EXHIBIT 4.1
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TECUMSEH PRODUCTS COMPANY
$300,000,000 4.66% Senior Guaranteed Notes due March 5, 2011
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NOTE PURCHASE AGREEMENT
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Dated as of March 5, 2003
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES.................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES.............................................................1
SECTION 3. CLOSING................................................................................2
SECTION 4. CONDITIONS TO CLOSING..................................................................2
Section 4.1. Representations and Warranties.........................................................2
Section 4.2. Performance; No Default................................................................2
Section 4.3. Compliance Certificates................................................................2
Section 4.4. Opinions of Counsel....................................................................3
Section 4.5. Purchase Permitted by Applicable Law, etc..............................................3
Section 4.6. Sale of Other Notes....................................................................3
Section 4.7. Payment of Special Counsel Fees........................................................3
Section 4.8. Guaranty Agreement.....................................................................4
Section 4.9. Private Placement Numbers..............................................................4
Section 4.10. Changes in Corporate Structure.........................................................4
Section 4.11. Proceedings and Documents..............................................................4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................4
Section 5.1. Organization; Power and Authority......................................................4
Section 5.2. Authorization, Etc.....................................................................4
Section 5.3. Disclosure.............................................................................4
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.......................5
Section 5.5. Financial Statements...................................................................5
Section 5.6. Compliance with Laws, Other Instruments, Etc...........................................6
Section 5.7. Governmental Authorizations, Etc.......................................................6
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders..............................6
Section 5.9. Taxes..................................................................................6
Section 5.10. Title to Property; Leases..............................................................7
Section 5.11. Licenses, Permits, Etc.................................................................7
Section 5.12. Compliance with ERISA..................................................................7
Section 5.13. Private Offering by the Company........................................................8
Section 5.14. Use of Proceeds; Margin Regulations....................................................8
Section 5.15. Existing Indebtedness; Future Liens....................................................9
Section 5.16. Foreign Assets Control Regulations, etc................................................9
Section 5.17. Status under Certain Statutes..........................................................9
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Section 5.18. Environmental Matters.................................................................9
Section 5.19. Solvency..............................................................................10
Section 5.20. Pari Passu Obligations................................................................10
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.....................................................11
Section 6.1. Purchase for Investment...............................................................11
Section 6.2. Source of Funds.......................................................................11
Section 6.3. Accredited Investor...................................................................12
SECTION 7. INFORMATION AS TO COMPANY.............................................................12
Section 7.1. Financial and Business Information....................................................12
Section 7.2. Officer's Certificate.................................................................15
Section 7.3. Inspection............................................................................15
SECTION 8. PREPAYMENT OF THE NOTES...............................................................16
Section 8.1. Required Prepayments..................................................................16
Section 8.2. Optional Prepayments with Make-Whole Amount...........................................16
Section 8.3. Prepayment of Notes Upon Change of Control............................................16
Section 8.4. Allocation of Partial Prepayments.....................................................17
Section 8.5. Maturity; Surrender, Etc..............................................................17
Section 8.6. Purchase of Notes.....................................................................17
Section 8.7. Make-Whole Amount.....................................................................17
SECTION 9. AFFIRMATIVE COVENANTS.................................................................19
Section 9.1. Compliance with Law...................................................................19
Section 9.2. Insurance.............................................................................19
Section 9.3. Maintenance of Properties.............................................................19
Section 9.4. Payment of Taxes and Claims...........................................................19
Section 9.5. Corporate Existence, Etc..............................................................20
Section 9.6. Additional Subsidiaries...............................................................20
Section 9.7. Pari Passu Ranking....................................................................20
SECTION 10. NEGATIVE COVENANTS....................................................................20
Section 10.1. Transactions with Affiliates..........................................................20
Section 10.2. Consolidated Net Worth................................................................21
Section 10.3. Consolidated Total Debt Coverage......................................................21
Section 10.4. Fixed Charge Coverage.................................................................21
Section 10.5. Permitted Investments.................................................................21
Section 10.6. Priority Debt.........................................................................21
Section 10.7. Subsidiary Debt.......................................................................21
Section 10.8. Liens.................................................................................22
Section 10.9. Merger, Consolidation, etc............................................................23
Section 10.10. Sale of Assets........................................................................24
Section 10.11. Nature of Business....................................................................24
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SECTION 11. EVENTS OF DEFAULT.....................................................................24
SECTION 12. REMEDIES ON DEFAULT, ETC..............................................................27
Section 12.1. Acceleration..........................................................................27
Section 12.2. Other Remedies........................................................................27
Section 12.3. Rescission............................................................................28
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.....................................28
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................28
Section 13.1. Registration of Notes.................................................................28
Section 13.2. Transfer and Exchange of Notes........................................................28
Section 13.3. Replacement of Notes..................................................................29
SECTION 14. PAYMENTS ON NOTES.....................................................................30
Section 14.1. Place of Payment......................................................................30
Section 14.2. Home Office Payment...................................................................30
SECTION 15. EXPENSES, ETC.........................................................................30
Section 15.1. Transaction Expenses..................................................................30
Section 15.2. Survival..............................................................................31
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................31
SECTION 17. AMENDMENT AND WAIVER..................................................................31
Section 17.1. Requirements..........................................................................31
Section 17.2. Solicitation of Holders of Notes......................................................31
Section 17.3. Binding Effect, Etc...................................................................32
Section 17.4. Notes Held by Company, Etc............................................................32
SECTION 18. NOTICES...............................................................................32
SECTION 19. REPRODUCTION OF DOCUMENTS.............................................................33
SECTION 20. CONFIDENTIAL INFORMATION..............................................................33
SECTION 21. SUBSTITUTION OF PURCHASER.............................................................34
SECTION 22. MISCELLANEOUS.........................................................................34
Section 22.1. Successors and Assigns................................................................34
Section 22.2. Payments Due on Non-Business Days.....................................................34
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Section 22.3. Severability..........................................................................35
Section 22.4. Construction..........................................................................35
Section 22.5. Counterparts..........................................................................35
Section 22.6. Governing Law.........................................................................35
Signature........................................................................................................36
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SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary
Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness and Liens thereon
SCHEDULE 10.5 -- Investments
EXHIBIT 1 -- Form of 4.66% Senior Guaranteed Note due March 5, 2011
EXHIBIT 2 -- Form of Guaranty Agreement
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company and
the Guarantors
EXHIBIT 4.4(b) -- Form of Opinion of General Counsel for the Company
EXHIBIT 4.4(c) -- Form of Opinion of Special Counsel for the Purchasers
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TECUMSEH PRODUCTS COMPANY
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4.66% Senior Guaranteed Notes due March 5, 2011
Dated as of
March 5, 2003
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
TECUMSEH PRODUCTS COMPANY, a Michigan corporation (the "Company"),
agrees with the Purchasers listed in the attached Schedule A (the "Purchasers")
as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $300,000,000 aggregate
principal amount of its 4.66% Senior Guaranteed Notes due March 5, 2011 (the
"Notes", such term to include any such notes issued in substitution therefor
pursuant to Section 13 of this Agreement). The Notes shall be substantially in
the form set out in Exhibit 1, with such changes therefrom, if any, as may be
approved by each Purchaser and the Company. Certain capitalized terms used in
this Agreement are defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached
to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser's name in Schedule A at the purchase price of
100% of the principal amount thereof. The obligations of each Purchaser
hereunder are several and not joint obligations, and each Purchaser shall have
no obligation and no liability to any Person for the performance or
nonperformance by any other Purchaser hereunder.
The obligations of the Company under this Agreement and the Notes will
be guaranteed pursuant to the Guaranty Agreement.
