT AGREEMENT
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SECTION 2.14 TAXES
(a) Except as otherwise provided in this Section 2.14, any and all
payments by any Loan Party under each Loan Document shall be made free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) in the case of each Lender and the Administrative Agent
(A) taxes measured by its net income (including the Michigan single business
tax), and franchise taxes imposed on it, and similar taxes imposed by the
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized and (B) any
U.S. withholding taxes payable with respect to payments under the Loan Documents
under laws (including any statute, treaty or regulation) in effect on the
Closing Date (or, in the case of (x) an Eligible Assignee, the date of the
Assignment and Acceptance and (y) a successor Administrative Agent, the date of
the appointment of such Administrative Agent) applicable to such Lender or the
Administrative Agent, as the case may be, but not excluding any U.S. withholding
taxes payable as a result of any change in such laws occurring after the Closing
Date (or the date of such Assignment and Acceptance or the date of such
appointment of such Administrative Agent) and (ii) in the case of each Lender,
taxes measured by its net income and franchise taxes imposed on it as a result
of a present or former connection between such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If any
Taxes shall be required by law to be deducted from or in respect of any sum
payable under any Loan Document to any Lender or the Administrative Agent (w)
the sum payable shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.14), such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (x) the relevant Loan Party shall make such deductions,
(y) the relevant Loan Party shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law and (z)
the relevant Loan Party shall deliver to the Administrative Agent evidence of
such payment.
(b) In addition, each Loan Party agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, in
each case arising from any payment made under any Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, any Loan
Document (collectively, "Other Taxes"). Each Loan Party authorizes the
Administrative Agent to pay such Other Taxes in the name of such Loan Party and,
for such purpose, to submit a Notice of Borrowing for Term Loans in the currency
such Other Taxes are owed (or, if not available, in Dollars) (i) after the
occurrence of any Event of Default and in respect of any event occurring on the
Closing Date and (ii) otherwise, with the consent of such Loan Party, in the
name of the Loan Party owing such Other Taxes and in an aggregate principal
amount not to exceed all amounts owing in respect of such Other Taxes. If such a
Notice of Borrowing is prepared by the Administrative Agent, the Borrowing
corresponding thereto shall be made without regard to the conditions precedent
set forth in Section 3.2 (Conditions Precedent to the Loans) and the proceeds
thereof shall be disbursed to the Administrative Agent in the name of the
Borrower and shall be used by the Administrative Agent solely to pay such Other
Taxes (any excess thereof to be used to repay such Borrowing).
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SECOND LIEN CREDIT AGREEMENT
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(c) Each Loan Party shall, jointly and severally, indemnify each
Lender and the Administrative Agent for the full amount of Taxes and Other Taxes
(including any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.14) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including for penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender or the Administrative Agent (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes by any Loan Party, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 11.8 (Notices, Etc.), the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under the Guaranty, the agreements and obligations of
such Loan Party contained in this Section 2.14 shall survive the payment in full
of the Obligations.
(f) Each Non-U.S. Lender that is entitled to an exemption from U.S.
withholding tax, or that is subject to such tax at a reduced rate under an
applicable tax treaty, shall (v) on or prior to the Closing Date in the case of
each Non-U.S. Lender that is a signatory hereto, (w) on or prior to the date of
the Assignment and Acceptance pursuant to which such Non-U.S. Lender becomes a
Lender or on or prior to the date a successor Administrative Agent or Collateral
Agent becomes the Administrative Agent or Collateral Agent, as applicable, (x)
on or prior to the date on which any such form or certification expires or
becomes obsolete, (y) after the occurrence of any event requiring a change in
the most recent form or certification previously delivered by it to the Borrower
and the Administrative Agent, and (z) from time to time thereafter if requested
by the Borrower or the Administrative Agent, provide the Administrative Agent
and the Borrower (or, in the case of an assignee pursuant to a Related Party
Assignment that is not delivered to the Administrative Agent in accordance with
Section 11.2(c), to the assigning Lender only) with two completed originals of
each of the following, as applicable:
(i) (A) Form W-8ECI (claiming exemption from U.S. withholding
tax because the income is effectively connected with a U.S. trade or
business) (or Form W-8IMY (with appropriate attachments)) or any successor
form, (B) Form W-8BEN (claiming exemption from, or a reduction of, U.S.
withholding tax under an income tax treaty) (or Form W-8IMY (with
appropriate attachments)) or any successor form, (C) in the case of a
Non-U.S. Lender claiming exemption under Sections 871(h) or 881(c) of the
Code, a Form W-8BEN (claiming exemption from U.S. withholding tax under
the portfolio interest exemption) (or Form W-8IMY (with appropriate
attachments)) or any successor form or (D) any other applicable form,
certificate or document prescribed by the IRS certifying as to such
Non-U.S. Lender's entitlement to such exemption from U.S. withholding tax
or reduced rate with respect to all payments to be made to such Non-U.S.
Lender under the Loan Documents. Unless the Borrower and the
Administrative Agent have received forms or other documents satisfactory
to them indicating that payments under any Loan Document to or for a
Non-U.S. Lender are not subject to U.S. withholding tax or are subject to
such tax at a rate reduced by an applicable tax treaty, the Loan Parties
and the Administrative Agent shall withhold amounts required to be
withheld by applicable Requirements of Law from such payments at the
applicable statutory rate.
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SECOND LIEN CREDIT AGREEMENT
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(ii) E ach U.S. Lender shall (v) on or prior to the Closing
Date in the case of each U.S. Lender that is a signatory hereto, (w) on
the date of the Assignment and Acceptance pursuant to which such U.S.
Lender becomes a Lender (other than a Related Party Assignment that is not
delivered to the Administrative Agent in accordance with Section 11.2(c)),
on or prior to the date a successor Issuer becomes an Issuer or on or
prior to the date a successor Administrative Agent or Collateral Agent
becomes the Administrative Agent or Collateral Agent, as applicable,
hereunder, (x) on or prior to the date on which any such form or
certification expires or becomes obsolete, (y) after the occurrence of any
event requiring a change in the most recent form or certification
previously delivered by it to the Borrower and the Administrative Agent
and (z) from time to time if requested by the Borrower or the
Administrative Agent, provide the Administrative Agent and the Borrower
(or, in the case of an assignee pursuant to a Related Party Assignment
that is not delivered to the Administrative Agent in accordance with
Section 11.2(c), to the assigning Lender only) with two completed
originals of Form W-9 (certifying that such U.S. Lender is entitled to an
exemption from U.S. backup withholding tax) or any successor form. Solely
for purposes of this Section 2.14(f), a U.S. Lender shall not include a
Lender, an Issuer or an Administrative Agent that may be treated as an
exempt recipient based on the indicators described in Treasury Regulation
section 1.6049-4(c)(1)(ii).
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.14 shall use its reasonable efforts (consistent with its internal
policies and Requirements of Law) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that would be payable or may
thereafter accrue and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
(h) Each Lender who makes a Related Party Assignment hereby
indemnifies and agrees to hold the Borrower and the Administrative Agent
harmless from and against any U.S. Federal withholding tax that would not have
been imposed but for (i) the failure of the Affiliate or the Related Fund that
received such Related Party Assignment to comply with clause (f) above or (ii)
the failure of such Lender to withhold such tax at the proper rate in the event
such Affiliate or Related Fund does not comply with clause (f) above (or
complies with clause (f) above but delivers forms indicating it is entitled to a
reduced rate of such tax).
SECTION 2.15 SUBSTITUTION OF LENDERS
(a) In the event that (i)(A) any Lender makes a claim under Section
2.12(c) (Increased Costs) or 2.13 (Capital Adequacy), (B) it becomes illegal for
any Lender to continue to fund or make any Eurodollar Rate Loan and such Lender
notifies the Borrower pursuant to Section 2.12(d) (Illegality), (C) any Loan
Party is required to make any payment pursuant to Section 2.14 (Taxes) that is
attributable to a particular Lender or (D) any Lender becomes a Non-Funding
Lender, (ii) in the case of clause (i)(A) above, as a consequence of increased
costs in respect of which such claim is made, the effective rate of interest
payable to such Lender under this Agreement with respect to its Loans materially
exceeds the effective average annual rate of interest payable to the Requisite
Lenders under this Agreement and (iii) in the case of clause (i)(A), (B) and (C)
above, Lenders holding at least 75% of the principal amount of the Term Loans
then outstanding are not subject to such increased costs or illegality, payment
or proceedings (any such Lender, an "Affected Lender"), the Borrower may
substitute any Lender and, if reasonably acceptable to the Administrative Agent,
any other Eligible Assignee (a
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SECOND LIEN CREDIT AGREEMENT
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"Substitute Institution") for such Affected Lender hereunder, after delivery of
a written notice (a "Substitution Notice") by the Borrower to the Administrative
Agent and the Affected Lender within a reasonable time (in any case not to
exceed 90 days) following the occurrence of any of the events described in
clause (i) above that the Borrower intends to make such substitution; provided,
however, that, if more than one Lender claims increased costs, illegality or
right to payment arising from the same act or condition and such claims are
received by the Borrower within 30 days of each other, then the Borrower may
substitute all, but not (except to the extent the Borrower has already
substituted one of such Affected Lenders before the Borrower's receipt of the
other Affected Lenders' claim) less than all, Lenders making such claims.
(b) If the Substitution Notice was properly issued under this
Section 2.15, the Affected Lender shall sell, and the Substitute Institution
shall purchase, all rights and claims of such Affected Lender under the Loan
Documents, and the Substitute Institution shall assume, and the Affected Lender
shall be relieved of all prior unperformed obligations of the Affected Lender
under the Loan Documents (other than in respect of any damages (which, pursuant
to Section 11.5 (Limitation of Liability), do not include exemplary or punitive
damages, to the extent permitted by applicable law) in respect of any such
unperformed obligations). Such purchase and sale (and the corresponding
assignment of all rights and claims hereunder) shall be recorded in the Register
maintained by the Administrative Agent and shall be effective on (and not
earlier than) the later of (i) the receipt by the Affected Lender of its Ratable
Portion of the Loans, together with any other Obligations owing to it, (ii) the
receipt by the Administrative Agent of an agreement in form and substance
satisfactory to it and the Borrower whereby the Substitute Institution shall
agree to be bound by the terms hereof and (iii) the payment in full to the
Affected Lender in cash of all fees, unreimbursed costs and expenses and
indemnities accrued and unpaid through such effective date. Upon the
effectiveness of such sale, purchase and assumption, the Substitute Institution
shall become a "Lender" hereunder for all purposes of this Agreement having a
Term Loan Commitment in the amount of such Affected Lender's Term Loan
Commitment assumed by it and such Term Loan Commitment of the Affected Lender
shall be terminated; provided, however, that all indemnities under the Loan
Documents shall continue in favor of such Affected Lender.
(c) Each Lender agrees that, if it becomes an Affected Lender and
its rights and claims are assigned hereunder to a Substitute Institution
pursuant to this Section 2.15, it shall execute and deliver to the
Administrative Agent an Assignment and Acceptance to evidence such assignment,
together with any Term Loan Note (if such Loans are evidenced by a Term Loan
Note) evidencing the Loans subject to such Assignment and Acceptance; provided,
however, that the failure of any Affected Lender to execute an Assignment and
Acceptance shall not render such assignment invalid.
ARTICLE III
CONDITIONS TO THE LOANS
SECTION 3.1 CONDITIONS PRECEDENT TO THE LOANS
The obligation of each Lender to make the Loans requested to be made
by it on the Closing Date is subject to the satisfaction or due waiver in
accordance with Section 11.1 (Amendments, Waivers, Etc.) of each of the
following conditions precedent on or before February 28, 2006:
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(a) Certain Documents. The Administrative Agent shall have received
on or prior to the Closing Date (and, to the extent any Borrowing of any
Eurodollar Rate Loans is requested to be made on the Closing Date, in respect of
the Notice of Borrowing for such Eurodollar Rate Loans, at least three Business
Days prior to the Closing Date) each of the following, each dated the Closing
Date unless otherwise indicated or agreed to by the Administrative Agent, in
form and substance satisfactory to the Administrative Agent and in sufficient
copies for each Lender:
(i) this Agreement, duly executed and delivered by the
Borrower and, for the account of each Lender requesting the same, a Term
Loan Note of the Borrower conforming to the requirements set forth herein;
(ii) the Guaranty, duly executed by each Guarantor set forth
on Schedule 3.1(a)(ii) (Guarantors);
(iii) the Pledge and Security Agreement, the Canadian
Collateral Documents, the Foreign Pledge Agreements and the Aircraft
Collateral Documents, each duly executed by the Borrower and each
Guarantor, together with each of the following:
(A) evidence satisfactory to the Administrative Agent
that, upon the filing and recording of instruments delivered at the
closing, the Collateral Agent (for the benefit of the Secured
Parties) shall have a valid and perfected second priority security
interest in the Collateral, including (x) such documents duly
executed by each Loan Party as the Administrative Agent may request
with respect to the perfection of its security interests in the
Collateral (including financing statements under the UCC, patent,
trademark and copyright security agreements suitable for filing with
the Patent and Trademark Office or the Copyright Office, as the case
may be, and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens created by the
Pledge and Security Agreement) and (y) copies of UCC search reports
as of a recent date listing all effective financing statements that
name any Loan Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral,
except for those that shall be terminated on the Closing Date or are
otherwise permitted hereunder;
(B) all certificates, instruments and other documents
representing all Pledged Stock being pledged pursuant to such Pledge
and Security Agreement and stock powers for such certificates,
instruments and other documents executed in blank;
(C) all instruments representing Pledged Debt
Instruments (including all instruments evidencing the IRB Debt owing
to the Borrower or any other Loan Party) being pledged pursuant to
such Pledge and Security Agreement duly endorsed in favor of the
Collateral Agent or in blank;
(D) all Deposit Account Control Agreements, duly
executed by the corresponding Deposit Account Bank and Loan Party,
that, in the reasonable judgment of the Administrative Agent, shall
be required for the Loan Parties to comply with Section 7.12
(Control Accounts; Approved Deposit Accounts); and
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SECOND LIEN CREDIT AGREEMENT
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(E) Securities Account Control Agreements duly executed
by the appropriate Loan Party and (1) all "securities
intermediaries" (as defined in the UCC) with respect to all
Securities Accounts and securities entitlements of the Borrower and
each Guarantor and (2) all "commodities intermediaries" (as defined
in the UCC) with respect to all commodities contracts and
commodities accounts held by the Borrower and each Guarantor;
(iv) the Intercreditor Agreement, duly executed and delivered
by the Administrative Agent (as defined in the First Lien Credit
Agreement), the Collateral Agent and the Borrower;
(v) a favorable opinion of (A) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and
Stone, P.L.C., counsel to the Loan Parties, in substantially the form of
Exhibit E (Form of Opinion of Counsel for the Loan Parties), (B) counsel
to the Loan Parties in Delaware, Wisconsin, Oklahoma, Michigan,
Mississippi, Tennessee, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, in each
case addressed to the Administrative Agent, the Collateral Agent and the
Lenders and addressing such other matters as any Lender through the
Administrative Agent may reasonably request and (C) (i) New York counsel
to the Administrative Agent as to the enforceability of this Agreement and
the other Loan Documents to be executed on the Closing Date and (ii)
counsel to the Administrative Agent in Brazil, Canada, France, India and
the United States (in respect of opinions addressing the Aircraft
Collateral Documents), in each case addressed to the Administrative Agent,
the Collateral Agent and the Lenders and addressing such other matters as
any Lender through the Administrative Agent may reasonably request;
(vi) a copy of the articles or certificate of incorporation
(or equivalent Constituent Document) of each Loan Party, certified as of a
recent date by the Secretary of State of the state of organization of such
Loan Party, together with certificates of such official attesting to the
good standing of each such Loan Party;
(vii) a certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying (A) the names and true signatures of each
officer of such Loan Party that has been authorized to execute and deliver
any Loan Document or other document required hereunder to be executed and
delivered by or on behalf of such Loan Party, (B) the by-laws (or
equivalent Constituent Document) of such Loan Party as in effect on the
date of such certification, (C) the resolutions of such Loan Party's Board
of Directors (or equivalent governing body) approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and (D) that there have been no changes
in the certificate of incorporation (or equivalent Constituent Document)
of such Loan Party from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to clause (vi) above;
(viii) a certificate of a Responsible Officer of the Borrower
and each Guarantor, stating that the Borrower and each Guarantor is
Solvent after giving effect to the initial Loans and Letters of Credit,
the application of the proceeds thereof in accordance with Section 7.9
(Application of Proceeds) and the payment of all estimated legal,
accounting and other fees related hereto and thereto;
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SECOND LIEN CREDIT AGREEMENT
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(ix) evidence satisfactory to the Administrative Agent that
the insurance policies required by Section 7.5 (Maintenance of Insurance)
and any Collateral Document are in full force and effect, together with,
unless otherwise agreed by the Administrative Agent, endorsements naming
the Collateral Agent, on behalf of the Secured Parties, as an additional
insured or loss payee under all insurance policies to be maintained with
respect to the properties of the Borrower and each other Loan Party; and
(x) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
(b) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent, the
Collateral Agent and the Lenders, as applicable, all fees and expenses
(including reasonable fees and expenses of counsel) due and payable on or before
the Closing Date (including all such fees described in the Second Lien Fee
Letter).
(c) Refinancing of Existing Credit Agreement. (i) All obligations
under the Existing Credit Agreement shall have been repaid in full, (ii) the
Existing Credit Agreement and all Loan Documents (as defined therein) shall have
been terminated (and all Liens securing such Existing Credit Agreement shall be
released) on terms satisfactory to the Administrative Agent and (iii) the
Administrative Agent shall have received a payoff letter duly executed and
delivered by the Borrower and the Existing Agent or other evidence of such
termination in each case in form and substance satisfactory to the
Administrative Agent.
(d) Redemption of Senior Guaranteed Notes. (i) All obligations under
the Senior Guaranteed Notes shall have been repaid in full, (ii) the Senior
Guaranteed Notes have been cancelled and returned to the Borrower and all Liens
granted by the Borrower in connection with such Senior Guaranteed Notes have
been released and (iii) the Administrative Agent shall have received a payoff
letter duly executed and delivered by the Borrower and the applicable indenture
trustee or other evidence of such termination in each case in form and substance
satisfactory to the Administrative Agent.
(e) Refinanced IRB Documents. (i) All obligations under the
Refinanced IRB Documents shall have been repaid in full, (ii) all Refinanced IRB
Documents have been terminated and all Liens outstanding in connection with such
Refinanced IRB Documents have been released and (iii) the Administrative Agent
shall have received a payoff letter duly executed and delivered by the
applicable Loan Party and the trustee or other evidence of such termination in
each case in form and substance satisfactory to the Administrative Agent.
(f) Consents, Etc. Each of the Borrower and its Subsidiaries shall
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all Permits
of, and effected all notices to and filings with, any Governmental Authority, in
each case, as may be necessary to allow each of the Borrower and its
Subsidiaries lawfully (i) to execute, deliver and perform, in all material
respects, their respective obligations hereunder and under the Loan Documents to
which each of them, respectively, is, or shall be, a party and each other
agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith, and (ii) to create
and perfect the Liens on the Collateral to be owned by each of them in the
manner and for the purpose contemplated by the Loan Documents.