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SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M. Chicago time, at a closing (the
"Closing") on March 5, 2003. At the Closing the Company will deliver to each
Purchaser the Notes to be purchased by such Purchaser in the form of a single
Note (or such greater number of Notes in denominations of at least $500,000 as
such Purchaser may request) dated the date of the Closing and registered in such
Purchaser's name (or in the name of such Purchaser's nominee), against delivery
by such Purchaser to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of immediately
available funds for the account of the Company to account number 361258074 at
Bank One, Michigan, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA#
▇▇▇▇▇▇▇▇▇. If at the Closing the Company shall fail to tender such Notes to such
Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to any Purchaser's
satisfaction, such Purchaser shall, at such Purchaser's election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
such Purchaser may have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Notes to
be sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement and of the Subsidiary Guarantors in
the Guaranty Agreement shall be correct when made and at the time of the
Closing.
Section 4.2. Performance; No Default. The Company and each Subsidiary
Guarantor shall have performed and complied with all agreements and conditions
contained in this Agreement and the Guaranty Agreement required to be performed
or complied with by each of them prior to or at the Closing, and after giving
effect to the issue and sale of the Notes (and the application of the proceeds
thereof as contemplated by Schedule 5.14), no Default or Event of Default shall
have occurred and be continuing. Neither the Company nor any Subsidiary shall
have entered into any transaction since the date of the Memorandum that would
have been prohibited by Section 10 hereof had such Section applied since such
date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company and each Subsidiary Guarantor
shall have delivered to such Purchaser an Officer's Certificate, dated the date
of the Closing, certifying that the conditions specified in Sections 4.1, 4.2
and 4.9 have been fulfilled.
(b) Company Secretary's Certificate. The Company shall have delivered
to such Purchaser a certificate certifying as to the resolutions attached
thereto and other corporate
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proceedings relating to the authorization, execution and delivery of the Notes
and the Agreements.
(c) Subsidiary Guarantor Secretary's Certificate. Each Subsidiary
Guarantor shall have delivered to such Purchaser a certificate certifying as to
the resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Guaranty Agreement.
Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Miller, Canfield, Paddock and Stone, P.L.C., counsel for
the Company and those Subsidiary Guarantors incorporated under the laws of
Michigan or Delaware, covering the matters set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated hereby as
such Purchaser or such Purchaser's counsel may reasonably request (and the
Company hereby instructs Miller, Canfield, Paddock and Stone, P.L.C. to deliver
such opinion to such Purchaser), (b) from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General
Counsel & Secretary of the Company, covering the matters set forth in Exhibit
4.4(b) and covering such other matters incident to the transactions contemplated
hereby as such Purchaser or such Purchaser's counsel may reasonably request (and
the Company hereby instructs its General Counsel & Secretary to deliver such
opinion to such Purchaser), and (c) from ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, such Purchaser's
special counsel in connection with such transactions, substantially in the form
set forth in Exhibit 4.4(c) and covering such other matters incident to such
transactions as such Purchaser may reasonably request.
Section 4.5. Purchase Permitted by Applicable Law, etc. On the date of
the Closing each purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject any
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing,
the Company shall have consummated the sale of the entire principal amount of
the Notes scheduled to be sold on the date of Closing pursuant to this
Agreement.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of the Purchaser's special counsel referred
to in Section 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing.
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Section 4.8. Guaranty Agreement. The Guaranty Agreement shall be in
form and substance satisfactory to each Purchaser and the Purchasers' special
counsel, shall have been duly executed and delivered by the parties thereto and
shall be in full force and effect and each Purchaser shall have received a true,
correct and complete copy thereof.
Section 4.9. Private Placement Numbers. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
Section 4.10. Changes in Corporate Structure. The Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.
Section 4.11. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and such Purchaser's special counsel, and such
Purchaser and such Purchaser's special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or such Purchaser's special counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Banc One
Capital Markets, Inc., has delivered to each Purchaser a copy of a Private
Placement Memorandum, dated
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January 2003 (including all attachments thereto, the "Memorandum"), relating to
the transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. This Agreement, the Memorandum and the
financial statements listed in Schedule 5.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum,
since December 31, 2001, there has been no change in the financial condition,
operations, business, properties or prospects of the Company or any Subsidiary
except changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. There is no fact known to the
Company that could reasonably be expected to have a Material Adverse Effect that
has not been set forth herein or in the Memorandum.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of
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the respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in the Memorandum under the caption "Tecumseh Products
Company -- Legal Proceedings," there are no actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any Subsidiary in
any court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate
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reserves in accordance with GAAP. The Company knows of no basis for any other
tax or assessment that could reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries, other than the Fasco Subsidiaries, have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1997, and for the Fasco Subsidiaries such
liabilities have been so determined and paid for all fiscal years up to and
including the fiscal year ended December 31, 1996.
Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
Section 5.11. Licenses, Permits, Etc.
(a) The Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise, authorization,
patent, copyright, service ▇▇▇▇, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, service ▇▇▇▇, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
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(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's plan year ended December 31, 2001, on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities and with respect to any single
plan the liability did not exceed the assets by more than $10,000,000. The term
"benefit liabilities" has the meaning specified in section 4001 of ERISA and the
terms "current value" and "present value" have the meanings specified in Section
3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of each Purchaser's representation in Section
6.2 as to the sources of the funds used to pay the purchase price of the Notes
to be purchased by each Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Purchasers and not more than 37 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.
8
Section 5.15. Existing Indebtedness; Future Liens. (a) Schedule 5.15
sets forth a complete and correct list of all outstanding Indebtedness of the
Company and its Subsidiaries as of December 31, 2002, since which date there has
been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Indebtedness of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in default and no waiver
of default is currently in effect, in the payment of any principal or interest
on any Indebtedness of the Company or such Subsidiary and no event or condition
exists with respect to any Indebtedness of the Company or any Subsidiary that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.8.
Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto, and without limiting the foregoing, none of the Company and
its Subsidiaries (i) is or will become a person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order 13224 of September
23, 2001, Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or
(ii) engages or will engage in any dealings or transactions, or be otherwise
associated, with any such person.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, or is subject to
regulation under the Public Utility Holding Company Act of 1935, as amended, the
ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, as disclosed in the Memorandum under the caption "Tecumseh Products
Company -- Legal Proceedings" or such as could not reasonably be expected to
result in a Material Adverse Effect. Except as otherwise disclosed in the
Memorandum under the caption "Tecumseh Products Company -- Legal Proceedings":
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real
9
properties now or formerly owned, leased or operated by any of them or
to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them or has disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in
each case in any manner that could reasonably be expected to result in
a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
Section 5.19. Solvency. The fair value of the business and assets of
each of the Company and each Subsidiary Guarantor exceeds the amount that will
be required to pay its respective liabilities (including, without limitation,
contingent, subordinated, unmatured and unliquidated liabilities on existing
debts, as such liabilities may become absolute and matured), in each case after
giving effect to the transactions contemplated by this Agreement, the Guaranty
Agreement and the Notes (including, without limitation, the use of the proceeds
of the sale of the Notes). Neither the Company nor the Subsidiary Guarantors,
after giving effect to the transactions contemplated by this Agreement, the
Guaranty Agreement and the Notes, will be engaged in any business or
transaction, or about to engage in any business or transaction, for which such
Person has unreasonably small assets or capital (within the meaning of the
Uniform Fraudulent Transfer Act, the Uniform Fraudulent Conveyance Act and
Section 548 of the Federal Bankruptcy Code), and neither the Company nor the
Subsidiary Guarantors has any intent to
(a) hinder, delay or defraud any entity to which any of them
is, or will become, on or after the date of Closing, indebted, or
(b) incur debts that would be beyond any of their ability to
pay as they mature.
Section 5.20. Pari Passu Obligations.
(a) The Notes. The Notes rank equally and ratably with all unsecured
and unsubordinated obligations of the Company generally, but subject to the
right of any Person having secured or preferred rights, whether such rights
arise by contract, statute, law (or the operation thereof) or otherwise.
(b) The Guaranty Agreement. The Guaranty Agreement ranks equally and
ratably with all unsecured and unsubordinated obligations of each of the
Subsidiary Guarantors generally, but subject to the right of any Person having
secured or preferred rights, whether such rights arise by contract, statute, law
(or the operation thereof) or otherwise.