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SECOND LIEN CREDIT AGREEMENT
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(g) Minimum First Lien Available Credit. After giving effect to the
loans to be made and letters of credit to be issued under the First Lien Credit
Agreement on the Closing Date, the First Lien Available Credit shall be at least
$65,000,000 on the Closing Date (it being understood and agreed that (x) all
Real Property set forth on Schedule 7.13 (Real Property Mortgages) to the First
Lien Credit Agreement shall constitute "Eligible Real Property" as defined in
the First Lien Credit Agreement and (y) the Thai Letter of Credit (as defined in
the First Lien Credit Agreement) shall not be deemed a Revolving Credit
Outstanding (as defined in the First Lien Credit Agreement), on the Closing
Date, in each case solely for the purpose of calculating the above stated First
Lien Available Credit).
(h) First Lien Credit Facility. The Administrative Agent shall have
received a duly executed copy of the First Lien Credit Agreement and all
ancillary documents relating thereto. The "Closing Date" under, and as defined
in the First Lien Credit Agreement, shall have occurred.
(i) Request for Borrowing. The Administrative Agent shall have
received a duly executed Notice of Borrowing.
(j) Representations and Warranties; No Defaults. The following
statements shall be true on the Closing Date, both before and after giving
effect to the Loans and to the application of the proceeds thereof (and the
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower to that effect):
(i) the representations and warranties set forth in Article IV
(Representations and Warranties) and in the other Loan Documents shall be
true and correct on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date, in
which case such representations and warranties shall have been true and
correct in all material respects as of such earlier date;
(ii) no Default or Event of Default shall have occurred and be
continuing; and
(iii) no litigation not listed on Schedule 4.7 (Litigation)
shall have been commenced against any Loan Party or any of its
Subsidiaries that would have a Material Adverse Effect.
(k) No Legal Impediments. The making of the Loans on the Closing
Date does not violate any Requirement of Law on the date of or immediately
following such Loan and is not enjoined, temporarily, preliminarily or
permanently.
(l) Additional Matters. The Administrative Agent shall have received
such additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request.
SECTION 3.2 DETERMINATIONS OF BORROWING CONDITIONS
For purposes of determining compliance with the conditions specified
in Section 3.1 (Conditions Precedent to the Loans), each Lender shall be deemed
to have consented to, approved, accepted or be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to the Lenders unless an officer of the
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SECOND LIEN CREDIT AGREEMENT
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Administrative Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender prior to the Borrowing
hereunder specifying its objection thereto and such Lender shall not have made
available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter into
this Agreement, the Borrower represents and warrants each of the following to
the Lenders and the Administrative Agent, on and as of the Closing Date and
after giving effect to the making of the Loans and the other financial
accommodations on the Closing Date:
SECTION 4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW
Each of the Borrower and the Borrower's Subsidiaries (a) is duly
organized, validly existing and, to the extent applicable to Foreign
Subsidiaries, in good standing under the laws of the jurisdiction of its
organization, (b) is duly qualified to do business as a foreign entity and, to
the extent applicable to Foreign Subsidiaries, in good standing under the laws
of each jurisdiction where such qualification is necessary, except where the
failure to be so qualified or in good standing would not, in the aggregate, have
a Material Adverse Effect, (c) has all requisite power and authority and the
legal right to own, pledge, mortgage and operate its properties, to lease the
property it operates under lease and to conduct its business as now or currently
proposed to be conducted, (d) is in compliance with its Constituent Documents,
(e) is in compliance with all applicable Requirements of Law except where the
failure to be in compliance would not, in the aggregate, have a Material Adverse
Effect and (f) has all necessary Permits from or by, has made all necessary
filings with, and has given all necessary notices to, each Governmental
Authority having jurisdiction, to the extent required for such ownership,
operation and conduct, except for Permits or filings that can be obtained or
made by the taking of ministerial action to secure the grant or transfer thereof
or the failure to obtain or make would not, in the aggregate, have a Material
Adverse Effect.
SECTION 4.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS
(a) The execution, delivery and performance by each Loan Party of
the Loan Documents to which it is a party and the consummation of the
transactions contemplated thereby:
(i) are within such Loan Party's corporate, limited liability
company, partnership or other powers;
(ii) have been or, at the time of delivery thereof pursuant to
Article III (Conditions to the Loans) will have been duly authorized by
all necessary action, including the consent of shareholders, partners and
members where required;
(iii) do not and will not (A) contravene or violate such Loan
Party's or any of its Subsidiaries' respective Constituent Documents, (B)
violate any other Requirement of Law applicable to such Loan Party
(including Regulations T, U and X of the Federal Reserve Board), or any
order or decree of any Governmental Authority or
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SECOND LIEN CREDIT AGREEMENT
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arbitrator applicable to such Loan Party, (C) conflict with or result in
the breach of, or constitute a default under, or result in or permit the
termination or acceleration of, any material Contractual Obligation of
such Loan Party or any of its Subsidiaries or (D) result in the creation
or imposition of any Lien upon any property of such Loan Party or any of
its Subsidiaries, other than those in favor of the Secured Parties
pursuant to the Collateral Documents; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority
or any other Person, other than those listed on Schedule 4.2 (Consents)
and that have been or will be, prior to the Closing Date, obtained or
made, copies of which have been or will be delivered to the Administrative
Agent pursuant to Section 3.1 (Conditions Precedent to the Loans), and
each of which on the Closing Date will be in full force and effect and,
with respect to the Collateral, filings required to perfect the Liens
created by the Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents
will have been upon delivery thereof pursuant to the terms of this Agreement,
duly executed and delivered by each Loan Party party thereto. This Agreement is,
and the other Loan Documents will be, when delivered hereunder, the legal, valid
and binding obligation of each Loan Party party thereto, enforceable against
such Loan Party in accordance with its terms.
SECTION 4.3 OWNERSHIP OF SUBSIDIARIES
(a) Set forth on Schedule 4.3 (Ownership of Subsidiaries) is a
complete and accurate list showing, as of the Closing Date, all Subsidiaries of
the Borrower and, as to each such Subsidiary, the jurisdiction of its
organization, the number of shares of each class of Stock authorized (if
applicable), the number outstanding on the Closing Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower. No Stock of any Subsidiary of the Borrower is
subject to any outstanding option, warrant, right of conversion or purchase of
any similar right. All of the outstanding Stock of each Subsidiary of the
Borrower owned (directly or indirectly) by the Borrower has been validly issued,
is fully paid and non-assessable (to the extent applicable) and is owned by the
Borrower or a Subsidiary of the Borrower, free and clear of all Liens (other
than the Liens in favor of the Secured Parties and the First Lien Secured
Parties created pursuant to the Pledge and Security Agreement), options,
warrants, rights of conversion or purchase or any similar rights. Neither the
Borrower nor any such Subsidiary is a party to, or has knowledge of, any
agreement restricting the transfer or hypothecation of any Stock of any such
Subsidiary, other than the Loan Documents. The Borrower does not own or hold,
directly or indirectly, any Stock of any Person other than such Subsidiaries and
Investments permitted by Section 8.3 (Investments).
(b) Schedule 4.3 (Ownership of Subsidiaries) identifies each
Subsidiary of the Borrower that is a Material Foreign Subsidiary on the Closing
Date.
SECTION 4.4 FINANCIAL STATEMENTS
(a) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2004, and the related Consolidated statements of
income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by PriceWaterhouseCoopers LLP, and the
Consolidated balance sheets of the Borrower and its Subsidiaries as at September
30, 2005, and the related Consolidated statements of income, retained earnings
and cash flows of the Borrower and its Subsidiaries for the nine months then
ended, copies of which have been furnished to each Lender, fairly present,
subject, in the case of said balance sheets as at September 30, 2005, and said
statements of income,
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retained earnings and cash flows for the nine months then ended, to the absence
of footnote disclosure and normal recurring year-end audit adjustments, the
Consolidated financial condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Borrower and its
Subsidiaries for the period ended on such dates, all in conformity with GAAP.
(b) None of the Borrower or any of the Borrower's Subsidiaries has
any material obligation, contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitment that is not reflected in the
Financial Statements referred to in clause (a) above or in the notes thereto and
not otherwise permitted by this Agreement.
(c) The Projections have been prepared by the Borrower in light of
the past operations of its business, and reflect projections for the seven year
period beginning on January 1, 2006 on a quarterly basis for the first year and
on a year by year basis thereafter. The Projections are based upon estimates and
assumptions stated therein, all of which the Borrower believes to be reasonable
and fair in light of current conditions and current facts known to the Borrower
and, as of the Closing Date, reflect the Borrower's good faith and reasonable
estimates of the future financial performance of the Borrower and its
Subsidiaries and of the other information projected therein for the periods set
forth therein.
SECTION 4.5 MATERIAL ADVERSE CHANGE
Except as disclosed in the (x) Form 10-Q filed by the Borrower with
the Securities and Exchange Commission for the Fiscal Quarters ended March 31,
2005, June 30, 2005 and September 30, 2005 and (y) Form 8-K filed by the
Borrower with the Securities and Exchange Commission on November 8, 2005,
November 9, 2005, January 9, 2006 and January 10, 2006, since December 31, 2004,
there has been no Material Adverse Change and there have been no events or
developments that, in the aggregate, have had a Material Adverse Effect.
SECTION 4.6 SOLVENCY
Both before and after giving effect to (a) the Loans to be made on
the Closing Date, (b) the Revolving Loans and Letter of Credit Obligations (as
each such term is defined in the First Lien Credit Agreement) to be made or
extended on the Closing Date and (c) the disbursement of the proceeds of such
Loans and Revolving Loans pursuant to the instructions of the Borrower
(including the payment in full of all of the Borrower's obligations under the
Existing Credit Agreement, the Senior Guaranteed Notes and the IRB Documents)
and (d) the payment and accrual of all transaction costs in connection with the
foregoing, each Loan Party is Solvent.
SECTION 4.7 LITIGATION
Except as set forth on Schedule 4.7 (Litigation), there are no
pending or, to the knowledge of the Borrower, threatened actions, investigations
or proceedings affecting the Borrower or any of its Subsidiaries before any
court, Governmental Authority or arbitrator other than those that, in the
aggregate, would not have a Material Adverse Effect. The performance of any
action by any Loan Party required or contemplated by any Loan Document is not
restrained or enjoined (either temporarily, preliminarily or permanently).
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SECTION 4.8 TAXES
(a) All federal, state, local and foreign income and franchise and
other material tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by the Borrower or any of its Tax Affiliates have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein or otherwise due and payable have been paid prior
to the date on which any fine, penalty, interest, late charge or loss may be
added thereto for non-payment thereof except where contested in good faith and
by appropriate proceedings if adequate reserves therefor have been established
on the books of the Borrower or such Tax Affiliate in conformity with GAAP. No
Tax Return is under audit or examination by any Governmental Authority and no
notice of such an audit or examination or any assertion of any claim for Taxes
has been given or made by any Governmental Authority. Proper and accurate
amounts have been withheld by the Borrower and each of its Tax Affiliates from
their respective employees for all periods in full and complete compliance with
the tax, social security and unemployment withholding provisions of applicable
Requirements of Law and such withholdings have been timely paid to the
respective Governmental Authorities.
(b) None of the Borrower or any of its Tax Affiliates has (i)
executed or filed with the IRS or any other Governmental Authority any agreement
or other document extending, or having the effect of extending, the period for
the filing of any Tax Return or the assessment or collection of any charges,
(ii) incurred any obligation under any tax sharing agreement or arrangement
other than those of which the Administrative Agent has received a copy prior to
the date hereof or (iii) been a member of an affiliated, combined or unitary
group other than the group of which the Borrower (or its Tax Affiliate) is the
common parent.
SECTION 4.9 FULL DISCLOSURE
The information prepared or furnished by or on behalf of the
Borrower and the Guarantors in connection with this Agreement or the
consummation of the transactions contemplated hereunder, including the
information contained in the Disclosure Documents, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading.
SECTION 4.10 MARGIN REGULATIONS
The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no proceeds of any Loan will be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock in contravention
of Regulation T, U or X of the Federal Reserve Board.
SECTION 4.11 NO BURDENSOME RESTRICTIONS; NO DEFAULTS
(a) None of the Borrower or any Subsidiary of the Borrower (i) is a
party to any Contractual Obligation the compliance with one or more of which
would have, in the aggregate, a Material Adverse Effect or the performance of
which by any thereof, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Lien permitted under
Section 8.2 (Liens, Etc.)) on the assets of any thereof or (ii) is subject
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to one or more charter or corporate restrictions that would, in the aggregate,
have a Material Adverse Effect.
(b) None of the Borrower or any Subsidiary of the Borrower is in
default under or with respect to any Contractual Obligation owed by it and, to
the knowledge of the Borrower, no other party is in default under or with
respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary of any Loan Party, other than, in either case, those defaults that,
in the aggregate, would not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of the Borrower, there are no Requirements
of Law applicable to any Loan Party or any Subsidiary of any Loan Party the
compliance with which by such Loan Party or such Subsidiary, as the case may be,
would, in the aggregate, have a Material Adverse Effect.
SECTION 4.12 INVESTMENT COMPANY ACT
None of the Borrower or any Subsidiary of the Borrower is (a) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended or (b) a "holding company" or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", as each such term is defined and used in the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.13 USE OF PROCEEDS
The proceeds of the Loans are being used by the Borrower (and, to
the extent distributed to them by the Borrower, each other Loan Party) solely
(a) to refinance all Indebtedness and other obligations outstanding under (i)
the Existing Credit Agreement, (ii) the Senior Guaranteed Notes and (iii) the
IRB Documents, (b) for the payment of transaction costs, fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby and (c) for working capital and general corporate purposes.
SECTION 4.14 INSURANCE
All policies of insurance of any kind or nature of the Borrower or
any of its Subsidiaries, including policies of life, fire, theft, product
liability, public liability, property damage, other casualty, employee fidelity,
workers' compensation and employee health and welfare insurance, are in full
force and effect and are of a nature and provide such coverage as is sufficient
and as is customarily carried by businesses of the size and character of such
Person. None of the Borrower or any of its Subsidiaries has been refused
insurance for any material coverage for which it had applied or had any policy
of insurance terminated (other than at its request).
SECTION 4.15 LABOR MATTERS
(a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving the Borrower or any of its
Subsidiaries, other than those that, in the aggregate, would not have a Material
Adverse Effect.
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(b) There are no unfair labor practices, grievances, complaints or
arbitrations pending, or, to the Borrower's knowledge, threatened, against or
involving the Borrower or any of its Subsidiaries, nor are there any
arbitrations or grievances threatened involving the Borrower or any of its
Subsidiaries, other than those that, in the aggregate, would not have a Material
Adverse Effect.
(c) Except as set forth on Schedule 4.15 (Labor Matters), as of the
Closing Date, there is no collective bargaining agreement covering any employee
of the Borrower or its Subsidiaries.
(d) Schedule 4.15 (Labor Matters) sets forth, as of the date hereof,
all material consulting agreements, executive employment agreements, executive
compensation plans, deferred compensation agreements, employee stock purchase
and stock option plans and severance plans of the Borrower and any of its
Subsidiaries.
SECTION 4.16 ERISA
(a) Schedule 4.16 (List of Plans) separately identifies as of the
date hereof all Title IV Plans, all Multiemployer Plans and all of the employee
benefit plans within the meaning of Section 3(3) of ERISA to which the Borrower
or any of the Borrower's Subsidiaries has any obligation or liability,
contingent or otherwise.
(b) Each employee benefit plan of the Borrower or any of the
Borrower's Subsidiaries intended to qualify under Section 401 of the Code does
so qualify, and any trust created thereunder is exempt from tax under the
provisions of Section 501 of the Code, except where such failures, in the
aggregate, would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects
with applicable provisions of ERISA, the Code and other Requirements of Law
except for non-compliances that, in the aggregate, would not have a Material
Adverse Effect.
(d) There has been no, nor is there reasonably expected to occur,
any ERISA Event other than those that, in the aggregate, would not have a
Material Adverse Effect.
(e) Except to the extent set forth on Schedule 4.16 (List of Plans),
none of the Borrower, any of the Borrower's Subsidiaries or any ERISA Affiliate
would have any Withdrawal Liability as a result of a complete withdrawal as of
the date hereof from any Multiemployer Plan.
SECTION 4.17 ENVIRONMENTAL MATTERS
(a) The operations of the Borrower and each of its Subsidiaries have
been and are in compliance with all Environmental Laws, including obtaining and
complying with all required environmental, health and safety Permits, other than
non-compliances that, in the aggregate, would not have a reasonable likelihood
of the Borrower and its Subsidiaries incurring Environmental Liabilities and
Costs after the date hereof whose Dollar Equivalent would exceed $1,000,000.
(b) Except as disclosed on Schedule 4.17 (Environmental Matters),
none of the Borrower or any of its Subsidiaries or any Real Property currently
or, to the knowledge of the
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Borrower, previously owned, operated or leased by or for the Borrower or any of
its Subsidiaries is subject to any pending or, to the knowledge of the Borrower,
threatened, claim, order, agreement, notice of violation, notice of potential
liability or is the subject of any pending or threatened proceeding or
governmental investigation under or pursuant to Environmental Laws other than
those that, in the aggregate, are not reasonably likely to result in the
Borrower and its Subsidiaries incurring Environmental Liabilities and Costs
whose Dollar Equivalent would exceed $1,000,000.
(c) Except as disclosed on Schedule 4.17 (Environmental Matters),
none of the Borrower or any of its Subsidiaries is a treatment, storage or
disposal facility requiring a Permit under the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the regulations thereunder or any
state analog.
(d) Except as disclosed on Schedule 4.17 (Environmental Matters),
there are no facts, circumstances or conditions arising out of or relating to
the operations or ownership of the Borrower or of Real Property owned, operated
or leased by the Borrower or any of its Subsidiaries that are not specifically
included in the financial information furnished to the Lenders other than those
that, in the aggregate, would not have a reasonable likelihood of the Borrower
and its Subsidiaries incurring Environmental Liabilities and Costs in excess of
$1,000,000.
(e) As of the date hereof, no Environmental Lien has attached to any
property of the Borrower or any of its Subsidiaries and, to the knowledge of the
Borrower, no facts, circumstances or conditions exist that could reasonably be
expected to result in any such Lien attaching to any such property.
(f) The Borrower and each of its Subsidiaries has provided the
Lenders with copies of all environmental, health or safety audits, studies,
assessments, inspections, investigations or other environmental health and
safety reports relating to the operations of the Borrower or any of its
Subsidiaries or any Real Property of any of them that are in the possession,
custody or control of the Borrower or any of its Subsidiaries.
(g) None of the information disclosed on Schedule 4.17
(Environmental Matters) would reasonably likely result in, individually or in
the aggregate, or cause a Material Adverse Effect.