10
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.
Section 6.1. Purchase for Investment. Each Purchaser represents that it
is purchasing the Notes for its own account or for one or more separate accounts
maintained by such Purchaser or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser's or their property shall at all times be within
such Purchaser's or their control. Each Purchaser understands that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by such Purchaser to pay the purchase price of
the Notes to be purchased by such Purchaser hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan, all plans maintained by the
same employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceed ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser has
disclosed to the Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose
11
assets are included in such investment fund have been disclosed to the
Company in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee is relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall deliver on the
date of Closing and on the date of any applicable transfer a certificate, which
shall either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in section 4975(e)(2) of the Internal Revenue
Code of 1986, as amended), with respect to any plan identified pursuant to
paragraphs (b) or (e) above, or (ii) with respect to any plan, identified
pursuant to paragraph (c) above, neither it nor any "affiliate" (as defined in
Section V(c) of the QPAM Exemption) has at such time, and during the immediately
preceding one year, exercised the authority to appoint or terminate said QPAM as
manager of any plan identified in writing pursuant to paragraph (c) above or to
negotiate the terms of said QPAM's management agreement on behalf of any such
identified plan. As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in section 3 of ERISA.
Section 6.3 Accredited Investor. Each Purchaser represents that such
Purchaser and each other account for which it is purchasing Notes, if any, is an
"accredited investor" as defined in Regulation D of the Securities Act.
SECTION 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
12
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days after the end of
each fiscal year of the Company, duplicate copies of:
(i) a consolidated balance sheet of the Company and
its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in
all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have
been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, and
provided that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year (together
with the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's certificate
described in clause (B) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public
concerning developments that are Material;
13
(d) Notice of Default or Event of Default -- promptly, and in
any event within five Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default or
that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice
or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(g) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
14
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.2 through
Section 10.10 hereof, inclusive, during the quarterly or annual period
covered by the statements then being furnished (including with respect
to each such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
15
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. On March 5, 2007 and on each March 5
thereafter to and including March 5, 2010 the Company will prepay $60,000,000
principal amount (or such lesser principal amount as shall then be outstanding)
of the Notes at par and without payment of the Make-Whole Amount or any premium,
provided that upon any partial prepayment of the Notes pursuant to Section 8.2
or 8.3 or purchase of the Notes permitted by Section 8.6 the principal amount of
each required prepayment of the Notes becoming due under this Section 8.1 on and
after the date of such prepayment or purchase shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such prepayment or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
Section 8.3. Prepayment of Notes Upon Change of Control.
(a) Condition to the Company's Action. Within ten (10) days after a
Change of Control, the Company shall have given to each holder of Notes written
notice containing and constituting an offer to prepay Notes as described in
subparagraph (b) of this Section 8.3, accompanied by the certificate described
in subparagraph (e) of this Section 8.3.
(b) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraph (a) of this Section 8.3 shall be an offer to prepay, in accordance
with and subject to this Section 8.3, all, but not less than all, the Notes held
by each holder (in this case only, "holder" in respect of any Note registered in
the name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) on the date specified in such offer (the "Proposed Prepayment
Date") that is not less than 30 days and not more than 60 days after the date of
such offer (if the Proposed Prepayment Date shall not be specified in such
offer, the Proposed Prepayment Date shall be the first Business Day which is at
least 45 days after the date of such offer).
16
(c) Acceptance; Rejection. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such acceptance
to be delivered to the Company at least 10 days prior to the Proposed Prepayment
Date. A failure by a holder of Notes to respond to an offer to prepay made
pursuant to this Section 8.3 shall be deemed to constitute a rejection of such
offer by such holder.
(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment. The prepayment
shall be made on the Proposed Prepayment Date.
(e) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.3; (iii) the principal amount of each Note offered to be prepaid; (iv)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the conditions of this Section 8.3 have
been fulfilled; and (vi) in reasonable detail, the nature and date or proposed
date of the Change of Control.
Section 8.4. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes (other than any partial prepayment under Section
8.3), the principal amount of the Notes to be prepaid shall be allocated among
all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof.
Section 8.5. Maturity; Surrender, Etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less
17
than zero. For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, .50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Screen PX1" on the
Bloomberg Financial Markets Services Screen (or such other display as
may replace Screen PX1 on the Bloomberg Financial Markets Services
Screen) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied
yield will be determined, if necessary, by (a) converting U.S. Treasury
▇▇▇▇ quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such
18
Called Principal were made prior to its scheduled due date, provided
that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the
next succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and required to be
paid on such Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Subsidiaries to, maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
19
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.9 and 10.10, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Subsidiaries and all
rights and franchises of the Company and its Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.6. Additional Subsidiaries. The Company hereby covenants and
agrees that, if any Domestic Subsidiary which is not a Subsidiary Guarantor (i)
guarantees the Company's obligations under the Credit Agreement, (ii) becomes an
obligor under the Credit Agreement or (iii) directly or indirectly guarantees or
becomes obligated under any Indebtedness or other obligations of the Company, it
will cause such Domestic Subsidiary to concurrently enter into a joinder
agreement substantially in the form of the joinder agreement set forth as Annex
1 to the Guaranty Agreement and acceptable in form and substance to the Required
Holders for the benefit of the holders of the Notes, together with a completed
closing certificate substantially in the form of Annex 2 to the Guaranty
Agreement and a favorable legal opinion of counsel as to the due authorization,
execution, delivery, legality, validity and enforceability thereof, and that
such guaranty agreement does not violate or conflict with any law or governing
document relating to the Company or such Domestic Subsidiary.
Section 9.7. Pari Passu Ranking. The Company's obligations under the
Notes and this Agreement will at all times rank at least pari passu, without
preference or priority, with all unsecured and unsubordinated Indebtedness of
the Company generally, but subject to the right of any Person having secured or
preferred rights, whether such rights arise by contract, statute, law (or the
operation thereof) or otherwise.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Transactions with Affiliates. The Company will not and
will not permit any Subsidiary to enter into directly or indirectly any
transaction (including without limitation the purchase, lease, sale or exchange
of properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and
20
upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.
Section 10.2. Consolidated Net Worth. The Company will not, at any time,
permit Consolidated Net Worth to be less than the sum of (a) $750,000,000, plus
(b) an aggregate amount equal to 50% of Consolidated Net Earnings (but, in each
case, only if a positive number) for each completed fiscal quarter beginning
with the fiscal quarter ending March 31, 2003.
Section 10.3. Consolidated Total Debt Coverage. The Company will not
permit, as at the end of each fiscal quarter, the ratio of Consolidated Total
Debt to Consolidated Operating Cash Flow to exceed 3.00 to 1.00 for the
immediately preceding four fiscal quarter period, taken as a single accounting
period ending on the date of calculation.
Section 10.4. Fixed Charge Coverage. The Company will not permit, as at
the end of each fiscal quarter, the ratio of Consolidated Earnings Available for
Fixed Charges to Consolidated Fixed Charges to be less than 2.00 to 1.00 for the
immediately preceding four fiscal quarter period, taken as a single accounting
period ending on the date of calculation.
Section 10.5. Permitted Investments. The Company will not, and will not
permit any Subsidiary to, make, authorize or have any Investment other than
Permitted Investments.
Section 10.6. Priority Debt. The Company will not, at any time, permit
Priority Debt to exceed 20% of Consolidated Net Worth determined as of the end
of the most recently ended fiscal quarter of the Company.
Section 10.7. Subsidiary Debt. In addition to and not in limitation of
any other applicable restrictions herein, including Sections 10.3 and 10.6, the
Company will not, at any time, permit any Subsidiary to, directly or indirectly,
create, incur, assume, guarantee, have outstanding, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness other
than:
(a) Indebtedness of a Subsidiary outstanding on the date of
Closing and any extension, renewal or refunding thereof, provided that
the principal amount thereof is not increased;
(b) Indebtedness of a Subsidiary owed to the Company or a
Wholly-Owned Subsidiary;
(c) Indebtedness of one or more Special Purpose Subsidiaries
incurred in connection with the Permitted Receivables Securitization
Program, which Indebtedness shall not at any time exceed $100,000,000
aggregate principal amount aggregating all such Special Purpose
Subsidiaries; and
(d) Indebtedness of a Subsidiary in addition to that
otherwise permitted by the foregoing provisions provided, that on the
date such Subsidiary incurs or otherwise becomes liable with respect to
any such Indebtedness, and immediately after giving effect
21
to the incurrence thereof, no Default or Event of Default exists
hereunder, including, without limitation, under Section 10.6.
Section 10.8. Liens. The Company will not, and will not permit any
Subsidiary to, create, assume, incur or suffer to be created, assumed or
incurred or to exist any Lien in respect of any Property, whether now owned or
hereafter acquired, except:
(a) Liens for taxes or assessments or other governmental
charges or levies, provided that payment thereof is not required by
Section 9.1 or 9.4;
(b) Liens created by or resulting from any litigation or
legal proceeding which is currently being contested in good faith by
appropriate proceedings, provided that payment thereof is not required
by Section 9.1 or 9.4;
(c) other Liens incidental to the normal conduct of the
business of the Company and its Subsidiaries or the ownership of their
property which are not incurred in connection with the incurrence of
Indebtedness and which do not, in the aggregate, materially impair the
use of such property in the operation of the business of the Company
and its Subsidiaries taken as a whole or the value of such property for
the purposes of such business;
(d) minor survey exceptions or minor encumbrances which are
necessary for the conduct of the activities of the Company and its
Subsidiaries or which customarily exist on properties of corporations
engaged in similar activities, which do not materially impair their use
in operations of the business of the Company and its Subsidiaries;
(e) existing Liens at the time of the issuance of the Notes
as described on Schedule 5.15;
(f) the extension, renewal or replacement of any Lien
permitted by the foregoing paragraph (e) in respect of the same
property subject thereto or the extension, renewal of such replacement
liens (without increase of principal amount of the Indebtedness
secured);
(g) (i) any Lien in property or in rights relating thereto to
secure any rights granted with respect to such property in connection
with the provision of all or a part of the purchase price or cost of
the construction of such property created contemporaneously with, or
within 180 days after, such acquisition or the completion of such
construction, or
(ii) any Lien in property existing in such property
at the time of acquisition thereof, whether or not the
Indebtedness secured thereby is assumed by the Company or such
Subsidiary, or
(iii) any Lien existing in the property of a
corporation at the time such corporation is merged into or
consolidated with the Company or a Subsidiary or at the time
of a sale, lease or other disposition of the properties of a
corporation or
22
firm as an entirety or substantially as an entirety to the
Company or a Subsidiary, provided, however, that all of such
Liens described in this Section 10.8(g) shall not exceed, in
the aggregate, 100% of the fair market value on the related
property;
(h) Liens, securing obligations of a Subsidiary to the
Company or a Wholly-Owned Subsidiary;
(i) Liens on assets of Special Purpose Subsidiaries securing
Indebtedness of such Special Purpose Subsidiaries pursuant to the
Permitted Receivables Securitization Program; and
(j) if and so long as no Default or Event of Default exists
hereunder, including, without limitation under Section 10.6, Liens
securing Indebtedness of the Company or any Subsidiary in addition to
those described in clauses (a) through (i) above.
Section 10.9. Merger, Consolidation, etc. The Company will not, and will
not permit any Subsidiary to, consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person (except that any
Subsidiary may merge with or into, or convey, transfer or lease substantially
all of its assets to, the Company or any Wholly-Owned Subsidiary if (1) in any
such merger or consolidation involving the Company, the Company is the survivor
and (2) immediately after giving effect to any such merger, consolidation or
conveyance, transfer or lease, no Default or Event of Default would exist)
provided, however,
(a) the Company may consolidate with or merge with another
corporation or convey, transfer or lease substantially all of its
assets in a single transaction or series of transactions to another
Person if the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, transfer or
lease substantially all of the assets of such Company as an entirety,
as the case may be, shall be a solvent corporation organized and
existing under the laws of the United States or any State thereof
(including the District of Columbia), and, if the Company is not such
corporation, (i) such corporation shall have executed and delivered to
each holder of any Notes its assumption of the due and punctual
performance and observance of each covenant and condition of this
Agreement and the Notes and (ii) shall have caused to be delivered to
each holder of any Notes an opinion of nationally recognized
independent counsel, or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements
or instruments effecting such assumption are enforceable in accordance
with their terms and comply with the terms hereof;
(b) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing and
the Company could incur at least $1.00 of Indebtedness under Section
10.3 and 10.4 assuming such transaction occurred as of the end of the
immediately preceding fiscal quarter.
23
No such conveyance, transfer or lease of substantially all of the assets of the
Company or such Subsidiary shall have the effect of releasing the Company or
such Subsidiary or any successor corporation that shall theretofore have become
such in the manner prescribed in this Section 10.9 from its liability under any
Financing Documents to which it is a party.
Section 10.10. Sale of Assets. Except as permitted under Section 10.9,
the Company will not, and will not permit any Subsidiary to, make any Asset
Disposition unless:
(a) in the good faith opinion of the Company or Subsidiary
making the Asset Disposition, the Asset Disposition is in exchange for
consideration having a fair market value at least equal to that of the
property exchanged;
(b) immediately after giving effect to the Asset Disposition,
no Default or Event of Default would exist;
(c) immediately after giving effect to such Asset
Disposition, the Company could incur at least $1.00 of additional
Indebtedness pursuant to Section 10.3 and Section 10.4 assuming such
Asset Disposition occurred as of the end of the immediately preceding
fiscal quarter; and
(d) the sum of (i) the Disposition Value of the property
subject to such Asset Disposition, plus (ii) the aggregate Disposition
Value for all other property that was the subject of an Asset
Disposition during the period of 365 days immediately preceding such
Asset Disposition would not exceed 15% of Consolidated Total Assets
determined as of the end of the most recently ended calendar month
preceding such Asset Disposition.
To the extent that the Net Sales Amount consisting of cash for any Transfer to a
Person other than the Company or a Subsidiary is applied to a Debt Prepayment
Application or applied or committed to be applied to a Property Reinvestment
Application within one year after such Transfer, then such Transfer (or, if less
than all such Net Sales Amount is applied as contemplated hereinabove, the pro
rata percentage thereof which corresponds to the Net Sales Amount so applied),
only for the purpose of determining compliance with subsection (d) of this
Section 10.10 as of any date, shall be deemed not to be an Asset Disposition.
Section 10.11. Nature of Business. The Company will not, and will not
permit any Subsidiary to, engage to any substantial extent in any business other
than the businesses in which the Company and its Subsidiaries are engaged on the
date of this Agreement as described in the Memorandum and businesses reasonably
related thereto or in furtherance thereof.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
24
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same becomes due
and payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Sections 10.2 through 10.10; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Company or any Subsidiary Guarantor or by any officer of
the Company or any Subsidiary Guarantor in this Agreement or the
Guaranty Agreement or in any writing furnished in connection with the
transactions contemplated hereby or thereby proves to have been false
or incorrect in any material respect on the date as of which made; or
(f) (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at
least $15,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Subsidiary is in default in the
performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least
$15,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such
default or condition such Indebtedness has become, or has been
declared, due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), the Company or any Subsidiary
has become obligated to purchase or repay Indebtedness before its
regular maturity or before its regularly scheduled dates of payment in
an aggregate outstanding principal amount of at least $15,000,000; or
(g) the Company or any Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they
become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
25
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any of its Subsidiaries, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief
or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Company or any of its
Subsidiaries, or any such petition shall be filed against the Company
or any of its Subsidiaries and such petition shall not be dismissed
within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $15,000,000 are rendered against one or more
of the Company and its Subsidiaries (net of insurance proceeds
whereunder a solvent insurer with an investment grade long term bond
rating has acknowledged in writing its obligation to satisfy such
judgment) and which judgments are not, within 60 days after entry
thereof, bonded, discharged or stayed pending appeal; or
(j) default shall occur in the observance or performance of
any provision of the Guaranty Agreement and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (j) of Section 11); or
(k) the Guaranty Agreement shall cease to be in full force
and effect for any reason whatsoever, including, without limitation, a
determination by any governmental body or court that such Guaranty
Agreement is invalid, void or unenforceable or any party thereto shall
contest or deny in writing the validity or enforceability of any of its
obligations under any such Guaranty Agreement; or
(l) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under Section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted proceedings
under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $15,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
26
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder; and
any such event or events described in clauses (i) through (vi) above,
either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect.