SECTION 4.18 INTELLECTUAL PROPERTY
The Borrower and its Subsidiaries own or license or otherwise have
the right to use all licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
copyright applications, Internet domain names, franchises, authorizations and
other intellectual property rights (including all Intellectual Property as
defined in the Pledge and Security Agreement) that are necessary for the
operations of their respective businesses, without, to the Borrower's knowledge,
infringement upon or conflict with the rights of any other Person with respect
thereto, including all trade names associated with any private label brands of
the Borrower or any of its Subsidiaries. To the Borrower's knowledge, no
license, permit, patent, patent application, trademark, trademark application,
service ▇▇▇▇, trade name, copyright, copyright application, Internet domain
name, franchise, authorization, other intellectual property right (including all
"Intellectual Property" as defined in the Pledge and Security Agreement), slogan
or other advertising device, product, process, method, substance,
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part or component, or other material now employed, or now contemplated to be
employed, by the Borrower or any of its Subsidiaries infringes upon or conflicts
with any rights owned by any other Person, and no claim or litigation regarding
any of the foregoing is pending or to the Borrower's knowledge, threatened.
SECTION 4.19 TITLE; REAL PROPERTY
(a) Each of the Borrower and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all Real Property and good
title to all personal property, in each case that is purported to be owned or
leased by it, including those reflected on the most recent Financial Statements
delivered by the Borrower, and none of such properties and assets is subject to
any Lien, except Liens permitted under Section 8.2 (Liens, Etc.). The Borrower
and its Subsidiaries have received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar agreements, bills of sale and other
documents in respect of, and have duly effected all recordings, filings and
other actions necessary to establish, protect and perfect, the Borrower's and
its Subsidiaries' right, title and interest in and to all such property.
(b) Set forth on Schedule 4.19 (Real Property) is a complete and
accurate list of all Real Property of each Loan Party and its Subsidiaries and
showing, as of the Closing Date, the current street address (including, where
applicable, county, state and other relevant jurisdictions), record owner and,
where applicable, lessee thereof.
(c) No Loan Party nor any of its Subsidiaries owns or holds, or is
obligated under or a party to, any lease, option, right of first refusal or
other contractual right to purchase, acquire, sell, assign, dispose of or lease
any Real Property of such Loan Party or any of its Subsidiaries.
(d) No portion of any Real Property of any Loan Party or any of its
Subsidiaries has suffered any material damage by fire or other casualty loss
that has not heretofore been completely repaired and restored to its original
condition. No portion of any Real Property of any Loan Party or any of its
Subsidiaries is located in a special flood hazard area as designated by any
federal Governmental Authority.
(e) All Permits required to have been issued or appropriate to
enable all Real Property of the Borrower or any of its Subsidiaries to be
lawfully occupied and used for all of the purposes for which they are currently
occupied and used have been lawfully issued and are in full force and effect,
other than those that, in the aggregate, would not have a Material Adverse
Effect.
(f) None of the Borrower or any of its Subsidiaries has received any
notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Real Property of the Borrower or any of
its Subsidiaries or any part thereof, except those that, in the aggregate, would
not have a Material Adverse Effect.
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ARTICLE V
FINANCIAL COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent to
each of the following as long as any Obligation or any Term Loan remains
outstanding and, in each case, unless the Requisite Lenders otherwise consent in
writing:
SECTION 5.1 MINIMUM FIXED CHARGE COVERAGE RATIO
The Borrower shall maintain a Fixed Charge Coverage Ratio,
determined on the last day of each Fiscal Quarter set forth below for the four
Fiscal Quarters ending on such date, of at least the minimum ratio set forth
below opposite such Fiscal Quarter:
MINIMUM FIXED CHARGE
FISCAL QUARTER COVERAGE RATIO
------------------------------------------ --------------------
December 31, 2007 1.00 to 1
March 31, 2008 1.05 to 1
June 30, 2008 1.05 to 1
September 30, 2008 1.10 to 1
December 31, 2008 1.10 to 1
March 31, 2009 1.10 to 1
June 30, 2009 1.10 to 1
September 30, 2009 and each Fiscal Quarter 1.15 to 1
thereafter
SECTION 5.2 MINIMUM EBITDA
The Borrower shall have, for the four Fiscal Quarters ending on the
last day of each Fiscal Quarter set forth below, EBITDA of not less than the
following:
FISCAL QUARTER MINIMUM EBITDA
------------------ --------------
March 31, 2006 $29,000,000
June 30, 2006 $24,000,000
September 30, 2006 $19,000,000
December 31, 2006 $40,000,000
March 31, 2007 $55,000,000
June 30, 2007 $70,000,000
September 30, 2007 $80,000,000
SECTION 5.3 CAPITAL EXPENDITURES
The Borrower shall not make or incur, or permit to be made or
incurred, Capital Expenditures (it being understood that any Capital
Expenditures financed solely through the proceeds obtained from property loss
insurance shall not be covered under this Section 5.3), during the four Fiscal
Quarters ending on the last day of each Fiscal Quarter set forth below to be, in
the aggregate, in excess of the maximum amount set forth opposite such Fiscal
Quarter:
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MAXIMUM CAPITAL
FISCAL QUARTER EXPENDITURES
-------------------------------------- ---------------
March 31, 2006 $135,000,000
June 30, 2006 $125,000,000
September 30, 2006 $115,000,000
December 31, 2006 $100,000,000
March 31, 2007 $100,000,000
June 30, 2007 $100,000,000
September 30, 2007 $100,000,000
December 31, 2007 $100,000,000
March 31, 2008 $110,000,000
June 30, 2008 $110,000,000
September 30, 2008 $110,000,000
December 31, 2008 $110,000,000
March 31, 2009 $115,000,000
June 30, 2009 $115,000,000
September 30, 2009 $115,000,000
December 31, 2009 $115,000,000
March 31, 2010 and each Fiscal Quarter $120,000,000
thereafter
ARTICLE VI
REPORTING COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent to
each of the following, as long as any Obligation or any Term Loan remains
outstanding and, in each case, unless the Requisite Lenders otherwise consent in
writing:
SECTION 6.1 FINANCIAL STATEMENTS
The Borrower shall furnish to the Administrative Agent each of the
following:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month in each Fiscal Year, financial information regarding the Borrower and its
Subsidiaries consisting of Consolidated and consolidating unaudited balance
sheets as of the close of such month and the related statements of income and
cash flow for such month and that portion of the current Fiscal Year ending as
of the close of such month, setting forth in comparative form the figures for
the corresponding period in the prior year.
(b) Quarterly Reports. Within 45 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year, financial information regarding
the Borrower and its Subsidiaries consisting of Consolidated and consolidating
unaudited balance sheets as of the close of such quarter and the related
statements of income and cash flow for such quarter and that portion of the
Fiscal Year ending as of the close of such quarter, setting forth in comparative
form the figures for the corresponding period in the prior year and the figures
contained in the Projections or, if applicable, the latest business plan
provided pursuant to clause (f) below for the current Fiscal Year, in each case
certified by a Responsible Officer of the Borrower as fairly presenting the
Consolidated and consolidating financial position of the Borrower and its
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Subsidiaries as at the dates indicated and the results of their operations and
cash flow for the periods indicated in accordance with GAAP (subject to the
absence of footnote disclosure and normal year-end audit adjustments).
(c) Annual Reports. Within 90 days after the end of each Fiscal
Year, financial information regarding the Borrower and its Subsidiaries
consisting of Consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as of the end of such year and related statements of income and
cash flows of the Borrower and its Subsidiaries for such Fiscal Year, all
prepared in conformity with GAAP and certified, in the case of such Consolidated
Financial Statements, without qualification as to the scope of the audit or as
to the Borrower being a going concern by the Borrower's Accountants, together
with the report of such accounting firm stating that (i) such Financial
Statements fairly present the Consolidated financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
the Borrower's Accountants shall concur and that shall have been disclosed in
the notes to the Financial Statements) and (ii) the examination by the
Borrower's Accountants in connection with such Consolidated Financial Statements
has been made in accordance with generally accepted auditing standards, and
accompanied by a certificate stating that in the course of the regular audit of
the business of the Borrower and its Subsidiaries such accounting firm has
obtained no knowledge that a Default or Event of Default in respect of the
financial covenants contained in Article V (Financial Covenants) has occurred
and is continuing, or, if in the opinion of such accounting firm, a Default or
Event of Default has occurred and is continuing in respect of such financial
covenants, a statement as to the nature thereof.
(d) Compliance Certificate. Together with each delivery of any
Financial Statement pursuant to clause (b) or (c) above and, with respect to the
fourth Fiscal Quarter of each Fiscal Year, within 45 days after the end of such
Fiscal Quarter (in respect of the unaudited results for such Fiscal Quarter), a
certificate of a Responsible Officer of the Borrower (each, a "Compliance
Certificate") (i) showing in reasonable detail the calculations used in
demonstrating compliance with each of the financial covenants contained in
Article V (Financial Covenants) and (ii) stating that no Default or Event of
Default has occurred and is continuing or, if a Default or an Event of Default
has occurred and is continuing, stating the nature thereof and the action that
the Borrower proposes to take with respect thereto.
(e) Corporate Chart and Other Collateral Updates. Together with each
delivery of any Financial Statement pursuant to clause (b) or (c) above, (i) a
certificate of a Responsible Officer of the Borrower certifying that the
Corporate Chart attached thereto (or the last Corporate Chart delivered pursuant
to this clause (e)) is true, correct, complete and current as of the date of
such Financial Statement and (ii) a certificate of a Responsible Officer of the
Borrower in form and substance satisfactory to the Administrative Agent that all
certificates, statements, updates and other documents (including updated
schedules) required to be delivered pursuant to the Pledge and Security
Agreement by any Loan Party in the preceding Fiscal Quarter have been delivered
thereunder (or such delivery requirement was otherwise duly waived or extended).
The reporting requirements set forth in this clause (e) are in addition to, and
are not intended to and shall not replace or otherwise modify, any obligation of
any Loan Party under any Loan Document (including other notice or reporting
requirements). Compliance with the reporting obligations in this clause (e)
shall only provide notice to the Administrative Agent and shall not, by itself,
modify any obligation of any Loan Party under any Loan Document, update
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any Schedule to this Agreement or any schedule to any other Loan Document or
cure, or otherwise modify in any way, any failure to comply with any covenant,
or any breach of any representation or warranty, contained in any Loan Document
or any other Default or Event of Default.
(f) Business Plan. Not later than January 31st of each Fiscal Year,
and containing substantially the types of financial information contained in the
Projections, (i) the annual business plan of the Borrower and its Subsidiaries
for such Fiscal Year, (ii) forecasts prepared by management of the Borrower for
each Fiscal Quarter for such Fiscal Year and (iii) forecasts prepared by
management of the Borrower for such and each of the succeeding Fiscal Years
through the Fiscal Year in which the later of (i) the Revolving Credit
Termination Date (as defined in the First Lien Credit Agreement) and (ii) the
Term Loan Maturity Date is scheduled to occur, including, in each instance
described in clauses (ii) and (iii) above, (x) a projected year-end Consolidated
balance sheet and income statement and statement of cash flows and (y) a
statement of all of the material assumptions on which such forecasts are based.
The Borrower shall notify the Administrative Agent of any material modifications
to such business plan and related forecasts upon the approval thereof by the
Board of Directors of the Borrower.
(g) Management Letters, Etc. Within five Business Days after receipt
thereof by any Loan Party, copies of each management letter, exception report or
similar letter or report received by such Loan Party from its independent
certified public accountants (including the Borrower's Accountants).
(h) Intercompany Loan Balances. Together with each delivery of any
Financial Statement pursuant to clause (a) above, a summary of the outstanding
balance of all intercompany Indebtedness as of the last day of the fiscal month
covered by such Financial Statement, certified by a Responsible Officer of the
Borrower.
SECTION 6.2 DEFAULT NOTICES
As soon as practicable, and in any event within five Business Days
after a Responsible Officer of any Loan Party has actual knowledge of the
existence of any Default, Event of Default or other event having had a Material
Adverse Effect or having any reasonable likelihood of causing or resulting in a
Material Adverse Change, the Borrower shall give the Administrative Agent notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone,
shall be promptly confirmed in writing on the next Business Day.
SECTION 6.3 LITIGATION
Promptly after the commencement thereof, the Borrower shall give the
Administrative Agent written notice of the commencement of all actions, suits
and proceedings before any domestic or foreign Governmental Authority or
arbitrator affecting the Borrower or any of Subsidiary of the Borrower that (i)
seeks injunctive or similar relief or (ii) in the reasonable judgment of the
Borrower or such Subsidiary, expose the Borrower or such Subsidiary to liability
in an amount aggregating $250,000 or more or that, if adversely determined,
would have a Material Adverse Effect.
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SECTION 6.4 ASSET SALES
Except for Asset Sales permitted under Section 8.4(g) and Section
8.4(h) prior to any Asset Sale whose Net Cash Proceeds (or the Dollar Equivalent
thereof) are anticipated to exceed $2,000,000, the Borrower shall send the
Administrative Agent a notice (a) describing such Asset Sale or the nature and
material terms and conditions of such transaction and (b) stating the estimated
Net Cash Proceeds anticipated to be received by the Borrower or any of its
Subsidiaries.
SECTION 6.5 LABOR RELATIONS
Promptly after becoming aware of the same, the Borrower shall give
the Administrative Agent written notice of (a) any material labor dispute to
which the Borrower or any of its Subsidiaries is or may become a party,
including any strikes, lockouts or other disputes relating to any of such
Person's plants and other facilities, and (b) any Worker Adjustment and
Retraining Notification Act or related liability incurred with respect to the
closing of any plant or other facility of any such Person.
SECTION 6.6 TAX RETURNS
Upon the request of the Administrative Agent, the Borrower shall
provide copies of all federal, state, local and foreign tax returns and reports
filed by the Borrower or any Subsidiary of the Borrower in respect of taxes
measured by income (excluding sales, use and like taxes).
SECTION 6.7 INSURANCE
As soon as is practicable and in any event within 90 days after the
end of each Fiscal Year, the Borrower shall furnish the Administrative Agent (in
sufficient copies for each of the Lenders) with (a) a report in form and
substance satisfactory to the Administrative Agent and the Lenders outlining all
material insurance coverage maintained as of the date of such report by the
Borrower or any Subsidiary of the Borrower and the duration of such coverage and
(b) an insurance broker's statement that all premiums then due and payable with
respect to such coverage have been paid and confirming, with respect to any
insurance maintained by the Borrower or any other Loan Party, that the
Collateral Agent has been named as loss payee or additional insured, as
applicable.
SECTION 6.8 ERISA MATTERS
The Borrower shall furnish the Administrative Agent (with sufficient
copies for each of the Lenders) each of the following:
(a) promptly and in any event within 30 days after the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate knows or has reason to know
that any ERISA Event has occurred, written notice describing such event;
(b) promptly and in any event within 10 days after the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate knows or has reason to know
that a request for a minimum funding waiver under Section 412 of the Code has
been filed with respect to any Title IV Plan or Multiemployer Plan, a written
statement of a Responsible Officer of the
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Borrower describing such ERISA Event or waiver request and the action, if any,
the Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with the PBGC or the IRS pertaining
thereto; and
(c) simultaneously with the date that the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.
SECTION 6.9 ENVIRONMENTAL MATTERS
The Borrower shall provide the Administrative Agent promptly and in
any event within 10 days after the Borrower or any Subsidiary of the Borrower
learning of any of the following, written notice of each of the following:
(a) that any Loan Party is or may be liable to any Person as a
result of a Release or threatened Release that could reasonably be expected to
subject such Loan Party to Environmental Liabilities and Costs whose Dollar
Equivalent shall exceed $1,000,000;
(b) the receipt by any Loan Party of notification that any real or
personal property of such Loan Party is or is reasonably likely to be subject to
any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition that could reasonably be expected to result in a violation of or
liability under, any Environmental Law, except for violations and liabilities
the consequence of which, in the aggregate, would not be reasonably likely to
subject the Loan Parties collectively to Environmental Liabilities and Costs
whose Dollar Equivalent shall exceed $1,000,000;
(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of or liability under any Environmental Law,
that, in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs whose Dollar Equivalent shall exceed $1,000,000;
(e) any proposed acquisition of stock, assets or real estate, any
proposed leasing of property or any other action by any Loan Party or any of its
Subsidiaries other than those the consequences of which, in the aggregate, have
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs whose Dollar Equivalent shall exceed
$1,000,000;
(f) any proposed action by any Loan Party or any of its Subsidiaries
or any proposed change in Environmental Laws that, in the aggregate, have a
reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that, in the aggregate, would have
cost $1,000,000 or more or that shall subject the Loan Parties to additional
Environmental Liabilities and Costs whose Dollar Equivalent shall exceed
$1,000,000; and
(g) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard
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or liability issue identified in any notice or report delivered pursuant to this
Agreement; provided, however, that the Borrower shall be required to provide
such report no more than once in any six month period.
SECTION 6.10 CUSTOMER CONTRACTS
Promptly after any Loan Party becoming aware of the same, the
Borrower shall give the Administrative Agent written notice of any cancellation,
termination or loss of any material Contractual Obligation or other customer
arrangement.
SECTION 6.11 TAX REPORTING
Promptly after the Borrower determines that it intends to treat the
Loans and the related transactions contemplated hereby as a "reportable
transaction" within the meaning of Treasury Regulation Section 1.6011-4 of the
Code, the Borrower shall give the Administrative Agent written notice thereof
and shall deliver to the Administrative Agent all IRS forms required in
connection therewith.
SECTION 6.12 OTHER INFORMATION
The Borrower shall provide the Administrative Agent or any Lender
with such other information respecting the business, properties, condition,
financial or otherwise, or operations of the Borrower or any Subsidiary of the
Borrower as the Administrative Agent or such Lender through the Administrative
Agent may from time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent to
each of the following (except that the following shall have no application to
Tecumseh Italy as long as the Borrower is diligently pursuing the dissolution or
liquidation of Tecumseh Italy), as long as any Obligation or any Term Loan
remains outstanding and, in each case, unless the Requisite Lenders otherwise
consent in writing:
SECTION 7.1 PRESERVATION OF CORPORATE EXISTENCE, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, preserve and maintain its legal existence, rights (charter and statutory)
and franchises, except as permitted by Sections 8.4 (Sale of Assets) and 8.7
(Restriction on Fundamental Changes).
SECTION 7.2 COMPLIANCE WITH LAWS, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, comply with all applicable Requirements of Law, Contractual Obligations and
Permits, except where the failure so to comply would not, in the aggregate, have
a Material Adverse Effect.
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SECTION 7.3 CONDUCT OF BUSINESS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, (a) conduct its business in the ordinary course and consistent with past
practice and (b) use its reasonable efforts, in the ordinary course and
consistent with past practice, to preserve its business and the goodwill and
business of the customers, advertisers, suppliers and others having business
relations with the Borrower or any of its Subsidiaries, except in each case
where the failure to comply with the covenants in each of clauses (a) and (b)
above would not, in the aggregate, have a Material Adverse Effect.
SECTION 7.4 PAYMENT OF TAXES, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, pay and discharge before the same shall become delinquent, all lawful
governmental claims, taxes, assessments, charges and levies, except where
contested in good faith, by proper proceedings and adequate reserves therefor
have been established on the books of the Borrower or the appropriate Subsidiary
in conformity with GAAP.
SECTION 7.5 MAINTENANCE OF INSURANCE
The Borrower shall (a) maintain for itself, and shall cause to be
maintained for each Subsidiary of the Borrower, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates, and such other insurance as may be reasonably
requested by the Requisite Lenders, and, in any event, all insurance required by
any Collateral Documents and (b) cause all such insurance relating to any Loan
Party to name the Collateral Agent on behalf of the Secured Parties as
additional insured or loss payee, as appropriate, and to provide that no
cancellation, material addition in amount or material change in coverage shall
be effective until after 30 days' written notice thereof to the Administrative
Agent.
SECTION 7.6 ACCESS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, from time to time permit the Administrative Agent and the Lenders, or any
agents or representatives thereof, within two Business Days after written
notification of the same and during normal business hours (except that during
the continuance of an Event of Default, no such notice shall be required) to (a)
examine and make copies of and abstracts from the records and books of account
of the Borrower and each Subsidiary of the Borrower, (b) visit the properties of
the Borrower and each Subsidiary of the Borrower, (c) discuss the affairs,
finances and accounts of the Borrower and each Subsidiary of the Borrower with
any of their respective officers or directors and (d) communicate directly with
any of its certified public accountants (including the Borrower's Accountants).
The Borrower shall authorize its certified public accountants (including the
Borrower's Accountants), and shall cause the certified public accountants of any
Subsidiary of the Borrower, if any, to disclose to the Administrative Agent or
any Lender any and all financial statements and other information of any kind,
as the Administrative Agent or any Lender reasonably requests and that such
accountants may have with respect to the business, financial condition, results
of operations or other affairs of the Borrower or any Subsidiary of the
Borrower.
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SECTION 7.7 KEEPING OF BOOKS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to keep, proper books of record and account, in which full and correct entries
shall be made in conformity with GAAP of all financial transactions and the
assets and business of the Borrower and each such Subsidiary.
SECTION 7.8 MAINTENANCE OF PROPERTIES, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, maintain and preserve (a) in good working order and condition all of its
properties necessary in the conduct of its business, (b) all rights, permits,
licenses, approvals and privileges (including all Permits) used or useful or
necessary in the conduct of its business and (c) all registered patents,
trademarks, trade names, copyrights and service marks with respect to its
business, except where failure to so maintain and preserve the items set forth
in clauses (a), (b) and (c) above would not, in the aggregate, have a Material
Adverse Effect.
SECTION 7.9 APPLICATION OF PROCEEDS
The Borrower (and, to the extent distributed to them by the
Borrower, each Loan Party) shall use the entire amount of the proceeds of the
Loans as provided in Section 4.13 (Use of Proceeds).
SECTION 7.10 ENVIRONMENTAL
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, comply in all material respects with Environmental Laws and, without
limiting the foregoing, the Borrower shall, at its sole cost and expense, upon
receipt of any notification or otherwise obtaining knowledge of any Release or
other event that has any reasonable likelihood of any of the Borrower or any
Subsidiary of the Borrower incurring Environmental Liabilities and Costs whose
Dollar Equivalent shall exceed $1,000,000 in the aggregate, (a) conduct, or pay
for consultants to conduct, tests or assessments of environmental conditions at
such operations or properties, including the investigation and testing of
subsurface conditions and (b) take such Remedial Action and undertake such
investigation or other action as required by Environmental Laws or as any
Governmental Authority requires or as is appropriate and consistent with good
business practice to address the Release or event and otherwise ensure
compliance with Environmental Laws.
SECTION 7.11 ADDITIONAL COLLATERAL AND GUARANTIES
To the extent not delivered to the Administrative Agent on or before
the Closing Date (including in respect of after-acquired property and Persons
that become a Material Domestic Subsidiary or Material Foreign Subsidiary of any
Loan Party after the Closing Date), the Borrower agrees promptly to do, or cause
each Subsidiary of the Borrower to do, each of the following, unless otherwise
agreed by the Administrative Agent:
(a) deliver to the Administrative Agent such duly-executed
supplements and amendments to the Guaranty, in each case in form and substance
reasonably satisfactory to the Administrative Agent and as the Administrative
Agent deems necessary or advisable in order to ensure that each Material
Domestic Subsidiary and Material Foreign Subsidiary that has entered
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into Guaranty Obligations in respect of the Indebtedness of any Loan Party
guaranties, as primary obligor and not as surety, the full and punctual payment
when due of the Obligations or any part thereof; provided, however, in no event
shall any Excluded Foreign Subsidiary be required to guaranty the payment of the
Obligations unless the Borrower and the Administrative Agent otherwise agree;
(b) deliver to the Administrative Agent such duly-executed joinder
and amendments to the Pledge and Security Agreement and the relevant Canadian
Collateral Document and, if applicable, other Collateral Documents (including,
in the case of any Loan Party that owns Stock of a Material Foreign Subsidiary,
Foreign Pledge Agreements), in each case in form and substance reasonably
satisfactory to the Administrative Agent and as the Administrative Agent deems
necessary or advisable in order to (i) effectively grant to the Collateral
Agent, for the benefit of the Secured Parties, a valid, perfected and
enforceable first-priority security interest in the Stock and Stock Equivalents
and other debt Securities owned by any Loan Party and (ii) effectively grant to
the Collateral Agent, for the benefit of the Secured Parties, a valid, perfected
and enforceable first-priority security interest in all property interests and
other assets of any Loan Party; provided, however, in no event shall (x) any
Loan Party, individually or collectively, be required to pledge in excess of 66%
of the outstanding Voting Stock of any Excluded Foreign Subsidiary or (y) any
assets of any Excluded Foreign Subsidiary be required to be pledged, unless the
Borrower and the Administrative Agent otherwise agree;
(c) deliver to the Administrative Agent all certificates,
instruments and other documents representing all Pledged Stock, Pledged Debt
Instruments and all other Stock, Stock Equivalents and other debt Securities
being pledged pursuant to the joinders, amendments and Foreign Pledge Agreements
executed pursuant to clause (b) above, together with (i) in the case of
certificated Pledged Stock and other certificated Stock and Stock Equivalents,
undated stock powers endorsed in blank and (ii) in the case of Pledged Debt
Instruments and other certificated debt Securities, endorsed in blank, in each
case executed and delivered by a Responsible Officer of such Loan Party;
(d) to take such other actions necessary or advisable to ensure the
validity or continuing validity of the guaranties required to be given pursuant
to clause (a) above or to create, maintain or perfect the security interest
required to be granted pursuant to clause (b) above, including the filing of UCC
financing statements in such jurisdictions as may be required by the Collateral
Documents or by law or as may be reasonably requested by the Administrative
Agent;
(e) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
SECTION 7.12 CONTROL ACCOUNTS; APPROVED DEPOSIT ACCOUNTS
(a) The Borrower shall, and shall cause each of its Subsidiaries
that are Loan Parties, to (i) deposit in an Approved Deposit Account all cash
they receive, (ii) not establish or maintain any Securities Account that is not
a Control Account and (iii) not establish or maintain any Deposit Account other
than with a Deposit Account Bank; provided, however, that the Borrower and such
Subsidiaries may (x) maintain payroll, withholding tax and other fiduciary
accounts, (y) maintain accounts with the Collateral Agent and (z) maintain other
accounts as long as the aggregate balance in all such accounts does not exceed
$500,000.
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(b) The Borrower shall, and shall cause each of its Subsidiaries, to
(i) instruct each Account Debtor or other Person obligated to make a payment to
any of them under any Account or General Intangible to make payment, or to
continue to make payment, to an Approved Deposit Account and (ii) deposit in an
Approved Deposit Account immediately upon receipt all Proceeds of such Accounts
and General Intangibles received by the Borrower or any of their Subsidiaries
from any other Person.
(c) In the event (i) the Borrower, any Subsidiary of the Borrower or
any Deposit Account Bank shall, after the date hereof, terminate an agreement
with respect to the maintenance of an Approved Deposit Account for any reason,
(ii) the Administrative Agent shall demand such termination as a result of the
failure of a Deposit Account Bank to comply with the terms of the applicable
Deposit Account Control Agreement or (iii) the Administrative Agent determines
in its sole discretion that the financial condition of a Deposit Account Bank
has materially deteriorated, the Borrower shall, and shall cause each Subsidiary
of the Borrower to, notify all of their respective obligors that were making
payments to such terminated Approved Deposit Account to make all future payments
to another Approved Deposit Account.
(d) In the event (i) the Borrower, any Subsidiary of the Borrower or
any Approved Securities Intermediary shall, after the date hereof, terminate an
agreement with respect to the maintenance of a Control Account for any reason,
(ii) the Administrative Agent shall demand such termination as a result of the
failure of an Approved Securities Intermediary to comply with the terms of the
applicable Securities Account Control Agreement or (iii) the Administrative
Agent determines in its sole discretion that the financial condition of an
Approved Securities Intermediary has materially deteriorated, the Borrower
shall, and shall cause each Subsidiary of the Borrower to, notify all of its
obligors that were making payments to such terminated Control Account to make
all future payments to another Control Account.
(e) The requirements of this Section 7.12 shall not apply to any
Excluded Foreign Subsidiary.
SECTION 7.13 REAL PROPERTY
(a) The Borrower shall, and shall cause each of its Subsidiaries
(other than Excluded Foreign Subsidiaries) to, (i) comply in all material
respects with all of their respective obligations under all of their respective
Leases now or hereafter held respectively by them, including the Leases set
forth on Schedule 4.19 (Real Property), (ii) not modify, amend, cancel, extend
or otherwise change in any materially adverse manner any term, covenant or
condition of any such Lease, (iii) not assign or sublet any other Lease if such
assignment or sublet would have a Material Adverse Effect, (iv) provide the
Administrative Agent with a copy of each notice of default under any Lease
received by the Borrower or any Subsidiary of the Borrower (other than Excluded
Foreign Subsidiaries) immediately upon receipt thereof and deliver to the
Administrative Agent a copy of each notice of default sent by the Borrower or
any Subsidiary of the Borrower (other than Excluded Foreign Subsidiaries) under
any Lease simultaneously with its delivery of such notice under such Lease and
(v) notify the Administrative Agent at least 14 days prior to the date the
Borrower or any Subsidiary (other than Excluded Foreign Subsidiaries) takes
possession of, or becomes liable under, any new leased premises or Lease,
whichever is earlier.
(b) At least 15 Business Days prior to (i) entering into any Lease
(other than a renewal of an existing Lease) for the principal place of business
and chief executive office of the Borrower or any Guarantor or any other Lease
(including any renewal) in which the Dollar
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Equivalent of the annual rental payments are anticipated to equal or exceed
$1,000,000 or (ii) acquiring any material owned Real Property, the Borrower
shall, and shall cause such Guarantor to, provide the Administrative Agent
written notice thereof and, upon written request of the Administrative Agent,
the Borrower shall, and shall cause such Guarantor to provide Phase I
environmental reports on such Real Property or, as the case may be, the Real
Property subject to such Lease showing no condition that could give rise to
material Environmental Liabilities and Costs.
(c) To the extent not previously delivered to the Administrative
Agent, upon written request of the Administrative Agent, the Borrower shall, and
shall cause each Guarantor to, execute and deliver to the Administrative Agent,
for the benefit of the Secured Parties, promptly and in any event not later than
45 days after receipt of such notice (or, if such notice is given by the
Administrative Agent prior to the acquisition of such Real Property or Lease,
immediately upon such acquisition), a Mortgage on any Real Property or Lease of
the Borrower or such Guarantor, together with (i) if requested by the
Administrative Agent and such Real Property is located in the United States or
Canada or is a Lease of Real Property located in the United States or Canada,
all Mortgage Supporting Documents relating thereto or (ii) otherwise, documents
similar to Mortgage Supporting Documents deemed by the Administrative Agent to
be appropriate in the applicable jurisdiction to obtain the equivalent in such
jurisdiction of a first-priority mortgage on such Real Property or Lease.
(d) Within 60 days after the Closing Date or such later date as may
be agreed to by the Administrative Agent, the Borrower shall cause Real Property
set forth on Schedule 7.13 (Real Property Mortgages) to be subject to a
Mortgage, in form and substance satisfactory to the Administrative Agent in its
sole discretion, together with all Mortgage Supporting Documents relating
thereto.
SECTION 7.14 POST CLOSING ITEMS
(a) The Borrower shall, and shall cause its Thai Subsidiary (as
defined in the First Lien Credit Agreement), within 5 Business Days of Closing
Date to deliver to the Collateral Agent the Thai Intercompany Note (as defined
in Section 8.03(e)(iii) of the First Lien Credit Agreement), endorsed in blank,
and delivered by a Responsible Officer of the Borrower.
(b) The Borrower shall, and shall cause the Specified Canadian
Subsidiaries, (A) within 20 days of the Closing Date to terminate and discharge
all existing Liens set forth on Schedule 7.14(b) (Existing Canadian Liens) to
the extent such Liens are not permitted under the Canadian Collateral Documents
and shall use commercially reasonable efforts to obtain and deliver to the
Collateral Agent within 20 days releases, waivers, acknowledgements, discharges
or other similar instruments (in form and substance satisfactory to the
Administrative Agent) from the parties set forth on Schedule 7.14(b) (Existing
Canadian Liens) in connection with the Liens set forth on Schedule 7.14(b)
(Existing Canadian Liens), to the extent such Liens are permitted under the
Canadian Collateral Documents and (B) to use commercially reasonable efforts to
deliver to the Collateral Agent, as soon as reasonably practicable and in any
event within 20 days, control account agreements required by Section 7.11 which
were not delivered on the Closing Date.
(c) The Borrower shall, and shall cause its Subsidiaries, to use
commercially reasonable efforts to deliver all Landlord Waivers and Bailee's
Letters set forth on Schedule 7.14(c) (Landlord Waivers and Bailee's Letters) to
the Collateral Agent.
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(d) Within 45 days after the Closing Date, the Borrower shall
deliver to the Collateral Agent the ▇▇▇▇▇▇▇-Coffee Series 1995 Bonds issued by
the ▇▇▇▇▇▇▇-Coffee Industrial Authority due on December 1, 2010 in accordance
with Section 7.11 hereof, unless the ▇▇▇▇▇▇▇ Property has been sold prior to
such date pursuant to Section 8.4(i), and at which time the Borrower shall be
relieved of any obligations to deliver such bonds.
(e) Within 15 days after the Closing Date or such later date as may
be agreed by the Administrative Agent, the Collateral Agent shall have received
an environmental site assessment report for each piece of Real Property subject
to a Mortgage and any Real Property that is part of the Borrowing Base, prepared
by a consultant acceptable to the Administrative Agent and in a form and scope
satisfactory to the Administrative Agent.
ARTICLE VIII
NEGATIVE COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent to
each of the following, as long as any Obligation or any Term Loan Commitment
remains outstanding and, in each case, unless the Requisite Lenders otherwise
consent in writing:
SECTION 8.1 INDEBTEDNESS
Neither the Borrower nor any of its Subsidiaries shall, directly or
indirectly, create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any Indebtedness except for the following:
(a) the Secured Obligations and the First Lien Secured Obligations
(other than in respect of Hedging Contracts);
(b) Indebtedness existing on the date of this Agreement and
disclosed on Schedule 8.1 (Existing Indebtedness), together with any Permitted
Refinancing of any Indebtedness permitted by this clause (b);
(c) Guaranty Obligations incurred by the Borrower or any Guarantor
in respect of Indebtedness of the Borrower or any Guarantor that is otherwise
permitted by this Section 8.1;
(d) Capital Lease Obligations and purchase money Indebtedness
incurred by the Borrower or a Subsidiary of the Borrower to finance the
acquisition of fixed assets, together with any Permitted Refinancing of any
Indebtedness permitted by this clause (d); provided, however, that the Capital
Expenditure related thereto is otherwise permitted by Section 5.3 (Capital
Expenditures) and that the Dollar Equivalent of the aggregate outstanding
principal amount of all such Capital Lease Obligations and purchase money
Indebtedness shall not exceed $7,500,000 at any time;
(e) a Sale and Leaseback Transaction permitted pursuant to Section
8.15(b) (Operating Leases; Sale/Leasebacks), to the extent such transaction
would constitute Indebtedness;
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(f) Indebtedness arising from intercompany loans (i) from the
Borrower to any Guarantor, (ii) from any Guarantor to the Borrower or any other
Guarantor, (iii) from any Non-Guarantor Subsidiary to the Borrower or any
Guarantor or (iv) from the Borrower or any Guarantor to any Non-Guarantor
Subsidiary; provided, however, that, in the case of this clause (iv), the
Investment in such intercompany loan to such Non-Guarantor Subsidiary is
permitted under Section 8.3 (Investments);
(g) Indebtedness arising under any performance or surety bond
entered into in the ordinary course of business;
(h) Obligations under Hedging Contracts permitted under Section 8.16
(No Speculative Transactions);
(i) Indebtedness (not otherwise permitted under this Section 8.1)
incurred by any Excluded Foreign Subsidiary (that is not a Material Foreign
Subsidiary) and Guaranty Obligations incurred by any Excluded Foreign Subsidiary
in respect of such Indebtedness; provided, however, that the Dollar Equivalent
of the aggregate outstanding principal amount of all such Indebtedness shall not
exceed $15,000,000 at any time;
(j) Indebtedness (not otherwise permitted under this Section 8.1)
incurred by any Brazilian Subsidiary in respect of any Indebtedness owed to any
Governmental Authority in Brazil; provided, however, (i) that the Dollar
Equivalent of the aggregate outstanding principal amount of all such
Indebtedness shall not exceed $25,000,000 at any time and (ii) the proceeds of
such Indebtedness shall be held in cash deposit or money market accounts in the
name of such Brazilian Subsidiary;
(k) Indebtedness (not otherwise permitted under this Section 8.1)
incurred by any Material Foreign Subsidiary; provided, however, that the Dollar
Equivalent of the aggregate outstanding principal amount of all such
Indebtedness shall not exceed $25,000,000 at any time; and
(l) unsecured Indebtedness not otherwise permitted under this
Section 8.1; provided, however, that the Dollar Equivalent of the aggregate
outstanding principal amount of all such unsecured Indebtedness shall not exceed
$7,500,000 at any time.
SECTION 8.2 LIENS, ETC.
Neither the Borrower nor any of its Subsidiaries shall create or
suffer to exist, any Lien upon or with respect to any of their respective
properties or assets, whether now owned or hereafter acquired, or assign, or
permit any of its Subsidiaries to assign, any right to receive income, except
for the following:
(a) Liens created pursuant to the Loan Documents and the First Lien
Loan Documents;
(b) Liens existing on the date of this Agreement and disclosed on
Schedule 8.2 (Existing Liens);
(c) Customary Permitted Liens on the assets of the Borrower and the
Borrower's Subsidiaries;
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(d) purchase money Liens granted by the Borrower or any of its
Subsidiaries (including the interest of a lessor under a Capital Lease and
purchase money Liens to which any property is subject at the time, on or after
the date hereof, of the Borrower's or such Subsidiary's acquisition thereof)
securing Indebtedness permitted under Section 8.1(d) (Indebtedness) and limited
in each case to the property purchased with the proceeds of such purchase money
Indebtedness or subject to such Capital Lease;
(e) any Lien securing any Permitted Refinancing of any Indebtedness
secured by any Lien permitted by clause (b) or (d) above or this clause (e)
without any change in the assets subject to such Lien and to the extent such
Permitted Refinancing is permitted by Section 8.1(e) (Indebtedness);
(f) Liens in favor of lessors securing operating leases or, to the
extent such transactions create a Lien hereunder, sale and leaseback
transactions, in each case to the extent such operating leases or sale and
leaseback transactions are permitted hereunder;
(g) Liens securing any Indebtedness of Excluded Foreign Subsidiaries
permitted under Section 8.1(b), (i), (j) or (k); and
(h) Liens not otherwise permitted by the foregoing clauses of this
Section 8.2 securing obligations or other liabilities of any Loan Party;
provided, however, that the Dollar Equivalent of the aggregate outstanding
amount of all such obligations and liabilities shall not exceed $1,000,000 at
any time.