As used in Section 11(l), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (g) or described in clause (vi)
of paragraph (g) by virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder of Notes at the time
outstanding affected by such Event of Default may at any time, at its option, by
notice or notices to the Company, declare all the Notes held by it to be
immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (i) all accrued and
unpaid interest thereon and (ii) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
27
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the Required
Holders, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, as applicable (b) all Events of
Default and Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have been waived
pursuant to Section 17, and (c) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to the Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent Event
of Default or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. (a) Subject to Section
13.2(b), upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
its attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the
28
Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$500,000, provided that if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $500,000. Any transferee of a Note, or purchaser of a participation
therein, shall, by its acceptance of such Note be deemed to make the same
representations to the Company regarding the Note or participation as the
Purchasers have made pursuant to Section 6.2, provided that such entity may (in
reliance upon information provided by the Company, which shall not be
unreasonably withheld) make a representation to the effect that the purchase by
such entity of any Note will not constitute a non-exempt prohibited transaction
under section 406(a) of ERISA.
(b) Each Purchaser and each other holder of any Note acknowledges that
the Notes have not been registered under the Securities Act of 1933 and that the
Company has no intention or obligation to so register the Notes. Each Purchaser
and each other holder agrees that it will not transfer any Note or any interest
therein unless such Note is registered under the Securities Act of 1933, there
is an applicable exemption from the requirement for such registration or such
Note is not subject to such registration. The Company may refuse to register any
transfer or attempted transfer that violates this subsection (b).
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $10,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
29
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Chicago, Illinois at the principal office of Bank
One, NA in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or any
Purchaser's nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose
for such Purchaser in Schedule A, or by such other method or at such other
address as such Purchaser shall have from time to time specified to the Company
in writing for such purpose, without the presentation or surrender of such Note
or the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. The Company will afford the benefits of
this Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by such Purchaser under this Agreement and that
has made the same agreement relating to such Note as such Purchaser has made in
this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by each Purchaser or holder of a Note
in connection with such transactions (being only the fees of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
in connection with the original issuance of the Notes) and in connection with
any amendments, waivers or consents under or in respect of this Agreement, the
Guaranty Agreement or the Notes (whether or not such amendment, waiver or
consent becomes effective), including, without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement, the Guaranty Agreement or
the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Guaranty
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby, by the Guaranty Agreement and by the Notes. The Company will pay, and
will save each Purchaser and each other holder of a Note harmless from, all
claims in respect of any fees, costs or expenses, if any, of brokers and finders
(other than those retained by any Purchaser or holder) incurred with respect to
the issuance and sale of the Notes or the transactions contemplated hereby.
30
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, the Guaranty Agreement
or the Notes, and the termination of this Agreement and the Guaranty Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement, the Guaranty Agreement and the Notes,
the purchase or transfer by any Purchaser of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of such Purchaser or any other holder of a Note. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant to this Agreement shall be deemed representations and
warranties of the Company under this Agreement. Subject to the preceding
sentence, this Agreement, the Guaranty Agreement and the Notes embody the entire
agreement and understanding between the Purchasers and the Company and supersede
all prior agreements and understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to any Purchaser
unless consented to by such Purchaser in writing, and (b) no such amendment or
waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time of
payment or method of computation of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof, the Guaranty Agreement or of the Notes. The Company will deliver
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.
31
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof, the
Guaranty Agreement or of the Notes unless such remuneration is concurrently
paid, or security is concurrently granted, on the same terms, ratably to each
holder of Notes then outstanding whether or not such holder consented to such
waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to a Purchaser or such Purchaser's nominee, to such
Purchaser or such Purchaser's nominee at the address specified for such
communications in Schedule A, or at such other address as such
Purchaser or such Purchaser's nominee shall have specified to the
Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Chief Financial
Officer, or at such other address as the Company shall have specified
to the holder of each Note in writing.
32
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to each Purchaser, may be
reproduced by each Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any holder of any Note by or on behalf of the Company
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
such holder as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such holder prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such holder or
any Person acting on such holder's behalf, (c) otherwise becomes known to such
holder other than through disclosure by the Company or any Subsidiary or (d)
constitutes financial statements delivered to such holder under Section 7.1 that
are otherwise publicly available. Each holder of a Note will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such holder in good faith to protect confidential information of
third parties delivered to such holder, provided that such holder may deliver or
disclose Confidential Information to (i) such holder's directors, trustees,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such holder's Notes), (ii) such holder's financial advisors and
other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (iii)
any other holder of any Note, (iv) any Institutional Investor to which such
holder sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which such holder offers to purchase any security of
the Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (vi)
any federal or state regulatory authority having jurisdiction over such holder,
(vii) the National Association of
33
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such holder's
investment portfolio, or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to such holder, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
such holder is a party or (z) if an Event of Default has occurred and is
continuing, to the extent such holder may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under such holder's Notes and this
Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of this Section 20
as though it were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any holder of a Note of information
required to be delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this Agreement or its
nominee or any other holder that shall have previously delivered such a
confirmation), such holder will confirm in writing that it is bound by the
provisions of this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, wherever
the word "Purchaser" is used in this Agreement (other than in this Section 21),
such word shall be deemed to refer to such Affiliate in lieu of such Purchaser.
In the event that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to such Purchaser all of the Notes then held
by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "Purchaser" is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to such Purchaser, and such Purchaser shall have all the rights of
an original holder of the Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
34
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by fewer than all, but together signed by
all, of the parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of Michigan excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
* * * * *
35
The execution hereof by the Purchasers shall constitute a contract
between the Company and the Purchasers for the uses and purposes hereinabove set
forth.
Very truly yours,
TECUMSEH PRODUCTS COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Treasurer and
Chief Financial Officer
36
Accepted as of March 5, 2003
NEW YORK LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Investment Vice President
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
BY New York Life Investment Management
LLC, Its Investment Manager
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
INSITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT
BY New York Life Investment Insurance Company
Its Investment Manager
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
STATE FARM LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Investment Officer
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary
37
STATE FARM LIFE AND ACCIDENT ASSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Investment Officer
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
BY GE Asset Management Incorporated, its
Investment Advisor
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Private Investments
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
BY GE Asset Management Incorporated, its
Investment Advisor
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Private Investments
EMPLOYERS REINSURANCE CORPORATION
BY GE Asset Management Incorporated, its
Investment Advisor
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Private Investments
38
FIRST COLONY LIFE INSURANCE COMPANY
BY GE Asset Management Incorporated, its
Investment Advisor
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Private Investments
GE LIFE AND ANNUITY ASSURANCE COMPANY
BY GE Asset Management Incorporated, its
Investment Advisor
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Private Investments
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President - Investments
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager - Investments
LONDON LIFE INSURANCE COMPANY
By /s/ ▇.▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Executive Vice-President
Chief Investment Officer
By /s/ ▇. ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
39
THE GREAT-WEST LIFE ASSURANCE COMPANY
By /s/ ▇.▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Executive Vice-President
Chief Investment Officer
By /s/ ▇. ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
Title: Vice-President Bond Investments
LONDON LIFE AND CASUALTY REINSURANCE CORPORATION
BY: Orchard Capital Management, as
Investment Adviser
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager and Vice President
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager and Vice President
PACIFIC LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. PATCH
------------------------------------------------
Name: ▇▇▇▇▇ ▇. Patch
Title: Assistant Vice President
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Secretary
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Title: Vice President
40
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
JEFFERSON PILOT LIFEAMERICA INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Title: Vice President
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
BY: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company, Inc., as
Investment Adviser
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
C.M. LIFE INSURANCE COMPANY
BY: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company, Inc., as
Investment Sub-Adviser
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
MASSMUTUAL ASIA LIMITED
BY: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company, Inc., as
Investment Adviser
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
41
AMERICAN HERITAGE LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
ALLSTATE LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
NATIONWIDE LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President Fixed Income Securities
42
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President Fixed Income Securities
NATIONWIDE MUTUAL INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President Fixed Income Securities
TRANSAMERICA LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
HARTFORD LIFE INSURANCE COMPANY
BY: Hartford Investment Services, Inc.
As Agent and Attorney-in-Fact
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
43
HARTFORD UNDERWRITERS INSURANCE COMPANY
BY: Hartford Investment Services, Inc.
As Agent and Attorney-in-Fact
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Fixed Income Securities
PIONEER MUTUAL LIFE INSURANCE COMPANY
BY: American United Life Insurance Company,
Its Agent
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Fixed Income Securities
THE STATE LIFE INSURANCE COMPANY
BY: American United Life Insurance Company,
Its Agent
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Fixed Income Securities
44
AMERITAS LIFE INSURANCE CORP.
BY: Ameritas Investment Advisors, Inc., as
Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President-Fixed Income Securities
ACACIA NATIONAL LIFE INSURANCE COMPANY
BY: Ameritas Investment Advisors, Inc., as
Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President-Fixed Income Securities
AMERITAS VARIABLE LIFE INSURANCE COMPANY
BY: Ameritas Investment Advisors, Inc., as
Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President-Fixed Income Securities
45
Extract of Schedule A
INFORMATION RELATING TO PURCHASERS
PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
State Farm Life Insurance Company $38,000,000
New York Life Insurance Company $28,000,000
Pacific Life Insurance Company $25,000,000
New York Life Insurance and Annuity Corporation $16,500,000
General Electric Capital Assurance Company $15,000,000
Great-West Life & Annuity Insurance Company $15,000,000
Allstate Life Insurance Company $12,000,000
London Life Insurance Company $10,000,000
Jefferson-Pilot Life Insurance Company $9,000,000
Nationwide Life Insurance Company $9,000,000
American United Life Insurance Company $7,500,000
Nationwide Life and Annuity Insurance Company $7,500,000
Transamerica Life Insurance Company $7,500,000
Jefferson-Pilot Financial Insurance Company $7,000,000
Massachusetts Mutual Life Insurance Company $6,100,000
Allstate Life Insurance Company of New York $5,000,000
Employers Reinsurance Corporation $5,000,000
First Colony Life Insurance Company $5,000,000
GE Capital Life Assurance Company of New York $5,000,000
GE Life and Annuity Assurance Company (5 purchasers) $5,000,000
London Life and Casualty Reinsurance Corporation $5,000,000
The Great-West Life Assurance Company (2 purchasers) $5,000,000
Massachusetts Mutual Life Insurance Company $4,400,000
Massachusetts Mutual Life Insurance Company $4,200,000
Hartford Life Insurance Company $4,000,000
Hartford Life Insurance Company $4,000,000
Hartford Underwriters Insurance Company (2 purchasers) $4,000,000
Transamerica Occidental Life Insurance Company $3,750,000
SCHEDULE A
(to Note Purchase Agreement)
Transamerica Life Insurance and Annuity Company (3 purchasers) $3,750,000
Nationwide Mutual Insurance Company (3 purchasers) $3,500,000
C.M. Life Insurance Company $3,200,000
American Heritage Life Insurance Company (5 purchasers) $3,000,000
Ameritas Life Insurance Corp. $2,000,000
Jefferson-Pilot LifeAmerica Insurance Company $2,000,000
Jefferson-Pilot LifeAmerica Insurance Company (3 purchasers) $2,000,000
State Farm Life and Accident Assurance Company $2,000,000
Massachusetts Mutual Life Insurance Company $1,600,000
Acacia National Life Insurance Company $1,000,000
Ameritas Variable Life Insurance Company (3 purchasers) $1,000,000
Pioneer Mutual Life Insurance Company $750,000
The State Life Insurance Company (3 purchasers) $750,000
MassMutual Asia Limited (3 purchasers) $500,000
New York Life Insurance and Annuity Corporation (separate $500,000
account) (3 purchasers)
A-2
DEFINED TERMS
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the express
requirements of this Agreement.
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Subsidiary to the Company or
a Subsidiary; and
(ii) Transfer from the Company to a Subsidiary,
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any Subsidiary or that
is obsolete or (iii) receivables owned by the Company or a Subsidiary
being transferred to a Special Purpose Subsidiary for fair market value
pursuant to the Permitted Receivables Securitization Program.
"Business Day" means (a) for the purposes of Section 8.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any
SCHEDULE B
(to Note Purchase Agreement)
day other than a Saturday, a Sunday or a day on which commercial banks in
Chicago, Illinois or Detroit, Michigan are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Change of Control" means if any Person or Persons acting in concert
(other than Permitted Shareholders) together with Affiliates thereof, shall in
the aggregate, directly or indirectly, control or own (beneficially or
otherwise) more than 50% (by number of shares) of the issued and outstanding
voting stock of the Company; and "Permitted Shareholders" means (i) ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, (ii) any Person who is the spouse of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a lineal
descendant of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or a spouse of a lineal descendant of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, (iii) the estate, executor, administrator or any legal guardian of the
Persons referred to in clauses (i) and (ii) above, (iv) the ▇▇▇▇▇▇▇ Foundation,
(v) any company a majority of the Voting Shares of which is owned or controlled
by any Persons referred to in any of clause (i), (ii), (iii), (iv) or (vi)
hereof, and (vi) any trust of which any Persons referred to above are the
specified or primary beneficiaries (or the equivalent under the applicable trust
instrument).
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Tecumseh Products Company, a Michigan corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Earnings Available for Fixed Charges" means, with respect
to any period, Consolidated Net Earnings for such period plus (to the extent
deducted to calculate Consolidated Net Earnings):
(a) all provisions for federal, state and local income taxes;
(b) depreciation and amortization, all in accordance with
GAAP;
(c) Consolidated Fixed Charges for such period;
(d) restructuring charges for plant closings (including
charges for impairment of value of equipment and severance costs) taken
after September 30, 2002 but on or before December 31, 2003, but not
any amount of such restructuring charges that exceeds $40,000,000 in
the aggregate; and
(e) non-cash charges related specifically to any goodwill
impairment charge required under FASB 142, but not any amount of such
charges that exceeds
B-2
(i) $25,000,000 for any four consecutive fiscal quarters or (ii)
$50,000,000 in the aggregate;
provided that, in the event any Person (or the assets thereof) is acquired by
the Company or any Subsidiary (whether by merger, consolidation, asset or stock
acquisition or otherwise) at any time during the period of calculation, such
acquisition shall be deemed to have been made on the first day of such
calculation period.
"Consolidated Fixed Charges" means, with respect to any period, the sum
of (i) Interest Expense for such period plus (ii) Lease Rentals for such period,
determined on a consolidated basis for the Company and its Subsidiaries
(excluding Special Purpose Subsidiaries), provided that, in the event any Person
(or the assets thereof) is acquired by the Company or any Subsidiary (whether by
merger, consolidation, asset or stock acquisition or otherwise) at any time
during the period of calculation, such acquisition shall be deemed to have been
made on the first day of such calculation period.