SECTION 8.3 INVESTMENTS
Neither the Borrower nor any of its Subsidiaries shall make or
maintain, directly or indirectly, any Investment except for the following:
(a) Investments existing on the date of this Agreement and disclosed
on Schedule 8.3 (Existing Investments);
(b) Investments in cash and Cash Equivalents; provided, however,
that such Investments shall be made in compliance with Section 7.12(a) (Control
Accounts; Approved Deposit Accounts);
(c) Investments in payment intangibles, chattel paper (each as
defined in the UCC) and Accounts, notes receivable and similar items arising or
acquired in the ordinary course of business consistent with the past practice of
the Borrower and its Subsidiaries;
(d) Investments received in settlement of amounts due to the
Borrower or any Subsidiary of the Borrower effected in the ordinary course of
business;
(e) Investments by (i) the Borrower in any Guarantor or any
Guarantor in the Borrower or any other Guarantor, (ii) any Non-Guarantor
Subsidiary of the Borrower in the Borrower or any other Subsidiary of the
Borrower, (iii) the Borrower in loans made to the Thai Subsidiary in the
aggregate principal amount of $10,000,000; provided, however, that such loans
are evidenced by an intercompany note on terms acceptable to the Administrative
Agent to be pledged in favor of the Collateral Agent pursuant to the Pledge and
Security Agreement (the "Thai Intercompany Note"), (iv) the Borrower or any
Guarantor in a Non-Guarantor Subsidiary or
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a Permitted Joint Venture; provided, however, that the Dollar Equivalent of the
aggregate outstanding amount of all Investments permitted pursuant to this
clause (iv) shall not exceed $5,000,000 in any Fiscal Year and $15,000,000 in
the aggregate at any time;
(f) loans or advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business as presently
conducted other than any loans or advances that would be in violation of Section
402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act; provided, however, that the Dollar Equivalent of
the aggregate principal amount of all loans and advances permitted pursuant to
this clause (f) shall not exceed $500,000 at any time;
(g) Guaranty Obligations permitted by Section 8.1 (Indebtedness);
(h) Investments by Excluded Foreign Subsidiaries not otherwise
permitted hereby; provided, however, that the Dollar Equivalent of the aggregate
outstanding amount of all such Investments shall not exceed $5,000,000 in any
Fiscal Year and $15,000,000 in the aggregate at any time; and
(i) Investments not otherwise permitted hereby; provided, however,
that the Dollar Equivalent of the aggregate outstanding amount of all such
Investments shall not exceed $2,000,000 at any time.
SECTION 8.4 SALE OF ASSETS
Neither the Borrower nor any of its Subsidiaries (other than
Excluded Foreign Subsidiaries) shall sell, convey, transfer, lease or otherwise
dispose of, any of their respective assets or any interest therein (including
the sale or factoring at maturity or collection of any accounts) to any Person,
or permit or suffer any other Person to acquire any interest in any of their
respective assets or, except in the case of the Borrower, issue or sell any
shares of their Stock or any Stock Equivalents (any such disposition being an
"Asset Sale"), except for the following:
(a) the sale or disposition of Cash Equivalents or Inventory, in
each case in the ordinary course of business;
(b) the sale or disposition of Equipment that has become obsolete or
is replaced in the ordinary course of business;
(c) (i) a true lease or sublease of Real Property not constituting
Indebtedness and not constituting a Sale and Leaseback Transaction and (ii) a
sale of assets pursuant to a Sale and Leaseback Transaction, in each case as
permitted under Section 8.15 (Operating Leases; Sale/Leasebacks);
(d) assignments and licenses of intellectual property of the
Borrower and its Subsidiaries in the ordinary course of business;
(e) any Asset Sale to the Borrower or any Guarantor;
(f) as long as no Default or Event of Default is continuing or would
result therefrom, any other Asset Sale for Fair Market Value, payable in cash
upon such sale; provided, however, that with respect to any such Asset Sale
pursuant to this clause (f), (i) the Dollar
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Equivalent of the aggregate consideration received during any Fiscal Year for
all such Asset Sales shall not exceed $5,000,000 and (ii) an amount equal to all
Net Cash Proceeds of such Asset Sale are applied to the payment of the
Obligations as set forth in, and to the extent required by, Section 2.7
(Mandatory Prepayments);
(g) as long as no Default or Event of Default is continuing or would
result therefrom, an Asset Sale for Fair Market Value payable in cash in respect
of the Stock or assets of the Little Giant Pump Company; provided, however, that
such (i) Asset Sale is consummated on or prior to July 31, 2006 and (ii) the Net
Cash Proceeds from such sale are applied to the Obligations as set forth in, and
to the extent required by, Section 2.7(b);
(h) the sale of (x) certain Investment Property set forth on
Schedule 8.4(a) in an aggregate Net Cash Proceeds of which shall not exceed
$500,000 and (y) the Borrower's Investments in Kulthorn ▇▇▇▇▇, so long as each
sale in clauses (x) and (y) are consummated on or prior to July 31, 2006; and
(i) so long as no Default or Event of Default is continuing or would
result from any sale hereunder, and so long as an Asset Sale is made for Fair
Market Value, payable in cash, the sale of certain Real Property set forth on
Schedule 8.4(b);
SECTION 8.5 RESTRICTED PAYMENTS
Neither the Borrower nor any of its Subsidiaries shall declare,
order, pay, make or set apart any sum for any Restricted Payment except for the
following:
(a) Restricted Payments by any Subsidiary of the Borrower made
directly or indirectly to the Borrower or any Guarantor;
(b) dividends and distributions declared and paid on the common
Stock of the Borrower and payable only in common Stock of the Borrower; and
(c) as long as no Default or Event of Default is continuing or would
result therefrom, dividends and distributions declared and paid in cash on the
common Stock of the Borrower at any time after December 31, 2006; provided,
however, that, after giving effect to such Restricted Payment and any payment
made pursuant to Section 8.6(b)(vi) (Prepayment and Cancellation of
Indebtedness), (x) the First Lien Available Credit is greater than $100,000,000,
(y) the Borrower shall be in compliance with Section 5.1 (Minimum Fixed Charge
Coverage Ratio) on a Pro Forma Basis for the most recent Fiscal Quarter with
respect to which a Compliance Certificate has been delivered pursuant to Section
6.1(d) (Compliance Certificate) and (z) the ratio of (A) the sum of the Secured
Obligations and the Second Lien Secured Obligations to (B) EBITDA for the four
Fiscal Quarters most recently ended prior to such payment shall not be greater
than 3:1.
SECTION 8.6 PREPAYMENT AND CANCELLATION OF INDEBTEDNESS
(a) Neither the Borrower nor any of its Subsidiaries (other than
Excluded Foreign Subsidiaries) shall cancel any claim or Indebtedness owed to
any of them except (i) in the ordinary course of business consistent with past
practice and (ii) in respect of intercompany Indebtedness among the Borrower and
the Guarantors.
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(b) Neither the Borrower nor any of its Subsidiaries shall prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any subordination
terms of, any Indebtedness; provided, however, the Borrower and each Subsidiary
of the Borrower may (i) prepay the Obligations in accordance with the terms of
this Agreement and repay the First Lien Secured Obligations in accordance with
the terms of First Lien Credit Agreement, (ii) make regularly scheduled or
otherwise required repayments or redemptions of Indebtedness, (iii) prepay
Indebtedness under the Existing Credit Agreement, the Senior Guaranteed Notes
and the IRB Documents with the proceeds of the initial Borrowings hereunder,
(iv) prepay any Indebtedness payable to the Borrower by any of its Subsidiaries,
(v) renew, extend, refinance and refund Indebtedness, as long as such renewal,
extension, refinancing or refunding is permitted under Section 8.1(e)
(Indebtedness), (vi) prepay Indebtedness of Excluded Foreign Subsidiaries
provided that such prepayment is made by an Excluded Foreign Subsidiary and
(vii) as long as no Default or Event of Default is continuing or would result
therefrom, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof any Indebtedness; provided, however, that, after
giving effect to such payment and any Restricted Payment made pursuant to
Section 8.5(c) (Restricted Payments), the First Lien Available Credit is greater
than $75,000,000 (or, if such prepayment is made with Net Cash Proceeds of the
Asset Sale permitted under Section 8.4(g) after giving effect to any mandatory
prepayment of such proceeds required under Section 2.9(b), 75,000,000).
SECTION 8.7 RESTRICTION ON FUNDAMENTAL CHANGES
Neither the Borrower nor any of its Subsidiaries shall, (a) (i)
merge with any Person, (ii) consolidate with any Person, (iii) acquire all or
substantially all of the Stock or Stock Equivalents of any Person or (iv)
acquire all or substantially all of the assets of any Person or all or
substantially all of the assets constituting the business of a division, branch
or other unit operation of any Person, (b) enter into any joint venture or
partnership with any Person unless the Investment is in a Permitted Joint
Venture permitted under Section 8.3(e) and Section 8.3(h) (Investments) or (c)
acquire or create any Subsidiary unless, after giving effect to such creation or
acquisition, such Subsidiary is a Wholly-Owned Subsidiary of the Borrower or
such Subsidiary, the Borrower or such Subsidiary is in compliance with Section
7.11 (Additional Collateral and Guaranties) and the Investment in such
Subsidiary is permitted under Section 8.3(e) and Section 8.3(h) (Investments);
provided, however, clauses (b) and (c) above shall not apply to Excluded Foreign
Subsidiaries. Notwithstanding the foregoing, nothing contained herein shall
restrict, prohibit or otherwise affect the ability of the Borrower to effect and
pursue the Borrower's ongoing efforts in connection with the institution and
pendancy of the liquidation of Tecumseh Italy as long as the Borrower is
diligently pursuing the dissolution or liquidation of Tecumseh Italy.
SECTION 8.8 CHANGE IN NATURE OF BUSINESS
Neither the Borrower nor any of its Subsidiaries shall make any
material change in the nature or conduct of its business as carried on at the
date hereof.
SECTION 8.9 TRANSACTIONS WITH AFFILIATES
Neither the Borrower nor any of its Subsidiaries shall, except as
otherwise expressly permitted herein, do any of the following: (a) make any
Investment in an Affiliate of the Borrower that is not a Subsidiary of the
Borrower, (b) transfer, sell, lease, assign or otherwise
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dispose of any asset to any Affiliate of the Borrower that is not a Subsidiary
of the Borrower, (c) merge into or consolidate with or purchase or acquire
assets from any Affiliate of the Borrower that is not a Subsidiary of the
Borrower, (d) repay any Indebtedness to any Affiliate of the Borrower that is
not a Subsidiary of the Borrower or (e) enter into any other transaction
directly or indirectly with or for the benefit of any Affiliate of the Borrower
that is not a Guarantor (including guaranties and assumptions of obligations of
any such Affiliate), except for, in the case of this clause (e), (i)
transactions in the ordinary course of business on a basis no less favorable to
the Borrower or, as the case may be, such Subsidiary thereof as would be
obtained in a comparable arm's length transaction with a Person not an Affiliate
thereof and (ii) salaries and other director or employee compensation to
officers or directors of the Borrower or any of its Subsidiaries.
SECTION 8.10 LIMITATIONS ON RESTRICTIONS ON SUBSIDIARY
DISTRIBUTIONS; NO NEW NEGATIVE PLEDGE
Except pursuant to the Loan Documents, the First Lien Loan Documents
and any agreements governing Indebtedness permitted by Section 8.1(b),(d),(e),
and (in respect of Liens securing Indebtedness permitted under Section 8.1(i)
and Section 8.1(k)) (Indebtedness) (in the case of agreements permitted by such
clauses, any prohibition or limitation shall only be effective against the
assets financed thereby), neither the Borrower nor any of its Subsidiaries shall
(a) agree to enter into or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of such Subsidiary to pay
dividends or make any other distribution or transfer of funds or assets or make
loans or advances to or other Investments in, or pay any Indebtedness owed to,
the Borrower or any other Subsidiary of the Borrower or (b) enter into or suffer
to exist or become effective any agreement prohibiting or limiting the ability
of the Borrower or any Subsidiary of the Borrower to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, to secure the Obligations, including any
agreement requiring any other Indebtedness or Contractual Obligation to be
equally and ratably secured with the Obligations.
SECTION 8.11 MODIFICATION OF CONSTITUENT DOCUMENTS
Neither the Borrower nor any of its Subsidiaries shall change its
capital structure (including in the terms of its outstanding Stock) or otherwise
amend its Constituent Documents, except for changes and amendments that do not
materially affect the rights and privileges of the Borrower or any Subsidiary of
the Borrower and do not materially affect the interests of the Secured Parties
under the Loan Documents or in the Collateral.
SECTION 8.12 MODIFICATION OF DEBT AGREEMENTS
Except as to any Excluded Foreign Subsidiary, neither the Borrower
nor any of its Subsidiaries shall change or amend the terms of any agreement or
instrument governing or evidencing any Indebtedness (other than the First Lien
Secured Obligations), the outstanding principal amount of which exceeds
$1,000,000 (or any indenture or agreement or other material document entered
into in connection therewith), if the effect of such amendment is to (a)
increase the interest rate on such Indebtedness, (b) change the dates upon which
payments of principal or interest are due on such Indebtedness other than to
extend such dates, (c) change any default or event of default other than to
delete or make less restrictive any default provision therein, or add any
covenant with respect to such Indebtedness, (d) change the subordination
provisions of such Indebtedness, (e) change the redemption or prepayment
provisions of such Indebtedness other
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than to extend the dates therefor or to reduce the premiums payable in
connection therewith or (f) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights to the holder of such Indebtedness in a manner
adverse to the Secured Parties.
SECTION 8.13 ACCOUNTING CHANGES; FISCAL YEAR
Neither the Borrower nor any of its Subsidiaries shall change its
(a) accounting treatment and reporting practices or tax reporting treatment,
except as required by GAAP or any Requirement of Law and disclosed to the
Lenders and the Administrative Agent or (b) fiscal year.
SECTION 8.14 MARGIN REGULATIONS
Neither the Borrower nor any of its Subsidiaries shall use all or
any portion of the proceeds of any credit extended hereunder to purchase or
carry margin stock (within the meaning of Regulation U of the Federal Reserve
Board) in contravention of Regulation U of the Federal Reserve Board.
SECTION 8.15 OPERATING LEASES; SALE/LEASEBACKS
(a) Except as disclosed on Schedule 8.1, neither the Borrower nor
any of its Subsidiaries (other than Excluded Foreign Subsidiaries) shall become
or remain liable as lessee or guarantor or other surety with respect to any
operating lease, unless the Dollar Equivalent of the aggregate amount of all
rents paid or accrued under all such operating leases shall not exceed
$5,000,000 in any Fiscal Year.
(b) Except as disclosed on Schedule 8.1, neither the Borrower nor
any of its Subsidiaries (other than Excluded Foreign Subsidiaries) shall enter
into any Sale and Leaseback Transaction if, after giving effect to such sale and
leaseback transaction, the Dollar Equivalent of the aggregate Fair Market Value
of all properties covered by sale and leaseback transactions would exceed
$5,000,000.
SECTION 8.16 NO SPECULATIVE TRANSACTIONS
Neither the Borrower nor any of its Subsidiaries shall engage in any
speculative transaction or in any transaction involving Hedging Contracts except
for the sole purpose of hedging in the normal course of business and consistent
with industry practices.
SECTION 8.17 COMPLIANCE WITH ERISA
Neither the Borrower nor any of its Subsidiaries shall cause or
permit to occur, (a) an event that could result in the imposition of a Lien
under Section 412 of the Code or Section 302 or 4068 of ERISA or (b) ERISA
Events that would have a Material Adverse Effect in the aggregate.
SECTION 8.18 ENVIRONMENTAL
Neither the Borrower nor any of its Subsidiaries shall allow a
Release of any Contaminant in violation of any Environmental Law; provided,
however, that the Borrower or such Subsidiary shall not be deemed in violation
of this Section 8.18 if all Environmental
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Liabilities and Costs incurred or reasonably expected to be incurred by the Loan
Parties as the consequence of all such Releases shall not exceed $1,000,000 in
the aggregate.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 EVENTS OF DEFAULT
Each of the following events shall be an Event of Default:
(a) the Borrower shall fail to pay any principal of any Loan when
the same becomes due and payable; or
(b) the Borrower shall fail to pay any interest on any Loan, any fee
under any of the Loan Documents or any other Obligation (other than one referred
to in clause (a) above) and such non-payment continues for a period of three
Business Days after the due date therefor; or
(c) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V (Financial Covenants), Section 6.1
(Financial Statements), 6.2 (Default Notices), 7.1 (Preservation of Corporate
Existence, Etc.), 7.6 (Access), 7.9 (Application of Proceeds), 7.11 (Additional
Collateral and Guaranties) or 7.13 (Real Property) or Article VIII (Negative
Covenants) or (ii) any other term, covenant or agreement contained in this
Agreement or in any other Loan Document if such failure under this clause (ii)
shall remain unremedied for 30 days after the earlier of (A) the date on which a
Responsible Officer of the Borrower becomes aware of such failure and (B) the
date on which written notice thereof shall have been given to the Borrower by
the Administrative Agent or any Lender; or
(e) Other than in respect of the First Lien Secured Obligations, (i)
the Borrower, any other Loan Party or any Material Foreign Subsidiary shall fail
to make any payment on any Indebtedness of the Borrower or any such Subsidiary
(other than the Obligations) or any Guaranty Obligation in respect of
Indebtedness of any other Person, and, in each case, such failure relates to
Indebtedness having a principal amount of $1,000,000 or more, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness or (iii) any such
Indebtedness shall become or be declared to be due and payable, or be required
to be prepaid or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(f) (i) the Borrower, any other Loan Party or any Material Foreign
Subsidiary shall generally not pay its debts as such debts become due, shall
admit in writing its
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inability to pay its debts generally or shall make a general assignment for the
benefit of creditors, (ii) any proceeding shall be instituted by or against the
Borrower, any other Loan Party or any Material Foreign Subsidiary seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts, under any Requirement of Law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a custodian, receiver, trustee or other similar official
for it or for any substantial part of its property; provided, however, that, in
the case of any such proceedings instituted against the Borrower, any other Loan
Party or any Material Foreign Subsidiary (but not instituted by the Borrower,
any other Loan Party or any Material Foreign Subsidiary), either such
proceedings shall remain undismissed or unstayed for a period of 60 days or more
or any action sought in such proceedings shall occur or (iii) the Borrower, any
other Loan Party or any Material Foreign Subsidiary shall take any corporate
action to authorize any action set forth in clauses (i) and (ii) above; or
(g) one or more judgments or orders (or other similar process)
involving, in the case of money judgments, an aggregate amount whose Dollar
Equivalent exceeds $1,000,000, to the extent not covered by insurance, shall be
rendered against one or more of the Borrower, any other Loan Parties or any
Material Foreign Subsidiary and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 20 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(h) an ERISA Event shall occur and the Dollar Equivalent of the
amount of all liabilities and deficiencies resulting therefrom, whether or not
assessed, exceeds $1,000,000 in the aggregate; or
(i) any provision of this Agreement, any Term Loan Note, any
Collateral Document or any other material Loan Document, after delivery thereof
shall for any reason fail or cease to be valid and binding on, or enforceable
against, any Loan Party party thereto, or any Loan Party shall so state in
writing; or
(j) any Collateral Document shall for any reason fail or cease to
create a valid and enforceable Lien on any Collateral purported to be covered
thereby or, except as permitted by the Loan Documents, such Lien shall fail or
cease to be a perfected and second priority Lien (subordinated only to the Lien
in favor of the First Lien Secured Parties under the First Lien Credit
Agreement), or any Loan Party shall so state in writing, in each case to the
extent that such failure or cessation relates to any Collateral with an
aggregate value in excess of $250,000; or
(k) there shall occur any Change of Control;
(l) one or more of the Borrower, any other Loan Party or any
Material Foreign Subsidiary shall have entered into one or more consent or
settlement decrees or agreements or similar arrangements with a Governmental
Authority or one or more judgments, orders, decrees or similar actions shall
have been entered against one or more of the Borrower, any other Loan Party or
any Material Foreign Subsidiary based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower, any other Loan Party or any Material Foreign
Subsidiary of the Borrower is likely to incur
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Environmental Liabilities and Costs whose Dollar Equivalent exceeds $1,000,000
in the aggregate that were not reflected in the Projections or the Financial
Statements delivered pursuant to Section 4.4 (Financial Statements) prior to the
date hereof; or
(m) there shall have occurred an "Event of Default" under, and as
defined in, the First Lien Credit Agreement and such Event of Default shall not
have been cured or waived for a period of 45 consecutive days in accordance with
the terms of the First Lien Credit Agreement.