"Consolidated Net Earnings" means the net earnings (or loss) of the
Company and its Subsidiaries (excluding Special Purpose Subsidiaries) for such
period (taken as a cumulative whole), as determined in accordance with GAAP,
excluding (to the extent deducted to calculate Consolidated Net Earnings):
(i) extraordinary gain and losses; and
(ii) any equity interest of the Company on the unremitted
earnings of any Person that is not a Subsidiary.
"Consolidated Net Worth" means the value of stockholders' equity of the
Company and its Subsidiaries (excluding Special Purpose Subsidiaries) determined
on a consolidated basis in accordance with GAAP.
"Consolidated Operating Cash Flow" means Consolidated Net Earnings for
the previous four quarters plus (to the extent deducted to calculate
Consolidated Net Earnings):
(a) provisions for federal, state and local income taxes;
(b) Interest Expense;
(c) depreciation and amortization, all in accordance with
GAAP;
(d) restructuring charges for plant closings (including
charges for impairment of value of equipment and severance costs) taken
after September 30, 2002 but on or before December 31, 2003, but not
any amount of such restructuring charges that exceeds $40,000,000 in
the aggregate; and
(e) non-cash charges related specifically to any goodwill
impairment charge required under FASB 142, but not any amount of such
charges that exceeds
B-3
(a) $25,000,000 for any four consecutive fiscal quarters or (b)
$50,000,000 in the aggregate;
provided that, in the event any Person (or the assets thereof) is acquired by
the Company or any Subsidiary (whether by merger, consolidation, asset or stock
acquisition or otherwise) at any time during the period of calculation, such
acquisition shall be deemed to have been made on the first day of such
calculation period.
"Consolidated Total Assets" means the total assets of the Company and
its Subsidiaries (excluding Special Purpose Subsidiaries), determined on a
consolidated basis in accordance with GAAP.
"Consolidated Total Debt" means, without duplication, all Indebtedness
of the Company and its Subsidiaries (excluding Special Purpose Subsidiaries),
including current maturities of such obligations, determined on a consolidated
basis in accordance with GAAP.
"Credit Agreement" means that certain Credit Agreement, as may be
amended, modified, supplemented, refinanced or replaced from time to time, dated
as of December 30, 2002, among the Company, the lenders listed on Schedule 1
thereto, and Bank One, NA (Main Office Chicago), as Agent.
"Debt Prepayment Application" means, with respect to any Transfer of
property, the application by the Company or any Subsidiary (excluding Special
Purpose Subsidiaries) of cash in an amount equal to the Net Sales Amount (or
portion thereof) with respect to such Transfer to pay Senior Debt of the Company
or any Subsidiary, (excluding Special Purpose Subsidiaries) (other than Senior
Debt in respect of any revolving credit or similar credit facility providing the
Company or any Subsidiary with the right to obtain loans or other extensions of
credit from time to time, except to the extent that in connection with such
payment of Senior Debt the availability of credit under such credit facility is
permanently reduced by an amount not less than the amount of such proceeds
applied to the payment of such Senior Debt), provided that in the course of
making such application the Company or such Subsidiary shall offer to prepay
each outstanding Note in accordance with Section 8.2 hereof, in a principal
amount which, when added to the Make-Whole Amount applicable thereto, equals the
Ratable Portion for such Note (which offer shall be in writing and shall offer
to prepay the Ratable Portion of the Notes on a date which is not less than 30
days after the date of the notice of offer). If any holder of a Note fails to
accept in writing such offer of prepayment within 15 days of receipt of the
notice of offer, then, for purposes of the preceding sentence only, the Company
or such Subsidiary nevertheless will be deemed to have paid Senior Debt in an
amount equal to the Ratable Portion for such Note. "Ratable Portion" for any
Note means an amount equal to the product of (x) the Net Sales Amount being so
applied to the payment of Senior Debt multiplied by (y) a fraction the numerator
of which is the outstanding principal amount of such Note and the denominator of
which is the aggregate principal amount of Senior Debt of the Company and its
Subsidiaries (excluding Special Purpose Subsidiaries).
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
B-4
"Default Rate" means that rate of interest that is the greater of (i)
6.66% per annum or (ii) 2.00% over the rate of interest publicly announced by
Bank One, NA in Chicago, Illinois as its "base" or "prime" rate.
"Disposition Value" means, at any time, with respect to any property
(a) in the case of property that does not constitute
Subsidiary Stock, the book value thereof, valued at the time of such
disposition in good faith by the Company, and
(b) in the case of property that constitutes Subsidiary
Stock, an amount equal to that percentage of book value of the assets
of the Subsidiary that issued such stock as is equal to the percentage
that the book value of such Subsidiary Stock represents of the book
value of all of the outstanding capital stock of such Subsidiary
(assuming, in making such calculations, that all Securities convertible
into such capital stock are so converted and giving full effect to all
transactions that would occur or be required in connection with such
conversion) determined at the time of the disposition thereof, in good
faith by the Company.
"Domestic Subsidiary" means any Subsidiary of the Company organized
under the laws of the United States of America, any state or territory thereof
or the District of Columbia.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fasco Subsidiaries" shall mean Fasco Industries, Inc., a Delaware
corporation, ▇▇▇▇▇▇▇▇ Motors Company, an Illinois corporation, ECM Motor
Company, a Delaware corporation, ▇▇▇ ▇▇▇▇▇ Gear Company, a Delaware corporation,
and ▇▇▇▇▇ Technologies, Inc., a Michigan corporation.
"Financing Documents" shall mean and include this Agreement, the Notes
and the Guaranty Agreement, in each case, as amended or modified from time to
time.
B-5
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such Indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Guaranty Agreement" means that certain Guaranty Agreement dated as of
March 5, 2003, by the Subsidiary Guarantors for the benefit of the holders of
the Notes from time to time.
B-6
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money) to the extent, in each
case, such letter of credit or instruments have been drawn; and
(f) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (e) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 10% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
B-7
"Interest Expense" means, for any period, the interest expense of the
Company and its Subsidiaries, other than Special Purpose Subsidiaries,
(including imputed interest in respect of Capital Leases), in respect of all
Consolidated Total Debt, and all debt discount and expense amortized or required
to be amortized in the determination of Consolidated Net Earnings for such
period.
"Investment" means any investment, made in cash or by delivery of
property, by the Company or any of their Subsidiaries (i) in any Person, whether
by acquisition of stock, debt or other obligation or security, or by loan,
Guaranty, advance, capital contribution or otherwise, or (ii) in any property.
"Lease Rentals" means, with respect to any period, the sum of the
rentals and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee under all leases of real or personal
property (other than Capital Leases), excluding any amount required to be paid
by the lessee on the count of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, provided, that, if at the date of
determination, any such rental or other obligations are contingent or not
otherwise definitely determinable by the terms of the related lease, the amount
of such obligations (i) shall be assumed to be equal to the amount of such
obligations for the period of 12 consecutive calendar months immediately
preceding the date of determination or (ii) if the related lease was not in
effect during such preceding 12-month period, shall be the amount estimated by a
Senior Financial Officer of the Company on a reasonable basis and in good faith.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.7.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes or the ability of
any Subsidiary Guarantor to perform its obligations under the Guaranty
Agreement, or (c) the validity or enforceability of this Agreement, the Guaranty
Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
B-8
"Net Sales Amount" means, with respect to any Transfer of any property
by the Company or any Subsidiary, an amount equal to the difference of:
(a) the aggregate amount of consideration (valued at the fair
market value thereof by the Company or such Subsidiary in good faith)
received by the Company or such Subsidiary in respect of such Transfer
minus
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by the Company or such Subsidiary in
connection with such Transfer.