SECTION 9.2 REMEDIES
During the continuance of any Event of Default, the Administrative
Agent may, and, at the request of the Requisite Lenders, shall, by notice to the
Borrower, declare the Loans, all interest thereon and all other amounts and
Obligations payable under this Agreement to be forthwith due and payable,
whereupon the Loans, all such interest and all such amounts and Obligations
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that upon the occurrence of the Events of
Default specified in Section 9.1(f) (Events of Default), the Loans, all such
interest and all such amounts and Obligations shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower. In addition to the
remedies set forth above, with or without the request of the Requisite Lenders,
each of the Administrative Agent and the Collateral Agent may exercise any
remedies provided for by the Collateral Documents and the Intercreditor
Agreement in accordance with the terms thereof or any other remedies provided by
applicable law.
SECTION 9.3 RESCISSION
If at any time after termination of the Term Loan Commitments or
acceleration of the maturity of the Loans, the Borrower shall pay all arrears of
interest and all payments on account of principal of the Loans that shall have
become due otherwise than by acceleration (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified herein)
and all Events of Default and Defaults (other than non-payment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 11.1 (Amendments,
Waivers, Etc.), then upon the written consent of the Requisite Lenders and
written notice to the Borrower, the termination of the Term Loan Commitments or
the acceleration and their consequences may be rescinded and annulled; provided,
however, that such action shall not affect any subsequent Event of Default or
Default or impair any right or remedy consequent thereon. The provisions of the
preceding sentence are intended merely to bind the Lenders to a decision that
may be made at the election of the Requisite Lenders, and such provisions are
not intended to benefit the Borrower and do not give the Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
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ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION
(a) Each Lender hereby appoints Citicorp as the Administrative Agent
hereunder and each Lender authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent under
such agreements and to exercise such powers as are reasonably incidental
thereto. Without limiting the foregoing, each Lender hereby authorizes the
Administrative Agent to execute and deliver, and to perform its obligations
under, each of the Loan Documents to which the Administrative Agent is a party,
to exercise all rights, powers and remedies that the Administrative Agent may
have under such Loan Documents and, in the case of the Collateral Documents, to
act as agent for the Lenders and the other Secured Parties under such Collateral
Documents.
(b) Each Lender hereby acknowledges the appointment of Citicorp as
the Collateral Agent pursuant to the Intercreditor Agreement and hereby
authorizes the Administrative Agent to execute the Intercreditor Agreement and
the Collateral Agent to take such action as agent on its behalf and to exercise
such powers as set forth in the Intercreditor Agreement and in the Collateral
Documents.
(c) As to any matters not expressly provided for by this Agreement
and the other Loan Documents (including enforcement or collection), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding upon all Lenders;
provided, however, that the Administrative Agent shall not be required to take
any action that (i) the Administrative Agent in good faith believes exposes it
to personal liability unless the Administrative Agent receives an
indemnification satisfactory to it from the Lenders with respect to such action
or (ii) is contrary to this Agreement, the Intercreditor Agreement or applicable
law. The Administrative Agent agrees to give to each Lender prompt notice of
each notice given to it by any Loan Party pursuant to the terms of this
Agreement or the other Loan Documents.
(d) In performing its functions and duties hereunder and under the
other Loan Documents, the Administrative Agent is acting solely on behalf of the
Lenders except to the limited extent provided in Section 2.5(c) (Evidence of
Debt), and its duties are entirely administrative in nature. The Administrative
Agent does not assume and shall not be deemed to have assumed any obligation
other than as expressly set forth herein and in the other Loan Documents or any
other relationship as the agent, fiduciary or trustee of or for any Lender or
holder of an Obligation. The Administrative Agent may perform any of its duties
under any Loan Document by or through its agents or employees.
(e) The Arrangers shall have no obligations or duties whatsoever in
such capacity under this Agreement or any other Loan Document and shall incur no
liability hereunder or thereunder in such capacity
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(f) The Administrative Agent agrees to promptly furnish to the
Lenders financial statements and field examination reports obtained by the
Administrative Agent pursuant to Section 6 of this Agreement.
SECTION 10.2 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
None of the Administrative Agent, any of its Affiliates or any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Term Loan
Note as its holder until such Term Loan Note has been assigned in accordance
with Section 11.2 (Assignments and Participations), (b) may rely on the Register
to the extent set forth in Section 2.5 (Evidence of Debt), (c) may consult with
legal counsel (including counsel to the Borrower or any other Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, (d) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made by or on behalf of
the Borrower or any of its Subsidiaries in or in connection with this Agreement
or any other Loan Document, (e) shall not have any duty to ascertain or to
inquire either as to the performance or observance of any term, covenant or
condition of this Agreement or any other Loan Document, as to the financial
condition of any Loan Party or as to the existence or possible existence of any
Default or Event of Default, (f) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the attachment, perfection or priority of any Lien created or
purported to be created under or in connection with, this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto or
thereto and (g) shall incur no liability under or in respect of this Agreement
or any other Loan Document by acting upon any notice, consent, certificate or
other instrument or writing (which writing may be a telecopy or electronic mail)
or any telephone message believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 10.3 POSTING OF APPROVED ELECTRONIC COMMUNICATIONS
(a) Each of the Lenders and the Borrower agree, and the Borrower
shall cause each Guarantor to agree, that the Administrative Agent may, but
shall not be obligated to, make the Approved Electronic Communications available
to the Lenders by posting such Approved Electronic Communications on
IntraLinks(TM) or a substantially similar electronic platform chosen by the
Administrative Agent to be its electronic transmission system (the "Approved
Electronic Platform").
(b) Although the Approved Electronic Platform and its primary web
portal are secured with generally-applicable security procedures and policies
implemented or modified by the Administrative Agent from time to time
(including, as of the Closing Date, a dual firewall and a User ID/Password
Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the
Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders
and the Borrower acknowledges and agrees, and the Borrower shall cause each
Guarantor to acknowledge and agree, that the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution. In consideration for the
convenience and other benefits afforded by such distribution and for the other
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consideration provided hereunder, the receipt and sufficiency of which is hereby
acknowledged, each of the Lenders and the Borrower hereby approves, and the
Borrower shall cause each Guarantor to approve, distribution of the Approved
Electronic Communications through the Approved Electronic Platform and
understands and assumes, and the Borrower shall cause each Guarantor to
understand and assume, the risks of such distribution.
(c) THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC
COMMUNICATIONS ARE PROVIDED "AS IS" AND "AS AVAILABLE". NONE OF THE
ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (THE "AGENT
AFFILIATES") WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED
ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY
DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM
AND THE APPROVED ELECTRONIC COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
AFFILIATES IN CONNECTION WITH THE APPROVED ELECTRONIC PLATFORM OR THE APPROVED
ELECTRONIC COMMUNICATIONS.
(d) Each of the Lenders and the Borrower agree, and the Borrower
shall cause each Guarantor to agree, that the Administrative Agent may, but
(except as may be required by applicable law) shall not be obligated to, store
the Approved Electronic Communications on the Approved Electronic Platform in
accordance with the Administrative Agent's generally-applicable document
retention procedures and policies.
SECTION 10.4 THE ADMINISTRATIVE AGENT INDIVIDUALLY
With respect to its Ratable Portion, Citicorp shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Lenders", "Requisite Lenders" and any similar
terms shall, unless the context clearly otherwise indicates, include, without
limitation, the Administrative Agent in its individual capacity as a Lender, a
Lender or as one of the Requisite Lenders. Citicorp and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with, any Loan Party as if Citicorp were not
acting as the Administrative Agent.
SECTION 10.5 LENDER CREDIT DECISION
Each Lender acknowledges that it shall, independently and without
reliance upon the Administrative Agent or any other Lender, conduct its own
independent investigation of the financial condition and affairs of the Borrower
and each other Loan Party in connection with the making and continuance of the
Loans and with the issuance of the Letters of Credit. Each Lender also
acknowledges that it shall, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents. Except for documents expressly required by any Loan Document to
be transmitted by the Administrative Agent to the Lenders, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial
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and other condition or creditworthiness of any Loan Party or any Affiliate of
any Loan Party that may come into the possession of the Administrative Agent or
any Affiliate thereof or any employee or agent of any of the foregoing.
SECTION 10.6 INDEMNIFICATION
Each Lender agrees to indemnify the Administrative Agent and each of
its Affiliates, and each of their respective directors, officers, employees,
agents and advisors (to the extent not reimbursed by the Borrower), from and
against such Lender's aggregate Ratable Portion of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements (including fees, expenses and disbursements of
financial and legal advisors) of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against, the Administrative Agent or any of
its Affiliates, directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement or the other Loan Documents or any
action taken or omitted by the Administrative Agent under this Agreement or the
other Loan Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or such Affiliate's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including fees, expenses and disbursements of financial
and legal advisors) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of its rights or responsibilities under, this
Agreement or the other Loan Documents, to the extent that the Administrative
Agent is not reimbursed for such expenses by the Borrower or another Loan Party.
SECTION 10.7 SUCCESSOR ADMINISTRATIVE AGENT
(a) The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and shall, immediately
upon giving such notice, be discharged from its duties and obligations under
this Agreement and the other Loan Documents; provided, however, that if the
Person acting as Administrative Agent is not also acting as First Lien Agent,
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents solely upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent as provided below. Upon any such resignation by the
Administrative Agent, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent selected from among the Lenders. Such appointment shall be
subject to the prior written approval of the Borrower (which approval may not be
unreasonably withheld and shall not be required upon the occurrence and during
the continuance of an Event of Default). Upon the acceptance of any appointment
as Administrative Agent by a successor Administrative Agent, such successor
Administrative Agent shall succeed to, and become vested with, all the rights,
powers, privileges and duties of the retiring Administrative Agent. The retiring
Administrative Agent shall take such action as may be reasonably necessary to
assign to the successor Administrative Agent its rights as Administrative Agent
under the Loan Documents. At any time after the discharge of a retiring
Administrative Agent from its duties and obligations under
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this Agreement and prior to any Person accepting its appointment as a successor
Administrative Agent, the Requisite Lenders shall assume and perform all of the
duties of such retiring Administrative Agent hereunder until such time, if any,
as a successor Administrative Agent shall become the Administrative Agent
hereunder. After its resignation as Administrative Agent hereunder, the retiring
Administrative Agent shall continue to have the benefit of this Article X as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement and the other Loan Documents.
(b) The Collateral Agent may resign, and a successor Collateral
Agent may be appointed, under the terms and conditions and as set forth in the
Intercreditor Agreement.
SECTION 10.8 CONCERNING THE COLLATERAL AND THE COLLATERAL DOCUMENTS
(a) Each Lender agrees that any action taken by the Administrative
Agent or the Requisite Lenders (or, where required by the express terms of this
Agreement, a greater proportion of the Lenders) in accordance with the
provisions of this Agreement or of the other Loan Documents, and the exercise by
the Administrative Agent or the Requisite Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders and other Secured Parties. Without limiting the
generality of the foregoing, the Administrative Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting agent
for the Lenders with respect to all payments and collections arising in
connection herewith and with the Collateral Documents, (ii) execute and deliver
each Collateral Document and accept delivery of each such agreement delivered by
the Borrower or any of its Subsidiaries, (iii) act as collateral agent for the
Lenders and the other Secured Parties for purposes of the perfection of all
security interests and Liens created by such agreements and all other purposes
stated therein, provided, however, that the Administrative Agent hereby
appoints, authorizes and directs each Lender to act as collateral sub-agent for
the Administrative Agent, the Lenders for purposes of the perfection of all
security interests and Liens with respect to the Collateral, including any
Deposit Accounts maintained by a Loan Party with, and cash and Cash Equivalents
held by, such Lender, (iv) manage, supervise and otherwise deal with the
Collateral, (v) take such action as is necessary or desirable to maintain the
perfection and priority of the security interests and Liens created or purported
to be created by the Collateral Documents and (vi) except as may be otherwise
specifically restricted by the terms hereof or of any other Loan Document,
exercise all remedies given to the Administrative Agent, the Lenders and the
other Secured Parties with respect to the Collateral under the Loan Documents
relating thereto, applicable law or otherwise.
Each of the Administrative Agent, the Lenders hereby authorizes and
directs (i) the Collateral Agent (without any further notice or consent) to
promptly release or subordinate any Lien as set forth in Section 8 of the
Intercreditor Agreement and (ii) the Administrative Agent (without any further
notice or consent) to release any Guarantor if such Guarantor is dissolved,
merged, consolidated, sold or otherwise transferred (except with or into another
Loan Party) in accordance with the terms hereof.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 AMENDMENTS, WAIVERS, ETC.
(a) Except as provided in the Intercreditor Agreement, no amendment
or waiver of any provision of this Agreement or any other Loan Document nor
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be in writing and (x) in the case of any such
waiver or consent signed by the Requisite Lenders (or by the Administrative
Agent with the consent of the Requisite Lenders) and (y) in the case of any
other amendment, by the Requisite Lenders (or by the Administrative Agent with
the consent of the Requisite Lenders ) and the Borrower, and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by each Lender directly affected
thereby, in addition to the Requisite Lenders (or the Administrative Agent with
the consent thereof), do any of the following:
(i) waive any condition specified in Section 3.1 (Conditions
Precedent to the Loans), except with respect to a condition based upon
another provision hereof, the waiver of which requires only the
concurrence of the Requisite Lenders and, in the case of the conditions
specified in Section 3.1 (Conditions Precedent to the Loans), subject to
the provisions of Section 3.2 (Determination of Borrowing Conditions);
(ii) increase the Term Loan Commitment of such Lender or
subject such Lender to any additional obligation;
(iii) extend the scheduled final maturity of any Loan owing to
such Lender, or waive, reduce or postpone any scheduled date fixed for the
payment or reduction of principal or interest of any such Loan or fees
owing to such Lender (it being understood that Section 2.7 (Mandatory
Prepayments) does not provide for scheduled dates fixed for payment) or
for the reduction of such Lender's Term Loan Commitment;
(iv) reduce, or release the Borrower from its obligations to
repay, the principal amount of any Loan owing to such Lender (other than
by the payment or prepayment thereof);
(v) reduce the rate of interest on any Loan outstanding and
owing to such Lender or any fee payable hereunder to such Lender or
reduce, or limit the application of, the Prepayment Premium;
(vi) postpone any scheduled date fixed for payment of interest
or fees owing to such Lender or waive any such payment;
(vii) change the aggregate Ratable Portions of Lenders
required for any or all Lenders to take any action hereunder;
(viii) release all or substantially all of the Collateral
except as provided in Section 10.8(b) (Concerning the Collateral and the
Collateral Documents) or release the Borrower from its payment obligation
to such Lender under this Agreement or the
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Term Loan Notes owing to such Lender (if any) or release any Guarantor
from its obligations under the Guaranty except in connection with the sale
or other disposition of a Guarantor (or all or substantially all of the
assets thereof) permitted by this Agreement (or permitted pursuant to a
waiver or consent of a transaction otherwise prohibited by this
Agreement);
(ix) amend Section 2.11(g) (Payments and Computations),
Section 10.8(b) (Concerning the Collateral and the Collateral Documents),
Section 11.7 (Sharing of Payments, Etc.), this Section 11.1, either
definition of the terms "Requisite Lenders" or "Ratable Portion" or
Section 8 of the Intercreditor Agreement or modify any other provision of
any Loan Document that would alter the pro rata sharing or the order of
application of payments required thereby; or
(x) subordinate any lien or security interest with respect to
any of the Collateral (except as permitted under Section 8 of the
Intercreditor Agreement);
and provided, further, that (x) no amendment, waiver or consent shall, unless in
writing and signed by any Special Purpose Vehicle that has been granted an
option pursuant to Section 11.2(f) (Assignments and Participations), affect the
grant or nature of such option or the right or duties of such Special Purpose
Vehicle hereunder and (y) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent or the Collateral Agent, as
applicable, in addition to the Lenders required above to take such action,
affect the rights or duties of the Administrative Agent or Collateral Agent, as
the case may be, under this Agreement or the other Loan Documents; and provided,
further, that the Administrative Agent may, with the consent of the Borrower,
amend, modify or supplement this Agreement to cure any ambiguity, omission,
defect or inconsistency, so long as such amendment, modification or supplement
does not adversely affect the rights of any Lender.
(b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(c) If, in connection with any proposed amendment, modification,
waiver or termination requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained but the consent of other Lenders whose consent
is required is not obtained (any such Lender whose consent is not obtained
(other than any Arranger or any of its Affilates) as described in this Section
11.1 being referred to as a "Non-Consenting Lender"), then, as long as the
Lender acting as the Administrative Agent is not a Non-Consenting Lender, at the
Borrower's request, any Eligible Assignee acceptable to the Administrative Agent
shall have the right with the Administrative Agent's consent and in the
Administrative Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lender, and such Non-Consenting Lender agrees
that it shall, upon the Administrative Agent's request, sell and assign to the
Lender acting as the Administrative Agent or such Eligible Assignee, all of the
Loans of such Non-Consenting Lender for an amount equal to the principal balance
of such Loans held by the Non-Consenting Lender and all accrued and unpaid
interest and fees with respect thereto through the date of sale; provided,
however, that such purchase and sale shall be recorded in the Register
maintained by the Administrative Agent and shall not be effective until (x) the
Administrative
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Agent shall have received from such Eligible Assignee an agreement in form and
substance satisfactory to the Administrative Agent and the Borrower whereby such
Eligible Assignee shall agree to be bound by the terms hereof and (y) such
Non-Consenting Lender shall have received payments of all Loans held by it and
all accrued and unpaid interest and fees with respect thereto through the date
of the sale. Each Lender agrees that, if it becomes a Non-Consenting Lender, it
shall execute and deliver to the Administrative Agent an Assignment an
Acceptance to evidence such sale and purchase and shall deliver to the
Administrative Agent any Term Loan Note (if the assigning Lender's Loans are
evidenced by a Term Loan Note) subject to such Assignment and Acceptance;
provided, however, that the failure of any Non-Consenting Lender to execute an
Assignment and Acceptance shall not render such sale and purchase (and the
corresponding assignment) invalid and such assignment shall be recorded in the
Register.
SECTION 11.2 ASSIGNMENTS AND PARTICIPATIONS
(a) Each Lender may sell, transfer, negotiate or assign to one or
more Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Loans);
provided, however, that (i) if any such assignment shall be of the assigning
Lender's Loans and Commitments, such assignment shall cover the same percentage
of such Lender's Loans and Commitments, (ii) the aggregate amount being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event (if less than
the assignor's entire interest) be less than $1,000,000 or an integral multiple
of $1,000,000 in excess thereof, except, in either case, (A) with the consent of
the Borrower (which consent shall not be unreasonably withheld or delayed) and
the Administrative Agent or (B) if such assignment is being made to a Lender or
an Affiliate or Approved Fund of such Lender and (iii) if such Eligible Assignee
is not, prior to the date of such assignment, a Lender or an Affiliate or
Approved Fund of a Lender, such assignment shall be subject to the prior consent
of the Administrative Agent (which consents shall not be unreasonably withheld
or delayed); and provided, further, that, notwithstanding any other provision of
this Section 11.2, the consent of the Borrower shall not be required for any
assignment occurring when any Event of Default shall have occurred and be
continuing.
(b) Except as otherwise permitted in Section 11.2 (c), the parties
to each such assignment shall execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Term Loan Note (if the assigning Lender's Loans are evidenced
by a Term Loan Note) subject to such assignment. Upon the execution, delivery,
acceptance and recording in the Register of any Assignment and Acceptance and,
other than in respect of assignments made pursuant to Section 2.15 (Substitution
of Lenders) and Section 11.1(c) (Amendments, Waivers, Etc.), the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount of
$3,500 from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall become a party hereto and, to the
extent that rights and obligations under the Loan Documents have been assigned
to such assignee pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender, (ii) the Term Loan Notes (if any) corresponding to the
Loans assigned thereby shall be transferred to such assignee by notation in the
Register and (iii) the assignor thereunder shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except for those surviving the
payment in full of the Obligations) and be released from its obligations under
the Loan Documents, other than those relating to events or circumstances
occurring prior to such
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assignment (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party hereto).
(c) Notwithstanding anything contained in Section 11.2 to the
contrary, a Lender may effect a Related Party Assignment without delivering an
Assignment and Acceptance to the Administrative Agent for recordation in the
Register and without payment of the assignment fee referred to in Section
11.2(b) and without delivering any tax forms (provided that should an assignee
party to a Related Party Assignment that is not a Lender deliver an Assignment
and Acceptance for recording, such assignee shall also deliver the applicable
tax forms); provided that (i) the Borrower, the Agents and the other Lenders
shall continue to deal solely and directly with such assigning Lender until such
Assignment and Acceptance has been delivered to the Administrative Agent and
promptly recorded in the Register in accordance with Section 11.2(d), (ii) the
failure of such assigning Lender to deliver an Assignment and Acceptance to the
Administrative Agent shall not affect the legality, validity, or binding effect
of such assignment, and (iii) an Assignment and Acceptance with respect to a
Related Party Assignment shall be effective as of the date specified in such
Assignment and Acceptance and recorded on the Related Party Register. The
Borrower agrees that each assignee party to a Related Party Assignment shall be
entitled to the benefits of Sections 2.14(d), 2.15 and 2.16 and to the same
extent as any other Lender that delivers an Assignment and Acceptance to the
Administrative Agent pursuant to this Section 11.2(c).
(d) The Administrative Agent shall maintain at its address referred
to in Section 11.8 (Notices, Etc.) a copy of each Assignment and Acceptance
delivered to and accepted by it and shall record in the Register the names and
addresses of the Lenders and the principal amount of the Loans owing to each
Lender from time to time and the Term Loan Commitments of each Lender. Except
for a Related Party Assignment, any assignment pursuant to this Section 11.2
shall not be effective until such assignment is recorded in the Register. In the
case of a Related Party Assignment as to which an Assignment and Acceptance is
not delivered to the Administrative Agent, the assigning Lender shall, acting
solely for this purpose as a non-fiduciary agent of the Borrower, maintain a
register (the "Related Party Register") comparable to the Register on behalf of
the Borrower. Any such Related Party Register shall be available for inspection
by the Borrower, the Agents and any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment and
Acceptance, (ii) record or cause to be recorded the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, at its
own expense, shall, if requested by such assignee, and provided any Term Loan
Notes to the order of the assigning Lender have been surrendered or an affidavit
of loss certificate has been provided by such Lender, execute and deliver to the
Administrative Agent, new Term Loan Notes to the order of such assignee in an
amount equal to the Term Loan Commitments assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has surrendered any Term
Loan Note for exchange in connection with the assignment and has retained Term
Loan Commitments hereunder, new Term Loan Notes to the order of the assigning
Lender in an amount equal to the Term Loan Commitments retained by it hereunder.
Such new
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Term Loan Notes shall be dated the same date as the surrendered Term Loan Notes
and be in substantially the form of Exhibit B (Form of Term Loan Note).
(f) In addition to the other assignment rights provided in this
Section 11.2, each Lender may do each of the following:
(i) grant to a Special Purpose Vehicle the option to make all
or any part of any Loan that such Lender would otherwise be required to
make hereunder and the exercise of such option by any such Special Purpose
Vehicle and the making of Loans pursuant thereto shall satisfy (once and
to the extent that such Loans are made) the obligation of such Lender to
make such Loans thereunder, provided, however, that (x) nothing herein
shall constitute a commitment or an offer to commit by such a Special
Purpose Vehicle to make Loans hereunder and no such Special Purpose
Vehicle shall be liable for any indemnity or other Obligation (other than
the making of Loans for which such Special Purpose Vehicle shall have
exercised an option, and then only in accordance with the relevant option
agreement) and (y) such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain responsible to the other
parties for the performance of its obligations under the terms of this
Agreement and shall remain the holder of the Obligations for all purposes
hereunder; and
(ii) assign, as collateral or otherwise, any of its rights
under this Agreement, whether now owned or hereafter acquired (including
rights to payments of principal or interest on the Loans), to (A) without
notice to or consent of the Administrative Agent or the Borrower, any
Federal Reserve Bank (pursuant to Regulation A of the Federal Reserve
Board) and (B) without notice to or consent of the Administrative Agent or
the Borrower, (1) any holder of, or trustee for the benefit of, the
holders of such Lender's Securities and (2) any Special Purpose Vehicle to
which such Lender has granted an option pursuant to clause (i) above;
provided, however, that no such assignment or grant shall release such Lender
from any of its obligations hereunder except as expressly provided in clause (i)
above and except, in the case of a subsequent foreclosure pursuant to an
assignment as collateral, if such foreclosure is made in compliance with the
other provisions of this Section 11.2 other than this clause (f) or clause (g)
below. Each party hereto acknowledges and agrees that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any such Special Purpose Vehicle, such party shall
not institute against, or join any other Person in instituting against, any
Special Purpose Vehicle that has been granted an option pursuant to this clause
(f) any bankruptcy, reorganization, insolvency or liquidation proceeding (such
agreement shall survive the payment in full of the Obligations). The terms of
the designation of, or assignment to, such Special Purpose Vehicle shall not
restrict such Lender's ability to, or grant such Special Purpose Vehicle the
right to, consent to any amendment or waiver to this Agreement or any other Loan
Document or to the departure by the Borrower from any provision of this
Agreement or any other Loan Document without the consent of such Special Purpose
Vehicle except, as long as the Administrative Agent and the Lenders and other
Secured Parties shall continue to, and shall be entitled to continue to, deal
solely and directly with such Lender in connection with such Lender's
obligations under this Agreement, to the extent any such consent would reduce
the principal amount of, or the rate of interest on, any Obligations, amend this
clause (f) or postpone any scheduled date of payment of such principal or
interest. Each Special Purpose Vehicle shall be entitled to the benefits of
Sections 2.13 (Capital Adequacy) and 2.14 (Taxes) and of Section 2.12(d)
(Illegality) as if it were such Lender; provided, however, that
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anything herein to the contrary notwithstanding, no Borrower shall, at any time,
be obligated to make under Section 2.13 (Capital Adequacy), 2.14 (Taxes) or
2.12(d) (Illegality) to any such Special Purpose Vehicle and any such Lender any
payment in excess of the amount the Borrower would have been obligated to pay to
such Lender in respect of such interest if such Special Purpose Vehicle had not
been assigned the rights of such Lender hereunder; and provided, further, that
such Special Purpose Vehicle shall have no direct right to enforce any of the
terms of this Agreement against the Borrower, the Administrative Agent or the
other Lenders.
(g) Each Lender may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to the Loans). The terms
of such participation shall not, in any event, require the participant's consent
to any amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any Loan Party therefrom, or to the
exercising or refraining from exercising any powers or rights such Lender may
have under or in respect of the Loan Documents (including the right to enforce
the obligations of the Loan Parties), except if any such amendment, waiver or
other modification or consent would (i) reduce the amount, or postpone any date
fixed for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or
substantially all of the Collateral other than in accordance with Section
10.8(b) (Concerning the Collateral and the Collateral Documents). In the event
of the sale of any participation by any Lender, (w) such Lender's obligations
under the Loan Documents shall remain unchanged, (x) such Lender shall remain
solely responsible to the other parties for the performance of such obligations,
(y) such Lender shall remain the holder of such Obligations for all purposes of
this Agreement and (z) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Each
participant shall be entitled to the benefits of Sections 2.13 (Capital
Adequacy) and 2.14 (Taxes) and of Section 2.12(d) (Illegality) as if it were a
Lender; provided, however, that anything herein to the contrary notwithstanding,
the Borrower shall not, at any time, be obligated to make under Section 2.13
(Capital Adequacy), 2.14 (Taxes) or 2.12(d) (Illegality) to the participants in
the rights and obligations of any Lender (together with such Lender) any payment
in excess of the amount the Borrower would have been obligated to pay to such
Lender in respect of such interest had such participation not been sold and
provided, further, that such participant in the rights and obligations of such
Lender shall have no direct right to enforce any of the terms of this Agreement
against the Borrower, the Administrative Agent or the other Lenders.
(h) In the event that any Lender sells participations in a Loan,
such Lender shall maintain a register on which it enters the name of all
participants in the Loans held by it (the "Participant Register"). A Loan (and
the registered note, if any, evidencing the same) may be participated in whole
or in part only by registration of such participation on the Participant
Register (and each registered note shall expressly so provide). Any
participation of such Loan (and the registered note, if any, evidencing the
same) may be effected only by the registration of such participation on the
Participant Register. Any such Participant Register shall be available for
inspection by the Borrower, Administrative Agent and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
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SECTION 11.3 COSTS AND EXPENSES
(a) The Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including the
reasonable fees, expenses and disbursements of the Administrative Agent's
counsel, Weil, Gotshal & ▇▇▇▇▇▇ LLP, local legal counsel, auditors, accountants,
appraisers, printers, insurance and environmental advisors, and other
consultants and agents) incurred by the Administrative Agent in connection with
any of the following: (i) the Administrative Agent's audit and investigation of
the Borrower and its Subsidiaries in connection with the preparation,
negotiation or execution of any Loan Document or the Administrative Agent's
periodic audits of the Borrower or any of its Subsidiaries, as the case may be,
(ii) the preparation, negotiation, execution or interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any condition set forth in Article III (Conditions to the Loans), any Loan
Document or any proposal letter or commitment letter issued in connection
therewith, or the making of the Loans hereunder, (iii) the creation, perfection
or protection of the Liens under any Loan Document (including any reasonable
fees, disbursements and expenses for local counsel in various jurisdictions),
(iv) the ongoing administration of this Agreement and the Loans, including
consultation with attorneys in connection therewith and with respect to the
Administrative Agent's rights and responsibilities hereunder and under the other
Loan Documents, (v) the protection, collection or enforcement of any Obligation
or the enforcement of any Loan Document, (vi) the commencement, defense or
intervention in any court proceeding relating in any way to the Obligations, any
Loan Party, any of the Borrower's Subsidiaries, this Agreement or any other Loan
Document, (vii) the response to, and preparation for, any subpoena or request
for document production with which the Administrative Agent is served or
deposition or other proceeding in which the Administrative Agent is called to
testify, in each case, relating in any way to the Obligations, any Loan Party,
any of the Borrower's Subsidiaries, this Agreement or any other Loan Document or
(viii) any amendment, consent, waiver, assignment, restatement, or supplement to
any Loan Document or the preparation, negotiation and execution of the same.
(b) The Borrower further agrees to pay or reimburse the
Administrative Agent, the Collateral Agent and each of the Lenders upon demand
for all out-of-pocket costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel and costs of settlement),
incurred by the Administrative Agent, the Collateral Agent and such Lenders in
connection with any of the following: (i) in enforcing any Loan Document or
Obligation or any security therefor or exercising or enforcing any other right
or remedy available by reason of an Event of Default, (ii) in connection with
any refinancing or restructuring of the credit arrangements provided hereunder
in the nature of a "work-out" or in any insolvency or bankruptcy proceeding,
(iii) in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to the Obligations, any Loan Party, any of the Borrower's Subsidiaries
and related to or arising out of the transactions contemplated hereby or by any
other Loan Document or (iv) in taking any other action in or with respect to any
suit or proceeding (bankruptcy or otherwise) described in clause (i), (ii) or
(iii) above.
SECTION 11.4 INDEMNITIES
(a) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Collateral Agent, the Arrangers and each Lender and
each of their respective
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Affiliates, and each of the directors, officers, employees, agents, trustees,
representatives, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article III (Conditions to
the Loans) (each such Person being an "Indemnitee") from and against any and all
claims, damages, liabilities, obligations, losses, penalties, actions,
judgments, suits, costs, disbursements and expenses, joint or several, of any
kind or nature (including fees, disbursements and expenses of financial and
legal advisors to any such Indemnitee) that may be imposed on, incurred by or
asserted against any such Indemnitee in connection with or arising out of any
investigation, litigation or proceeding, whether or not such investigation,
litigation or proceeding is brought by any such Indemnitee or any of its
directors, security holders or creditors or any such Indemnitee, director,
security holder or creditor is a party thereto, whether direct, indirect, or
consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of this Agreement, any other Loan Document, any
Obligation, any Disclosure Document, or any act, event or transaction related or
attendant to any thereof, or the use or intended use of the proceeds of the
Loans or in connection with any investigation of any potential matter covered
hereby (collectively, the "Indemnified Matters"); provided, however, that the
Borrower shall not have any liability under this Section 11.4 to an Indemnitee
with respect to any Indemnified Matter that has resulted primarily from the
gross negligence or willful misconduct of that Indemnitee, as determined by a
court of competent jurisdiction in a final non-appealable judgment or order.
Without limiting the foregoing, "Indemnified Matters" include (i) all
Environmental Liabilities and Costs arising from or connected with the past,
present or future operations of the Borrower or any of its Subsidiaries
involving any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such property or any
contiguous real estate, (ii) any costs or liabilities incurred in connection
with any Remedial Action concerning the Borrower or any of its Subsidiaries,
(iii) any costs or liabilities incurred in connection with any Environmental
Lien and (iv) any costs or liabilities incurred in connection with any other
matter under any Environmental Law, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (49 U.S.C. Section 9601 et
seq.) and applicable state property transfer laws, whether, with respect to any
such matter, such Indemnitee is a mortgagee pursuant to any leasehold mortgage,
a mortgagee in possession, the successor in interest to the Borrower or any of
its Subsidiaries, or the owner, lessee or operator of any property of the
Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above,
to the extent (x) incurred following foreclosure by the Administrative Agent,
the Collateral Agent or any Lender, or the Administrative Agent, the Collateral
Agent or any Lender having become the successor in interest to the Borrower or
any of its Subsidiaries and (y) attributable solely to acts of the
Administrative Agent or such Lender or any agent on behalf of the Administrative
Agent or Lender.
(b) The Borrower shall indemnify the Administrative Agent, the
Collateral Agent and the Lenders for, and hold the Administrative Agent and the
Lenders harmless from and against, any and all claims for brokerage commissions,
fees and other compensation made against the Administrative Agent, the
Collateral Agent or the Lenders for any broker, finder or consultant with
respect to any agreement, arrangement or understanding made by or on behalf of
any Loan Party or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.
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(c) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against any investigation, litigation or proceeding or
requested Remedial Action, in each case contemplated in clause (a) above, and
the Borrower, in any event, may participate in the defense thereof with legal
counsel of the Borrower's choice. In the event that such Indemnitee requests the
Borrower to defend against such investigation, litigation or proceeding or
requested Remedial Action, the Borrower shall promptly do so and such Indemnitee
shall have the right to have legal counsel of its choice participate in such
defense. No action taken by legal counsel chosen by such Indemnitee in defending
against any such investigation, litigation or proceeding or requested Remedial
Action, shall vitiate or in any way impair the Borrower's obligation and duty
hereunder to indemnify and hold harmless such Indemnitee.
(d) The Borrower agrees that any indemnification or other protection
provided to any Indemnitee pursuant to this Agreement (including pursuant to
this Section 11.4) or any other Loan Document shall (i) survive payment in full
of the Obligations and (ii) inure to the benefit of any Person that was at any
time an Indemnitee under this Agreement or any other Loan Document.
SECTION 11.5 LIMITATION OF LIABILITY
(a) The Borrower agrees that no Indemnitee shall have any liability
(whether in contract, tort or otherwise) to any Loan Party or any of their
respective Subsidiaries or any of their respective equity holders or creditors
for or in connection with the transactions contemplated hereby and in the other
Loan Documents, except to the extent such liability is determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
primarily from such Indemnitee's gross negligence or willful misconduct. In no
event, however, shall any Indemnitee be liable on any theory of liability for
any special, indirect, consequential or punitive damages (including, without
limitation, any loss of profits, business or anticipated savings). The Borrower
hereby waives, releases and agrees (each for itself and on behalf of its
Subsidiaries) not to ▇▇▇ upon any such claim for any special, indirect,
consequential or punitive damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
(b) In no event shall any Agent Affiliate have any liability to any
Loan Party, Lender or any other Person for damages of any kind, including direct
or indirect, special, incidental or consequential damages, losses or expenses
(whether in tort or contract or otherwise) arising out of any Loan Party or any
Agent Affiliate's transmission of Approved Electronic Communications through the
Internet or any use of the Approved Electronic Platform, except to the extent
such liability of any Agent Affiliate is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted primarily form
such Agent Affiliate's gross negligence or willful misconduct.