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Investments" means and includes:
(a) Investments in property to be used in the ordinary course
of business of the Company and its Subsidiaries;
(b) Investments in current assets arising from the sale of
goods and services in the ordinary course of business of the Company
and its Subsidiaries (other than Special Purpose Subsidiaries);
(c) Investments existing as of the date of the Note Agreement
and described on Schedule 10.5;
(d) Investment in or advances to one or more Subsidiaries
(other than Special Purpose Subsidiaries) or any Person that
concurrently with such investment becomes a Subsidiary (other than
Special Purpose Subsidiaries);
(e) Investments by the Company and its Subsidiaries in Special
Purpose Subsidiaries consisting solely of the minimum equity investment
reasonably necessary to conduct the Permitted Receivables
Securitization Program;
(f) Investments by Special Purpose Subsidiaries in receivables
purchased by such Special Purpose Subsidiaries from the Company or
another Subsidiary pursuant to the Permitted Receivables Securitization
Program (and the proceeds from such receivables);
(g) certificates of deposit and banker's acceptances with
final maturities of one year or less issued by U.S. commercial banks
having capital and surplus in excess of
B-9
$100,000,000 and whose long-term debt is rated at ▇▇▇▇▇ "▇▇" by ▇▇▇▇▇'▇
Investors Service or "A" by Standard & Poor's Corporation;
(h) commercial paper with a minimum rating of "A1" or "P1" by
either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service,
respectively, and maturing not more than 270 days from the date
acquired;
(i) direct obligations of the United States or United States
agency obligations with a maturity of one year or less;
(j) Investments in Repurchase Agreements;
(k) tax exempt state or municipal general obligation bonds
rated "AA" or better by Standard & Poor's Corporation, "Aa2" or better
by ▇▇▇▇▇'▇ Investors Services or an equivalent rating by any other
credit rating agency of recognized national standing, provided that
such obligations mature within 365 days from the date of acquisition
thereof; and
(l) other Investments not to exceed, in the aggregate, 15% of
Consolidated Net Worth.
As used in this definition of "Permitted Investments":
"Acceptable Bank" means any bank or trust company (i) which is
organized under the laws of the United States of America or any State
thereof, (ii) which has capital, surplus and undivided profits
aggregating at least $100,000,000, and (iii) whose long-term unsecured
debt obligations (or the long-term unsecured debt obligations of the
bank holding company owning all of the capital stock of such bank or
trust company) shall have been given a rating of "A" or better by S&P,
"A2" or better by Moody's or an equivalent rating by any other credit
rating agency of recognized national standing.
"Acceptable Broker-Dealer" means any Person other than a
natural person (i) which is registered as a broker or dealer pursuant
to the Exchange Act and (ii) whose long-term unsecured debt obligations
shall have been given a rating of "A" or better by S&P, "A2" or better
by Moody's or an equivalent rating by any other credit rating agency of
recognized national standing.
"Repurchase Agreement" means any written agreement
(a) that provides for (i) the transfer of one or more
United States Governmental Securities in an aggregate
principal amount at least equal to the amount of the Transfer
Price (defined below) to the Company or any of its
Subsidiaries from an Acceptable Bank or an Acceptable
Broker-Dealer against a transfer of funds (the "Transfer
Price") by the Company or such Subsidiary to such Acceptable
Bank or Acceptable Broker-Dealer, and (ii) a simultaneous
agreement by the Company or such Subsidiary, in connection
with such transfer
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of funds, to transfer to such Acceptable Bank or Acceptable
Broker-Dealer the same or substantially similar United States
Governmental Securities for a price not less than the Transfer
Price plus a reasonable return thereon at a date certain not
later than 365 days after such transfer of funds,
(b) in respect of which the Company or such
Subsidiary shall have the right, whether by contract or
pursuant to applicable law, to liquidate such agreement upon
the occurrence of any default thereunder, and
(c) in connection with which the Company or such
Subsidiary, or an agent thereof, shall have taken all action
required by applicable law or regulations to perfect a Lien in
such United States Governmental Securities.
For purposes of applying the limitations set forth in Section 10.5, Permitted
Investments shall be valued at the original cost thereof less any amount repaid
or recovered in cash on account of capital or principal.
"Permitted Receivables Securitization Program" means one or more
transactions wherein the Company and/or a Subsidiary transfers under a true sale
transaction receivables of the Company and/or such Subsidiary to a Special
Purpose Subsidiary which issues or incurs Indebtedness secured solely by such
receivables, provided however, that (i) such Indebtedness is recourse only to
such receivables, (ii) the aggregate principal amount of all Indebtedness
outstanding of all Special Purpose Subsidiaries pursuant to such transactions
shall not at any time exceed $100,000,000 and (iii) at the time of any such
transaction and immediately after giving effect thereto, no Default or Event of
Default would exist and the Company could incur at least $1.00 of additional
Debt pursuant to Sections 10.3 and 10.4.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" means the sum, without duplication, of (i) Indebtedness
of the Company secured by Liens not otherwise permitted by clauses (a) through
(i) of Section 10.8; and (ii) all Indebtedness of all Subsidiaries (other than
any Special Purpose Subsidiary) not otherwise permitted by clauses (a), (b) or
(c) of Section 10.7.
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"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇
or inchoate.
"Property Reinvestment Application" means, with respect to any Asset
Disposition of property, the application of the Net Sales Amount (or a portion
thereof) with respect to such Asset Disposition to the acquisition by the
Company or any Subsidiary (other than a Special Purpose Subsidiary) of operating
assets of the Company or such Subsidiary to be used in the business of such
person.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Required Holders" means, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security" has the meaning set forth in Section 2(1) of the Securities
Act.
"Senior Debt" means and includes (i) any Indebtedness of the Company
owing to any Person which is not a Subsidiary or Affiliate and which is not
expressed to be junior or subordinate to any other Debt of the Company and (ii)
Indebtedness of any Subsidiary (excluding Special Purpose Subsidiaries) due and
owing to any Person other than the Company, another Subsidiary or an Affiliate.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Special Purpose Subsidiary" means a Wholly-Owned Subsidiary organized
under the laws of the United States or any State thereof and authorized solely
to (i) purchase receivables from the Company or a Subsidiary and issue
Indebtedness with recourse solely to such receivables and (ii) engage in
activities reasonably necessary to effectuate the transactions referred to in
clause (i).
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or
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more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Guarantors" means M.P. Pumps, Inc., a Michigan corporation,
Tecumseh Investments, Inc., a Mississippi corporation, Tecumseh Compressor
Company, a Delaware corporation, Little Giant Pump Company, an Oklahoma
corporation, ▇▇▇▇▇▇▇ Holdings, Inc., a Georgia corporation, Tecumseh Power
Company, a Delaware corporation, Vitrus, Incorporated, a Rhode Island
corporation, Convergent Technologies International, Inc., a Delaware
corporation, Evergy, Inc., a Delaware corporation, Trenton Division, Inc., a
Tennessee corporation, Euromotor, Inc. a Delaware corporation, Tecumseh Pump
Company, a Delaware corporation, Tecumseh Products Company, Engine and
Transmission Group, Dunlap Operations, Inc., a Tennessee corporation,
Manufacturing Data Systems, Inc., a Michigan corporation, ▇▇▇▇▇▇▇ Products,
Inc., a Georgia corporation, ▇▇▇▇▇▇ Property Company, LLC, a Wisconsin limited
liability company, Fasco Industries, Inc., a Delaware corporation, ▇▇▇▇▇▇▇▇
Motor Products Company, an Illinois corporation, ECM Motor Company, a Delaware
corporation, ▇▇▇ ▇▇▇▇▇ Gear Company, a Delaware corporation, ▇▇▇▇▇ Technologies,
Inc., a Michigan corporation, and Tecumseh Canada Holding Company, a Delaware
corporation and any other Person who, pursuant to Section 9.6, executes a
joinder agreement and becomes a party to the Guaranty Agreement.
"Subsidiary Stock" means, with respect to any Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person.
"Transfer" means with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including any disposition of any capital stock of any Subsidiary or the assets
of any Subsidiary, whether by merger, consolidation or otherwise.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.
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