SECTION 11.6 RIGHT OF SET-OFF
Upon the occurrence and during the continuance of any Event of
Default each Lender and each Affiliate of a Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other Indebtedness at any time owing by such
Lender or its Affiliates to or for the credit or the account of the Borrower
against any and all of the Obligations now or hereafter existing whether or not
such Lender shall have made any demand under this Agreement or any other Loan
Document and even though such Obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off
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and application made by such Lender or its Affiliates; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application. Each Lender agrees that it shall not, without the express
consent of the Requisite Lenders (and that, it shall, to the extent lawfully
entitled to do so, upon the request of the Requisite Lenders) exercise its
set-off rights under this Section 11.6 against any deposit accounts of the Loan
Parties and their Subsidiaries maintained with such Lender or any Affiliate
thereof. The rights of each Lender under this Section 11.6 are in addition to
the other rights and remedies (including other rights of set-off) that such
Lender may have.
SECTION 11.7 SHARING OF PAYMENTS, ETC.
(a) If any Lender (directly or through an Affiliate thereof) obtains
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off (including pursuant to Section 11.6 (Right of Set-off)) or otherwise)
of the Loans owing to it, any interest thereon, fees in respect thereof or
amounts due pursuant to Section 11.3 (Costs and Expenses) or 11.4 (Indemnities)
(other than payments pursuant to Section 2.12 (Special Provisions Governing
Eurodollar Rate Loans), 2.13 (Capital Adequacy) or 2.14 (Taxes)) or otherwise
receives any Collateral or any "Proceeds" (as defined in the Pledge and Security
Agreement) of Collateral (other than payments pursuant to Section 2.12 (Special
Provisions Governing Eurodollar Rate Loans), 2.13 (Capital Adequacy) or 2.14
(Taxes)) (in each case, whether voluntary, involuntary, through the exercise of
any right of set-off (including pursuant to Section 11.6 (Right of Set-off)) or
otherwise) in excess of its Ratable Portion of all payments of such Obligations
obtained by all the Lenders, such Lender (a "Purchasing Lender") shall forthwith
purchase from the other Lenders (each, a "Selling Lender") such participations
in their Loans or other Obligations as shall be necessary to cause such
Purchasing Lender to share the excess payment ratably with each of them.
(b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each Selling Lender shall be rescinded and such Selling Lender shall repay to
the Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment in
relation to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the Purchasing Lender in respect
of the total amount so recovered.
(c) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 11.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 11.8 NOTICES, ETC.
(a) Addresses for Notices. All notices, demands, requests, consents
and other communications provided for in this Agreement shall be given in
writing, or by any telecommunication device capable of creating a written record
(including electronic mail), and addressed to the party to be notified as
follows:
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(i) if to the Borrower:
TECUMSEH PRODUCTS COMPANY
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Miller, Canfield, Paddock and Stone, P.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(ii) if to any Lender, at its Domestic Lending Office
specified opposite its name on Schedule II (- Applicable Lending Offices
and Addresses for Notices) or on the signature page of any applicable
Assignment and Acceptance;
(iii) if to the Administrative Agent:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Sebastien Delasnerie
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
or at such other address as shall be notified in writing (x) in the case of the
Borrower or the Administrative Agent, to the other parties and (y) in the case
of all other parties, to the Borrower and the Administrative Agent.
(b) Effectiveness of Notices. All notices, demands, requests,
consents and other communications described in clause (a) above shall be
effective (i) if delivered by hand, including any overnight courier service,
upon personal delivery, (ii) if delivered by mail, when deposited in the mails,
(iii) if delivered by posting to an Approved Electronic Platform, an Internet
website or a similar telecommunication device requiring that a user have prior
access to such Approved Electronic Platform, website or other device (to the
extent permitted by Section 10.3 (Posting of Approved Electronic Communications)
to be delivered thereunder), when
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such notice, demand, request, consent and other communication shall have been
made generally available on such Approved Electronic Platform, Internet website
or similar device to the class of Person being notified (regardless of whether
any such Person must accomplish, and whether or not any such Person shall have
accomplished, any action prior to obtaining access to such items, including
registration, disclosure of contact information, compliance with a standard user
agreement or undertaking a duty of confidentiality) and such Person has been
notified that such communication has been posted to the Approved Electronic
Platform and (iv) if delivered by electronic mail or any other
telecommunications device, when transmitted to an electronic mail address (or by
another means of electronic delivery) as provided in clause (a) above; provided,
however, that notices and communications to the Administrative Agent and the
Collateral Agent pursuant to Article II (The Facility) or Article X (The
Administrative Agent) shall not be effective until received by the
Administrative Agent and the Collateral Agent.
(c) Use of Electronic Platform. Notwithstanding clauses (a) and (b)
above (unless the Administrative Agent and the Collateral Agent request that the
provisions of clause (a) and (b) above be followed) and any other provision in
this Agreement or any other Loan Document providing for the delivery of any
Approved Electronic Communication by any other means the Loan Parties shall
deliver all Approved Electronic Communications to the Administrative Agent and
the Collateral Agent by properly transmitting such Approved Electronic
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ or such other electronic
mail address (or similar means of electronic delivery) as the Administrative
Agent and the Collateral Agent may notify the Borrower. Nothing in this clause
(c) shall prejudice the right of the Administrative Agent or any Lender to
deliver any Approved Electronic Communication to any Loan Party in any manner
authorized in this Agreement or to request that the Borrower effect delivery in
such manner.
SECTION 11.9 NO WAIVER; REMEDIES
No failure on the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 11.10 BINDING EFFECT
This Agreement shall become effective when it shall have been
executed by the Borrower and the Administrative Agent and when the
Administrative Agent shall have been notified by each Lender that such Lender
has executed it and thereafter shall be binding upon and inure solely to the
benefit of the Borrower, the Administrative Agent and each Lender and, in each
case, their respective successors and assigns; provided, however, that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
SECTION 11.11 GOVERNING LAW
This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
SECTION 11.12 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
(a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York
located in the City of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
the Borrower hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereto hereby irrevocably waive any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, that any of
them may now or hereafter have to the bringing of any such action or proceeding
in such respective jurisdictions.
(b) The Borrower hereby irrevocably consents to the service of any
and all legal process, summons, notices and documents in any suit, action or
proceeding brought in the United States of America arising out of or in
connection with this Agreement or any other Loan Document by the mailing (by
registered or certified mail, postage prepaid) or delivering of a copy of such
process to the Borrower at its address specified in Section 11.8 (Notices,
Etc.). The Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(c) Nothing contained in this Section 11.12 shall affect the right
of the Administrative Agent, the Collateral Agent or any Lender to serve process
in any other manner permitted by law or commence legal proceedings or otherwise
proceed against the Borrower or any other Loan Party in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
SECTION 11.13 WAIVER OF JURY TRIAL
EACH OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE LENDERS
AND THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.14 MARSHALING; PAYMENTS SET ASIDE
None of the Administrative Agent, the Collateral Agent or any Lender
shall be under any obligation to marshal any assets in favor of the Borrower or
any other party or against or in payment of any or all of the Obligations. To
the extent that the Borrower makes a payment or payments to the Administrative
Agent, the Collateral Agent or the Lenders or any such Person receives payment
from the proceeds of the Collateral or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party,
then to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, right and remedies therefor, shall
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred.
SECTION 11.15 SECTION TITLES
The section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto, except when used to reference a
section. Any reference to the number of a clause, sub-clause or subsection
hereof immediately followed by a reference in parenthesis to the title of the
Section containing such clause, sub-clause or subsection is a reference to such
clause, sub-clause or subsection and not to the entire Section; provided,
however, that, in case of direct conflict between the reference to the title and
the reference to the number of such Section, the reference to the title shall
govern absent manifest error. If any reference to the number of a Section (but
not to any clause, sub-clause or subsection thereof) is followed immediately by
a reference in parenthesis to the title of a Section, the title reference shall
govern in case of direct conflict absent manifest error.
SECTION 11.16 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document. Delivery of an executed signature page of
this Agreement by facsimile transmission, electronic mail or by posting on the
Approved Electronic Platform shall be as effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
parties shall be lodged with the Borrower and the Administrative Agent.
SECTION 11.17 ENTIRE AGREEMENT
This Agreement, together with all of the other Loan Documents and
all certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof. In the event of any
conflict between the terms of this Agreement and any other Loan Document, the
terms of this Agreement shall govern.
SECTION 11.18 CONFIDENTIALITY
Each Lender, the Administrative Agent and the Collateral Agent agree
to use all reasonable efforts to keep information obtained by it pursuant hereto
and the other Loan Documents confidential in accordance with such Lender's, the
Administrative Agent's or the Collateral Agent's, as the case may be, customary
practices and agrees that it shall not disclose any such information other than
(a) to such Lender's, the Administrative Agent's or the Collateral Agent's, as
the case may be, employees, representatives and agents that are or are expected
to be involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and are advised of the confidential
nature of such information, (b) to the extent such information presently is or
hereafter becomes available to such Lender, the Administrative Agent or the
Collateral Agent, as the case may be, on a non-confidential basis from a source
other than the Borrower or any other Loan Party, (c) to the extent disclosure is
required by law,
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SECOND LIEN CREDIT AGREEMENT
TECUMSEH PRODUCTS COMPANY
regulation or judicial order or requested or required by bank regulators or
auditors or (d) to current or prospective assignees, participants and Special
Purpose Vehicle grantees of any option described in Section 11.2(f) (Assignments
and Participations), contractual counterparties in any Hedging Contract
permitted hereunder and to their respective legal or financial advisors, in each
case and to the extent such assignees, participants, grantees or counterparties
agree to be bound by, and to cause their advisors to comply with, the provisions
of this Section 11.18. Notwithstanding any other provision in this Agreement,
the Administrative Agent hereby agrees that the Borrower (and each of its
officers, directors, employees, accountants, attorneys and other advisors) may
disclose to any and all persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the Facility and the transactions
contemplated hereby and all materials of any kind (including opinions and other
tax analyses) that are provided to it relating to such U.S. tax treatment and
U.S. tax structure.
SECTION 11.19 PATRIOT ACT NOTICE
Each Lender subject to the Patriot Act hereby notifies the Borrower
that, pursuant to Section 326 of the Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower, including the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Patriot Act.
[SIGNATURE PAGES FOLLOW]
97
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
TECUMSEH PRODUCTS COMPANY,
as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Treasurer & CFO
[SIGNATURE PAGE TO TECUMSEH PRODUCTS COMPANY SECOND LIEN CREDIT AGREEMENT]
CITICORP USA, INC.,
as Administrative Agent and Collateral
Agent
By: /s/ Sebastien Delasnerie
--------------------------------------
Name: Sebastien Delasnerie
Title: Vice President
[SIGNATURE PAGE TO TECUMSEH PRODUCTS COMPANY SECOND LIEN CREDIT AGREEMENT]
ABLECO FINANCE LLC.
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
[SIGNATURE PAGE TO TECUMSEH PRODUCTS COMPANY SECOND LIEN CREDIT AGREEMENT]
TABLE OF CONTENTS
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS............................................ 1
Section 1.1 Defined Terms.............................................................. 1
Section 1.2 Computation of Time Periods................................................ 31
Section 1.3 Accounting Terms and Principles............................................ 32
Section 1.4 Conversion of Foreign Currencies........................................... 32
Section 1.5 Certain Terms.............................................................. 33
ARTICLE II THE FACILITY............................................................................... 33
Section 2.1 The Term Loan Commitments.................................................. 33
Section 2.2 Borrowing Procedures....................................................... 34
Section 2.3 Termination of the Term Loan Commitments................................... 42
Section 2.4 Repayment of Loans......................................................... 42
Section 2.5 Evidence of Debt........................................................... 42
Section 2.6 Optional Prepayments....................................................... 43
Section 2.7 Mandatory Prepayments...................................................... 43
Section 2.8 Interest................................................................... 44
Section 2.9 Conversion/Continuation Option............................................. 45
Section 2.10 Fees....................................................................... 46
Section 2.11 Payments and Computations.................................................. 47
Section 2.12 Special Provisions Governing Eurodollar Rate Loans......................... 50
Section 2.13 Capital Adequacy........................................................... 51
Section 2.14 Taxes...................................................................... 52
Section 2.15 Substitution of Lenders.................................................... 54
ARTICLE III CONDITIONS TO THE LOANS................................................................... 55
Section 3.1 Conditions Precedent to the Loans.......................................... 55
Section 3.2 Determinations of Borrowing Conditions..................................... 60
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................................. 61
Section 4.1 Corporate Existence; Compliance with Law................................... 61
Section 4.2 Corporate Power; Authorization; Enforceable Obligations.................... 61
Section 4.3 Ownership of Subsidiaries.................................................. 62
Section 4.4 Financial Statements....................................................... 63
Section 4.5 Material Adverse Change.................................................... 63
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TABLE OF CONTENTS
(CONTINUED)
Section 4.6 Solvency................................................................... 63
Section 4.7 Litigation................................................................. 63
Section 4.8 Taxes...................................................................... 64
Section 4.9 Full Disclosure............................................................ 64
Section 4.10 Margin Regulations......................................................... 64
Section 4.11 No Burdensome Restrictions; No Defaults.................................... 65
Section 4.12 Investment Company Act..................................................... 65
Section 4.13 Use of Proceeds............................................................ 65
Section 4.14 Insurance.................................................................. 65
Section 4.15 Labor Matters.............................................................. 66
Section 4.16 ERISA...................................................................... 66
Section 4.17 Environmental Matters...................................................... 67
Section 4.18 Intellectual Property...................................................... 67
Section 4.19 Title; Real Property....................................................... 68
ARTICLE V FINANCIAL COVENANTS......................................................................... 69
Section 5.1 Minimum Fixed Charge Coverage Ratio........................................ 69
Section 5.2 Minimum EBITDA............................................................. 69
Section 5.3 Capital Expenditures....................................................... 69
ARTICLE VI REPORTING COVENANTS........................................................................ 70
Section 6.1 Financial Statements....................................................... 70
Section 6.2 Default Notices............................................................ 72
Section 6.3 Litigation................................................................. 72
Section 6.4 Asset Sales................................................................ 72
Section 6.5 Labor Relations............................................................ 72
Section 6.6 Tax Returns................................................................ 73
Section 6.7 Insurance.................................................................. 73
Section 6.8 ERISA Matters.............................................................. 73
Section 6.9 Environmental Matters...................................................... 73
Section 6.10 Customer Contracts......................................................... 75
Section 6.11 Tax Reporting.............................................................. 75
Section 6.12 Other Information.......................................................... 75
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TABLE OF CONTENTS
(CONTINUED)
ARTICLE VII AFFIRMATIVE COVENANTS..................................................................... 76
Section 7.1 Preservation of Corporate Existence, Etc................................... 76
Section 7.2 Compliance with Laws, Etc.................................................. 76
Section 7.3 Conduct of Business........................................................ 76
Section 7.4 Payment of Taxes, Etc...................................................... 76
Section 7.5 Maintenance of Insurance................................................... 76
Section 7.6 Access..................................................................... 77
Section 7.7 Keeping of Books........................................................... 77
Section 7.8 Maintenance of Properties, Etc............................................. 77
Section 7.9 Application of Proceeds.................................................... 77
Section 7.10 Environmental.............................................................. 77
Section 7.11 Additional Collateral and Guaranties....................................... 78
Section 7.12 Control Accounts; Approved Deposit Accounts................................ 79
Section 7.13 Real Property.............................................................. 80
ARTICLE VIII NEGATIVE COVENANTS....................................................................... 81
Section 8.1 Indebtedness............................................................... 81
Section 8.2 Liens, Etc................................................................. 82
Section 8.3 Investments................................................................ 83
Section 8.4 Sale of Assets............................................................. 84
Section 8.5 Restricted Payments........................................................ 84
Section 8.6 Prepayment and Cancellation of Indebtedness................................ 85
Section 8.7 Restriction on Fundamental Changes......................................... 85
Section 8.8 Change in Nature of Business............................................... 85
Section 8.9 Transactions with Affiliates............................................... 86
Section 8.10 Limitations on Restrictions on Subsidiary Distributions; No New Negative
Pledge..................................................................... 86
Section 8.11 Modification of Constituent Documents...................................... 86
Section 8.12 Modification of Debt Agreements............................................ 86
Section 8.13 Accounting Changes; Fiscal Year............................................ 87
Section 8.14 Margin Regulations......................................................... 87
Section 8.15 Operating Leases; Sale/Leasebacks.......................................... 87
Section 8.16 No Speculative Transactions................................................ 87
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TABLE OF CONTENTS
(CONTINUED)
Section 8.17 Compliance with ERISA...................................................... 87
Section 8.18 Environmental.............................................................. 88
ARTICLE IX EVENTS OF DEFAULT.......................................................................... 88
Section 9.1 Events of Default.......................................................... 88
Section 9.2 Remedies................................................................... 90
Section 9.3 Rescission................................................................. 91
ARTICLE X THE ADMINISTRATIVE AGENT.................................................................... 91
Section 10.1 Authorization and Action................................................... 91
Section 10.2 Administrative Agent's Reliance, Etc....................................... 92
Section 10.3 Posting of Approved Electronic Communications.............................. 93
Section 10.4 The Administrative Agent Individually...................................... 93
Section 10.5 Lender Credit Decision..................................................... 94
Section 10.6 Indemnification............................................................ 94
Section 10.7 Successor Administrative Agent............................................. 95
Section 10.8 Concerning the Collateral and the Collateral Documents..................... 95
ARTICLE XI MISCELLANEOUS.............................................................................. 97
Section 11.1 Amendments, Waivers, Etc................................................... 97
Section 11.2 Assignments and Participations............................................. 99
Section 11.3 Costs and Expenses......................................................... 102
Section 11.4 Indemnities................................................................ 103
Section 11.5 Limitation of Liability.................................................... 105
Section 11.6 Right of Set-off........................................................... 105
Section 11.7 Sharing of Payments, Etc................................................... 106
Section 11.8 Notices, Etc............................................................... 106
Section 11.9 No Waiver; Remedies........................................................ 108
Section 11.10 Binding Effect............................................................. 108
Section 11.11 Governing Law.............................................................. 108
Section 11.12 Submission to Jurisdiction; Service of Process............................. 108
Section 11.13 Waiver of Jury Trial....................................................... 109
Section 11.14 Marshaling; Payments Set Aside............................................. 109
Section 11.15 Section Titles............................................................. 110
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TABLE OF CONTENTS
(CONTINUED)
Section 11.16 Execution in Counterparts.................................................. 110
Section 11.17 Entire Agreement........................................................... 110
Section 11.18 Confidentiality............................................................ 110
Section 11.19 Patriot Act Notice......................................................... 111
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TABLE OF CONTENTS
(CONTINUED)
SCHEDULES
Schedule I - Term Loan Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 1.1 - Aircraft
Schedule 3.1(a)(ii) - Guarantors
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Subsidiaries
Schedule 4.7 - Litigation
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.19 - Real Property
Schedule 7.13 - Real Property Mortgages
Schedule 7.14(b) - Existing Canadian Liens
Schedule 7.14(c) - Landlord Waivers and Bailee's Letters
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
Schedule 8.4(a) - Investment Property
Schedule 8.4(b) - Real Property to be Sold
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Term Loan Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Notice of Conversion or Continuation
Exhibit E - Form of Opinion of Counsel for the Loan Parties
Exhibit F - Form of Guaranty
Exhibit G - Form of Pledge and Security Agreement
vi